Many of us will make a business case for our next marketing campaign (experiment), but few will take the time to create a prediction. A prediction enables us to identify the one or two things that really matter while providing both constraints and flexibility. In scientific terms, we call it a hypothesis.
The dictionary definition of a hypothesis is a supposition or proposed explanation made based on limited evidence as a starting point for further investigation. Especially in scientific terms, a hypothesis should be testable.
Practices like TRIZ, Area Method and Integrative Thinking yield excellent results. These practices take time to develop a well-formed hypothesis or prediction. I also think that developing a competing hypothesis, Theory of Constraints people will think immediately of Evaporating Clouds, as a worthwhile exercise. However, you can feel like you are not proceeding because you are constantly challenging your idea. What you are actually doing is refining your idea and at a minimum making it something testable.
The cost of prototyping, which is an extension of experimentation, has been vastly reduced in the digital age. The Lean StartupTM idea that we put a minimum viable product (MVP) in the hands of the customer and leave them to decide lends itself to rapid iteration. But is it really evidence-based testing? When thinking of the difference between the Lean Startup cycle of Build/Measure/Learn Cycle and PDCA, I find that the formation of a well thought out hypothesis is one of the fundamental differences
Though a prototype could be considered a hypothesis, often prototypes are done later in the process after we have formed a degree of confirmation bias. In marketing, we will design and carry out a plan or launch with the idea of making it work rather than testing our hypothesis. If you cannot afford for it to fail, it is not an experiment. It is not an MVP.
In Michael Schrage’s book, The Innovation Hypothesis, he calls a business hypothesis as a testable belief about future value creation. Saying we form a hypothesis to create a meaningful learning experience which we could further define as acquiring greater insight and awareness.
From Schrage’s book:
A business hypothesis takes the form of:
- The Team Believes Exploring This _____ (Action/Capability)
- Will Likely Result in This ______ (Desirable Improvement/Outcome)
- We’ll Know This Because _______ (Our Explicit/Understood Metric) _____ (Significantly Changed)
Schrage also mentions, “If the business hypothesis isn’t written down, agreed upon and readily shareable, it’s not a business hypothesis.”