Tag Archives: feedback

company

How to Build a Fail-Fast Culture

There’s a lot of talk these days about how failure is not just fine but fantastic.

Tech companies famously tout “fail fast”-style mantras. One of Facebook’s guiding principles is “Done is better than perfect.” Many start-up founders are known for having built companies that failed before finding long-term success.

The philosophy of encouraging mistakes and quickly learning from them complements the design-thinking movement. In this way of thinking, you’re encouraged to launch quickly, shipping imperfect product and iterating based on customer feedback.

But what role can this approach play in a slow-moving, large company? After all, many of the small start-ups that encourage fast failure will grow quickly, and maintaining that kind of culture as it scales is tricky. How do you treat not-quite-perfect, disappointing or outright failed ideas and projects as acceptable among hundreds or thousands of employees?

Here are a few guiding principles for instilling an innovative, fail-fast philosophy in a larger organization.

Set up mini innovation groups: I worked with an organization that set up small teams across the company with the mandate to drive innovations in the everyday routines of work. The teams discuss new processes, test their ideas and then present a summary of improvement initiatives. They share ways to extend their concept, and the teams look at other potential business implications. A review board makes the final approvals based on the portfolio and suggests ways to make wider impact. It’s an organized, civilized and, yet, wholly innovative way of working in a bigger company. And if the teams’  ideas fail? Well, at least they were given permission to try.

Focus on feedback year-round: If you were working on a new project and it failed to launch or didn’t perform well in a test, would you want to hear about what you could’ve done better from your manager a year later? Real-time development happens throughout the work days and weeks– not during an annual performance review – and allows you to constantly and more quickly improve. But this is a change you should make as part of a bigger talent innovation strategy in performance management – it can’t be executed effectively alone.

Recruit, promote and succession-plan differently: To encourage a fail-fast mentality, we must reimagine what we consider successful. Along with rethinking annual performance reviews, consider what guidance and framework you use to define a productive employee. Can you reward the team that boldly pushed new ideas, even if the ideas didn’t come to fruition? Is a top performer one who differentiated your brand in the marketplace with a new angle, even if it didn’t have the same broad reach as last year’s campaign? Adhere to what principles your organization’s strategy prioritizes, but ensure you’re not inadvertently punishing people who take smart risks.

Follow basic culture evolution lessons: Strategy+business magazine’s article “Culture and the Chief Executive” shared how culture can evolve by following four tenets, and they’ll of course apply here, too.  The basic steps to remember:

  • Demonstrate positive urgency by focusing on your company’s aspirations — its unfulfilled potential — rather than on any impending crisis.
  • Pick a critical few behaviors that exemplify the best of your company and culture that you want everyone to adopt. Set an example by visibly adopting these behaviors yourself.
  • Balance your appeals to the company to include both rational and emotional cues.
  • Make the change sustainable by maintaining vigilance on the few critical elements that you have established as important.

Know your limitations: Certain companies, organizations within an enterprise and missions can more easily afford to push the envelope and experiment than others. While inspiration can come from the tech world, there are limits to how far your organization can go. The key is to understand, challenge and ultimately work within these limits to foster a culture of innovation. Even in risk-averse circumstances, some businesses exercise the fail-fast philosophy on non-mission-critical projects that won’t harm the business, brand or customers if they don’t pan out. This approach can reinforce your culture and can empower and engage the team. It can even lead to new value if the idea can spark other future, more achievable initiatives.

It’s difficult to create a work world balance where innovation and creativity can quickly become executable projects or products in the market while also staying within the complex boundaries of a large organization — especially one that’s regulated.

But a learning culture that embraces fresh ideas, even those that could fail, is increasingly essential. More than ever, our clients ask PwC to help them stay competitive and innovative while smaller organizations threaten their growth. And, more than ever, big businesses risk losing talent to these companies, too.

To keep up, you’ve got to re-up. There’s little progress to be made by doing things the way you’ve done them in the past few years. If you consider how your company’s culture could better embrace risk and failed ideas, you’ll be better positioned to deal with more unpredictability and to grow in the future.

8 Opportunities Created by UBI

With competition tightening, insurers are motivated to find ways to more precisely predict risks, sharpen pricing strategies and provide better value to their policyholders. Usage-based insurance (UBI) offers a promising approach. Data obtained from real-world deployments and proof points from industry surveys indicate that the benefits of well-designed UBI programs can justify the investment.

The expansion of UBI programs around the world is proof that insurers are increasingly recognizing that UBI programs can transform business models by delivering both revenue-generating opportunities and cost-saving opportunities by:

  1. Acquiring low-risk drivers: Insurers starting UBI programs often target low-risk drivers first. These drivers welcome the opportunity to demonstrate their safe-driving practices and benefit from lowered premiums.
  1. Increasing customer retention: To combat steep attrition common in the insurance industry, insurers can capitalize on the investment that drivers have made in a UBI program. After demonstrating safe vehicle operation for a period of time and obtaining lower rates, these drivers are less likely to go to another insurer.
  1. Offering personalized, value-added services to customers: Telematics data collection gives insurers a window into driver habits and behavior, providing opportunities for unique, innovative, value-added services.
  1. Reducing the frequency and magnitude of claims: By helping improve driver behavior and awareness, telematics can cut the frequency and magnitude of claims significantly.
  1. Improving accident reconstruction: Data collected using telematics devices can help paint a picture of the conditions and events whenever a driver is involved in an accident. Factors such as location, speed, G-forces and weather can help fill in details that the driver or witnesses may not recall.
  1. Encouraging better driver behavior: Statistical evidence supports the argument that drivers perform better when enrolled in a UBI program, with the understanding that their driving performance is being analyzed for safe driving practices.
  1. Reducing claims processing costs and fulfilling claims promptly: Analytics in support of a UBI program can distinguish between claims that should be processed directly and those that require deeper investigation. By identifying the claims that need not be challenged, carriers can reduce the costs of claims processing and improve efficiency.
  1. Increasing client engagement: Insurers can successfully enhance driver behavior, as has been indicated by a number of surveys, by providing prompt feedback, rewarding safe practices, acknowledging improvements and, in some cases, creating games to let a driver immediately see recommended practices in action, with scores that help reinforce good, safe driving.

As a vehicle for enhancing revenues, reducing costs and nurturing a steadily growing customer base, UBI counters prevailing trends that show increasing customer dissatisfaction with their insurance companies. UBI provides a number of ways to improve the overall customer experience and to expand communication with customers. Accurate telematics data can reduce the frequency and the magnitude of claims, as well as speed up the settlement process, all of which results in cost savings for insurers. Structuring insurance programs around distinct customer personas, behaviors and preferences is a proven path toward building a long-term relationship and boosting customer satisfaction.

We recommend that, before contemplating a UBI program, insurers should be clear about objectives and adopt a strategy well-suited to long-range corporate plans. UBI programs can be effectively mapped to the individual market objectives and mission of each carrier by choosing the segments, product features and data-collection technologies appropriate to each company’s long-term strategy.

For more information, download IMS’ free white paper on Building a Business Case for UBI.

small deliverables

Mitigating Risk With Small Deliverables

For far too long, products have failed to make it to market. Or, if they finally do, they are over budget and grossly unpopular because of poor implementation of product development principles. Product development as a discipline has exploded with the ascendancy of the tech industry, because of the emphasis on innovation and product releases. This has created a paradigm shift in how risk is mitigated relative to bringing new products to market.

Of all the variables involved in getting a successful product to market, batch size is of paramount importance. The emphasis on small deliverables is the key to mitigating risk in modern product development.

What Is Batch Size?

According to Eric Ries, author of The Lean Startup, “Batch size is the unit at which work-products move between stages in a development process.” An example of a batch in the context of a software project is the set of code written in the development phase to implement a single, complete new feature of a product.

There are three key advantages to delivering features in small batch sizes: a decrease in development time decrease, an increase in feedback and a drop in cost.

Development Time Is Decreased

The ability to reduce the time from development to launch is not only a competitive advantage, but is also a risk mitigator. The ability to deliver a unit of work to your users quickly is a key benefit of delivering in small batch sizes. It is far better to have your new feature in your user’s hand sooner rather than later so you can test the assumptions that are the basis for future iterations.

Reduced development time also reduces the risk of obsolescence. In the past, I worked with a company to develop a technology that was first to market in its product category. The problem was that the product was delivered in large batch sizes. By the time the product was ready for market, the underlying technology had moved to another medium. Had the product been delivered in small increments, it would have been possible to integrate technology consistent with the pace of the industry.

The Feedback Loop Is Increased

Delivering on iterations of your product in small batch sizes increases the frequency of feedback from your user base, so you can be sure your product development is consistent with the expectations of your customers.

If you deliver a large batch of features to your user base, there is a likelihood that one or more features will be ill-received. This means the other delivered features were predicated on a false assumption. Engineers will make assumptions all through the construction process based on the most current information. This situation adds an inordinate amount of risk to a rollout that could have been mitigated with correct assumptions established from the outset.

Cost Is Decreased

When development of a software feature is finished, there are still activities that need to occur before a feature goes live. These include code testing, project meetings and process reviews. It is a common misconception by project managers that transaction costs associated with development cycles are fixed. In fact, these activities exponentially grow as the batch size grows and as a result are extremely costly. For example, troubleshooting a bug in code that relates to one feature is relatively straightforward. Troubleshooting a bug where code affects several related features is exponentially more complex and time-consuming.

Large batches increase risk in product development by causing schedule slippage, which in turn costs money. According to analysis by Donald Reinertsen, project schedules slip exponentially as time to delivery drifts. See figure 1 below:

fig 1

Figure 1

In conclusion, small deliverables reduce risks associated with product development. A major advantage of reduced batch size is that the time in development decreases. This allows your deliverable to get into your user’s hands more rapidly and creates a feedback loop. Smaller batches ensure your project stays on budget and increases the likelihood of your ultimate goal of getting to market.