Outcome-Driven Innovation – for Product Managers

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TLDR

Tony Ulwick, creator of Jobs-to-Be-Done, introduces Outcome-Driven Innovation (ODI), a revolutionary approach to product management. ODI shifts focus from generating ideas to understanding and addressing customer needs, leading to more successful products and innovations.



* ODI prioritizes understanding customer needs over generating product ideas

* The approach uses both qualitative and quantitative research to identify unmet customer needs

* Key components include the job map, need statements, and the opportunity algorithm

* ODI stays focused on customer problems, not potential solutions



This customer-centric approach to innovation offers product managers a structured method to create products that truly meet market needs and drive business success.

Introduction

Welcome to the 500th episode of this podcast—that’s 500 weeks, or nearly 10 years of episodes for product managers and leaders. I have a special guest to discuss how we have seen product innovation change over the last several years—what has worked and what has not. As a product professional, you need perspective on where things are headed and what is working, which is aided by looking at the changes that have occurred. Let’s gain perspective from the knowledge and experience of one of the most influential people in product innovation, Tony Ulwick.

The Birth of Outcome-Driven Innovation (ODI)

Ulwick’s lightbulb moment came during his time at IBM. He was part of the team that created the PCjr, a product that flopped badly. This failure led to a crucial question: What if we knew beforehand how customers would judge our product?

This idea became the foundation of Outcome-Driven Innovation. Ulwick realized that if we could predict how customers would measure a product’s value, we could design products to meet those criteria. Even better, if these criteria stayed the same over time, we could use them to guide long-term product development.

Building the ODI Framework

After the PCjr setback, Ulwick moved from engineering to product planning at IBM. He started exploring what makes innovation successful. His early research involved a simple but powerful method: asking customers to compare products.

“What makes Product A better than Product B?” This question led to valuable insights. Ulwick found that customer needs fell into three main categories:



* Functional aspects: How well does the product do its job?

* Consumption aspects: How easy is it to use the product?

* Financial aspects: Is the product worth its cost?



Over time, this categorization evolved into the Job Map concept. The Job Map breaks down what customers are trying to do into steps like planning, gathering materials, doing the task, and checking results. This framework made innovation more predictable and effective.

Fine-Tuning the ODI Process

As Ulwick refined ODI, he drew inspiration from various sources. Theodore Levitt’s famous quote, “People don’t want a quarter-inch drill, they want a quarter-inch hole,” resonated deeply. It reinforced the idea of focusing on the customer’s underlying goal.

Collaborating with Clay Christensen led to the popular term “Jobs-to-Be-Done.” This catchy phrase made it easier to explain the concept of focusing on customer goals rather than product features.

A key part of refining ODI was creating stable criteria for good need statements, which Ulwick calls “desired outcomes.” These statements are:



* Stable over time: They don’t change quickly

* Actionable: You can do something about them

* Measurable: You can tell if you’ve achieved them

* Controllable: You can influence them