Jobs to be Done: Theory to Practice Page 9
Devise a new feature set
Knowing what features to add to a product to help customers get more of the job done and/or get the job done better is the key to success in product innovation. Adding the right features is dependent on knowing what needs are underserved. Knowing, for example, which 15 of the customer’s 100 desired outcomes are underserved lets a company focus its efforts on those 15, thereby ending wasted effort and increasing the chances of success to a dramatic 86 percent.
Companies do not lack ideas. They often have thousands of ideas. What they need is insight into the customer’s underserved outcomes. This is what the ODI process provides. Once everybody in the organization knows precisely what the customer’s unmet outcomes are, all company resources can be aligned to address them—resulting in the systematic and predictable creation of customer value.
Devise new subsystems and/or ancillary services
Hardware and technology-based companies often stunt their growth potential because they resist adding a necessary service component. When the entire Job-to-be-Done is defined and the underserved outcomes are revealed, however, a company comes face to face with the fact that the only way to satisfy the remaining underserved outcomes is by adding an ancillary service offering. With a list of underserved outcomes in hand, a company can define exactly what value the service offering must deliver.
Advanced Medical Optics followed this approach when it added a service offering to complement its sale of lenses, insertion systems, laser vision correction systems, and other devices for cataract and refractive surgical procedures. Offering this service had immediate positive results on its Net Promoter score, the perception of its overall business practices, and its customer loyalty index. Two years later, AMO was awarded the prestigious Omega Management NorthFace Award, which recognizes world-class customer satisfaction.
Conceptualize the ultimate solution
A company’s ultimate goal should be to provide an offering that gets the entire job done on a single platform. Such a platform often requires hardware, software, and service subsystems or components. Conceptualizing this ultimate solution provides a company with a long-term vision of where it needs to go and what will be necessary to secure or maintain a market leadership position.
With the ultimate solution in mind, a company is in a position to make the decisions that will allow it to stay on track, stay focused, and not let a competitor own the ultimate platform-level solution.
For example, the ultimate solution we presented to an agricultural company we were working with required skills and capabilities that went far beyond the company’s capabilities at that time. As the years went by, the company watched a competitor make the acquisitions that were required to create, build, and own this platform-level solution. This got management’s attention. With no time to waste and clarity in where the market was heading, the company worked to make its own acquisitions so it could remain relevant in the market.
Taking the seven steps outline above, a company can systematically create solutions that will get a job done better and/or more cheaply. Defining the actions it will take is the essence of an effective product strategy.
5.
CASE STUDIES
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MICROSOFT
Discovering hidden growth opportunities
Microsoft was under pressure to build additional value into its Software Assurance offering. In exchange for a flat fee, corporate customers received operating system upgrade rights if they signed a multiyear contract.
However, there was mounting evidence that the offering was not providing the right mix of benefits to customers at a time when IT budgets were facing increased scrutiny. Microsoft was aware that some key customers were questioning the value of the offering. Even more telling, renewals of Software Assurance agreements were declining, putting a significant amount of potential revenue at risk. “We were a business facing a potential crisis,” recalls Dave Wascha, a Microsoft director.
Traditionally, Microsoft had viewed the Software Assurance offering simply as a vehicle for the efficient purchase of software upgrades. The market was changing, however, and Microsoft realized that the Software Assurance offering needed to change with it. As one tech reporter observed, “There appears to be some disconnect between how Microsoft wants to sell its software and how businesses want to buy.” Improvements were necessary to give customers additional reasons to purchase.
Software license management is not a trivial task for large corporations, and it typically involves multiple stakeholders. Microsoft focused on understanding the jobs of two particular decision makers—procurement managers and IT professionals. Procurement managers are responsible for understanding, selecting, and negotiating license agreements (the Job-to-be-Done). IT professionals work closely with procurement managers in assessing upgrade needs, evaluating agreements, implementing licensing renewals, and managing software licenses once purchased (their Job-to-be-Done).
Drawing on interviews with procurement managers, the ODI practitioner dissected the job of purchasing a license agreement, uncovering approximately 75 desired outcome statements. Customer interviews were also conducted with IT professionals, resulting in the discovery of well over 100 desired outcome statements related to their core functional Job-to-be-Done and related job statements.
Two ODI-based quantitative surveys were created and deployed. Approximately 100 procurement managers and 300 IT professionals prioritized their respective desired outcome statements for importance and level of satisfaction.
The results of the Outcome-Based Segmentation analysis revealed underserved segments of procurement managers and IT professionals. Dozens of underserved outcomes were revealed for each constituent. Wascha recalls that as they started to look at the job the customers were trying to get done, “we realized that we were only really engaging with the customer in one tiny piece of their job—the purchase of the software. But this was just part of a much bigger challenge that they faced. We were not engaging with them in many of these other areas that were very important to them and where they were very dissatisfied.”
The opportunity landscape for purchasing and managing software licenses revealed a number of jobs and desired outcomes that were underserved. Many could be addressed by products already developed, but not previously integrated into the offering.
Based on this improved understanding of the job its customers were trying to accomplish, Microsoft adopted a lifecycle management view of the business, from the customer’s perspective. Microsoft discovered opportunities related to software acquisition and deployment at the start of the lifecycle. In the middle of the lifecycle, there were opportunities in the areas of maintenance, training, patching, and security. Finally, at the end of the lifecycle, Microsoft identified opportunities to create value for customers during disposal of old PCs—an immense issue for many of its customers.
The innovation and the impact
One of Microsoft’s most profound discoveries was that the company had already developed many solutions for internal use that would help customers achieve their desired outcomes and get jobs done, given this broader lifecycle perspective.
However, those solutions had never been packaged together in a cohesive and compelling offering. Wascha notes, “The most amazing thing is that we really did not write that many new lines of code to meet customer needs. Rather, it was about looking at the job in its flowchart, looking at software assets that we already had, and then piecing them together as solutions to each part of the job.
For example, Microsoft discovered that customers were having trouble keeping track of the number of PC software licenses they owned—a necessary step in compliance.
Microsoft already had a licensing server that could address this need, but the company had never considered including it as a part of the Software Assurance offering. Similarly, IT professionals were having difficulty anticipating potential software conflicts when they deployed a new operating system. Again, Microsof
t already had a tool that could address this need, one that the company had been using internally. Microsoft decided to include a version of that tool in its Software Assurance offering.
Customers also wanted to reduce the time and cost involved in training employees to use the upgraded software. To address this, Microsoft implemented a training voucher program that gave employees access to certified Microsoft trainers. Once again, this was a program that Microsoft had already developed but had never been made a formal component of the Software Assurance offering.
Microsoft also uncovered an unmet need related to prevention of internal security violations. As in the other examples, Microsoft already had a successful product that it was able to make part of the Software Assurance package. The product included rule templates that enabled companies to quickly set software and PC access restrictions for different groups of employees—a key element of internal security. And the list of enhancements to the Software Assurance offering could go on.
The benefits to Microsoft from adopting the ODI approach were dramatic and immediate. In the year Microsoft announced the changes to the Software Assurance offering, they beat their revenue goal by over 10 percent. This was even before the fully revised product was available. Customer satisfaction increased, and complaints about Software Assurance dropped.
In subsequent years, Microsoft was able to substantially grow the Software Assurance business and dramatically increase annual renewal rates. Microsoft discovered it was sitting on a growth business once value was measured from the customer’s perspective. Wascha noted, “Salespeople loved the new product offering. They felt they had something of value to offer.”
KROLL ONTRACK
Discovering hidden growth opportunities
Kroll Ontrack was faced with a strategic opportunity and a challenge. The opportunity lay in the potential market for an electronic document discovery solution for the legal industry. The challenge? Creating an effective market strategy for a business still in its infancy.
“The term ‘paperless office’ was just coming into vogue,” notes Andrea Johnson, Kroll Ontrack’s vice president of marketing and communications. Lawyers were finding that many documents relevant to a legal proceeding were available only in electronic form. Competitors who had historically served the market were able to meet the paper discovery needs of lawyers but were ill equipped to manage the discovery of these electronic records.
In response to a client’s request, Kroll Ontrack started a small business focused on electronic document discovery. It struggled at first to define a strategy based on customer needs. As Ben Allen, CEO of Kroll and former Kroll Ontrack president, explains, “We knew the potential for electronic discovery—all of the underlying foundational elements suggested that this would be an important industry opportunity. What we didn’t know was how to understand what clients wanted to achieve in a way that could be translated into an efficient and effective strategy for growth. The electronic discovery market was so new that if you asked clients what features they wanted, they didn’t know what you were talking about.”
In order to define a market strategy for a product offering that was still in its infancy, Kroll Ontrack relied on Strategyn’s ODI methodology. “After going home and reading 17 strategy books,” Allen recalls, “what struck me about Strategyn’s ODI thinking was the concept that outcomes wouldn’t change over time. We were really at the stage where we were trying to figure out what lawyers were trying to accomplish, not what features they wanted.”
Drawing on interviews with lawyers (the end users), the ODI practitioner uncovered approximately 100 desired outcome statements related to “finding information that supported/refuted their case” (the Job-to-be-Done). The outcome statements were rated for importance and satisfaction by a statistically valid sample of the population. Outcome-Based Segmentation and other analyses were performed.
The innovation and the impact
Using ODI, Kroll Ontrack gained a better understanding of the opportunities presented by electronic discovery, and it used this knowledge to develop an effective product strategy. Kroll Ontrack focused on the job of e-document discovery and the outcomes that members of the legal community desired, which led the company to develop groundbreaking new solutions.
For example, Kroll Ontrack rolled out a new product called Harvester and some related imaging tools that addressed the top two underserved electronic discovery outcomes: “Minimize the likelihood that relevant documents were excluded from capture” and “Minimize the likelihood that information is inadvertently altered or destroyed while the data is being captured.” Because two other outcomes, “Minimize the likelihood of making coding errors” and “Minimize the time that it takes to obtain all information relating to a specific subject,” were also important, Kroll Ontrack added a custom-coding feature to its online review tool.
The ODI-based research guided the pursuit of numerous other innovations as well. For example, Kroll acquired a clever search technology that employs clustering algorithms to enable a user to find documents associated with a keyword even if that keyword does not occur in the document. This was done to satisfy two of the outcome opportunities identified. In addition, Kroll Ontrack launched ESI Consulting, which offers clients expert guidance in tackling the task of capturing all relevant documents. Lastly, it rolled out a new trial preparation tool that targeted litigation process outcomes.
Reflecting on the top opportunities that the ODI methodology revealed, Allen recalls, “There has been a ton of innovation at Kroll around these outcomes. These are the heart of it. We brought forward all elements that an electronic document has available and made them available to filter or search by. And we have continued to add features along the way.” By adding innovative features to its electronic discovery platform every quarter to address additional underserved outcomes, it made it very difficult for competitors to catch them.
Kroll Ontrack’s electronic discovery product employed a dominant strategy—it got the job done better and more cheaply than competing solutions. Prior to Kroll Ontrack, competitors had been attempting to address the challenges presented by electronic documents with modifications to the paper document discovery systems. In contrast, “Kroll Ontrack leapfrogged the competition with a revolutionary innovation,” observes Johnson, “because it added capabilities based on the job that customers were trying to get done rather than seeking to improve the current solution platform.”
A myopic definition of the market ultimately cost the leading competitors their discovery business. Allen concludes, “If these big, well-established companies had understood the outcomes that customers really valued, they could have dominated this business. I think they saw themselves as paper document processing companies, not discovery solutions providers. The leaders today—none of them were players in the old paper discovery business.”
Kroll’s market strategy has paid off. Kroll Ontrack grew is revenue in this market from $11 million in to over $200 million in about 6 years. For years, Kroll Ontrack was the industry leader in both market share and revenues. They received acclaim from industry experts and customers for quality and were named the top electronic data discovery system by readers of Law Technology News. They were also recognized by Law Firm Inc. as the most-used electronic discovery provider for seven years in a row.
ARM & HAMMER
Arm & Hammer’s Animal Nutrition business (Church & Dwight) was determined to grow. Scott Druker, director of the business, chose to employ Strategyn and its Outcome-Driven Innovation methodology to formulate and drive its growth strategy. A mere year after adopting Strategyn’s “Jobs-to-be-Done” thinking, the business experienced over 30% revenue growth, far outpacing its competitors. Scott sat down with Tony Ulwick to talk about their journey.
Ulwick: Scott, how would you describe the problem that Church & Dwight was trying to solve?
Druker: We had gone through several product development efforts and launches in recent years that were disappointing despite th
e technical success of the products. The commercial response was lackluster. So, not wanting to repeat history and recognizing that innovation was an important aspect of our growth strategy, we asked ourselves, “Okay, how can we do things differently?” I was familiar with your work, and I thought it would be an interesting approach to take given the challenges we were facing with our animal nutrition products in the dairy market.
How would you describe Arm & Hammer Animal Nutrition’s traditional approach to innovation?
We relied largely on discussions that we’d had with customers, with people in the industry that we worked in, the dairy industry in particular. We’d talk to nutritionists and to dairy producers, asking, “What are some of your biggest issues?” We mainly focused on the nutritionists, who are the people the dairy producer hires to help put together the ration to feed the cows. Our products go into those rations, so even though the dairy producers are buying the products, most of our efforts were focused on the nutritionists.
Would it be fair to say that before using ODI, part of the issue was not knowing which customer to target to obtain the needed insights?
We’ve always known the end customer is the dairy producer, and ultimately the dairy cow, but yeah, we were basically getting our innovation information from a consultant that was being hired by the dairy producer. So yeah, I think absolutely part of our issue was we weren’t identifying the right people to speak to.