Experimental Approaches to Strategy and Innovation

Abstract

Firms continue to adopt business experimentation to shape product innovation and help form business strategy. In this dissertation, I explore boundary conditions to business experimentation for strategy and innovation practice in three closely related studies. In the first study, I examine how varying access to inexpensive testing influences the way managers search for new opportunities with experiments. Using data from a leading A/B testing platform, I find that greater access to inexpensive testing may inadvertently limit a firm’s ability to identify high-performing opportunities. In the second study, I explore how senior managers associate with learning and performance outcomes in experimentation. I find that senior managers’ involvement associates with more significant learning signals but smaller performance improvements. In the third study, I analyze how iterative, Agile project management methods that are widely used to manage business experimentation affect new product innovation. In a software development field experiment and follow-on laboratory study, I find that iterative management frameworks cause managers to prioritize short-term value over novelty in products. Overall, this dissertation contributes to a burgeoning literature on experimentation in strategy, innovation, and entrepreneurship. By articulating pertinent boundary conditions to managing experimentation, this work seeks to help managers effectively leverage experimentation to realize its potential benefits for firm innovation and performance.