Build Confidence in Your Strategy with Small Tests
You’ve crafted a strategy for your team or organization, got buy in from stakeholders, and you’re ready to execute...right? Not so fast. Jumping straight from an idea to implementation leaves out a critical step that can help you refine your strategic plan and make more informed, confident choices—testing. It’s also one of the most creative moments in the strategic process. If you are raising a doubtful eyebrow right now, hear us out.
While many people think of strategy work as highly analytical and quantitative, that’s just one part of the story, says Jennifer Riel, IDEO’s Global Director of Strategy. Strategy in itself is a creative act—understanding the world as it is and imagining possibilities for how we want it to be—and “designing the strategy tests that you could run can actually be incredibly fun and incredibly playful, and, in a lot of ways, the most creative part of the entire journey,” she says.
As a strategy advisor, Jennifer has worked across industries and countries, including at companies like Procter & Gamble, Target, and Voya Financial. Before IDEO, Jennifer spent 13 years teaching at the Rotman School of Management. She co-authored Creating Great Choices: A Leader's Guide to Integrative Thinking with Roger Martin and is an instructor in IDEO U’s online course Designing Strategy.
In an interview on IDEO U’s Creative Confidence Podcast, Jennifer breaks down three main types of strategic tests, gives advice for choosing the right test, and shares examples from her many years of experience advising global companies on their strategic choices.
Listen on Apple Podcasts or Spotify
Why you should test your strategy
A strategy is the set of choices you make to move from where you are to where you aspire to be. When crafting a strategy for your business, first generate a set of possibilities that could bring your ideal future state to life—expanding into a new region or launching a new product, for instance. A lot of people stop there and just pick one of their possibilities. But rather than relying on gut feel or debate to decide between choices, tests let you gather evidence to help you make a more thoughtful, evidence-based decision.
To determine what tests you should run, next ask “What would have to be true for each of those possibilities to be a great strategy?” For example, for a possibility that includes expanding to a new region, perhaps it would have to be true that the region is economically attractive, that customers there will be willing to buy your products, and that you can get the talent you need in the region. We call these barriers. Some barriers you’ll be really sure you can overcome, and some you’ll be less sure about. For the ones you’re less sure about, you’ll need a little more information before making a decision. That’s an ideal place to bring in testing.
Much like prototyping, the act of testing a strategic possibility gives lots of feedback to refine and improve the strategy moving forward. It helps us avoid committing to a strategy too early, but it can’t take away all the risk.
“Testing will never give us certainty,” Jennifer warns. “Strategy is about the future, and we won't know for sure until we do it. But you can use tests to feel more or less confident about an idea.”
Think of a company like Uber. It built a strategy in ride services that has a lot of different elements: the ecosystem of riders and drivers, the app, its transparency, all the back-end systems to make it run, and the human systems to build trust in the platform. There were a lot of things that would have had to be true for Uber’s launch strategy to be a winning one. It would have to be true its engineers could build a robust platform, that Uber could attract a pool of drivers, that people would be willing to get into a stranger’s car, and so on.
The goal when building a business is to craft a product or service that is desirable, feasible, and viable. While she didn’t work with Uber on their strategy, Jennifer bets the company was already sure about some elements, like their ability to build the technical platform (the feasibility of their service), and maybe less sure about other barriers, like a person’s willingness to download the app and ride with a stranger (the desirability of the service). So user behavior would be an ideal place to do some early testing because “if it's not desirable, it doesn't really matter if it's technically feasible.”
Types of strategic tests
So what does a strategic test look like? Tests fall into three main categories: guerilla, indicative, and high fidelity.
Guerilla Tests are fast, scrappy and low-cost. What might you do if you had a day and $100?
Indicative Tests often require an investment in time and money. What might you do if you had a few weeks and $5,000 (or whatever sum is appropriate, depending on the size of your organization)?
High-fidelity Tests usually require a full team and considerable time and money. What might you do if you had several months and an even larger budget?
Designing tests that meet your individual needs requires creative thought. There’s no one-size-fits-all solution or one thing that everyone should test when crafting a strategy. This is where the fun starts. Testing can be a great opportunity to step away from your email, talk to your customers, and get hands-on with prototypes. Pull your team in for a brainstorm to come up with options for each of the three types of tests—guerilla, indicative, and high-fidelity.
“Designing the strategy tests that you could run can actually be incredibly fun and incredibly playful, and, in a lot of ways, the most creative part of the entire journey.”
Choosing the right type of test
Choosing the right tests depends on the type of barrier, how much confidence you need to move forward, and the resources you have available. People often default to big, high-fidelity tests like large-scale pilots, but Jennifer says to start small and take a similar approach to prototyping. The intent is to create quick, cheap, and scrappy tests that help you learn and refine your ideas. Sometimes a quick coffee chat with your best customer or a back-of-the-envelope calculation will be enough to give the team the confidence to move forward. Consider testing as an opportunity to break out of your usual patterns, too. If you usually do conjoint analysis, try in-market observation or vice versa.
Take the example of a chief learning officer at a large financial services company. Jennifer worked with them to develop a strategy for a company-wide learning program, employing several strategic tests in the process. The officer assumed they’d need to build out a robust digital training platform for employees. Their initial instinct was to jump into coding that platform straight away. Instead, they worked with Jennifer to design several tests around the barriers to success they identified—employee’s desire for an online learning platform, the ability to build the technical platform, and if it was possible to organize the information in a way that was easily understandable.
A guerilla test they could do to determine people’s real needs and behaviors around learning would be ethnographic interviews where employees shared good and bad learning experiences. An indicative test could be talking to other chief learning officers to see how they solved similar challenges or getting quotes from suppliers to cost out building the platform. A high-fidelity test could be prototyping a manually supported platform and putting it in front of a small group of employees to see how they use it and what information they click on.
The company used several of these tests and came to find that there was a larger array of employee learning needs than they’d originally identified. Plus, people didn’t want an app with every single learning resource available—that felt overwhelming. Instead, they wanted only the relevant resources, curated to their personal needs. In the end, the chief learning officer saved time and money by not pursuing a losing strategy. They used the results of testing to change their annual employee performance review process to incorporate more questions around learning and career development needs. That allowed them to tailor individual learning recommendations for each person in the company.
Bonus: Tests get others excited about your strategy
Not only will testing your strategy save you from pursuing the wrong approach, it’s also a great way to get others bought in and committed to doing their part to make your strategy succeed.
Jennifer says the most common reason she sees strategy work fail is that the broader organization isn’t aware or engaged. And you can’t do this type of work alone. “If you bring your organization in to help you do the testing, and if you engage them in the consideration of what would have to be true and how you could test, it's much more likely that they're going to understand the choices and be excited about them.”
So what are you waiting for? Don’t let time and resource constraints hold you back. If a budget of $50,000 doesn’t feel realistic for you, that’s OK. Even if you do have money to burn, start with $100 and a few hours and see what you can learn. You might even have a little fun along the way.
Learn repeatable steps you can use to create and take action on a strategy for your business, team, or organization in our online course Designing Strategy.
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