Toolbox for growth and innovation – the outcome-driven innovation process

The author challenges traditional ways of gathering information for innovation in products and services. In this book, Ulwick introduces an outcome-driven innovation process, which he presents as new and productive.

The book has a refreshing point of view on customer involvement and distribution of work between customers and experts. It is important to know precisely what inputs an organization or a company wants from the customers in order to find business opportunities and create value. According to the book, a significant business opportunity lies in knowing which outcomes are important and which unsatisfied needs the customers has. After exploring these factors, solutions are evaluated and carried out by the experts.

Based on our understanding of the book and the outcome-driven innovation method, we started to think of the methods as an “innovation toolbox”. Ulwick is offering the following 8 tools in his book:

1 You need an innovation strategy!

Your organization has to have an innovation strategy for value creation. Be prepared to define the following steps for the innovation strategy:

  • Value for whom? How?
  • Is the focus on products, services, markets where no-one has gone before, operational or disruptive innovations? Think of your organization’s market situation.
  • Customers buy products or services in order to get tasks, “jobs”, done, yes. Which jobs do you want to help the customers get done? A product or service can make things easier or better for the customer or more jobs can get done with it. There are also non-consumers who are not satisfied with the existing solutions, and also jobs that nobody is doing yet because no solution is provided for them.
  • Where in the value chain is the focus on value creation?

2 Know exactly the type of information you need: Customer inputs

What does a customer input mean and why is that relevant information to your business? Customer inputs are information on what outcomes customers want to achieve. Experts need customer inputs in order to be able to devise the best solutions to the outcomes. To identify the right type of feedback is crucial in this step. It is essential to know precisely what type of information is needed and in the outcome-driven innovation process jobs, outcomes and constraints are the desired inputs. Also, a common language is a necessity. No vague or ambiguous concepts allowed.

3 Define and discover opportunities

To find hidden opportunities one has to thoroughly research a job, outcome or constraint. Significant opportunities are the ones both important and unsatisfied by the existing solutions. What does belong to an outcome driven research? The methodology includes:

  • Customer interviews
  • A survey, where importance of the jobs outcomes and constraints (from pre-research, interviews) are evaluated and satisfaction with the available solution is expressed
  • The opportunity algorithm. It is determined in the algorithm which jobs, outcomes or constraints are under- or overserved.

Having important and unsatisfied outcomes figured out the organization decides where it should invest in.

4 Segment the market in the outcome driven way

In the outcome-driven innovation process customers are segmented based on the outcomes they are trying to achieve. It is not done by product, price or demographics. Concentrate on segments with opportunities! Other criteria are that segments should be homogeneous in membership but different from  another. Furthermore, the segments should be predictable in behavior and reachable by the company’s actions.

5 Targeting Opportunities for Growth
After exploring the existing opportunities within a given market in the prior chapters of this book, this chapter is about devising an effective and specified targeting strategy. In order to do so, consider broad-market opportunities first, then segment specific opportunities. Have a closer look at related opportunities, that can form a theme and technology development related opportunities aiming toward long-term growth. Interestingly, he is proposing that a product or service should deliver all the performance that can be absorbed, but no more. Customers shall not feel they are paying for more than they are using. And what is different about targeting for innovation? It is not targeting towards a market or customer segment, but targeting towards opportunities that are represented in over- or underserved markets.

6 Positioning Current Products
It is important to sell a product, that is clearly addressing the highly underserved outcomes. Furthermore, customers shall be clearly informed about the products advantages by using a solid messaging strategy. In order to do so, it first has to be determined if there are flows in the current messaging and to specify these flows.
More interesting was the introduction of the idea of branding products to reflect the job they are helping people to get done. By doing so, people get reminded of the brand every time they think about the job to be done.

7 Prioritizing Projects in the Development Pipeline
Additional growth can be reached by determining which of the initiatives in the product development pipeline does the best job in serving the remaining targeted underserved outcomes. In this evaluation process, time is an important aspect as well as the possibility to create additional customer value.
New features of products are not likely to impact the outcome. Therefore, when adressing new features, it is most important to evaluate the features ability to serve specific targeted outcomes and not to measure the features’ overall score.

8 Devising Breakthrough Concepts
The key ingredient to successful idea generation is a target. It is important that the employees really know all the targets that the customers are trying to achieve and which ones are underserved in order to be able to focus when brainstorming.
Ulwick states, that the key reasons for failing to come up with breakthrough ideas in traditional brainstorming sessions are:

  • Managers fail to activate the employees’ creative energy
  • Managers measure the outcome of ideation sessions in quantity instead of focusing on the quality of the ideas
  • Managers simply lack the right tools for selecting valuable outcome.

Bad ideas have to be eliminated quickly to avoid worthless effort and wasted money. The best ideas have to be optimized for cost, effort, risk and sustainability to be taken further.

Conclusion
We share Ulwick’s point of view on customer involvement and work distribution between customers and experts. Furthermore, “Knowing exactly what kind of job the customer wants to be done through the product or service”, is in our opinion a very valuable point and new angle he is offering in his book and the heart piece of his theory, which really will stick at least to our heads.
However, we have to mention, that by this time of the studies, we have already been reading several other books and some of them, like Blue Ocean Strategy, Leading the Revolution and Open Services Innovation, for example, where highly inspiring to read due to the novelty of information. This book did not strike the same mark.
While the book is fairly easy to read and very well structured, it is written in a very redundant style, repeating the same points up to 3-4 times. It feels like the author really tries to make the content stick to the readers head, but he definitely missed to catch us that way.  In addition, we did not connect very well to the chosen examples, mostly they were too specific and not engaging.

Reference:
Anthony W. Ulwick, What Customers Want – Using Outcome-Driven Innovation to Create Breakthrough Products and Services. 2005. McGraw-Hill Companies, Inc.

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