A Software Organization's Path to Innovation and Value Creation

Have you ever read a requirement specification containing enough detail to make a modern pulp-writer envious? Yet, within a couple paragraphs your eyes glazed over, and you began wondering if the ten cups of coffee you drank this morning were possibly decaffinated? There is a better way. Welcome to Jobs-to-be-Done and Outcome-Driven Innovation. While this article will get into these concepts, you can find significantly more details in a book written by Anthony Ulwick, What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services.

Tenets of Customer Driven Innovation

The basic principles of Outcome-Driven Innovation and Jobs-to-be-Done concepts are extremely simple. Yet, buried within the simplistic notion lies an incredibly powerful idea. People buy products and services that help them get jobs done easier or faster. At its core, not too complex. I've repeated it in the list below for additional emphasis.

The 8 Step Innovation Process

In his book, Anthony Ulwick descibes an eight-step process to innovation, which is listed below.

Formulating the Innovation Strategy

Not surprisingly, the first step in this innovation process involves devising a plan. While I'd not describe this as a novel idea, failure to do so will likely cause the rest of the process to fail. So it's importance cannot be overstated. This is where you decide what product or service you are going to provide to a set of customers. The options are fairly simple. You can provide a product or service to new customers or existing customers, and it can either help them do a job better than they are already doing it, or it can help them get more jobs done. While there are a lot of details to figure out as part of this step, it's simplest form is actually quite powerful. You need to help a customer get more jobs done, or get a job done better!

There are a couple common mistakes to avoid when formulating your strategy.

• Make sure you consider the end user directly - this is especially true of organizations that primarily sell thru channel partners. Make sure you are speaking to the actual users of your service or product.
• Consider all relevant customers - it may seem easier to focus on a very specific set of customers, especially for organizations that are far back in the supply chain. However, failure to consider inputs from all types of customers often leaves significant opportunities undiscovered.
• Don't let one customer speak for another - It is extremely important to know who in the value chain makes the most important judgement of value, and then speak with them directly.

Capturing Customer Inputs

While many organizations capture customer input, many of these same organizations aren't able to make the distinction between input, and quality of input. Many are under the naive assumption that any input from the customer is good input. This is not true! A lot of customer input is only marginally useful. If Henry Ford had listened to his customers, he'd have built a faster horse.

What Job Needs to Be Done

However, this is not a customer's fault, but the producer's. Often when seeking input, their processes are misguided. They may ask customers which features they'd like, or which things they'd like changed with the product specifications. Maybe they've even asked the customer what their needs are. However, customers tend to provide input in the solution space instead of the problem space, even when they are not the best equipped to provide solutions. In these cases, the producer should always direct the customer's attention and input to the problem space. What job is the customer trying to accomplish? The producer can use this information to formulate the optimal solution, rather than building a solution recommended by the customer.

What Outcomes Determine Success

For each job that needs to be done, there are a set of criteria (outcome statements) that a customer will use to judge success. Each outcome statement contains a direction (minimize / increase), a unit of measure, and the outcome desired. For example, a software development team implementing a testing framework, it could be minimize the time it takes to run the test suite, or minimize the amount of code required to write a test, (or both). Often, a single job may contain 50 - 150 outcome statements.

Constraints

For each job that a customer is trying to accomplish, there are a set of constraints the make it more difficult to accomplish. This may be in the form of environmental, regulatory, physical, or cultural. Organizations that find creative ways to overcome these constraints are often well-positioned to create breakthrough innovations.

Identifying Opportunities

Identifying opportunities can be challenging. As such, there are a few mistakes that are commonly made during this process.

The equation to maximize opportunity is simple. It involves focusing on the jobs that are most important to the customers. Within the most important jobs, focus on the jobs that customers are currently least satisfied with the existing solutions. Of course, the difficult part of this is discovering what is most important, and what needs are poorly served. You'll have to figure out how to do that (since you are the expert in your market, not me), but it'll likely involve surveying your customers in some form or fashion.

Market Segmentation

It is quite common to segment the market by demographics, psychographics, purchase behavior, and needs-based segmentation. While all of these approaches can provide some value, the most value comes from outcome-based segmentation. This involves segmentation by the jobs the customer is actually trying to do. This also means that if an 85 year old grandma living in the middle of a corn field in Iowa is trying the do the same job as a 16 year old teenager living in the middle of Los Angeles (ie: trying to share photos with their friends), then they belong in the same market segment (even if only for this particular job). If you have trouble digesting this one, you'll have to take it up with Mr. Ulwick, as I don't consider myself an elite marketing mind. Or you could just read Chapter 4 of his book,

The Rest of the Process

The rest of the innovation process consists of targeting opportunities for growth, positioning current products, prioritizing projects in the development pipeline, and devising breakthrough concepts. However, those topics are getting beyond the realm of my expertise, and beyond my interest in researching them. You can feel free to do your own research.

Summary

By understanding what job the customer is trying to accomplish, and the performance measures that will be used to judge a product's performance, it becomes much easier to predict what the customer wants. This allows you to optimize messaging about your current product's advantages in ways that appeal to the underserved market, allows for appropriate prioritization of products in pipeline, and allows you to systematically devise ideas that address remaining opportunities. Go get started. Good luck!

Related Posts