Predicting whether a new product will succeed or fail has always been a crucial challenge for companies. For Tony Ulwick, this question became a defining moment after witnessing a high-profile product flop during his early career at IBM. That experience fueled his journey toward creating Outcome-Driven Innovation (ODI), a framework that redefines how companies approach product development by focusing on customer needs and outcomes. In this article, we explore Tony's insights into transforming failure into foresight, offering actionable strategies for businesses looking to innovate successfully.
The Journey from IBM to Innovation Pioneer
Tony’s journey began in the 1980s with a lesson that reshaped his understanding of product development. Tasked with launching the IBM PC Junior, he anticipated it would revolutionize home computing. But to his surprise, the Wall Street Journal declared the product a flop the very next day. “It took us about a year to come to grips with that fact,” Tony recalls. This setback led him to a crucial realization: “They were using some set of metrics to judge the value of the product…could we know what those metrics are well in advance in the product development cycle?”
This question became the cornerstone of Tony’s work. He began analyzing how companies could predict market success by identifying customer-driven metrics early in the development process. In 1991, he founded Stratagen, a consultancy dedicated to refining this concept, and over the years, his approach evolved into Outcome-Driven Innovation (ODI).
What Is Outcome-Driven Innovation (ODI)?
ODI redefines the product development process by emphasizing measurable customer outcomes, helping companies focus on what people actually want to achieve rather than the products they buy to do it. Tony explains: “People don’t want a quarter-inch drill; they want a quarter-inch hole.” With ODI, the emphasis shifts from the product itself to the underlying job that customers want done, breaking the development process down into actionable steps.
The core of ODI lies in “job mapping,” a structured way to understand the customer’s journey in accomplishing their goal. By examining each step, companies can identify and measure success in ways that resonate with customers. According to Tony, “Once I have the job map, I can figure out how people measure success along each step of the way.”
Applying ODI: The Cordis Case Study
Tony’s ODI framework has helped numerous companies predict and meet their customers’ needs effectively. One of the most significant examples is his work with Cordis Corporation, a medical device company that had lost its market share in angioplasty balloons. Instead of merely improving the balloon, Tony applied ODI to uncover the “job” that cardiologists aimed to accomplish: restoring blood flow to an artery. Through ODI’s job-mapping process, Tony and his team identified over 100 metrics that mattered to interventional cardiologists performing the procedure.
Using ODI, Cordis prioritized the 15 most important but unsatisfied needs, leading to the development of a new line of angioplasty balloons and, notably, the heart stent—a breakthrough product that became the fastest-growing medical device in history. This success propelled Cordis from a 1% market share to over 20%, ultimately leading to its acquisition by Johnson & Johnson.
“What are the chances that your product will randomly address the top unmet needs if you don’t know what those needs are? Pretty much zero,” Tony states, underscoring the strategic focus ODI brings.
Shifting the Mindset: Thinking Beyond Demographics
A core aspect of ODI is redefining traditional market segmentation. Instead of demographics or psychographics, ODI focuses on unmet needs within specific jobs that customers want done. Tony notes, “We’re going to define a market as a group of people in the job they’re trying to get done.” This approach challenges companies to think differently about customer needs, moving away from assumptions based on age, income, or lifestyle, and instead segmenting around specific, actionable outcomes.
ODI’s customer-centric approach also provides clarity when identifying unmet needs. Tony explains that these are not just missing product features but measurable outcomes that customers value but are not fully satisfied with existing solutions. This precision prevents companies from targeting “phantom needs,” helping them allocate resources to areas with genuine market demand.
Building an Aligned Team for Innovation Success
Implementing ODI requires more than just a new framework; it demands alignment across the organization. According to Tony, one of the biggest obstacles to innovation is ensuring that everyone is “paddling in the same direction.” ODI facilitates this by creating a shared understanding of market needs and setting clear metrics for success.
Tony emphasizes, “We need to know the right direction and align our organization to point in that direction so everyone agrees on what a need is and what the needs are.”
Stratagen’s offerings reflect this philosophy, consisting of research, educational cohorts, and ideation sessions that allow teams to conceptualize breakthrough solutions collaboratively. With these components in place, companies not only benefit from the clarity of ODI’s market insights but also build a cohesive culture that drives innovation forward.
A Resource for Entrepreneurs: The ODI Pro Course
Tony’s passion for making ODI accessible to a wider audience has led him to create the ODI Pro certification course. “A lot of entrepreneurs don’t have the time or the budget to hire consulting firms. They want to figure out ways to do it themselves,” he says. This course, available online, offers practical training for entrepreneurs and teams aiming to adopt ODI principles in their own ventures. By following the course, participants learn how to apply job mapping, identify unmet needs, and implement ODI to increase their chances of market success.
For those interested in further resources, Tony’s website, Strategyn.com, offers articles, white papers, and free downloadable content, including his book on Outcome-Driven Innovation at jobstobedonebook.com.
Key Takeaways and Next Steps
Tony Ulwick’s Outcome-Driven Innovation framework provides a powerful, predictive approach to product development, helping companies avoid the costly missteps that often accompany innovation efforts. His work demonstrates how aligning with customer-defined outcomes can lead to measurable success in the marketplace.
Here’s a quick summary of Tony’s insights:
Redefine Market Needs: Focus on customer outcomes instead of product features.
Utilize Job Mapping: Gain insights into customer journeys to better serve their needs.
Align the Team: Ensure that everyone in the organization understands and targets the same unmet needs.
Prioritize Customer Segmentation by Needs: Move beyond demographics and segment based on specific, measurable outcomes.
Tony’s ODI framework offers a refreshing alternative to conventional product development approaches, giving businesses the tools to innovate with confidence. For anyone interested in learning more, his online ODI Pro certification and free resources on his website provide a wealth of information to kickstart the journey to innovation success.
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