Stephen Wunker: Steps to Put Christensen's Jobs-to-be-Done Theory into Practice

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Nine of the ten most valuable companies in America can trace their greatness to reconceiving a market’s boundaries.  From ExxonMobil to Apple to Wal-Mart, these firms expanded markets that others saw as static.  How can companies in today’s economy – seemingly hemmed in on all sides by hyper-competitive markets – break into new ground?

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 20^th 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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How to Be a Truly Global Company : C.K. Prahalad

 During the high-growth years between 1992 and 2007, the globalization of commerce galloped at a faster pace than in any other period in history. Now, amid the chronic unemployment and anti-trade rhetoric of the post-financial-crisis world, some observers wonder whether globalization needs a time-out. However, the experience of multinational companies in the field suggests the opposite. For them, globalization isn’t happening rapidly enough. Whereas GDP growth has stalled in the industrialized world, consumption demand is still expanding in China, India, Russia, Brazil, and other emerging markets. The 1 billion customers of yesterday’s global businesses have been joined by 4 billion more. These customers reside in a much larger geographic area; three-quarters of them are new to the consumer economy, and they need the infrastructure, products, and services that only global companies provide.

The problem is not globalization, but the way our current institutions are set up to respond to this new demand. The prevailing corporate operating model does not work well with the structural changes that have taken place in the global economy.

Most companies are still organized as they were when the market was largely concentrated in the triad of the old industrialized world: the U.S., Europe, and Japan. These structures lead companies to continue building their global strategies around the trade-offs and limits of the past — trade-offs and limits that are no longer accurate or relevant.

One of the most prevalent and pernicious of these perceived trade-offs is the one between centrally driven operating models and local responsiveness. In most companies, an implicit assumption is at play: If you want to gain the full benefits of economies of scale — and to integrate common values, quality standards, and brand identity in your company around the world — then you must centralize your intellectual power and innovation capability at home. You must bring all your products and services into line everywhere, and accept that you can’t fully adapt to the diverse needs and demands of customers in every emerging market.

Alternatively (according to this assumption), if you want locally relevant distribution systems, with rapidly responding supply chains and the lower costs of emerging-market management, then you must decentralize your company and run it as a loose federation. You must move responsibilities for branding and product lineups to the periphery, and accept different trade-offs: more variable cost structures, fewer economies of scale, more diverse and incoherent product lines, and more inconsistent standards of quality.

Some companies try to use strict cost controls to manage these trade-offs. They put in place a decentralized operating model with some central oversight, usually augmented by outsourcing. But this is a tactical move based on expediency, rather than a global strategy. This approach leads to suboptimal results in today’s complex world.

Other false trade-offs are visible in the tension many companies experience between their current business model and the needs of the emerging markets they are entering. They wonder:

Whether to serve existing customers in their home countries or new customers in emerging countries. 

• Whether to meet competitive quality standards demanded by consumers in wealthy countries or offer just the “good enough” features that poorer customers can afford.

• Whether to pursue a strategy of premium or discount pricing.

• How to attract and retain resources and talent, which are perceived as draining away from emerging markets to the industrial world whenever employees are permitted to migrate.

• Whether, in using resources strategically, to follow the typical Western orientation (toward reducing labor and accumulating capital) or the view from emerging markets (where labor is inexpensive, capital is difficult to accumulate, and therefore it is worth investing in building large workforces for growth). via strategy-business.com 

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Business today is a chess match without rules. Requiring nimble competitiveness in which conventional thinking is discarded. InnoThink Group is provocative. Dynamic. Imaginative and committed to helping our clients out compete for top line growth. To see what we can do for you contact us.

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, education and competitive advantage. To hire Jim to speak to your organization - Call 719- 649- 4118 or email us for availability. Subscribe to our innovation and hypercompetition newsletter?