Succeeding at innovation is tough business
Marketing strategists, Stephen Wunker, Jessica Wattman and David Farber show that most innovative product launches fail.
- More than half of newly launched products don’t meet their company’s expectations.
- Of every 100 new products, only one covers its development costs.
- Of 300 new products, only one successfully meets the company’s growth target.
The reason? The authors point to the failure of traditional approaches to product development.
- They mentioned that brainstorming squashes creativity much more than anything else.
- Customer research is focused on demographics and attitudes but fails to explain why customers behave the way they do.
- In addition, most productive product developers are happy with improving their existing products incrementally. But what counts is that their products provide a better service to customers. So, improving products ought to mean making them better in the eyes of customers. But, as most productive product developers have a limited understanding of the customer’s decision-making process, they failed to deliver accordingly.
- Finally, most product developers fall in the trap of adding too many features to their products without knowing whether these features actually solve a prevalent customer pain point.
To be clear, finding a way to repeatedly satisfy current customers and simultaneously attract new ones is arguably the biggest challenge facing companies today, according to the authors.
The authors quote Theodore Levitt, a Harvard economist, who once wrote that “people don’t want to buy a quarter inch drill. They want a quarter-inch hole.” In other words, customers are interested in getting to an outcome more than they are in purchasing a product. They see buying a product as a means to and end.
The authors mention that customers have numerous things to get done every single day and the goal of any company must be to focus on their customers’ jobs, such as going to work, eating healthy food, doing sports, saving money, sending their kids to university…
The Job-To-Be-Done Atlas
The authors recommend that leaders develop a “Job-To-Be-Done Atlas” made up of three different components
1/ prioritize what jobs customers are trying to get
First of all, product developers should identify and prioritize the jobs that their customers want to get done. This starts out with identifying their customers’ job drivers which derives from at least three factors including:
- the customer’s attitude and personality trait traits,
- their background and long-term context and,
- their circumstances that make up their immediate or near-term factors.
These three elements explain how customers get to a decision. The authors talk about two different “prototype consumer personas”:
- Jill is a suburban soccer mom. She wants to get her children to soccer practice and other extracurricular activities, wants her family to enjoy healthy nutrition all the while getting everybody to where they need to be on time. Therefore, Jill will be interested in very functional products that are able to accomplish tasks quickly. She might be interested in a microwave that provides quick cooking while preserving the meals nutrients at the same time.
- On the other hand, Buzz is a young tech enthusiast. He may not be interested in the same products as Jill as he may be more interested in novel features and what someone like Jill may consider to be gadgets. But, as Buzz has purchasing power, product developers may consider how to tweak their existing product offerings to appeal to Buzz. Their choice of features to be developed will probably be different from those they would select for Jill.
2/ Understand what success means in the customer’s eyes
Second of all, the authors suggest that leaders look at what how customers define success and spot the roadblocks that may interfere with it. The idea is to develop a product that offers a seamless user experience where there is little to no friction. That’s how to choose the features to be developed in the product.
3/ Outline to product development timeline
In addition, the authors suggest that decision makers outlined the business stakes and make a product roadmap as to how the firm will be developing products in the time to come considering the jobs that their customers are trying to achieve to get done.
The authors mentioned that his thinking in terms of jobs to be done provides a “clear causal mechanism that moves consumers from job drivers to jobs to specific purchase and usage behaviors”.
Finally, the authors mentioned that companies should change their pricing model and evolve from a competition-based pricing to one that is based on value. In other words, in pricing their products they should look at how much customers are willing to pay today to reach a desired outcome and price their products and services accordingly.
What I find particularly interesting in this book is at least several things
The authors point to the failure of existing product development approaches involving brainstorming, customer research. This is a problem because satisfying existing customers and finding new ones is perhaps the biggest challenge facing companies today. The authors mentioned that companies should look at customers as people that are trying to get a number of jobs done on a day-to-day basis. Therefore, when customers go for one product over another, it is because they see this product as helping them achieve their desired outcome. In other words, customers don’t buy the product because they like the product itself. They buy a product because they see this product being instrumental in getting to their desired outcome. The authors go on and talk about how to develop a comprehensive job to be done roadmap and Atlas. They mentioned that this change in thinking helps develop clear causal mechanisms helping understand why customers make the decisions they do and behave the way they do. Applying this thinking to pricing may help companies evolve from a competition-based pricing to one that’s based on value.
Although the book does explain the current failure in product development, it does not look into the question of capital efficiency itself. It doesn’t measure how applying these new methodologies would boost profitability in the near and long-term. Also, the book doesn’t provide an analytical risk assessment in the product development space as, all launches seem to be failing for the same reason: inefficient product development methodologies.
To sum up
Marketing strategists, Stephen Wunker, Jessica Wattman and David Farber, start out by mentioning that only one product launch out of 300 meet a company’s growth target. This failure comes from. This failure is largely due to our approach to product development. Brainstorming and customer research doesn’t work. Instead, the authors mentioned that product developers should understand that customers are trying to get a number of things done on a day-to-day basis. Therefore, customers go from one product rather than another based on whether this product will help them achieve their desired outcome. The authors provide a framework to building a Jobs Atlas and Jobs Roadmap. They also stress that implementing the jobs to be done methodology proves crucial in evolving from a competition-based pricing model to a value-based pricing model.
Although the book points to failed product development methodologies, it does not provide an exhaustive analysis of why products fail. There seems to be just one reason and they are all connected to inadequate product launch frameworks. Plus, they don’t go into how their new methodology may boost capital efficiency in the near and long-term.