- 03 Oct 2016
Clayton Christensen: The Theory of Jobs To Be Done
- Author Interview
What Job Would Consumers Want to Hire a Product To Do?
In today’s digital age, business executives collect reams of data as they try to develop the next must-have product for consumers, yet corporate innovation efforts remain painfully hit or miss.
A recent McKinsey poll found that 84 percent of global executives said innovation was extremely important for business growth, yet 94 percent were dissatisfied with their own innovation performance.
Why do so many innovation initiatives fall flat?
Clayton M. Christensen, widely regarded as one of the world’s top experts on innovation and growth and author of the theory of disruptive innovation, says executives often fail because they study the wrong product and customer data, which leads them to unwittingly design innovation processes that “churn out mediocrity.”
He writes about this problem in a new book, Competing Against Luck: The Story of Innovation and Customer Choice, coauthored with Taddy Hall, Karen Dillon, and David S. Duncan. The book goes on sale tomorrow.
“For years, I’d been focused on understanding why great companies fail, but I realized I had never really thought about the reverse problem: How do successful companies know how to grow?” writes Christensen, the Kim B. Clark Professor of Business Administration at Harvard Business School.
The secret to winning the innovation game lies in understanding what causes customers to make choices that help them achieve progress on something they are struggling with in their lives. To get to the right answers, Christensen says, executives should be asking: What job would consumers want to hire a product to do?
"You should look at the workarounds that your customers are needing to do. It becomes a real source of a lot of insights"
“For me, this is a neat idea,” Christensen writes of the Theory of Jobs to Be Done. “When we buy a product, we essentially ‘hire’ something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we ‘fire’ it and look around for something else we might hire to solve the problem.”
Just look at companies that have experienced wild innovation success, Christensen says: Uber founders recognized that urban transportation was doing a poor job and found a way to one-up cabs and car services by allowing consumers to hail cars within minutes on their phones. Care.com, the online matchmaking service for child care, senior care, and pet care, was developed 10 years ago by Sheila Marcelo after she struggled to fulfill her own child care needs. The company now has more than 20 million members spanning 18 countries, and its full 2015 revenues were $138.7 million.
It helps if a company can sell not only a product, but an experience. Pre- teen girls “hire” American Girl dolls to validate their sense of self-worth, while mothers (the ones actually purchasing the dolls) pay a premium—more than $100 per doll—partly as a way to connect with their daughters. The company has sold 29 million dolls and pulls in more than $500 million in sales each year.
Christensen hopes his book will help executives apply the Jobs Theory to improve their own innovation track record.
Dina Gerdeman: Can you discuss the belief that customers don’t simply buy products or services, but they “hire” companies to do a job?
Clayton Christensen: Every day stuff happens to us. Jobs arise in our lives that we need to get done. Some are little jobs, some are big ones. Some jobs surface unpredictably. Other times we know they’re coming. When we realize we have a job to do, we reach out and pull something into our lives to get the job done.
Let me illustrate with a personal story. I’m 6-feet-8-inches tall. My shoe size is 16. My wife and I have sent all our children off to college. I live in a suburb of Boston and drive a Honda minivan to work. I have a lot of other characteristics and attributes. But these characteristics have not yet caused me to go out and buy The New York Times today. There might be a correlation between some of these characteristics and the propensity of customers to purchase the Times. But those attributes don’t cause me to buy that paper—or any product.
If The New York Times doesn’t understand why I might choose to “hire” its product in certain circumstances and why I might choose something else in others, its data about me or people like me is unlikely to help it create any new innovations for me. Correlation does not reveal the one thing that matters most in innovation—the causality behind why I might purchase a particular solution. That answer, I believe, is found in the job I’m hiring a product or service to do.
Gerdeman: It sounds like many companies make the mistake of picking and choosing data to suit their biases, right?
Christensen: In writing the book, it occurred to me that God doesn’t create data for mankind. He’s done a lot of things for us, but data isn’t one of them. Every piece of data that we see is a tiny fraction of the phenomena of the theory it is trying to summarize. It doesn’t tell the whole story. People who create the data include in it the information that is salient to what they are trying to accomplish.
They exclude the data they think is irrelevant. Then you’re looking at the data, and you don’t know that it’s the wrong data. You don’t realize the data you’re seeing doesn’t have the substance needed to answer the (innovation) question you want answered.
Gerdeman: So it’s important to observe the customer and ask the right questions?
Christensen: Yes. You are trying to find out for your company: Is there a job for our customers that needs to get done but no product to get the job done?
When somebody has a job to do and there isn’t a product that is obviously designed to get that job done, they engage in these workarounds. (I think,) “I have to do this and it gets me frustrated, but I’ll deal with all of that in order to get the job done.” You should look at the workarounds that your customers are needing to do. It becomes a real source of a lot of insights. My third son Michael went to Stanford, called, and said, “I need to furnish my apartment tomorrow.” So Michael found himself needing to get this job done. When I give talks about this concept, I ask, “Is there a brand that pops into people’s mind when you realize that’s the job to do?” And over 95 percent of them say IKEA.
It helped me understand the puzzle. IKEA exists to do a job. I need to furnish my apartment quickly. They have been rolling out their business model around the world for 50 years, and nobody has copied them. There are other companies that are retailers of furniture, but nobody has organized around that specific job to be done. The owner is one of the richest men in the world. How can he get rich by making furniture that is essentially throwaway furniture and sell it to the low end of humanity, college students who don’t have money? If I have to look around and shop to get the job done perfectly, that is very costly and time-consuming. If somebody comes and says, “I can get this job done perfectly for you,” I am delighted to pay a premium price for an average product.
Gerdeman: You say many managers fail at innovation because they don’t take into account the specific context of a job that needs to be done. Can you discuss why that’s important in defining a job and developing an innovative solution?
Christensen: You need to consider the circumstances when you’re understanding the job that needs to be done. If this idea of jobs to be done is such a great idea, why do so few companies actually organize themselves around it? I realized that managers have to respond to data, and so when I’m starting my company, I live in the context and I’m very observant about the context. But the context doesn’t have a voice. So it can’t scream out to me: “You don’t understand the context!” It’s passive and I have to observe it. That’s data.
"You lose connection with what causes customers to buy your products in the first place"
If I become successful and the company starts to take off, all of a sudden I as a manager find myself with data swirling around me, and the data is about customers, competition, products, recalls, distribution problems, and I have to respond to that data even as the context doesn’t broadcast any data anymore. Very quickly companies can inadvertently define their business as: We make these products and we sell them to these customers with these attributes. And you lose connection with what causes customers to buy your products in the first place.
Gerdeman: You say companies should be thinking about what job their product or service will be replacing. In other words: What has to get fired for my product to get hired?
Christensen: That’s exactly right. As managers, if we think there’s a job our organization needs to do, we don’t think very often about how people are getting this done now. People are accustomed to the workarounds. So you have to (ask people to) fire something in order for them to hire your product. But there are a lot of negative jobs, (jobs that make you think), “I don’t want to do this.”
I get sick more often than I would like, and I always get sick on busy days. I know what problem I have: It’s strep throat. The worst thing in the world is having to go to the doctor and sit in a waiting room for two hours and the doctor says, “Oh, you have strep throat. Here’s a prescription.” Then you have to wait at CVS. I don’t want to see the doctor. I don’t have time for that. Now we have the Minute Clinic, and it’s growing.
Gerdeman: For business executives reading this interview, can you provide what you consider some important steps for implementing the Jobs Theory?
Christensen: If you understand the experiences you need to provide customers, that tells you what you need to integrate and how you have to integrate it in order to provide experiences to get the job done. Delivering experiences is done by having a process that delivers those results. You have to organize your company around processes that get the job done, that provide customers the experiences they need.
Most companies have lost scope of the job to be done. They’re organized by categories of customers or competitors or products so that nobody is responsible for experiences. Nobody is responsible for the processes that lead to the experiences. So very quickly you lose that focus.
Once you understand the job, there needs to be somebody responsible for delivering that experience. If there are six experiences that are important to nailing a job, we need six people to manage those processes. That’s critical.
Gerdeman: You mention that what gets measured gets done. Southern New Hampshire University tracks how many minutes it takes to respond to an inquiry. Amazon focuses on when orders are delivered, not when they are shipped. The key here is keeping what matters in focus, right?
Christensen: Isn’t that a great concept? A lot of companies don’t do that. I spent my life developing theories about management. A theory is a statement of causality. Every time you as a manager take an action, it’s predicated on a theory: If I do this, this will be the result. If we do it this way, we’ll be successful. Managers are voracious consumers of theory.
In all of our research, we have not developed a good theory about metrics. Are we measuring the right thing or the wrong thing, and how do you know whether it’s right or wrong? Do you wait until all the evidence is in and then say, “Oh crud”?
The connection of job to be done with the metric is really an important idea. We know there needs to be a great theory there. I don’t think we’ve developed it yet.
Editor's note: This story was updated to correct current membership statistics for Care.com.
- Book Excerpt
How to Hear What Your Customers Don’t Say
Most companies want to stay closely connected to their customers to make sure they’re creating the products and services those customers want. Rarely, though, can customers articulate their requirements accurately or completely—their motivations are more complex and their pathways to purchase more elaborate than they can describe. But you can get to the bottom of it. What they hire—and equally importantly, what they fire—tells a story. That story is about the functional, emotional, and social dimensions of their desire for progress—and what prevents them from getting there. The challenge is in becoming part sleuth and part documentary filmmaker—piecing together clues and observations—to reveal what “jobs” customers are trying to get done. In our book, “Competing Against Luck,” we define a “Job to Be Done” as the progress a consumer is trying to make in particular circumstances.
Jobs to Be Done have always existed. Innovations have just gotten better and better in the way we can respond to them. So no matter how new or revolutionary your product idea may be, the circumstances of struggle already exist. Consequently, in order to hire your new solution, by definition customers must fire some current compensating behavior or suboptimal solution—including firing the solution of doing nothing at all. Wristwatches were fired in droves as soon as people began carrying mobile phones that not only told them the time but could sync with calendars and provide alarms and reminders. I fired my weekly Sports Illustrated when I could suddenly flip on ESPN. Companies don’t think about this enough. What has to get fired for my product to get hired? They think about making their product more and more appealing, but not what it will be replacing.
A customer’s decision-making process about what to fire and hire has begun long before they enter a store—and it’s complicated. There are always two opposing forces battling for dominance in that moment of choice and they both play a significant role.
The forces compelling change to a new solution: First of all, the push of the situation—the frustration or problem that a customer is trying to solve—has to be substantial enough to cause them to want to take action. A problem that is simply nagging or annoying might not be enough to trigger someone to do something differently. Secondly, the pull of an enticing new product or service to solve that problem has to be pretty strong, too. The new solution to the Job to Be Done has to help customers make progress that will make their lives better. This is where companies tend to focus their efforts, asking about features and benefits, and they think, reasonably, that this is the roadmap for innovation. How do we make our product incredibly attractive to hire?
The forces opposing change: There are two unseen, yet incredibly powerful, forces at play at the same time that many companies ignore completely: the forces holding a customer back. First, habits of the present weigh heavily on consumers. “I’m used to doing it this way.” Or living with the problem. “I don’t love it, but I’m at least comfortable with how I deal with it now.” And potentially even more powerful than the habits of the present is, second, the anxiety of choosing something new. “What if it’s not better?”
Consumers are often stuck in the habits of the present—the thought of switching to a new solution is almost too overwhelming. Sticking with the devil they know, even if imperfect, is bearable. I refused to upgrade my mobile phone for years, in spite of all the whiz-bang things my assistant assured me the new phone could do, because I was comfortable with the one I had. This is largely because, as Nobel Prize winner Daniel Kahneman has shown, people’s tendency to want to avoid loss is twice as powerful psychologically as the allure of gains.
The anxieties that come into play are powerful: anxiety about the cost, anxiety of learning something new, and anxiety of the unknown can be overwhelming. Why do many consumers hang onto their old mobile phones, even when they might get some trade-in value toward a new one? “What if the new one fails at some point?” “What if I find myself in some kind of unanticipated situation where I need a backup phone?” “What if . . . ?” Health clubs have only recently come around to the idea that locking customers into annual contracts creates so much anxiety that it prevents them from joining in the first place. Innovators all too often focus exclusively on the forces pushing for change—making sure that the new solution for resolving a customer’s struggle is sufficiently alluring to cause them to switch. But they completely ignore the powerful forces blocking the customer’s decision to make that change.
Excerpt from Competing Against Luck by Clayton M. Christensen, Taddy Hall, Karen Dillon, and David S. Duncan. Copyright © 2016 by Clayton M. Christensen, Taddy Hall, Karen Dillon, and David S. Duncan. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.