Wednesday, November 3, 2010

Outcome Expectations (aka Hiring Criteria)

Dr. Phil Samuel

We already know that when it comes to innovation, the most important fact is that the customers hire products and services (solutions) to get a Job done. Many providers do not approach product development and customer fulfillment utilizing this crucial fact. Instead of focusing the key unit of analysis as the Jobs To Be Done (JTBD), many have been incorrectly focusing their analysis on the customer or solution attributes. On the other hand, innovation vanguard firms know that by focusing on the higher purpose - a Job To Be Done (JTBD) - they can create a significant advantage for the customer and provider.

The second important fact is to know that every JTBD is associated with a set of customer criteria called “outcome expectations”. These are a set of solution neutral criteria customer uses to choose from among the competing solutions. The “outcome expectations” are also called “hiring criteria”, implying that customers use these criteria to hire a solution. Some of these criteria are expressed positively (customers want more of them) and relates to the benefits associated with the Job To Be Done. Others are expressed negatively (customers want to minimize them) and relates to the cost or harm incurred while getting the Job done.

Keeping up with our discussions about the candles and light bulbs, customers were hiring them to get the job of illumination done so that they can be productive when darkness was prevailing. When they wanted to get the job of illumination done, it came with a list of solution neutral criteria. These included (more) ease of achieving illumination, (more) safe production of illumination, (more) control of the amount of brightness, while minimizing costs associated with illumination, time involved in achieving illumination, the resources (such as fuel, equipment, and people), impact on environment and unexpected outages. We will note that none of these expectations discussed attributes about candles or light bulbs. When candles are the prevailing method of production of illumination, it is easy to limit the focus on the functions of the candles. It would be normal for the candle companies as well their customers to limit the discussions around making the candles last longer, brighter, reducing the smoke and soot, minimizing the dripping of wax and improving the fire hazard. For this reason, the innovation vanguard firms know not to depend too much on just the literal voice of the customers.

Often, market researchers as well as solution developers miss out on opportunities by segmenting the customers by demographics and psychographics. The right way to segment a group of customers is to segment them based on Job To Be Done and Outcome expectations. Customers who place similar emphasis on Job To Be Done and Outcome expectations belong in the same segment. For example, there might be a set of customers who want illumination but place a high priority on reliable illumination that does not adversely affect the environment. For another set of customers control of brightness and cost may be higher priority. By understanding how customers place importance to outcome expectations, firms can create solutions geared to that segment of the market to gain significant competitive advantage.

Dr. Phil Samuel is the Chief Innovation Officer (CIO) for BMGI, a management-consulting firm specializing in performance excellence and innovation. An integral part of BMGI’s management team since 2005, Phil brings more than a decade of experience to his role as CIO, helping clients in-source creativity and increase organic growth potential. Phil is a dynamic speaker and published author, whose most recent credits include the books, “Design for Lean Six Sigma: A Holistic Approach to Design and Innovation” and “The Innovator’s Toolkit: 50+ Techniques for Predictable and Sustainable Organic Growth.”

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