Outcome InnovationThe first transformative principle is that game-changing innovation is grounded in changing customer outcomes. A customer outcome is defined as the extent to which a customer reaches their intended goal, or has better solved their problem, along with the resulting increase in value.
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Outcome innovation does not mean providing more of the same value. It is an upleveling of the customer outcome that provides new and different value they seek, helping the customer better accomplish their ultimate objective.
The leading indicator that you’ve changed the customer outcome is that they make their purchase decision based on a new and different set of purchase criteria. This changes the entire basis of competition—the reason why a customer buys one solution over another. The key is to center around innovating customer outcomes. Peloton’s combination of high-quality fitness equipment and streaming or on-demand video classes delivers a new outcome because it gets the customer closer to their main objective along with all the accompanying benefits. It created new value that neither fitness centers nor fitness equipment vendors could adequately provide. Peloton upleveled the outcome of their solution to closely match the customer’s actual goal. In this case, the goal is not to buy a better stationary bike; it’s to become more fit, perhaps lose weight, and Peloton helps customers achieve it with added value of being motivating and convenient. Outcome innovation provides an advantage in creating more options for innovation. As we will see, focusing on outcomes overcomes product myopia and presents opportunities for innovation, even when the product or service itself offers little prospect for innovation. |
Explore this and other topics in the upcoming book Transformative.
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