A Blog by Jonathan Low

 

Jun 30, 2017

What Happened When Microsoft Gave Employees $50,000 To Experiment With Innovation

Empowerment enabled by well-defined outcome measures produces results. JL

Alison Eyring reports in Inc.:

(Microsoft) gave five teams $10,000 each and 45 days to develop and test an innovative marketing idea as long as it had a high return on learning (ROL). The aim was to learn, and then act fast to implement successful ideas across the business. One team chose a project related to  SQL Database. With this model, the team achieved more engagement than with any other marketing tool. The experiment had very high ROL, and the game became the primary advertising engine for SQL.
As the pace of change has accelerated in the ever faster-changing tech industry, Silicon Valley's most innovative companies have used a variety of methods to foster innovation and grow fast. While Eric Schmidt famously let Googlers spend 20 percent of their time on creativity and innovation, Mark Zuckerberg had the early mantra "Move fast and break things" to empower employees to experiment and make mistakes. In his podcast series Masters of Scale, LinkedIn founder Reid Hoffman cites this ability to "manage the chaos" as a key growth driver.

Free people up to experiment

When tech behemoth Microsoft found that it needed to learn fast and act even faster, CMO Asia-Pacific Justin Spelhaug found a way to get teams innovating and quickly building growth capabilities in sales and marketing. He used a data-driven, "test-measure-iterate then build" method.
Up until then, the marketing organization had relied almost entirely on return on investment (ROI) to measure success, which drove a lot of caution and emphasis on large, tried-and-tested approaches. It also meant that there was a lot of frustration on the marketing teams concerning the lack of freedom and resources to try new approaches.

Make a $10,000 challenge

Spelhaug gave five teams $10,000 each and 45 days to develop and test an innovative marketing idea. It could be anything as long as it had a high return on learning (ROL). The aim was to learn as much as possible, and then act as fast as possible to implement successful ideas across the business.
One of the five teams chose a project related to a game built for SQL Database. The game was a huge hit with techies. With this gamification model, the team achieved more engagement than with any other marketing tool. The small, $10,000 experiment had very high ROL, and the game eventually became the primary advertising engine for SQL.

Focus on return on learning

Spelhaug's experimental approach allowed the marketing team to try out and test several approaches quickly. By formally stating hypotheses, setting up a study design, and gathering data to evaluate the outcomes, the teams were able to learn quickly and at the same time, they ultimately delivered a valuable marketing campaign.

Lead innovation to build growth capabilities faster

When growing a business, there are times when you need to go faster and grow capabilities to meet evolving customer needs or stay ahead of the competition.
By building the right growth capabilities, you can fuel a faster pace of growth for your business. In an ever-faster changing marketplace, this often requires leaders and teams to innovate very quickly, which can be challenging in organizations where beliefs and norms are deeply embedded.
By experimenting, thinking big, and measuring return on learning rather than return on investment, like Microsoft did, you can quickly develop growth capabilities where you need them.

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