Traditional approaches to strategic analysis focus on finding the single best path forward, but businesses who deal with uncertainty may require a strategic experimentation approach. Find out if this approach is right for you.

1. Executive Briefing
Introduction to Strategic Experimentation

2. 2
Traditional approaches to strategic analysis
focus on finding the single best path forward
Traditional Strategic Analysis Process
Identify Potential
Courses of
Action
Gather Data
Related to Each
Prospective
Course of Action
Analyze the Data
Select a Specific
Course of Action
Process Goal:
Find the One Best Way

3. 3
But traditional approaches do not work well in
highly uncertain situations, or ones with lots of options
When uncertainty is high, it’s highly unlikely that
a strategic analysis process designed to find the
optimal solution will define the route that leads to
the best future state before any action is taken.

4. 4
Strategy development / execution that is based on Strategic
Experimentation works much better in these situations
Provides a way to adapt
quickly and effectively to
rapidly changing conditions
Provides a way to explore
multiple options quickly,
cheaply and effectively
Provides a way to reduce or
eliminate key uncertainties
quickly and cheaply
Strategic Experimentation is a formal process for:
1. Identifying and prioritizing key risks and
uncertainties associated with a strategic initiative.
2. Applying lessons learned from inside and outside
the company to address as many aspects of the
risks and uncertainties as possible.
3. Designing and executing quick, inexpensive
experiments to address the remaining aspects.
4. Using the results of these experiments to inform
further action-planning and decision-making.
Strategic Experimentation is action-driven, not planning-driven

5. 5
Step 1: Identify, assess and plot all key decisions and risks
Key Decisions / Risks
MagnitudeofRisk
HighLow
Low High
Degree of Uncertainty
5
Uncertainty about which
option or approach is best
Strategic or financial risk if
you make the wrong choice
Focus efforts on
reducing or
eliminating biggest
risks / uncertainties
2
1
4
3

6. 6
Step 2: Analyze previous efforts to learn what
has and hasn’t worked in similar situations
ID
Similar Uncertainties or Risks…
We’ve Faced Others Have Faced
What Worked What Didn’t Work What Worked What Didn’t Work
1
2
4
Results of this analysis represent the collective
insights gained from leveraging your organization’s
experience and “learning on someone else’s dime”

7. 7
Step 3: Design / Execute quick, cheap experiments
to address remaining risks / uncertainties
Uncertainty: What is the best initial price for our widget?
Planning
Assumption:
$40
Experiment: Test prices in $5 increments from $30 to $60
Metric(s): % of click-throughs for purchase at each price
Results:
Test Price % of Click-Throughs
$30 16%
$35 20%
$40 19%
$45 21%
$50 19%
$55 13%
$60 8%
This is a specific
example, rather than a
generic example (as
used Steps 1-2), to
clarify the approach.
Experiments should be
devised and run to
address all key risks
and uncertainties that
remain after the
analyses in Step 2.

8. 8
Step 4: Use results of experiments to inform decision-making,
and incorporate insights into revised action plans
Results:
Test Price % of Click-Throughs
$30 16%
$35 20%
$40 19%
$45 21%
$50 19%
$55 13%
$60 8%
Result: Responses are similar
(within margin of error)
at several price points.
Decision: Use highest price in
the range.
Action: Set price at $50 rather
than $40, and adjust
revenue forecasts.

9. 9
Information services provider used strategic experimentation
to support launch of successful new business unit
Situation: Information services provider wants to launch a new information products business.
Key
Uncertainty:
What kinds of information products would appeal to existing customer base?
Application:
Company rapidly developed and market-tested low-fidelity prototypes of 15 potential products.
Discovered five that had broad appeal.
Conducted additional experiments to define initial set of product designs and product features.
Designed / staffed new unit to support development, sale, installation / operation and support
of initial product set.
Result: Rapid adoption by existing customer base. Exceeded Year 1 revenue target by 40%.

10. 10
A Strategic Experimentation-based approach to
strategy development / execution has several benefits
Using Strategic Experimentation in your organization will:
• Enable you to deal more effectively with risk and uncertainty
• Increase execution speed and the quality of outcomes for key strategic initiatives
• Create a more action-oriented culture
• Increase organizational agility and adaptability
• Increase organizational performance

11. Metre22, LLC
3001 Knox Street • Suite 204
Dallas, Texas 75205
Mark Bills
mark.bills@metre22.com • 312.391.3272