The Experimenter Series: Academic Collaboration with Professor Maria Guadalupe
The Experimenter Series is a collection of six interviews with people pioneering scientific experiments in large organisations. This time, we speak to Professor Maria Guadalupe at INSEAD, on collaborations between academia and the private sector.
This interview series sheds a light on experimental research in the workplace, exploring how different people from diverse companies make it happen. I’m Gus Lindemann, a behavioural researcher at MoreThanNow, fresh off LSE’s Psychology of Economic Life masters programme. As I’ve now spoken to two talented pioneers from the private sector, it’s time to turn to academia. In this episode, Maria shares how collaboration between the private sector and academia is beneficial for all, and she should know! Maria is not only a professor of economics at INSEAD, she’s also director of their RCT Lab and a member of the illustrious Thinkers 50 list.
“Sometimes the most valuable experiment is where things don't work. Because that's the one you want to stop, right?”
Maria Guadalupe
Gus: Hi Maria! Thanks so much for taking the time to meet with me. I have heard such great things about the work you have done. Could you tell me a bit about yourself to kick things off?
Maria: Of course! I'm a professor of economics at INSEAD. I was trained at LSE as well; I got my PhD there. I started as a labour economist, but when I joined the business school I transitioned to studying employees and organisations more broadly. So, I would now call myself an organisational economist. Because of the kind of questions I ask and historically speaking, labour economics has always been very focused on the use of data. It is about really trying to get as much data as you can, then thinking about it in a sophisticated way to get out the right kind of information. And for the last eight years, I decided that instead of using existing data (collected by governments or other institutions), I would try to work with companies to generate new data. And that's where experimentation comes in. We are now at a time where developments in data collection have led to a great opportunity to really learn; to truly learn how organisations work, what works, what doesn't, and how can we make them work better. In the midst of these developments, field experiments remain the best way to get at causality.
It is not always such an easy sell, as not every question lends itself to an experiment. So, one of the things I did shortly after I joined INSEAD in 2012 was to create an RCT lab. This is a platform to have companies partner with INSEAD, faculty and PhD students to develop RCTs. I try to collaborate with companies directly, or with people like MoreThanNow, to help leaders think about how to design their interventions and to help them answer the questions that they have in the most scientific way possible.
G: Well, it is such amazing work you have done. A real pioneering job.
“We always want to find something that works. But it’s almost more valuable to know that it doesn’t work, so that you can stop that.”
M: It's been quite painful, I can tell you that. In all honesty, my batting average is not very high, in the sense that I've talked to so many more companies than that I have managed to conduct field experiments with! [laughs] But when I speak to my colleagues, they share the same experience, it is just quite hard to realise. The requirements to run an experiment are significant. But as I tell my MBA students when I teach them about organisations, even if you cannot run a field experiment, you should have an experimental mindset when you go about doing anything. When you are about to implement a new policy, a new rule, a new strategy, just something new in an organisation, that you question it. That you think “how am I going to know whether this is working or not?” In experiments, one big lesson is that sometimes the most valuable experiments are where things don't work, because that's the one you want to stop, right? If something is not working as it should, you should stop it immediately. We always want to find something that works. But it's almost more valuable to know that it doesn't work. A bit paradoxical, but true.
G: That is a really good lesson to keep in mind. But it must be quite intimidating for people who aren’t that familiar with experiments, where it is easier to maybe turn a blind eye. So, you said it has not been the easiest road, what do you think are some of the blocks on your end on trying to get corporations to do experiments?
M: I think it has several layers. One is a very pragmatic layer, where I was saying before that some questions that cannot be answered with experiments. If you have a new company strategy, it's going to be hard to randomise your company strategy and try several strategies to see which one will work best. That's the kind of question that doesn't lend itself to experimentation, from a company perspective. What I also found is that you need senior management to be fully committed to the process and be open-minded. Because experiments can be perceived as risky, and you need someone to take responsibility for running it. Also, it needs to be an environment where failure is rewarded. This does not mean that you want to fail but more that there is a willingness to explore and that finding a mistake is rewarded. That it is a place and a culture where data and information are not seen as a threat.
All this, paired with an organisation that will dedicate the time and resources, and you’ll get to a world where leaders are informed by data and make decisions based on evidence, which I think has been lacking for too long. Although Covid has made the value of science so much more common to everybody: it has made science more visible and shown that when you get it right you can save lives. In a world with so much uncertainty, complexity, and volatility the value of good answers is so important. So, I think that companies should be adopting this kind of stuff, not because it is fashionable, but because it gives the right answers.
G: Very thought-provoking. It sounds like you're at such an interesting point between academia and practice. How do you find those two worlds?
“I’m not going to tell a company the answer they want to hear, I’m going to tell you the truth. ”
M: Ideally, one would not see so much of a difference in the sense that a company can be a kind of laboratory. A company has real needs and things they want to discover. We always work very hard to know, what are the needs of the company and how can we help them either evaluate something that they want to do already or something new they had not thought about. We can help design the rollout and the implementation so that they can generate data that is useful. The value we bring as academics lies in our independence. I’m not going to tell a company the answer they want to hear, I’m going to tell them the truth. With academics, we have an external perspective, so we can call it as it is and help companies gain more transparency. And of course, we bring the skills. Having done many experiments, in many places. Having devoted our lives to this skill-set that is often hard to match in the private sector, you know, we're like, the nerds that make this happen! There are also things we do not have, which is why I think collaboration is so insightful and I learn a lot from it. That is what I discovered from this research and why I love it because I learn a lot. The other thing I love about field experiments is that it has a direct impact. Through some of the research that I have done, I have been able to directly see the positive impact it has had. Regardless of the science, you have a direct impact on people and organisations and that I find extremely rewarding.
G: That's so amazing. I really struggled with that sometimes in my masters I was so deep into the theory you just lose touch with reality. And I think it's so cool that you're doing research that has an impact on people’s daily lives.
M: Going from one to the other is actually a privilege. Because when you really work in a company you live in the day-to-day real world. When you spend too much time in academia, you live in that ivory tower, the bubble. And I think the value is in being able to go from one to the other and back again and have both talk to each other, which for me is a lot of fun. It’s about learning right? In the end, it is so fun to learn from the differences.
G: And I think experiments can be so surprising. Like there are so many tiny things that you wouldn't expect to discover, and they just roll out and are there. So, do you think there's a shift in recent years in how we perceive experiments? Or do you think things will change for experimental research?
M: I think it's going to accelerate. I think there's a demand from companies. I hear from more companies that now know about experiments and want to explore how they work in practice. In a way, it is similar to what happened with big data, where 10 years ago it was just in its beginnings and now it has so much influence. I’ve also noticed a trend that a lot of people from academia are moving to the private sector, just because companies need experts to be able to help them do this research right. In my opinion, this is only going to grow.
G: I completely agree. And organisations are such cornerstones of society, you are touching people’s daily lives with this research, making such an impact in my opinion. That's why I think your work with Novartis on psychological safety is really incredible.
M: Yeah, I have big hopes for it. It has been fantastic to work with MoreThanNow, with James and Zsofia. It's a brilliant group of talented, creative people that also know the science very well. It’s been a really great collaboration.
G: That is really nice to hear. Yes, I am very happy to be here it is such an amazing company and such an exciting field. Is there anything else I have forgotten to ask that you’d like to mention? Or what you think is important to say from an academic point of view?
M: Coming back to what I was saying earlier, that academia can bring in an external perspective and skillset. That's where when I see the value of collaboration; the willingness to explore and to learn from each other. Working with diverse people with diverse perspectives and diverse insight is actually where the most interesting things come up. To make it work, there's there needs to be this openness to learn and to be vulnerable to hear what the other side knows that you don't.
G: It’s so true. It's very different from management consulting, where you basically pay to get your right answer. I think it's very cool.
M: Absolutely. And maybe the more you pay, the more you think it's the right answer!!
G: Exactly! A real confirmation bias. Experimental research in that sense is very brave. And I think, the most sustainable option because at least you really know what works. Well with that, I’ll say goodbye Maria. Thank you so much for your time and wonderful insights.
“In a world with so much uncertainty, complexity and volatility, the value of good answers is so important. So, I think that companies should be adopting this kind of stuff, not because it is fashionable, but because it gives the right answers and installs an experimental mindset.”
A massive thank you to Professor Maria Guadalupe, who was so kind to share her thoughts. It was very inspiring to hear that even someone as knowledgeable as Maria keeps on learning from experiments. A good lesson for us all!