Perfect Doesn’t Mean Effective
These trends are all coming from large companies with resources and talent capable of making their work “perfect”, so why are so few of them pursuing it?
80% of Consequences Come From 20% of Causes
What people often overlook is how this holds true for business activities as well. You will likely capture the majority of an activity’s value at the beginning, with returns on investment diminishing as the effort continues. Although the perfect solution may in fact be achievable – and even more valuable – this principle shows us that the point when expended effort becomes a net loss is far earlier than “perfection”. Within that final 20% of quality lies the vast majority of our time and energy, which would be better served accomplishing 80% of several other business outcomes.
In short, perfection wastes time and money.
Speed is the Optimal Path to Success
The chart below represents an 80/20 curve relating to the business value of tasks. Each bar represents a task and its measured business value. What the 80/20 Rule shows us here is how 80% effort is “optimal” in relation to the value we get out of our actions.
However, with concepts as abstract as “effort”, shooting for a real number is futile. We can’t accurately quantify our effort, and even if we could, landing directly on 80% would be virtually impossible. How do you put in exactly 80% effort when doing things like deciding on sub-contractors or creating sales collateral?
If more value exists at the beginning of our efforts than at the end, it stands to reason that taking too long is more costly than finishing too early. Thus, our goal should be to focus on speed.
By focusing on speed, we ensure that if we miss the 80% mark we still “fail” in the most efficient manner. To see this in action, imagine two identical startups selling their own widgets. As these businesses grow, both startups realize they need some sort of CRM to manage customers and orders. Startup A, recognizing that this is a core part of their business, launches a two-week research project to determine the absolute best fit for their company. Startup B, however, spends an afternoon researching options then picks one that seems decent.
Fast forward two weeks… Startup B realized they rushed their decision and some business processes will have to remain manual. However, they now have two weeks of customer data in the system and are using this data to create sales strategies. Startup A ended up with the “perfect” solution with all tasks perfectly automated, but no data to determine sales strategy. They are now two weeks behind their competitor. Only now are they starting to enter customer data, and it will be another two weeks before they have enough information to start developing a sales strategy.
Startup B captured the bulk of the business value (a way to build a sales strategy) despite rushing the research task and failing to address some lower value business processes with their purchased software, whereas Startup A missed out on leveraging high value results because it was stuck waiting on “perfection”.
The Difference Between Rapid Testing and Recklessness is How Much You Learn
At this point you may think I’m encouraging you to act recklessly. I know I certainly thought that the first time I saw these rapid testing concepts in action. There is a final aspect separating recklessness from strategic speed: learning. Or, more accurately: you should frame your pursuit of the 80% value in the context of learning new information to apply to your next decision or action. When you treat every next move as a deliberate test for gathering information, you gain the insight to deploy your effort where it matters the most.
Let’s go back to our startups. This time Startup B had massive problems with the software that they selected. A purely speed based strategy would tell them to pick the next best software and cross their fingers it would work better. Technically they would still accomplish more because of their speed, but they also would still be charging down the same path without knowing if it was the right path. What happens if they treat the decision as a test with the explicit purpose of learning about their sales needs?
By framing it as a learning-based strategy, Startup B would pay closer attention to the business value provided by the software and note what conditions would cause them to change directions. These insights could lead to a better next pick but, more importantly, this deliberate focus on learning may reveal that the company’s business process doesn’t actually need a CRM at all.
Maybe these widgets require a unique sales process, or maybe a CRM is too complex and unwieldy to use efficiently at this stage. If that’s the case, their next action would be to pivot quickly to some other solution, completely abandoning the goal of getting a new CRM and saving money in the process. By inspecting the results, Startup B will gain business value even in failure.
Speed helps you get to your goal. Testing helps you determine if your goal is correct.
Rapid Testing Mindset is a Powerful Strategy for Innovation
Even failure-embracing organizations can stifle innovation if they remain focused on perfection. Innovation is a time-consuming process, often taking hundreds of iterations to find the best solution. When perfection is expected before results are known, these types of organizations will spend the majority of their time on the low value items that make up the last 20% of quality.
If the 80/20 Rule holds true, every “perfectly” completed task sacrifices the same effort as five 80% completed tasks. That’s four missed learning opportunities for every attempt. The result is large feed feedback loops, low agility, and even abandoned projects as the effort to gather new information becomes too costly.
Organizations embracing rapid testing will experience failure. It will be messy and often chaotic. However, these organizations will also generate business insights far more quickly than their competitors. They’ll be more agile, more responsive to changes, and, by necessity, foster cultures of exploration and creativity.