Do You Want to Chase a Hunch or Rely on a Promise?

Many people are fond of saying that “innovation begins with a good idea.” The problem with this seemingly obvious statement is that it’s not true. At least, not if you want to make innovation a predictable and repeatable business process.

It’s important to understand that innovation is comprised of two separate and distinct tasks if it’s ever going to be a repeatable business process:

1. First, identify the target customers’ important unsatisfied needs. and then
2. Generate solution ideas to address those most attractive unmet needs

It’s hard for a doctor to develop an effective treatment plan if they have not first conducted a diagnosis to identify what ails the patient. As the late Professor Clayton Christensen would say, to treat before diagnosing is medical malpractice. And yet companies are brainstorming new ideas and launching new products based on a hunch (hypothesis) about their customers’ needs alone every day, what Christensen calls marketing malpractice.

I concede that running experiments on hypotheses in an online environment where the costs and the consequences of being wrong are low can work well. It’s worth noting, however, that even Steve Jobs adamantly sought to understand customer needs before attempting to generate and/or develop solution ideas.

For many B2B firms especially, where the cost and consequences of misunderstanding the target customers’ needs (having an incorrect hypothesis) can be devastating. It leads to high failure rates, a lot of frustration, wasted time and resources, opportunity costs, and even reputation damage – all of which are unnecessary.

The question every leader and innovation team should ask themselves is, “Do you want to spend your time and money chasing a hunch or investing in a promise? A “hunch” is an unvalidated hypothesis about what customers want. A “promise” is an important unsatisfied job to be done and/or the criteria they use to measure success. Jobs and criteria explain causality and, therefore, make a promise.

The Jobs-to-Be-Done (JTBD) innovation approach enables firms to capture a comprehensive set of customer needs through qualitative interviews in virtually any functional market. These needs – i.e., jobs and criteria statements – can then be prioritized with a quantitative survey by having a representative sample of the target market rate each need for its “importance to get done” and their “satisfaction in getting it done” given their current product/service solution. Needs that are both important and unsatisfied are opportunities for innovation and growth. The more important and less satisfied a need is, the greater the opportunity for innovation and growth it presents.

(Note: a “functional market” is any market in which the target customers primarily want to accomplish a functional job such as make a hole, listen to a patient’s heart and lungs, and reduce tax liabilities. Emotional and social “jobs” are also captured with JTBD but they cannot be deconstructed into steps with criteria for success the way a functional job can. See The Customer-Centered Innovation Map, by Lance A. Bettencourt and Anthony W. Ulwick, Harvard Business Review, May 2008).

By identifying the opportunities in the market before generating ideas, companies can pursue the promise that, if they can develop a solution that helps their customers get an important unsatisfied job done better, then they can be confident that the firm will be creating a valued and unique solution. We know this because the job and customer criteria statements explain causality. People “hire” products and services to get their jobs done.

You can help your innovation team succeed dramatically more by ensuring the target customers’ important unsatisfied needs have been identified and prioritized before generating solution ideas. Identifying the opportunities (important unsatisfied needs) first enables firms to then evaluate and select which opportunities are most attractive to pursue for new value creation. Great new strategies and products address big unmet market needs with the firm’s relative strengths and that’s exactly what we’re engineering here in a systematic fashion. Then the innovation team and designers can devise solution ideas with clarity and confidence because they will know where to focus and what to do to create unique value for their target customers.

Identifying customers’ important unsatisfied needs before generating solution ideas delivers dramatic results such as:

• Increased new product success rates
• Increased likelihood of breakthrough innovation
• Quicker time-to-market (because only ideas that are known to address important unsatisfied need go into development)
• Creation of a valued and unique position in the marketplace
• Increased revenue growth

These results come from identifying customers’ important unsatisfied needs as jobs to be done and/or criteria for success, prioritizing them according to importance and satisfaction ratings, and only then generating solution ideas to address the most attractive opportunities. Do you see how this can improve your innovation efforts? Do you see how it turns innovation around from chasing hunches to investing in promises?