Dear Marco, today we are discussing the topic of growth, how you drive growth in your professional environment, and how you've created growth in the past. Before we dive into that, could you describe your professional background?

My professional journey began in Switzerland. I started at Disetronic, a company that developed insulin delivery systems for people with diabetes. The company was known for its high level of innovation and for its incredible growth. As a junior engineer, I was fortunate to get assigned to a strategically important development project early on, where we were tasked with the development of the next generation flagship insulin pump. I gained valuable experience in product development and all aspects of how to bring a medical device to market in a cross-functional organization. I have only the best memories of that time. 

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Back then, as engineers we had lots of ideas about how to develop the product from a technological and functional perspective. Based on our views, we determined what the product should look like, feel like and work, what quality it should have, what features it should possess, and so on. Customer needs were mostly defined from a medical and regulatory point of view (product must be safe to use for patients while achieving desired medical outcomes). Other than that, everyone had their own definition of “what should be built”. Customer needs were conducted via focus groups or surveys, but many solution decisions were not rooted in evidence based customer insights. 

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After the successful launch of the product, I had the opportunity to go on a short term assignment with the US Chief Technology Office in California to explore new technologies for a future generation of drug delivery systems. There I had my first engagements with startups. One year later, I moved to Palo Alto where I spent 6 years in the heart of Silicon Valley - it was a dream come true for me and I took full advantage of the amazing learning opportunities that the San Francisco Bay Area offered in terms of the amazing skills, expertise, talent and bold mindsets there. 

I built a small team with the goal of developing and testing new business models for Roche-Diabetes in the field of Type 2 Diabetes. The professional and life experience gained in those 6 years have shaped my beliefs and my approach to “value creation for people and the company” fundamentally with one thing at the core what I consider Rocket Science: a company’s ability to discover & validate customer insights and the relentless pursuit measuring if value is being created for customers and for the company. Building solutions is something that everyone can figure out sooner or later - but creating value with those solutions is a completely different challenge. 

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That's interesting. What triggered this change? Discovering customer needs is not always straightforward. Did you have an "aha moment," or was it a gradual evolution?

The most exciting moment for me as an engineer was always to see when our solutions were put into the hands of our customers - that’s the ultimate moment of truth - so I had a very strong desire to gain expertise in how to increase the likelihood that the customer is thrilled about what he received. But I had no expertise in how to do this. I had done some customer research, but truly understanding people on a fundamental level, gaining a deep and rich understanding of who they are, their experiences, needs, pain points, emotional, functional, social needs was missing - I had no clue. My key conclusion was that the solution does not matter, no one cares about your product, it is irrelevant - the only thing that matters are the unmet needs and how the new product satisfies these needs 10x better than anything before. ​

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In Silicon Valley, they were already quite advanced in this regard. I worked with anthropologists,  ethnographers, social scientists, design researchers —people who study cultures, people. For an anthropologist, it’s never about the solution. I learned a lot from these people and transferred their skills into the business world.  I realized that this was what I wanted to learn: become a subject matter expert on how to discover people's insights. Solutions and technologies change every second, every minute but the ability to identify people's needs in their natural environment remains. In today’s business world in order to survive, the expertise to quickly and efficiently discover and validate needs and measure value becomes crucial. 

 

Learning from these people and incorporating their expertise, tools, mindsets into the business was one of the best things in my career. It laid the foundation for what I still enjoy doing today: finding out what people's needs are to help the organization, make good decisions and create value.

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You mentioned anthropologists. What else stood out about Silicon Valley? What sets them apart?

What struck me the most was the mindset of many people I’ve met and worked together. At that time in the Bay Area, the culture was very driven by exploration: trying things out with little fear of failure. Someone once told me that the reason why Silicon Valley has this “innovation” reputation is because "crazy people go there, they have crazy ideas, and they are able to make those crazy ideas come to life;  whereas in other areas of the world, you just cannot." The foundation there is "crazy people can do crazy things." And 99% of those crazy people may not go anywhere with their ideas, but that 1% will succeed. That is unique.​

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Many companies still find it unconventional to consider an anthropologist as a source for a new business idea. How can you convey the importance of having different approaches and perspectives?

We had an advantage back then. We were an incubator in Palo Alto, and we were protected. So, we could try out many things. That means we did a lot of things that didn't lead to anything - an investor or Chief Finance Officer might call it "waste" from a business perspective. On the other hand, we could build extremely valuable competencies simply because it was a “high performance learning environment”. One of those competencies was clearly measuring customer needs. And that was, and still is today part of rocket science. My goal was then to take those methods out of the Incubator and see if they survive the “large corporation test”. If you think you have a unique “method” then put it into the “corporate shredder” and you’ll get the results quickly.

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One day, I stumbled upon Jobs-to-be-done [JTBD] somewhat by chance. My boss told me there was a two-day class on Jobs-to-be-done in San Francisco. During those two days, I realized that Tony Ulwick was talking about the problems of customer centric innovation and I was like: ”how does this guy know our company?” Of course he did not but I ended up working with him to establish JTBD as part of our discovery competency. 
 

That's when we met. It was the time Vendbridge worked with Tony Ulwick and Strategyn, his company. How did your journey continue from there?

I returned to Europe after 6 years and led a large development project out of Germany. Once again, the problem arose that customer needs were not clearly defined. So, I proposed to a Product Manager that we bring in anthropologists, ethnographers, and design research experts and combine their expertise with the principles of Jobs-to-be-done. It was a clash of cultures. My questions about customer needs confused the Product Manager. Who is the target customer for their product? What are their needs and which ones are unmet? Which segments share unmet needs? How will you measure customer value? What type of value are we measuring and delivering? How do we know?  He realized that he could not answer those questions through the lens of the patient - and I told him that no one in the world cares about what we as an organization think value is - only the customer knows. He agreed and we had a deal to proceed. 

 

I managed to persuade him to allocate a budget and conduct a pilot project with Vendbridge. Together with you and the Vendbridge team, we created a needs-based segmentation for insulin pumps. That was the breakthrough. The results were presented at a global event to all senior executive managers. It was a day full of presentations. Afterwards, a survey was conducted to determine which presentation was the most valuable. Our presentation on Jobs-to-be-done received the highest number of votes. I don't think I ever told you that.

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Afterward, I had many conversations with the GMs who wanted exactly what we had. Not the traditional market research with 200 pages and 3,000 different data points that ultimately don't tell you where the opportunities lie. No one knows what to do with that data, it’s impossible to prioritize and that’s where most companies go to default decision making: using opinions and executive leader status to make decisions instead of letting the data guide the decision making process. It laid the groundwork for us to now focus solely on opportunity-driven value creation.

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We encounter many companies that have search fields for innovation, and immediately jump to developing solution ideas. More recent innovation methods and approaches like Agile or Lean even fuel this tendency. They start with a solution and then search for problems. What's your take on such approaches, especially in healthcare?

My view is that many companies choose new methods because consultants say so or because it’s the new hype. But many companies do not take the time to understand if the desired business outcome can be achieved using a “plug & play” approach or if methods need to be adjusted to the culture or if a culture change is inevitable. I’ve seen the seeds of failed methodologies in many executive briefings and demos - almost every time leaders are asking the wrong questions and make decisions based on assumptions that have never been tested or validated. Methods are means to create value - measure if they do and if not, learn and adjust quickly. 

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With regards to solutions and ideas, my view is that it doesn't really matter whether you start with the need or the solution. The end point is what matters most: demonstrating that you are creating value. Every company should be able to explain in very detail their definition of value, how they create and measure value. After all, we must prove that our offerings satisfy unmet human needs equally well or ideally much better than previous solutions and that we can monetize the value delivered to achieve desired growth objectives over time. Where do you start? It's not that important.

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In our team, however, we focus on the need and measuring value. I’ve seen a lot of waste being created (time, energy, budget) with focus on product ideation while spending little time on the problem exploration and validation. “Idea first” is also a question about resources and how much return or waste is acceptable by “building the solution first and then searching for the problem”.

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At one point, the solution comes into play anyway, right? The solution must be validated. How do you do that?

Of course. Validation in our case comes after customer discovery. Discovery involves finding qualitative insights first. For example, we visit patients in their home to learn about their life in their natural environment using a variety of methods. But we don't know which needs are more important than others, and we know nothing about the overall market. Whether there are many people who share the same needs or whether we've found insignificant insights. So, we quantify our insights to increase our confidence in targeting the right customer needs at the right time in the right environment.​

 

The challenge is that sometimes we don't have just one need or one segment; we might have five segments and 20 or 30 unfulfilled needs. Suddenly, you're talking about potentially 100 or 200 possible products or solutions. Plus, different markets and countries, and so on. This requires strategic decision-making on the need side as well as on the solution validation side. That’s why we’ve built strategic growth paths that must be validated step by step to receive funding, similar to how investors look at funding startups. 

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How do you make these strategic decisions on the need side?

We evaluate needs and customer opportunities from a medical, health economics, and competitive perspective. The need is important but most importantly is the context in which the need exists so we assess and prioritize contextual customer needs. From there, a strategy emerges: where to play, how to play, and how to win. 

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We often experience situations where needs are quickly set aside, and people prefer to develop solutions. In a recent project, someone said, "I don't like this customer need. I'd rather build something else". How do you handle such situations?

It's important to acknowledge that building products and solutions is what we all have been trained to do - it’s part of the culture.  Products are what we must develop and deliver. In order to “build the right product for the right people at the right time” we developed several approaches, one of them is called "Insights Immersion” where we build empathy among our people for the customer - data with statistical results don't matter there, no one cares if the survey had statistical significance. Instead we create opportunities for the developers to observe and understand customer and patient journeys. We connect the people who want to build solutions that address the most important problems of patients and their family members. 

 

There we de-prioritize the solutions that everyone loves to discuss, ideate on, analyze, test, etc. People can argue for hours about what solutions to build but they run out of discussion in minutes if we ask to share their last observations of customers struggling with getting a job done. I always say, insights unite people, solutions divide people.

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You mentioned earlier that the ultimate goal is growth. What does growth mean to you?

Growth has two aspects for me: one is financial growth, and the other is growth in terms of impact on patients. How many patients desperately want our solution because it better satisfies their needs and thus improves their lives? Growth is something that you must earn as a company, every year, every month and with every new release -  by getting the most underserved jobs done better.    

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That would be the gold standard if you had a direct link from the need to the revenue goal. How do you see that?
We try to approach everything through hypotheses. Everything is a hypothesis until it's proven to be true or false. Recently, the Executive Leadership Team asked how we would know whether the current investments and all the projects in the pipeline would truly succeed in the market. My answer was straightforward: we don't know! But here's what we do know: we know how confident we are in the data generated until today that proves we invest into solving unmet customer needs and how well we have been able to satisfy them. And most importantly we know what the riskiest assumptions are. We must test and validate to minimize the likelihood that we build and launch products that never create value for customers and for our business. Those are all facts and can be used for making informed business decisions with confidence. We also have confidence in our methods and how to validate hypotheses to de-risk our investments. That's it. 

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That's an honest answer. If you have that, you're already a hundred times better than where our conversation began: with opinion-based decision-making. Marco, we thank you for this fascinating conversation.

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To all the Growth Architects

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