Competing Against Luck: The Story of Innovation and Customers Choice, by Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan
IN 1995 the term “disruptive innovation” was coined by Harvard Professor Clayton Christensen to describe how certain types of innovation change industries. But this is rare. Most innovation doesn’t amount to much, and fizzles out despite extensive quantitative research and Herculean advertising efforts.
In this book, Christensen et al offer a simple but profound insight which they call the ‘Theory of Jobs to Be Done’. The purpose of this insight is to shed light on why people adopt an innovation in large enough numbers to make it a success, and how to identify innovations that will be adopted.
‘The job to be done’, they assert, is the causal mechanism for successful innovation. Using this insight enables companies not only to create but also to predict new innovations that will succeed. Phrasing the innovation in this manner allows for a deep understanding of the customers’ need at a more profound level.
To introduce this concept, the authors describe (among other examples) the “job of a milkshake”. Why would someone “hire” a milkshake? What “job” is the milkshake expected to perform? “We all have jobs we need to do that arise in our day-to-day lives and when we do, we hire products or services to get these jobs done,” the authors explain.
If you can answer this question, increasing sales is far more likely to be useful than doing taste tests, demographic surveys and purchase studies.
So why did you hire that milkshake?
When looking for an answer to this question (an actual case), the researchers were surprised to find that an oddly high number of milkshakes were sold before 09:00 to people who came to the fast food restaurant alone. Doing taste tests, demographic surveys and purchase studies would not yield the quality of information that came from asking this question: “Excuse me, please, but I have to sort out this puzzle. What job were you trying to do for yourself that caused you to come here and hire that milkshake?”
It turned out that they had long and boring rides to work and needed something to keep the commute interesting. Coffee doesn’t do the job well because it gets cold too quickly and eating bananas makes you feel too full, but hiring a milkshake does the job well. It is thick enough to sip, lasts long enough, and remains pleasurable through the journey.
Approaching the study from the ‘job to be done’ perspective is quite different to fast food restaurants asking a patron to give feedback in one of its customer surveys to the question: “How can we improve this milkshake so you buy more of them?” A single dad coming to a restaurant with his young son would answer the survey very differently to the same man when he buys a milkshake for his morning commute. The milkshake is hired for very different jobs, in two very different circumstances.
So how can one identify innovative opportunities if compiling data-rich models only makes businesses “masters of description but failures at prediction”? “We believe Jobs Theory provides a powerful way of understanding the causal mechanism of customer behaviour, an understanding that, in turn, is the most fundamental driver of innovation success,” the authors explain.
So how is Jobs Theory to be applied so that you create products that customers will not only want to buy, but will even be willing to pay premium prices for? Simply put, customers don’t buy products or services: they pull them into their lives to resolve highly important, unsatisfied jobs that arise.
Jobs are never simply about the function of the service or product. The circumstance is central to their definition, not customer characteristics, product attributes, new technology, or trends. Just think of how you would hire a baby-sitter – who would you trust with your children?
“It’s important to note that we don’t ‘create’ jobs, we discover them,” the authors explain. This is a 180 degree shift from viewing innovation as creating what no one has ever seen before, and then trying to stimulate a need.
Look for the job your customers need to be done
Jobs can be discovered in many ways. One is just watching the customers you do – and don’t – already have, and looking for the job that they want done. Do many DIY customers in your hardware store need technical assistance?
You can also learn much about a Job to Be Done from people who aren’t hiring any product or service to do the Job. Airbnb reports that 40% of their “guests” say they would not have made a trip at all, or would have stayed with family, if Airbnb didn’t exist. As such, Airbnb is not in competition with hotels. There may be an entirely new growth opportunity right in front of you.
Are people creating ways of working around a problem or just compensating for it? Banking giant ING saw the segment no bank wants: low net-worth individuals who want a simple, inexpensive banking facility. They were being chased away by high banking charges and other barriers. ING created ING Direct that has no deposit minimums, is fast, convenient, and secures your money. Of course, you won’t see workarounds if you’re not fully immersed in the context of the consumers’ struggle.
There are probably more jobs people do not want to do than jobs they want to do. Negative jobs are often the best innovation opportunities. Because most people don’t want to go to the doctor if they don’t have to, there are now more than a thousand MinuteClinic locations inside CVS pharmacy stores in 33 states in America.
Innovation can also be identified in the unusual use of products. NyQuil had been on the market for decades as a cold remedy, but some consumers were using it to help them sleep, even when they weren’t sick. This led to ZzzQuil, which offers a good night’s sleep without the other active ingredients consumers didn’t need.
Growth can be found where none seems possible. It is dependent on knowing what to look for, and the question to be asked: What is the Job here?
There are gems in this easy-to-read book, with many examples of every point they make. No matter your line of work, this is a clever way to look for new business, but it must be done carefully and slowly.
Readability: Light -+— Serious
Insights: High +—- Low
Practical: High -+— Low
* Article originally published on FIN24
* Ian Mann is the Founder and CEO of Gateways . Views expressed are his own.