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Anthony W. Ulwick
Review
At any moment, I have a short queue of product books I want to read. I try to follow long books with shorter ones, so I don't lose momentum. I naively thought this book would be a quick read, but it isn't. It's insight-dense and concise, making it hard to get through.
The author has created and trademarked a product innovation process that he claims has an 86% success rate. That's great news for us right? Well. Hold on. The catch is it seems impractical to do, and it's trademarked, so you'll need to hire his consultancy to do it with you.
I love this book. The author critiques and discards much of what is standard in the industry. It's difficult to read as it will challenge some of your beliefs. I'd love to try the full 84-step process one day, but I think I'll need to be in the C-suite to actually implement it.
For now, I'll use parts of the process in a less rigorous way, despite the author's advice against it.
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Key Takeaways
The 20% that gave me 80% of the value.
Jobs To Be Done · Anthony W. Ulwick 2016
Traditional innovation processes have a poor success rate at 17%, while Outcome Driven Innovation (ODI) can reach 86%. ODI focuses on the metrics customers use to measure success and the value they get from getting a job done. If you understand those metrics, you can create solutions that address unmet needs and dramatically improve your odds of success.
Many companies start with an “ideas-first” approach, generating lots of concepts and quickly filtering them out. But this is like prescribing medicine without diagnosing symptoms—if you don’t know what customers really need, you’re bound to miss the best solution. Customers often can’t reliably and accurately articulate exactly what they want. The “needs-first” approach sounds better, but many organisations fail to uncover most of those needs in the first place, don’t define what a “need” is, or rely only on customers’ own words, resulting in incomplete or misleading insights.
Jobs-to-be-done theory provides a framework for categorising, defining, capturing and organising all of your customer’s needs. Tying customer-defined performance metrics (in the form of desired outcome statements) to the Job-to-be-done.
Knowing the customers needs allows you to unlock better strategy by revealing hidden segments of opportunity and determining which needs are underserved or over served.Remember: People are more loyal to getting a job done than they are to any brand.
Identifying these “jobs” can help reveal underserved or overserved needs in the market. You look at core functional jobs, related jobs, emotional jobs, consumption chain jobs, and financial outcomes.
Jobs-to-be-done Needs Framework
We must consider different types of customer needs: The core functional job, related jobs, emotional jobs, consumption chain jobs and financial outcome jobs.
- Job: the overall task the customer is trying to execute
- Outcome: the metric the customer uses to measure success and value while executing a job
Customer need statements should be mutually exclusive and defined independently of each other. A complete set of customer needs should be collectively exhaustive.
The goal of innovation is to devise solutions that address unmet customer needs. So we need to… know the needs, know which are unmet and understand segments of customers with different unmet needs.
You’re looking for a segment of customers with unmet needs you can serve - that make up a big enough % of the market to make it attractive
The core functional job is stable, solution-agnostic, and unbounded by geography, and the real key is to pinpoint the desired outcome statements that reflect how customers define success and value each step of the way.
Armed with that understanding, you can help customers get the job done either better or more cheaply. Incremental improvements won’t cut it; you typically need something significantly better or cheaper… small changes won’t have the same effect.
Uber example:
- Uber Lux → charging significantly more for significantly better
- UberX → charging less for better
- UberPool → charging significantly less for worse
Imagine trying to launch a differentiated strategy in a market that was over-served… there would be nobody looking to spend more as they’re already satisfied. You’d fail. This is the power of JTBD to select macro strategy.
Outcome Driven-Innovation
ODI is a comprehensive, data-driven innovation process built on JTBD. It links a company’s value-creation efforts to the performance metrics customers actually care about. It breaks down into these 10 steps:
- Define the customer
- Define the Jobs-to-be-Done
- Define the job statement in the correct format
- Job statement = verb + object of the verb (noun) + context clarifier
- E.g. Listen to music whilst on the go
- Uncover customer needs
- Outcome Statement = Direction of Improvement + performance metric + object of control + contextual clarifier
- Find segments of opportunity
- Differences in needs don’t come from demographics or psychographics
- To discover segments of customers with unmet needs, you need to segment the market around unmet needs
- Define the value proposition
- know where customers are underserved
- secure the value proposition that communicates to customers that their needs can be satisfied
- do everything to satisfy the unmeet needs better that competition
- Conduct the Competitive Analysis
- Knowing how customers measure value, and how the competition stack up enables an organisation to create products and services that get the job done better or more cheaply
- Formulate the innovation strategy
- Target hidden growth opportunities
- Opportunity Score = outcome importance + (outcome importance - outcome satisfaction)
- Formulate the market strategy
- Formulate the product strategy
Implementing the complete ODI is complex, it has 6 phases and 84 steps 😖
- Initiate an ODI project (15 steps)
- Uncover the customer’s needs (18 steps)
- Gather quantitative data (18 steps)
- Discover hidden opportunities for growth (10 steps)
- Formulate the market strategy (12 steps)
- Formulate the product strategy (10 steps)
It’s usually best managed by a small, well-trained team, leaving everyone else to build the solutions once unmet needs and strategic directions are clear. You can roll it out in three phases:
- Understand the jobs to be done
- Discover hidden opportunities in your market
- Use those insights to drive growth.
By staying focused on what customers actually need, you’ll unlock more successful innovations and outpace traditional approaches.
Deep Summary
Longer form notes, typically condensed, reworded and de-duplicated.
Foreward
- 72% of all new product & service introductions fail to live up to expectations
- Tools and process drive efficiency and create a framework for conversations
- This research led Alex Osterwalder to create the Value Proposition Canvas
- Tony’s approach takes the guesswork out of the innovation process
- A tested model for innovation management that increases your chance of success
- Improve your innovation toolbox
Introduction: The Failure That Led to Success
- Author was embarrassed by an early product failure. Giving him motivation to…
- Identify the metrics that customers use to judge the value of newly released products early on in the product planning process.
- Author first studied: Six sigma, quality function deployment, TRIZ, voice of the customer.
- Worked with statisticians on conjoint, factor and cluster analysis to segment markets
- GOAL: Apply Six Sigma and process control principles to innovation.
- Key Challenge: How to uncover the metrics that customers use to measure success and value
- He tried the process out, and increased the market share of a company from 1% to 20%.
- Tying customer-defined metrics to the underlying process the customer was trying to execute was the key to success.
- Patented the process and called it Outcome-Driven Innovation. The company is called Strategyn.
- Clayton Christensen used his material and popularised Jobs to be Done in The Innovator’s Solution
- Clayton’s idea: People hire products to get jobs done … is compatible with ODI
- Data showing success rates of traditional innovation processes average 17%, the success rate of ‘Outcome Driven Innovation’ is 86%.
- 86% of products and services launched by clients were a success
- The innovation process is 5x more predictable if you focus on Jobs-to-be-done
- Companies can increase the chances of successful innovation if they know ‘what metrics customers use to measure success and value’ when getting a job done.
Part 1: Theory
Chapter 1: Why do innovation projects fail?
- Goal of innovation → come up with solutions that address unmet customer needs
- Two schools of thought
- Ideas-first approach: come up with ideas, test them with customers to see if they meet their needs
- Most follow this approach (68% of companies use a gated innovation process )
- Generate lots of large ideas
- Quickly and inexpensively filter out ideas they think will fail
- Gates: Scope → Business Case → Development → Testing + Validation → Launch
- Referred to as a ‘numbers game’ or ‘failing fast’
- Predicated on the fact that most ideas will fail.
- Generate hundreds of ideas (without knowing customer needs) whilst being told, there are no bad ideas
- Despite it’s popularity - there are three reasons why it doesn’t work:
- Generating lots of ideas doesn’t meaningfully improve the chances that you’ll generate the optimal idea that will satisfy unmet customers needs
- Customers have 50 to 150 needs. 5-80% of which will be unmet. There are many combinations
- It’s like trying to hit a target when you don’t know where the target is. OR a doctor making the right prescription without knowing the symptoms
- The evaluation and filtering process is flawed
- because the customer needs are not known and which of them are unmet isn’t known
- the best solution is likely not in the consideration set
- customers might not be able to make the connection between the product/service and their needs
- Customers can’t articulate the solutions they want
- Coming up with the winning solution is not the customers responsibility
- Companies using the ideas-first approach to innovation struggle to achieve success rates greater than 10 to 20%
- Needs-first approach: learn what the customer’s needs are, determine which of those are unmet, devise a solution to meet them
- Often flawed in execution.
- Understand customer needs → figure out which are unmet → device a concept to address them
- Despite the available needs gathering methods, companies nearly always fail to uncover all or even most of the customer’s needs
- There’s no common language for communicating a need
- Companies rarely have a complete list of agreed upon customer needs, and which of those are unmet
- Characteristics a customer need statements need to be defined
- Obtaining inputs in the customers own words results in the wrong inputs
- Many companies assume it’s impossible to get a complete set of customer needs
- Companies try to satisfy needs without a clear definition of what a need even is
- Before a company can succeed at innovation → they must agree on what a need is and the types of needs that customers have
Chapter 2: Jobs-to-be-done needs framework
People don’t want to buy a quarter-inch drill, they want a quarter-inch hole Theodore Levitt
People buy products and services to get a job done Clayton Christensem
- Jobs-to-be-done theory provides a framework for:
- categorising, defining, capturing and organising all of your customer’s needs
- tying customer-defined performance metrics (in the form of desired outcome statements) to the Job-to-be-done
- In addition to knowing the customer’s needs, you can build a common understanding of what a need is
- Knowing the customers needs allows you to unlock better strategy:
- Hidden segments of opportunity can be discovered
- Determine which needs are underserved or over served
- Ideation, testing, evaluation and marketing of concepts is simpler and easier
- Customers are more loyal to getting a job done - than they are to companies → you can win market share
- Jobs-to-be-done Needs Framework
- We must consider different types of customer needs
- Core functional job
- Related jobs
- Emotional jobs
- Consumption chain jobs
- Financial outcomes
- Job = the overall task the customer is trying to execute
- Outcome = the metric the customer uses to measure success and value while executing a job
- There can be up to 50 desired outcome statements for every functional or consumption chain job
- The framework reveals significant complexity involved in understanding all the needs in a market (there can be well over 100 needs)
- Needs are multilayered and complex
- MECE
- Customer need statements are mutually exclusive - defined independently of each other
- A complete set of customer needs is collectively exhaustive
- Why does each need to be stated separately and categorised correctly?
- The goal of innovation is to device solutions that address unmet customer needs. So we need to…
- Know the needs
- Know which are unmet
- Check for segments of customers with different unmet needs
- You’re looking for a segment of customers with unmet needs you can serve - that make up a big enough % of the market to make it attractive
- Innovation is transformed from a game of chance to a science when the needs are known in advance of ideation
- Markets aren’t homogenous → customers don’t agree on what needs are unmet
- Persona’s are often misleading - segmentation requires quantitative research that’s statistically significant
- JTDB Needs Framework provides…
- What inputs are needed
- How they should be categorised and organised
- Why they are captured, and how they should be used
- A deep understanding of the core functional job helps you create a better product/service than the competition
- The core functional job:
- is defined in a single statement: “monitor a patients vital signs”
- is the anchor around which all other needs are identified
- Define the core functional job first - then emotional, related and consumption chain jobs relative to it.
- Two reasons for understanding functional jobs well:
- to discover new jobs to address
- to define a market they are serving in a new way to use JTBD theory
- Market selection: the process of deciding what new markets a company should enter to establish new revenue streams
- Step 1: pick customers and understand the jobs they’re trying to get done
- Step 2: use quantitative research to determine which of those jobs are least satisfied and will make the most attractive markets to target for growth
- Most companies use ODI to better position their existing offerings
- If your product is a platform - it’s hard to determine the core functional jobs (as there can be many). In that case - use qualitative research to uncover all the reasons a customer may use the offering and then use quantitative research and factor analysis to group together like attributes and discover core jobs
- A functional JTBD has three unique and extremely valuable characteristics:
- A job is stable, it doesn’t change over time
- A job has no geographical boundaries
- A job is solution agnostic
- Desired outcomes on the core functional job:
- Studying the job like it’s a process will uncover the metrics that customers use to measure success and value as they execute each step in that job
- Metrics are included in specially formed need statements we call ‘desired outcomes’
- Uncovering the customer’s desired outcomes (and metrics of success) is the real key to success at innovation - it’s more important than defining the actual job perfectly.
- To uncover the customer’s desired outcomes - we dissect the core functional job into it’s component parts using a job map
- the job map becomes the framework from which to capture desired outcome statements
- desired outcome statements explain precisely how customers measure success and value as they go through each step. of the core functional job
- they describe to get the job done more quickly, predictably, efficiently and without waste
- 50-150 desired outcome statements are applicable to the core functional job
- E.g Trying to listen to music → minimise the time it takes to get songs in the desired order
- Rules for constructing desired outcome statements:
- designed and structured to be measurable, controllable, actionable, devoid of solutions and stable over time
- they are structured so they can be prioritised for importance and satisfaction using statistically valid market research methods
- Related Jobs - Knowing related jobs (the user may want to get done) can lead to platform level solutions that get many jobs done - it’s not uncommon to find 5-20 related jobs might me on the mind of the user
- Emotional / Social Jobs
- Emotional jobs define how customers want to feel or avoid feeling as a result of executing the core functional job.
- Social jobs define how the customer wants to be perceived by others
- Expect 2025 emotional and social jobs to be on the mind of the user when executing the core functional job
- Consumption Chain Jobs
- Represent the different stages of the product lifecycle (receive, install, set-up, transport, clean, store, maintain)
- Each consumption chain job is comprised of its own distinct set of desired outcome statements
- The purchase process itself can be considered a consumption chain job (research, evaluate and transact)
- Consumption chain jobs can become points of product improvement or competitive differentiation.
- Financial Desired Outcomes
- Buyers consider 40-80 financial outcomes (metrics) when making a purchase decision
- Buying a medical device you might consider ‘reducing the length of the patent’s stay’
Chapter 3: The JTBD Growth Strategy Matrix
- You can use them to:
- explain what causes new product and service offerings to win or fail in the marketplace
- help select the growth strategy that fits the situation and get a win in the marketplace
- New products and services win in the marketplace if they help customers get a job done better (faster, more predictably, with higher output) and/or more cheaply
- The JTBD Market GrowthStrategy Matrix:
- Note read this as significantly better/worse/more/less … small changes won’t have the same effect.
- Uber example:
- Uber Lux → charging significantly more for significantly better
- UberX → charging less for better
- UberPool → charging significantly less for worse
- Imagine trying to launch a differentiated strategy in a market that was over-served… there would be nobody looking to spend more as they’re already satisfied. You’d fail. This is the power of JTBD to select macro strategy.
Part 2 Process
Chapter 4: Outcome Driven-Innovation
- “Cobbling together a hodgepodge of incompatible practices and relying on qualitative insights alone doesn’t work” → with regards to how companies do innovation
- Outcome Driven Innovation = a comprehensive, customer-centric, data-driven innovation process that is built around Jobs Theory
- It puts JTBD theory into practice
- Claims 86% success rate
- ODI links a companies ‘Value Creation Metrics Activities’ to ‘Customer-defined performance metrics’
- An approach to:
- Needs gathering
- Needs-based segmentation
- competitive analysis
- Opportunity identification
- Idea generation and validation
- Market sizing
- Formulation of market and product strategy
- 10 Key Steps
Chapter 5: Case Studies
- I won’t detail the case studies - but will collect any insights
- Companies can often meet customer needs better - just by using what they have and changing the positioning
- When bringing something new to the market - your customers might not know your technology or your features → so you can rely on a more stable set of jobs to be done
- Define your customer as a job executor. Ask customers what jobs they are trying to get done - instead of asking them what solutions they want.
- Other benefits to using ODI:
- Cost reduction - you’re only working on the things that matter
- Enhanced speed to market - everyone understands what’s important and what needs to be delivered
- Enhanced credibility - you don’t get questioned by internal stakeholders so much
Chapter 6: Becoming an ODI practitioner
- Lots of companies want to do it - few want to rely on a third party consulting firm
- Strategyn will make a toolkit available to their clients to help them do it themselves
- But here’s an overview of the 6 phases and 84 steps 😖
- 6 Phases and steps
- What skills are required to be an ODI practitioner:
- Process orientation and systems mentality
- Skilled and experienced in qualitative and quantitative research practices
- Superior creative problem-solving, analytical and quantitative skills
- Previous experience on a product team
- Trained in six-sigma
- Team leadership and group facilitation capabilities
- Strong communication skills with ability to synthesise, document and present
- Detail orientation - highly organised
Chapter 7: Transforming the organisation
- Innovation shouldn’t be everyone’s responsibility - a small group of people doing ODI can inform market and product strategy. It’s a mistake to train everyone and get them ‘doing innovation’
- Keep the majority of the company building. Most companies are great at building products.
- Build a team of ODI practitioners - who form the core of an innovation centre of excellence
- Build it in three phases:
- Understand your customers jobs to be done
- Discover hidden opportunities in your market
- Use new customer insights to drive growth
- Proposes a model where an ODI consultant joins the new innovation team at intervals to help them move one or multiple products through the process
- ODI enables companies to…
- Discover hidden opportunities
- Formulate market and product strategies
- Mitigate the risk of failure
- Create what customers want
- Predict what new products will win in the marketplace
- Discover new markets