The Innovator's Toolkit: 50+ Techniques for Predictable and Sustainable Organic Growth, 2nd Edition

Technique 4

Value Quotient

Identify opportunity gaps in the marketplace.

 

Value quotient is the ratio of a solution's desired outcomes to its undesired outcomes—relative to some job to be done (JTBD). For example, if one key desired outcome for a driver is to increase visibility at all times, then a car window that cleans itself has a higher value quotient than a window you have to clean—assuming the self-cleaning window can be purchased for about the same price with no additional drawbacks (undesired outcomes).

The purpose of this technique is to assess the value of your current solutions against those of your competitors—and relative to an ideal state in which a theoretical solution could fulfill all desired outcomes and avoid all undesired outcomes. Such an idealized solution (ideal innovation) would meet all expectations, cost nothing, and have zero chance of harming the user, anyone else, or the environment.

Understanding the Value Quotient technique enables the innovator to identify opportunities—or value dimensions—that are ripe for exploration and exploitation (Exhibit 4.1). The extent to which you can increase value along these dimensions determines the extent to which you will be successful with an innovation project.

Exhibit 4.1 Value Continuum. Every product, service, or solution in the marketplace contains a certain degree of value relative to others. The goal is to fulfill desired outcomes to the greatest extent possible and avoid undesired outcomes to the greatest ...