What is an opportunity?
One fundamental reason companies struggle to identify opportunities is because they lack a clear definition of what an opportunity is. Opportunity, like requirement, has been defined and redefined in so many ways that it does not have a clear meaning. Often, when managers talk about uncovering areas of opportunity, for example, they are referring to identifying new ideas, technologies, or solutions that customers may want. A razor manufacturer, for example, may believe that adding a fifth blade is a great opportunity. (When will they stop? Wasn’t three good enough?) Companies believe such solutions offer opportunities for growth, but that thinking is backward.
In the outcome-driven paradigm, an opportunity for growth is defined as an outcome, job, or constraint that is underserved. An underserved outcome, in turn, can be defined as something customers want to achieve but are unable to achieve satisfactorily, given the tools currently available to them.
These undeserved outcomes point to where customers want to see improvements made and where customers want to see improvements made and where they would recognise the delivery of additional value. If circular saw users, for example, think that minimising the likelihood of the cut going off track is an important and unsatisfied outcome, then that would represent an opportunity for improvement among the 50 to 150 outcomes related to executing that job.
Undeserved jobs signal potential opportunities for new markets. They are jobs that customers cannot perform satisfactorily with the tools that are currently available to them. Job-related opportunities for growth can be discovered by determining what ancillary or related jobs are underserved when a customer is using an existing product or service and by determining what jobs people are trying to get done in general. If it turns out that preventing skin dryness is an important and unsatisfied job when shaving,
Then customers may value a product that would help them perform that job more effectively. If it were determined that people want to wake up with fresh breath after sleeping all night, then that job might represent an opportunity for a brand new market.
Undeserved constraints also represent opportunities for growth as they point out under what conditions or circumstances a customer is unable to perform a job of interest.
Outcome, job, and constraint statements provide managers with quantifiable, tangible measures along which to create new products and services. These measures represent solid opportunities for improvement and growth. When Bosch used this approach to make its entree into the North American circular saw market, they uncovered a dozen outcome-related opportunities for improvement in a very mature market, many of which were previously unknown to their development team. This insight led to the creation of a very innovative and successful product.
Agreeing on what comp-rises an opportunity is the foundational first step. Having once defined opportunity, a company can then identify and prioritise the opportunities open to it.
(An extract from ‘What Customers Want’ by Anthony W Ulwick. With permission from Tata McGraw-Hill)