Competing Against Luck: The Story of Innovation and Customer Choice

by Clayton M. Christensen

I wonder what job arises in people’s lives that causes them to come to this restaurant to “hire” a milk shake?

Milk shake question

“Help me stay awake and occupied while I make my morning commute more fun.”

Milk shake JTBD for morning

that moment, the milk shake isn’t competing against a banana or a Snickers bar or a doughnut, like the morning milk shake is. It’s competing against stopping at the toy store or my finding time for a game of catch later on.

Milk shake JTBD afternoon

You have to understand the job the customer is trying to do in a specific circumstance. If the company simply tried to average all the responses of the dads and the commuters, it would come up with a one-size-fits-none product that doesn’t do either of the jobs well. And therein lies the “aha.” People hired milk shakes for two very different jobs during the day, in two very different circumstances. Each job has a very different set of competitors—in the morning it was bagels and protein bars and bottles of fresh juice, for example; in the afternoon, milk shakes are competing with a stop at the toy store or rushing home early to shoot a few hoops—and therefore was being evaluated as the best solution according to very different criteria. This implies there is likely not just one solution for the fast-food chain seeking to sell more milk shakes. There are two. A one-size-fits-all solution would work for neither.

Crux of milk shake story

Chapter Takeaways Disruption, a theory of competitive response to an innovation, provides valuable insights to managers seeking to navigate threats and opportunities. But it leaves unanswered the critical question of how a company should innovate to consistently grow. It does not provide guidance on specifically where to look for new opportunities, or specifically what products and services you should create that customers will want to buy. This book introduces the Theory of Jobs to Be Done to answer these questions and provide clear guidance for companies looking to grow through innovation. At its heart, Jobs Theory explains why customers pull certain products and services into their lives: they do this to resolve highly important, unsatisfied jobs that arise. And this, in turn, explains why some innovations are successful and others are not. Jobs Theory not only provides a powerful guide for innovation, but also frames competition in a way that allows for real differentiation and long-term competitive advantage, provides a common language for organizations to understand customer behavior, and even enables leaders to articulate their company’s purpose with greater precision.

Milk shake chaper - lesssons learnt

define a “job” as the progress that a person is trying to make in a particular circumstance. This definition of a job is not simply a new way of categorizing customers or their problems. It’s key to understanding why they make the choices they make. The choice of the word “progress” is deliberate. It represents movement toward a goal or aspiration. A job is always a process to make progress, it’s rarely a discrete event.

What is a job ?

Second, the idea of a “circumstance” is intrinsic to the definition of a job. A job can only be defined—and a successful solution created—relative to the specific context in which it arises. There are dozens of questions that could be important to answer in defining the circumstance of a job. “Where are you?” “When is it?” “Who are you with?” “While doing what?” “What were you doing half an hour ago?” “What will you be doing next?” “What social or cultural or political pressures exert influence?” And so on.

Define circumstance

To summarize, the key features of our definition are: A job is the progress that an individual seeks in a given circumstance. Successful innovations enable a customer’s desired progress, resolve struggles, and fulfill unmet aspirations. They perform jobs that formerly had only inadequate or nonexistent solutions. Jobs are never simply about the functional—they have important social and emotional dimensions, which can be even more powerful than functional ones. Because jobs occur in the flow of daily life, the circumstance is central to their definition and becomes the essential unit of innovation work—not customer characteristics, product attributes, new technology, or trends. Jobs to Be Done are ongoing and recurring. They’re seldom discrete “events.”

What is a job summary

Jobs Theory answers this question by asserting that customers purchase and use (or “hire” in our jobs metaphor) products and services to satisfy jobs that arise in their lives. A job is defined as the progress that a customer desires to make in a particular circumstance.

What is a job?

What are the experiences customers seek in order to make progress?

Jtbd qn 1

What obstacles must be removed?

Jtbd qn 2

What are the social, emotional, and functional dimensions?

Jtbd qn 3

When you are solving a customer’s job, your products essentially become services. What matters is not the bundle of product attributes you rope together, but the experiences you enable to help your customers make the progress they want to make.

When you are solving a customer's job, you essentially become a service!

Deeply understanding jobs opens up new avenues for growth and innovation by bringing into focus distinct “jobs-based” segments—including groups of “nonconsumers” for which an acceptable solution does not currently exist. They choose to hire nothing, rather than something that does the job poorly. Nonconsumption has the potential to provide a very, very big opportunity. Seeing your customers through a jobs lens highlights the real competition you face, which often extends well beyond your traditional rivals. Questions for Leaders What jobs are your customers hiring your products and services to get done? Are there segments with distinct jobs that you are inadequately serving with a one-size-fits-none solution? Are your products—or competitors'—overshooting what customers are actually willing to pay for?

Summary of second chapter

Innovation is less about producing something new and more about enabling something new and important for customers.

What is innovation as per JTBD?

If you observe people employing a workaround or “compensating behavior” to get a job done, pay close attention. It’s usually a clue that you have stumbled on to a high-potential innovation opportunity, because the job is so important and they are so frustrated that they are literally inventing their own solution.

Compensating behavior

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. The people who hired Depend Silhouette incontinence products fired staying at home instead of risking going out. 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.

Fire existing to hire new

Seemingly objective data about customer behavior is often misleading, as it focuses exclusively on the Big Hire (when the customer actually buys a product) and neglects the Little Hire (when the customer actually uses it). The Big Hire might suggest that a product has solved a customer’s job, but only a consistent series of Little Hires can confirm it. Before a customer hires any new product, you have to understand what he’ll need to fire in order to hire yours. Companies don’t think about this enough. Something always needs to get fired. Hearing what a customer can’t say requires careful observation of and interactions with customers, all carried out while maintaining a “beginner’s mind.” This mindset helps you to avoid ingoing assumptions that could prematurely filter out critical information.

Hearing what customers don't say summary

Developing a full understanding of the job can be done by assembling a kind of storyboard that describes in rich detail the customer’s circumstances, moments of struggle, imperfect experiences, and corresponding frustrations. As part of your storyboard, it’s critically important to understand the forces that compel change to a new solution, including the “push” of the unsatisfied job itself and the “pull” of the new solution. It is also critical to understand the forces opposing any change, including the inertia caused by current habits and the anxiety about the new. If the forces opposing change are strong, you can often innovate the experiences you provide in a way that mitigates them, for example by creating experiences that minimize the anxiety of moving to something new.

Push of the unsatisfied job and pull of the new solution

All three layers—Uncovering the Job, Creating the Desired Experiences, and Integrating around the Job—are critical. When a company understands and responds to all three layers of the job depicted here, it will have solved a job in a way that competitors can’t easily copy.

3 layers of job resume

Complete solutions to jobs must include not only your core product or service, but also carefully designed experiences of purchase and use that overcome any obstacles a customer might face in hiring your solution and firing another. This means that ultimately all successful solutions to jobs can be thought of as services, even for product companies. If you can successfully nail the job, over time you can transform your company’s brand into a purpose brand, one that customers automatically associate with the successful resolution of their most important jobs. A purpose brand provides a clear guide to the outside world as to what your company represents and a clear guide to your employees that can guide their decisions and behavior.

Crux of resume of a JTBD e.g. Google , FedEx

There is a second very important lesson in the Amazon story: there is a degree of ambidextrousness that enables processes to be both highly efficient and flexible. Jobs are not flexible—they have existed for years and years, even centuries. But how we solve for jobs varies over time. The important thing is to be attached to the job, but not the way we solve it today. Processes must flex over time when a better understanding of customer jobs calls for a revised orientation. Otherwise you’ll risk changing the concept of the job to fit the process, rather than the other way around.

Amazon JTBD lesson

fact, the misstep is so common in the high-tech world, that Anshu Sharma of Storm Ventures has earned justifiable recognition for calling attention to the problem, which he has dubbed “stack fallacy.” Stack fallacy highlights the tendency of engineers to overweight the value of their own technology and underweight the downstream applications of that technology to solve customer problems and enable desired progress. “Stack fallacy is the mistaken belief that it is trivial to build the layers above yours,” Sharma says. It’s the reason that companies fail so often when they try to move up the stack. “They don’t have first-hand empathy for what customers of the product one level above theirs in the stack actually want. They’re disconnected from the context in which their product will actually be used.”

Stack fallacy

powerful lever to drive job-centric process development and integration is to measure and manage to new metrics aligned with nailing the customer’s job. Managers should ask what elements of the experience are the most critical to the customer, and define metrics that track performance against them. Most organizations do not have one person who is the “steward” ensuring the company consistently delivers against the customer’s job. Traditional organizational structures and siloes do have value and are likely to endure, and large-scale reorgs are not usually practical. Therefore, the best way to move toward a more jobs-centric organization is to carefully set up and integrate the right processes, measure the right things, and over time embed jobs centricity in the culture. How you solve for a customer’s job will inevitably change over time; you need to build in flexibility to your processes, to allow them to continuously adapt and improve the experiences you deliver.

Crux of JTBD resume

The Fallacy of Active Versus Passive Data The Fallacy of Surface Growth The Fallacy of Conforming Data

The three fallacies of innovation

Product sales generate data about products: how many, how profitable, and which ones, etc. Customers’ purchases generate data about customers themselves: business or consumer, large or small, wealthy or not-so-much, direct or via sales channel, local or far-flung, etc. Investments in people, facilities, and technology generate data on their productivity, returns, and value. Competitors emerge, leading investors and managers to create benchmarks that make data.

Story of struggle first fallacy

the spring of 2014 Science magazine published the findings of an academic study of the popular Google Flu Trends11—Google’s flu-tracking service, which is supposed to predict flu trends ahead of the traditional Centers for Disease Control and Prevention reports. Google Flu Trends (GFT) was based on an algorithm that matched fifty million search terms against 1,152 data points. In essence, Google hoped to predict flu outbreaks by cross-referencing search terms (symptoms, medical providers, remedies) with relevant objective data. The authors, academics from Northeastern University, Harvard University, and the University of Houston, concluded that Google Flu Trends had wildly overestimated the number of flu cases in the United States for more than two years. The article, “The Parable of Google Flu: Traps in Big Data Analysis,” concluded that the errors were, at least in part, due to the decisions made by GFT engineers about what to include in their models—mistakes the academics dubbed “algorithmic dynamics” and “big data hubris.” Google had admirable goals: maybe early warning on flu trends could prevent the spread of disease and save lives earlier than conventional methods. But as Google engineers found, you have to make choices about what to analyze. Unfortunately, the exact link between specific search terms and Google’s algorithm was far too complicated and subject to myriad human dynamics (maybe a hypochondriac searched the same terms month after month or perhaps Google ...

Google flu terms data anamoly

The Fallacy of Active Data Versus Passive Data: Instead of staying cognizant of and focused on the type of data that characterizes the rich complexity of the job (passive data), growing companies start to generate operations-related data (active data), which can seduce managers with its apparent objectivity and rigor but which tends to organize itself around products and customer characteristics, rather than Jobs to Be Done. The Fallacy of Surface Growth: As companies make big investments in customer relationships, they focus their energies on driving growth through selling additional products to those customers or solving a broader set of their jobs, what we call surface growth—as opposed to staying focused on solving the core job better. The Fallacy of Conforming Data: Managers focus on generating data that conforms to their preexisting business models.

The three fallacies Summary

Having a jobs-focused organization, the CEOs we interviewed for this book tell us, leads to four categories of clear benefit: Enable distributed decision making with clarity of purpose—employees throughout the organization are empowered to make good jobs-focused decisions and to be autonomous and innovative. Align resources against what matters most—and free resources from what does not. Inspire people and unify your culture in service of what they care about most. Measure what matters most—customer progress,

Benefits of JTBD

Amazon founder Jeff Bezos has been crystal clear since its inception that there are three things that matter in their retail business: vast selection, low prices, and fast delivery. In Amazon’s now famous “customer backward” innovation process, those three measures are monitored on a minute-by-minute basis. Bezos doesn’t consider delays to be accidents or poor performance, he considers them “defects” to be eradicated. For example, to stay true to its foundational promise of “lowest prices,” Amazon built a shopping robot, an automated search engine that scours the prices of hundreds of benchmark products twice a day. If a lower price was found, the Amazon price was automatically lowered to beat that competitor’s price. That’s why you sometimes see an unexpected price drop while a product sits in your Amazon shopping cart. If the lower price dips below some appropriate gross-margin threshold, it triggers human review. Everything about that system is designed for efficiency—but its focus is squarely on efficiently delivering on the job customers are hiring Amazon to do. Bezos personally hands out the Amazon “Just Do It” award—an old Nike shoe—every few months to an employee who has strayed from his or her official job responsibilities to do something for the greater good of Amazon. That kind of focus keeps employees clear on what matters most to Amazon’s customers.

Amazon JTBD

An organization explicitly focused on a clearly defined job enjoys four key benefits: Distributed decision making: Employees throughout the organization are empowered to make good decisions that align with the job, and to be autonomous and innovative. Resource optimization: The jobs focus shines a light on which resources are aligned against what matters most and which are not, and enables them to be rebalanced accordingly. Inspiration: Solving a customer’s job is inherently inspiring to individuals in an organization, as it enables them to see how their work enables real people to make progress in their lives. Better measurement: With a focus on the job, people will naturally seek to measure and manage to more customer-centric metrics.

Benefits of JTBD

One of the silliest habits of many in academia is to orchestrate a finding that “disproves” a theory that a colleague has developed and published. The authors publish their paper in a journal of repute, and then smugly lie back on a beach somewhere because their paper is now “in the literature.” This helps no one. Anomalies do not disprove anything. Rather, they point to something that the theory cannot yet explain. Scholars who find anomalies need to roll up their shirtsleeves and work to try to improve a theory or replace it with a better one.

Brutal truth on academics throries

First, if you or a colleague describes a Job to Be Done in adjectives and adverbs, it is not a valid job. It might describe an experience that a customer needs to have in order to do the job, but it is not a job, as we have defined it here. For example, “convenience” is not a Job to Be Done. It might be an experience that might cause a customer to choose your product rather than a competitor’s product, but it is not a job. A well-defined Job to Be Done is expressed in verbs and nouns—such as, “I need to ‘write’ books verbally, obviating the need to type or edit by hand.” In contrast, the sentence “We should aspire to be more honest” is a noble goal, but it’s not a job. Second, defining a job at the right level of abstraction is critical to ensuring that the theory is useful. This can be more art than science, but there is a good rule of thumb: if the architecture of the system or product can only be met by products within the same product class, the concept of the Job to Be Done does not apply. If only products in the same class can solve the problem, you’re not uncovering a job. A couple of examples: “I need to have a chocolate milk shake that is in a twelve-ounce disposable container” is not a job. The possible candidates that I could hire to do this are all in the milk shake product category. I could call this a need or a preference—but it isn’t a job. We need to go up another level of abstraction in order to discover the job. “I need something that will keep me occupie...

Pitfalls with JTBD