“Outcome-Driven Venturing: Build the right solutions—and build them right” – Noel Sobelman and Tony Ulwick
The holy grail of innovation in the twenty-first century is customer insight. Designing products and solutions from the customer-in, rather than the product-out. Technical specialists from engineers to actuaries have started to learn how to investigate customer needs and preferences before they spend time designing products that the market does not want. However, our application of the science of customer insight has often lagged behind this enthusiastic embrace of outside-in thinking. That’s where ‘outcome driven venturing’ that focuses on the customer’s “job to be done” fits in.
People buy products and services to get a “job” done. This Jobs-to-be-Done (JTBD) theory has been successfully put into practice by countless companies over the last 20+ years. Through these successes, we have learned that customers can state the metrics they use to measure success when getting a job done—and that these metrics, when defined as desired outcomes, bring science to the front-end of the innovation process. With these advancements, companies can know with greater certainty whether a concept will win in the marketplace before development even begins—and invest its resources only in high potential solutions. In other words, companies have learned how to apply Jobs Theory, using Outcome Driven Innovation (ODI) to consistently ensure they “build the right solutions”.
Design thinking, lean startup, and Agile methods have emerged over the last 12 years as the predominant approaches for development and the back end of innovation. Thanks to thought leaders like Michael Tushman, Charles O’Reilly, Steve Blank, Eric Reis, Alex Osterwalder, Brant Cooper, and others, we now have a methodology and growing toolset for streamlining development and go-to-market processes. These lean innovation concepts help us “build the solutions right”.
Combining downstream lean methods with upstream JTBD practices creates a robust, end-to-end growth formula. This helps take the guesswork out of needs discovery and prioritization for, ideating, incubating, and scaling new ventures. Through this combined synergy, companies seeking to create new ventures are now able to build the right solutions AND build them right.
Combining JTBD with Lean Innovation
Lean innovation teaches us how to run experiments with customers to test the most critical unknowns in a transformative new idea. Techniques such as empathy interviews and ethnography are used to surface the unmet needs of target customers and to continuously seek evidence that the customer values the solution to the problem. In addition, companies start with the riskiest, highest impact business model assumptions to learn as quickly and as cheaply as possible. These experiments start early in the innovation process and continue through development, as teams validate the attractiveness of the evolving solution and the viability of the business model.
JTBD short circuits this process by defining and prioritizing upfront the desired outcomes the customer seeks. This data quickly exposes hidden segments of opportunity and unmet needs that can take months to uncover if teams jump too quickly into build and experiment mode.
Take Kroll Ontrack’s entry into the electronic evidence discovery market as an example. Its first two iterations of a minimum viable product failed to produce sufficient evidence that they were on the right track. Why? Their experiments failed to consider all aspects of the customer’s job-to-be-done. In fact, they ignored parts of the job completely. In addition, they optimized unimportant parts of the job at the expense of getting the underserved parts of the job done more effectively. As a result, they had to rethink their problem assumptions, revisit their proposed solution, and start down a new test and learn pathway.
JTBD helps reduce the number of experiment iterations needed to validate the magnitude and prevalence of the problem and helps pinpoint more quickly the value customers place on a proposed solution. Working together, JTBD and lean innovation allow companies to isolate the most important desired outcomes upfront, design more targeted customer experiments, and more effectively validate solutions to significant problems. This results in shorter development cycle times while increasing the odds of innovation success.
Once Kroll Ontrack applied Jobs Theory and lean innovation together, they quickly got an awarding winning product to market. (see case study). This is the power of outcome-driven venturing. It adds science to the front-end of the innovation process.
Noel Sobelman is a Principal with Change Logic. He works with corporate leaders to accelerate core business vitality while simultaneously building new-growth businesses. For the past 25 years, he has worked in the areas of growth strategy, innovation capability building, portfolio management, organization design, ecosystem development, and digital enablement. He is widely recognized for bringing a practical and applicable approach to companies looking to ignite change.
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 Jobs to be Done: Theory to Practice (IDEA BITE PRESS, October 2016), “What Customers Want” (McGraw-Hill) and numerous articles in Harvard Business Review and Sloan Management Review.