What customers want

On What Customers Want
Ziya G. Boyacigiller
This presentation was created and given by Ziya
Boyacigiller who was leading Angel Investor and a loved
mentor to many young entrepreneurs in Turkey. We have
shared it on the web for everyone’s benefit. It is free to
use but please cite Ziya Boyacigiller as the source when
you use any part of this presentation. For more about
Ziya Boyacigiller’s contributions to the start-up Ecosystem
of Turkey, please go to www.ziyaboyacigiller.com

CLASS ON…What Customers
Want
Using Outcome-Driven Innovation
to Create Breakthrough
Products/Services
By Anthony W. Ulwick
Lecture Prepared by: Ziya G. Boyacigiller

Most Attempts to Create
Successful Products Fail
60% fail during development
40% of those making it to market fail
¾ of money spent is lost !
Yet failures are not random, they are
predictable and avoidable.

Gambling on a Market
Until Mid-1980s  Technology-Driven
 Develop technology then find market
Motorola risked $5 billion on Iridium
project, failed, and sold the company for
$25 million – ½ cent for every $ !
 $3,000 phones at $7 a minute did not work

Conclusion:
Narrow Demographic Appeal

Trial-and-Error is too costly:
 Failure rates approaching ~90%
 Lead times for success averaging ~8 years
 Risk is too high…
A new approach is needed.
Instead of developing technology and looking for
customers, let’s talk to customers first and develop
the technology they need.
 Let’s become Customer-Driven

… 20 years later in USA…
Being Customer-Driven is not working:
 50-90% products/services still fail
 Collectively costing ~$100 billion a year
 New Coke
 200,000 consumer market-research
 $4 million cost of interviews
 Biggest marketing flops in history!
 PCjr by IBM
 $1 million cost of market-research
 18 months of effort
 Wall Street Journal announced it a flop in 1 day after
product introduction to public!

A new approach is needed…
 Problem:
Variance
is too high.
There are few
successes, but too many
failures in innovation.
Solution: Treat “innovation” as a “Process”
Use similar approach for reducing variance in manufacturing processes,
such as:
Use statistical-process-control tools.
Identify the stages of innovation.
Eliminate the factors introducing variance.
SUCCESS

Willing
Worker
Day
1
Day
2
Day
3
Day
4
Mike 8 11 6 7
Leon 14 10 8 11
Karen 7 10 11 5
Bob 11 10 6 10
Melvin 7 12 6 13
Paul 14 7 7 14
Totals 61 60 44 60
Variance Explained
Dr. Demings’ Redbead Experiment
Dr. Deming asks six willing workers to
manufacture white beads by scooping them
out of a box containing an 80:20 mixture of
white to red beads. They are given a target of
no more than 3 red beads per day. But the
number of red beads produced was as
follows. What is causing the variance?

SPC*: Your quality is only as good as
the quality of inputs into the process.
ODI*: Your innovation quality is only as good as the
quality of the customer’s inputs into the innovation
process.
 To improve innovation quality, we need to reduce
“variance” in the customer inputs.
(The variance and the closely-related standard deviation are measures
of how spread out a distribution is. In other words, they are measures of
variability. Variance makes information ambiguous, unreliable,
vague...)
* SPC=statistical process control, ODI= outcome driven innovation

How is variance introduced when
collecting inputs from customers?
Communication Errors
 Through using imprecise language
 Hears “red” writes red as blood (it is red as her hair…)
 Translation Problems
 Hears “container” writes “box” (it is a “bag”…)
 Omission Problems
 Hears “small container” writes “box” (“small” is lost…)
 Vocabulary Problems
 Hears “crimson” writes “blue” (doesn’t know the word…)
Sampling Errors
 Customer is not knowledgeable
 Too few customers are surveyed
Questioning Errors
 What do you want? (customer doesn’t know either…)
 Would you use this? (“yes” but how many, at what price…)
etc.

Language is important !
Customer “requirements” can be:
 Wants
 Needs
 Benefits
 Solutions
 Ideas
 Desires
 Demands
 Specifications
 etc.
We need a precise language to capture
“what customers want”.

1. Capture customer inputs well in advance, using
precise language,
2. Define what criteria customers will use to judge a
product’s value (factual/quantifiable measures),
3. Then, deliver a product that dutifully meets these
criteria.
Note: These criteria must be predictive of success
(i.e. with cause-and-effect link to success)
Successful Innovation
Process

“Phone Design” Game – Part
1
1. Talk to “customers” to define a new phone
(to be contract manufactured for you) to sell.
2. Next, draw a picture of the “phone” you
designed.
3. Show this picture to your “customers” and
see if they will buy it or not. Find out why
they like it or don’t like it.

Outcome Driven Innovation is built
on “precise customer inputs”
1. Customers buy products and services to help them
get “jobs” done.
2. Customers use a set of metrics (performance
measures) to judge just what it will take to get the
job done perfectly. These metrics are called
“customers’ desired outcomes” or
“outcomes” in short.
3. These customer inputs make systematic and
predictable (low variance) creation of
breakthrough products possible.

Explaining
Outcome Driven Innovation
1. Customers buy products and services to help them get “jobs”
done.
People buy/hire/license:
 MP3  to manage and enjoy music
 Insurance  to limit financial risk
 Consulting firms  to formulate strategies
 Corn seed  to grow corn
 Drill bits  to make holes
 Servers  to manage e-mail

Explaining
2. Customers use a set of metrics (performance measures) to judge how
well a job is getting done and how a product performs. These
metrics are called “customers’ desired outcomes” or
“outcomes” in short.
For any job customers may apply 50 to 150 outcomes
to judge how well the job is getting done.
[job] “to grow corn” 
 [outcomes]
 …,
 minimize number of seeds that don’t germinate,
 increase number of plants that emerge at the same
time,
 minimize yield loss due to excess heat during
pollination,
 …

Explaining
3. These customer inputs make systematic and predictable creation of
breakthrough products possible – by minimizing variance at each stage of the
innovation process.
With these (jobs/outcomes), companies can improve
ability to execute all downstream activities with
minimal variance:
 Identify opportunities for growth
 Segment markets
 Conduct competitive analysis
 Generate and evaluate ideas
 Communicate value to customers
 Measure customer satisfaction

“Phone Design” Game – Part
2
1. Use Outcome Driven Innovation methodology to create a new
phone (to be contract manufactured for you) to sell..
You need to find and talk to “customers”.
2. Design on paper (draw) a picture of the “phone”.
You should make use of Blue Ocean methodology for value
innovation.
3. Show this picture to your “customers” and see if they will buy it
or not. How may will buy - not buy?
4. Find out what they like – what they don’t like with your design.

Cordis Case:
In 1994 medical-device company Cordis targeted 15 underserved
outcomes to grow market share in angioplasty balloon market.
 3 outcomes addressed with current products, they had never told
customers…  revised messaging and sales strategy  market
share went up from 1 to 5% within 6 months.
 “stent” in development pipeline (one of 40 projects) an extremely
important and unsatisfied outcome (minimizing restenosis) 
placed more priority and resources  first to market  fastest
growing product in medical industry with $1 billion sales in 2 years.
 remaining dozen underserved outcomes  developed and
introduced additional products in next 1.5 years  market share
grew from 5 to 20%, making them the market leader.

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 1:
Formulate an
innovation
strategy
Companies
focus on their
core markets;
other growth
strategies are
considered too
risky.
Companies
consider
multiple
avenues for
product,
market,
operational,
and disruptive
innovation
Companies
devise
attractive
growth
strategies that
have high
growth
potential and a
high probability
for success.

What Type of Innovation
Do We Want to Pursue?
1. Product/Service Innovation
Addressing one/few outcome(s)  incremental improvement
Grow market share
1. New Market Innovation
Find underserved jobs (product alternatives exist)
Best growth opportunity into new markets
1. Operational Innovation
Address inefficiencies in operations through innovation
1. Dell, Toyota, Progressive Insurance, Wall Mart
Disruptive Innovations
Use new technology to replace prevailing business model in an
existing market that is filled with overserved customers.
Two types:
“Low-End Disruption”,
“New-Market Disruption”(no products exist)
(significant growth opportunity)
(see “Innovation Models”, Christensen)
Customerjobs/outcomesfirstdefined,
thentechnologyisdeveloped.
Technologyisfirst
developed,then
companylooksfor
customers

Can We Achieve a Breakthrough?
Addressing multiple outcomes
Addressing multiple jobs
Disruptive innovation

What Customer-Jobs Do We Want to
Address?
Growth Options
Devise product or
service innovations
that help customers
get more jobs done
– often ancillary related
jobs (iPod)
Devise product or
service innovations that
help new customers do
a job that nobody is
doing yet; no
product exists.
(telephone, TV, CRM)
Devise product or
service innovations
that help customers
get a job done
better. (Nokia
phones)
Devise product or
service innovations that
help new customers do
a job that others are
already doing.
(Canon desktop
copiers, angioplasty
balloons)
Existing Customer(s) New Customer(s)
NewJob(s)CurrentJob(s)

Where in the Value Chain Do
We Want to Focus Value
Creation?
This is important because:
 Must know who to maximize value for
 Who to contact to get inputs
Three mistakes to watch for:
 Company does not consider end user directly
(talking to “ISP” but not to “ISP’s customers”)
 Company does not consider all relevant customers for innovation
(talking to “doctors” and not to “nurses”)
 Company lets one customer speak for another
(talking to “sales people” to get “consumer” inputs)
Drug
Manufacturer
Distributor
Drug
Store
Consumer
Doctor
Pharma
Value
Chain

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 2:
Capture
customer
inputs
Companies
listen to the
“voice of the
customer” and
struggle to
make sense
out of vague
inputs in order
to give
customers the
solutions they
Companies
determine what
outcomes
customers
want to
achieve, and
let qualified
experts, not
customers,
devise the best
solutions.
Marketing and
development
managers have
the customer
inputs they
need to create
solutions of
significant
value.

Three Types of Jobs
1. Functional Jobs
(birthday party for your son)
2. Emotional Jobs – Personal
(feel good as a mother)
3. Emotional Jobs – Social
(show others you care for your family)

Dissection of an Outcome
Use personal and group interviews with observational
research…
Reduce the time it takes to prepare the wood for cut <10 min.
direction
unit of measure
outcome desired
Note: Use only
“reduce” ,
“increase”,
“meet”
to minimize variance
Note: Overcoming “constrains” is
important as well – e.g. Roche Accu-Chek
Comfort Curve for people with diabetic
episode… (Constrain: Must be useable
by people with blurry vision & shaky
hands) Constraints are “must” meet
outcomes.
Increase the air flow to blow away saw dust >3
cm3
/sec.
specified limit

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 3:
Identify
areas of
opportunity
Companies
define
“opportunities” as
the solutions
customer say
they want. They
prioritize
innovation
initiatives based
on available
resources and
existing core
Companies
define
“opportunities”
as the outcomes
customers say
are important
and
unsatisfied.
Then find the
resources and
build the
competencies to
Managers know
where to focus
employee
creativity to
create customer
value.
Companies don’t
waste time and
effort on
outcomes that
are already
overserved or

World’s First and Only
15 Blade Razor
Overdesigned?

Prioritizing Opportunities
1. Prepare survey questionnaire that has all the job, outcome,
constraint statements captured from customer interviews.
2. Give survey to statistically significant target population (no
more than 600, minimum defined by population size)
3. Ask participants to rate importance from 1 to 5 on a scale,
5=critically important, 1= not important at all
4. Ask participants to rate the degree they are satisfied with how
the solutions they are using today from 1 to 5 on a scale, 5=
totally satisfied, 1= not satisfied at all.
5. Enter the results into the opportunity algorithm to determine
which jobs, outcomes, and constraints are underserved and
overserved.

Opportunity Algorithm
opportunity =
importance + max (importance – satisfaction, 0)
(units for importance and satisfaction =
percent of surveyed rated this outcome a 4 or 5.)
Example:
importance= 88% (8.8), satisfaction= 21% (2.1) 
opportunity= 8.8 + (8.8-2.1) = 15.5

Possible Opportunity Ratings
importance
satisfaction
0 5 10
0 0 10
ok
20
excellent
5 0 5 15
good
10 0 5 10

Identifying Overserved and
Underserved Markets
Underserved job/outcome when
“importance > satisfaction”
 Opportunity >15  Extreme areas of opportunity – do not miss !
 Opportunity >12 & <15  “low hanging fruit” ready for improvement
 Opportunity >10 & <12  worthy of consideration
 Opportunity <10  unattractive
Overserved job/outcome when
“satisfaction > importance”
 Stop focusing on these outcomes
 Do cost reduction if market is cost-sensitive by taking out overserved functions
 Do disruptive innovation, if market has many overserved opportunities of significant
size and/or growth.
Catch migrating value by measuring opportunities
over time.

Outcome Driven Competitive
Analysis
satisfaction
outcome imp sat opp com
p
#1
com
p
#2
comp
#3
#1 8.3 4.5 12.
1
5.6 3.8 4.8
#2 … … 12.
0
… … …
…Note: Best to present these using value curves

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 4:
Segment the
market
Customer are
conveniently
classified by
product type,
price point,
age, risk
aversion, and
other
demographic
and
psychographic
Customers are
segmented
based on the
jobs/outcomes
they are trying
to achieve.
They are not
placed into
artificial,
company-
imposed
Managers are
able to
discover
segments of
opportunity in
markets where
few if any
opportunities
appear to exist,
revealing new
avenues for

Effective Segmentation must
create a population that:
 Has a unique set of underserved or overserved outcomes
 Represents a sizeable portion of the population
 Is homogeneous – meaning that the population agrees on
which outcomes are underserved or overserved and
responds in the same manner to appropriately targeted
products or services.
 Makes an attractive strategic target – one that fits with the
philosophy and competencies of the firm
 Can be reached through marketing or sales efforts.

Traditional segmentation
techniques (such as
demographic or
psychographic) do not work
when defining innovative
products.

…requires an understanding of
the circumstances in which
customers buy or use things.
Predictable* marketing…
* Knowing accurately which products will connect with their customers (sell)

Proper Segmentation
Increases Market Share
 Tier 1 Customers– who were buying other products but were
not happy and ready to switch will start buying your product
since now it fits their needs better than the alternative.
 Tier 2 Customers– who had looked at the alternatives and
decided not to buy / wait, will start buying your product since
now it fits their needs the way they want it.
 Tier 3 Customers– who had not looked, will be influenced by
your new “satisfied” Tier 1 & 2 customers by “word of mouth”
advertising.

Outcome-Based
Segmentation
1. Collect required data
(customers’ desired outcomes)
2. Choose segmentation criteria
(use factor analysis*)
3. Group together surveys with similar factors
(use cluster analysis*)
4. Profile clusters
* Factor analysis seeks to discover if the observed variables can be explained largely or entirely in
terms of a much smaller number of variables called factors.
* The purpose of cluster analysis is to discover a system of organizing observations, usually people,
into groups, where members of the groups share properties in common.

Motorola’s “Radio
Products” Case
 1997, limited growth,
market appears to be
maturing…
 New ways for growth?
 Traditional vertical segmentation wasn’t
working for them…

1. Collecting the Required Data:
 Radio users had almost 100 desired outcomes, such as
“Minimize the number of communications that are intercepted by
unauthorized parties”...
 Designed a survey and sent to a large random sample of radio
users population.
 Survey captured degree of importance of each outcome for the
customer, and the degree they felt each outcome was satisfied
by the products currently available.
Motorola’s “Radio Products” Case

2. Choosing the Segmentation Criteria:
 Grouped similar outcomes together into 18 distinct
opportunity-based factors (used factor analysis)
 They chose one outcome from each factor that showed
the most variation in market response.
In factors where there was no substantial market variation,
no outcomes were chosen.
 In total 11 outcomes were selected as segmentation
attributes (see next slide)

Segmentation Attributes for Radio
Products
1. Minimize the number of messages that are misunderstood.
2. Minimize the number of interruptions during a communication
3. Minimize the amount of interference encountered when communicating
4. Minimize the effort required to communicate discreetly
5. Minimize the number of annoying incoming communications
6. Minimize the time it takes to confirm receipt of a communications
7. Minimize the effort required to establish a record of the communication
8. Minimize the number of communications that can be intercepted
9. Minimize the likelihood of making inadvertent changes to settings
10. Minimize the effort required to program the device
11. Minimize the effort to operate the device with gloves on

3. Conducting Cluster Analysis:
 Used opportunity ratings given to the 11 selected
outcomes.
 Decided on 3 clusters who rated outcomes as shown
below as important and unsatisfied:
1. Segment 1: Rated 4, 7 , 8 (40% respondents)
2. Segment 2: Rated 1, 2, 3, 9, 11 (28% respondents)
3. Segment 3: Rated 5, 6, 10 (30% respondents)

Segment Opportunities
SEGMENT 3
5. Minimize the
number of
annoying
incoming
communications
6. Minimize the time it
takes to confirm
receipt of a
communications
10. Minimize the effort
required to
program the
device
SEGMENT 2
1. Minimize the number of
messages that are
misunderstood.
2. Minimize the number of
interruptions during a
communication
3. Minimize the amount of
interference encountered
when communicating
9. Minimize the likelihood of
making inadvertent
changes to settings
11. Minimize the effort to
operate the device with
gloves on
SEGMENT 1
required to
communicate
discreetly
required to
establish a
record of the
communication
8. Minimize the
number of
communications
that can be
intercepted

4. Profiling the Clusters:
 Motorola profiled (surveyed again) the surveyed
customers to understand the demographic and
psychographic characteristics of the 3 segments.
(This could have been done through the initial
survey…)
 The questions gathered age, job titles, how
frequently they used the products, what they used it
for, geographic location, etc.

Motorola Mobile Radio
Segment Profiles
SEGMENT 1:
“Hired” mobile radio products to communicate privately, discreetly, or
covertly, without being noticed by others and without being overheard.
They conducted covert operations from inside a vehicle, valued privacy
and security related outcomes.
They included police, security personnel, and similar individuals; were
younger users; and were likely found in urban areas.
Resulting Solution:
Enhanced encryption
A mechanism to prevent others from overhearing communication
Noiseless operation

Segment Profiles
SEGMENT 2:
“Hired” mobile radio products to provide clear, unambiguous, and
uninterrupted communications when face with dangerous, even life-
threatening, situations.
Members of the segment consisted mainly of firefighters, police, and
security personnel that often leave their vehicles to perform
assignments but must maintain vehicle contact at all times.
Resulting Solution:
Voice command technology
Emergency locators
Modifications to permit use with gloves

Segment Profiles
SEGMENT 3:
“Hired” mobile radio products to communicate with teams and groups, to
coordinate activities, and to perform administrative tasks.
Members of this segment included coast guard, locomotive engineers, and
others who make constant use of radio communications throughout the
day to do their jobs. In contrast to other segments, members of this
segment required neither privacy nor emergency-situation capabilities.
Resulting Solution:
Easier to program radio
A mechanism to ensure message is received

Motorola’s Results
 Until this point, no mobile radio products by Motorola had
addressed the outcomes uniquely desired in each segment with
well-matched products and service offerings.
 There was a one-size-fits-all mentality.
 Motorola optimized a product for each segment.
 Products addressed previously underserved outcomes for the
specific segment, and eliminated product features that addressed
outcomes of little or no importance to the segment population.
 Better products at lower prices with increase customer satisfaction
resulted. Revenue growth reached 18% in a flat market,
and Motorola secured leadership position in the market.

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 5:
Target
opportunities
for growth
(targeting
strategy)
Companies
pursue ideas
that are
intuitively
attractive, easy
to develop, or
that fit within
the firm’s core
competencies.
Companies
pursue
underserved
and overserved
outcomes for
improvement
and cost
reduction,
respectively.
Companies
proactively
define a
competitive
position that is
unique and
valued and
then devise
solutions to
occupy that
position.

Broad Market Targeting
Opportunities
1. Combining related opportunities that form a theme
(Coplast “preventing complications” vs. “healing faster”)
2. Combining unrelated opportunities that represent growth
avenues (target multiple unsatisfied outcomes)
(Bosch CS20 circular saw)
3. Prioritizing a single opportunity that can be addressed
with a new, supplementary product
(Cordis stent)
4. Eliminating overserved outcomes that add unnecessarily
to product cost
($2000 PC vs $200 PC – see next slide)
5. Addressing opportunities for technology development and
long-term growth
(Cisco acquisitions, airbags)

MIT’s Negroponte’s $200 PC

Narrow-Segment Targeting
Strategies
(what to do when broad-market is not attractive)
1. Identify opportunities that cover multiple (outcome-
based) segments
(if cannot target 100% of customers, target as many as possible)
2. Build a single platform for multiple segment
solutions
(thus reduce the number of platforms required, which reduces
development time & cost)
3. Pursue the least-challenging segments of
opportunity first
(segments with many underserved outcomes are harder to satisfy,
which makes them more challenging)
4. Target segments that represent attractive (lowest)
price points (plot performance vs price point)
(least-demanding segment can be disrupted more easily)

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 6:
Assess
messaging
and branding
(positioning
strategy)
Companies are
uncertain if
their
positioning and
messaging is
tied to the
customers’
underserved
outcomes.
Products and
brands are tied
directly to the
emotional jobs
or functional
outcomes
customers are
trying to
achieve.
Messaging
connects
solidly with
customers and
enhances the
sales of
existing and
new products.

Messaging Should Tout a
Product’s True Value
Most companies don’t know which customer
outcomes are important and underserved.
(so they talk about all their features in advertisements – and don’t show their differentiating
features – see PC advertisements in newspapers, “Which one should I buy? They all look
the same to me… Use facts and numbers whenever possible!)
Precision, not vagueness, in messaging is needed to
connect product with what customer wants.
(companies use “adjectives” – such as “reliable”, “light”, “fast”, “better” which are vague,
imprecise, and ope to interpretation – use specific facts and numbers – razor with
rubberized handle touted as “easy to use”, customers should figure out what that means.
Better to say (“ …so you won’t drop it when your hands are wet…”)
Repeating outdated messaging
(once an outcome is satisfied it no longer resonates with customers, holding on to an
outdated message will slow sales and growth)
Create a message around a theme or specific
outcome

Emotional or Functional ?
Jewelry
Cosmetics
Food & beverages
Packaged goods
Automobiles
Clothing
Bottled water
Chemicals
Raw materials
Electronics
Appliances
Software
Services
Medical devices
Functional Complexity
EmotionalComplexity
Emotional or Functional ?
Cell phones,
digital watches,
automobiles,
etc.

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 7:
Prioritize
projects in
the
development
pipeline
Managers are
compelled to
cove all bases.
They initiate
hundreds of
development
efforts, spread
resources too
thin, and are
reluctant to kill
projects already
under way.
Companies
evaluate
products in the
pipeline for
their ability to
address the
customers’
underserved
outcomes.
Companies
know which
initiatives will
create the most
value. They
are able to
create more
winning
products in
less time and
at less cost.

What issues do companies face
when prioritizing projects?
Difficulty determining which concepts will address
market opportunities
(use opportunity ranking / table)
Compulsion to cover all bases
(due to expecting variance and not knowing which opportunity is best  don’t
put all eggs in the same basket  dilutes resources  reduces success rate)
Difficulty killing projects
(belief that with a bit more work and investment the project will succeed – which
is based on assumptions and not on evidence)
Failure to allocate sufficient resources to get the
project to market quickly
(a 6 month delay to market reduces the life-time profit by 2 – starting a project
gives false sense of security that the project will succeed)

Stages of
Innovation
Customer-
Driven
Approach
Outcome-
Driven
Approach
Benefits of
Outcome-
Driven
Approach
Stage 8:
Devise
breakthrough
ideas
Employees
brainstorm
without focus,
generating
hundreds of
ideas with
questionable
value. Many
ideas must be
evaluated at
significant cost.
Employees use
focused
brainstorming
to direct their
energies
toward specific
underserved
outcomes and
generate a few
ideas of
significant
Employees
don’t waste
their time
generating
ideas that do
not add value.
They generate
only ideas that
are worthy of
pursuit.

Why do companies fail to
produce breakthrough ideas?
Managers don’t direct employees’
creativities.
Companies judge success of idea generation
processes by the number of ideas generated,
not the quality of the ideas.
Many ideas are generated, and most
companies lack a useful way to capture,
evaluate, and select the best ideas.

Knowing where to focus creativity is the
key to successful and accountable
innovation.
Outcome-based innovation makes sure
to focus innovation on opportunities,
and without diminishing performance
along other important outcomes.

Customer Scorecard
satisfaction
outcom
e
imp sat opp concep
t
#1
concep
t
#2
concep
t
#3
#1 8.3 4.5 12.
1
5.6 3.8 4.5
#2 … … 12.
0
… … …
…

How much value is enough?
Offering <3% more value than current
products often fail
Offering 5% to 10% more value results in
successful products (grow market share
and/or revenue, profit)
Offering >20% more value results in
dramatically higher market share, revenue,
profit. (breakthrough products)

Genius is 1 percent inspiration
and 99 percent perspiration
T.A.Edison

“Innovation is 1 percent
inspiration, and 99 percent
perspiration.”
Z.G. Boyacigiller

What customers want

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