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Nine of the ten most valuable companies in
The wrong place to start is by asking customers what they want.
Overwhelmingly, customers will answer based on how a market exists today.
As Henry Ford reputedly said of his industry, “If I asked customers what they
wanted, they would have said a faster horse.” Instead, you need to look
deeper and examine underlying needs.
Clayton Christensen, the famed Harvard Business School Professor known
for coining the term “disruptive innovation,” believes that one of his most
enduring legacies will be an idea he first put forward in his 2003 book The Innovator’s Solution: don’t
sell products and services to customers, but rather try to help people address their jobs-to-be-done. This
seemingly simple idea has profound implications for re-framing
industries. As I saw in years of consulting with Christensen to companies
giant and small, it can revolutionize how firms compete. But the concept
can also be tough to put into practice. A six-step process provides a
rigorous way of defining the jobs you can address. Once those challenges
are tightly defined, it is much easier to generate bold ideas for new
solutions.
1. What are the high-level jobs-to-be-done?
Rather than looking just at what people buy, examine the
needs that arise during their lives. Sometimes the job is much broader
than the product or service that is bought. For instance, why did I take
five small children to a movie on Sunday afternoon? Because on a rainy
day I needed to get them out of house for a few hours. Could movie
theaters expand their addressable market by emphasizing how they can occupy
kids? What if the room used for the 20th screen was
adapted instead for inexpensive play like a childrens’ gym?
2. What are the current approaches and what pain
points result?
Jobs-to-be-done can sprawl across dozens of industry
categories. Clearly a company can’t address each job, but by looking
broadly it can re-define its true “competition.” After it understands the
full landscape, it can focus narrowly. Theaters may not want to invest in
indoor playgrounds, but they need to see playgrounds as a rival every bit as
real as a multiplex a few miles away. By understanding the pain points
associated with competitive offerings, a business can better invest in
emphasizing its distinctive strengths.
3. What benchmarks exist in the full range of
competing offerings and analogies?
Companies should always compare themselves to directly
comparable firms, but they should not be seduced by the simplicity of that
exercise. Through examining all that the full set of rivals and analogous
offerings can do, they can get excellent ideas for their own business.
For instance, a movie theater could learn from Disney World about how to market
merchandise to children and how to entertain people in lines.
4. What performance criteria do customers use?
Much psychological research has shown that even horribly
complicated decisions are often reduced to a small handful of criteria that
people can keep in mind at any one time. What are they for your
industry? What adjectives describe a good solution? Asking
customers these questions can open up surprising routes for improving current
solutions or marketing existing offerings more effectively.
5. What prevents new solutions from being adopted?
Managers are often
too enamored of their own ideas.
Unfortunately, even compelling ideas can take a long time to catch
on. Indoor plumbing took 4,500 years
from its invention to become widely adopted.
Really, is your idea better than indoor plumbing? Think in a disciplined
fashion about all the obstacles hindering adoption of new solutions in your
industry. Talk to customers about how
they made a decision to adopt a recent innovation – not innovations in general,
as that can average out important details, but rather a specific case study.
6. What value would success create for
customers?
By understanding the
value that lies in resolving a pain point, you can see how many degrees of
freedom you have to engineer a new solution.
For instance, if resolving an issue on construction sites could avoid 30
minutes of downtime twice a week, and that time is valued at $600 / hour for
the crew, then you get a sense of potential price and cost of a new
solution. Keep in mind that value could
be defined by money, time, convenience, peace of mind, and other metrics.
Re-framing a market
can be an immensely powerful engine of business growth. These six steps help to translate
Christensen’s theory of jobs-to-be-done – an immensely powerful idea – into
specific ideas for action. via forbes.com
Jim Woods is president and founder of InnoThink Group; a global innovation, growth and hypercompetition consultancy. He is an author and speaker on strategic innovation and competitive advantage. To hire Jim to speak to your organization - Call 719- 649-4118 or email us for availability.
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