Book – Competing Against Luck

competing-against-luck.pngAnother wonderful Clayton M. Christensen book (I loved The Innovator’s Dilemma and The Innovator’s Solution).

The main idea is a need for an innovation guide that can help companies to focus their efforts.  Disruption, a theory of competitive response to innovation, does not have this advice.  The Jobs theory does, it explains why customers “hire” different products or services to do specific “jobs,” even if the same product or service can be “hired” to do different “jobs” by the same market segment.

A job is defined as the progress that a customer desires to make in a particular
circumstance.

“Big hire” – customer purchases the product
“Little hire” – customer uses the product (just purchasing the product is not enough for a successful fit, the customer needs to use the product to be satisfied with its performance for a specific “job.”

When customer “hires” a new product, an old solution needs to be “fired” – it is important to understand what needs to be fired for your product to be successful.

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.

milkshake.pngUnderstanding of the “Job to be Done” that compels the customer to buy the product or service also helps to define the competitive environment and possible product substitutions.

Book’s opening example: customers “hire” a milkshake in the morning to drink during a boring commute (substitutes: bananas, doughnuts, etc.), or the same customers can “hire” a milkshake in the afternoon as a treat for a child (substitutes: toys, play, etc.).

“Jobs” based approach helps companies to segment their target audience better, including identification of non-consumers, for whom the current product is not better than choosing nothing at all.  Finding and satisfying sections of non-consumers can become a big opportunity for a company.

Example: small businesses would not use accounting software; they often used personal financial software to run their business, even if it was not designed for the business management.  The choice was based on the need to use a financial software, but lack of knowledge/desire to understand major accounting packages and obscure accounting terminology.  The solution: a small business accounting software with less features than traditional business  accounting software and as easy to use as a personal finance tool.

Most companies focus disproportionately on the functional dimensions of their customers’ jobs; but you should pay equally close attention to uncovering the emotional and social dimensions, as addressing all three dimensions is critical to your solution nailing the job.

Measurement of success: a company needs to define metrics based on the most important factors of the “job to be done” from the customer’s perspective, and track progress based on these metrics.

While there are many drivers of this drift away from the true north of the customer’s job, foremost among them is the tendency of managers to fall prey to the Three Fallacies of Innovation Data:

  • confused.pngThe 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.

Interesting: the “jobs to be done” approach can also be used in the internal organizational services, as mentioned in Hacking Marketing.

Excellent book (though I am a fan of the author 😉 ).

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