S. 3 Ep. 36 – How To Create The Right Thing For The Right People

Taylorr: You know those moments when you’re doing what you love in your business, maybe it’s standing on stage or creating content, whatever it is, you’re totally immersed and time just seems to slip-by? This is called The Flow State.

Austin: At Speaker Flow, we’re obsessed with how to get you there more often. Each week we’re joined by a new expert where we share stories, strategies, and systems to help craft a business you love. Welcome to Technically Speaking.

Taylorr: And we are live. Tony, welcome to Technically Speaking. It is truly an honor to have you here today. Thanks for joining us.

Tony: Taylorr, it’s my pleasure. Thanks for the invite.

Taylorr: Yeah, for sure.

Austin: Sometimes we see people pop up on our calendar and it’s frankly, shocking that somebody would be willing to have a conversation with us. And you fit into that category.

Taylorr: And you fall into that category, for sure.

Austin: We’re truly honored.

Taylorr: Big fans. Yeah.

Tony: Well, it’s good to hear, it’s my pleasure. So, yeah, I’m looking forward to a good podcast.

Taylorr: Yeah, definitely. So, I think we have to start off with some background. We were actually just talking before the show, 30 years or so with 32, maybe it was; doing the work with Strategen in the product space for almost 40, let’s say. What happened in your past to get to the point where you started working on the Jobs to be Done Theory and how are we here today?

Tony: That’s a great question. It’s a story I’d love to tell too, because it was so life changing. I was working for IBM at the time, so this is back in the early 1980s. And I went to work in their PC division as a manufacturing engineer working on a product that was called the PC Junior. And the PC Junior was IBM’s answer to home computing. It was going to beat Apple, which was just coming onboard, and it was going to just take over the world. And we spent two years getting ready for it, getting the new manufacturing plant set up, getting inventory built up. And the day after that product was introduced, the headlines in the Wall Street Journal read, “The PC Junior is a flop.”

Taylorr: The day after?

Tony: The day after. They didn’t even take a week or two weeks, they declared it a flop the day after. Now, the bad news was they were right. It was a flop. It took about a year for us to come to grips with the fact that it was, they pulled it from the market. It was a billion dollar IBM failure.

Taylorr: Wow. The nineties.

Tony: Now, at the time, I was new to product space, and new to IBM too. And I thought, well, this is IBM, how could a company with that kind of resource fail in such a spectacular way? But as I started investigating it, I realized, it’s not just IBM, a lot of companies were putting out failed products. In fact, a lot of companies still put out failed products. But it got me very interested in understanding how that could happen and how you could avoid it. Because, as you know, working on the product for a couple years, putting your heart and soul into it and seeing it flop in the market is, well, it’s not fun.

Taylorr: Heart wrenching.

Austin: Humbling, perhaps.

Tony: Humbling. Yes, exactly. So, the thought was, how can we avoid that? And that was the starting point of coming up with the answer.

Austin: Wow. So, were you tasked by IBM to go and do this research and uncover what happened? Or was this just your curiosity and your wheels spinning on what happened here?

Tony: Well, as I discovered what was going on, I went to the product planning team to see how was this done, what happened, what went wrong? And I actually joined that product team because what I had learned is that they’re just following the same stuff everyone else was following at the time. And the cutting edge back in those days was, voice of the customer was just getting started. And we had conjoint analysis that was new. So, there were a few new tools that were being added to demystify that fuzzy front-end of innovation. 

I spent my last six years at IBM, as a product planner and investigating different techniques and trying to come up with a solution. They were a great company to work with, I have to say. I was lucky enough to play the role of an internal consultant. So, I was a consultant inside IBM and I would more or less hire myself out to different groups at IBM to develop strategy based on this kind of thinking. I was in Australia working with the IBM team there when it really just clicked in. 

So, I mentioned I have an engineering background. I’ve worked in the manufacturing line and I studied innovation for these six years. And I rethought through a quote that we’ve all heard a hundred times or a thousand times, and that is Levitt’s quote, people don’t want the quarter-inch drill, they want the quarter-inch hole. But what occurred to me in that moment was, why don’t we just study the creation of the quarter-inch hole, instead of studying how to make a better drill. Let’s not talk to people about drills, let’s talk to them about the process they’re trying to execute.

And as an engineer, I love that, because now you can break down the process into steps. And just like in manufacturing, you figure out what can we measure and control to produce a predictable output? Right? And the same thinking, I’m thinking if we could apply the same mindset to the customer, this would be a solution, right? Because they’re trying to execute some underlying process; let’s study the process, understand what metrics they’re using to judge success and value. And if we can do that, we could predictably come up with solutions that get the job done better, or help them execute the process in a more efficient manner. 

Once that hit, I said, okay, let’s go test that. And I started coming up with the outcome statements in that form and just thinking through everything from that lens, right? My first project as a consultant outside of IBM was with Cordis Corporation. We worked with interventional cardiologists who were trying to restore blood flow to an artery. They used angioplasty balloons, right? So, you could say it’s the angioplasty balloon market, but really it’s a group of people, cardiac surgeons, who are trying to restore blood flow to an artery. 

So, let’s go talk to them and see how do they measure success as they’re going through the process of restoring blood flow to the artery. And sure enough, you can come up with a set of metrics that very clearly represent what they’re trying to accomplish; they can prioritize them for you, they can tell you which are the most underserved, and you can use those as inputs to help guide ideation sessions, which I did. A year and a half later, they introduced 19 new products, all of which became number one or two in the market.

The market share went from roughly 1% to over 20%. In addition, they identified one outcome that was highly underserved, which was minimize the likelihood of re-stenosis, which is the recurrence of the blockage. And they said, well, we’re working on something that could potentially address that along with the 40 other things. And we said, well, you should double, triple down your resources on that and be the first to market with it, which they were. And that happened to be the heart stent. That, in and of itself, became a billion dollar business within a couple of years. 

So, you could imagine my excitement, right? This was my first shot out of the blocks, outside of IBM. And it was just wildly successful. And it proved that the process worked. In the year since we’ve been just working to refine the process so it works in all different situations, and as you start considering all different situations, things get more complex and you have to create new rules in different parts of the process and all of that kind of stuff. So, that’s what we’ve done. And over the 30 years we’ve applied it in nearly every industry successfully. We hope to keep applying it and keep improving it, make it the standard practice in terms of innovation.

Taylorr: Yeah, wow.

Austin: What a cool story, man.

Taylorr: Yeah, for real.

Austin: That’s awesome.

Taylorr: I’m curious, this should be a quick question, but what was your role in IBM as it relates to the PC Junior?

Tony: Yeah. I was a manufacturing engineer. I was setting up the manufacturing line.

Taylorr: I see.

Tony: I was the guy programming the auto-insertion machines so the components would get placed correctly on the printed circuit boards, that kind of stuff.

Taylorr: Wow. Just no box. Okay.

Austin: Yeah.

Tony: So, that helps me clarify.

Austin: So our listeners know who we’re talking to here, right?

Taylorr: Yes. Yeah, for sure. Okay, that makes perfect sense. Okay. And then, you segued that into the internal consulting stuff.

Tony: Yeah.

Taylorr: What I’m curious about is, do you find that the product fails because the product isn’t fulfilling the outcome that the clients are wanting? Or that the positioning of the product didn’t get picked up on? Was PC Junior inherently a poor product? Or was it that it wasn’t positioned properly for the market to understand? So, I guess in a nutshell, in this one specific example, is it really about the product? Is it about the positioning of the product? Is it both as it relates to innovation? Can you help me understand that a bit more?

Tony: Sure. Well, if you don’t have a product that meets the customer’s unmet needs, then no matter what you say about it, it isn’t going to matter, right?

Taylorr: Sure.

Tony: So, you have to have the first part. But people can go wrong by not addressing the right needs. And if even if they address right things, they could go wrong with the wrong message, but our approach makes it obvious what needs you should go after. And then, of course, if you go after them, you should tout that in your value proposition as well.

Taylorr: Sure.

Tony: It goes hand-in-hand. So, they’re kind of highly correlated. And what I find is products that fail generally; just they don’t get the job done a lot better. It’s just that simple, right? So, when you think about a job like restoring blood flow to an artery, it goes from beginning to end. There are 10 steps. There might be a hundred outcomes that the surgeons are trying to address. And what you’re trying to figure out is, well, how do we get the job done a lot better, right? 

Because you can ask yourself this question, would you switch from your favorite brands for another product that gets the job done 1% better or 2% better? Probably not, right? It’s not worth it. But if you get the job done, about 15% better or more, now we just start getting some adopters. So, the first rule of thumb is, make sure your product gets to the job done a lot better. What companies often do is they’ll discover one unmet need and they’ll go address it and put a new release out, and the customers go, yeah, well, that’s nice. But that’s incremental improvement. And then they do it again six months later with another incremental improvement. And that goes on for years, right?

But in reality, right up-front, there were may have been 20, 30 unmet needs, and if they knew what they all were, you could take a chunk at a time, take five or six, address them all, right? Now, you’re making significant improvements, right? Where people go, wow, they’re getting the job done a lot better. The next release, again, a lot better, right? Now, everyone takes notice. Competitors are going to be challenged to try to keep up with you because they’re going to have to do what you just did, and then pick the next five or six unmet needs to get ahead of you. 

So, this is how we help companies get that protection and sustainable competitive advantage. It’s not necessarily because they patented their technology, it’s because their competitors don’t know how to create value at the pace that they do. I have a great story with Kroll Ontrack, for example; when we helped them enter the electronic evidence discovery market. We discovered about 60 unmet needs in priority order. The first iteration of the product addressed about 30 of them; it was wildly better, very successful. And they followed the same pattern for years. They just took the next set of unmet needs and worked on them for the next release. And then the next set. 

Well, the competitors, it took them 15 years to catch up with them because they were always focused, the way I like saying this is, they were always on the most efficient path to growth. They were always focused on the needs that if addressed, would have the greatest impact on the biggest customer population. And so all this is knowable, right? So, if you can discover that and get on that path and stay on that path, that actually becomes your competitive advantage. Even if other people are copying your technology, they’re on the old release, and you’re still ahead of them, and you’re always ahead of them. Until, of course, you’re getting the job done perfectly. And then other people can get it done equally as well, and then things go to hell from there.

Austin: Yeah, understood. I’m interested in the balance of qualitative versus quantitative measurements of what the customers want or need. How much is it about bottom line data that suggests success versus just making them feel better about whatever they’re doing?

Tony: Yeah, that’s a great question. We use qualitative research to uncover the customer’s outcomes. So, we talked about what are the metrics you use to measure success when getting a job done? So, the interventional cardiologist, for example, may say I want to minimize the likelihood of going into a side vessel when I’m trying to transverse through a tortuous vessel. Or I want to minimize the time it takes to get to the edge of the lesion. I want to minimize the likelihood of overreaching the lesion and they’re thinking these things as they’re going through the procedure, right? 

And so, this is how they measure success. And what we’re doing is we’re capturing those outcomes using qualitative research. We sit with the interventional cardiologists, we ask them to take us through the process in super slow motion. So, we just go step by step, and this takes hours. It could take 8, 10 hours to get the complete set of statements, but in the end, you know exactly how they’re thinking about value creation. I want to minimize the likelihood of going into the side vessel. I want to minimize time it takes to get to the edge of the lesion. They know what they’re trying to do. 

So, qualitative research is designed to help capture those statements. There might be 50, 80, a hundred of those statements. The quantitative research side, it’s designed to figure out which are unmet. Because there are 80 needs or a hundred needs. Well, which ones do we focus on? We can’t focus on all 80, right? Let’s get a priority order. So, we will put those statements in a survey and go out to those interventional cardiologists. We’ll sample 180 of them, maybe 360 of them, depends on the situation. We’ll ask them to tell us how important each outcome is. And then, given the solutions that they’re using today, how satisfied are they with their ability to achieve the outcome?

So, that gives us two data points, tells us what’s important and not satisfied. And from there we say, well, if an outcome is really important and not well satisfied, we’re going to call that unmet need. And we have an algorithm that says opportunity equals importance plus the difference between the importance of satisfaction. So, if a need is very important and the difference between importance and satisfaction is great, it’s going to get a high score. So, this is how we prioritize them. So, you can get a need that’s as high as a 20 in an opportunity score and as low as a zero. Anything over 10, generally speaking, is a good opportunity for value creation. So, we’ve discovered that over the years. 

So, what we’re trying to do here, at a high level, it’s very simple. We’re saying, hey, let’s define our customer. Let’s understand what they’re trying to accomplish. Let’s understand the priority order of the needs. And then once we know what the unmet needs are, let’s systematically work to address them. With Cordis, we knew their top 15 unmet needs. So, in our ideation session, we went one by one, the top one first, and started coming up with solutions that address the unmet needs. Now, what’s always interesting in these sessions is the engineers and team generally don’t struggle to come up with ideas. In fact, they often have already had ideas, but the problem is they’ve often had thousands of ideas and they don’t know what 15 outcomes are the most important in priority order, right? That’s the magic.

You think about it like this, what are the chances of someone randomly coming up with a solution that addresses the top 15 unmet needs if they don’t know what those 15 unmet needs are? Not very good, right?

Austin: Yeah.

Tony: But, if you know what those 15 unmet needs are in priority order, and you can work to address them, now, what are your chances? So, this is why we have an 86% success rate because we’re trying to stack the odds in our favor, right? Saying, here’s the 15 unmet needs, solve them. And if you do, you’re going to get the job done 15% better or more, and you’re going to beat your competitor. So, at a high level, that’s the philosophy, it’s pretty simple from a philosophical standpoint. The practice is a little bit more difficult, but you can see the way we think about this when we’re trying to create value for customers.

Taylorr: Yeah.

Austin: Brilliant.

Taylorr: Well, I think you just kind of unlocked something for me. Because one of the questions I had kind of coming into this is this relationship between a job to be done and then outcome-driven innovation.

Tony: Yeah.

Taylorr: I think prior to the episode I was thinking a job is an outcome. But what it sounds like, and I think the cardiac example helps solidify this, is the job is we need to restore blood flow, but there are all these other outcomes as a part of that job that they’re looking for in order to accomplish that job. Am I understanding that properly?

Tony: You have it exactly right. Yeah. And that is a common misnomer. So, what we do is we define the market as a group of people in the job to be done. So, we’ll say its interventional cardiologists trying to restore blood flow to an artery, just as you said, Taylorr, that’s what they’re trying to do at a high level. And as they go about and try to get that job done, they have these measures of success we call desired outcomes. So, that’s exactly right. It’s a hierarchy, right? The high level job, the job steps, and all pf the outcomes underneath each job step.

Taylorr: Okay, that makes perfect sense. So, in follow-up to that; actually, you prompted this, about your success rate, 86% success rate. What happens with the other 14%?

Tony: Well, generally they don’t get the job done significantly better.

Taylorr: Gotcha.

Tony: In other words, maybe there weren’t 15 unmet needs. Maybe there were only four. Maybe there were only three, and they addressed them, but it didn’t move the needle enough. And that’s where we came up with that rule set. We said there’s a threshold here; it’s not as if you can guarantee success by satisfying the top two or three unmet needs, it may not be enough. And we started tracking overall satisfaction with executing a job, and that clued us in on what kind of difference we had to make. When we helped Bosch into their North American circle of sum market, we calculated out that by satisfying these 4 to 10 met needs, we helped get the job done about 20% better. So, that gave them a high level of confidence that the product they were conceptualizing was worth developing and was going to win in the marketplace.

Austin: Wow.

Taylorr: Gotchya.

Austin: This might not actually be valid at all, so I will start with that. But in the case of the cardiology example that you gave, I think that it’s obvious to some degree that it’s an important job to be done. So, I think we all connect, that’s something that needs to happen. Do you ever find that there are instances where the job to be done, that’s the non-starter, we’re looking at the wrong job to be done, and how would somebody even know if that’s the case?

Tony: Yeah. Well, you’re on a great point. And this is a market selection discussion, right? Where you’re saying, hey, there’s an interventional cardiologist who’s trying to restore blood flow to an artery. Is that an important unsatisfied job? And should we go investigate that market? Right? So, you’re deciding between that, or you could say, Hey there are parents who are trying to pass on life lessons to children; that’s another market, right? Or it could be pharmacists who are trying to fill a drug infusion pump, or it could be a thousand things, right? Those are all different markets. And, Austin, what you’re getting at is how do you pick a good market, right? 

How do you know that the market’s worth even playing in, right? That’s like picking the ballpark, right? And getting into the ballpark. On our website, we actually created, there’s a tool that’s available for download there that has, I think, 42 different metrics that could be used to judge the attractiveness of a market. But some of them are very simple. So, for example, would you rather invest in a job that people get done once a year or twice a day? Would you rather focus on a job that has 20,000 job executors or 200 million job executors? You kind of get the idea, right? There are certain jobs that a lot of people are trying to get done that they’re dissatisfied with, with current solutions, and they’re large enough where you can make investments and get a good return. 

So, that’s what you’re trying to figure out in the market selection phase. And to your point, not all markets are worth pursuing. Some are more attractive than others. And, of course, generally speaking as well, you want to pick a market that’s in your wheelhouse. If you’re not medical experts, you’re focusing on intervention cardiologists trying to restore blood flow, isn’t going to work for you, right? Maybe you need to develop a software tool that helps parents pass on life lessons to children, maybe that’s more in your wheelhouse. So, those are the kind of criteria that you start thinking through when you’re picking your market.

Taylorr: Yeah. That makes sense. One thing I’m thinking about here is in a lot of these examples talked about cardiac surgeons, Bosch, if you look at the Strategen website, very well-decorated with massive companies using jobs to be done and ODI to help innovate new products. Is this relatable at the smaller scale? Imagine, I don’t know, a thought leader, right? A solopreneur a lot of ways. Sometimes small teams have a core set of expertise trying to figure out that maybe job that needs to get done, how to communicate that effectively, how to build products and services around it. Does this idea of jobs to be done in outcome-driven innovation apply to the smaller scale?

Tony: Sure. Yeah, absolutely. You can even take it down to a thought leader who’s trying to write a book, for example. A book is a product, right? A book’s a product. So, who’s the customer for that product, right? And what job are they trying to get done? And notice how I ask that question. A lot of people assume a job, right? They assume that the customer wants to do X when in fact they want to do more than X. So, for example, you could be a kettle maker and go out to your customers and say, Hey, why do you buy my product? Well, it’s to heat water to the right temperature. Okay, that’s true. And you could go be the best kettle maker on earth, but be disrupted by Keurig and Espresso and others who said that’s only part of a bigger job, right? 

The bigger job is I’m trying to create a hot beverage for consumption. That’s what I’m trying to do. The same thing is true in this individualistic example that you suggested for writing a book. When you’re writing a book, you’re trying to help people solve a problem or get a job done, what is the job? Right? And then each chapter in the book should work toward helping them get the job done perfectly. So, what that means is you have to know what job they’re trying to get done. 

You have to be able to break down the job they’re trying to get done and understand how do they measure success? Even if your book is on how to break a bad habit, it’s still a process. And you could write about how to break a bad habit, understand how the process works, understand the metrics people have when they measure success, and talk about that throughout your book and help them get the entire job done, right? So, that’s the other aspect. Most products get part of a job done. 

This is any product for individuals writing a book or medical device companies putting out a product as well. It often just gets part of a job done, and then there might be another tool that gets another part of the job done, and people end up cobbling together multiple solutions to get the entire job done. Well, eventually what’s going to happen is someone’s going to come up with a platform-level solution that gets the entire job done, and they’ll own the space, just like Nespresso’s a good example there. But you’re trying to do that even when you’re writing a book, right? Let’s understand the job the customer’s trying to get done. 

Break a bad habit; let’s understand what they’re trying to go through. It’s more than just identifying that it is a bad habit and recognizing and admitting that it is, then there are alternative solutions to breaking the habit, and then they have to employ them, and then they have to maintain them and measure their progress. And there’s the entire job that you have to consider. So, when you’re writing that book, get the entire job done to the customer. So, it’s taking the same principles and applying it to any product, whether it’s a stent, angioplasty balloon, or a book, or a course.

Austin: Yeah. So, it sounds like there’s an important element here, which is being, probably intimately familiar with who the market is and what they want, and conversations with them sounds like, is a big part of this in terms of being able to validate the idea to begin with. It seems like that opens up this possibility of human error in communication with you, where it’s possible that there’s a disparate gap between what somebody wants or what they think they want versus what actually gets the job done. And so, do you ever find that there’s this balance between what they want and what they actually need to be effective and how, if that’s the case, would you reconcile that?

Tony: Sure. This is one of the biggest problems in innovation. And what you’re getting at is the notion that customers may not know what they want. And so, that is true in a solution space. They don’t know what solutions they want. It’s just like Henry Ford said, if I asked people what they wanted, they would’ve said a faster horse. And Steve Jobs said people don’t know what they want until they see it. But what they’re really saying is, if I ask people what solution they wanted, they would’ve said a faster horse. Or people don’t know what solutions they want until they see them. That’s true. But a solution is not a need, right? A solution satisfies a need. 

If you start going down that path and you conflate solutions with needs, you would walk away from those statements and say, Hey, you know what? People don’t even know what they want. They have latent needs. They can’t articulate their needs, so why should we even talk to them? Let’s just go build something and put it in front of them and see if they like it. And that’s the excuse that people often use to justify why they skip market research. I’ve seen this a thousand times. But what they’re doing is they’re conflating the notion that a solution is a need and that’s just not true, right? 

And this is why we say we’re going to define a need as the metrics people use to measure success when getting a job done. Like minimize the likelihood of going down that side vessel or minimize the likelihood of overshooting the lesion, right? Those are measurable outcomes that are the needs. We’re not saying to the customer, tell us how to avoid going down the side vessel. Just tell us what you’re trying to do, we’ll figure out how to help you do it in solution space. You just tell us what you’re trying to do in problem space. And it’s that mindset when we go through and create that job statement, all of the job steps, all of the outcomes, we do it all in problem space. It’s everything they’re trying to do independent of any solution that’s created to do it. 

So, there may be 20 ways to restore blood flow to an artery, and if you were doing a process map, there’d be 20 process maps, one for each way, because you’re in solution space. But in problem space, there’s only one job map for restoring blood flow to an artery because everyone’s trying to do the same thing in problem space; they’re just doing it in 20 different ways in solution space, right?

Austin: Oh, man, I get it. It’s amazing how much this frame of reference changes the information that you get.

Tony: Yeah.

Austin: I can see why the word lens gets used frequently in the innovation space, because you do have to take a vantage point when you’re approaching something if you’re going to expect to get the proper information out. That just totally flipped my paradigm about that.

Tony: Yeah, that’s good. Yeah. And that’s the difference, because these sound like slight nuances, but they make all of the difference in the world. I do polls in a lot of my webinars and ask people, how many of you believe that customers have latent needs? And to this day, 95% say, I do. Yes, customers have latent needs. And that’s because we’ve been taught to think that for the last 50 years, right? That, hey, customers don’t know what they want. And we pull out the Steve Jobs quote, we pull out the Henry Ford quote as justification for this stuff, and it just perpetuates this myth that is causing companies to fail because they’re failing to see the difference between problem space and solution space.