The gospel of minimum viable product (MVP) 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 offering. By taking the 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 defines itself by the minimum viable outcome it achieves will
increase efficiency of product development cycles,
create more robust add-on offerings and
cultivate a better understanding of how to communicate their value proposition.
One of the core tenants of the MVP 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.
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 — reduce 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
“Which outcome I am helping my customer achieve?”
“How does my product/service do it better than my competitors?”
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.
In his article “What is Outcome-Driven Innovation (ODI)?”, Anthony Ulwick describes how outcome-driven companies are able to align their marketing and development strategies:
?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.
Strategyn Whitepaper: What Is Outcome-Driven Innovation?
March 15, 2009
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
simplify their operations,
reduce development cycle times and
clarify their value proposition along the way.
And what business executive doesn’t like the sound of that?
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