How to apply strategy and innovation to build a rock-solid foundation for your marketing organization.
After decades of analyzing innovation failures, I repeatedly isolate one factor that stands out above all others as the lead culprit. Ironically, it is the customer. More specifically, many innovations fail because they rely on what customers say they need.
How can this be? Isn’t the customer always right? Well as it turns out, customers often have a hard time describing what they really need. So when companies let customers drive the innovation process, there is a good chance the resulting innovation will fail.
This well-documented lesson has profound implications. There are subtle problems with being a customer-driven company. The marketing profession can no longer afford to merely be customer-focused. Salespeople will not always succeed by giving customers just what they say they need. Customer service satisfaction may not be achieved by thinking the customer is always right. Customers may not recommend your company just because you gave them what they asked for.
The marketing profession is responsible for getting companies into this dilemma. For decades marketers preached the benefits of customer-centricity. Granted, this orientation yielded tremendous gains over previous business eras of being too product, sales or technology-driven. But the research is now abundantly clear: we can no longer rely on what customers tell us they need. They often get it wrong.
Now the marketing profession must adjust and lead the company in a new direction. Numerous post-mortems of failed innovations provide a clear path forward for marketers. Rather than simply ask customers about their needs, marketers need to focus on jobs and outcomes. In this new paradigm the focus is not on the customer, it is on the job you are hired to perform. The job and the job-completion process is the new path for creating and communicating customer value. This new orientation is summarized by three fundamental marketing questions:
- What job does (or will) the customer hire us to perform?
- What are the steps for completing this job?
- What outcomes does the customer seek to achieve at each step along the way?
The three questions represent a profound shift. In What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services, I describe how competitiveness now relies on how well marketers answer these questions.
Armed with the right answers, marketers can envision and design products that help customers get the job done better.
They can also create more effective marketing strategies (e.g., define outcome-based market segments) and programs (e.g., tailor campaign messages to highlight key outcomes for each market segment).
The three steps of job-based marketing appear easy, but don’t be fooled. Identify the wrong job or capture it too broadly or too narrowly, and you solve the wrong problem. Insufficient granularity in defining the process steps exposes you to competitive incursions. Failing to measure each outcome prevents you from proving to yourself and future customers that your product is better than the others.
Job-based marketing is significantly more complex than its predecessor. A job typically has 50 to 150 outcomes. These outcomes are not discovered through impersonal customer survey forms. Instead, qualified experts personally observe and talk to customers in ways that ensure the full job process is mapped and the desired outcomes are collected and quantified. These marketing activities represent a new and essential marketing competency.
The race is on to build job-based marketing competencies and integrate this new perspective throughout the organization.
Indeed, I see companies competing on how thoroughly and quickly they integrate job-based marketing into nearly every aspect of their operations. Starting yesterday, the race goes to those who grasp and master job-based marketing first.
Let me illustrate. My first major success came when I helped Cordis Corporation (now a J&J company) reinvent its line of angioplasty balloon products. By understanding the job that interventional cardiologists were trying to get done (restore blood flow in an artery), we discovered a number of hidden growth opportunities and conducted a series of strategy sessions to help Cordis create a new product line. In less than 18 months, Cordis 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.
This success became the foundation of Outcome-Driven Innovation (ODI) – a strategy and innovation process that we designed from the ground up to create products and services that are certain to get the job done significantly better that any competing solution. It has a success rate that is five times the industry average – and this is no accident. Future posts will describe Outcome-Driven Innovation in more detail, exploring what it takes to win.
About the Author
Tony Ulwick is the pioneer of jobs-to-be-done theory, the inventor of the Outcome-Driven Innovation® (ODI) process, and the founder of the strategy and innovation consulting firm Strategyn. He is the author of “What Customers Want” (McGraw-Hill) and numerous articles in Harvard Business Review and Sloan Management Review.More Content by Anthony Ulwick