Competing Against Luck: The Story of Innovation and Customer Choice

by Clayton M. Christensen

when you truly understand what causes consumers to make the choices they do. Innovation can be far more predictable—and far more profitable—but only if you think about it differently. It’s about progress, not products.

A clear view of customers’ jobs means an organization should never overshoot what those customers are actually willing to pay for. On the contrary, we believe that when customers find the right product to respond to their Job to Be Done, they’re often willing to pay more—

Many companies fall into the trap of asking consumers what about their current offering they could tweak to make it more appealing. Faster? More colors? Cheaper? When you start with the assumption that you’re just altering what you already have created, or relying on broader industry-accepted category definitions, you may have already missed the opportunity to uncover the real job for consumers.

Consumers can’t always articulate what they want. And even when they do, their actions may tell a different story.

Jobs Theory helps innovators identify the full picture of the progress a customer is trying to make in particular circumstances, including the complex set of competing needs and relative priorities. You have to understand not only what customers want to hire, but what they’ll need to fire to make room for the new solution. All that context matters profoundly.

identifying a Job to Be Done does not require a magical algorithm. There is no one special method of uncovering Jobs to Be Done and that is precisely the point: there is no black box. You just have to have a “beginner’s mind” as you walk through a consumer’s decision-making process, looking for clues as to the full picture of the struggle.3

Innovators have to have a heat-seeking sensor for the tensions, struggles, stress, and anxiety of both the Big Hire and the Little Hire. When we go out in search of innovation opportunities we are like detectives trying to piece together a complicated story with all its emotional richness, because only by constructing the story can we innovate in ways that change the ending.

uncovering jobs is about clustering insights, not having a single eureka. But we can start to form hypotheses and ask fresh questions, as well as think about what we might probe on subsequent interviews.

The key to getting hired is to understand the narrative of the customer’s life in such rich detail that you are able to design a solution that far exceeds anything the customer themselves could have found words to request. In hindsight, breakthrough insights might seem obvious, but they rarely are. In fact, they’re fundamentally contrarian: you see something that others have missed.

Customers are often unable to articulate what they want; even when they do describe what they want, their actions often tell a completely different story.

What evidence do you have that you’ve clearly understood your customers’ jobs?

Can you tell a complete story about how your customers go from a circumstance of struggle, to firing their current solution, and ultimately hiring yours (both the Big and the Little Hires)?

What are the forces that impede potential customers from hiring your product? How could you innovate the experiences surrounding your product to overcome these forces?

New products succeed not because of the features and functionality they offer but because of the experiences they enable.

There’s a reason successful jobs-based innovations are hard to copy—it’s in this level of detail that organizations create long-term competitive advantage because this is how customers decide what products are better than other products.

You can only shape the experiences that are important to your customers when you understand who you are really competing with. That’s how you’ll know how to create your résumé to be hired for the job. And when you get that all right, your customers will be more than willing to pay a premium price because you’ll solve their job better than anyone else.

having a Job to Be Done as a North Star helps guide an organization to design the right product and experiences to achieve that job—and not “overshoot” in a way that consumers won’t value.

The real challenge is how do you get this herd of energy—your team—lining up on a future road map, some of which you can’t yet see. Jobs Theory helps you do that. It’s crazy powerful, if you get that right. —Chet Huber, OnStar’s founding CEO

Resources, generally speaking, are fungible. They can be bought and sold. Products can, often, be easily copied. But it is through integrating processes to get the job done that companies can create the ideal experiences and confer competitive advantage.

W. Edwards Deming, father of the quality movement, may have put it best: “If you can’t describe what you are doing as a process, then you don’t know what you are doing.”

A 2010 Bain & Company study reported that fewer than one-third of major reorgs reviewed delivered any material improvement and many actually destroyed value.

“We’re much more focused on processes than organization,” says Piacentini. “It’s one of the reasons we can move fast.

Ford’s core mistake—of focusing on the product spec rather than the job spec—gets repeated all the time.

The gravitational pull of existing process is very, very strong.

Here’s how the trouble starts: managers by their very nature respond to information—and negative information, in particular, causes them to respond quickly.

data, as it turns out, is very loud. It shouts at you to focus on it and prioritize it and improve it. It’s easy to track and measure and is usually seen as a proxy for how well the manager is doing his job. This is a subtle but transformational shift in perspective, and it feels good to migrate from the unstructured messiness of passive data to the reassuringly concrete active data. But what feels like progress can prove to be poison if it leads managers to mistake the model of reality that active data offers for the real world.5 Data is always an abstraction of reality based on underlying assumptions as to how to categorize the unstructured phenomena of the real world. Too often, managers conveniently set this knowledge aside: data is man-made.

trying to do many jobs for many customers can confuse customers so they hire the wrong products for the wrong jobs and end up firing them in frustration instead. This makes companies vulnerable to disrupters who focus on a single job—and do it well.

Data has an annoying way of conforming itself to support whatever point of view we want it to support. In fact, Nate Silver, a well-known statistician and founder of the New York Times political blog FiveThirtyEight (it was acquired by ESPN in 2013), noted, “The most calamitous failures of prediction usually have a lot in common. We focus on those signals that tell a story about the world as we would like it to be, not how it really is.”8 We don’t realize this, we don’t mean for it to happen, but it is an unfortunate frailty of the human brain.

Does this sound familiar? Your sales, marketing, and R&D teams are all in the same room with the business-unit head, discussing where to focus innovation resources. The sales team is sure it knows what customers want because it’s constantly talking to its customers about their most pressing needs. The marketing team has reams of ideas for leveraging the existing brand, perhaps by offering new versions, new flavors, new colors, or special offers. The R&D team is excited about new features and benefits it’s working on, driven by cool new technologies or applications. And the head of the business is relentlessly focused on getting things into the market that have a shot at helping the P&L by the end of the year. Needless to say, each team comes armed with carefully constructed supporting data that offers a model of reality through the lens of its functional responsibilities, performance metrics, and financial incentives. All the teams are working with a kind of confirmation bias—seeing only the information that tends to support their point of view. None of these perspectives is wrong, but the point is that none is truly objective. And more important, not one of the models reflects the customers’ job.

We pick and choose the data that suits us. “Decisions don’t get made. They happen,” observes neuromarketing expert, Gerald Zaltman, a longtime colleague at Harvard Business School who has spent years studying how managers represent their ideas and apply their ideas and knowledge.

It’s not easy to get these jobs-based goals right—as we’ve discussed, jobs are complex and nuanced and require a deep understanding of the progress a consumer is trying to make. But when you do, the impact on an organization’s productivity can be dramatic, because the resulting clarity enables a much greater share of the organization’s human capital to be deployed with the right balance of autonomy and alignment. Since we know that strategy is formed in the everyday choices employees make about resources, processes, and priorities, clarity about what jobs your customers are hiring you to do provides a kind of intuitive playbook.

Once GM’s OnStar team figured out that customers were hiring the service for peace of mind while driving, that clarity shifted the organization’s focus from cool new “brochure ware” features to genuinely targeted customer benefits that aligned with the Job to Be Done. It was a focus that played out not just in what and how OnStar designed into its service, but the everyday decisions made by employees in all parts of the organization.

a clear Job to Be Done can provide the foundation for an organization’s culture—we solve problems this way because we know what matters and why.

When companies organize themselves into business units with responsibilities for products of certain characteristics or units with responsibilities for certain customer groups, data is gathered through those filters creating models that rarely map to customer jobs.

Cook, who served on the board of Amazon for years, points to the online retail giant as the model of understanding how to measure what matters most to customers’ Jobs to Be Done—while still focusing on improving efficiency.