It takes more than just luck at Caesars

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in Best-Practices Leadership,Firing,Management Training

While theft is a firing offense at Caesars, so too is running an experiment without a control group.

Gary Loveman, CEO, president and chairman of Caesars Entertainment, puts a continued focus on data analysis and small-scale testing that can scale into companywide initiatives.

The goal: To get customers to spend more money during their playtime.

Loveman observes that leaders often make the mistake of relying on their ex­perience and analysis over simple experiments. His advice to fellow leaders:

Get over a romantic appreciation for instinct. What’s lacking is rigorous scientific approaches.

Intuit founder Scott Cook also encourages trial-and-error approach. He tells his staff: “Whatever happens, you’re doing right, because you’ve created evidence, which is better than intuition.”

If aggressive testing is such a no-brainer, why aren’t more companies doing it? Chalk it up to an old-fashioned aversion to change.

Dan Ariely, author of Predictably Irrational, often has tried to help companies do experiments but usually fails.

For example, for a company struggling with getting a good bonus system in place, Ariely suggested experiments or even just a survey.

Management said no. They “didn’t want to add to the trouble by messing with people’s bonuses merely for the sake of learning,” says Ariely. “But the employees are already unhappy, I thought, and the experiments would have provided evidence for how to make them less so in the years to come.”

Leadership lesson: Strive to create a culture of experimentation in which the inevitable failures are deemed OK.

 — Adapted from “In Experiments We Trust,” Leslie Brokaw, MIT Sloan Management Review.

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