4

SUCCESS CRITERIA

THE CUSTOMER’S
DEFINITION OF A WIN

ONCE WE UNDERSTAND THE jobs, job drivers, current approaches, and pain points, can we build a product? Oftentimes, no! Stephen discovered this a decade ago, when a large cell phone company read some of the earliest writings about Jobs to be Done and asked that the framework be used to design a next-generation offering. What did jobs tell us about how to make trade-offs between size and durability, battery life and screen resolution, and a large number of other key design decisions? Too little. The company needed to understand how exactly customers defined the successful accomplishment of priority jobs, in the appropriate contexts (drivers), so that the product would be considered by corporate buyers who were currently using workarounds such as walkie-talkies to enable their workforce to communicate (current approaches and pain points). Key questions had to be answered: How quickly must the device be mastered by new employees? In what specific ways must it excel in looking up a product or a conversation thread about a specific task? It was only by digging into the success criteria that he learned the critical facts necessary to shape the product in these detailed yet essential ways. Success metrics can be numerous, highly specific, and concrete—they are invaluable in telling innovators how to make their ideas into hits.

IN THIS CHAPTER, YOU WILL LEARN:

How to define success from the customer’s perspective rather than management’s.

Where to find opportunities to add value and how to measure your results.

Why making sacrifices and trade-offs can actually add value to a new solution.

DEFINING SUCCESS

Too little time is spent thinking about how customers will decide whether a new product or service is a success. It’s often assumed that the customer will like the new offering, so the conversation focuses on business-oriented metrics—things such as first-year sales figures, breakeven time, and market share captured. Part of the reason we focus on business metrics is that they’re more easily measured. No one has come up with a formula or magic number for predicting ex ante whether a new product will succeed. Although it would be nice to suggest that you simply need to satisfy two jobs and alleviate three pain points, success is rarely this academic.

At the same time, we’ve found that the companies that have the greatest success are those that have figured out how to satisfy the right jobs and alleviate the right pain points. This means honing in on contexts that are particularly important or distressing. It requires understanding what truly motivates your target customer.

The innovation team at Big Heart Pet Brands spent a lot of time with cat owners trying to understand their routines and the relationships they had with their pets.¹ Perhaps unsurprisingly, these relationships are driven by a complex web of emotional jobs punctuated by a number of functional pain points. The Big Heart team found that cat owners are continuously striving to get their independent cats to express affection, with feeding time playing an extremely important role. Dry cat foods are less expensive, less messy, and faster to serve. They can be left out all day, and it is easier to buy them in bulk quantities. At the same time, many cat owners will tell you that their cats prefer the taste, texture, and variety that come with wet foods. Based on the structure of the existing market, pet owners were forced to make a trade-off decision. They needed to choose whether it was more important to satisfy the emotional jobs related to pleasing their cats’ tastes or to avoid the functional pain points associated with wet foods. So with this constraint standing in the way, how did Big Heart meet the customer’s definition of success? It challenged the existing product category structure (which is driven primarily by supply chain issues) and avoided the wet/dry dichotomy altogether.

Big Heart took its insights into the jobs and pain points of its customers and developed a new product concept—a cat food with a dry exterior but a wet, meaty center. It tested exceptionally well with customers. Through rapid prototyping and continuous product improvement, Big Heart was ultimately able to create a product that consumers would love and that the company could cost-effectively manufacture at scale. The new product line—Meow Mix Tender Centers—won on both the functional and emotional levels, alleviating the need for the customer to choose between the two. As a result, combined sales for the first two years exceeded $100 million, a feat that has been achieved with only three pet food launches in the past five years. By focusing on an important aspect of the pet relationship—one charged with emotional concerns—the Big Heart team was able to satisfy customers in a big way.

MEASURING SUCCESS

Figuring out how to win in established markets can be difficult enough. As innovative companies begin to compete asymmetrically—by winning along previously unconsidered dimensions of performance—the very definition of a win can change, making the task that much harder. Let’s look closely at the Tesla Model S, named the Best Overall car for 2014 and 2015 by Consumer Reports.² Consumer Reports chooses its top car picks based on three criteria: performance, reliability, and safety. Performance is further broken down into traditional characteristics around handling, capacity, and comfort, while reliability and safety are based on user-reported problems and crash test results, respectively. In some ways, traditional success criteria can be cross-applied for the Model S. Safety ratings, for example, are still an important measure of success. However, when the P85D version of the Model S broke the Consumer Reports rating system—scoring 103 points out of a possible 100—it became clear that traditional success criteria are insufficient for judging the Model S.³

To understand how Tesla is redefining the very notion of a perfect car, we need to think about what the Model S actually is, using Jobs language. The Model S is an electric vehicle, which makes it much more than simply a transportation choice. The new technology expands the range of jobs that people can satisfy to include a number that are not transportation related. Driving an electric car, for example, not only gets you where you want to go but also allows you to act on environmental concerns. The addition of this new dimension, however, means that the car will be assessed across a range of standards—some familiar (safety, comfort, reliability) and some completely new (refueling/recharging times, ability to travel long distances). The Model S wins because it does an exceptionally good job satisfying both the traditional and newly relevant jobs that customers buying an electric car want to satisfy.

COMMON STRATEGIES FOR CREATING SUCCESS

Figure 4-1

Beyond just satisfying jobs, however, it’s important to understand how customers want to satisfy those jobs. More is not always better. Satisfying customers’ jobs means knowing what they want more of, what they want less of, and where they are looking to strike a balance. To help get you started, we put together a list of common strategies for tying success criteria back to key Jobs principles (see Figure 4-1).

By understanding the details of what customers demand, companies can use that knowledge to compete asymmetrically. They can change the perception of what an industry is supposed to deliver and leverage overlooked assets that give them an advantage over established or stronger competitors.

Let’s look at how a bold upstart is challenging an industry behemoth in this way. For years, Microsoft Outlook has been the king of business email. And for what seems like just as long, young tech companies have come to the table announcing how they have the next big application that will finally be the death of email. Yet email thrives.

While attempts at email replacement have come and gone, Slack has come to the table with something different. Instead of trying to replace email—which isn’t what customers are asking for—Slack has focused on identifying what customers want more of and what they want less of, ultimately creating an offering that strikes a balance. Slack is one of the fastest-growing new business applications. It’s an office messaging app that works with email rather than trying to replace it outright.

Slack focuses on making internal communication easier. It offers a fast, informal way to talk to coworkers, but it retains the archiving abilities of traditional email, even improving on the ability to search old messages. Email continues to be used, especially for external communications, but Slack helps reduce the volume of messages in your inbox, while simultaneously reducing the need for time-consuming face-to-face meetings. In part, this is because the app lets users search and access shared files on their own, without having to question other team members. When questions are necessary, workers can provide quick answers and status updates in a side window, reducing clutter in their inboxes. As the number of Slack users has grown to over a million, teams using the app have praised its ability to improve efficiency. By understanding where to cut and where to add, Slack has reached a $3.8 billion valuation in just over two years.⁴

It is critical to understand that some seemingly minor variables can actually be quite important because they are used as ways to measure whether certain jobs are getting done. For Brookwood, the independent school mentioned earlier in this book, parents’ success criteria include the breadth of course offerings (showing that the school attends to the varied interests of its students), student body diversity (ensuring that children emerge from their education well grounded), and parental access to the educational program (illustrating the school’s commitment to forging a partnership in a child’s schooling).

CREATING VALUE THROUGH TRADE-OFFS

A customer-centric lens allows companies to understand how they can make trade-offs to increase value. Deeply understanding customer demand allows you to shift from spending on unnecessary, overvalued attributes and invest in important jobs that the market underappreciates and that will make a difference. In 1996, MSNBC launched into the small but developing cable news space. After years of finishing third in the three-company race—competing against CNN and Fox News—MSNBC adopted a new model in time for the 2008 U.S. presidential election. The new model reduced spending on overpriced TV talent that fit a certain image, realizing that cable news viewers were more interested in what hosts had to say than in what they looked like. MSNBC could spend less money by hiring talent with stronger backgrounds in political science, such as former radio personalities and print media journalists, but with less on-air TV experience. At the same time, MSNBC delivered more of what its target audience sought: political commentary. This meant that MSNBC could place less emphasis on gathering and verifying facts, an expensive process that is better handled by other established news sources. According to the Pew Research Center, MSNBC’s content is 85 percent opinion, while Fox News delivers 55 percent opinion and CNN delivers 46 percent opinion.⁵ Even though the 2008 election was a polarizing time, likely causing a surge in MSNBC’s popularity among viewers seeking a liberal forum, the model has continued to prove successful for MSNBC. By 2012, MSNBC had the lowest production costs per viewer but finished second in average primetime viewership (see Figure 4-2). From 2011 to 2012, MSNBC also saw a 20 percent increase in viewership among the highly sought after 25- to 54-year-old demographic, while Fox News saw a 1 percent increase.⁶

What these examples illustrate is that customers value products that succeed in the areas that matter most to them. At the same time, managing production costs and product complexity may require lowering performance in areas that matter less. The issue that remains, then, is how to find areas to deprioritize without upsetting your customers. After all, don’t we all feel a little irked when the airline cuts leg room by another inch or our favorite snack disappears from shelves in a product line simplification effort? (What ever happened to Tostitos Gold? They were thick enough that they never broke even in the heartiest of dips!). This brings us back to the importance of job drivers and customer segmentation. Although it may not be possible to please everyone, understanding how customers cluster together lets you determine the contexts in which your products will be used, as well as how prevalent those contexts are in the general population.

PRODUCTION COSTS FOR MAJOR CABLE NEWS NETWORKS

Figure 4-2

Consider the achievement of the Colgate Wisp, one of the boldest innovations in the multicentury history of the toothbrush. By most standards, the Wisp—a flimsy, small, single-use brush with a tiny minted pearl in the center of its miniscule bristles—isn’t a great device. It cleans a modicum of plaque, no tartar, and little in the cracks and crevices where mouth nasties get started. It’s not electric and features no cartoon characters. However, it narrowly targets a precise job: cleaning your mouth when you’re outside your home. Users measure success by criteria including removal of obvious pieces of food, freshening the taste of their mouths, speediness of use, and not having to spit (an etiquette no-no in shared workplace bathrooms). By delivering on these criteria and little else, the Wisp has become a big brand and created a totally new source of growth for Colgate.

THIS CHAPTER IN PRACTICE—DETERMINING WHERE TO EXCEL

When Stephen rolled out Africa’s first mobile commerce platform in 2002 (for the Celtel phone network that is now owned by India’s Airtel), the first customers were large businesses like South African Breweries (SAB) that sought to streamline the payment process for big deliveries. SAB’s finance staff wanted clear proof that the new solution would help them accomplish two jobs: speed deliveries and reduce fraud. Establishing the success criteria for each job helped Celtel design the detailed parameters of the system. For instance, the system should reduce the number of times money was counted from seven to no more than two. It should save an hour per night from the reconciliation process once drivers returned with their empty trucks. It should essentially eliminate the problem of delivery truck driver-instigated fraud. Having these clear parameters in place enabled Celtel to know where to invest, such as in educating distributors receiving the beer as well as finance staff at the depot, and what could be left for later, such as creating a beautiful interface. Knowing the key jobs was vital but not enough. Success criteria enabled the design of an appropriate solution—and nothing beyond what was actually needed.

CHAPTER SUMMARY

Success criteria translate jobs into highly actionable parameters. They must be tied to jobs, and they may be important only because they are used as proxies for whether certain jobs are being addressed. Criteria are often impacted by customers’ attitudes, background, and circumstances. Sometimes they are tangibly measurable, although just because some are not—emotions, for example—doesn’t mean they don’t count. Fulfilling the success criteria gives customers a reason to believe that you will accomplish their overarching jobs. Because success criteria are typically numerous, they provide innovators with detailed guidance on how customers determine that a job has gotten done, in what context, and how a new solution will be assessed as beating its alternatives. They provide a critical step between customer insight and determining product features. In this way, they enable ideas to become well-articulated concepts.

Success criteria can be captured by focusing on occasions and contexts that are most important to the customer.

You can measure success by evaluating how well your product can satisfy key customer jobs. Understand what customers want more of, what they want less of, and where they seek balance. Determine how they will measure success, using proxies and other approaches that make sense through their eyes.

The definition of a win may change as other companies compete asymmetrically and alter customer expectations for what an industry or product category will deliver.

Additional value can be created by making trade-offs. It’s perfectly acceptable to give up on certain features that matter to only a limited number of customers. Focus on excelling along the dimensions that matter to your target customer segments.