What is Outcome-Driven Innovation?
Outcome-Driven Innovation (ODI) is a reliable strategy and innovation process that increases the chances of a company to create and market successful product and service offerings at a rate that is 5 times higher than the average in the industry. With ODI, a company’s marketing efforts are more successful and its innovation efforts are more predictable and profitable. This is because ODI starts with a thorough understanding of the customer’s job to be done. By looking through a jobs-to-be-done lens, we have improved the way customers, markets, and needs are defined. Additionally, we have also improved how markets are segmented and sized, as well as how ideas are constructed and tested.
The ODI process employs research methods that reveal hidden opportunities for growth. The process works by tying customer-defined metrics (desired outcomes) to the customer’s job to be done, making innovation measurable. By knowing how customers measure value, companies are able to align the actions of sales, marketing, development, and R&D with these metrics to systematically and predictably create customer value.
ODI helps companies to:
Find potential markets that they may have not explored before.
Gain a larger share of the market by finding the right positioning for their current offerings to compete with the opportunities in a market.
Improve sales by changing the conversation to be more aligned with what resonates with customers.
Make their existing offerings better so that it does the customer’s job better and/or more cheaply (increasing revenue and reducing churn).
Enhance their product portfolio with new product and service offerings that address adjacent and altogether new markets.
Make the customer experience and journey better overall.
To apply Jobs-to-be-Done Theory, you must first identify the target market as “a group of people + the job they are trying to get done.” For example, parents who want to teach their children life lessons make up a market. Other markets include dental hygienists who clean patients’ teeth and farmers who grow crops.
Benefits of outcome-driven innovation:
There are many benefits of defining a market around the job-to-be-done:
It enables the transformation of innovation from art to science. Because the job-to-be-done is a process, statistical process control principles can be applied to help figure out what factors cause customers to struggle when getting the job done. Consequently, proven ODI-based qualitative and quantitative market research techniques can be applied to discover customer needs, which are unmet, and which customer segments are under and over-served. Additionally, this market definition provides a way to measure progress towards goal achievement and success. By understanding the job to be done, you can develop hypotheses about how your product or service can help customers overcome specific struggles they face while trying to get the job done. These hypotheses can then be tested through normal market research channels such as surveys, interviews, or focus groups.
The benefits of the ODI framework are vast, but some of the key ways it can help a company are by:
– Adopting a common language to define, capture and communicate customer needs, which in turn builds a culture of innovation.
– Mitigating the risk of failure by defining target opportunities with precision.
– Sidestepping the need to “fail fast” and pivot by reducing time to market.
– Conceptualizing and predicting which ideas and products will win in the marketplace.