science

Outcome-driven innovation

Outcome-driven innovation is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Outcome-driven innovation rather than just read about it. In short: Outcome-driven innovation (ODI) is a strategy and innovation process developed by Anthony W. Ulwick.

Key takeaways

Outcome-driven innovation belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Outcome-driven innovation to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Outcome-driven innovation from memory before moving on to harder problems.

Reference excerpt

Outcome-driven innovation (ODI) is a strategy and innovation process developed by Anthony W. Ulwick. It is built around the theory that people buy products and services to get jobs done. As people complete these jobs, they have certain measurable outcomes that they are attempting to achieve. It links a company's value creation activities to customer-defined metrics. Ulwick found that previous innovation practices were ineffective because they were incomplete, overlapping, or unnecessary. ODI attempts to identify jobs and outcomes that are either important but poorly served or unimportant but over-served. ODI focuses on customer-desired outcome rather than demographic profile in order to segment markets and offer well-targeted products. By knowing how customers measure value, companies are able to align the actions of marketing, development, and R&D with these metrics and systematically create customer value.

Origin Ulwick was granted the first of twelve patents on the ODI process in 1999. In late 1999, Ulwick claims to have introduced ODI to Clayton Christensen. Christensen mentions examples of Ulwick and Richard Pedi of Gage Foods with the way of thinking about market structure used in the chapter "What Products Will Customers Want to Buy?" in his Innovator's Solution and called "jobs to be done" or "outcomes that customers are seeking". Instead of assuming what their customers want or need, typically product developers determine the voice of the customer (VOC). ODI takes VOC a step further by focusing on jobs-to-be-done rather than product improvements. The objective is to translate customers’ needs into products or services they can’t live without. ODI theory posits that companies typically collect the wrong kinds of input from their customers, and states that all the company should find out is what the customers’ ultimate output goal is: what they want the product or service to do for them, not how it should do it. The goal of the method is to help companies discover new product and service opportunities. According to Ulwick, ODI is the culmination of 20 years of studying innovation methodology. In 2002, it was introduced in the Harvard Business Review, and expanded upon in Ulwick's 2005 book, What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services. In 2016, Ulwick published Jobs to be Done: From Theory to Practice to explain the process for converting "Jobs Theory" to practice.

Opportunity algorithm Ulwick's "opportunity algorithm" measures and ranks innovation opportunities. Standard gap analysis looks at the simple difference between importance and satisfaction metrics; Ulwick's formula gives twice as much weight to importance as to satisfaction: importance + max(importance-satisfaction,0), where importance and satisfaction are the proportion of high survey responses. The opportunity algorithm formula is as follows: Importance + (Importance-Satisfaction) = Opportunity. Customers use a 1-to-10 scale to quantify the importance of each desired outcome and the degree to which it is currently satisfied. The rankings are inserted into the formula to form the overall innovation opportunity score that highlights the outcomes with the highest “importance” scores and lowest “satisfaction” scores.

Worked examples

Example 1 — a first encounter with Outcome-driven innovation

Start with the simplest possible case. Write down what Outcome-driven innovation claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Outcome-driven innovation before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Outcome-driven innovation ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Outcome-driven innovation

In research: Outcome-driven innovation appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Outcome-driven innovation in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Outcome-driven innovation is common in secondary-school and first-year university syllabi. It links to neighbouring topics Innovation, so understanding it makes those chapters shorter.
In everyday life: Look for Outcome-driven innovation outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Outcome-driven innovation in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Outcome-driven innovation means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Outcome-driven innovation out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Outcome-driven innovation in simple terms?

Outcome-driven innovation (ODI) is a strategy and innovation process developed by Anthony W. Ulwick.

Why does Outcome-driven innovation matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Outcome-driven innovation?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Outcome-driven innovation.