Many of you probably agree that the “ideas first” approach to innovation management has its drawbacks. In a complex and dynamic environment, companies can no longer afford to fire off ideas using an inefficient, trial-and-error shotgun principle. Targeted and successful innovation processes begin with an understanding of customers and their needs. But even within the “customer-centric” approach different methods exist to achieve this understanding, including Design Thinking and Outcome-Driven Innovation® (ODI), just to mention two prominent representatives. In this article, we would like to outline some of the differences and present a possible integration of the two approaches.
Customer-centric innovation approaches give the identification of customer needs a central significance in the innovation process. Design Thinking and ODI differ not only in how they identify customer needs – they differ even more so in their understanding of what a need actually is.
Design Thinking emphasizes the implicit, emotional needs of its research target group. As a consequence, Design Thinkers apply methods such as ethnography or role-playing to immerse themselves into a customer’s emotional situation. Product developers should feel firsthand what the customer’s problems and underserved needs are. The aim is to have the best possible “feel” for the customer’s needs. The idea behind this approach is, Design Thinkers would argue, that the actual customer needs cannot be articulated and are therefore latent.
Practitioners of Outcome-Driven Innovation®, on the other hand, take a different perspective: though customers may be an inferior source for verbalizing their emotional constitution, they are experts in their very own set of metrics for getting a job done successfully. Consequently, customers can express very well what jobs they want to get done and what outcomes they want to achieve; provided you ask them right questions!
The method stands and falls with clear and measurable customer needs (so-called “outcomes”). For this purpose, a special in-depth interview technique is used, which aims at getting behind any nebulous “feelings of need” until unmistakable, solution-free and universal outcome statements with long-term validity can be formulated. Here are two examples of outcome statements from an ODI study in the medical field: “Minimize the time it takes to assess how much tissue needs to be removed from a patient”. Or: “Minimize the probability that more tissue than necessary will be removed from a patient.”
On average, 100 to 150 outcomes are identified in an ODI project, which are then evaluated in a large-scale study according to the criteria of satisfaction and importance. The goal of quantitative research is to identify those customer needs with the greatest potential for value growth, which will then become the guidelines for the innovation process.
Difference 2: The process
Design Thinking is more of an attitude than a well-defined process. Design Thinking can be summarized as a combination of “the right people + the necessary freedom + the right approach” (source: SAP Innovation Lab Handout April 26, 2017). The phases in a Design Thinking process are therefore to be understood as rough instructions and can be carried out in different orders or several times.
The ODI process, on the other hand, consists of clearly defined, distinct and consecutive phases. Therefore, an ODI is manageable in terms of time and capacity. Furthermore, there are clear-cut outputs in each of the individual phases.
Difference 3: The origin
The idea behind Design Thinking is to apply the thinking and approach typical of (industrial) designers not only in the later stages in the design of a product, but already when needs are identified and ideas are developed. But there is a disconnect: Designing products is essentially a physical activity; understanding customer needs is a semantic activity and requires a semantic model. Strategyn’s ODI expert Rob Shade explains this in detail in his article “How to Save Design Thinking” published in The Marketing Journal.
Outcome-Driven Innovation® has its origins in the front end of the innovation process: the central idea is to build on clear and accurate customer needs not only in the beginning of the innovation process, but to maintain clarity and accuracy throughout the entire process, from understanding the problem to idea generation and concept development to concept evaluation. Thus, the outcomes identified at the front end can be traced back at any point in the idea generation process and they are also central criteria in the subsequent evaluation of competing product concepts. This ensures that only those concepts are implemented that significantly better meet underserved customer needs.
Which of the two approaches is more effective depends on the corporate culture, the industry and the individual situation. By taking out variability, Outcome-Driven Innovation® turns innovation into a manageable business process; the identified customer needs – since they are solution-free and thus valid in the long term – provide a guideline for product development, innovation strategy, innovation roadmaps, and for communication and sales measures for many years (see these ODI-based services from Edizon to learn more about what ODI can do for you).
Integrating ODI and Design Thinking into the innovation process provides clear advantages, if done smartly: successful companies first conduct an ODI study to identify strategic growth areas and then use the strengths of Design Thinking to develop winning solutions for clearly defined outcomes. This way it is possible to leverage the advantages of both approaches.
What is your opinion on similarities and differences, strengths and weaknesses of the two approaches? We are curious to exchange viewpoints with you! Write us on email@example.com or meet us at our new Innovators Talk.
“Businesses want to think in terms of categories. Consumers want us to think in terms of their needs.” ~ Clayton Christensen
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