In 1995, Clayton Christensen married two words that have stayed fruitfully coupled ever since. "Disruptive innovation"--the sexiest term to hit the management lexicon since Joseph Schumpeter's "creative destruction"--made the scene just as the internet was starting to bust things up. Not surprisingly, tech entrepreneurs adopted it as their rallying cry. If something was new then that meant it was disruptive, and if it was disruptive then it was better, and if it was better then victory was assured.
Readers of Christensen's The Innovator's Dilemma, however, know that the Harvard Business School professor had in mind something more nuanced than a manifesto on the triumph of novelty. Rather, "disruptive innovation" addresses how incumbents cope with saucy, under-resourced challengers who pierce their complacent underbellies with low-cost offerings that target overlooked customers. Christensen called the concept a "competitive response to an innovation." Essentially, it was about playing defense.
For new companies, on the other hand, defense is not a natural position. What entrepreneurs really need to know is how to find opportunities to innovate and create new products or services that will succeed. That's the subject of Christensen's just-released title, Competing Against Luck: The Story of Innovation and Customer Choice (Harper Business; read an excerpt), co-written with Taddy Hall, Karen Dillon, and David Duncan. In this book, Christensen introduces "jobs theory" as an effective way to frame the question of what customers want and will pay a premium for. Like the user-driven methodologies of design thinking and lean startup, jobs theory will likely become part of the thoughtful founder's strategy arsenal.
True to its unpretentious name, jobs theory is disarmingly simple. Innovation seekers start by identifying a customer's "job," which the authors define as "the progress she is trying to make in given circumstances." (Jobs have emotional and social as well as functional characteristics.) Then they cast or recast the company's offering as something customers "hire," or pull into their lives in order to achieve that progress. That shifts the focus from who customers are (the goal of target marketing) or what they do (the goal of field studies) to why they do it.
Defining customer jobs is one of those challenges that make smart management books read like mystery novels. Christensen and his co-authors pose confounding real-life business puzzles and then reveal--with a flick of some company leader's insight--the oh-so-satisfying solutions. Here the mysteries surround motives: "What causes a customer to purchase and use a particular product or service?" So, for example, OnStar evolved from a collection of nifty features to an integrated communications system for the car. But it really took off when developers defined the customer's job as to attain peace of mind when she is driving. Ikea is another example. The company doesn't target any specific demographic; rather, customers hire the company to "help me furnish my apartment today."
The jobs metaphor frames the trajectory of a customer's relationship with a product in intriguing ways. For instance, the initial purchase is a "big hire." Each time the customer uses that product thereafter is a "little hire." For companies that prize repeat business and reputation, little hires matter just as much as big ones. Often, when customers hire one product, they fire another. When mobile phones came along, wristwatches got their pink slips en masse.
Jobs exist within very specific contexts: "What do consumers care most about in that moment of trying to make progress?" That question may suggest a surprisingly disparate set of competitors for a new offering. When a smoker takes a cigarette break at work, in addition to the nicotine fix he is "hiring cigarettes for the emotional benefit of calming him down, relaxing him," the authors write. Outside in the designated smoking area, he may also look forward to hanging out with like-minded friends. Any cigarette brand will do that job for him. But so will Facebook.
Jobs theory essentially transforms products into services. "What matters is not the product attributes you rope together, but the experiences you enable to help your customers make the progress they want to make," the authors write.
In perhaps the single most important lesson for entrepreneurs, Christensen and his colleagues explain that jobs are discovered, not created. The book suggests several good hunting grounds. For example, there are opportunities for innovation wherever people cobble together workarounds, as Open Table understood when it solved the job (as the authors put it) of juggling multiple guests and restaurant choices with varying availability. Or consider things people don't want to do ("negative jobs" in the language of the book), such as taking a sick kid to the pediatrician on a busy workday. The founders of Quick MedX solved that job with a chain of walk-in clinics that quickly treat a defined set of common ailments. (Quick MedX eventually became CVS's MinuteClinic.)
On its own, "What job is our customer trying to accomplish?" stands as one of those great business questions that companies deploy to stimulate creative juices at the start of meetings. But Competing Against Luck doesn't just introduce a tool, it also lays out a program. Once a company identifies its product's job, it must organize around that job, for example by creating metrics that matter to the customer rather than focusing on those that improve efficiency or deliver a narrow outcome within a function. "When managers are focused on the customer's Job to Be Done, they not only have a very clear innovation effort but they also have a vital organizing principle for their internal structure," the authors write.
Christensen has been researching the ideas that undergird Competing Against Luck for two decades (in essence, searching for and refining the Job to Be Done of jobs theory.) In the process, he's uncovered some very successful companies that have deployed a version of the tool, even if they didn't realize they were doing so at the time. In the most successful cases, brands have become identified with the jobs customers have hired them to do. Among examples the authors cite are Intuit, Match.com, Keurig, Disney, and FedEx. Also Uber, which is widely heralded as a disruptive innovation, although technically that's wrong, as Christensen has patiently explained in other forums.
And then there's Christensen's personal favorite: Jack Bauer, the hero of the TV series 24. "When you need to save the world in 24 hours," Christensen writes, "Jack Bauer is your man."