Multinational companies often test new or improved processes by rolling out a limited pilot in one or several markets. New research identifies how to maximize the chances of success for these high-stakes dress rehearsals.
Successful multinationals get that way by finding progressively better ways to leverage good operational improvements across the entire company. But developing such superior processes is not easy. As few as one in three new process initiatives succeeds. Each failure can cost the company as much as $10 million in development costs — not to mention foregoing the hundreds of millions of dollars that a successful initiative might have generated.
New operational ideas fail for many reasons. One of the most common is not that the idea was bad, but that the developers set up a pilot that failed to persuade managers in the units that the process was an improvement. If the pilot covers business units, customer types, or products and services that the managers who are expected to roll out the innovation don’t see as analogous to their own unit’s situation, the working template may be viewed as insufficient to be considered a reliable experiment.
Many of these failures can be avoided. Specifically, successful pilots share three qualities: credibility, replicability and feasibility. The pilot location must seem credible in that the situations and challenges seem familiar to the managers who are expected to eventually adopt it into their own units. It needs to be replicable as well, and capable of being turned into a template that can be rapidly introduced in a variety of locations. Finally, its results must meet the expectations of multiple stakeholders.