Expanding on Episode 166 to cover the full Value Innovation process for product managers.
The last interview, episode 166, was a panel discussion with innovators at companies using Value Innovation to discover what customers really want before building a product. The panel participants talked about a 10-step process they used. This discussion provides details for each step as well as where additional resources are found.
To learn the 10 steps, I invited Dick Lee, the founder of Value Innovations and a long-time practitioner of the Value Innovation method, to talk with us.
The 10 steps in Value Innovation are:

* Define project mission and objectives,
* Define value chain and identify the most important customer (MIC),
* Develop “as is” and “best in class” value curves
* Conduct contextual interviews to uncover unmet needs
* Develop “to be” value curve,
* Review “to be ” value curve with the MIC,
* Modify “to be” value curve,
* Define value proposition,
* Determine how to deliver the “what,” and
* Confirm with MIC that the “how” is compelling

Summary of some concepts discussed for product managers
[2:47] Step 1: Define Project Mission and Objectives
We assumed that teams would know what their project’s mission was, but found more and more that it wasn’t the case. This part of the process involves asking some very basic questions like what’s in scope, what’s out of scope, what’s the purpose of the project, and who is the project’s team leader. One example of this is a company called American Vanguard. They make pesticide products that were harming fish, but couldn’t develop a new formula because it would take too long to go through regulatory approvals. In this case, what’s in scope was creating a new delivery method rather than a completely new product.
[6:35] Step 2: Identify Most Important Customer (MIC)
In the B2B world, most people assume that the MICs are their direct customers, or the person that they sell their product to. We developed the Value Chain to help identify the MIC. It breaks down all of the transactions between you and the ultimate end user of your product. We ask three questions at each step of the way: Who is responsible for fixing a problem? Who loses the most money if there’s an issue? Who sees the value in your product? Many times we’ll find degrees of all three in each step of the process.
[11:07] Step 3: Develop “As Is” and “Best in Class” Value Curve
This is one that some companies are inclined to skip. A value curve breaks down a product or service into elements of performance, such as ease of use. Each element has its own attributes that are broken down even further. The value curve also helps prioritize which elements are worked on based on what’s most important to the MIC. You can only work on three or four within a reasonable time frame. You try to put yourself in the MIC’s shoes to develop the curve. This allows interviewers in the next step to connect what the interviewee is saying with the attributes in the value curve.
[13:32] Step 4: Conduct Contextual Interviews to Discover Unmet Needs
Contextual interviews take place in steps 4, 6, 7, and 10. Interviews take place with pairs of MICs so that you get varied perspectives.  Step 4 specifically involves interviews with 6 pairs of people. The most important question in the first interview is “What keeps you awake at night?” We only ask open-ended questions and have no idea where they’ll go. Another example is “What do you expect the biggest challenges to be in your field over the next five years?” It’s important to have the right interviewer to draw information out of people and get them ...