I came across all kinds of fascinating studies in researching this book, but one of my favorites comes from Jack Zenger and Joseph Folkman, called “How Age and Gender Affect Self-Improvement” (Harvard Business Review, 2016). Drawing on Carol Dweck’s work on fixed versus growth mindsets, they studied seven thousand businesspeople through self assessments and 360-degree reviews from coworkers. They found that older people were more open to self-improvement and less defensive to criticism because they had evolved over time to focus on improving instead of just proving themselves. And the researchers found that the more self confidence individuals have, the more willing they are to change.

Cook’s challenge inspired a multiyear effort to make experimentation a companywide capability. Today, Intuit nurtures experimentation in five key ways.

EXPERIMENTAL TEAMS. Intuit assembles small “discovery teams,” like the ones behind SnapTax and PersonalPro, around promising ideas. A typical team includes individuals drawn from engineering, product management, and design— what cook calls “a hacker, a hustler, and a dreamer.” Once constituted, these teams operate outside the chain of command and enjoy a high level of autonomy. To ensure they don’t get bogged down in bureaucracy, teams are matched up with executive sponsors. The SnapTax team, for example, was mentored by the VP of product management for TurboTax, Intuit’s VP of engineering, and Scott Cook. Sponsors meet with teams once a week to provide coaching, remove bottlenecks, and help secure resources. Further support comes from Intuit’s innovation catalysts—a group of two hundred experimentation “black belts” who dedicate 10 percent of their time helping colleagues identify customer needs, design experiments, and build prototypes.

INNOVATION TRAINING. Designing experiments takes skill, and at intuit, every employee gets the chance to become a pro. The company’s innovation curriculum, Design for Delight (D4D), is a weeklong course that builds skills in three areas: customer empathy, idea development, and rapid prototyping. New hires are expected to complete the course within their first three months. Further training is offered via “Lean StartIn,” a weeklong workshop where a team uses the D4D methodology to address customer pain points. Over the course of five days, the group develops three to four prototypes and runs multiple tests. More than two thousand employees have participated in a Lean StartIn since the program’s launch in 2012.

TIME FOR EXPERIMENTATION. Intuit also supports experimentation with “unstructured time.” All associates are encouraged to spend 10 percent of their time working on a passion project. Employees can consolidate this time into blocks and are encouraged to sync up with colleagues to tackle chunky problems. In a typical example, the team responsible for QuickBooks saved up its unstructured time over several months so it could devote a full week to brainstorming new product features. During the week, the team created a prototype for a mobile version of its signature product. Jeff Zias, an innovation leader at Intuit, reckons that over the last decade, unstructured time spawned five hundred discrete projects that eventually shipped products or services to internal and external customers.

DEDICATED FUNDING. Innovators at intuit have multiple sources of experimental capital. Each department has an experimentation budget for upgrading current products. Would-be experimenters can also compete for funds in periodic innovation challenges and 13 14 hackathons. Finally, innovators can seek support from the CEO fund, a discretionary pool Cook established to ensure that outlier ideas don’t get starved of resources. Investments are typically small—tens of thousands of dollars over two to three months—but can range higher when an idea needs longer incubation. PersonalPro, for example, received several million dollars over three years. Existing businesses are expected to match the CEO fund for ideas that will benefit their customers.

ENABLING FUNCTIONS. Support functions are responsible for enabling experimentation. In 2012, Intuit’s IT department cut the time it took to set up an online test from two months to two hours. The following year, the legal department published guidelines on how to run an experiment without the need for a legal sign-off. Staff functions are also expected to experiment with their own services. A few years ago, an HR project manager prototyped a program that put job applicants into a live Intuit project before the final hiring decision. The results were so impressive that this is now a key part of Intuit’s recruitment process.

Another factor at work here, though, is the status quo bias, a powerful and widespread psychological force in business. The concept was introduced by researchers William Samuelson and Richard Zeckhauser, who showed in studies with many kinds of decision-makers, including managers, that “when making an important choice, people are more likely to pick the option that maintains things as they are currently.” When you’re enjoying success, your status quo bias is reinforced, which might be just fine. But given that after five, six, or seven years, market conditions will surely have evolved, it usually won't be fine to stick with the status quo later. When responding to those changes would involve making a substantial alteration to or even reversal of a winning strategy or to operational engineering you have orchestrated, the status quo bias makes recognizing the need for change and making the case for it to your team and board a good deal more challenging.

For acquisition, he shared, “We would look at almost anything that came up within the industry for sale, and we had four factors that drove our decisions. One, we would only buy number one or two share brands in their category. We did not believe we could take a dying brand and turn it around. Two, we wanted to buy businesses that had higher gross margin than out company average, so would help our gross margin. Three, we looked for asset-light companies. We didn’t want to buy a company with lots of factories or ones for which we’d have to build new factories. We preferred to bring operations into our own facilities. And four, we went for products that had some sort of advantage versus the competition that we could leverage with our marketing, sales, and operations muscle to make better.” That formula guided the well-measured acquisition of numerous leading brands during his tenure, including Spinbrush, OxiClean, Orajel, Batiste, and Vitafusion. These were businesses that his own business leaders had the expertise to run, and he folded them into Church & Dwight’s existing operations. Focusing on employees with R&D expertise, they kept, on average, only 10 percent of employees, many of whom joined the team at headquarters. “We doubled the size of the company,” he reported, without adding substantially to the number of employees.

Acknowledgments

We were fortunate to be surrounded by some of the best leadership advisers on the planet. We tapped into the wisdom of our colleagues Cathy Anterasian, Ellen Kumata, Tony Byers, Julie Daum, Ann Yerger, Sabine Vinck, Colin Graham, Jordan Brugg, and many others to gain additional context of the inner game that CEOs face day in and day out. Many of them connected us to exceptional CEOs we were keen to include in our research.