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From Management’s Point of View ~From Research to Implementation- Hypothesize/Verify/Execute/Adjust~

March 10, 2023

As the nature of my work involves various opportunities for research, it is important for me to think about how best to obtain results, as well as how to put those results into practice. Our approach to research at TOPC can be summarized as “hypothesize – verify – execute – adjust.” This is similar to what is commonly known as PDCA (plan – do – check – adjust), but it is significant that “plan” is replaced with “hypothesize.”

1. Hypothesize

  • If research is approached blindly, there will never be enough time to accomplish anything. It is, therefore, essential to form a hypothesis in order to decide on a direction to move in.

  • It’s okay even if the hypothesis itself is wrong. The important thing when forming a hypothesis is to think hard about “why” and dig deeply. The process will serve to verify whether or not the hypothesis is correct.

  • For example, someone thinking about managing a small restaurant might form a hypothesis that says, “It might be better to sell takoyaki rather than okonomiyaki.” The reasons for this might be “Because Americans like small round things,” or “Because it’s easier to eat something that is bite-sized.”

2. Verify

  • After formulating the hypothesis, you have to verify whether it is correct, and if you are moving in the right direction.

  • Having hypothesized that “takoyaki would sell better,” it would be too risky to open a takoyaki shop right away. It would probably be better to do some test sales. You might open a stall at a fair or festival in the US to see which of the two was more popular. If takoyaki did in fact sell better, it would be good to test whether you could expect enough sales to support a restaurant.

  • While verifying “what sells,” it is also important at this stage to confirm “why it sells.” For example, if many of American customers felt that, “the outer crust was deliciously crispy,” you would want to make it that way. You would also want to work on as many aspects as possible, such as the best-selling number of units in a package, or the desirable amount of seasoning. If you understand “why it sells,” you will see the direction to move in.

  • The significance of verification, then, is to determine the direction at a low cost.

3. Execute

  • Once you’ve decided to go with takoyaki, the next step is to execute.

  • The thing to be careful about here is becoming caught up in the many, complicated tasks of running a business, and forgetting about the basics. There is a huge amount of work associated with opening a shop, but the focus has to be on the main axes like selling price, cost of goods, location, staffing, the menu, and the taste of the food. These primary things should be firmed up through ongoing and repeated hypothesizing and verification. Other business-related matters can be assigned to employees or outside professionals.

  • By focusing clearly on the main things and not getting lost in the details, the shop will gradually turn into a stable business.

4. Adjust

  • Once the main axes are established and secured, the next thing is to adjust the specifics. In the process of continuing to sell takoyaki, for example, you would want to be investigating on a daily basis what aspects your customers like. If a lot of your customers feel that the chunks of octopus are too finely chopped, for instance, it would probably be good to focus on using larger pieces. You would want to be constantly gauging customer reactions, say, to the doneness of the crust, or to the octopus being used.

  • When the recipe has been perfected, it would be time to go back to the hypothesis stage with a new staple item for the menu.

Here, I’ve used the familiar example of a small restaurant, but in fact, all companies repeat these same four steps of hypothesis, verification, execution, and adjustment over and over again as they grow. I would say that it is unfailing attention to this mundane, repeated cycle that leads an organization to stable expansion.


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