Trade
December 10, 2015

The WTO’s Big Pivot

By Andrea Durkin

WTO entreprneurs

92% of startups fail within three years.

 Entrepreneurs and innovators don’t view failure the same as you and me.  Some degree of failure in the innovation process is accepted as inevitable.  Entrepreneurs don’t fear it, they drive toward it faster so they can learn from it and build it into the foundation of future success.  Failure can be valuable.

 One of the secrets to success in Silicon Valley?  Fail faster.

The startup community in Silicon Valley has embraced Lean StartUp principles for several years now.   Startups use the framework to hasten product takeoff. Enterprises use it to sustain product innovation and encourage intrapreneurship.  It’s how Dropbox went from 100,000 registered users to over 4 million in the span of fifteen months.  It’s why Adobe funds thousands of employee-driven “product experiments”.

How to learn from failure.

A core component of the Lean StartUp methodology is the “build-measure-learn” feedback loop.  Based on the identified market need, companies focus on building what’s called a “minimum viable product” or MVP.

The concept of an MVP refers to products or services that are developed just enough to test them in the marketplace in order to derive insights from customer engagement.  Pilots or experiments enable companies to measure response with data.  What they learn from the data on customer experience informs whether the company changes the product to build something better, or pivots altogether.

They aren’t just testing a product.  They are testing the idea of the product, enlisting early adopters, solving real problems, and learning what needs to be built.   In this environment, many failures are perceived as “good” failures because they reveal pathways to success.

As Amy Edmondson wrote in Harvard Business Review, “discovering new drugs, creating a radically new business, designing an innovative product, and testing customer reactions in a brand-new market are tasks that require intelligent failures.”

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Is the Doha Round too big to fail or too big to succeed?

The historic concept of a single undertaking wherein nothing is agreed until everything is agreed has been a useful construct for not leaving hard issues behind.  But the WTO’s membership has grown substantially and Members’ economic priorities and levels of development differ significantly.  The volume and nature of modern global commerce adds complexity to the traditional dynamics of negotiating global trade deals.  The composition and scope of the WTO’s remit is not itself a concern, but trying to negotiate on too many topics at once may be.

74% of startups fail due to premature scaling.[ii] Whatever other challenges, the scope of desired agreement is proving an insurmountable hurdle.

Failure might be the WTO’s best option.

 The WTO’s value proposition to generate economic opportunities for its Members large and small is clear, and the agenda of the Doha Round is packed with topics that are worthy.  That’s a great place to build anew.

But the minimum viable product of the Doha Round has been market-tested for nearly thirteen years now and it may simply be time to take the lessons on board and make the big pivot to a new format.

Build-Test-Learn

What if the WTO reexamined and segmented its customers, determined the global marketplace’s underserved needs in terms of disciplines and norms, and redefined its value proposition in the realm of global trade negotiations?

What if the WTO then rebuilt its minimum viable product and instead of working toward a large package of agreements, developed some prototypes with early adapters, say in the areas of trade facilitation (TFA), trade in services (TiSA), information technologies (ITA2), and environmental goods and services (EGA) to name a few.

The insights from those negotiations and agreements become part of the feedback loop to create new and better products from the standpoint of the customer-private individuals and companies trading their goods, services and ideas.

A step closer to success.

The WTO needs to fail faster if it intends to keep pace with commercial developments.

If the Ministers agree to pivot in Nairobi next week, it will not be a failure of negotiators to find a path forward and it will not be a failure of political will.

It will be a sign that the WTO Members are ready to pull insights from the experience of Doha to find future paths to success.