Jobs to be Done: Theory to Practice Read online

  I then facilitated a series of strategy sessions to help the Cordis team use these insights to create a new product line. By mid-1993, the company launched 19 new products, all of which became number 1 or 2 in the market.

  Cordis’ market share increased from 1 percent to more than 20 percent, and its stock price more than quadrupled. Needless to say, I was thrilled: this was validation that my method worked. Tying customer-defined metrics to the underlying process the customer was trying to execute was the key to success.

  ADVANCING THE PROCESS

  I engaged in dozens of innovation initiatives over the next several years, achieving similar results with companies such as Motorola, Pratt & Whitney, Medtronic, AIG, Allied Signal and Telectronics. Making process refinements with every application, I learned how to apply the process in multiple industries and for hardware, software, and service offerings. The process became very robust as I continued to rid it of inefficiencies and variability and established a strict set of rules for defining desired outcome statements. As the decade progressed, I decided to rename the company and offering to communicate its focus on strategy and innovation, and in 1999, the company became Strategyn and the data-driven process became Outcome-Driven Innovation® (ODI).

  Also in 1999 I was granted my first patent on the ODI process. It was the first of 12 patents I would eventually receive regarding my strategy and innovation process.

  In late 1999, I had the distinct pleasure of introducing Outcome-Driven Innovation and our research and segmentation techniques to Harvard Business School professor Clayton Christensen. We met in his Harvard office on several occasions in the 5 years that followed. I introduced Clay to ODI and showed him examples of how the process was executed and the results it delivered our clients.

  Clay was quick to key in on the fact that the focus of our approach was not on the customer or the product, but rather on the underlying process the customer was trying to execute, or, as he eventually came to call it, the “job” the customer was trying to get done.

  Clay was kind enough to cite Strategyn and me as originators of these practices in his 2003 book, The Innovator’s Solution, in which he popularized the idea that people “hire” products to get a “job” done. To this day, Clay continues to be a proponent of Jobs-to-be-Done Theory and a key contributor to its development.

  Clay also introduced me to Mark Johnson and Matt Eyring, who I enjoyed working with on a number of joint activities in the early days of Innosight. I was honored that an offer was made to me to join Innosight as a partner in 2004, although I respectfully declined the offer. While Innosight’s focus on disruptive innovation was exciting, my focus on Jobs-to-be-Done theory and ODI remained my top priority.

  In 2002, Harvard Business Review (HBR) published my article called Turn Customer Input into Innovation, which described Outcome-Driven Innovation and its successful application at Cordis. The success of that article helped our team to grow Strategyn as a business and inspired me to write a book on Outcome-Driven Innovation called What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products. Released in 2005, this seminal book explained in detail how ODI transforms Jobs-to-be-Done Theory into an effective innovation practice. Since that time I have had the honor of writing other articles that were published in HBR and MIT Sloan Management Review.

  The most rewarding part of my journey has resulted from being a hands-on ODI practitioner. That is my passion. I have led and continue to lead hundreds of innovation engagements with inspiring people in the world’s most admired companies. Every week I have the privilege of learning from top thinkers in companies across a wide range of industries. In 2016, the Strategyn team and I have worked with companies such as B. Braun, HD Supply, Minitab, Twitter, Panasonic, Kawasaki, WL Gore, Momentive, The Medicines Company, Roche, Bayer, P&G, Medtronic, Oracle, Johnson & Johnson, Arm & Hammer, Harte Hanks, DePuy, Terumo, CA Technologies, and Pulte Group. I am a practitioner at heart.

  Years of hands-on experience applying ODI have been the key to continued process improvement and our advancement of Jobs-to-be-Done Theory. To this day my team and I have ongoing ODI best practice reviews to share our collective knowledge and improve our thinking, tools and practices. Our goal remains the same—to transform innovation from an art to a science.

  In the September, 2016 Harvard Business Review article, Know Your Customers’ Jobs to be Done, Clayton Christensen states, “Innovation can be far more predictable—and far more profitable—if you start by identifying the jobs that customers are struggling to get done”.

  Strategyn has collected data through formal research that supports Christensen’s claim and shows just how much more predictable innovation becomes when using Jobs-to-be-Done Theory and Outcome-Driven Innovation.

  To obtain this data, we engaged a Harvard Business School trained independent researcher to study the success rates of traditional innovation methods vs. our own innovation process, Outcome-Driven 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.

  This means that 86 percent of the products and services launched by our clients using ODI were a success. This data validates Christensen’s claim that the innovation process is more predictable if you start with a focus on the Job-to-be-Done. In fact, it is five-times more predictable. The reason for the success of ODI is simple: a company can dramatically increase its chances for success at innovation if it knows precisely what metrics customers use to measure success and value when getting a job done.

  Here are the details of the study.

  JOBS-TO-BE-DONE THEORY & OUTCOME-DRIVEN INNOVATION IMPROVES INNOVATION SUCCESS RATES

  In order to accurately determine the success rate for traditional innovation processes, the researcher found success rate reports from 12 different sources, including the Harvard Business Review, the consulting firm Frost & Sullivan, the professional services firm PricewaterhouseCoopers, the Product Development Management Association (PDMA), the Corporate Strategy Board and others.

  Frost & Sullivan reported (i) that only one in 300 new products significantly impacts a company’s growth and (ii) that only 1% of new products recoup their product development costs.

  The Corporate Strategy Board reported that over the past four decades, of the 172 companies that spent time in the Fortune 50, only 5% sustained a growth rate greater than the growth rate of the gross domestic product.

  PricewaterhouseCoopers reported that only 11% of all venture investments get to any capital liquidity.

  R.G. Cooper reported that new products succeed 25% of the time.

  The Product Development Management Association (PDMA) claims that new products succeed 59% of the time.

  The 12 sources studied and the innovation success rates they cited are summarized in the table:

  Source

  Rate

  Frost & Sullivan, “Growth Process Toolkit:

  New Product Development,” 2008.

  0.3%

  Frost & Sullivan, “Growth Process Toolkit:

  New Product Development,” 2008.

  1%

  Andrew Campbell and Robert Park, ‘Stop Kissing Frogs,” Harvard Business Review, July-August 2004.

  1%

  Dr. John Sviokla, “The Calculus of Commerce,” Diamond Cluster International, Inc. 2004.

  3%

  Corporate Strategy Board, “Stall Points,” 1998. Cited in Clayton Christensen and Michael Raynor, “The Innovator’s Solution,” page 5, Harvard Business School Press, 2003.

  5%

  Andrew Campbell and Robert Park, ‘Stop Kissing Frogs,” Harvard Business Review, July-August 2004.

  10%

  Kevin J. Clancy and Randy L. Stone, “Don’t Blame the Metrics,” Harvard Business Review, June 2005.

  10%

  Corporate Strategy Board, “Overcoming Stall Pints,” 2006.

  10%

/>   PriceWaterHouseCoopers, “Shaking the Money-Tree,” slide 33, U.S. Venture Liquidity 2001-2007, Q3 2008.

  11%

  Average

  17%

  Dr. Robert G. Cooper, “Doing it Right,” Product Development Institute Inc., 2006.

  25%

  Abbie Griffin, “Drivers of New Products Success,” Product Development & Management Association, 1997.

  59%

  Dr. Robert G. Cooper, “Doing it Right,” Product Development Institute Inc., 2006.

  67%

  Strategyn

  86%

  In order to study the success rate of our Outcome-Driven Innovation methodology, the researcher conducted interviews with representatives of 43 Strategyn clients that had used ODI to launch a product or service or to engage in an operational or marketing innovation initiative. No incentives were offered to those who participated, and to encourage candor, anonymity was assured.

  The researcher asked companies to judge the success of the ODI initiative they undertook based on their choice of one of four success metrics: revenue, market share, customer satisfaction, or return on investment. The company representative was re-contacted to confirm agreement with the categorizations (i.e., successful or unsuccessful, the success metrics used, etc.).

  Of 21 projects that made use of the ODI methodology and resulted in product launches, 18 were rated successes by the sponsoring company—an 86% success rate. Five of these product launches received industry awards. I’ll describe some of these projects as case studies for success later in this book.

  Strategyn clients interviewed

  43

  ODI-based products entered into development

  49

  Pending launch

  28

  Launched

  21

  Declared a success after launch

  18

  Success Rate

  86%

  The 21 launches were categorized as follows: new product (10), new service (1), product enhancement (4), service enhancement (4), and operational enhancement (2). For the three product launches that were considered unsuccessful, the sponsoring companies indicated that they did a poor job of executing the commercialization of the product.

  Company

  Industry

  What was launched

  Success Criteria

  Case Study

  Award

  Success

  Company A

  Medical devices

  New product

  Revenue

  ✔

  ✔

  Company B

  Hardware

  New product

  Market share

  ✔

  ✔

  ✔

  Company C

  Software

  New product

  Revenue

  Company D

  Financial services

  New product

  Customer Sat

  ✔

  Company E

  Industrial

  New product

  Revenue

  ✔

  Company F

  Medical devices

  New product

  Revenue

  ✔

  ✔

  Company F

  Medical devices

  New product

  Customer Sat

  ✔

  ✔

  ✔

  Company G

  Software

  New product

  Revenue

  ✔

  ✔

  ✔

  Company H

  Consumer electronics

  New product

  Revenue

  ✔

  Company I

  Hardware

  New product

  Market share

  ✔

  ✔

  Company J

  Manufacturing

  New service

  Customer Sat

  ✔

  Company F

  Medical devices

  Product enhancement

  Revenue

  ✔

  Company F

  Medical devices

  Product enhancement

  Revenue

  Company K

  Software

  Product enhancement

  Revenue

  ✔

  ✔

  Company K

  Software

  Product enhancement

  Revenue

  ✔

  Company L

  Medical devices

  Service enhancement

  Customer Satisfaction

  ✔

  ✔

  ✔

  Company M

  Business services

  Service enhancement

  Customer Satisfaction

  ✔

  Company N

  Financial services

  Service enhancement

  Customer Satisfaction

  ✔

  Company O

  Emergency services

  Service enhancement

  Revenue

  ✔

  Company P

  Aviation

  Operational enhancement

  ROI

  ✔

  Company P

  Aviation

  Operational enhancement

  ROI

  ✔

  Subtotals

  8

  5

  18

  Total

  21

  Success Rate

  86%

  THIS BOOK

  “What is the value of Jobs-to-be-Done Theory and how do you put the theory into practice?”

  This book answers these questions. I reveal to you the hidden implications of Jobs-to-be-Done Theory and explain how to put Jobs-to-be-Done Theory into practice using Outcome-Driven Innovation®.

  The structure of this book systematically takes you through three phases – from Theory, to Process and finally to Practice.

  The story told in this book can be summarized as follows:

  Companies fail frequently at innovation because they struggle to understand and rationalize all the customer’s needs.

  Jobs Theory provides a needs framework that makes it possible to categorize, define, capture, organize and prioritize customer needs.

  A strategy framework, built around Jobs Theory, enables a company to correctly categorize, understand, and employ the 5 strategies that drive growth.

  Outcome-Driven Innovation ties customer-defined metrics to the customer’s Job-to-be-Done, transforming every aspect of opportunity discovery, marketing and innovation.

  Prospective practitioners can assess their ability to put Jobs Theory and ODI into practice with detailed insight into a typical innovation initiative.

  Companies should employ a proven three-phased approach to build a competency in Outcome-Driven Innovation.

  Chapter 1 introduces us to the root cause of failure in innovation. Why do so many projects fail?

  Chapter 2 introduces the solution: the Job-to-be-Done Needs Framework.

  Chapter 3 introduces the Job-to-be-Done Growth Strategy Matrix to explain how and when to use the five strategies that drive growth.

  Chapter 4 introduces our latest thinking regarding the execution of the Outcome-Driven Innovation process.

  Chapter 5 includes six case studies of companies that applied the Outcome-Driven Innovation process and achieved impressive results.

  Starting with Chapter 6, we introduce the Practice: a description of the 84 steps that comprise the Outcome-Driven Innovation process. Developed over the past 25 years, these are the steps a practitioner must take to successfully execute ODI.

  Chapter 7 describes a three-phased approach for helping your organization use ODI to build a competency in innovation.

  Chapter 8 is about the “Language of Job-to-be-Done” – the lexicon of innovation.

  Lastly, Chapter 9 points
you to useful resources – videos, articles, and books that may be helpful on your journey of learning and practice.

  Innovation is far from simple.

  An effective innovation process must produce answers to the following questions:

  Who is the customer?

  What job is the customer trying to get done?

  What are the customer’s desired outcomes?

  How do they measure value?