Jobs to be Done Theory to Practice - Anthony W. Ulwick

“If you liked the book, you can purchase it using the links in the description below. By buying through these links, you contribute to the blog without paying any extra, as we receive a small commission. This helps us bring more quality content to you!”

BOOK LINK:

CLICK HERE

Here is a summary of the book “Jobs to be Done: Theory to Practice” by Anthony W. Ulwick:

• The book discusses Jobs-to-be-Done theory, which proposes that customers hire products and services to get a job done. Understanding the specific jobs customers want done is key to successful innovation.

• Traditional approaches to identifying customer needs often fail because they don’t categorize needs properly. The JTBD framework provides a structured way to define the 6 types of customer needs.

• The book introduces the Outcome-Driven Innovation process developed by Ulwick, which has an 86% success rate. It guides companies through explicitly defining customer jobs, uncovering needs, finding market opportunities, and developing solutions.

• Case studies showcase how companies like Microsoft, Kroll Ontrack, and Bosch have utilized ODI to gain insights, identify new growth opportunities, and achieve innovation success.

• It provides guidance for practitioners on executing an ODI project through 84 defined steps. It also discusses how companies can transform their organizations to adopt a JTBD mindset and capabilities.

• The book establishes JTBD and ODI as practical theories and processes for consistently creating innovative solutions that are aligned with customers’ jobs-to-be-done.

• The author’s failure with the IBM PCjr project inspired him to develop a way to better understand customers’ needs and metrics for judging products early in the development process.

• Through years of research and applying tools like Six Sigma, he had a breakthrough of focusing on the processes customers try to execute, rather than the products themselves. This led him to found Strategyn and develop the Outcome-Driven Innovation (ODI) process.

• An early success applying ODI was with medical device company Cordis, which helped reinvent its angioplasty balloon products and saw huge growth. This validated that focusing on customer-defined metrics tied to underlying processes works.

• Over decades, the author refined ODI through numerous projects, gaining patents. He introduced the concept to Clayton Christensen, who popularized the “Jobs-to-be-Done” theory.

• The author’s 2002 HBR article and growing success of Strategyn spread awareness of ODI and customer-focused innovation management. This inspired him to write a book on the topic.

• The passage discusses the innovation method called Outcome-Driven Innovation (ODI), which is based on Jobs-to-be-Done Theory.

• ODI transforms the theory into an effective innovation practice for predicting customer needs and developing successful new products/services.

• The author has extensive experience leading hundreds of ODI engagements with companies and writing about it.

• A study showed that traditional innovation has a 17% success rate on average, while ODI has an 86% success rate based on client projects. This validates that focusing on customer jobs makes innovation much more predictable.

• The study looked at outcomes of 43 projects using ODI across various industries. 18 out of 21 product launches were deemed successful by the companies based on metrics like revenue, market share, customer satisfaction, ROI.

• The high success rate of ODI is because it identifies the concrete metrics customers use to define success for a given job, rather than just focusing on product features.

• The book will explain the theory, process and practice of using ODI to drive innovative outcomes for companies based on the author’s extensive experience in the field.

Here is a summary of the -be-Done Growth Strategy Matrix:

• The matrix provides five strategies that companies can use to drive growth based on two dimensions: market needs fulfillment and internal capabilities.

• The five strategies are defend, hold, expand, extend, and create. Each strategy corresponds to a different quadrant of the matrix based on where a company’s products/services fall in terms of needs fulfillment and capabilities.

• Defend strategy is for products that fulfill needs well but company capabilities are weakening. Focus on optimization.

• Hold strategy is for products that fulfill needs well and company has strong capabilities. Maintain and maximize.

• Expand strategy is for products that fulfill some needs and capabilities are strong. Grow in existing markets.

• Extend strategy is for products that fulfill some needs but capabilities need developing. Enter adjacent markets with similar needs.

• Create strategy is for unfulfilled needs and company needs to build new capabilities. Develop breakthrough innovations.

• The matrix helps companies determine the most appropriate strategy based on market/customer insights and internal assessments to guide focused growth efforts.

• The ideas-first approach to innovation, where companies generate product ideas and then get customer feedback, is often flawed because customers cannot properly evaluate ideas they have not experienced. They may not see the connection between an idea and their actual needs.

• The needs-first approach aims to address this by understanding customer needs first before developing ideas. However, executing this approach is also difficult because companies struggle to fully understand and agree on customer needs.

• There are several reasons for this: 1) There is no common definition or framework for what constitutes a “need”. 2) Managers within companies often disagree on how needs should be defined, described, and prioritized. 3) Customers cannot always articulate their needs clearly. 4) There is an assumption that customers have “latent” or unarticulated needs, but this cannot be proven.

• As a result, companies end up innovating without truly understanding customer needs, which undermines their marketing, product development, and strategy. A clearer framework and shared understanding of needs is needed for successful needs-first innovation.

• The success of R&D, product development, sales, and innovation depends on understanding customer needs. However, fully understanding all customer needs is a major challenge.

• Jobs-to-be-done theory provides a useful framework for categorizing, defining, capturing, and organizing all customer needs. It focuses on the “jobs” or tasks customers hire products and services to accomplish.

• The framework identifies different types of customer needs, including the core functional job, desired outcomes of that job, related jobs, emotional/social jobs, consumption chain jobs, and financial outcomes. Customer needs are complex, multilayered, and vary between segments.

• Completely understanding customer needs allows companies to discover unmet needs, target segments with unique unmet needs, and develop solutions that significantly improve customers’ ability to get jobs done. This makes innovation more systematic and predictable.

• Market research is needed to accurately identify segments and determine which needs are truly unmet rather than assumed. Understanding customer needs at this depth enables more effective product development, marketing, and innovation.

• Understanding the core functional job a customer is trying to get done is important for existing companies looking to improve their offerings or create new products and services in core existing markets.

• For platform-level solutions used for multiple purposes, qualitative and quantitative research is needed to uncover all the reasons for use and group related attributes to identify the core jobs.

• Defining the job, related jobs, desired outcomes, emotional/social jobs, and consumption chain jobs provides valuable insights. Desired outcomes describe how customers measure success at each job step.

• Insights into the core job, related jobs, desired outcomes, and consumption chain jobs can inform product/service improvements, experience design, and competitive differentiation strategies.

• Understanding the financial desired outcomes customers consider in purchase decisions also informs innovation opportunities. Defining all the different types of customer needs through jobs-to-be-done analysis provides a framework for growth strategies targeting underserved needs and customer segments.

• A company needs to decide on a growth strategy to ensure success in the marketplace. Jobs-to-be-Done theory can help by explaining what makes products win or fail and selecting the right strategy.

• Products win when they help customers get jobs done better and/or cheaper. This led to a 5-strategy matrix based on performance and price: differentiated (better, more expensive), dominant (better, cheaper), disruptive (worse, cheaper), discrete (worse, more expensive), sustaining (slightly better/cheaper).

• Each quadrant has a unique customer target: underserved for differentiated, all customers for dominant, overserved/non-customers for disruptive, restricted customers for discrete.

• The strategies are defined and examples given for each: differentiated targets underserved customers, dominant targets all, disruptive targets overserved/non-customers, discrete targets restricted customers, sustaining retains existing customers.

• Segmentation is needed to understand customer outcomes and identify underserved/overserved segments to apply the right strategy. Differentiated captures high profits initially from underserved customers before moving down market.

In short, it presents a framework to analyze products’ strategies based on job-get-done performance and price in order to select the strategy that best fits the target customer segment. Segmentation is key to identifying the right segment to target.

• Companies can successfully move down market by lowering prices of older products and introducing newer, better products. They can also lower costs through operational innovations like Uber did with freelance drivers.

• Incumbents can target existing products at overserved customers and grow profits and market share by introducing new, higher-profit products.

• A dominant strategy introduces a product that gets the job done significantly (20%+) better and cheaper than competitors. This allows winning as an incumbent or new entrant cannot defend against it.

• Disruptive strategies successfully serve overserved customers who accept worse performance for lower costs, and non-consumers who previously couldn’t afford options. A series of products then improves performance while maintaining lower costs.

• Discrete strategies sell existing products in unique situations allowing higher prices. Restrictions justify this, like concessions charging more due to limited water access.

• Sustaining strategies slightly (under 5%) improve performance or lower costs to maintain position against competitors taking share. Incumbents leverage this but new entrants risk is too high with only slight advantages.

• Outcome-driven innovation is a customer-centric, data-driven process built around jobs theory. It analyzes markets in new ways and links value to customer-defined job metrics for successful innovation.

Here is a summary of the key points about ODI (Outcome-Driven Innovation) and the process it employs:

• ODI takes a rigorous, controlled approach to needs gathering, segmentation, opportunity identification, idea generation and validation, market sizing, and strategy formulation to help drive predictable innovation outcomes.

• The 10-step ODI process begins with defining the customer and ends with a market and product strategy to create value for that customer.

• Important early steps include defining the key customer types (end user, product support team, purchase decision maker) and correctly identifying the core functional job the customer is trying to get done.

• The job should be defined from the customer’s perspective, at the right level of specificity to guide innovation, without being too narrow or broad. Emotional and outcome needs are separate from defining the core functional job.

• Subsequent steps gather insights about emotional jobs, desired outcomes, and opportunities to better fulfill customer needs in a way that leads to predictable innovation success.

In summary, ODI provides a structured process starting with deep customer understanding to help companies identify opportunities and drive innovative new products, services and strategies.

The passage discusses segmenting customers based on their unique unmet needs, which it argues is the only truly valuable form of segmentation. Traditional methods like demographics often fail to capture why customers have different needs.

It explains that customers experience different difficulties and complexities when trying to get a job done. Subsets of customers may face added challenges that create additional unmet needs. For example, tradesmen making many finish cuts have needs for faster blade adjustments. Drivers going to multiple locations struggle more with traffic unpredictability.

The key is that these subsets encounter job difficulties that others do not, resulting in unique unmet needs. The only way to discover valuable customer segments is to group them according to these differing sets of unmet needs, as identified through analyzing desired outcome statements around the core functional job. This need-based segmentation can then be used to target unique solutions to groups who will truly value them.

• The methodology involves conducting market segmentation based on customers’ unmet needs or desired outcomes, rather than demographics. This is called “Outcome-Based Segmentation”.

• The 4 steps are: 1) Analyze the job-to-be-done and capture customer needs as outcome statements. 2) Conduct a survey to determine importance and satisfaction of outcomes. 3) Use factor and cluster analysis to segment customers based on unmet outcomes. 4) Profile segments to understand complexity and level of underserved needs.

• Knowing the unmet needs/outcomes allows companies to target innovation opportunities and growth strategies where needs are underserved. It prevents guessing and increases chances of success.

• Competitive analysis is done by having customers evaluate competing offerings against the full set of outcomes. This reveals which offerings better fulfill needs and which outcomes are generally underserved in the market.

• This insight helps companies offset competitor strengths and carve out a unique position by addressing underserved outcomes. It was demonstrated successfully by Coloplast in the wound care market.

• Conducting competitive analysis based on features alone is outdated. Evaluating based on outcomes provides more relevant insights to create superior solutions for customers.

• Bosch conducted a survey of users of the two best-selling circular saw brands, DeWalt and Makita, to understand the importance and satisfaction levels of 75 different outcomes/features.

• This data provided insights into which outcomes were “table stakes” (very important and satisfied), which brand performed better on which outcomes, and which outcomes represented opportunities because they were important but unsatisfied.

• 14 outcomes were identified as significant opportunities based on having an opportunity score over 10.

• Bosch realized addressing the unmet needs could allow them to occupy a unique competitive position by satisfying needs competitors had not.

• The data also helped Bosch avoid adding unnecessary features that did not provide value.

• Outcome-driven competitive analysis provides deeper customer insights not normally available, enabling innovation focused on better job completion at a lower cost.

• Bosch was then able to formulate an innovation strategy targeting a specific underserved segment and set of unmet needs to address, rather than relying on guesses.

• An opportunity algorithm and landscape further prioritize which unmet needs represented the best opportunities for growth and innovation focus.

• This quantitative customer understanding then informs developing a targeted market strategy centered on effectively communicating how new offerings solve important unmet needs.

• Decide which existing offerings best address the unmet outcomes of each outcome-based customer segment. Target communications and marketing of those products at the relevant segments.

• Include an outcome-based value proposition highlighting how products meet unmet customer needs when communicating with customers.

• Build digital marketing strategies around keywords customers use when searching for solutions to their unmet outcomes.

• Assign marketing leads to the appropriate outcome-based customer segment to ensure they receive tailored messaging.

• Train sales teams on identifying customer segments and guiding conversations based on customers’ unmet outcomes and needs.

• Analyze products to see if features from other offerings could address unmet outcomes without new development.

• Prioritize and accelerate products in development that satisfy important unmet needs.

• Consider partnering with or acquiring other companies to fill gaps in addressing unmet customer outcomes.

• Develop new product features and service offerings specifically designed around key unmet outcomes.

The key is gaining a deep understanding of specific customer pain points and unmet needs in order to align all aspects of marketing, sales and product development accordingly.

• Microsoft was facing pressure to improve the value of its Software Assurance offering, as renewals were declining and customers were questioning the value. They took an ODI approach to better understand customer needs.

• They interviewed procurement managers and IT professionals to understand the jobs they were trying to do related to purchasing and managing software licenses. This uncovered many desired outcomes.

• Surveys revealed underserved segments and outcomes for both roles. Microsoft realized it needed to take a broader lifecycle perspective, from acquisition to disposal.

• They discovered they already had solutions developed internally that could address unmet customer needs, like license tracking, testing for software conflicts, training programs, and security tools.

• Integrating these existing solutions transformed the Software Assurance offering to better meet the full range of customer jobs and outcomes.

• The results were dramatic - revenue exceeded goals before the new offering launched. Customer satisfaction and renewals increased substantially, leading to growth in the business. Taking an ODI approach helped Microsoft uncover hidden opportunities by fully understanding customer needs.

• Kroll Ontrack was faced with an opportunity to enter the emerging market for electronic document discovery solutions for the legal industry. However, the market was still nascent so defining an effective strategy was challenging.

• Using Strategyn’s Outcome-Driven Innovation (ODI) methodology, Kroll Ontrack conducted research to understand the desired outcomes of lawyers (the end users) in the e-discovery process. This uncovered around 100 outcomes.

• The ODI research guided Kroll Ontrack to develop innovative solutions focused on the most important and underserved outcomes. This included tools to minimize document exclusion/alteration during capture and speed up information retrieval.

• Kroll Ontrack continued innovating each quarter to address additional outcomes, making it hard for competitors to catch up.

• Prior competitors viewed it as a paper document market, but Kroll Ontrack “leapfrogged” them by developing a revolutionary digital platform focused on the jobs lawyers needed to get done.

• The ODI-driven strategy was highly successful, with Kroll Ontrack growing its e-discovery revenues from $11M to over $200M in around 6 years and becoming the long-time industry leader.

So in summary, using ODI helped Kroll Ontrack understand client needs in a new market, guide strategic innovation, and achieve significant growth outpacing competitors who did not take such a job-based approach.

• Strategyn recommended an outcome-based market strategy that focused on understanding the needs and jobs of the dairy producer, even though they are not a direct customer.

• The strategy emphasized changing messaging away from product features to focus on outcomes and how products can help satisfy dairy producer goals.

• Segmentation was changed from demographic to focus on shared outcomes across different sized dairies.

• An initial focus was identifying existing products that addressed high priority outcomes across segments.

• Messaging, positioning, website and literature were reoriented around outcomes.

• Revenue grew over 30% in 2014 as the new strategy started to take effect, aided by improved economic conditions.

• The outcome-driven insights helped identify and acquire a complementary business focused on other species but addressing dairy producer needs.

• The executive team found the outcome-based approach useful to evaluate and communicate acquisitions.

• The customer reported seeing immediate impacts in conversations and product uptake as well as long term revenue growth results.

• Both the customer and their team found value in the process and have embraced the outcome-focused methodology.

• Bosch Tool Company wanted to enter the North American professional circular saw market but faced challenges due to competition and lack of innovation in the market.

• They used Outcome-Driven Innovation (ODI) methods like job mapping and surveys to identify unmet customer needs, specifically among finish carpenters.

• Analysis revealed 14 unmet outcomes, including issues with cords and line-of-sight visibility during cuts.

• Bosch addressed these unmet needs with innovations like the DirectConnect cord system and blade guard cutouts, without increasing costs.

• Customer satisfaction was projected to increase 38% and the new CS20 circular saw was very successful.

• Similarly, Abbott Medical Optics used ODI to improve their customer service for materials managers who replenish lenses for cataract surgery.

• They identified unmet needs around communication and problem resolution and introduced advocacy teams to improve the customer experience and relationship approach.

• In both cases, ODI helped uncover hidden customer needs and opportunities that competitors had missed, leading to more innovative and successful new products and services.

• Hussmann originally launched an LED lighting product line for refrigeration cases but saw little success over 4 years as customers were skeptical of upfront costs and value.

• They applied ODI methodology to better understand customer needs. They identified over 300 desired outcomes from interviews with shoppers, store merchandisers, and executives.

• Key stakeholder groups prioritized the outcomes. Eight related to display case lighting and were unmet needs for executives around true color display and uniform lighting.

• Hussmann developed their EcoShine LED system specifically addressing these unmet needs around uniformity, reduced glare, and true product colors.

• The EcoShine system has been very successful in the market, gaining double digit market share in its first year through superior performance on the identified outcomes.

• ODI helped Hussmann differentiate without increasing costs, speed up development, and gave them credibility internally by clearly demonstrating customer needs.

• It shifted Hussmann’s culture to be more customer-needs driven rather than technology-driven. ODI validated their innovation strategy and priorities.

• The passage provides an overview of what it takes to become an ODI (outcome-driven innovation) practitioner and effectively lead ODI projects within an organization.

• It outlines the key responsibilities of an ODI practitioner, which include initiating projects, uncovering customer needs, gathering quantitative data, discovering opportunities, formulating market and product strategies.

• The passage then walks through each of the main phases of an ODI project in detail, outlining the specific steps and activities required of the practitioner for project initiation, qualitative research, quantitative research, data analysis, etc.

• It emphasizes that being an ODI practitioner requires skills in project management, qualitative and quantitative research, data analysis, facilitating teams and driving organizational change.

• The goal is to equip interested individuals within organizations with the knowledge and tools needed to take on the practitioner role and successfully lead ODI efforts internally, without relying on outside consulting firms long-term.

So in summary, the passage provides an in-depth look at what it takes to be an effective internal ODI practitioner capable of independently leading jobs-to-be-done and outcome-driven innovation projects.

• The goal is to build an internal ODI (Outcome-Driven Innovation) team that will drive innovation efforts in the organization. This team applies Jobs Theory and ODI practices to strategically selected markets.

• Training the entire organization is not necessary or effective. A small ODI team can drive innovation by informing decisions about markets, products in development pipeline, etc.

• The ODI team acts as a Center of Excellence, using customer-centric, data-driven processes to minimize risk and maximize success.

• Building the team within an existing Six Sigma program helps, as those practitioners have relevant skills.

• The transformation happens in 3 phases:

  1. Understand customer jobs-to-be-done via qualitative research workshop
  2. Conduct quantitative market research using ODI methods
  3. Teach insights across the organization to drive decision-making

• Phase 1 qualitatively identifies customer needs and jobs. Phase 2 provides data-backed insights. Phase 3 socializes these insights organization-wide.

• Doing this process for one product team at a time allows learning while transforming decision-making gradually.

The key takeaway is that innovation should be driven by a small, specialized ODI team that informs the whole organization, rather than trying to train everyone all at once.

• Phase I involves working with the product team to identify the target customer(s), understand the job(s) they are trying to get done, and define customer needs/desired outcomes. This establishes a common language and shared understanding.

• Phase II involves conducting quantitative market research through customer surveys. This provides data on unmet needs, market segmentation, competitive strengths/weaknesses, and opportunities.

• Phase III trains the team to use the customer insights from Phases I-II to make outcome-driven decisions across marketing, product development, strategy, and more. It shifts the team’s mindset to be customer-centric and data-driven.

• The expected impacts of completing all three phases are that the team agrees on customers and jobs, uses a common definition of needs, understands unmet needs, pursues a strategy based on opportunities rather than guesses, and makes decisions guided by customer data rather than opinions.

• The goal is for the company to consistently create customer value, pursue the right opportunities, mitigate risks, develop winning products, and discover new markets - leading to an 86% success rate for new products and services.

• 1962 - Theodore Levitt said “people don’t want a quarter-inch drill, they want a quarter-inch hole”, laying the foundation for the jobs-to-be-done concept.

• 1984-1985 - IBM’s failure of the PCjr inspires Tony Ulwick to develop a new innovation process focused on understanding the job to be done rather than coming up with ideas first.

• 1990 - Ulwick has the insight to treat the job/process as separate from solutions and apply Six Sigma principles to study it.

• 1991 - Ulwick founds Total Quality Group to put his new theory and innovation process (CD-MAP) into practice.

• 1992 - Ulwick uses his process to help Cordis Corporation create new angioplasty balloons, the first application.

• 1994 - Cordis’ success validates Ulwick’s process works.

• 1996 - Ulwick files patents describing evaluating concepts around customer job metrics.

• 1997 - Ulwick’s segmentation method leads to new Motorola radio growth.

• 1999 - Ulwick changes company name to Strategyn and process name to Outcome-Driven Innovation (ODI).

• 1999-2000 - Ulwick introduces ODI to Clayton Christensen and completes 50th engagement.

• 2002 - HBR publishes Ulwick article bringing jobs theory mainstream attention.

The article outlines the development and adoption of Tony Ulwick’s Outcome-Driven Innovation (ODI) process over several decades. Some key points:

• ODI was introduced in 2002 and recognized by Harvard Business Review that year as an impactful business idea.

• Clayton Christensen popularized the idea of “Jobs-to-be-Done” theory in his 2003 book, citing Strategyn and Ulwick as originators.

• Case studies in 2004 and 2007 showed ODI driving growth at companies like Microsoft.

• Ulwick’s 2005 book explained how to apply Jobs-to-be-Done theory through ODI in practice.

• Independent studies found ODI led to an 86% innovation success rate, much higher than industry average.

• Companies like Johnson & Johnson successfully used ODI for new product development.

• Over time, ODI and Jobs-to-be-Done theory gained further recognition and adoption through various articles, books, and Ulwick completing many client engagements.

So in summary, it outlines how Ulwick developed and promoted the ODI process and Jobs-to-be-Done theory over decades, with increasing validation of its effectiveness through case studies and adoption by leading companies.