Outcome Driven Innovation

Outcome Driven Innovation

1. The process companies need to adopt to align their crossfunctional strategies and become proficient at innovation

2. Two popular approaches that have emerged for executing the innovation process revolve around the two key process inputs: ideas and needs.

   • "Idea-first" approach, companies brainstorm or otherwise come up with product or service ideas and then test them with customers to see how well the ideas address the customer's needs.
     • Many refer to this accelerated ideas-first approach as “failing-fast” – where many ideas are generated and tested quickly, thus revealing the best ideas faster
       • Despite its popularity, academic support and widespread use, the idea-first approach to innovation is inherently doomed to failure. There are two reasons:
         • 1 - Generating more ideas does not meaningfully improve the probability that someone will come up with the optimal idea to satisfy unmet customer needs.
         • 2 - The evaluation and filtering processes is flawed.
   • “Needs-first” approach, companies first learn what the customer’s needs are, then discover which needs are unmet, and then devise a concept that addresses those unmet needs.
     • Even though needs-first approaches acknowledge that customer needs are the most important input into the innovation process, there is no universally accepted definition of what a need is and it is assumed that customers have latent needs or needs that cannot be articulated.
     • Despite all the talk about satisfying customer needs, there is very little understanding of what a customer need is - what its purpose, structure, content and syntax should be.
       • The needs-first approach is not inherently flawed, only structurally flawed.

3. 1 - When it comes to innovation, the job, not the product, must be the unit of analysis.

   • Knowing what these emotional jobs are can influence product design and help companies develop a more effective value proposition and marketing communications strategy,

4. 2 - A job map provides the structure needed to ensure all customer needs are captured.

   • A job map is a visual depiction of a functional job, deconstructed into its discrete process steps, which explains in detail exactly what the customer is trying to get done.

5. 3 - The proper definition of "customer need" becomes clear when the job is the unit of analysis.

   • Companies must analyze the job of interest and ascertain from customers what must be measured and controlled to ensure the job is executed with the speed, predictability and output customers desire.

6. 4 - Different customer inputs are needed for concept innovation and design innovation.

7. 5 - The opportunity algorithm makes it possible to prioritize unmet needs.

   • Opportunity = Importance + max(Importance – Satisfaction, 0)

8. 6 - Opportunities (which needs are unmet) dictate which market growth paths to pursue.

9. 7 - Scattershot brainstorming doesn't work; sequenced and focused idea generation does.

10. 8 - The value of an idea can be quantified when all the needs are known.