Review

At any moment, I have a short queue of product books I want to read. I try to follow long books with shorter ones, so I don’t lose momentum. I naively thought this book would be a quick read, but it isn’t. It’s insight-dense and concise, making it hard to get through.

The author has created and trademarked a product innovation process that he claims has an 86% success rate. That’s great news for us right? Well. Hold on. The catch is it seems impractical to do, and it’s trademarked, so you’ll need to hire his consultancy to do it with you.

I love this book. The author critiques and discards much of what is standard in the industry. It’s difficult to read as it will challenge some of your beliefs. I’d love to try the full 84-step process one day, but I think I’ll need to be in the C-suite to actually implement it.

For now, I’ll use parts of the process in a less rigorous way, despite the author’s advice against it.

Key Takeaways

The 20% that gave me 80% of the value.

• Data showing success rates of traditional innovation processes average 17%, the success rate of ‘Outcome Driven Innovation’ is 86%.
• Companies can increase the chances of successful innovation if they know ‘what metrics customers use to measure success and value’ when getting a job done.
• Goal of innovation → come up with solutions that address unmet customer needs
• Two existing schools of thought on innovation:

Ideas-first approach: come up with ideas, test them with customers to see if they meet their needs.

• Generate lots of large ideas then quickly and inexpensively filter out ideas they think will fail (using stage gates)
• Three reasons why it won’t work
  1. Generating lots of ideas doesn’t meaningfully improve the chances that you’ll generate the optimal idea that will satisfy unmet customers needs. It’s like a doctor making the right prescription without knowing the symptoms
  2. The evaluation and filtering process is flawed… because the customer needs are not known and which of them are unmet isn’t known, the best solution is likely not in the consideration set, customers might not be able to make the connection between the product/service and their needs
  3. Customers can’t articulate the solutions they want
• Companies using the ideas-first approach to innovation struggle to achieve success rates greater than 10 to 20%

Needs-first approach: learn what the customer’s needs are, determine which of those are unmet, devise a solution to meet them

• Companies nearly always fail to uncover all or even most of the customer’s needs
• Obtaining inputs in the customers own words results in the wrong inputs
• Many companies assume it’s impossible to get a complete set of customer needs
• Companies try to satisfy needs without a clear definition of what a need even is

• Jobs-to-be-done theory provides a framework for categorizing, defining, capturing and organizing all of your customer’s needs. Tying customer-defined performance metrics (in the form of desired outcome statements) to the Job-to-be-done
• Knowing the customers needs allows you to unlock better strategy by revealing hidden segments of opportunity and determining which needs are under-served or over-served
• Customers are more loyal to getting a job done – than they are to companies

• Jobs-to-be-done Needs Framework
  • We must consider different types of customer needs: Core functional job / Related jobs / Emotional jobs / Consumption chain jobs / Financial outcomes
  • Job: the overall task the customer is trying to execute
  • Outcome: the metric the customer uses to measure success and value while executing a job

• Customer need statements are mutually exclusive – defined independently of each other
• A complete set of customer needs is collectively exhaustive
• The goal of innovation is to device solutions that address unmet customer needs. So we need to…
  • Know the needs
  • Know which are unmet
  • Check for segments of customers with different unmet needs
• You’re looking for a segment of customers with unmet needs you can serve – that make up a big enough % of the market to make it attractive
• The core functional job:
  • is defined in a single statement: “monitor a patients vital signs”
  • is the anchor around which all other needs are identified
• A functional JTBD has three unique and extremely valuable characteristics:
  1. A job is stable, it doesn’t change over time
  2. A job has no geographical boundaries
  3. A job is solution agnostic
• Uncovering the customer’s desired outcomes (and metrics of success) is the real key to success at innovation – it’s more important than defining the actual job perfectly.
• To uncover the customer’s desired outcomes – we dissect the core functional job into it’s component parts using a job map. desired outcome statements explain precisely how customers measure success and value as they go through each step. of the core functional job.

• New products and services win in the marketplace if they help customers get a job done better (faster, more predictably, with higher output) and/or more cheaply
• The JTBD Market Growth Strategy Matrix:

• Your product needs to be significantly better or cheaper … small changes won’t have the same effect.
• Uber example:
  • Uber Lux → charging significantly more for significantly better
  • UberX → charging less for better
  • UberPool → charging significantly less for worse
• Imagine trying to launch a differentiated strategy in a market that was over-served… there would be nobody looking to spend more as they’re already satisfied. You’d fail. This is the power of JTBD to select macro strategy.

Outcome Driven-Innovation

• Outcome Driven Innovation = a comprehensive, customer-centric, data-driven innovation process that is built around Jobs Theory
  • ODI links a companies ‘Value Creation Metrics Activities’ to ‘Customer-defined performance metrics’
• 10 Key Steps
  1. Define the customer
  2. Define the Jobs-to-be-Done
     • Define the job statement in the correct format
       • Job statement = verb + object of the verb (noun) + context clarifier
       • E.g. Listen to music whilst on the go
  3. Uncover customer needs
     • Outcome Statement = Direction of Improvement + performance metric + object of control + contextual clarifier
  4. Find segments of opportunity
     • Differences in needs don’t come from demographics or psychographics
     • To discover segments of customers with unmet needs, you need to segment the market around unmet needs
  5. Define the value proposition
     • know where customers are under-served
     • secure the value proposition that communicates to customers that their needs can be satisfied
     • do everything to satisfy the unmet needs better that competition
  6. Conduct the Competitive Analysis
     • Knowing how customers measure value, and how the competition stack up enables an organization to create products and services that get the job done better or more cheaply
  7. Formulate the innovation strategy
  8. Target hidden growth opportunities
     • Opportunity Score = outcome importance + (outcome importance – outcome satisfaction)
  9. Formulate the market strategy
  10. Formulate the product strategy

• Define your customer as a job executor. Ask customers what jobs they are trying to get done – instead of asking them what solutions they want.
• Other benefits to using ODI:
  • Cost reduction – you’re only working on the things that matter
  • Enhanced speed to market – everyone understands what’s important and what needs to be delivered
  • Enhanced credibility – you don’t get questioned by internal stakeholders so much

• Doing ODI is incredibly involved – 6 phases and 84 steps 😖
  • Initiate an ODI project (15 steps)
  • Uncover the customer’s needs (18 steps)
  • Gather quantitative data (18 steps)
  • Discover hidden opportunities for growth (10 steps)
  • Formulate the market strategy (12 steps)
  • Formulate the product strategy (10 steps)
• Innovation shouldn’t be everyone’s responsibility – a small group of people doing ODI can inform market and product strategy. It’s a mistake to train everyone and get them ‘doing innovation’. Keep the majority of the company building. Most companies are great at building products. Build a team of ODI practitioners – who form the core of an innovation center of excellence
• Build it in three phases:
  1. Understand your customers jobs to be done
  2. Discover hidden opportunities in your market
  3. Use new customer insights to drive growth