The 2019 Nobel prize for Economics was won by Abhijit Banerjee, Esther Duflo and Michael Kremer from MIT and Harvard University. The award this year has received even more publicity than usual, not because Duflo is only the second woman in history to have won this prize, but also because of the nature of their research on alleviating global poverty. A worthy cause no doubt, but it was their approach and methodology to this problem that was cited by the Nobel committee. Their mantra ‘what works, matters’ was demonstrated throughout their approach in designing multiple experiments at a small level and testing them in real world settings.

Not daunted by trying to tackle such an enormously complex subject as global poverty, they tested various small initiatives, tracked outcomes and demonstrated the power and feasibility of focussed field experiments that were ‘low cost, well designed and simple’.

Businesses are also facing an increasingly complex set of emerging conditions. In our book ‘Flex or Fail’, we explore a key aspect of this as to how AI and automation will drive transformational change and its potential implications on competitiveness, productivity and jobs. Businesses are of course facing many other factors such as the threat of an economic recession, changing demographics and global warming, to mention but a few.

What should business leaders do to evaluate this level of complexity and make rational decisions for the future of jobs and the longevity of their enterprises? In spite of policy advisors and consultants who are setting out various future scenarios, there is no ‘playbook’ out there that organisational leaders can truly rely on. Winning organisations will need to ‘design their own futures’, but how?

‘Framing the problem’ is the first and crucial step. This usually begins by formulating a hypothesis, a proposed explanation made on the basis of limited evidence, as a starting point for further investigation. Those with a scientific background will be familiar with this approach, often followed by observation, measurement, experimentation and analysis of results that may modify the starting hypothesis.

This may sound a bit ‘heavy duty’ for busy senior executives to follow, but back to our Nobel Laureates. They faced similar complex issues, but were able to address these by deconstructing them into a set of multiple small, well defined, simple and precise questions. These could be answered by crafting well designed experiments that were used to test solutions and discover outcomes that had real impact, and could be scaled up. 

Their preferred methodology of randomised controlled trials (RCT) is familiar to physicians as the ‘gold standard’ for defining efficacy and risk for testing new drugs and medical interventions. It is now becoming standard practice in development economics.

In a randomised controlled trial, subjects are randomly assigned to one of two groups: the ‘experimental group’ receiving the intervention that is being tested, and the ‘comparison group’ or control who follow the conventional approach. The two groups are then followed up to see if there are any differences between them in outcome. This approach seeks to achieve statistically validated results and avoidance of bias, which is a common problem in testing new solutions in business settings.  

 Like the Nobel Laureates, creating a ‘living laboratory’ within your organisation is both feasible and can drive competitive advantage. It can be achieved at a small scale within a controlled setting, and can be used by senior executives to answer the question “what works, and what doesn’t work” in a fast and iterative way. Results of the outcome of such experiments can be scaled up to drive organisational benefits. RCTs are of course not the only approach business can take, as other methodologies are available that may be simpler and quicker to deploy depending on the situation.

 Our experience of working with clients and analysis in the field can be distilled down to three ‘key success factors’ for business leaders to consider when establishing a ‘living laboratory’ within their organisations:

  1. Undertaking this kind of research within the business needs ‘top-level’ leadership. This is a new and innovative approach that needs to be championed and communicated from the C-suite
  2. Applying ‘intelligence-based’ crafting of the problem and selection of methodologies used to test solutions that mitigate for bias. This requires a small, but diverse high-performing team in terms of skills, knowledge and thinking.
  3. Bold decision-making at the ‘top-level’ to utilise findings that can drive positive change in order to realise competitive advantage

 In our book ‘Flex or Fail’, we describe the future of work and pay in an era of automation and outline a set of steps organisations will need to take to retain competitive advantage. We are working with organisational leaders to support deployment of these approaches to help develop solutions to complex problems that their industry and organisation may be facing in the future.

We cannot guarantee that you will win a Nobel Prize, but be assured that you will deepen your organisations insight, innovation and confidence when planning for the future. It’s time to write your own playbook… 

Please contact us at if you wish to be amongst a core group of innovative companies that are pioneers in the Flex Movement. RTA Consulting would be happy to provide consultancy support for your organisation on these topics, speak at your events or engage with you to expand the conversation.