CEOs–and all members of the C-suite–want to grow the company, but it’s no easy task. Just ask Thomas Glocer, the former CEO of Thomson Reuters. He was just fired for not growing fast enough.
A December 2, 2011, Wall Street Journal article <http://on.wsj.com/wuWogz>reports, “The Markets division has suffered from the weak performance of a new product, Eikon, that it had been hoping would spur growth. In response to the weak performance, Thomson reorganized the Markets unit in July, under pressure from the Thomson family.” Glocer tried to turn things around, but in December he announced that Eikon, “which was supposed to begin paying dividends [in 2012], likely won’t see an uptick in sales until next year and won’t drive revenue growth until 2013.” That wasn’t good enough for the Thomson family.
What did the Markets division–and Glocer–do wrong? The answer is relatively simple: they relied on very traditional innovation methods. With their knowledge of the market, they brainstormed what they felt would be a good solution: Eikon. After concept testing, they created a supporting business. Then they created product requirements, based on the teams’ prioritization of the features. Finally, they developed and launched the product.
And it failed to generate growth.
This happens all the time. Why? Because executives continue to use innovation processes that are fundamentally flawed. First, they brainstorm a weak idea with their team without knowing all the customer’s needs. Then they find customers who say they would buy such a product–even though they won’t. Lastly, they put together a business case that mistakenly projects returns that would pay back their investments. In other words, they guess, and most of the time, they guess wrong. Ultimately, this destroys the equity value of the company.
To mitigate these risks, companies must use an innovation process that works. Our patented innovation process, Outcome-Driven Innovation, achieves these objectives almost 90 percent of the time. It works because it is focused on the job the customer is trying to get done. With the customer’s needs in mind, we help companies: (1) correctly identify markets that offer revenue growth potential, (2) effectively uncover all the customer’s needs and prioritize those that are unmet, and (3) systematically construct the platforms and feature ideas that will satisfy the unmet needs.
And because we defined customer needs (outcomes) using metrics, we can measure if a new solution concept is going to deliver value in the market (i.e. will it help the customer get the job done better) before significant capital is invested in development, marketing, and sales.
Had Thompson Reuters’ Markets division understood the job their customers were trying to get done and what metrics those customers used to measure the successful execution of that job, the division would have developed an entirely different product, one that would have accelerated Thomson Reuters’ growth.
And Thomas Glocer would likely still have his job.