Formulate the Strategy
The fourth step in Outcome-Driven Innovation is to formulate the growth strategy. Every strategy is essentially a plan to grow by beating competitors. In order to determine the optimal growth strategy, a company must determine three things. First, what jobs (i.e., markets) is it going to target. Second, what platform is it going to use to help the customer get the job done. And third, which job executors is it going to target. These three options create the six possible revenue growth paths.
So how do you decide which strategy is the best? One word: data. Strategy should be based on unambiguous, quantitative market data. The goal of any strategy is to grow by satisfying customer needs better than competitors. So customer needs (i.e., jobs and outcomes) determine the best strategy.
In every market, job executors can use alternatives to get the job done, including competing products and ad hoc solutions. In order to determine the best strategy, we analyze all of the competition in the market. A company can capture market share if its solution offers more value to the job executor than competitive or alternative solutions.
We calculate precisely how much value must be delivered (i.e., which outcomes need to be satisfied and by how much) in order to capture leading market share. This determines the optimal growth strategy. If an existing product platform (e.g., the angioplasty balloon) cannot satisfy the underserved outcomes (e.g., minimize the likelihood of restenosis), then the best strategy is to create a new platform (e.g., the stent) to help get the job (e.g., open an artery) done better.
And because we know the size of the Securable Market, the value add of competitive offerings, and the competitive intensity of the market, we can project the potential revenue for a new product with a very high degree of accuracy and before we have invested any capital in product development. This enables us to create growth plans that work.
Outcome-Driven Innovation determines the best growth strategy, but how do we generate successful solution ideas?
