Growth Strategy Made Simple Through Innovation

Study after study has shown that the key to successful innovation and growth is having a clear understanding of customers’ unmet needs to guide the innovation process. Yet many leaders struggle with how to differentiate, innovate and grow because they don’t know which of their target customers’ needs remain unmet by their own offerings and their competitors’ offerings. If you don’t know where your target customers’ unmet needs lie, it’s very difficult to differentiate, innovate and grow. It becomes a guessing game that leads to high failure rates, a lot of frustration, wasted time and resources, opportunity costs and even reputation damage. All of this is unnecessary but quite common for companies today.

Why is discovering target customers’ unmet needs so hard? The number one reason is the widespread confusion about what a “customer need” really is. Many people mistakenly believe that customers have “latent unarticulated needs, needs they cannot articulate.” This is simply false when we ask customers what they want to accomplish rather than asking them for product or service specifications.

Theodore Levitt said, “People don’t want to buy a ¼ inch drill; they want a ¼ inch hole!” This quote reveals the difference between a need and a solution. The “drill” is a solution. The solution could be a pick, a punch, a laser, or some yet-to-be-invented tool but none of these are customer needs. The job of making a ¼ inch hole is the true customer need. ‘Making a hole’ is probably just one step in a higher-level job such as installing a cabinet or hanging shelves but, regardless, the point is that customer needs are functional, emotional, and social jobs to be done that are totally separate from solutions.

“Jobs thinking” can be applied to any industry.

• GBQ Partners (a regional accounting firm) understood that “CFOs and CEOs don’t want to buy accounting services; they want to get their financial and accounting-related jobs done.” This enabled GBQ to create new service lines, enter into a joint venture, and help its people understand how customers define value.
• Microsoft understood that “IT professionals don’t want to buy software; they want to get their IT-related tasks done.” This enabled Microsoft to create winning new IT solutions.
• And people don’t want to buy your product or service, or mine. They want to get something done, have an experience, and feel and be perceived in a certain way. These are their true needs and all of them are readily available to be discovered by any company that knows how.

A key reason why market research has fallen into disrepute in many circles is that market researchers have been asking customers what the best solution would be. This is like a doctor asking his patients what the best treatment plan would be. Most people don’t have the expertise to answer this and it’s not their responsibility; it’s the doctor’s and supplier’s responsibility.

Fortunately, customers can tell us what they want to get done, how they want to feel and be perceived, and where they struggle when executing a specific job. Discovering this information is the basis of a good “customer diagnosis.” It informs the development of new or improved offerings that help target customers get their jobs done better. It guides the innovation process with predictable success.

To identify opportunities at the total market level with statistical validity and to discover new segments of opportunity (segments that are underserved), we put all the jobs target customers are trying to get done into a survey that is deployed to a representative sample population. Respondents are asked to rate how important each task is to get done and how satisfied they are with their ability to get it done given current solutions. A job that is both important and unsatisfied is an opportunity. The more important and less satisfied a task is, the greater the opportunity for innovation and growth it presents. This enables companies to determine where to focus and what to do to create new value with precision and confidence. It prevents wasting time and money generating ideas and developing offerings that consumers don’t want.

This approach enables leaders to establish a valued and unique position in the market which is the essence of a winning growth strategy. I can declare this before any new product solutions have been conceived of because we know that:

1. If your offering addresses an important need then customers will value it.
2. If your offering addresses an unsatisfied need then your customers will consider it to be unique because the market is not currently satisfying it.

This is how leading companies are turning innovation and growth into a predictable business process.

Most companies don’t lack creativity or ideas; they lack focus. They lack clarity about where the best opportunities in the market lie. Forget about rapid prototyping until after you have discovered what jobs your customers are trying to get done, where they struggle, and why. Getting this information will provide you with rich targets for innovation, differentiation and revenue growth. This is innovation and growth made simple.