Tony Ulwick: Can We Predict Innovation Success?

21st Century Entrepreneurship

Tony Ulwick is an innovation strategist whose journey began with a tough lesson at IBM, developing the PC Junior—a product that was anticipated to change home computing but was labeled a failure in the Wall Street Journal almost immediately. Reflecting on this experience, Tony began asking a critical question: "How could we know what makes a product succeed or fail before launching it?" In this episode, we discuss how this question shaped his career and led him to create Outcome-Driven Innovation (ODI), a framework that helps companies systematically uncover and meet their customers’ true needs.

We explore Tony’s transition from a manufacturing engineer at IBM to founding Stratagen and developing the ODI method. This unique framework enabled Tony to define success based on what customers aim to achieve—not just what companies want to sell. "People don’t want a quarter-inch drill; they want a quarter-inch hole," Tony explains, capturing the essence of ODI. By mapping out the “jobs” people are trying to get done and measuring success through customer-defined outcomes, Tony reveals a clear process for minimizing market failure and optimizing innovation.

Tony also delves into a case study with Cordis Corporation, where he applied ODI to help them break through in the medical devices field. He worked closely with interventional cardiologists to understand their true objectives, discovering that "minimizing the likelihood of restenosis" (the recurrence of blockage) was a top unmet need. Through this insight, Cordis developed the heart stent—a revolutionary device that grew their market share from 1% to over 20% and drove their stock price from $16 to $108, eventually leading to their acquisition by Johnson & Johnson.

Key Takeaways:

• Focus on Outcomes, Not Features: Tony emphasizes how crucial it is to define needs as measurable customer outcomes, saying, "What are the chances your product will address the top unmet needs if you don’t know what they are? Pretty much zero."
• Map the Customer’s Job: By using ODI’s “job map,” companies can gain a structured view of how their customers achieve their goals and identify what matters most. As Tony explains, "Once I have the job map, I can figure out how people measure success along each step of the way…they want to minimize defects and maximize predictability."
• Rethink Market Segmentation: Rather than traditional demographics or psychographics, ODI segments customers by unmet needs, which Tony argues is more effective: "Most companies can’t segment around needs because they don’t agree on what a need is or which ones are unmet."

This episode is packed with insights for innovators and business leaders looking to take a methodical approach to product development and avoid the pitfalls that lead to market failures. Through Tony’s practical examples and powerful mindset shift, he demonstrates how focusing on what customers truly want to achieve, rather than the products themselves, can transform an entire market.