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.
Related Reading:
Five Discovery Skills that Distinguish Great Innovators
Is Your Org Chart Stuck in a Rut? Try a Scientific Experiment
Are Crummy Products Your Next Growth Opportunity?
Editor's note: This story was updated to correct current membership statistics for Care.com.
