« Job To Be Done : theory to practice » by Tony Ulwick from Strategyn

Is Tony Ulwick from Strategyn the new guru of innovation ? Philip Kotler, another management guru, say yes : « I call him the Deming of innovation because, more than anyone else, Tony has turned innovation, into a science ».
 
His book « Jobs To Be Done : from theory to practic» celebrates 25 years of Outcome-Based Innovation (ODI) success, basis of the Job-To-Be-Done Theory (JTBD) proposed by Clayton Christensen Harvard Business School Professor in Marketing.
 
In the foreword, Alex Osterwalder explains this work led him to develop the infamous Busines Model Canvas and Value Proposition, no less …
 
So what is it about ? Some extracts (in italics) will show the incredible similarities with Value(s) Management, while some points (in bold) may still be improved with our experience :
 
– This set me on a mission: I wanted to figure out a way to identify the metrics that customers use to judge the value of newly released products early on in the product planning process.
– In 2002, Harvard Business Review (HBR) published my article called Turn Customer Input into Innovation
– The results of that study showed that while the success rates of traditional innovation processes average 17 percent, the success rate of Outcome-Driven Innovation is 86 percent.

– The goal of innovation is straightforward: to come up with solutions that address unmet customer needs. … The “ideas-first” or « test fast, fail fast » approach is inherently flawed : how do you make sure an innovation will succeed without knowing the needs?  The « needs-first » approach is often flawed in execution : but a common language for communicating a need does not exist … there is very little understanding of what characteristics a customer need statement should possess and what the structure, content, and syntax of a need statement should be (id.) … supplier firms end up regarding the collection of these customer inputs as an art … while this approach works for IDEO, it makes innovation more of an art than a science … 

Sorry, we know it is not correct : Functional Analysis helps exhaustive and formal needs expression since the ‘50s ! But we share the experience of Ulwick that this is still absent from most companies, and from many design methods ! Sure we can help fix this.

– The key to solving this mystery lies in Jobs-to-be-Done Theory. Harvard Business School marketing professor Theodore Levitt said, « People don’t want to buy a quarter-inch drill. They want a quarter-inch hole! » Clayton Christensen said, “People buy products and services to get a job done” 

– what a customer is trying to accomplish include (i) the core functional Job-to-be-Done, (ii) the desired outcomes tied to the core functional Job-to-be-Done, (iii) related jobs, (iv) emotional and social jobs, (v) consumption chain jobs, and (vi) the buyer’s financial desired outcomes.

– Customers have needs related to buying, using, and owning a product. They have emotional and functional needs. Customer need statements are mutually exclusive—they are defined independent of each other. A complete set of needs is collectively exhaustive – it incorporates all the needs a customer has for a given job. Each need must be stated separately and categorized correctly.

 – One important factor that cannot be overlooked is that most markets are not homogeneous—meaning in nearly every market, customers do not agree on what needs are unmet.

 – The core functional job is the anchor around which all other needs are defined. It is defined first, then the emotional, related and consumption chain jobs are defined relative to the core functional job.

– While defining the functional job correctly is important, uncovering the customer’s desired outcomes (the metrics they use to measure success when getting the job done) is the real key to success at innovation.

 – The jobs along the product lifecycle are called consumption chain jobs. Each consumption chain job is comprised of its own distinct set of desired outcome statements. The purchase process itself can be considered a consumption chain job … An understanding of the buyer’s financial needs informs the decisions that lead to product and business model innovation

– Jobs-to-be-Done Theory unlocks the mystery that has for decades been clouding the understanding of customer needs. 

– A company must decide what strategy should be pursued to ensure it wins in the marketplace (with) the Job-to-be-Done Growth Strategy Matrix

– The matrix suggests that companies can create products and services that are (1) better and more expensive, (2) better and less expensive, (3) worse and less expensive, and (4) worse and more expensive

We recognize here our definition of Value = needs satisfaction / costs, and the ways to improve it :  either improving needs satisfaction (jobs done) and/or reducing costs (charge less)

– The product/service strategies introduced in this framework are defined as follows: Differentiated (Nespresso’s, Apple’s iPhone) /Dominant (Google AdWords, UberX, Netflix) / Disruptive (Google Docs, Coursera) / Discrete (drinks sold in airports) / Sustaining. 

– the Outcome-Based SegmentationTM methodology allow the same company to successfully run different strategies teignes on different segments.

– By supplying a definition of customer needs that the entire organization can embrace, ODI offers a rigorous, controlled approach to needs gathering, needs-based segmentation, competitive analysis, opportunity identification, idea generation and validation, market sizing, and the formulation of market and product strategy. The result is a predictable approach to innovation : 

I. Define the Customer : : the end user (or functional job executor), the product life cycle support team (people who install, set up, store, transport, maintain, repair, clean, upgrade, and dispose of the product), and the purchase decision maker.

 II. Define the Jobs-to-be-Done : most products only get part of a job done … take the customer’s perspective … Define the job statement in the correct format: A job statement always begins with a verb and is followed by the object of the verb (a noun).

We recognize here the VM way to express ‘functions’ = what the solution is doing to meet stakeholder needs. Sorry Ulwick does not know about ‘system modeling’ which secures and facilitates the solution function expression and relations to stakeholders needs !

III. Uncover Customer desired outcomes : create a “job map”, a visual depiction of the core functional job, deconstructed into its discrete process or job steps, independent of all the competing solutions that customers are using. Customers know perfectly well how they measure success when executing a job and are very capable of communicating those metrics—and those metrics, simply put, are their desired outcomes. 

A desired outcome statement includes a direction of improvement, a performance metric (usually time or likelihood), an object of control (the desired outcome), and a contextual clarifier (describing the context in which the outcome is desired).

We recognize here the VM way to express ‘criteria’. Sorry Ulwick does not know about how to define and quantify them and allocate flexibility.

 IV. Find Segments of Opportunity. We recognize here the VM way to define solutions for each stakeholders segment. Sorry Ulwick does not go further, by defining the optimal solution for each separate need !

V. Define the Value Proposition. We recognize here the VM way to define a « what is enough » solution, which may be only a marketing message underlining what the product is used for !
VI. Conduct the Competitive Analysis. We recognize here the VM way to define a « what is enough » solution by comparing benchmarks against the JTBD instead one against  the other. Sorry Ulwick does to go further to propose functional benchmarks : find solution answering the same need in other industries and sectors !

VII. Formulate the Innovation Strategy ; 

VIII. Target Hidden Growth Opportunities : an ‘opportunity algorithm’ is proposed, showing solution in a relative importance * satisfaction matrix. We recognize here the Value(s) matrix. Sorry Ulwick does not know about the 3D matrix showing also feasibility and costs.

 IX. Formulate the Market Strategy. We recognize here the VM Action Plan.

X. Formulate the Product Strategy : Why reinvent the wheel? Innovation is the ability to use technology (existing or new) to address an unmet customer need. We recognize here the « What is enough? » question and the search for simpler solutions, quite often already existing in the company but ignored, or from an existing partner.

Nice case studies are presented : from Microsoft on Software Assurance, Kroll Ontrack on electronic document discovery solution for the legal industry, Arm & Hammer on refocusing animal nutrition products towards users needs, Bosch on entering the US circular saw market, About Medical Optics on gaining market shares by adding helpful devices to their products, Husmann on selling merchandising solutions instead of refrigerated boxes.
 
– Ulwick also presents the 84 steps on how to become an ODI professional in your company.
and propose to write him at tony@strategyn.com

I’ll do that ! We definitely have synergies to build 😉

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