INNOVATION SPECIAL .....Clayton Christensen: The Theory of Jobs To Be Done

Clayton Christensen: 

The Theory of Jobs To Be Done

NEW BOOK: Clayton M. Christensen's The Innovator's Dilemma was a classic text on how companies fail. In a new book, Competing Against Luck, Christensen tackles the opposite challenge: how companies succeed. First lesson, discover what job consumers are hiring your product to do.

·         AUTHOR INTERVIEW

What Job Would Consumers Want to Hire a Product To Do?

Interview by Dina Gerdeman

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.

“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?

 “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 nearly 10 million members in 16 countries with revenues approaching $60 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.

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.

http://hbswk.hbs.edu/item/clay-christensen-the-theory-of-jobs-to-be-done?cid=spmailing-13556370-WK%20Newsletter%2010-05-2016%20(1)-October%2005,%202016