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The Characteristics of a Requirement Statement

July 21, 2008 – 10:06 am | by admin

Most companies already understand that there are four basic approaches to product and service innovation: growing core markets, capitalizing on adjacent market opportunities, discovering new markets and disrupting existing markets. But when it comes to understanding customer needs, voice-of-the-customer programs are undermined in two ways. First, there is no consistent standard that defines just what a “need” is — what its purpose, structure, content and format should be. Second, companies do not understand that to succeed at all these innovation strategies, two very different types of customer inputs are needed — in other words, they do not realize just how a “need” must be defined given the type of innovation initiative being pursued. Only when companies learn what needs are will they be able to consistently uncover hidden opportunities for growth through innovation.

Anthony W. Ulwick and Lance A. Bettencourt recently have introduced a set of timeless standards that define the purpose, structure, content and format of a customer need statement and thereby to transform the art of requirements gathering, and hence innovation, into a rules-based discipline.

Companies need to remember that it’s not enough to just solicit opinions; getting the right information is crucial. Customer requirements are used by companies to inform and guide many marketing and development decisions — and to drive the innovation process. Generally speaking, they are sought to ensure that critical business decisions related to marketing, development and innovation are optimized for the creation of customer value. These decisions are key in achieving growth through innovation and must be informed with complete and accurate data.

To make customer input useful to the entire company, it must possess these six characteristics:

The statement must reflect the customer’s definition of value. It must not be an interpretation or a translation of what the customer values. It must not be the company’s perception of how customers measure value or how they think customers should measure value. It is all too common for companies to inadvertently translate what the customer has said into something inaccurate or misleading. Value must be defined and measured from the customer’s perspective; otherwise, it is a useless input for identifying hidden opportunities and carrying out other marketing and development activities.
The statement must have universal acceptance. A requirement must be relevant to all customers, regardless of geographic location, gender and income level. Otherwise, a different set of requirements is needed from every possible demographic — making regional, national and global innovation, positioning and branding near impossible.
The statement must be relevant now and in the future. The underlying need for a product must not change quickly over time, or it will be a moving target that is impossible to hit. It must have the same intended meaning and relevance now as it did 10 years ago and will 10 years from now (for example, people needed tools for cooking before the microwave was introduced). Without this characteristic, companies will not be able to decide today what features to include in a product that may take three to five years to bring to market.
The statement must prompt a course of action. A customer requirement must indicate what action to take to solve the problem. Merely finding out that a product must be more reliable, comfortable or easy to use — inputs that each customer will define differently — does little to guide the actions of engineers and designers. If you can’t measure value, you won’t know if you are on the path toward creating it.
The statement’s meaning must not be open to interpretation. A customer requirement must be precise and clear enough so that all who read it arrive at the same interpretation of its meaning. This transparency in meaning must begin with the customer, but it also extends to all downstream users of the information such as sales and marketing staff, design engineers and others. Just about every product could benefit from being faster, better and cheaper — but those dimensions must be specifically defined for every case.
The statement itself must not confound the way it or other statements are prioritized. A good experiment seeks to determine which specific factor is causing an effect, and it does this by controlling all other sources of variation. The same must be done when prioritizing customer needs. Shifts in structure, content and format may introduce unwanted sources of variability that confound requirement prioritization when requirements are prioritized using phone, face-to-face or Web-based market research surveys. If some statements begin with a verb and others begin with an adjective, if some statements include a solution and others do not, then it’s questionable which one is more important. This is arguably the greatest weakness of most requirement statements today, as a lack of discipline here causes companies to pursue the wrong opportunities and to miss others altogether. When solutions are included in a need statement, for example, we see lower ratings given to that statement than a similar statement that is void of solutions — consequently, an unmet need may not be identified if it contains a solution.