Competing against luck
Innovation and consumer options
Description
Innovation shouldn't be a game of chance, nor should it focus on enhancing features that customers disregard. Instead, companies should adopt the Jobs-to-be-Done theory, viewing products as tools customers "hire" to accomplish tasks.
If a product performs well, it's "rehired"; if not, it's "fired". This perspective shifts innovation from adding extras to creating truly superior solutions that help customers progress. By understanding the "jobs" customers need done, companies can base their strategies on insight rather than luck, yielding different competitors, priorities, and most importantly, improved outcomes.
This approach leaves the uncertainty of innovation behind. - Clayton Christensen, Taddy Hall, Karen Dillon, and David Duncan.
Table of contents
01The causal mechanism for successful innovation
Innovation can be predictable if you understand why customers choose a particular solution, helping to forecast their future needs accurately. The key lies in discerning the jobs customers hire you to do. A mid-1990s fast-food chain case illustrates this. Despite customer surveys and attempts to implement suggestions, milkshake sales remained stagnant. The breakthrough came when consultants asked customers what job they were hiring the milkshake to do.
Most were buying milkshakes for their commute to work, needing something to make the drive interesting and keep them nourished until lunch. This insight allowed the chain to align their product with the customer's job, making the milkshake more viscous, adding fruit chunks, and moving the dispensing machine to the front. However, milkshakes purchased in the afternoon or evening served a different job, typically bought by parents as a treat for their children.
This highlights that people hire milkshakes for two very different jobs during the day, each with a different set of competitors and evaluated based on different criteria. This suggests that there isn't a one-size-fits-all solution for the fast-food chain to sell more milkshakes, but rather two distinct solutions. Many recent innovation successes, like Uber, have identified a Job-to-be-Done and offered a product or service that performs that job exceptionally well. The core insight is that customers don’t buy products or services; they pull them into their lives to make progress. We call this progress the “job” they are trying to get done, and in our metaphor we say that customers “hire” products or services to solve these jobs.
02Applying jobs theory in the real world
Understanding your customers' underlying Jobs-to-be-Done (JTBD) is a critical aspect of product development and marketing. It involves delving into the customer's needs and frustrations to identify the progress they are trying to make in a given circumstance. This process is not straightforward, as it requires a combination of investigative and documentary skills to gather and interpret clues about customer behavior and preferences.
To begin with, it's essential to recognize the barriers to progress that customers face or the experiences that frustrate them. This involves looking at what customers currently use to get jobs done and what they reject. Such an analysis can reveal the true complexity of their JTBD, which in turn informs the type of experiences your product or service should offer to be considered a viable solution. Customers may not always be able to articulate their JTBD clearly. This necessitates a proactive approach to understanding their story and deciphering their priorities, trade-offs, and opportunities. A robust strategy for uncovering these jobs includes several steps. First, observe the jobs you perform in your own life, as this can provide insights into the jobs others might also be trying to get done. Second, look for opportunities in nonconsumption—situations where no current solution is being used. Third, identify common workarounds or hacks that people employ to overcome the limitations of existing solutions. Fourth, consider what tasks people explicitly try to avoid, as these can indicate areas ripe for innovation. Lastly, pay attention to unusual or unintended uses of your products, as these can reveal unmet needs or new market opportunities.
03Organizational and leadership challenges of jobs theory
In the dynamic landscape of business, organizations traditionally structure themselves either by functional units such as marketing, finance, and operations, or by geographical location to cater to local market needs. However, this conventional approach often leads to siloed operations that may not always align with the evolving demands of customers. On the other hand, the most successful growth companies have adopted a more customer-centric strategy, organizing and optimizing around the customer's Job-to-be-Done. This paradigm shift focuses on understanding and fulfilling the specific needs or 'jobs' that customers hire products or services to do, thereby achieving a sustainable competitive advantage.
The concept of Job-to-be-Done (JTBD) offers a lens through which companies can view their products and services from the customer's perspective, emphasizing the importance of the outcome the customer seeks to achieve. By aligning organizational processes, structures, and metrics around the JTBD, companies can ensure that they consistently create and deliver experiences that help customers complete their jobs more effectively and efficiently. This approach requires a deep integration of processes across the organization, transcending traditional boundaries and silos to deliver a cohesive customer experience.
However, most companies tend to focus on processes that improve internal efficiencies or deliver narrow outcomes within specific functions. While these efforts may lead to short-term gains, they often fall short of providing the comprehensive set of experiences that truly nail the customer's job. To overcome this challenge, it may be necessary to define entirely new processes and find innovative ways to coordinate functions that are typically isolated within the business. This involves a significant shift in organizational culture and structure, including changes in reporting structures, metrics, and the overall mindset of employees.
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