Part1
Understanding customer needs though Jobs to be Done
In his seminal 1960 HBR article ‘Marketing Myopia’, Prof Theodore Levitt argued that companies are too focused on producing goods or services and don’t spend enough time understanding what customers want or need. Therefore, he encouraged executives to switch from a production orientation to a consumer orientation." People don’t want a quarter-inch drill, they want a quarter-inch hole”, as he often told his students at Harvard Business School.
60 years later in 2020, we still hear large companies talking about ‘trying’ to become customer-centric and make user-centric products. But as large companies get blindsided by unexpected competitors with more compelling services and experiences, the importance of customer experience in strategy has never been more critical for businesses.
Prof. Levitt’s wisdom has been shared in business journals and academic textbooks and even implemented occasionally for marketing, but seldom followed in its true spirit. While he didn’t essentially coin the term ‘Jobs to be done’ he did, in a somewhat incomplete sense describe the essence of it.
Origins aside, the credit for bringing JTBD into the mainstream imagination goes to another legendary HBS professor and management guru, the late Clayton Christensen, author of such iconic books like The Innovator’s Dilemma (where the now much-abused term ‘disruption’ was coined), The Innovators Solution, and Competing against Luck.
In this 2016 HBR article, he explains why large organizations have failed repeatedly at innovation.
“The theory of jobs to be done was developed in part as a complement to the theory of disruptive innovation — which at its core is about competitive responses to innovation: It explains and predicts the behavior of companies in danger of being disrupted and helps them understand which new entrants pose the greatest threats. But disruption theory doesn’t tell you how to create products and services that customers want to buy. Jobs-to-be-done theory does. It 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.”
“Most of the masses of customer data 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 caused another. And though it’s no surprise that correlation isn’t causality, we suspect that most managers have grown comfortable basing decisions on correlations.”
In the article, Prof Christensen doesn’t mince words when he says that the traditional ‘by numbers’ management style, with its obsession with collecting data and fitting the world in predictable models and archetypes has mostly misled organizations towards the edge of the innovation cliff. On the other hand, Jobs to be done, which is rooted in empathy, is a more causal perspective to understand customer’s underlying motivations and struggles.
While many definitions exist, JTBD ( Jobs To Be Done) is perhaps a more meaningful lens to look at customers and their ‘struggles’. It is a framework for viewing your products and solutions in terms of the jobs customers are trying to get done. In other words, the JTBD is the reason why your customers hire your product or service. It is a starting point for innovation and a critical element when devising strategy.
Case Study- One of the most famous examples of JTBD being applied is the ‘Milkshake Story’. In Competing against luck, Prof. Christensen shared how one time Mc Donald’s wanted to innovate their milkshake to increase the sales. First, they got their brilliant marketing team, world-class managers, and oceans of data to work on this. Then they identified the key demographics, set up focus groups to understand the mindset of customers, asked them what they could change about the taste, sizing, etc. to get them to buy more milkshake. Based on customer suggestions, they made the necessary changes. By conventional management standards, everything by the book.
And yet, there was hardly any effect on sales.
Eventually, they got Prof. Christensen’s team to work on this challenge. Here he tells the fantastic story in this short video interview.
Now keeping this milkshake example in mind, let’s apply this JTBD to the Levitt quote of wanting quarter-inch holes
You are a traditional drill manufacturer, you think you’re in the business of making holes in surfaces. Your competition is other drill makers, especially cheap imports. You have invested heavily in a distribution network over the years and hardware store relations. You even sell online on Amazon. Your idea of innovation will be a stronger, sharper, cheaper, durable drill bit, just as the feedback your customers have given.
But as a famous quote often misattributed to Henry Ford goes, “ If I had asked my customers what they wanted, they would have said faster horses”.
So while you’re figuring out to how to make your drills cheaper and yet stronger, out of nowhere comes a specialty chemicals company like 3M, which understands drilling holes isn’t an end to itself, but a task in pursuit of a larger objective, like decorating homes by displaying art or photographs. This opens more possibilities like this heavy-duty double-sided mounting tape, which even does away with the risk of handling a power tool.
And then, if you’re Samsung, you change the whole equation of experiencing art by launching a TV set like ‘The Frame’ which displays high-end museum-quality paintings when idle and makes an otherwise passive household appliance a visible piece of décor.
Chasing desirable outcomes is how you move out of the solution space and into a bigger context. Those who are stuck doing incremental innovation around faster, cheaper, stronger are going to get blindsided sooner than later.
Part 2 contd. here…
