In his book The Innovator’s
Solution, Harvard Business School professor, Clayton Christensen
states that customers buy products and services to help get a
job done. We have held that position for many years – and it
forms the basis for our outcome-driven thinking. Outcome-driven
innovation is a unique approach to innovation in that it is not
focused on the customer, the product or the competition – rather
it is focused on the job the customer is trying to get done.
What we have discovered is that from the customer’s perspective
it is the job that is the stable, long-term focal point around
which value creation should be centered.
This thinking has two far-reaching ramifications for those
responsible for value creation. First, when the job is accepted
as the unit of analysis it means that companies must not capture
requirements on a product or service – rather they must capture
requirements on the job that the product or service is intended
to perform. So, instead of obtaining requirements on corn seed,
for example, a corn seed manufacturer would want to obtain
requirements on the job of farming corn.
Second, just as companies have for years applied six sigma
principles to dissect internal business processes and determine
what must be measured and controlled to produce a predictable
output, the jobs that customers are trying to get done can
similarly be dissected and studied to determine what must be
measured and controlled to ensure the job is executed with the
speed, predictability and output desired by the customer. These
metrics – or desired outcomes as we call them – are the
customer’s fundamental measures of performance when getting a
job done.
A customer need then, in the outcome-driven paradigm, is defined
as a metric that is used to measure the successful execution of
a given job. When farming corn, for example, corn farmers base
success on their ability to “minimize the number of seeds that
fail to germinate”, to “increase the percentage of plants that
emerge at the same time”, and to “minimize the yield loss due to
excess heat during pollination”. These three examples of desired
outcomes all have a specified structure, content and format.
Capturing the right customer inputs is just one step in the
outcome-driven innovation process. Once these inputs are
uncovered, and 50 to 150 inputs are common, quantitative
research is used to determine which outcomes are both important
and unsatisfied, thus revealing where the market is underserved
and where opportunities for value creation exist. It is critical
that the customer inputs adhere to a strict set of rules in
order to ensure the true importance and satisfaction ratings are
obtained – this is where most other processes falter, making the
innovation process unstable and unpredictable.
The customer insight gained through outcome-driven research is
used by companies today to drive many marketing and development
activities. For example, they are used to segment markets,
position products, prioritize the development pipeline, focus
creativity, systematically devise breakthrough solutions and
assess acquisitions. The true outcome-driven company uses this
insight to drive many activities that lead to growth.
