What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services: Using Outcome-Driven Innovation to Create Breakthrough Products and Services

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McGraw Hill Professional, Sep 6, 2005 - Business & Economics - 240 pages

A world-renowned innovation guru explains practices that result in breakthrough innovations

"Ulwick's outcome-driven programs bring discipline and predictability to the often random process of innovation."

-Clayton Christensen

For years, companies have accepted the underlying principles that define the customer-driven paradigm--that is, using customer "requirements" to guide growth and innovation. But twenty years into this movement, breakthrough innovations are still rare, and most companies find that 50 to 90 percent of their innovation initiatives flop. The cost of these failures to U.S. companies alone is estimated to be well over $100 billion annually.

In a book that challenges everything you have learned about being customer driven, internationally acclaimed innovation leader Anthony Ulwick reveals the secret weapon behind some of the most successful companies of recent years. Known as "outcome-driven" innovation, this revolutionary approach to new product and service creation transforms innovation from a nebulous art into a rigorous science from which randomness and uncertainty are eliminated.

Based on more than 200 studies spanning more than seventy companies and twenty-five industries, Ulwick contends that, when it comes to innovation, the traditional methods companies use to communicate with customers are the root cause of chronic waste and missed opportunity. In What Customers Want, Ulwick demonstrates that all popular qualitative research methods yield well-intentioned but unfitting and dreadfully misleading information that serves to derail the innovation process. Rather than accepting customer inputs such as "needs," "benefits," "specifications," and "solutions," Ulwick argues that researchers should silence the literal "voice of the customer" and focus on the "metrics that customers use to measure success when executing the jobs, tasks or activities they are trying to get done." Using these customer desired outcomes as inputs into the innovation process eliminates much of the chaos and variability that typically derails innovation initiatives.

With the same profound insight, simplicity, and uncommon sense that propelled The Innovator's Solution to worldwide acclaim, this paradigm-changing book details an eight-step approach that uses outcome-driven thinking to dramatically improve every aspect of the innovation process--from segmenting markets and identifying opportunities to creating, evaluating, and positioning breakthrough concepts. Using case studies from Microsoft, Johnson & Johnson, AIG, Pfizer, and other leading companies, What Customers Want shows companies how to:

  • Obtain unique customer inputs that make predictable innovation possible
  • Recognize opportunities for disruption, new market creation, and core market growth--well before competitors do
  • Identify which ideas, technologies, and acquisitions have the greatest potential for creating customer value
  • Systematically define breakthrough products and services concepts

Innovation is fundamental to success and business growth. Offering a proven alternative to failed customer-driven thinking, this landmark book arms you with the tools to unleash innovation, lower costs, and reduce failure rates--and create the products and services customers really want.


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Who Is the Target of Value Creation and How Should It Be Achieved?
Silence the Voice of the Customer Lets Talk Jobs Outcomes and Constraints
Discovering Where the Market Is Underserved and Overserved
Using OutcomeDriven Segmentation to Discover Segments of Opportunity
Deciding Where to Focus the Value Creation Effort
Connecting Opportunities with Valued Product Features
Separating the Winners from the Losers
Using Focused Brainstorming and the Customer Scorecard to Create Customer Value
Tactical Tips for Managers

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Page 182 - Sigma simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process — from manufacturing to transactional and from product to service.
Page 191 - Deviation," is the square root of the sum of the squares of the deviations from the mean divided by one less than the number of observations.
Page 133 - ... as being among the key underserved outcomes. The manufacturer would first look at the projects in its pipeline to see which ones satisfied those outcomes best. This analysis would simultaneously reveal which initiatives fail to address the opportunities. Upon completing such an evaluation, managers would be able to predict with a high degree of certainty which projects and initiatives will hit the targets and are worthy of continued or even accelerated funding. As an example of this type of analysis,...
Page 27 - ... likelihood of errors while dialing (making it easier for users to get a specific task done), and by improving service-area ranges (overcoming constraints to use). Let's examine more closely these three types of information. Jobs to Be Done — a Key Factor For Growth In both new and established markets, customers (people and companies) have jobs that arise regularly and need to get done. To get the job done, customers seek out helpful products and services. A man who needs to shave every day...
Page 30 - Turn Customer Input into Innovation," Harvard Business Review (January 2002), 91-97.
Page 38 - After several sessions, the compiled statements were consolidated so duplicate pieces of information could be removed. In the end, AIG obtained about seventyfive statements that reflected the way in which its customers measure value when setting up and managing accounts. The resulting inputs were subsequently prioritized through quantitative research and used to guide idea generation and concept evaluation, leading to the creation of a new web-based service offering that streamlined the agent's job....
Page 41 - Constraints on a Product That Removes Body Hair • The product must be usable with one hand • The product must not require the use of mirror Value can also be created by helping a customer overcome an obstacle to getting a job done in a given situation. Solutions Specifications Needs Benefits The means by which a need or outcome is satisfied; often stated as a concept or a product or service feature.
Page 102 - Knowing which opportunities to target for growth has a dramatic impact on all subsequent actions a firm takes. No longer will the firm have to fear failing because it has expended resources on overserved outcomes or improved satisfaction levels for some outcomes at the expense of others. Instead, it will be able to act with the confidence that its investment of resources will result in the solid creation of customer value.

About the author (2005)

Anthony Ulwick is the CEO of Strategyn, a pioneer and world leader in outcome-driven innovation. Since 1991 he has served as a consultant to Johnson & Johnson, Microsoft, Hewlett-Packard, AIG, Chiquita Brands, and dozens of other leading corporations. Mr. Ulwick's innovation practices were recognized by the editors of the Harvard Business Review as some of the best business ideas of 2002.

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