The Power of Experiments: Decision Making in a Data-Driven World
Michael Luca and Max H. Bazerman
The MIT Press (March 2020)
How to do very well “what all good scientists do. Experiment.”
Opinions are divided, sometimes sharply divided, about the origin of what is generally referred to as “the scientific method.” For present purposes, let’s view it a process of rigorous thought by which to conduct scientific inquiry. Perhaps since Aristotle and at least since the 17th century, its purpose is to differentiate truth from non-truth. Verification is usually conducted through experimentation. That is, testing the given hypothesis or assumption.
According to Michael Luca and Max H. Bazerman, “This book will help to develop and draw out principles that will help managers make the most of experimental results…Our goal is to help readers gain an appreciation of experiments and avoid common pitfalls. We’ll demystify the experimental method, which is at times cast in alarmist tones.”
Every day in the business world, there are questions to be answered and problems to be solved. Luca and Bazerman provide an abundance of information, insights, and counsel that will help prepare their reader to answer the right questions and to solve the right problems, doing so with the power of experimentation.
More specifically, Part I (Chapters 1-3) includes “a broad discussion of the potential of experiments and the factors that have led to their proliferation. In the process, we’ll describe the nerdy and fascinating history of the experimental revolution, including the earliest known experiments, advances in scientific methods, the rise of social science labs and field experiments, and the recent proliferation of companies and governments running their own experiments.”
Next, in Part II (Chapters 4-10), Luca and Bazerman “cover the central role experiments play in the tech sector — drawing out lessons and best practices from a series of notable experiments covering companies ranging from Airbnb to Uber to eBay.” And then in Part III (Chapters 11-15), they examine “how behavioral experiments in organizations are helping to shed light on health, education, and financial decision-making — leading to processes and products that better account for the many quirks of human behavior.”
Hopefully, this brief commentary tells you what you need to know so that you can decide whether or not to read this book and then, if read, how you can derive the greatest benefit from it when answering the questions and solving the problems you encounter, whenever and whereverv they may be needed, within and beyond a workplace.
I now defer to Michael Luca and Max H. Bazerman who review, in the final chapter, the following five overarching themes for those who want to leverage experiments in their organizations:
1. “We are at the beginning of ab experimental revolution”
2. “Much of this [development] has been good.”
3. “Because experimentation makes organizations smarter, they have negative effects as well.”
4. “Experiments are valuable well beyond the tech sector.”
5. “There is still a lot of work to be done.”
They also note “four common ways that experiments are helping to improve decisions with organizations” and briefly discuss them. However potentially valuable this book may be, each reader must employ effective experimentation to make that verification by answering questions and solving problems in our data-driven world, both within and beyond a business context.