OUTCOME-DRIVEN INNOVATION® Jobs-to-be-Done Theory in Practice

“THE PCjr IS A FLOP” Wall Street Journal 1984

Hypothesis: If a product team could know in advance what metrics its customers were going to use to judge a new offering, it could optimize the product to address those metrics—and predictably deliver a winning solution.

FIRST SUCCESS In 1991 I led an effort to help Cordis Corporation break down and analyze the process cardiologists went through to “restore blood flow in a blocked artery.” Opportunities were revealed, prioritized and addressed. By mid-1993, Cordis launched 19 new angioplasty balloon products, all of which became number 1 or 2 in the market. Its market share increased from 1 percent to more than 20 percent. This work also led to the development of the stent—the fastest growing device in medical history. ODI has been refined and proven over 26 years.

“Ulwick’s outcome-driven programs bring discipline and predictability to the often random process of innovation.” – Clayton Christensen
 “I call him the Deming of Innovation because, more than anyone else, Tony has turned innovation into a science.” – Philip Kotler
 THEORY IN PRACTICE

“Innovation becomes much more predictable—and far more profitable—when it begins with a deep understanding of the job the customer is trying to get done.” “Innovation can be 100% predictable.” – Clayton Christensen PREDICTABLE INNOVATION

INCREASE CHANCES FOR SUCCESS 5-FOLD ODI IS PHENOMENALLY SUCCESSFUL Strategyn engaged an independent researcher to compare the success rates of innovation methods. The results show that while traditional methods yield a 17 percent success rate on average, the success rate of ODI is 86 percent. The chances of success increase 5-fold when using the Outcome-Driven Innovation process.

INNOVATION
 
 
 “The process of devising solutions…that address unmet customer needs.”

IDEAS NEEDS THE IDEAS-FIRST APPROACH IS INHERENTLY FLAWED Companies work to brainstorm, iterate and “fail fast” in order to discover the solutions that will address the customers unmet needs.

THE NEEDS-FIRST APPROACH MAKES MORE SENSE This approach applies marketing 101 logic. But while it makes intuitive sense, it doesn’t yield significantly better results. Why? IDEAS NEEDS

There isn’t agreement on how to define a “need” or on what types of needs exist.

Solutions Specifications Problems Requirements Customer Needs Wants Must haves Exciters Delighters Value drivers Latent needs Unarticulated needs Expectations Characteristics Desires Wishes Attributes Features Benefits Ideas Jobs Table stakes Anxieties Pains Gains Inspirations Behaved values

According to traditional VoC practitioners, a need statement could be anything that follows: • Assumptions of what a product should do • What a customer wants a product to do • What a customer would be surprised/delighted to see a product do • A benefit of using the product • The function a product performs • What a product lets you do • A detailed description of how a customer wants a product to perform • A problem that a product solves • An issue the customer is having • Criteria for success • A statement of a fundamental problem in a given situation that needs to be solved • A customer’s task demands VoC PRACTITIONERS DO NOT AGREE

NEEDS
 
 
 In the innovation equation
 “needs” must be defined as a constant.

“People don’t want a quarter inch drill, they want a quarter inch hole.” —Theodore Levitt CHANGE THE UNIT OF ANALYSIS Six Sigma principles can be applied to innovation when studying the “underlying process” that people are trying to execute while using a product or service, rather than studying the product or the customer. This thinking led to our innovation process: OUTCOME-DRIVEN INNOVATION®

JOBS-TO-BE-DONE OFFERS A NEW PERSPECTIVE When looking through a Jobs-to-be-Done lens, customers, markets, needs, segments and opportunities look different. i. People buy products and services to help them get a job done ii. The “job”—not the product—is the unit of analysis iii. A “job” is stable over time, making it a constant in the equation

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”— tied to the job-to-be- done 01. Define the market: job executor and “job-to- be-done”

Insert Picture here THE DATA MODEL MAKES INNOVATION PREDICTABLE Value creation becomes more predictable when you know the customer’s unmet needs and are able to assess how much better competing solutions/ideas will help the customer get the “job” done. DESIRED OUTCOMES OPP Minimize the time it takes to determine if/ where any dissections have occurred 12.4 Minimize the time it takes to position the balloon across the lesion 14.1 Minimize the time it takes to open the blockage 5.2 Minimize the likelihood of restenosis (recurrence) 16.4 Minimize the likelihood of damaging a vessel during the procedure 12.7 Minimize the time it takes to determine the location of an advancing balloon in the patient 10.5 Minimize the time it takes to advance the balloon to the lesion 9.5 Minimize the time it takes to stop patient bleeding at the entry point 8.1

ODI INSIGHTS INFORM DECISION MAKING FOR YEARS TO COME The data model aligns teams with a common language and understanding of customers and their needs. The model drives customer-centric and data- driven decision making across the organization. Marketing Product planning Product development and design Digital, IoT, M&A, R&D, business model Customer experience Product portfolio management ODI Data Model

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”— tied to the job-to-be- done 01. Define the market: job executor and “job-to-be-done”

LP market MP3 market CD market Streaming market MARKETS ARE OFTEN DEFINED AROUND PRODUCTS All products will eventually become obsolete. But when a product goes away, it doesn’t mean the underlying market disappears.

LP market MP3 market CD market Streaming market DEFINE THE MARKET AROUND THE JOB-TO-BE-DONE People don’t want LP’s, CD’s, or 8 track tapes. They want to listen to music. The job-to-be-done doesn’t go away, even after a product is long gone. Listen to music

JOB TO BE DONE
 
 
 Can be anything a group of people are trying to accomplish.

MARKET = “JOB EXECUTOR” + “JOB-TO-BE-DONE” By defining a market as a job executor with a functional job-to-be-done, ODI provides a new avenue for market analysis. Listen to music Music enthusiasts

MARKET = “JOB EXECUTOR” + “JOB-TO-BE-DONE” By defining a market as a job executor with a functional job-to-be-done, ODI provides a new avenue for market analysis. Create a digital asset Business professionals

MARKET = “JOB EXECUTOR” + “JOB-TO-BE-DONE” By defining a market as a job executor with a functional job-to-be-done, ODI provides a new avenue for market analysis. Parents Pass on life lessons to children

MARKET = “JOB EXECUTOR” + “JOB-TO-BE-DONE” By defining a market as a job executor with a functional job-to-be-done, ODI provides a new avenue for market analysis. Cut a piece of wood in a straight line Tradesmen

MARKET = “JOB EXECUTOR” + “JOB-TO-BE-DONE” By defining a market as a job executor with a functional job-to-be-done, ODI provides a new avenue for market analysis. Legal teams Discover information that supports/refutes a case

MARKET DEFINITION IS CRITICAL AND NOT ALWAYS EASY Most products only get part of a job done. Don’t ask “what job does my product do.” Instead ask “what job is the customer trying to get done.” Prepare a hot beverage for consumption Boil water

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”—tied to the job-to-be-done 01. Define the market: job executor and “job-to- be-done”

JOB, JOB STEP, OUTCOME HIERARCHY Once the job-to-be-done is defined, we create the job map and collect outcomes within each step of the job. Job Step 4 Job Step 3 Job Step 1 Job Step 2 Job Step 5 Job Step…n Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Core Functional Job

THE JOB MAP IS USED TO ANALYZE THE JOB-TO-BE-DONE A Job Map details, step by step, what the customer is trying to get done—not what they are doing. 
 A Job Map is solution agnostic and applies across geographies. One map per market. The Customer-Centered Innovation Map, Harvard Business Review, 2008 Confirm Verify Monitor Execute Define Plan Locate Gather Prepare Organize Modify Conclude

JOB MAP FOR ‘LISTENING TO MUSIC’ – FUTURE VISION The job map reveals what function the ultimate solution must provide to get the entire job done on a single platform. It outlines a roadmap for growth. Confirm Confirm the music plan Monitor Monitor the experience Define Assess the situation Locate Gather the desired music Prepare Order the music for listening Modify Modify the music selection Conclude Assess the experience

MP3 PLAYERS GET MORE OF THE JOB DONE While the LP and CD only enable the execution of the “listen” step, the MP3 solution gets more of the job done. Confirm Confirm the music plan Monitor Monitor the experience Define Assess the situation Locate Gather the desired music Prepare Order the music for listening Modify Modify the music selection Conclude Assess the experience

STREAMING SERVICES GET MORE OF THE JOB DONE Using your preferences, Pandora picks music for you and keeps track of what music you want to hear again. Confirm Confirm the music plan Monitor Monitor the experience Define Assess the situation Locate Gather the desired music Prepare Order the music for listening Modify Modify the music selection Conclude Assess the experience

JOB, JOB STEP, OUTCOME HIERARCHY Once the job-to-be-done is defined, we create the job map and collect outcomes within each step of the job. Job Step 4 Job Step 3 Job Step 1 Job Step 2 Job Step 5 Job Step…n Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Outcome Core Functional Job

THE “DESIRED OUTCOME” STATEMENT The perfect “need” statement has these unique characteristics and is called a “desired outcome”: • Stable over time: constant in the innovation equation • Tied to the job-to-be-done • A metric customers use to measure success when getting a job done • Measurable/controllable in the design of the product/service • Solution agnostic • Predictive • Research-ready • Cross-functionally applicable Company Customer

LISTENERS HAVE MANY DESIRED OUTCOMES A desired outcome is a structured statement that defines how customers measure value and how a company can create it. Giving Customers a Fair Hearing, MIT Sloan Management Review, 2008 Minimize the time it takes to get the songs in the desired order for listening. Direction Object of control Metric Contextual clarifier

LISTENERS HAVE MANY DESIRED OUTCOMES Over 100 outcome statements are often needed to detail how customers measure the successful execution of the job. Confirm the music plan Monitor the experience Assess the situation Gather the desired music Order the music for listening Modify the music selection Assess the experience Minimize the time it takes to determine how much music will be needed, e.g., minutes, etc.

LISTENERS HAVE MANY DESIRED OUTCOMES Over 100 outcome statements are often needed to detail how customers measure the successful execution of the job. Confirm the music plan Monitor the experience Assess the situation Gather the desired music Order the music for listening Modify the music selection Assess the experience Minimize the time it takes to determine the order in which to play the songs

LISTENERS HAVE MANY DESIRED OUTCOMES Over 100 outcome statements are often needed to detail how customers measure the successful execution of the job. Confirm the music plan Monitor the experience Assess the situation Gather the desired music Order the music for listening Modify the music selection Assess the experience Minimize the likelihood that the music sounds distorted when played at high volume

Insert Picture here OUTCOMES FUEL A PREDICTIVE MODEL FOR GROWTH Outcomes remain stable over time. Solutions change over time to satisfy the 100+ outcomes, enabling customers to get the job done better. Having a complete set of customer outcome statements is the holy grail of innovation: a complete and agreed upon understanding of the customer’s needs. Desired outcomes Minimize the time it takes to determine how much music will be needed -- -- -- -- Minimize the time it takes to determine what songs to include -- -- + ++ Minimize the time it takes to determine the order in which to play the songs -- -- + ++ Minimize the likelihood that the music sounds distorted -- ++ + ++ Minimize the time it takes to remove songs that you no longer want to hear -- -- + + Solutions

THE JOBS-TO-BE-DONE NEEDS FRAMEWORK Desired outcome 71 Desired outcome 72 … Desired outcome n Desired outcome 51 Desired outcome 52 … Desired outcome n Core functional job 50 – 150 desired outcome statements Get the core job done better and/or more cheaply. Job executor Related jobs Related job 1 Related job 2 Related job 3 Related job 4 Related job 5 Related job 6 Related job 7 … Related job n Help get more jobs done. Job executor Emotional jobs Emotional job 1 Emotional job 2 Emotional job 3 Emotional job 4 Emotional job 5 Emotional job 6 Emotional job 7 … Emotional job n Add emotional appeal. Job executor Purchase Receive Install Setup Learn to use Interface with Maintain Upgrade Replace Consumption chain jobs Desired outcome 91 Desired outcome 92 … Desired outcome n Improve the user experience. Job executor, other Financial outcomes Financial outcome 1 Financial outcome 2 Financial outcome 3 Financial outcome 4 … Financial outcome n Enhance the business model. Buyer

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”— tied to the job-to-be- done 01. Define the market: job executor and “job-to- be-done”

ODI-BASED RESEARCH REVEALS UNMET NEEDS Statistically valid quantitative research reveals hidden segments, competitive strengths, unmet outcomes and more. When [job step], how important is it to you that you are able to: When using [solution], how satisfied are you with your ability to: Not at all important Somewhat important Important Very important Extremely important Not at all satisfied Somewhat satisfied Satisfied Very satisfied Extremely satisfied Outcome 2 Using side-by-side ratings reduces both the actual length and perceived length of the survey for respondents. Minimize the time it takes to get the songs in the desired order

0 2 4 6 8 10 0 2 4 6 8 10 Outcome THE OPPORTUNITY LANDSCAPE Opportunity score = importance + max (importance – satisfaction, 0) Minimize the time it takes to get the songs in the desired order for listening Importance - - - V E IMP 5 5 9 47 34 8.1 81% Satisfaction - - - V E SAT 12 28 30 17 13 3.0 30% Opportunity Score 13.2 13.2 30% of the sample rated the outcome very or extremely satisfied. 3.0 81% of the sample rated the outcome very or extremely important 8.1

0 2 4 6 8 10 0 2 4 6 8 10 Outcomes THE OPPORTUNITY LANDSCAPE The analysis reveals with precision where the market is under- and over served. Importance - - - V E IMP 5 5 9 47 34 8.1 81% Satisfaction - - - V E SAT 12 28 30 17 13 3.0 30% Opportunity Score 13.2 13.2 3.0 8.1 Underserved Overserved Table Stakes

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”— tied to the job-to-be- done 01. Define the market: job executor and “job-to- be-done”

NOT ALL JOB EXECUTORS ARE ALIKE Segments of customers with different unmet outcomes exist because people struggle differently when executing the job-to-be-done. Demographic, psychographic and attitudinal segment classifications do not reveal segments of customers with different unmet outcomes. Traditional segmentation methods cause companies to target phantom segments.

GENDER DOES NOT REVEAL UNIQUE OPPORTUNITIES Our research proves that segmenting a market around gender does not reveal significant customer differences. 0 2 4 6 8 10 0 2 4 6 8 10

AGE DOES NOT REVEAL UNIQUE OPPORTUNITIES Our research proves that segmenting a market around age does not reveal significant customer differences. 0 2 4 6 8 10 0 2 4 6 8 10

OUTCOME-BASED SEGMENTATION The only way to find segments of customers with different unmet needs is to segment the market around unmet needs. Factor Group 1 Factor Group 2 Factor Group 3 Outcome 10 Outcome 3 Outcome 4 Outcome 11 Outcome 5 Outcome 8 Outcome 2 Outcome 9 Outcome 6 Outcome 1 Outcome 7 The variables serve as a solid basis for segmentation. Variable 1 Variable 2 Variable 3 Statistical-based clustering process Cluster analysis places respondents into a predetermined number of groups (segments) based on how they rated the importance and satisfaction of the segmentation variables. Segment profiling exercise The most important insight is figuring out what is causing respondents in one segment to struggle more/differently than others. This insight leads to the creation of statistically valid “personas” or segment descriptions.

ON AVERAGE A MARKET MAY APPEAR WELL SERVED But the average customer does not exist. There are always segments of customers with different unmet outcomes. 0 2 4 6 8 10 0 2 4 6 8 10

DISCOVER HIDDEN SEGMENTS OF OPPORTUNITY Outcome-Based Segmentation reveals under- and overserved segments, their size, and which outcomes to target for growth. 57% 24% 0 2 4 6 8 10 0 2 4 6 8 10 19% of respondents 57% 24% Differentiated Disruptive Sustaining

0 2 4 6 8 10 0 2 4 6 8 10 21% of respondents 45% 34% DISCOVER HIDDEN SEGMENTS OF OPPORTUNITY Outcome-Based Segmentation reveals under- and overserved segments, their size, and which outcomes to target for growth.

0 2 4 6 8 10 0 2 4 6 8 10 31% 34% 35% DISCOVER HIDDEN SEGMENTS OF OPPORTUNITY Outcome-Based Segmentation reveals under- and overserved segments, their size, and which outcomes to target for growth.

0 2 4 6 8 10 0 2 4 6 8 10 18% of respondents 26% 56% DISCOVER HIDDEN SEGMENTS OF OPPORTUNITY Outcome-Based Segmentation reveals under- and overserved segments, their size, and which outcomes to target for growth.

0 2 4 6 8 10 0 2 4 6 8 10 15% of respondents 21% 33% 31% DISCOVER HIDDEN SEGMENTS OF OPPORTUNITY Outcome-Based Segmentation reveals under- and overserved segments, their size, and which outcomes to target for growth. Differentiated

Target = Job executor Segment Outcomes Knowing the target increases a company’s chances for success 5-FOLD

INNOVATION BECOMES PREDICTABLE Bosch successfully entered the competitive and commoditized North American circular saw market with a saw that got the job done better. Rafter hook Redirected air flow Direct Connect Positive bevel stop “The CS20 was a hit with both users and channel partners. It was also recognized as one of the top 100 innovations in 2004 by Popular Science.” —Jason Shickerling, Product Manager

INNOVATION BECOMES PREDICTABLE Kroll Ontrack successfully entered the electronic evidence discovery market with an offering that got the job done better and more cheaply. “Knowing what outcomes were most underserved enabled the team to focus on what mattered most to the customer. After two failed attempts, Strategyn and ODI helped us disrupt a market and grow to a position of market leadership.” —Ben Allen, CEO

OUTCOME-DRIVEN INNOVATION® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined metrics to the customer’s "job-to-be-done”. 05. Use the data model to formulate a winning growth strategy 04. Discover hidden segments of opportunity 03. Quantify the degree to which each need is under/overserved 02. Uncover the customer’s “needs”— tied to the job-to-be- done 01. Define the market: job executor and “job-to- be-done”

ODI INSIGHTS INFORM DECISION MAKING FOR YEARS TO COME The data model aligns teams with a common language and understanding of customers and their needs. The model drives customer-centric and data- driven decision making across the organization. Marketing Product planning Product development and design Digital, IoT, M&A, R&D, business model Customer experience Product portfolio management ODI Data Model

ARE YOU DEVELOPING A PCjr?
 
 JTBD + ODI MAKES INNOVATION PREDICTABLE

@ulwick asktony@strategyn.com Jobs-to-be-Done.com – articles and canvas Jobs-to-be-Done-book.com – free book download Put Jobs-to-be-Done Theory into Practice

INTEGRATING ODI INTO YOUR ORGANIZATION Take your product teams on a unique innovation journey—help them see their markets through a Jobs-to-be-Done lens. Phase 01 Gain agreement on what a need is and what the customer’s needs are Phase 02 Gain agreement on what segments and unmet outcomes exist Phase 03 Gain agreement on the plan to address the targeted unmet outcomes • Educate the team on JTBD and ODI • Translate the team’s customer insights into the JTBD Needs Framework • Refine and validate the set of outcomes with external customers • Gain cross-functional team agreement on the set of outcomes • Prepare a survey to collect importance and satisfaction data on each desired outcome statement • Translate the survey into required languages • Create the sample design and field the survey • Obtain results, conduct analyses and build the data model • Study and interpret the results of the research • Use the data model to build a market and product strategy • Teach others to use the data model to make growth decisions and/or facilitate sessions to guide team members.

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Market = group of people using the same product (milkshakes) Market milkshakes differently to the target “segment” Modify the milkshake for the “segment” CHRISTENSEN’S JTBD THEORY IN PRACTICE Goal of Milkshake Marketing: sell more of a product that already exists Select the “segments” to target Discover a unique circumstance of product use Discover a unique circumstance of product use Discover a unique circumstance of product use Discover a unique circumstance of product use Assess competing solutions Assess competing solutions Assess competing solutions Assess competing solutions Describe each segment in terms of the JTBD (a complex, multilayered story with functional and emotional components)

Market = a group of people with a common job-to-be-done Market existing products to each target segment Create new solutions that get the job done better and/or more cheaply for each segment ULWICK’S JTBD THEORY IN PRACTICE Goal of ODI: Create the ultimate solution for groups of people with a job-to-be-done Select the “segments” to target Describe each segment in terms of the unique circumstance that is causing its population to be under/over-served Define a complete set of customer needs: outcomes tied to the core job, consumption jobs, etc. Segment the market around the unmet outcomes (discover/size statistically valid segments of opportunity) Define the job executor and the “job” they are trying to get done