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Outcome Expectations (aka Hiring Criteria)

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.

The Fallacy of Voice of the Customer

Revenue and profit growth is one of the top agendas for most corporations. Growth is primarily achieved through either mergers and acquisitions or organic means. Innovation is the key approach to drive organic growth, however, the process of innovation and organic growth has been considered messy, risky, and unpredictable. We know that organic growth is achieved by creating new value proposition for customers with unmet needs. Within the last few years, companies have placed greater emphasis in collecting voice of the customer (VOC) to accelerate their innovation efforts. In spite of all the advances made in voice of the customer research, companies still bring products and services to the market place that fail.

While customers have a key place in formulating our innovation strategy, many voice of the customer  gathering processes are flawed or misdirected. Most companies and customers are good at articulating what they are familiar with, which leads then to focus on the functions of the existing products and solutions. As such, the literal voice of the customers is usually centered on the useful and harmful functions of existing solutions. For example, let us say that our company manufactures lawn mowers. We decide to conduct a focus group of our lawn mower customers to gather the voice of the customers. These customers are likely to tell the lawn mower manufacturer that they need to make the lawn mower more fuel efficient, easier to push, less noisy, less polluting the environment, easier to maintain, easier to store, occupy less space, cut grass faster and uniform, and weigh less. Sophisticated customers might indicate that they would like to see lawn mowers in different colors and styles that appeal to human emotions. On the surface, these would appear as true customer need based on the voice of the customer (VOC).

On the other hand, if we ask the lawn mower customers why they are using lawn mowers, they are likely to answer that it is for cutting grass. If we ask them again, why they need to cut grass they are likely to say that it is for keeping the grass beautiful. The reason for keeping the grass beautiful could be to have aesthetically pleasing surroundings, conform to Homeowner’s Association regulations, or to increase the value of your home. While most lawn mower companies such as Honda and John Deer are focused on improving the lawn mower, another company is working on eliminating the need to cut grass. They are trying to bring about a new generation of S-curve to satisfy the need of keeping the grass beautiful without the need for mowing it regularly. It is interesting to note that most incumbent businesses are not good at commercializing the next generation of S-curve. It is none of candle companies that commercialized the light bulbs, and none of the slide rule companies that commercialized the calculator. The failure is not because the incumbents are not collecting the voice of the customers, but not focusing on the underlying customer need. Professor Ted Leavitt of Harvard Business School once said, “People who buy power drills don’t necessarily want to buy a quarter inch drill. They want a quarter inch hole”. The underlying customer need is called a Job to Be Done. A Job to Be Done is the reason customers are hiring or using our products and solutions. Companies good at innovating, always focus on this higher purpose for which their customers buy products, services and solutions.