Back to Basics – Innovating New Products

I got a good reality check this past month. I had just come out of a review project with a million dollar business operating internationally, identifying about 70 large and small opportunities for productivity improvements, and was asked by a friend to help him with his healing business. He wanted to know what he could do to improve his income over what he was making from hourly consultations. We talked about a number of opportunities to grow his business from his current client base with new products and services.

 

But my reality check was about how much help he needed with the little things that were beyond his skill set. This is a guy who has serious qualifications in healing but just thinking about setting up an Excel worksheet to plan a workshop budget was putting him under great stress. A basic database tool to replace his notebook with client diagnoses and treatment information was almost a step too far. But not after he could see the benefits of being able to easily pull out clustered treatment information and emails for post-consultation follow-up and sales opportunities.

 

The Job to be Done

 

I thought about the needs of both those clients and many others and looked at the situation from a “Jobs to Be Done” perspective. Both of them had a job to do, which was to operate a profitable business. This is a job that has existed since commerce began. Both of them had outcomes they wanted to achieve in the process, and most of these outcomes are identical to what all of us want in business. There are obvious outcomes like:

 

  • Minimize the risk of bankruptcy
  • Increase the size of the business to make it saleable
  • Increase profits to provide enough salary to cover the desired lifestyle
  • Minimize the risk around payment of taxes
  • Minimize the risk around business structure and licensing needs

 

In fact, in the job of operating a business, we should be able to list at least 50 outcomes we want – either minimizing some aspect or increasing something. These outcomes are how we measure our success. We can define desired outcomes in areas such as:

 

Planning Business Plan Development, Innovation & Creativity, Strategy Execution
Marketing and Sales Marketing Essentials, Negotiating, Pricing, Customer Experience
Finance Budgeting, Finance Essentials
Staff Capabilities Hiring, Leading & Motivating, Coaching,  Performance Appraisals, Retaining Employees
Teams Team Leadership, Team Management, Persuading Others
Productivity Process Improvement, Project Management, Performance Measurement, Change Management
Regulatory Licenses, taxes, manpower

 

Measuring Financial Outcomes

 

As an example, many of my clients want to Increase the usefulness of information about their financial situation. In simple terms, they say to me, “Give me something I can understand!” Most have difficulty understanding what accounting reports tell them; accounting packages such as QuickBooks are not really management tools, tools needed to help the average small business owner know how to get the job done and satisfy his key outcome needs.

 

Often I have produced for a client a simple Excel overview page from whatever accounting package they use, so they can get some quick feedback about how their business is travelling:

 

Results (Rp or $) Yesterday Week to Date Last Week MTD Last Month YTD Last Year
MY INCOME PERFORMANCE
What I Sold
What it Cost
What I Made (Gross Profit)
My Variable Expenses
My Fixed Expenses
What I Made (before tax)
MY FINANCIAL CONDITION
What I Own
What I Owe
What I’m Worth
MY CASH FLOWS
Operating inflow
Operating Outflow
Investing Inflow
Investing Outflow
Financing inflow
Financing Outflow
Net Cash Flow

 

Using this form my clients can get a quick overview of what matters. They can also use it for planning, to see the impact of a change in prices or a change in sales volume. We show percentages as well as dollars.

 

Back to Basics

 

But my typical client, Charley, also wants to know very basic but critical financial outcomes – and this involves three key measures:

 

  • Am I increasing my ability to survive in business? (And if not, for how long can I continue to trade?)
  • Am I increasing my growth rate?
  • Am I increasing my profitability?

 

So a good business tool would help Charley or you easily understand those three states, without needing a diploma in accounting. To be truly useful it would also advise you on the best things you can do to fix or improve your situation, and it would help you monitor how well you are progressing against your action plans.

 

I made this tool and call it The BizWiz Doctor, because it’s magic at diagnosing the current state of health of your business, recommending suitable treatments, and then helping you monitor results of the chosen remedies.

 

You can peruse the detailed “biz patient” medical records and look at a whole series of charts If you want, but generally, you don’t need to. And there are more than 130 potential action remedies available, but Charley really only wants to be guided to the best ones he needs at this time; the solutions that will improve his outcomes from getting the job done. In essence, he’s truly interested in outcomes, not features.

 

Innovation at Work

 

What I have just described above is an example of innovation at work. Based on feedback from many clients I have identified what are the most important outcomes they want from getting the job done. I have picked the one with the biggest opportunity and put it to market.

 

What determines innovation opportunity? It’s a combination of two things –

 

  • How important is this particular outcome compared with others in the list, of getting the job done?
  • How well is this required outcome currently being met in the eyes of the customer (not you!)

 

To achieve a result you need to talk to your customers. Understand what their real outcomes are, and how well they are being satisfied.  You can’t guess. And outcomes are quite different from benefits and features.  Ask: “What jobs are people trying to get done today that they are unable to get done satisfactorily given the products and services that are currently available?”

 

Just for You

 

If you are interested, you can join in a little survey I’m conducting.  Record a list of your top 20 outcomes you want to achieve from running your business. The first 30 responses I get will receive a free copy of The BizWiz Doctor. Everyone who takes part will get the complete list as well as the next step in its analysis. Email me at [email protected] for details of how to enter the data – it will be a link to a simple format Google Drive.

 

The purpose of this “homework” is to give you a taste of what you want to be looking for from your own product or service, or talking with your customer about the outcomes they are looking for from you, to get the job done.

 



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