Competing Against Luck: The Story of Innovation and Customer Choice
Tags: #business #innovation #customer experience #product development #marketing #strategy
Authors: Clayton M. Christensen, Taddy Hall, Karen Dillon, David S. Duncan
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Overview
In ‘Competing Against Luck’, I introduce the ‘Theory of Jobs to Be Done’ as a powerful framework for understanding customer behavior and driving successful innovation. This book argues that customers ‘hire’ products and services not for their features but for the ‘jobs’ they help them get done in their lives. These ‘jobs’ are multi-faceted, encompassing functional, emotional, and social dimensions, and are always framed by the specific circumstances in which they arise. This theory has profound implications for how companies approach innovation. It encourages them to shift their focus from developing ‘better’ products to deeply understanding the ‘progress’ customers seek and the obstacles they face in achieving it. The book provides practical guidance on ‘job hunting’— uncovering customer ‘jobs’ — as well as on crafting effective ‘job specs’ and building integrated processes and experiences around those jobs. It also highlights the importance of measuring success based on customer progress, rather than internal metrics. I show through real-world examples how companies like SNHU, American Girl, Intuit, OnStar, and Deseret News have achieved remarkable success by applying this jobs-focused approach. This book is a must-read for any leader or innovator seeking to break free from the frustration of hit-or-miss innovation. It offers a clear framework for understanding customer motivation and a powerful set of tools for creating products and services that customers will not only want to buy, but will be eager to ‘hire’ over and over again.
Book Outline
1. Introduction: Why You Should Hire This Book
Innovation is hard because we’ve been asking the wrong questions. Instead of focusing on creating perfect products, we need to deeply understand the ‘progress’ customers seek in their lives and how our innovations can help them achieve it. I introduce the ‘Theory of Jobs to be Done’ as the missing link in successful innovation, emphasizing that customers ‘hire’ products and services to get specific ‘jobs’ done in their lives. Data that simply shows customer characteristics or preferences is not enough; we need to understand the causal mechanism behind why a customer chooses a specific solution.
Key concept: The fundamental problem: the masses and masses of data that companies accumulate are not organized in a way that enables them to reliably predict which ideas will succeed. Instead the data is along the lines of “this customer looks like that one,” “this product has similar performance attributes as that one,” and “these people behaved the same way in the past,” or “68 percent of customers say they prefer version A over version B.” None of that data, however, actually tells you why customers make the choices that they do.
2. The Milk Shake Dilemma
This chapter delves deeper into the core concept of ‘Jobs to Be Done,’ using the milkshake dilemma as an example. Customers don’t simply buy milkshakes; they ‘hire’ them to fulfill specific jobs in their lives. These ‘jobs’ are framed by the circumstances in which they arise, such as a boring commute or a need to connect with children. The milkshake’s competition isn’t just other milkshakes, but a whole array of products that could fulfill the same job. By understanding the ‘job’ customers are trying to do, companies can create products that better meet their needs and stand out from the competition.
Key concept: What job did you hire that product to do?
3. Jobs in the Wild
To innovate effectively, you need to shift your focus from products to the ‘progress’ customers seek. Understanding a customer’s ‘job’ is more than just identifying their needs; it requires grasping the functional, social, and emotional dimensions of the progress they desire. This chapter further defines what a ‘job’ is (and isn’t) and emphasizes the importance of the circumstance in which the job arises. I use the example of margarine, illustrating how focusing on the ‘jobs’ customers hire it to do can unlock new growth opportunities.
Key concept: 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.
4. Job Hunting
This chapter provides practical guidance on ‘job hunting,’ or the process of uncovering customers’ ‘jobs’. While there isn’t a single right way to do it, this chapter outlines five helpful approaches: seeing jobs in your own life, finding opportunity in ‘nonconsumption,’ identifying workarounds, zoning in on things you don’t want to do, and spotting unusual uses of products. I emphasize the importance of approaching this process with a ‘beginner’s mind’ – a mindset free from preconceptions and open to new possibilities.
Key concept: 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.
5. How to Hear What Your Customers Don’t Say
This chapter stresses the importance of understanding the forces that both compel and oppose change when a customer considers hiring a new product or service. These forces often have strong emotional and social dimensions that companies frequently overlook. Customers can’t always articulate what they want, and even when they do, their actions may tell a different story. I also introduce the concept of the ‘Big Hire’ and the ‘Little Hire’, explaining that companies often focus too narrowly on the former without understanding the reasons behind the latter.
Key concept: Consumers are often stuck in the habits of the present — the thought of switching to a new solution is almost too overwhelming. Sticking with the devil they know, even if imperfect, is bearable.
6. Building Your Résumé
Uncovering a customer’s job is only the first step in successful innovation. You need to translate those insights into a ‘job spec’—a blueprint that details the functional, emotional, and social aspects of the progress a customer seeks, the tradeoffs they’re willing to make, and the obstacles that get in the way. I highlight the success of American Girl dolls, not because of the product itself, but because of the complete and integrated experience they offer. Companies need to think beyond product features and design solutions that truly address the entire job.
Key concept: 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.
7. Integrating Around a Job
This chapter emphasizes the importance of ‘processes’ in successful innovation. Processes are the invisible mechanisms by which organizations transform resources into value and deliver experiences that customers value. They are the invisible glue that holds successful, jobs-focused companies together. I use the example of Mayo Clinic, contrasting its highly integrated and customer-centric approach to healthcare with the fragmented and less effective processes of a traditional hospital. I also discuss the success of Toyota, whose open-door policy for competitors revealed the importance of processes rather than readily observable features or technologies.
Key concept: “If you can’t describe what you are doing as a process, then you don’t know what you are doing.”
8. Keeping Your Eye on the Job
This chapter focuses on how companies often lose sight of the customer job, even after successful launches. Three fallacies frequently trap companies: The Fallacy of Active Versus Passive Data, The Fallacy of Surface Growth, and The Fallacy of Conforming Data. I illustrate how V8 juice, after a successful campaign aligned with a job, gradually lost its focus and returned to competing in a crowded market. Understanding and addressing these fallacies is critical for sustained innovation success.
Key concept: 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.
9. The Jobs-Focused Organization
This chapter explores how focusing on customers’ Jobs to Be Done can transform an entire organization and its culture. I use the example of Intuit and its TurboTax product. When the company shifted its focus from improving the tax interview tool to the ultimate job customers were hiring TurboTax to do - ‘get my taxes done’ - it unlocked new levels of creativity and innovation. Jobs-focused organizations can empower employees at all levels, align resources effectively, and measure success based on customer progress rather than internal metrics.
Key concept: When everyone on the team understands that the goal is “taxes are done,” they’re all pulling in the same direction.
10. Final Observations About the Theory of Jobs
I express my enthusiasm for the transformative power of Jobs Theory, emphasizing that it provides a framework for understanding the causal mechanisms behind innovation success, thus removing luck from the equation. I acknowledge the limitations of the theory, emphasizing that it’s not a universal solution for every problem. Finally, I illustrate the breadth and depth of the theory by highlighting its application in various fields, including education, healthcare, and even personal life.
Key concept: That has been the aim of this book, too. If you know how innovation works—what truly causes innovation to succeed—your efforts don’t have to be left to fate.
Essential Questions
1. What is the ‘Jobs to Be Done’ theory and how does it change the way we think about innovation?
The core premise of this book is that successful innovation hinges on understanding the ‘jobs’ customers are trying to get done in their lives. Instead of focusing on product features or demographics, companies need to understand the progress customers seek and the circumstances in which they ‘hire’ products to help them achieve it. This involves identifying the functional, emotional, and social dimensions of their ‘jobs’ and understanding the forces that compel and oppose change.
2. How can companies uncover the ‘jobs’ that customers are ‘hiring’ their products to do?
This book provides practical strategies for uncovering customer ‘jobs.’ These include observing customers in their moments of struggle, identifying workarounds and compensating behaviors, paying attention to nonconsumption, and recognizing unusual uses of products. The key is to approach this process with a ‘beginner’s mind,’ free from preconceptions and open to discovering the often hidden complexities of customer motivations.
3. How can companies create successful solutions that go beyond just a product and encompass the entire ‘job’?
The book emphasizes that delivering a successful solution to a customer’s ‘job’ involves more than just creating a product. It requires designing and delivering a complete set of experiences - from purchase to use - that address all the dimensions of the job and overcome any obstacles customers face. This may involve rethinking pricing, distribution, customer service, and other aspects of the business model. The American Girl doll company exemplifies this principle, succeeding not because of the dolls themselves, but because of the rich and integrated experiences they offer.
4. How can companies organize themselves to become truly ‘jobs-focused’ and reap the benefits of this approach?
The book argues that organizing a company around ‘jobs’ can drive innovation and align employees toward a common purpose. This involves creating a culture where the customer’s job is central to decision-making, resource allocation, and performance measurement. Examples like SNHU, OnStar, and Intuit demonstrate how a jobs-focused approach can lead to better products, improved processes, and ultimately, a more successful organization.
5. What are the limits of Jobs Theory and when is it not the most appropriate framework?
The book acknowledges that while Jobs Theory is a powerful tool, it’s not a universal solution for every business challenge. It’s most effective when applied to situations where customers face significant struggles to make progress, and where emotional and social factors play a role in their choices. However, in situations involving purely rational decisions or technical specifications, other frameworks might be more appropriate.
Key Takeaways
1. Focus on the ‘progress’ customers seek, not just the product.
Customers care about the ‘progress’ they can make with your product, not the product itself. They ‘hire’ your product to get a specific ‘job’ done in their lives. This job often has social and emotional dimensions that go beyond the functional aspects of the product.
Practical Application:
An AI development team can apply this by not just focusing on developing the most advanced algorithms but also on understanding the specific ‘jobs’ users hire AI for. For instance, if building a chatbot for customer service, the focus should not just be on natural language processing, but also on understanding the emotional and social dimensions of a customer seeking help – are they frustrated, confused, or in a hurry? This can help design a chatbot that provides not just information but also empathy and a seamless, frustration-free experience.
2. Pay attention to the ‘Little Hire’ moments.
It’s crucial to understand not just when a customer buys your product (the ‘Big Hire’) but also how often they use it (the ‘Little Hire’). Consistent ‘Little Hire’ moments signal that your product is truly solving the customer’s ‘job’.
Practical Application:
An AI product manager for a music streaming service can utilize this by studying not just listening patterns but also by analyzing when users choose to ‘fire’ the service – are they switching to a competitor, or are they simply not listening to music at that time? Understanding the reasons behind these ‘Little Hire’ moments can lead to insights that drive product improvements, such as better playlist recommendations, personalized features, or seamless integration with other devices.
3. Understand and address the ‘anxiety of the unknown’.
Don’t underestimate the forces that hold customers back from adopting new solutions, particularly the ‘anxiety of the unknown’. Understanding and mitigating these anxieties is critical for driving adoption.
Practical Application:
An AI company developing self-driving car technology might initially focus on the functional aspects of transportation. However, by understanding the emotional anxieties that come with relinquishing control to a machine, they can design experiences that build trust and confidence. For example, providing transparent information about how the AI is making decisions, or offering the option for manual override in specific situations, can address these anxieties and make customers more comfortable ‘hiring’ a self-driving car.
4. Organize your company around customer ‘jobs’.
Organizing a company around customer ‘jobs’ can foster a culture of innovation, empower employees, and ensure that all efforts are aligned toward creating customer value.
Practical Application:
Instead of organizing an AI team around functional expertise (e.g., natural language processing, computer vision), consider structuring it around customer ‘jobs’. For instance, create teams dedicated to specific jobs like ‘help me find information quickly and reliably’ or ‘help me create compelling visual content’. This aligns incentives, fosters collaboration, and ensures that all efforts are directed toward solving the customer’s job.
5. Measure what matters to the customer.
Traditional metrics often focus on internal efficiency rather than customer outcomes. Shift your focus to measuring progress and success based on customer-centric metrics that reflect the value your product is creating in their lives.
Practical Application:
For example, instead of measuring an AI assistant’s success by the number of tasks completed, focus on metrics that reflect user satisfaction and progress. Measure how often users return to the assistant for help, how successfully they complete their desired tasks, and how satisfied they are with the experience. These metrics provide a more accurate picture of whether the AI is truly solving the customer’s ‘job’.
Suggested Deep Dive
Chapter: The Milk Shake Dilemma
This chapter effectively illustrates the core concept of the ‘Jobs to Be Done’ theory in a simple and memorable way. It provides a clear understanding of how understanding the ‘job’ customers hire a product to do can lead to insights that drive innovation and differentiation.
Memorable Quotes
Introduction: Why You Should Hire This Book. 8
“What job did you hire that product to do?”
How to Think, not What to Think. 37
“Theory has a voice, but no agenda.”
“We Get You”. 73
“When you are solving a customer’s job, your products essentially become services.”
“All of a Sudden You Can See the Path . . .”. 124
“Perspective is worth 80 I.Q. points.”
Purpose Brand. 144
“Your search is over, pick me!”
Comparative Analysis
Competing Against Luck aligns with the principles of design thinking and customer-centric innovation espoused in books like ‘The Lean Startup’ by Eric Ries and ‘Inspired’ by Marty Cagan. It shares the emphasis on deeply understanding customer needs and iteratively developing solutions. However, it goes a step further by providing a more concrete framework - the ‘Jobs to Be Done’ theory - for deciphering those needs. Unlike ‘Blue Ocean Strategy’ by W. Chan Kim and Renée Mauborgne, which focuses on creating uncontested market space, this book emphasizes understanding existing customer struggles, even in seemingly crowded markets. It shares common ground with ‘The Innovator’s Dilemma’ in acknowledging the challenges established companies face in responding to disruptive innovation. However, while ‘The Innovator’s Dilemma’ focuses on competitive response, ‘Competing Against Luck’ provides a more proactive framework for driving innovation by understanding the causal mechanism of customer choice.
Reflection
Competing Against Luck presents a compelling argument for adopting a jobs-focused approach to innovation. However, the book might be overly optimistic in assuming that identifying the ‘job’ is the silver bullet for innovation success. In reality, executing on a job-spec involves navigating numerous organizational and market complexities. The book focuses heavily on anecdotes and qualitative examples, which are illustrative but may not always represent statistically significant trends. Additionally, while emphasizing the importance of emotional and social dimensions, the book might downplay the role of rational factors like price and functionality in customer decision-making. Despite these caveats, the book offers a valuable framework that can help companies shift their perspective and create products and services that better meet customer needs. Its emphasis on understanding the causal mechanism behind customer choice is a crucial contribution to the field of innovation.
Flashcards
What is a ‘job’ in the context of the Jobs to Be Done theory?
The progress that a person is trying to make in a particular circumstance.
What is the core concept of the Jobs to Be Done theory?
Customers don’t simply buy products; they ‘hire’ them to do specific jobs in their lives.
What are the three dimensions of a ‘job’ that companies need to consider?
They are the functional, social, and emotional dimensions.
What is a ‘job spec’?
A blueprint that outlines the functional, emotional, and social aspects of the progress a customer seeks, the tradeoffs they’re willing to make, and the obstacles that must be overcome.
What is the Fallacy of Active Versus Passive Data?
The tendency of managers to focus on internal metrics and data about their products and operations, rather than on data that reveals the underlying ‘jobs’ customers are trying to do.
What is the Fallacy of Surface Growth?
When companies make big investments in customer relationships and focus their efforts on selling more products to existing customers, rather than on deeply understanding and solving the core job better.
What is the Fallacy of Conforming Data?
When managers focus on generating data that conforms to their preexisting business models, rather than on data that challenges those models and reveals new opportunities.
What is a ‘purpose brand’?
A brand that becomes synonymous with a specific job in customers’ minds.