Job Theory: The theoretical foundation of predictable growth
Organizations around the world have devoted countless resources to the challenge of innovation through the years. Companies spend billions every year on compiling data, acquiring tools and hiring highly skilled personnel to succeed with innovation.
The innovation processes within companies are perfected down to every little detail — whether it is data collection, data analysis, requirements, measurements, risk or design. It might appear as though companies have mastered an awfully precise, scientific process. But in reality, innovation is still a painful hit-or-miss game for most companies and leaves innovation to chance.
Naturally, the question about how companies can successfully innovate with greater predictability arises. In Competing Against Luck, Clayton Christensen (2016) presents the answer in the form of a theory on customer choice, of which one of the powerful key components is that customers don’t simply buy products and services — they hire them to do a job in their lives that resolves their struggles for progress.
Why is Jobs to Be Done important?
The fundamental problem with innovation in most companies is that they ask the wrong questions. In the age of Big Data, masses and masses of data are compiled and analyzed with advanced techniques and tools. But many companies tend to look for patterns and cross-references to describe customers, linking characteristics to purchase decisions — the “what” — but failing to uncover the true cause of customers purchasing products and services — the “why.”
Many companies are simply working towards the wrong goal, getting better and better at the wrong things. Instead, innovators should start asking themselves the right question to get the right answers:
What causes a customer to purchase and use a particular product or service?
At its heart, Jobs Theory explains why customers pull certain products and services into their lives. It reveals the causal mechanisms behind purchase decisions and, furthermore, where to look for successful new product ventures. Consequently, innovation success becomes predictable, and you can compete against luck while others are still counting on it.
Defining the job
What are innovators missing then? Christensen argues that the innovation process has been lacking a theory as an essential tool to solving the innovators’ challenges — a theory that provides an answer to the question of what causes a customer to purchase and use a particular product or service. Jobs Theory provides this answer. Putting it simply, customers don’t just buy products and services; they pull them into their lives to make progress in particular circumstances.
Christensen calls this progress a “Job to Be Done” — or just a “job” — and customers can either “hire” or “fire” products to fulfill or solve these jobs. More specifically, a job consists of three components: progress, circumstance and dimensional complexity.
Progress
The definition of a job is the progress that a person is trying to make in a particular circumstance. The choice of the word “progress” is deliberate, as it represents movement towards a goal or an aspiration. A job is thus always a process to make progress, and it entails all the struggles and barriers customers encounter when seeking to solve their jobs.
Circumstance
A certain desired progress is always strongly influenced by the circumstance in which it arises. The circumstance — meaning the specific context — is fundamental for defining a job, and thus for creating successful.
Several questions could be important to ask when probing the circumstance of the job, such as who, when, where, while doing what and what will you be doing next, but also extends to other contextual factors, such as life stage, family status or financial status. Managers usually constrain themselves to looking at product attributes, customer characteristics, trends or competitive response, but those are insufficient factors when predicting customer behavior. It is all about making the job and its specific context the unit of analysis rather than other factors that correlate with, but don’t cause, a purchase decision.
The circumstance is this cause. It links a need to a context, which becomes a job, making it specific and a driver for choice. You might find yourself “being hungry in the morning on your way to work.” That’s a need, but it’s too vague and general to provide directions for where to look for product innovations.
When linking a specific circumstance to that need, such as “I’m alone on a long, boring commute and want to entertain myself, while staying satiated until noon,” it suddenly provides clear guidelines on what job and struggles are critical, and thus why people might “hire” a thick, long-lasting milk shake instead of a banana that’s gone too quickly.
Simultaneously, circumstance also explains why a parent might “hire” the same product for its child to feel like a good parent for very different reasons. For those reasons, a circumstance is always fundamental for defining a job and innovating with success.
Functional, social and emotional dimensions
Finally, when defining a job, it is insufficient to focus entirely on the functional or practical need. A job also has social and emotional dimensions, which can be far more important than the functional. Think of childcare. One would of course think of the functional dimension when hiring a solution — safely taking care of one’s children in a location and manner that works well in one’s life — but the choice probably relies more on emotional and social dimensions, such as who one will trust with one’s children.
It is important to note that we don’t create jobs, we discover them. Jobs are persistent and remain the same over time, but the way we solve them changes. Think of technology and how it has changed the job of teenagers communicating without the intervention of parents. The underlying job has not changed, but the solution has changed dramatically; from passing notes in class to Snapchat. They are two very different solutions, and that is exactly why it is dangerous to fall in love with a solution instead of falling in love with solving the underlying job.
Understanding and focusing on circumstance-specific hiring criteria triggers a whole new set of important insights of which a very notable one is that the competitive field is likely very different than first assumed.
“We compete with everything you do to relax (…) We compete with video games. We compete with drinking a bottle of wine. That’s a particularly tough one. We compete with other video networks, playing board games.”
— Netflix CEO, Reed Hastings
Companies will have to consider and shape their offerings around the experiences that consumers will seek in solving their jobs and help them surpass any barrier that gets in their way of making the desired progress.
Competitive advantages will be determined by who understands and solves their customers’ jobs the best. Because how could companies ever hope to create solutions that consumers will hire over all other potential products if they don’t know what they are really competing with?
Premium prices
By successfully identifying and deeply understanding the customers’ jobs and its competitors, companies will possess valuable information about how to design products and services that solve the job and the struggles it entails better than all existing solutions.
Such products and services are highly valued by customers, and they are consequently willing to pay premium prices for those solutions. It can thus be very profitable to invest in such market research.
But be aware that your findings are strongly influenced by the questions you ask. Identifying and deeply understanding the customers’ jobs does not rely on the tools you use, but what you are looking for.
Job Hunting — where do we find the jobs?
Starting to look for the right things does not necessarily mean already gathered data and research have to be discarded. However, asking the right questions and piecing the data and research together in the right way is key. Think of it as equipping a job lens; capturing the story of customers in their moments of struggle or desire for progress, which in turn will allow for a different understanding of the competitive landscape and the priorities and tradeoffs customers are willing to make.
Although jobs are everywhere around us, they can be difficult to see without the right approach. In other words, you will need a job-hunting strategy. Five approaches are presented below.
1. Competing with nothing — nonconsumption
First, and where the biggest potential lies, is what Christensen calls “nonconsumption.” Too often, companies consider only how they can gain market shares from competitors, but not where they can find overlooked demand. When there are no acceptable existing solutions that satisfy consumers’ jobs, they choose to do nothing about the unresolved job. This is exactly where highly successful companies like Airbnb have made breakthrough innovations, and thus where the biggest growth opportunities lie. You won’t see nonconsumption if you’re not looking for it, but if you find it, you will compete with nothing.
2. Finding a job close to home
Looking for a job in your everyday life can be a very useful approach, and the reason is simple. If you encounter a struggle that prevents you from resolving a job, chances are that other people have as well. In fact, some of the world’s greatest innovators have discovered poorly resolved jobs with inspiration from their own lives, such as when Sony co-founder Akio Morita introduced the Walkman.
3. Workarounds and compensating behaviors
Sometimes, customers are deeply unhappy with existing solutions to jobs they want to resolve very badly. They care about solving the job so badly that they bundle several solutions, creating their own to compensate for the poorly resolved job. These kinds of workarounds are golden opportunities for innovators just waiting to be seized. It requires deep understanding of the circumstance in which the customer struggles to utilize the huge potential that lies within workarounds and compensating behavior, but succeeding will in turn allow for charging premium prices.
4. Unusual uses
Companies can learn a lot by investigating unusual uses of long-established products. That is, when customers use them in ways that are different than the company had intended. By studying how customers use products for different purposes than initially intended, jobs that are hidden in plain sight can be identified and better products introduced for already-existing customers.
5. Look for what people don`t want to do
Finally, a great way of looking for customers struggling to make progress is looking for so called “negative jobs”. In contrast to “positive jobs,” negative jobs are those that customers don’t want to do. Honing in on what people don’t want to do is a great source of inspiration and provides plenty of innovation opportunities.
Hiring and firing solutions
Customers can’t always articulate their requirements accurately or completely — their motivations are often complex and the decision-making process complicated, and it starts way before entering the store. Despite the complexity, there are still some useful concepts to learn. There are always two opposing forces battling for dominance in the moment of choice: “forces compelling change” and “forces opposing change.”
The forces compelling change to a new solution
There are two forces pushing and pulling customers to change solutions. First, there has to be a significant frustration causing customers to want to take action. It might not be enough that the struggle is simply nagging or annoying the customer — it has to be substantial enough before the customer starts looking elsewhere.
The second force, the pull of an enticing new product or service, has to be present and has to solve the customer’s struggle for progress better than the current solution. Although the push of the current solution and the pull of another solution is where companies often direct their efforts, the forces opposing changes are not to be neglected.
The forces opposing changes
There are two unseen, yet incredibly powerful, forces at play that many companies ignore completely: the forces holding a customer back. First, customers are often stuck in the “habits of the present.” Even though their job is getting solved poorly, they’re comfortable with the solution and therefore stick with it, or they’re simply used to solving the job in a certain way. This has to do with the tendency of customers seeking to avoid losses, which is a stronger psychological driver than the allure of gains. Second is “anxiety of choosing something new.” The anxiety of the unknown is powerful, because customers worry that it will not be a better solution, or the solution will not work at all — the “What if…?”
Innovators too often focus on the forces compelling for change by trying to make sure the new solution is sufficiently resolving the customers’ struggles to cause them to switch, but completely ignoring the forces opposing that change. It is of course important to make a product compelling enough for customers to consider switching, but the opposing forces are important as well. There is almost always some kind of friction involved with switching from one solution to another. There is less friction for solutions with only functional dimensions, but when the decision involves “firing” a solution with emotional and social attachments, it is far harder to let go. That holds true even in the B2B market. A plant manager ordering supplies has be sure she can trust the supplier. If not, she might become anxious about looking bad or unprofessional in the eyes of her colleagues or even getting fired.
Disclaimer
This article is strongly inspired by “Competing against luck” by Clayton Christensen, Taddy Hall, Karen Dillon and David S. Duncan (2016). We believe the information relevant for any manager, and we strongly recommend reading the book itself to obtain a better understanding of customer choice. The following is a short description from the book:
After years of research, Harvard Business School professor Clayton Christensen and his coauthors Taddy Hall, Karen Dillon and David S. Duncan have come to one critical conclusion: Extensive data on customers is not the key to successful innovation and growth.
Customers don’t simply buy products or services; they “hire” them to do a job. Understanding customer jobs drives innovation success, and the “Jobs to Be Done” approach is used by some of the world’s most respected companies, including Amazon, Uber and Airbnb to name a few.
Christensen and his coauthors contend that by understanding what causes customers to “hire” a product or service, any manager can predict what innovations will succeed, creating products customers not only want to “hire,” but that they will pay premium prices to bring into their lives.
