Implementing pilot projects: Purpose, process, and best practices

Humans generally don’t like change all that much, opting instead for the comfort of familiarity. However, this can create problems for a product organization because aversion to change is one of the biggest enemies of innovation.

Anything that makes things different than what people are used to will make many people uncomfortable. In an organization, around 15-20 percent of people will be excited about changes, while 20-30 percent will be resistant; the remaining will take a watch-and-see approach.

The question becomes, “How can you innovate in a scenario like this?

That’s where a pilot project comes in. In this article, you’ll learn what a pilot project is, the key elements that go into one, and how you can implement and scale it.

What is a pilot project?

A pilot project is a way of testing something new before deciding upon further investment. Instead of making an entire upfront investment, the pilot project aims to test something on a reduced scale to assess whether it works. When it works, the organization can expand the project; when it doesn’t, it can cut costs.

Some people confuse a pilot project with a proof of concept (POC). However, they’re different. A pilot project represents a real-world scenario, while a POC evaluates whether the team can achieve specific goals.

Pilot projects are helpful to drive change because they aim to start small. When it works well, it’s easy to scale up. Here are a few examples:

• Changing how teams work — If you try deploying scrum to 100 teams, you’ll face loads of resistance, but you can gain support to deploy it with five teams and measure the results
• Operational change — In manufacturing, pilot projects evaluate whether a new method is worth the investment before adapting the assembly line around it

A real-world example of a pilot project

A few years ago, I worked for an automaker and one of our struggles was keeping the inventory accurate. We often had problems with missing spare parts. Worse, everyone knew the root cause: Manual work.

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We had a system in which whenever someone grabbed a part from the inventory, the person dropped the label in a box. Later, another operator would collect and read the labels, and the system would update the inventory. There were too many failure points in a single process, but changing it entirely would impact hundreds of people, and nobody wanted such a challenge.

That changed once an innovative engineer reimagined how we calculate the inventory. She said, “What if instead of dropping the label in a box, the operator goes through a kind of portal, which automatically reads the labels and sends it to our servers, and voi-là?”

Her idea inspired everyone to try it out, but we had people against it as many uncertainties still lay before us. Setting up a pilot project enabled us to stop talking about the work and start doing it.

We calculated our investment to change 10 percent of our operations, explore a new solution, and prove we can reduce inventory mistakes from 10 percent to 1 percent. We asked for two months of development time and one month running the pilot.

After getting the greenlights, we explored different solutions and found our way with RFID tags. Within six weeks, we had something to start our pilot. Although our first and second attempts failed, we learned about the issues and could correct the course. Then, we put it into the product and ran it for a month. The results were astounding; we decreased the error by less than a percentage.

The team got excited, and we scaled it up. First, we moved to 20 percent of our operations for another month, then 50 percent, and finally, we went all in.

I attribute the success to starting small with a pilot because it enabled us to pivot the solution when we learned some parts didn’t work. Also, we could observe the operations calmly while collecting real data. The pilot won the skeptical people, enabling us to transform how we managed the production inventory.

Steps for implementing a pilot project

At this point though, you might be asking yourself, “How do you gain support to implement a pilot project?”

Let’s take the previous example and break it down to what matters:

1. Find a problem worth solving — Identify something valuable to drive change. We identified the inaccurate inventory
2. Define a compelling objective — Second, commit to a goal that matters. We challenged ourselves to reduce inventory errors from 10 percent to 1 percent
3. Agree on the investment — Pilots come with a cost, and you must clarify that you can get their approval
4. Set the pilot timeframe — Pilots run for a limited period. Define how long you need to prove whether it’s worth progressing
5. Run the pilot — Observe how the pilot project operates in production. Be as close as possible to it
6. Measure results — Continuously evaluate the results. Strive to understand where the pilot is going and be open-minded to uncover potential improvements, even if that requires a pivot
7. Iterate — Your first pilot version probably won’t cut it, so you have to adapt to what works as you envisioned
8. Decide — As you reach the end of your pilot, you need to decide whether it was a success or failure. Be objective and make the call

Tips for scaling successful pilot projects

When your pilot succeeds, the next natural step is to scale it up. You may think you should just do an immediate rollout, but I’d encourage you to take a step-by-step approach.

Not everything that works with a small sample works with a bigger one. Here are my learnings and recommendations:

• Double the audience — First, double the sample and run for a certain period. It’s probably the same as the initial pilot. This’ll help you understand how the pilot behaves with a larger audience
• Gradually scale until you reach your whole audience — Once you double your sample and acquire the same results, you can gradually scale the reach as you get the expected results. For example, start with 5 percent, then 10 percent, 20 percent, 40 percent, 80 percent, and 100 percent. Of course, the numbers depend on your scenario, but the key is only to advance if you still collect the desired results
• Adapt as needed — You’ll uncover new use cases as you scale the reach, which is normal. Take your time to adapt it while keeping your eyes on the result
• Focus — It’s vital to remain focused on the pilot until you scale up to your whole audience. Sometimes, teams start moving to the next challenge, and the pilot team reduces when they are most needed. To ensure success, don’t do that

Key elements of a pilot project plan

You may wonder how you can pitch your pilot project, given that too many people are resistant to trying new things. Let me simplify that for you with the following template:

Keep it as simple as possible. No business case. No dozens of pages.

You need enough information on a single page that convinces people to learn more about it.

Here are the key parts:

• Name: Give a memorable name to your pilot project
• Goal: Your pilot must have a compelling goal
• Summary: High-level overview of the context.
• Investment: Estimate the high level of investment
• Duration: Set how long the pilot project will last
• Success criteria: Determine what you need to see to call it a success

Here’s an example of what we discussed earlier:

Key takeaways

Pilot projects are an important tool for helping you win support for complex projects. They aren’t the same as POCs, as they aim to run in production with a reduced sample. Despite the smaller size, they help you determine whether you should scale up or cut costs.

It’s generally a good idea to start as small as possible, while still allowing you to pursue relevant goals. Aim to incrementally deliver value, so that you can prove your need to scale up. Throughout the process, remain laser focused and stay open to learning and adapting from your findings.

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