Anthony W. Ulwick

Conceptualize the ultimate solution

A company’s ultimate goal should be to provide an offering that gets the entire job done on a single platform. Such a platform often requires hardware, software, and service
subsystems or components. Conceptualizing this ultimate solution provides a company with a long-term vision of where it needs to go and what will be necessary to secure or maintain a market leadership position.

With the ultimate solution in mind, a company is in a position to make the decisions that will allow it to stay on track, stay focused, and not let a competitor own the ultimate platform-level solution.

For example, the ultimate solution we presented to an agricultural company we were working with required skills and capabilities that went far beyond the company’s capabilities at that time. As the years went by, the company watched a competitor make the acquisitions that were required to create, build, and own this platform-level solution. This got management’s attention. With no time to waste and clarity in where the market was heading, the company worked to make its own acquisitions so it could remain relevant in the market.

Taking the seven steps outline above, a company can systematically create solutions that will get a job done better and/or more cheaply. Defining the actions it will take is the essence of an effective product strategy.

5.
CASE STUDIES

MICROSOFT

Discovering hidden growth opportunities Microsoft was under pressure to build additional value into its Software Assurance offering. In exchange for a flat fee, corporate customers received operating system upgrade rights if they signed a multiyear contract.

However, there was mounting evidence that the offering was not providing the right mix of benefits to customers at a time when IT budgets were facing increased scrutiny. Microsoft was aware that some key customers were questioning the value of the offering. Even more telling, renewals of Software Assurance agreements were declining, putting a significant amount of potential revenue at risk. “We were a business facing a potential crisis,” recalls Dave Wascha, a Microsoft director.

Traditionally, Microsoft had viewed the Software Assurance offering simply as a vehicle for the efficient purchase of software upgrades. The market was changing, however, and Microsoft realized that the Software Assurance offering needed to change with it. As one tech reporter observed, “There appears to be some disconnect between how Microsoft wants to sell its software and how businesses want

to buy.” Improvements were necessary to give customers additional reasons to purchase.

Software license management is not a trivial task for large corporations, and it typically involves multiple stakeholders. Microsoft focused on understanding the jobs of two particular decision makers—procurement managers and IT professionals. Procurement managers are responsible for understanding, selecting, and negotiating license agreements (the Job-to-be-Done). IT professionals work closely with procurement managers in assessing upgrade needs, evaluating agreements, implementing licensing renewals, and managing software licenses once purchased (their Job-to-be- Done).

Drawing on interviews with procurement managers, the ODI practitioner dissected the job of purchasing a license agreement, uncovering approximately 75 desired outcome statements. Customer interviews were also conducted with IT professionals, resulting in the discovery of well over 100 desired outcome statements related to their core functional Job-to-be-Done and related job statements.

Two ODI-based quantitative surveys were created and deployed. Approximately 100 procurement managers and 300 IT professionals prioritized their respective desired outcome statements for importance and level of satisfaction.

The results of the Outcome-Based Segmentation analysis revealed underserved segments of procurement managers and IT professionals. Dozens of underserved outcomes were revealed for each constituent. Wascha recalls that as they started to look at the job the customers were trying to get done, “we realized that we were only really engaging with the customer in one tiny piece of their job— the purchase of the software. But this was just part of a much bigger challenge that they faced. We were not engaging with them in many of these other areas that were very important to them and where they were very dissatisfied.”

The opportunity landscape for purchasing and managing software licenses revealed a number of jobs and desired outcomes that were underserved. Many could be addressed by products already developed, but not previously integrated into the offering.

Based on this improved understanding of the job its customers were trying to accomplish, Microsoft adopted a lifecycle management view of the business, from the customer’s perspective. Microsoft discovered opportunities related to software acquisition and deployment at the start of the lifecycle. In the middle of the lifecycle, there were opportunities in the areas of maintenance, training, patching, and security. Finally, at the end of the lifecycle, Microsoft identified opportunities to create value for customers during disposal of old PCs—an immense issue for many of its customers.