An innovation strategy should inform
An innovation strategy is a plan to grow market share or profits through product and service innovation. When looking at innovation strategy through a jobs-to-be-done lens, we see that an effective strategy must correctly inform which job executor, job, and segment to target to achieve the most growth, and which unmet needs to target to help customers get the job done better. When it comes to creating the solution, an innovation strategy must also indicate whether a product improvement, or a disruptive or breakthrough innovation approach is best. Unfortunately, most innovation strategies fail in these regards, which is why innovation success rates are anemic.
Myths that mislead
Innovation strategy is not about selecting activities to pursue that are different from those of competitors. This is the myth that misleads. Selecting activities is not strategy. An innovation strategy is about creating winning products, which means products that are in an attractive market, target a profitable customer segment, address the right unmet needs, and help customers get a job done better than any competing solution. Only after a company produces a winning product or service should it consider what activities are needed to deliver that product or service.
Why focus on activities?
To formulate an effective innovation strategy, a company must know all its customers’ needs, which needs are unmet, and what segments of customers exist with different unmet needs. But in most companies, managers can’t agree on what a customer need even is, so of course they don’t know what all those needs are, let alone which are unmet or what needs-based segments exist. Given this situation, there is no way they can successfully formulate an innovation strategy that will help customers get a job done better. And this is why companies focus on activities instead. Activities are something tangible that companies can control. Unfortunately, activities merely enable competitive advantage, they’re not the reason for it.
Formulating an innovation strategy
The truth is, competitive advantage and differentiation are derived from choosing the right unmet customer needs to target. To do this, all the customers’ needs must be known. Our approach to formulating an innovation strategy works because it is built around a solid definition of what a customer need is, and our approach reveals all the customers’ needs. It is the only process to do so. We have discovered that customers consider between 50 and 150 metrics when assessing how well a product or service enables them to successfully execute any job. These metrics (or desired outcomes) are the customer’s needs, and the power behind our innovation process, Outcome-Driven Innovation (ODI).
The qualitative, quantitative, and analytical methods that comprise our ODI process provide the insights we need to formulate a robust and reliable innovation strategy. ODI-based strategies work because they reveal what needs-based segments exist, if those segments are under- or overserved, how big they are, and what unmet needs are unique to each segment. They also reveal if a new platform is needed to drive growth.
Most companies have never had customer insights like this before, nor the decision-making advantages that come along with them. Using ODI, we determine which strategy is best, allowing us to make the winning move. Learn more about our growth strategy consulting services.
Turn Customer Input into Innovation
In this timeless 2002 Harvard Business Review article, Tony Ulwick first introduces the concept of Outcome-Driven Innovation and the opportunity algorithm to HBR readers. He explains how Cordis Corporation (now a division of Johnson & Johnson) used ODI to formulate an innovation strategy that increased its angioplasty balloon market share from 1 percent to 20 percent. Learn More
The Customer-Centered Innovation Map
In this groundbreaking 2008 Harvard Business Review article, Tony Ulwick and Lance Bettencourt reveal an important discovery they made while turning the jobs-to-be-done innovation theory into practice: job mapping. A job map breaks down the job the customer wants to get done into specific process steps, enabling us to formulate an effective innovation strategy. Learn More
Giving Customers a Fair Hearing
In this provocative article in MIT Sloan Management Review, Tony Ulwick reveals how a customer need must be defined within the jobs-to-be-done framework to become a useful input into the innovation process. This article introduces timeless standards for defining the types of customer needs that exist and how we use them to formulate an innovation strategy that creates customer value. Download the article
Silence the Voice of the Customer
This white paper by Strategyn founder Tony Ulwick highlights the business advantages of using our ODI methods to capture and prioritize customer needs. It explains why traditional voice-of-the-customer (VOC) practices continue to fail and makes a solid case for retiring VOC as a method for understanding customer needs. Download the white paper
What is Outcome-Driven Innovation
Outcome-Driven Innovation (ODI) is the most effective innovation process that exists today. This white paper by Strategyn founder and ODI inventor Tony Ulwick explains why innovation has historically been an ineffective process, the discoveries he made that led to ODI, and how we use it to formulate innovation strategies that accelerate company growth. Download the white paper
A New Perspective on Strategy
The goal of business strategy formulation is to create a unique and valued competitive position. This white paper by Strategyn founder Tony Ulwick offers a different perspective on strategy, explaining why customer needs (not company activities) are the basic unit of competitive analysis. Ulwick also introduces the innovation strategies we use to drive company growth and beat the competition.
Download the white paper
What Customers Want
What Customers Want, the best seller by innovation thought leader Tony Ulwick, explains what Outcome-Driven Innovation (ODI) is and why it works. Ulwick, who pioneered jobs-to-be-done thinking and invented ODI, details how ODI transforms jobs-to-be-done theory into a practical method for formulating an innovation strategy that drives company growth. Learn More
Choose from a dozen case studies of companies such as Microsoft, Ingersoll Rand, Bosch, and others, and learn how we used our ODI methodology to formulate innovation strategies that help companies grow. Learn More