Unmet needs represent market opportunities
Looking through a jobs-to-be-done lens, we see that a market opportunity exists when customers struggle to get a job done. Indeed, addressing those unmet needs is the key to success. But in most companies, managers don’t agree on what a customer need even is. This means it’s impossible for them to know what all the needs are, let alone for there to be consensus on which are unmet. Our methods of prioritizing market opportunities work because they are built around our solid understanding of what a customer need is. Our opportunity algorithm (explained below) makes it easy for us to determine which customer needs are unmet and to what degree. Knowing which customer needs to address in priority order enables us to systematically accelerate company growth. This is a key output of our innovation process, Outcome-Driven Innovation (ODI).
Myths that mislead
Companies often define a market opportunity as a new product or technology they have created. They believe that finding a need that their technology or product offerings can address is the actual market opportunity, but that is a myth that misleads. A market opportunity does not exist because a company has a certain competency or has created something; it exists because customers are struggling to get a job done. Their struggles are the market opportunity: success comes from discovering what they are and helping them get the job done without the struggle.
The opportunity algorithm prioritizes market opportunities
We have discovered that customers consider between 50 and 150 metrics (their desired outcomes) when assessing how well a product or service enables them to successfully execute any job. These metrics are the customer’s needs. A customer need is unmet when it is important to the customer, but not well satisfied with the solutions currently available.
To discover which of these needs are important and unmet, we have devised a mathematical formula we call the opportunity algorithm, which says that market opportunity = (importance + max,0 (importance – satisfaction)). This formula reveals which customer needs are most important and least satisfied; the ones that represent the best opportunities for growth.
For instance, if circular saw users agree that minimizing the likelihood of the cut going off track is an important and unsatisfied need, then that need represents a market opportunity. The more important the need and the less satisfied the customer is, the greater the opportunity for value creation. We use sophisticated quantitative market research techniques to ensure the accuracy of our data, reducing the risk of failure and making sure we focus on the right opportunities for growth. (Learn more about discovering unmet customer needs.)
Our Opportunity Landscape has proven to be invaluable in helping us visualize the degree to which markets are over- and underserved. The landscape is a snapshot of all the customers’ needs: each dot in the landscape represents the degree to which a specific need is important to the customer and the customer’s level of satisfaction. Each market opportunity is highlighted in the landscape. Knowing a market’s underlying structure is critical for formulating the right innovation strategy. We discover hidden opportunities for growth by revealing where customers need help most. These market opportunities are also used as inputs into our market segmentation process, revealing unique segments of opportunity. 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. He explains how Cordis Corporation (now a division of Johnson & Johnson) used ODI to discover hidden market opportunities and increase its angioplasty balloon market share from 1 percent to 20 percent.
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 discover any hidden market opportunity that exists.
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 your innovation process. This article introduces timeless standards for defining the types of customer needs that exist and how we use them to uncover each market opportunity and create value for customers.
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 uncovering any market opportunity that exists.
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 ODI enables us to discover any market opportunity that exists and accelerate a company’s growth.
Download the white paper
Retiring the House of Quality
Quality function deployment (QFD) was created as a tool for product design, not as a tool for innovation. When applied to identifying market opportunities, this useful design tool fails to produce effective results. This article by Strategyn’s Tony Ulwick and Rick Norman and Richard Zultner of the QFD Institute makes a case for retiring the House of Quality as an innovation tool.
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 understanding market opportunities and an effective process for innovation and growth.
Choose from a dozen case studies with companies such as Microsoft, Ingersoll Rand, Bosch, and others, and learn how we have used our ODI methodology to identify market opportunities and help companies grow.