A common language of innovation has the power to unite an organization in its effort to create new, breakthrough products. A common framework to understand the innovation problem opens the door to new ways to understand the solution. With the advent of jobs-to-be-done theory comes an opportunity to redefine innovation from the customer’s perspective; and an opportunity to understand and discuss innovation by seeing it through a new lens. These are the terms we use to define the concepts that comprise jobs-to-be-done thinking and our innovation process, Outcome-Driven Innovation (ODI). It is the jobs-to-be-done language of innovation.
The Language of Innovation
Since people buy products and services to get a job done, innovation is defined as the process of devising a product or service concept that helps customers get a job or jobs done better. The innovation process begins with market selection and ends with a product or service concept that is approved for development. Ideally, only winning product concepts enter the development process. To be approved for development, a winning concept must also meet company success and societal criteria.
Idea-first Approach to Innovation
An inherently flawed approach to innovation that starts with the generation of ideas and is followed by evaluation and filtering methods that determine which ideas customers like best without ever explicitly understanding all their needs. Although this approach is popular, the chances of coming up with an idea that precisely addresses all the unmet needs of target customers is near zero. This approach is analogous to a sharpshooter trying to hit a target without knowing what the target is or a doctor prescribing a treatment without observing patient symptoms. It is a time-consuming and costly approach that may never produce a winning concept. Because it is nothing more than guesswork, it will always result in low success rates.
Needs-first Approach to Innovation
An approach to innovation in which companies first uncover all the customer’s needs, then determine which are unmet, and then devise solutions to address those unmet needs. Historically, the needs-first approach to innovation has been ineffective, but the approach is not inherently flawed. The approach has been ineffective because in most companies there is no agreement on what a need is, and few companies believe all the customer’s needs can be captured. They have been told for years that customers can’t articulate their needs and that customers have latent needs, neither of which is true. (See “customer need”.)
Outcome-Driven Innovation (ODI)
Outcome-Driven Innovation is an innovation process invented by Strategyn in 1991 that has been tested and refined for over 20 years. It is an effective needs-first approach to innovation that has an 86 percent success rate.
Basics: What Is A Market?
The collective set of companies that offer solutions to help customers get a job done.
In the outcome-driven paradigm, a market is defined as a group of people (job executors) and the core job or jobs they are trying to get done. This is in stark contrast to the way companies typically define a market—usually in terms of the technology, product, or solution customers use to get the job done. The outcome-driven definition is need oriented rather than solution oriented. A market is defined in this manner so that the entire job the customer is trying to get done can be studied and so that all customer needs and potential innovation opportunities will be revealed. (See market selection.)
A plan that a company devises in order to achieve and maintain a unique and valued competitive position in a market.
New or Emerging Market
A new job that a group of customers want to get done because of changes in policy or conditions, scientific discoveries, or in support of a new technology, or a job that a significant group of customers now want to get done due to a demographic trend. New or emerging markets are uncovered using qualitative methods that analyze trends and other factors.
Inputs Into The Innovation Process
Company Success Criteria
The set of financial, strategic, and other criteria that a company uses to evaluate the attractiveness of markets, product platforms, business models, and features. Typically, these criteria go undefined and are not formally agreed upon or prioritized by management. They are rarely made transparent to the organization. Because these criteria are critical inputs into the innovation process, Strategyn has defined a unique and effective set, based on over 60 interviews with executives in a wide range of industries. This universal set of criteria is useful for evaluating the attractiveness of new markets, platforms, business models, and features.
Consumption Chain Jobs
The secondary functional jobs that customers must get done as they purchase, use, and take care of a product or service. For example, customers in many cases must acquire, receive, install, set up, learn to use, interface with, transport, store, maintain, upgrade, replace, and dispose of a product. Those tasks are not the primary reason for acquiring the product or service, but the customer must be able to perform them easily if the product or service is to be perceived favorably. Each of these 12 consumption chain jobs should be considered targets for design innovation, especially those that have a history of poor execution. Each consumption chain job has its own distinct job map and set of need statements.
Broadly speaking, a constituent in the customer chain, for whom the company chooses to create value. Although each constituent in the customer chain may be considered a customer, the primary customer in the customer chain is always the job executor. That is the person around whom the market has been created. Other constituents in the customer chain support the job executor and are trying to execute their own unique jobs. For example, the distributor performs the job of distribution and the purchaser performs the job of acquiring the product.
The group of downstream customers who manufacture, distribute, sell, or purchase a product or service as it makes its way to the person who ultimately uses the product or service to execute the job the product was intended to perform.
Customer Input Hierarchy
The structure and relationship of all the customer inputs that are needed to effectively execute the innovation process.
A metric that customers use to measure the successful execution of a job. When questioning customers about any given job, companies can expect to uncover between 50 and 150 such metrics, which are known in the outcome-driven paradigm as the customer’s desired outcomes because they explain what it is the customer is trying to achieve when executing the job. The name “outcome-driven innovation” originated from the discovery of these outcomes. (See customer needs.)
Synonymous with customer need, above.
The way customers want to be perceived or feel when executing a core functional job. When using a product or service, people may want to be perceived in a way that reflects their desired persona. They may also want to obtain a desired feeling. How they want to be perceived and how they want to feel are the customer’s emotional jobs. When driving a car, for example, a driver may want to be perceived as successful and environmentally conscious and may want to feel a sense of accomplishment. While products and services are created to help customers perform functional jobs, they are often positioned around the emotional jobs customers are trying to accomplish.
The primary task or fundamental goal a customer is trying to accomplish or problem the customer is trying to resolve in a given situation. Removing food particles from teeth, filing a tax return, and cleaning a car’s exterior are all examples of functional jobs that people try to get done. In addition to core functional jobs, there are also related functional jobs that people are trying to get done at the same time. These represent adjacent market opportunities. (See “Giving Customers a Fair Hearing,” in the Spring 2008 issue of the Sloan Management Review for additional details and rules to following when documenting job statements.)
A task, goal or objective a person is trying to accomplish or a problem they are trying to resolve. A job can be functional or emotional.
A visual depiction of a functional job, deconstructed into its discrete process steps, that explains in detail exactly what the customer is trying to get done. Unlike a process map, a job map does not show what the customer is doing (a solution view); rather, it describes what the customer is trying to get done (a needs view). Analysis of hundreds of jobs has revealed that all jobs consist of some or all of the eight fundamental process steps shown in Figure 4: define, locate, prepare, confirm, execute, monitor, modify, and conclude. This insight is essential for creating a framework around which customer needs (outcomes) are gathered. (To learn more about job mapping, see “The Customer-Centered Innovation Map” in the May 2008 issue of the Harvard Business Review.)
Discovering and Analyzing Unmet Customer Needs
Traditionally, a specific instance of the fourth of Strategyn’s six growth paths, in which the new platform only helps the customer get the job done more cheaply—not better—a strategy that works when the market as a whole is truly overserved. Although this situation has been given much hype, it rarely arises. As suggested in examples cited by numerous innovation experts, in many cases a disruptive platform will be improved or features will be added over time, eventually enabling customers to get the job done better. This suggests that the market was not actually overserved. Our findings indicate that while it is common to find that a small segment of a market is overserved, it is rare that any market as a whole is overserved. Our preference is to define disruptive innovation as the creation of a new platform that replaces an old platform and is attractive to a large segment of the target population.
Market Growth Paths
One of six ways in which a market can be successfully grown through innovation. The categorization scheme used to create the six growth paths includes three elements: the platform (core or new), the job executor (current or new), and the job (core job or other jobs). The growth path or paths that should be followed in a given market are dictated by the opportunities that exist in that market. For example, if a dozen or more outcomes cannot be suitably satisfied on the core platform, then the third and fourth growth paths should be considered. With insight into what jobs and outcomes are under- and overserved, a company can decide which paths to pursue. The paths are not mutually exclusive, and the best strategy may be to pursue all growth paths, if the opportunities exist.
A customer need that is both important and poorly satisfied (underserved), which makes it an attractive target for improvement, or a customer need that is unimportant and very well satisfied (overserved), which makes it an attractive target for cost reduction. This definition is need oriented rather than solution oriented. Nanotechnology, for example, may be a promising technology, but it is not considered an opportunity. The needs it satisfies are market opportunities.
The formula used to determine the degree to which a specific job or outcome is under- or overserved. Our experience has led us to conclude that an opportunity for value creation exists when the opportunity score exceeds 10.0, although lower scores may reflect opportunities in certain situations. Details on how to use the equation can be found in the book What Customers Want.
Opportunity-Based Segmentation (Needs-Based)
A method by which unique segments of opportunity—segments of customers with uniquely different need (outcome or job) priorities-can be discovered and sized. Opportunity-based segmentation is made possible when a “need” is defined as a desired outcome or a job and “unmet” is defined as important and unsatisfied per the opportunity algorithm. The opportunity score resulting from the opportunity algorithm is used as the numerical value around which this segmentation is performed. Under- and overserved segments are discovered and sized using this method. Job statements are used as inputs when a company is looking to discover segments of customers who have a unique desire to get certain jobs done (market discovery). Outcome statements are used as inputs when a company is looking to discover segments of customers who get a specific job done differently (market growth). (See market segmentation.)
Opportunity Landscape Model
A visual depiction of a market (core job) and the degree to which all customer needs (related jobs and/or outcomes) are important and satisfied. A view of the landscape gives instant insight into whether a market is under- or overserved. This serves as an input to accurately determine which of the six market growth paths (discussed above) to pursue in order to grow the market.
A market in which many of the customer’s desired outcomes are unimportant and well satisfied, (more satisfied than important). Customers in an overserved market are likely to adopt new products that will help them get the job done less expensively, even if the new products do not let them get the job done quite as well as the products currently available.
A market in which many of the customer’s desired outcomes are important and poorly satisfied. Customers in an underserved market are likely to adopt new products that will help them get the job done better.
A customer need that is both important and poorly satisfied. (See market opportunity.)