12.09.2022

Growing into New Markets with Outcome-Driven Innovation®

In order to survive and thrive in the long run, every company needs to think about how to create more value. In principle, there are several avenues for generating value:

  • A company may generate more value in an existing market by identifying unmet needs and developing an offer to serve them better than any existing product or service does. This is the core of Outcome-Driven Innovation® (ODI), a methodology designed for uncovering hidden innovation potential in an existing market. However, the growth potential of existing markets is very often limited, as markets naturally face an ever-increasing competitive pressure and diminishing margins.
  • As a consequence, most companies come to the point where they have to leave their comfort zone and create value in adjacent markets. Growing into adjacent markets means that a company either helps new job executors to get a job done, that is already served by a company’s products or services. Or it may provide solutions for a new job that the current job executors are trying to get done.
  • Sometimes, strategy requires to leave familiar terrain entirely and explore the unknown by expanding into totally new markets. New markets are markets where both the target customer (= job executor) and the job-to-be-done are new to a company.

In 2020, my colleague Rita Zehetner published a blog article, where she provides a step-by-step framework on how to grow in existing and into adjacent markets. In her article, she argues that entering completely new markets poses a very high risk of failure.

However, there may be situations where the biggest innovation potential lies exactly in these white spaces, the uncharted terrain of new markets. Even if it is difficult to identify, assess and capture totally new markets, I am convinced that it is possible, and that ODI offers the right tools to do so. Let’s approach new markets by tackling the following three questions:

  1. How to discover a new market in the first place?
  2. How to evaluate a new market attractiveness?
  3. How to successfully grow into a new market?

If you feel like brushing up your knowledge on ODI methodology, check out the training formats of the JTBD Institute Europe, especially the JTBD E-Learning Platform.

 

1. How to discover a new market in the first place?

While in existing markets the focal point is on the job that job executors are trying to get done, we have to take a higher perspective when addressing totally new markets. Here the challenge is to identify all possible jobs-to-be-done in a certain area. We suggest to do this by creating a so-called “Job Inventory”.

The Job Inventory can be approached in two ways: Generally speaking, innovators may start out from a technology or a group of people when thinking about a new market. Starting with a technology in mind, possible new markets are identified by considering jobs that the technology in question could address. If you start with a group of people in mind, the resulting job inventory will comprise all kind of jobs these people are trying to get done.

Once a broad Job Inventory is created, the next step is to use clustering and correlation analysis to consolidate the information, and identify topics that cover as many jobs as possible.

See how this approach was employed by a mixed team of Jobs-to-be-Done Innovation Strategists and the New Business Development team of a leading daily media company. Existing users of daily media products were asked what jobs, tasks, and objectives they seek to address in their daily life related to a media product. This generated a long list of jobs-to-be-done, which were then quantified in a large-scale survey. The simple question of that survey was: How relevant is that specific job, task or objective on a quantitative scale? A statistical clustering and correlation analysis revealed seven major jobs-to-be-done that translated the original long list of tasks into a reduced set of jobs (e.g., “stay conversant in a popular topic”) that could then be used as jobs-based market definitions for that media company (see picture below “Why do people hire a daily quality newspaper?”).

 

2. How to evaluate a new market attractiveness?

Evaluating the attractiveness of completely new markets is the next challenge. Knowing market opportunities is not enough, internal criteria such as (core) competencies or strategic directions have to be considered as well. Therefore, it is even more important to proceed systematically, to define each market in the same way and to use the same criteria for evaluating market attractiveness.

Our partner Strategyn has developed a Market Selection Tool for this purpose, which you can download on their website. The Market Selection Tool includes more than 40 unique criteria to consider when evaluating which market to pursue. These criteria are, for example, the size and growth rate of the job executor base, the frequency of job execution, the percent of underserved customers, the willingness to pay more to get the job done better, but also company-internal criteria like feasibility with current capabilities or organizational aspects.

 

3. How to successfully grow into a new market?

Once the most promising market has been selected and defined through the Jobs-to-be-Done lens, the procedure from here on does not differ from that in existing markets. Now we reduce our flight altitude again, to take a closer view at under- and overserved needs in that market by using Outcome-Driven Innovation® (ODI).

However, when tackling a new market, there is a high probability that not all the necessary resources and competencies are available in your company. If this is the case, consider creating an ecosystem of partners who combine their strengths to better serve the customer’s job-to-be-done. To that end, check out our blog on creating an innovation ecosystem with the Jobs-to-be-Done framework.

In a nutshell, the advantages of Outcome-Driven Innovation® (ODI) – consistent customer-centricity, data-base and the systematic approach – are as helpful for identifying totally new markets as they are for existing markets. Let’s set off together for new shores!

What about your experience in growing into totally new markets? Should you have feedback or questions, just drop me a line:).

Why do people hire a daily quality newspaper?

illustration on why people hire a daily newspaper
Events ,JTBD Master Class , 05. Oct - 06. Oct, 2022

JTBD MASTER CLASS ADVANCED

Advanced training on putting Jobs-to-be-Done theory into practice with Outcome-Driven Innovation® to formulate a winning growth strategy, with …

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JTBD Strategy Class , 09. Nov, 2022

JTBD VIRTUAL STRATEGY CLASS

A new “Jobs-to-be-Done” Viewpoint on Strategy for Discovery & Quantification of Hidden Opportunities for Value Creation and Innovation. …

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