More on this book
Kindle Notes & Highlights
Read between
February 8 - February 11, 2016
Companies often use needs-related adjectives such as "reliable," "consistent," and "robust," or benefits-related adjectives such as "faster," "better," and "cheaper," in their communications and messaging. But as we learned in Chapter 2, these types of statements are vague, imprecise, and open to interpretation. They are unlikely to communicate a product's true value.
The customer must fill in the blanks, which means that success is left to chance. Why run that risk? Precision, not vagueness, is the key to communicating a product's true value.
If it is learned, for example, that a company's product outperforms all other competitors in satisfying an outcome that has a high opportunity score, then this reveals a competitive strength in an area that is generally underserved. Letting customers know that a product addresses this underserved outcome will likely result in increased sales.
Once a company has determined that it indeed has a competitive strength in an area that is generally underserved, it must be able to determine what it is about its product that is the source of that competitive advantage. If the Bosch circular saw is better at minimizing the time it takes to make bevel adjustments, then the design team must be able to ascertain what it is about the saw that contributes to the delivery of that unique value. Is it the detents on the guide, the quick release mechanism, or some other attribute? Once the answer is discovered, the company will be able to communicate
...more
When a company is lucky enough to find that their product is best at satisfying a number of related underserved outcomes, then they are in a strong position to own that theme. In this case, the best messaging strategy is often devised by aggregating the related outcomes under a higher-level statement that accurately reflects the theme and the underlying outcomes.
So what can we learn from all this? Different markets require different messaging strategies. Motorola made the mistake of thinking that a strategy that worked well for marketing giants would work well for Motorola—without taking into account the fact that those marketing giants were in low-function markets, whereas Motorola is in a high-function market.
companies should base their messaging strategies on the functional jobs and outcomes their customers are trying to achieve and move toward emotional appeal only after a product's function has been just about fully exploited.
If a competitor is investing in a certain area, companies often feel compelled to make a similar investment, not because they know the competitor is doing the right thing, but because they do not know with certainty that the competitor is doing the wrong thing.
Knowing with certainty that an initiative is targeted at unimportant or overserved outcomes gives executives the ammunition they need to get past project exuberance and the project champion's belief in the inevitability of the project's ultimate success. Even the most talented engineers and designers cannot deliver value where none is desired.
companies do not need to generate hundreds of ideas. Rather they need only to generate a handful of ideas that specifically and satisfactorily address the customer's underserved desired outcomes.
We often like to ask, "How many people within your organization know all the outcomes that customers are trying to achieve?" If your firm is like most, the answer will be "none." We also like to ask, "Of those that know what outcomes customers want to achieve (if any), how many know which outcomes are most underserved?" Here again the typical answer is "none."
In our experience, if companies know those underserved outcomes, they are able to devise highly valued solutions more than 90 percent of the time.
While some experts suggest that applying constraints is confining and may stifle creativity, we argue that on the contrary, constraints focus creativity in a way that generates valuable, usable, and practical ideas.
Whoever said there is no such thing as a bad idea has never participated in an idea generation session.
If the idea does not have the potential to significantly or totally satisfy 80 percent of the target customers (remember, the aim is breakthrough improvement), then the idea is eliminated.
Ideally the company will know if the new offering satisfies the collective set of customer outcomes 5 percent more or 20 percent more.
It turns out that products that deliver less than 3 percent more value than those currently available often fail. By contrast, most successful new products and services (defined here as products that maintain or incrementally grow a company's market share and/or revenue) typically deliver between 5 and 10 percent more value than currently available products. Product and service ideas that deliver 20 percent or more value often result in dramatic increases in market share, revenue, and profit.
But however natural old habits feel, they result in otherwise logical companies making irresponsible decisions. In what other business process is a 50 to 90 percent failure rate acceptable? None. So what has to change?
Executives must reinforce the idea throughout the firm that customers indeed use a set of metrics to measure how effectively they are able to get a job done and that the company can use those same metrics to guide the creation of products.
If marketing wants to provide development with data that is useful for developers, then it must learn what information is needed (jobs, outcomes, constraints, and segments of opportunity) and acquire the skills to obtain that information—otherwise development should be empowered to gather the information on its own.
companies must stop thinking that market researchers can only be reactive data collectors; instead, they must push their researchers to become proactive strategists who uncover areas of opportunity in a market, inform marketing and development of those opportunities, and work with those functions to ensure that the opportunities are addressed.
Adoption of outcome-driven innovation should be thought of the same way—as an investment in infrastructure made to improve a critical business process and give the company a competitive advantage.
For those companies and individuals who want to apply outcome-driven thinking on their own (that is without third party training or assistance) we suggest that they start with internal company innovation—that is, process innovation applied to internal services,
