Jobs to be Done: Theory to Practice Page 11
To identify opportunities for service innovation, AMO targeted the materials managers (the job executors) who were responsible for replenishing ophthalmic lenses for cataract implant surgeries (the Job-to-be-Done). They targeted medical facilities in which cataract surgeries were performed.
Through interviews with materials managers, the ODI practitioner dissected the Job-to-be-Done into its component parts through the use of a job map and worked to capture a complete set of approximately 100 desired outcome statements. By studying the job map, AMO discovered that a traditional distinction between front-office and back-office responsibilities for materials management was artificial.
Next, ODI-based quantitative research methods were employed. Through a controlled online survey, approximately 200 materials managers rated each desired outcome statement for (i) its level of importance, and (ii) the degree to which it was satisfied, given the service offerings they were currently using. This data was used to run a variety of data analyses (Outcome-Based Segmentation, competitive analysis, etc.). The analyses resulted in the discovery of a large segment of materials managers that had approximately 50 underserved outcomes (see the opportunity landscape).
The analysis of this segment revealed a flaw in AMO’s service delivery approach and in the process of obtaining ophthalmic lenses more generally. The process of communicating problems to AMO and its competitors frustrated materials managers. They were often unsure whom to contact to get a particular problem resolved because the issues they confronted ranged from delivery and lens consignment to invoicing and returns. AMO management recognized that delays often resulted because materials managers had to contact several people within AMO before finding someone who could help them. Matters were further complicated by the fact that the resolution of a given problem might require the involvement of several people and/or several layers of approval within AMO.
With knowledge of the customer’s underserved outcomes, an ODI practitioner led a team of AMO sales, technical support, customer service, accounts payable, logistics, and IT infrastructure managers through the process of developing solutions to satisfy the most promising opportunities. Valuable solutions were conceptualized and later validated and implemented.
The innovation and the impact
To improve its service delivery approach, AMO transitioned from a transaction approach to a relationship approach to customer service. As Rago explained, “Before, we had a first-in, first-out approach to customer service. A customer had no relationship with the person who happened to answer the phone when they called. Now, the top clients are automatically directed to a dedicated advocate who can handle anything that the customer needs. The next tier of clients go to regional customer care teams, or pods—a small team that works together to know the customer, and manage any concerns that the customer has.”
AMO introduced advocates and regional customer care teams. Customers then had a single point of contact within AMO and a voice inside the company to address the range of issues they confront. If a customer issue required additional research, an AMO advocate or member of the care team had responsibility for problem resolution, ensuring that customers with tricky problems no longer had to navigate opaque internal processes without a guide. Physical proximity among team members of different functional areas also improved communication and coordination to resolve customer problems. As a result, the customer’s problems were resolved faster and more thoroughly.
In addition, the customer service team assumed a more strategic role within AMO. Advocates and care team members reached out to customers on a regular basis
to identify potential issues. Regional sales calls included customer care team members to ensure that everyone knew what changes were taking place and which accounts were being threatened. This enabled AMO to proactively head off potential account problems and better anticipate how to grow account revenues.
AMO’s management team also learned that not having the right lenses on hand for a surgical case was a big problem for materials managers. Because this particular problem has more to do with the ongoing back-office operations of a surgical center than with vendor service and support, it had not occurred to AMO or its competitors to address it. But once the ODI methodology brought the problem to AMO’s attention, the company was able to develop an advanced schedule-planning and inventory management software module that facilitated accurate and timely replenishment of lenses based on upcoming case needs, current inventory, and other considerations.
The implementation of these service offerings had immediate positive results:
• AMO’s Net Promoter score increased by nearly 10 percent in the year following introduction of the service innovations.
• A MarketScope industry survey showed that industry perceptions of AMO’s overall business practices and of the quality of its products and services has improved significantly since introduction of the innovations.
• AMO’s corporate survey showed that its customer loyalty index improved by 14 percentage points in the year following introduction of the innovations.
Two years later, AMO was awarded the prestigious Omega Management NorthFace Award, which recognizes world-class customer satisfaction.
HUSSMANN
Discovering hidden growth opportunities
Hussmann decided 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.
“LEDs showed minimal volume and little impact on the lighting business,” remarks Clay Rohrer, an innovation and business development manager at Hussmann. “We tried to penetrate the business for four years, and we were missing the boat.”
Anshuman Bhargava, a Hussmann LED product manager and also an innovation and business development manager, notes, “We were going out and searching the globe for new technologies that seemed to make sense. They were always focused on energy or controls, which were trends in the market. We weren’t tied to needs of the customer. We were tied to technologies.”
LEDs, which offer energy efficiency, represented a potentially billion-dollar market, but customers were skeptical about the up-front costs and overall value of the technology. Hussmann knew that success would depend on the company’s ability to uncover and inexpensively address specific customer needs so that Hussmann’s LED product would stand out on performance dimensions that mattered to customers.
To find and exploit opportunities for competitive differentiation, Hussmann applied Strategyn’s ODI methodology. Drawing on the responses of shoppers, store merchandisers, and executive merchandisers, Hussmann dissected the complementary jobs of those key groups.
“We had been selling refrigerated boxes, not merchandising solutions,” Rohrer remarks. “Historically, we had left the merchandisers alone and focused more on the product procurement people. Now, we went to different levels of merchandisers and to the shoppers, and we combined insights from all these audiences.”
This extensive, multi-audience effort resulted in the capture of over 300 desired outcome statements. Next, using ODI-based quantitative research techniques, Hussmann had 1,500 shoppers, 200 store merchandisers, and 50 executive merchandisers prioritize those outcomes.
Among the outcomes prioritized by executive merchandisers, many were underserved, as highlighted in the opportunity landscape. Of these unmet outcomes, eight related to display case lighting: for example, executive merchandisers wanted to increase the likelihood that the lighting would display the true product color and the likelihood that the lighting would be uniform.
These needs became the foundation for Hussmann’s LED innovation and differentiation efforts.
The innovation and the impact
Knowing where to focus i
ts efforts was the key to Hussmann’s success. The team went through the eight underserved outcomes, developed engineering specifications for each and a new portfolio of LED lights, and then began systematically devising low-cost features that would dramatically improve customer satisfaction on each outcome.
Rohrer reports, “We used ODI to tweak an existing design and didn’t have to redesign the whole thing. We looked at it from the ODI perspective of the job of illuminating products. What are the problem areas? What are the focus areas? Then we grouped the opportunities into common themes that we had to address to win the market. Uniform illumination, level of brightness, and energy efficiency were key things. We focused on them and developed solutions.”
Hussmann created an innovative line of LED products— the EcoShine LED Lighting System—and focused its value proposition on satisfying the eight underserved outcomes in the merchandising of perishable food products. The EcoShine system matched competitors on certain outcomes for LEDs, such as energy efficiency and long life, but it was a breakthrough innovation because it added value on several new merchandising outcomes that competitors had overlooked. Hussmann advertises feature comparisons between the EcoShine line and its competitors on these specific outcomes. EcoShine boasts superior uniform horizontal and vertical lighting within a display case, reduced glare, and truer product colors (because the lighting is optimized for the display of meat, dairy, and produce).
The product has been a hit in the market. “In only one year, we’ve gone from a fraction of a digit to double digits in market share in North America,” Bhargava notes. Backed by a strong sales commercialization effort, the product received favorable press coverage in industry publications such as Supermarket News, generated favorable buzz as a “home run” at trade shows, and created excitement among utility companies, who are providing incentives for customers to adopt this energy- efficient system.
In addition to generating immediate revenue growth (previously measured in thousands of dollars and now measured in tens of millions, according to Rohrer and Bhargava), the ODI process resulted in three other important benefits for Hussmann.
1. Cost reductions. Hussmann differentiated its LED products without increasing product cost—a prime objective. Rohrer describes how this was possible: “We made incremental changes to an existing platform in all the right areas, based on how customers measure value. We hit all the key outcomes at the right level without raising costs. In fact, we reduced costs dramatically because we were so focused on just changing the things that mattered.”
2. Enhanced speed to market. Bhargava notes that having a prioritized list of customer needs, stated in clear, unambiguous language, made it possible to “move through the early stages [of product development] much more quickly … so that we could really get to work. We were able to translate the desired outcomes very clearly for engineering so that they understood what to develop. We didn’t leave anything for them to guess at.” He also notes that the insights gained through the process enabled Hussmann to set optimal prices based on the value of each SKU.
3. Enhanced credibility. The prioritized customer outcomes have changed the strategic dialogue within the firm. Rohrer states, “It is a whole different conversation with the executive team. It used to be a long decision process based on arguments over whether customers would buy some new product or not. ‘Oh, did you think of this? Of that?’ Now they see the exact need set and can evaluate how a solution might address those needs.” Bhargava concurred, “ODI brings a lot of credibility. You no longer get questioned by internal stakeholders—operations and engineering, supply chain, sales, and so on.”
Beyond these project benefits, ODI has created a fundamental shift in Hussman’s innovation culture. As Rohrer describes it, “We’ve shifted the culture from a technology-driven company to a customer-needs-driven company.”
PRACTICE
6.
BECOMING AN ODI PRACTITIONER
>> CONTENTS
Jobs Theory intuitively makes sense, and Strategyn, through its application of ODI, has proven Jobs Theory is very effective in practice. With the contributions of leading academics like Clayton Christensen, and Jobs Theory champions and practitioners around the world, a new paradigm is on the horizon. I think it is safe to predict that companies will become more customer-centric, job-focused and outcome-driven. So what is next?
Many companies we’ve worked with over the years have wanted to put Jobs Theory and ODI into practice on a large scale. Most of them didn’t want to be dependent on a third-party consulting firm over the long term for their ongoing success. Instead, they wanted to have and use their own practitioners and make Jobs Theory and ODI part of their DNA and organizational fabric. What our clients and other companies often want to know is this: “How do we put Jobs Theory and ODI into practice within our organization?”
In this chapter and the next, I will answer that question. While the next chapter addresses the needs of the organization, this chapter is written for the practitioner—the individuals that will take it upon themselves to apply Jobs Theory, practice ODI, and drive change in their organization.
In my days at IBM, I took on this role—the change agent, or the maverick as I was called. I was the internal consultant who wanted to help IBM find a better way to innovate. I took on the role of the practitioner as I tried to change the way people think about innovation. I remember how I appreciated the help I received from internal IBM supporters, my mentors and managers. I also remember how I’d wished that someone would come along and offer me the process, tools and instructions I would need to be successful. Now that I have the process, tools and instructions, I want to share them with you.
To that end, in the first quarter of 2017, Strategyn will make available to our clients a Jobs-to-be-Done Toolkit that will include the tools, templates, and instructions that Strategyn’s internal ODI Practitioners use to effectively lead strategy and innovation engagements.
So, do you have what it takes to become an ODI Practitioner? Is becoming an ODI practitioner right for you? Let me help you decide.
Becoming an ODI Practitioner is not easy and it’s not for everyone. Speaking as an ODI practitioner, however, I can tell you that, to me, it is the most fulfilling and rewarding career I could imagine. As an ODI Practitioner, you have the opportunity to:
Work with the smartest and most inspiring people in business.
Work on projects that span dozens of markets, learning more about each market than would otherwise be possible.
Contribute to the creation of products and services that improve people’s lives.
Learn a valuable skill set that can be employed throughout your lifetime.
Train your mind to think in a uniquely disciplined fashion.
Contribute to the success of others and society as a whole.
Have fun along the journey.
What does the ODI Practitioner do?
The ODI Practitioner is responsible for mastering the application of Jobs Theory and performing all aspects of the ODI process in a wide variety of contexts to meet the specific needs and expectations of the organization. An ODI Practitioner must be able to:
Initiate an ODI project.
Uncover the customer’s needs.
Gather quantitative data.
Discover hidden opportunities for growth.
Formulate the market strategy.
Formulate the product strategy.
As I detail the ODI Practitioner’s responsibilities for each of these 6 phases, I am going to reveal the 84-step process that our Strategyn ODI Practitioners follow when they engage with clients. This insight will help you get a good sense of what it takes to execute an ODI project and the skill sets that are required to do so. Then you can decide if a career as a Jobs Theory and ODI practitioner in your organization is right for you.
I. INITIATE AN ODI PROJECT
In most companies that have adopted Jobs Theory and ODI, there is no shortage of possible applications. There
is a good chance that you will be quickly overwhelmed with project opportunities.
In the first phase of an ODI engagement, the ODI practitioner must secure, scope, plan, and initiate the project. The goal in this phase of the engagement is to gain the project team’s agreement on (i) the project plan and scope, (ii) who the customer is, (iii) the definition of the Job-to-be-Done, and (iv) the preliminary job map.
The 15 steps that the ODI Practitioner must take to effectively execute the first phase of a project are as follows:
Familiarize the organization with the benefits of JTBD theory and ODI.
Select a project to pursue using ODI.
Define the goals of the ODI project.
Scope the ODI project.
Define the project timeline.
Select the ODI project team.
Determine what types of needs must be captured for the project.
Create screener(s) to recruit candidates for job map interviews.
Recruit candidates for job map interviews.