For as long as we can remember, innovation has been a top priority — and a top frustration — for leaders. In a recent McKinsey poll, 84% of global executives reported that innovation was extremely important to their growth strategies, but a startling 94% were dissatisfied with their organizations’ innovation performance. Most people would agree that the vast majority of innovations fall far short of ambitions.
On paper, this makes no sense. Never have businesses known more about their customers. Thanks to the big data revolution, companies now can collect and analyze an enormous variety and volume of customer information, at unprecedented speed. Many firms have established structured innovation processes and brought in highly skilled talent to run them. But for most of them, innovation is still painfully hit-or-miss.
What has gone so wrong?
The fundamental problem is that most of the masses of customer data that companies create is structured to show correlations: This customer looks like that one, or 68% of customers say they prefer version A to version B. While it’s exciting to find patterns in the numbers, they don’t mean that one thing actually caused another.
After decades of watching great companies fail, we’ve come to the conclusion that the focus on correlation — and on knowing more and more about customers — is taking firms in the wrong direction. Instead they need to home in on the progress that the customer is trying to make in a given circumstance — what the customer hopes to accomplish. This is what we’ve come to call “the job to be done.”
When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, the next time we’re confronted with the same job, we tend to hire that product again. And if it does a crummy job, we “fire” it and look for an alternative. Jobs-to-be-done theory transforms our understanding of customer choice in a way that no amount of data ever could, because it gets at the causal driver behind a purchase.
The Business of Moving Lives
A decade ago, Bob Moesta, an innovation consultant, was charged with helping bolster sales of new condominiums for a Detroit-area building company. The company had targeted downsizers — retirees looking to move out of the family home and divorced single parents.
The units got lots of traffic, but few visits ended up converting to sales. It was easy to speculate about reasons for poor sales. But instead of examining those factors, Moesta set out to learn from the people who had bought units what job they were hiring the condominiums to do.
The conversations revealed an unusual clue: the dining room table. Prospective customers repeatedly told the company they wanted a big living room, a large second bedroom for visitors and a breakfast bar to make entertaining easy and casual; they didn’t need a formal dining room. And yet, in Moesta’s conversations with actual buyers, the dining room table came up repeatedly. “People kept saying, ‘As soon as I figured out what to do with my dining room table, then I was free to move,’” reports Moesta. He and his colleagues couldn’t understand why the dining room table was such a big deal.
But as Moesta sat at his own dining room table with his family over Christmas, he suddenly understood. Every birthday was spent around that table. Every holiday. The table represented family.
What was stopping buyers from making the decision to move, he hypothesized, was the anxiety that came with giving up something that had profound meaning.
That realization helped Moesta and his team begin to grasp the struggle potential homebuyers faced. “I went in thinking we were in the business of new-home construction,” he recalls. “But I realized we were in the business of moving lives.”
With this understanding of the job to be done, dozens of small but important changes were made to the offering. The architect managed to create space in the units for a dining room table by reducing the size of the second bedroom. The company also focused on easing the anxiety of the move itself: It provided moving services, two years’ worth of storage and a sorting room within the condo development where new owners could take their time making decisions about what to discard.
The insight into the job the customers needed done allowed the company to differentiate its offering in ways competitors weren’t likely to copy. The new perspective changed everything.
Getting a Handle on the Job to Be Done
Successful innovations help consumers to solve problems — to make the progress they need to, while addressing any anxieties that might be holding them back. Here are some principles to keep in mind:
— “Job” is shorthand for what an individual really seeks to accomplish in a given circumstance.
Consider the experience a person is trying to create. What the condo buyers sought was to transition into a new life, in the specific circumstance of downsizing.
— The circumstances are more important than customer characteristics, product attributes, new technologies or trends.
Before they understood the underlying job, the developers focused on trying to make the condo units ideal. But when they saw innovation through the lens of the customers’ circumstances, the competitive playing field looked totally different.
— Good innovations solve problems that formerly had only inadequate solutions — or no solution.
Prospective condo buyers were looking for simpler lives without the hassles of homeownership. But to get that, they thought, they had to endure the stress of selling their current homes. It was only when given an option that addressed all the relevant criteria that shoppers became buyers.
Jobs are never simply about function — they have powerful social and emotional dimensions.
Creating space in the condo for a dining room table reduced a very real anxiety that prospective buyers had. Reducing their stress made a catalytic difference.
(Clayton M. Christensen is a professor at Harvard Business School. Taddy Hall is a principal with the Cambridge Group and the leader of Nielsen’s Breakthrough Innovation Project. Karen Dillon is the former editor of Harvard Business Review. David S. Duncan is a senior partner at Innosight. They are co-authors of the forthcoming “Competing Against Luck: The Story of Innovation and Customer Choice.”)
