Educate yourself on selected topics about customer-centric innovation through white papers and published articles.
Learn how Liebherr-Transportation Systems, a manufacturer of heating, ventilation, and air conditioning systems for vehicles, successfully entered a new market that was dominated by two incumbent companies at the time. Although the market seemed saturated at first glance, outcome-based segmentation enabled Liebherr to identify two attractive customer segments, and to develop a solution that created enthusiasm among their B2B customers. The case study illustrates Liebherr’s path from identifying most relevant customer segments and their needs, over developing a focused market entry and product strategy to developing a totally new solution concept.
Despite the enormous strategic relevance of innovations in terms of securing the future of the company, many innovation projects still perform surprisingly poor. Studies on innovation success factors show that a large part of the reasons, why innovation initiatives fail, are related to a lack of customer-centricity. When a company sets out to achieve innovation excellence, it is not enough to introduce new or change existing innovation processes.
These days, consumers have real power:
they can research companies, compare ratings, and find alternatives with a simple tap. Focusing on customer needs isn’t a nice–to–have, it’s a strategic imperative.
Use the Link bellow to hear the audio version of Tony Ulwick’s book ‘Jobs-to-be-Done Theory to Practice’
Companies have a five times higher success rate in their innovation activities when they use Outcome-Driven Innovation® (ODI). This is the result of an independent research study Strategyn engaged in 2010. The study compared new product development reports from 12 different sources such as Harvard Business Review, PricewaterhouseCoopers and the Product Development Management Association (PDMA) and averaged the reported success rate between 10 to 20 percent. This means that using traditional innovation methods, only one or two out of 10 products can be considered as a success.
This case study shows how to identify unfulfilled customer needs in a seemingly saturated market with Outcome-Driven Innovation® (ODI) and how to translate the results into a successful market and product strategy.
“Outcome-Driven Innovation® offered a whole new perspective on market definition, strategy building and innovation. An exact understanding of the actual customer needs on the basis of the ‘job’ of the customer is the heart of the procedure and the starting point for all decisions in the innovation process. That convinced us.”
Robert Andexer, Head of Business Unit DOORS
In a book that challenges everything you have learned about being customer driven, internationally acclaimed innovation leader Anthony Ulwick reveals the secret weapon behind some of the most successful companies of recent years. Known as “outcome-driven” innovation, this revolutionary approach to new product and service creation transforms innovation from a nebulous art into a rigorous science from which randomness and uncertainty are eliminated.
Written by the great-grandniece of Thomas A. Edison, this article examines the
basic paradigms and the approach to innovation of one of the greatest minds in history. Edison was more than an inventor, even if he registered 1,093 U.S. patents and 1,293 international patents. He was also a business man focused on efficiency and success as he defined success as a function of utility, as a function of the ability to satisfy customer needs.
This article provides a new perspective on understanding innovation strategies and deciding with strategy (or strategies) a company should pursue for entering new markets as well as for growing in an existing market. Based on the Jobs-to-be-Done theory it reveals five different innovation strategies a company can pursue: a differentiated strategy, a dominant strategy, a disruptive strategy, a discrete strategy and a sustaining strategy.
Customer orientation is not a novelty to managerial practice but there are still exceedingly few companies to be truly customer centric. In customer centric organizations, everyone across the whole organization makes sure that his or her business decisions support the creation of customer value.
The following article is a transcript of an extraordinary open and informal discussion between innovation pioneer Anthony W. Ulwick and an executive who recently took on the responsibility for establishing an innovation center of excellence for a $10 billion firm.
Jobs-to-be-Done is best defined as a perspective — a lens through which you can observe markets, customers, needs, competitors, and customer segments differently, and by doing so, make innovation far more predictable and profitable.
This article proposes a new segmentation scheme that reveals naturally existing segments in a market based on the differences in what customers want a product or service to do for them. While traditional segmentation criteria like demographics, psychographics or purchase behavior often create “phantom segments” that in reality do not exist or are unable to define groups of customers with a common needs structure, outcome-based segmentation provides a more predictable target criterion for product development, marketing and innovation management.
Companies often fail in their innovation initiatives because they lack one fundamental prerequisite for innovation success: they are not able to create real customer value. The problem behind is that most companies do not really understand how their customers measure value. Without a clearly defined target, innovation becomes rather a game of chance than a controllable business process.
“We had an advanced product, the Gylon Bio Pro seal, that we thought would be very valuable to the pharmaceuticals industry,” reports Michel Lefrançois, the director of R&D of TGF in Europe. “But when we showed the seal to maintenance managers, who are the main contacts for our sales force, they weren’t very interested.”
Streema, a startup offering live radio content online, has been working with Strategyn to tackle the common challenges of growing a young company and developing its core product. We asked co-founder Martin Siniawski to reflect on his journey and to share his thoughts on how Outcome-Driven Innovation (ODI) was used as a customer-centric framework for their product development and market research efforts.
In 2004, Microsoft was under pressure to build additional value into its Software Assurance offering. In exchange for
a flat fee, corporate customers received operating System upgrade rights if they signed a multiyear contract. However, there was mounting evidence that the offering was not providing the right mix of benefits to customers at a time when IT budgets were facing increased scrutiny. Microsoft was aware that some key customers were questioning the value of the offering. Even more telling, renewals of Software Assurance agreements were declining, putting a significant amount of potential revenue at risk. “We were a business facing a potential crisis,” recalls Dave Wascha, a Microsoft director.
In late 2001, Kroll Ontrack was faced with a strategic opportunity and a challenge. The opportunity lay in the potential market for an electronic document discovery solution for the legal industry. The challenge? Creating an effective market strategy for a business still in its infancy.
In 2008, Kroll Fraud Solutions, a division of the risk consultancy firm Kroll, was already at the forefront in helping organizations respond to data breaches. But with market demand growing, aggressive new competitors were emerging. To maintain its leadership position, Kroll needed a strategy built around a comprehensive understanding of what an organization is trying to get done when it is responding to a data breach.
ITI Scotland announced it would invest £7.9m over three and a half years in the development of an advanced
wound care technology platform. The ultimate goal was to develop a point-of-care diagnostic platform that could be readily applied to aid the diagnosis and monitoring of chronic wound infection, both in clinical and community environments. Specifically, diabetes-related wounds were recognized as a primary target for application.
Ingersoll Rand’s Hussmann division decided in 2009 to reexamine its LED product line. Used to illuminate refrigeration cases for cold beverages and perishable and frozen foods, the product line offered reduced operating costs—especially when compared with fluorescent lighting. But in the four years following the launch of the product line, Hussmann had seen little reaction from customers. Convenience stores, supermarkets, and warehouse stores simply didn’t warm up to the idea.
Huber Engineered Woods, a manufacturer of oriented strand board, sheathing, and related building materials, was looking to expand their growth, perhaps even to acquire new technologies to do so, but the financial risks gave them pause. Embracing Strategyn’s Outcome-Driven Innovation (ODI) approach let them see their market in a whole new way. What was Huber’s breakthrough solution? They’d already created it. Calvin Trumbo, Huber’s director of business development, talked with Strategyn’s founder, Tony Ulwick, about the journey to that discovery.
Operating in over 25 countries, Abbott Medical Optics, or AMO (formerly Advanced Medical Optics), is a leading provider of lenses, insertion systems, laser vision correction systems, and other devices for cataract and refractive surgical procedures. Although it emphasizes technological innovation, AMO operates in markets in which innovative
products are quickly imitated by competitors. To solidify financial returns in this type of market, the company
needs to attract and retain customers through excellent secondary service and support mechanisms.
Advanced Surgical Tools (AST) wanted to extend a successful product line into attractive adjacent markets. Surgical tools based on AST’s Unity Technology (technology that enables simultaneous cutting and coagulation) were optimized for and successful in particular surgical contexts (e.g., gynecological, colorectal, and gastrointestinal procedures), but needed modifications if they were to be used for exposure in joint replacement and spine surgeries—high-volume procedures for which AST had low market penetration.
Arm & Hammer’s Animal Nutrition business (Church & Dwight) was determined to grow. Scott Druker, director of the business, chose to employ Strategyn and its Outcome-Driven Innovation methodology to formulate and drive its growth strategy. A mere year after adopting Strategyn’s “jobs-to-be-done” thinking, the business had experienced double digit growth, far outpacing its competitors. Scott sat down with Strategyn’s founder, Tony Ulwick, to talk about the remarkable journey.
In 2001, the Robert Bosch Tool Company decided to enter the North American professional circular saw market. Many challenges stood in the way of their success. Randall Coe, director of product development, notes that management had four key objectives in mind: “We wanted to (1) enter the market with a saw that reflected the high-quality image carried by the Bosch name, (2) compete effectively and outperform the products produced by DeWalt and other competitors in the U.S. market, (3) ensure our product would be carried by the big-box retailers, e.g., Home Depot and Lowe’s, and (4) price the resulting product at a competitive industry Price point while yielding the desired profit margin.”
Harte Hanks (HH) and Strategyn co-developed a strategic marketing service based on the premise that just as consumers “hire” products to do specific jobs, they also hire retailers to help them execute the “buying job” as they proceed along their buyer’s journey. To test the efficacy of this new service, HH and Strategyn focused on looking for strategic opportunities to help struggling brick-and-mortar businesses fight back against the relentless pressure from online competition.
A leading provider of outsourcing services, Ceridian provides its corporate clients with HR, payroll, and benefits administration services while serving as the first line of contact for client employees who have HR-related questions. For many of its clients, Ceridian becomes the company’s HR department and has daily interaction with client employees.
People “hire” products and services to get jobs done. They will choose those products and services that help them get a job done better and/or more cheaply. Understanding the job that a customer is ultimately trying to get done enables companies to identify hidden growth opportunities.
This article explains why listening to the “voice of customer” is not enough and presents a better approach to turn customer input into innovation. It points out that the traditional approach to Gather customer input – asking customers what they want – typically leads to “me-too” products that merely impress anyone. The problem is that asking for customers what they want is asking forsolutions. Creating solutions should be the responsibility of a company’s development team, not the responsibility of customers. Customers aren’t expert for that part of the innovation process,
they are experts for needs. If a company can understand what a customer is really trying to achieve in using a product or a service, the solution space opens up significantly.
With a clear Definition of what a Customer Need is, companies are able to get Inputs that are required to succeed at Innovation.
Free Download of Tony Ulwick’s latest book.
Why do so many innovation projects fail? What are
the root causes of failure? How can they be
avoided? Since 1990, Tony Ulwick has pioneered an
innovation process that answers these questions.