An Introduction to Outcome-Driven Innovation

This paper by Tony Ulwick, Strategyn provides a summary of the Strategyn Outcome-Driven Innovation method, describing 8 key discoveries that define the approach. These are:

1. When it comes to innovation, the job, not the product, must be the unit of analysis.
2. The proper definition of “customer need” becomes clear when the job is the unit of analysis.
3. A job map provides the structure needed to ensure all customer needs are captured.
4. Concept innovation and design innovation are two different things, but can be addressed similarly.
5. The opportunity algorithm makes it possible to prioritize unmet needs.
6. Opportunities (which needs are unmet) dictate which market growth paths to pursue.
7. Scattershot brainstorming doesn’t work; sequenced and focused idea generation does.
8. Ideas can be evaluated with precision when all the needs are known.

Download An Introduction to Outcome-Driven Innovation Strategyn UK 2009(.pdf)

Here is an excerpt:

1. When it comes to innovation, the job, not the product, must be the unit of analysis.

Today, most companies support the theory that customers buy products and services for a specific purpose: to get jobs done. A job is defined as the fundamental goals customers are trying to accomplish or problems they are trying to solve in a given situation. Making the job the unit of analysis is the cornerstone of the outcome-driven innovation philosophy. From the customer’s perspective, it is the job that is the stable, long-term focal point around which value creation should be centered because the job’s perfect execution reflects the customer’s true definition of value.

Current products and services are merely point-in-time solutions that enable customers to execute jobs. They should not be the focal point for value creation. A vinyl record, a CD, and an MP3 storage unit, for example, all help customers accomplish the job of storing music. Focusing on creating a better record doesn’t help in the creation of the CD or the MP3 device, but focusing on improving the job of storing music supports the discovery and creation of new ways to help customers get the job done better.

This thinking, which we developed in the mid-1990s, has been widely cited and publicized by academics such as Harvard Business School professor Clayton Christensen and others in many articles and books. Accepting the job as the primary unit of analysis has important downstream ramifications: companies must stop thinking that customer needs somehow relate to the use of a product or service and instead must understand that needs relate to how well the customer is getting a job done. Figuring out how to help customers get a job done better or helping them get other or new jobs done is the real goal of innovation.

We have also discovered that customers have emotional jobs they are trying to get done when using a product or service. Knowing what these emotional jobs are can influence product design and help companies develop a more effective value proposition and marketing communications strategy.

2. The proper definition of “customer need” becomes clear when the job is the unit of analysis.

Because customers buy products to help get jobs done, if companies want to improve an existing product or to create a new product, they must figure out where the customer struggles in the execution of a specific job and then devise ways to help the customer. This means that companies must analyze the job of interest and ascertain from customers what must be measured and controlled to ensure the job is executed with the speed, predictability and output customers desire. The metrics customers use to measure the successful execution of a job are what we call the customers’ desired outcomes; they are customer needs. A corn farmer, for example, may want to “minimize the time it takes for the corn seeds to germinate” or to “increase the percent of plants that emerge at the same time.” When trying to help customers get a job done better, companies must find out which outcomes customers are dissatisfied with and then devise solutions that address the problems. This is where the term outcome-driven innovation originates. These metrics can be uncovered using any of the popular interviewing methods, e.g., personal interviews, focus groups, ethnographic interviews, etc.

I run the UK office of Strategyn and with our growing team, are delivering ODI projects in UK, Ireland, Germany, Scandinavia and Iberia.

If you have a question or comments on the paper, do drop me a note...

Download An Introduction to Outcome-Driven Innovation Strategyn UK 2009(.pdf)