Reinventing innovation for 25 years
Inspired by failure
Early in my career as a product engineer I experienced the ultimate professional disappointment—for 18 months I put my heart and soul into creating a product that failed in the marketplace. It was 1984 and I was part of the IBM PCjr development team. We were working on a product that was supposed to revolutionize home computing. In advance of its release The Washington Post wrote, “the PCjr will quickly become the standard by which all other home computers are measured”. So you can imagine my surprise when instead, the day after we introduced the PCjr I woke up to read the headlines in the Wall Street Journal declaring, “PCjr is a flop”. I was shocked! As we learned over the next few months, they were right—it was a flop: an embarrassment that cost IBM over a billion dollars and put a blemish on its reputation.
The humiliation of failure had a profound effect on me. I was determined to never let that happen again. In the weeks that followed I wondered how they called this correctly, and did it so quickly. It occurred to me that if we knew what metrics they (and potential customers) were going to use to judge the value of our product well before we introduced it, we would have the opportunity to design our product to address those metrics and achieve a positive result. This set me on a mission: as an engineer and a product planner, I wanted to figure out how we could identify the metrics that customers will use to judge the value of newly released products early on in the product planning process.
Over the next 5 years I studied and applied many new tools that looked promising, including voice-of-the-customer, quality function deployment (QFD), TRIZ, six sigma, and conjoint analysis. I studied everything that was written on these subjects and applied them in my product planning activities. I conducted hundreds of customer interviews and dozens of quantitative studies. I also worked with IBM statisticians to learn how to best apply conjoint, factor and cluster analysis to segment markets in a meaningful way. I worked as an internal IBM consultant, using what I learned to help different IBM teams formulate market and product strategies. IBM management was very supportive throughout all of this, which is something I appreciate to this day.
I was in Sydney, Australia with an IBM team in 1990 when I had a mental breakthrough. It occurred to me that we could apply six-sigma principles to innovation if we studied the “process” that people were trying to execute when they were using a product or service, rather than studying the product itself. This would allow us to break down the process the customer was trying to execute and study it in detail. The challenge would be uncovering the metrics that customers use to measure success and value as they go about executing these processes.
Validating the process
In October 1991 I left IBM and founded The Total Quality Group. The goal of this 1-man consultancy was to apply my newly envisioned process, which I called CD-MAP (to denote the concept of customer-driven maps), to product strategy and planning initiatives. One of my first clients was Cordis Corporation, a company that was trying to reinvent its line of angioplasty balloon products. I interviewed interventional cardiologists to break down and analyze the process they went through to restore blood flow in an artery. Through this qualitative research effort I constructed 75 uniquely defined customer need statements that I called desired outcomes. The statements were constructed to contain the metrics the interventional cardiologists were using to judge and measure their success as they tried to restore blood flow in an artery. With those inputs in hand, I conducted quantitative research to discover which of those outcomes were underserved. This resulted in the discovery of a number of unmet outcomes. I then facilitated a series of strategy sessions to help the Cordis team use these insights to create a new product line. In less than 18 months, the company launched 19 new products, all of which became number 1 or 2 in the market. Cordis’ market share increased from 1 percent to more than 20 percent, and its stock price more than quadrupled. Needless to say, I was thrilled: this was validation that my method worked.
I engaged in dozens of innovation initiatives over the next several years, achieving similar results with companies such as Motorola, Pratt & Whitney, Medtronic, AIG, Telectronics, and Allied Signal. Making process refinements with every application, I learned how to apply the process in multiple industries and for hardware, software and service offerings. The process became very robust as I continued to rid it of inefficiencies and variability and fine-tuned the way desired outcome statements were constructed. As the decade progressed I decided to rename the company and offering to communicate its focus on strategy and innovation. So around 1999 I changed the name of the company from The Total Quality Group to Strategyn and the name of the process from CD-MAP to Outcome-Driven Innovation® (ODI).
In 2000 I had the distinct pleasure of introducing ODI and our research and segmentation techniques to Harvard Business School professor Clayton Christensen in a series of meetings in Cambridge. He was quick to key in on the fact that the focus of our approach was not on the customer or the product, but rather on the underlying process the customer was trying to execute, or as he came to call it, the “job” the customer was trying to get done. Clay was kind enough to cite Strategyn and me as originators of these practices in his 2003 book, The Innovator’s Solution, where he popularized the idea that people “hire” products to get a “job” done. To this day, Clay continues to be a champion of jobs-to-be-done theory and a key contributor to its development.
One of the highlights of my career occurred in 2002 when Harvard Business Review (HBR) published an article I authored called Turn Customer Input into Innovation. Later that year Harvard Business Review recognized ODI as one of the best business ideas of the year, declaring it one of “the ideas that will profoundly affect business as we forge ahead in today’s complex times.” The success of that article helped to grow Strategyn as a business and inspired me to write a book on Outcome-Driven Innovation called What Customers Want. Released in 2005, the book explained in detail how ODI transforms jobs-to-be-done theory into an effective innovation process. Since that time I have had the honor of authoring other articles that were published in HBR and MIT/Sloan Management Review.
The road ahead
My career has been an ongoing learning experience. I have worked with the best and brightest people in industry and have seen innovation through the lens of many companies. I’ve had the privilege of contributing to the creation of products that save and protect lives, and make people’s lives more convenient and enjoyable. Today I continue to work with dozens of companies each year, helping them address their unique innovation challenges. We have built a great team at Strategyn and are well poised to achieve our vision—which is to make ODI the standard innovation practice in companies across the world.
Most popular publications
What Customers Want
McGraw Hill — June 15, 2005
In his best-selling book What Customers Want, innovation expert, Tony Ulwick explains how the jobs-to-be-done innovation theory is transformed into practice with his Outcome-Driven Innovation process. This book provides a new framework and process for innovation and growth. Clayton Christensen says, “Ulwick’s outcome-driven programs bring discipline and predictability to the often random process of innovation.”
Turn Customer Input Into Innovation
Harvard Business Review — January 1, 2002
In his first HBR article, innovation expert Tony Ulwick describes the foundational elements of his innovation process and describes how it was used by Cordis Corporation, a division of J&J, to create a new line of angioplasty balloons that increased their market share from 1% to over 20%.
The Customer-Centered Innovation Map
Harvard Business Review — May 1, 2008
Sure, people hire products and services to get a job done. While all this seems obvious, very few companies use this perspective to discover new opportunities for growth. This article describes the job map, an efficient system that companies can use to find new ways to grow.
Giving Customers A Fair Hearing
MIT Sloan Management Review — May 1, 2008
In over 95% of all companies, there is a lack of agreement on what a customer need even is. It’s no wonder that companies almost never know all their customer’s needs. In this article, innovation expert Tony Ulwick introduces a timeless definition of what a need is, what its content, format and syntax should be – and why.
As the leading product strategy innovation expert, Tony can help you address your most complex innovation challenges. Contact us to learn more.