Outcome-Driven Innovation (ODI) is a strategy and
innovation
Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entit ...
process developed by
Anthony W. Ulwick. It is built around the theory that people buy products and services to get jobs done.
[Anthony Ulwick, ''What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services'', 2005 ] As people complete these jobs, they have certain measurable outcomes that they are attempting to achieve.
[Rebbeck, Tom]
"Outcome-Driven Innovation: A New Approach to Tackling Over-the-Top Services?"
Analysys Mason. June 22, 2012 It links a company's value creation activities to customer-defined metrics.
Ulwick found that previous innovation practices were ineffective because they were incomplete, overlapping, or unnecessary.
ODI attempts to identify jobs and outcomes that are either important but poorly served or unimportant but over-served. ODI focuses on customer-desired outcome rather than demographic profile in order to segment markets and offer well-targeted products.
By knowing how customers measure value, companies are able to align the actions of marketing, development, and R&D with these metrics and systematically create customer value.
Origin
Ulwick was granted the first of twelve patents on the ODI process in 1999. In late 1999, Ulwick claims to have introduced ODI to
Clayton Christensen
Clayton Magleby Christensen (April 6, 1952January 23, 2020) was an American academic and business consultant who developed the theory of "disruptive innovation", which has been called the most influential business idea of the early 21st century. ...
.
[Strategyn]
"Ulwick and Christensen: The Birth of Jobs to Be Done (Spring 2000)"
YouTube. October 30, 2016 Christensen mentions examples of Ulwick and Richard Pedi of Gage Foods with the way of thinking about market structure used in the chapter "What Products Will Customers Want to Buy?" in his ''Innovator's Solution'' and called "jobs to be done" or "outcomes that customers are seeking".
Instead of assuming what their customers want or need, typically product developers determine the
voice of the customer
In marketing, the voice of the customer (VOC) summarizes customers' expectations, preferences and aversions.
A widely used form of VOC market research produces a detailed set of customer wants and needs, organized into a hierarchical structure, ...
(VOC). ODI takes VOC a step further by focusing on jobs-to-be-done rather than product improvements. The objective is to translate customers’ needs into products or services they can’t live without.
[Dyer, Stephen; Sun, Jian; Ding, Bill]
"The Innovator's Secret Weapon."
ATKearney. January 2013 ODI theory posits that companies typically collect the wrong kinds of input from their customers, and states that all the company should find out is what the customers’ ultimate output goal is: what they want the product or service to do for them, not how it should do it.
[Justesen, Susanne]
"The Relevance of Outcome-Driven Innovation."
Innoversity Research. Aug. 15, 2006 The goal of the method is to help companies discover new product and service opportunities.
According to Ulwick, ODI is the culmination of 20 years of studying innovation methodology.
["Outcome-Driven Innovation."]
Strategyn website. Accessed Aug. 1, 2013 In 2002, it was introduced in the
Harvard Business Review
''Harvard Business Review'' (''HBR'') is a general management magazine published by Harvard Business Publishing, a wholly owned subsidiary of Harvard University. ''HBR'' is published six times a year and is headquartered in Brighton, Ma ...
, and expanded upon in Ulwick's 2005 book, ''What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services.''
[Ulwick, Anthony]
"Turn Customer Input into Innovation."
Harvard Business Review. Vol. 80. No. 1. January 2002
In 2016, Ulwick published ''Jobs to be Done: From Theory to Practice'' to explain the process for converting "Jobs Theory" to practice.
Opportunity algorithm
Ulwick's "opportunity algorithm" measures and ranks innovation opportunities. Standard
gap analysis
In management literature, gap analysis involves the comparison of actual performance with potential or desired performance. If an organization does not make the best use of current resources, or forgoes investment in capital or technology, it ...
looks at the simple difference between importance and satisfaction metrics; Ulwick's formula gives twice as much weight to importance as to satisfaction: importance + max(importance-satisfaction,0), where importance and satisfaction are the proportion of high survey responses.
The opportunity algorithm formula is as follows: Importance + (Importance-Satisfaction) = Opportunity. Customers use a 1-to-10 scale to quantify the importance of each desired outcome and the degree to which it is currently satisfied. The rankings are inserted into the formula to form the overall innovation opportunity score that highlights the outcomes with the highest “importance” scores and lowest “satisfaction” scores.
See also
*
New product development
In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along ...
References
{{reflist, 2
External links
* Anthony Ulwick, Strategyn Co., "What is Outcome-Driven Innovation (ODI)?
* JTBDinstitute.com," The Jobs to Be Done Institute
* Strategyn, "The Outcome-Driven Innovation (ODI) Process
Innovation