In a nutshell, the outcome-driven product creation approach is based on the tenet that companies should understand what their customers want before they invest in the creation of a new product or service. This is why we, as Product Managers, should make the innovation process more efficient.
So far, by conducting customer interviews and acting on the feedback, we seem to know what criteria customers will use to judge a product's value, and we can design a product that meets those criteria. Companies continue to define "requirements" as any kind of customer input: customer wants, needs, benefits, solutions, ideas, desires, demands, specifications, and so on. So, in result, the product would be a success. If so, where had the process gone wrong? Why had so many products failed?
To figure out how to successfully innovative IT product, companies must think about customer requirements very differently and focus more on the criteria that customers are going to use to judge a product's value and dutifully design a product that ensures those criteria are met. These criteria must be predictive of success and not lagging indicators.
There you have three key tenets that define outcome – driven product creation:
- Customers buy products and services to help them get jobs done.
Customers have “jobs” with functional dimensions that need to get done. When customers become aware of such a job, they look around for a product or service that will help them get the job done. So, the focus is not on the customer, it is on the job to do it faster, more conveniently, and less expensively than before. It’s good to know that more than 80 percent of initiatives are designed to improve existing products and services that already have an established customer base.
- Help New Customers Do a Job That Others Are Already Doing
Under this innovation growth option, companies focus on creating innovations that target non-consumers—individuals who want to get a job done but can't because the products available for doing the job are either expensive or require specialized skills.
- Help New Customers Do a Job Nobody's Doing Yet
Under this innovation option, a company seeks to create a new product or service that is aimed at helping customers get a job done, where no product or service is currently available - the market does not yet exist.
When a company chooses the innovation path, it should decide for whom and how it wants to create value and focus first on the end user who can legitimately provide the inputs that are needed to improve an existing product or to create a whole new one. The important thing is to avoid such mistakes:
- do not focus on the wrong customer,
- excluding the end user from consideration (it often happens when more than one constituent should be considered);
- do not accept secondhand information about customer requirements (do not let one customer speak for another, for instance, do not let the salespeople collect or provide information about customer requirements. It is better to go directly to the sources).
What about the Requirements-Gathering Process?
During the requirements gathering process, three issues remain important to remember:
- A standard definition of requirements does not exist—when we talk about customer requirements, we talk about customer needs, wants, solutions, benefits, ideas, outcomes, and specifications.
- To bring clarity and objectivity to the innovation process, we need to create a common language around the different types of information about customer requirements.
- It is possible that we do not obtain the data needed from customers.
- We should be careful about accepting the customers' statements as requirements.
- Instead of debating the methods used to capture customer information, we should focus on collecting the right kind of information.
What Types of data do we typically collect?
- Solutions
Many customers offer their requirements in the form of a solution to a problem, describing the physical features they want to see. Besides, very often, they do not know how the requested features will affect other dimensions of the product.
So, capturing customer requirements, we should be looking for the criteria customers use to measure the value of a product or service—not their ideas about the product or service itself.
- Specifications
Although this type of feedback may be appropriate in certain situations (among government contractors, for instance), accepting specifications as customer inputs inherently prevents engineers and designers from using their creative skills.
- Needs
Customers' needs are usually expressed as high-level descriptions of the overall quality of a product or service. For instance, “reliable”, “effective”, “robust”, or "resilient.” Although these simple statements provide some indication, they are imprecise and open to interpretation. This often leads to frustration and friction between the marketing and development departments.
Good customer input must be concise, actionable, and measurable because it’s helpful in solving the problem.
What Customer Inputs Should We Collect?
We should obtain three types of data:
- We need to know which jobs our customers are trying to get done (that is, the tasks or activities customers are trying to carry out).
There are three different types of jobs that customers are often trying to get done:
- functional jobs, personal jobs, and social jobs (two types of emotional jobs)
A mom organizing a party for her child may want to arrange the party (functional job), but she may also want to feel loved by her child (personal job) and be perceived as a good mom by the other moms (social job).
Functional jobs define the tasks people seek to accomplish, personal jobs explain the way people want to feel in a given circumstance, and social jobs clarify how people want to be perceived by others.
- The outcomes customers are trying to achieve (that is, the metrics customers use to define the successful execution of a job).
Customers want to get more jobs done, but they also want to be able to do specific tasks faster, better, or cheaper than they can currently. To define what "faster" or “better” means, we need to capture the set of metrics (measures of value) to define how to get the job done and what it means to get the job done perfectly. These metrics are desired outcomes that typically state directions of improvement:
- minimize or increase
- contain a unit of measure (number, time, frequency, likelihood)
When we have a collective set of outcomes that represents the customer's value model, we have all the measures used to judge how well a job is getting done.
- The constraints that may prevent them from adopting or using a new product or service. Besides getting more jobs done or a specific job done better, customers also need help overcoming the constraints that prevent them from getting a job done altogether or under certain circumstances. These constraints are often physical, regulatory, or environmental in nature.
How Should We Collect Customer Inputs?
The method of gathering customer requirements is not as important as knowing what type of information we want from customers (jobs, outcomes, and constraints). Then it is simply to ask what they were trying to achieve.
We need to learn how to think about activities that customers try to achieve. Helpful questions such as:
- What makes one company's offering better or worse than another's, and why?
- What characteristics describe the ideal service offering?
To sum up, development and marketing managers are responsible for identifying opportunities for growth, segmenting markets, conducting competitive analysis, generating and evaluating ideas, generating intellectual property, communicating value to customers, and measuring customer satisfaction. To successfully perform these activities, these managers rely on feedback from customers, which means the customer-requirements-gathering process is one of the most critical in business, which is why it is worth focusing on the Outcome-Driven Product Creation idea, which means on Jobs, Outcomes, and Constraints of users. Pay attention to help some job done in general, get more jobs done, help get a job done better, or simply help overcome an obstacle to getting a job done in a given situation.
If you are interested in this topic, I encourage you to read the book: Anthony W. Ulwick, “What customers want. Using Outcome-Driven Innovation to Create Breakthrough Products and Services”.
