Many companies have trouble making the transition from a failing business model to one that works. Often, one culprit is an inability to experiment.
Image courtesy of Google.
As the scientific community has long known, experimentation is the key to knowledge. It enables people to check their assumptions and run various “what if” tests to expand the base of what they know. In the business world, executives generally recognize the importance of experimentation, but many don’t practice it nearly as much as they should. For such executives, the recently published Getting to Plan B: Breaking Through to a Better Business Model (Harvard Business Press, 2009) should be required reading.
Written by John Mullins, an associate professor at London Business School, and Randy Komisar, a partner with the venture capital firm Kleiner Perkins Caufield & Byers in Menlo Park, California, the book makes a strong case that organizations need to experiment regularly to overhaul a business model that’s broken or to fine-tune one that needs adjusting. Indeed, many successful companies originally had very different business models from the ones they eventually adopted. Getting to Plan B is filled with such case studies, from the famous (the online payment service PayPal Inc.