Innovation is the process of devising a solution that addresses unmet
customer needs. To win at innovation, a company must be able to uncover all
the customers’ needs, figure out which are unmet and then work to devise
solutions that will address them.
Sounds simple enough, but in most companies the marketing, development, and
R&D teams can’t even agree on what a “need” is. This is the root cause
of failure in innovation. While customer needs are a critical input into
the innovation process, confusion as to what a need is continues to derail
the science of needs discovery.
To address this issue, I have spent the last 30 years working on
“inventing” what I hoped to be the “perfect” need statement. This has
resulted in the creation of the desired outcome statement, which is the
cornerstone of the
Outcome-Driven Innovation process
.
To invent the perfect need statement I started by asking, “what
characteristics should a need statement possess in order to make it the
perfect input into the innovation process?” I have concluded that the
perfect set of need statements should have the following 10
characteristics:
1. Stable over time
: It’s hard to hit a moving target. The ideal set of needs would not change
from the beginning to the end of the product development cycle, or for the
foreseeable future. If needs are ever-changing (variables in the innovation
equation, rather than constants) then innovation will always be a guessing
game dependent on luck.
2. Enable the accurate evaluation of competing solutions:
The ideal set of customer needs would enable a company to accurately assess
how much better or worse one solution is than another. This would enable
the evaluation of existing solutions, competing solutions and
ideas/concepts for new offerings that could be developed in the future. The
data model would help companies determine what products/services will win
in the marketplace and where to invest.
3. Reveal how customers measure value:
The perfect set of need statements would communicate the metrics that
customers use to measure value. If customer value can be measured, then the
ability to create that value becomes more predictable.
4. Guide the creation of a new products/services:
The perfect need statements would be actionable, meaning they would be
measurable and controllable in the design of a product or service offering.
In other words, the need statements would describe what function the
product/service should offer to get the job done better and would guide the
creation of ideas/solutions that would provide the needed function.
5. Prevent misunderstanding
: The perfect set of needs would be clear, concise, accurate and stated in
a way that could not be misunderstood, misinterpreted or misused. The
statements would not be ambiguous. Everyone in the organization would have
the same understanding of the customer’s needs.
6. Explain all the causal factors that contribute to failure:
The innovation process is unpredictable when companies don’t know all the
factors that contribute to process variability. The ideal set of needs
would reveal all the metrics/criteria that customers use to assess
the value that one product/service offering provides over another. Knowing
these metrics/criteria would help companies predict what products and
services will win in the marketplace.
7. Discoverable through research
: Ideally, the need statements would be easily obtainable in a consistent
format from customers or other sources in a reproducible and scalable
manner.
8. Enable unmet need discovery:
Knowing which of the customer’s needs are unmet is fundamental to success
at innovation. Consequently, the need statements would have to be
structured so that customers could prioritize them in a way that reveals
which are unmet.
9. Inform the organization:
The perfect set of need statements would help each function get its job
done better. For example, it would help marketing define a more effective
value proposition; help product planning identify hidden opportunities;
help M&A better determine what acquisitions would fill gaps in the
product line; help R&D effectively determine where to invest, and so
on.
10. Unify the organization:
Ideally, one set of need statements would inform the entire organization,
including sales, marketing, product planning, strategy, development,
R&D, M&A and other company functions. Rather than nobody knowing
all the customer’s needs, the entire organization would know and agree on a
common set of customer needs. This would unite the organization in its
language, market understanding and direction.
Desired outcome statements were designed to possess these characteristics
and more. They are “the metrics customers use to measure success when
getting a job done”, making them stable over time, discoverable and useful
inputs.
One desired outcome associated with the job of “listening to music” is:
To learn more about desired outcome statements and the Outcome-Driven
Innovation process see the
Outcome-Driven Innovation whitepaper.