The gospel of minimum viable product goes like this:
Many businesses follow this mantra (and for good reason). It helps maintain a laser-like focus on continually developing and refining their product offerings. By taking the minimum viable product (sometimes abbreviated MVP) ethos and applying it to the development process itself, a business can realize tangible and lasting improvements to its bottom line.
Their focus shifts from delivering product to delivering outcomes. This is outcome-driven development.
Instead of defining their process around product, companies should instead be focusing on the objective: the outcome.
Often referred to the “job,” businesses help their customers achieve a specific outcome.
A business that defines itself by the minimum viable outcome will:
One of the core tenets of the minimum viable product model is receiving and acting upon your customer’s feedback. By using product delivery (rather than outcome delivery) to drive customer interaction, consumer feedback remains a lagging performance indicator.
Your customers’ responses reflect a bias towards the current product generation, not what a product is capable of becoming.
Tony Ulwick, master and pioneer of the outcome-driven innovation model, explains:
“It is often argued…that, ‘A customer would have never asked for the microwave oven.’ That is true, but the microwave oven is not a need – it is a solution. While customers may not know what solutions they want, they most certainly know their needs related to getting a job done. In this case, they know they want to prepare a meal (the job-to-be-done) that is not overcooked or undercooked, and they want to do it more quickly without having to clean up. The problem isn’t that customers don’t know their needs. The problem is that there is confusion and lack of agreement as to what a ‘need’ even is.”
Companies have access to market research and the ability to interact with customers before product development in order to understand customer needs and the “job-to-be-done.”
Outcome-driven innovation prioritizes customer interaction prior to development, thereby making it an input in the product development cycle. While both models require continuous consumer interaction to achieve success, outcome driven development places customer communication at the beginning of the development cycle.
Consumer insights shift from being an output of product development to an input, thereby handing you a predictive tool for forecasting results.
This ultimately streamlines the R&D process by reducing the number of iterations a product undergoes to achieve final product/market fit.
Before developing a new product or refining a current one, companies should always ask themselves:
Think of a craftsman who wants to cut a board in half. He has the option of using a table saw, a handsaw, an axe and a host of other tools at his disposal. The craftsman will use the product that completes his goal of cutting the board in the most efficient manner.
It is this outcome – the goal – that a company must address when selling their tool to the craftsman.
However, many companies don’t structure themselves like this. There are many featuring heads of business development, engineering, operations and product (among others). There are varying levels of implied responsibility within each function to deliver the customers’ desired outcomes –most notably the head of product.
Yet, there is no single party responsible for maintaining an outcome-driven development process.
Companies shifting to outcome-driven models will naturally correct this issue. They’ll convert the product team into an outcome team.
Often, a single ball carrier within the company shepherds the development process.
Outcome driven innovation is not limited to product development. You can implement and utilize this strategy across your organization.
”ODI overcomes this problem by providing all the functions with a single set of customer inputs, all revolving around the main purpose the organization is there for in the first place – to help customers get a job done. A single set of job-based customer inputs drives and aligns strategies for messaging, positioning, purpose branding and sales, along with strategies for beating the competition, pipeline prioritization, concept creation and evaluation, patent portfolio development, acquisition assessment, research and development and other related activities. When using this approach, the company’s thinking is aligned with the customer’s value measurement system.”
Let’s build upon our earlier example of the craftsman who cuts lumber. Remember that an outcome-oriented business aligns its development and marketing efforts towards delivering the best wood cutting product possible.
By shifting the frame of reference, marketing and development teams can collaboratively gain better perspectives of the marketplace. A business utilizing outcome-driven development can more effectively create (and sell) a solution that resonates with its target market segments.
Meanwhile, the typical business focuses on delivering a unit with more robust features than similar products.
If you adopt the minimum viable product perspective in your business, you’ll eventually learn which outcomes your customers seek. However, reliance on product creation to generate customer feedback has led many teams down false paths.
Companies that focus instead on delivering minimum viable outcomes do the following:
And what business executive doesn’t like the sound of that?
[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: What Every Founder/Entrepreneur Must Know and Turning an Idea Product into a Business. This is an updated version of an article originally published on May 31, 2017.]
©All Rights Reserved. March, 2020. DailyDAC™, LLC d/b/a/ Financial Poise™
Tom Kirby is the founder of Chicago-based file sharing service PrepDD. Before that he was Vice President of Business Strategy and Director of Finance and Operation for VIN-specific auto marketing technology company LotLinx, also of Chicago.
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