Outcome-Driven Innovation
Strategyn has developed an Innovation methodology that they call outcome driven innovation. The basics of this methodology is to build a customer scorecard that captures what the customer values most and what the competition doesn't do. With this scorecard companies can then focus their creativity and systematically generate valuable ideas only on opportunities deemed valuable by the scorecard.
An important thing to note is that the customer values that are captured in the scorecard are not ideas or solutions that a customer might have on a product or a service. Instead it is focused on capturing a set of metrics that a customer uses to measure value when using a product to get a job done. These metrics define what outcomes must be achieved in order for a job to be done perfectly and is termed "desired outcome". A well-formulated outcome will state both the direction of improvement (minimize, increase) and a unit of measure (time, frequency) giving it the characteristics of a true metric. For example, when looking at improving shavers, Strategyn asked companies to look past suggestions from customers such as triple blades or lubricating strips and instead uncover the metrics that define how customers measure value such as minimizing preparation time, minimizing the number of nicks, etc.
Strategyn's focus on obtaining "desired outcomes" and looking past ideas or solutions when capturing the "voice-of-the-customer" is valid since customers can easily articulate what's wrong with a product or a service but they can rarely tell you where to go from there. Even if customers tried to suggest ideas or solutions, most of it would be based on what they have seen or are familiar with. However, methodologies using only questionnaires and surveys as Strategyn has done is insufficient. This is due to the fact that surveys and questionnaires are not good tools to capture unarticulated needs and a lot of time people can't always say what they need and people don't always do what they say. This is where I believe observation-based research comes into play and will help fill the gaps left by surveys and questionnaires, especially in Asia where the culture as a whole is less expressive. An example where questionnaires failed was when P&G tested the idea of combining a small hand cleaner with a long pole and tested that idea via a survey. The survey indicated that people hated it. But when P&G tested the idea again using working prototypes, people loved it and this gave birth to Mr Clean MagicReach.
Also Strategyn's claim that "by engaging customers in conversation and probing customers with questions, customers are very capable of stating the desired outcomes they are trying to achieve – providing more insight than well-tuned observational or anthropological techniques" couldn't be further from the truth. I say this because of the reasons given in the previous paragraph. Also, if you are engaging a customer in a conversation in the customer's environment, you are already using an observational technique known as contextual inquiry. Finally observation has a dual purpose -- the first is of course to understand the customer, and the second reason, which is as important or even more important, is that observation is a source of inspiration for ideas. For example, facing the challenge of enticing people into opening new accounts, Bank of America came to IDEO in search of ethnography-based innovation opportunities. To better understand the desired market -- boomer-age women with kids--IDEO traveled with members of Bank of America's innovation team across the United States, conducting observations in Atlanta, Baltimore, and San Francisco. What they observed was that after a day of shopping, people put their leftover coins in a jar. Based on this observation, they created a new kind of account ("Keep the Change") to help people save money. Customers who sign up for the program have their debit card purchases rounded up to the closest dollar. The amount that's rounded up is automatically placed into a savings account. There are now about two million such accounts. So in terms of techniques used for obtaining "desired outcomes", organizations would be better off using a balanced approach of surveys, questionnaires and observation-based techniques.
The other potential pitfall of solely relying on outcome driven innovation is tunnel vision. Focus is a good thing but innovation is one of those things that you need have focus and at the same time keep an eye on the horizon and things around you. An organization will always want to have a portfolio of projects that are spread across incremental, evolutionary and radical/disruptive space. For example, 3M started off as a mining company and if they had only used outcome driven innovation, focusing only on their core competency, then most of their improvements would have been in the area of mining and they would probably not have come up with Post-It notes and other notable innovations. So while outcome driven innovation helps put focus on things and I believe is really good for incremental and evolutionary innovation, it would be prudent for organizations to also include other innovation methodologies like design thinking. So I guess it seems that just like everything else in life, balance is the best.
