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October 7, 2016

Editor's Choice: Competing Against Luck: The Story of Innovation and Customer Choice

By: Dylan Schleicher @ 11:15 AM – Filed under: Innovation & Creativity, Leadership & Strategy

Competingagainstluck

Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen, Taddy Hall, Karen Dillon, and David S. Duncan, HarperBusiness, 288 pages, $29.99, Hardcover, October 2016, ISBN 9780062435613

Clayton Christensen’s theory of disruptive innovation has been one of the most powerful ideas in business for the past two decades. It is so influential that it’s hard to make it through a conversation about business without the words “disruption” or “innovation” being dropped. But, as Christensen notes in his new book, Competing Against Luck, there is one thing that that theory can not do:

 

The theory of disruptive innovation does not tell you where to look for new opportunities. It doesn’t predict or explain how, specifically, a company should innovate to undermine the established leaders or where to create new markets. It doesn’t tell you how to avoid the frustration of hit-and-miss innovation—leaving your fate to luck. It doesn’t tell you how to create products and services that customers will want to buy—and predict which new products will succeed.

 

But the Theory of Jobs to Be Done does.

 

“Theory of Jobs to Be Done” does not roll of the tongue as easily as “creative disruption” (“Jobs Theory” for short makes it more palatable), but it is, in my opinion, of even more foundational importance to a company’s existence. 

The theory of disruption concerns itself (and those who use it) with how to construct a competitive response to disruptive innovation. Jobs Theory shifts the focus to the act of creation—how to actually go about innovation in companies both large and small. But there is an even bigger shift…

Creative disruption was about how to respond to your competition, while Jobs Theory is about how to respond to your customers. And, with that shift comes a fundamental change in thinking about what your company does, from manufacturing a product or service, to making progress in your customers’ lives:

 

There is a simple, but powerful, insight at the core of our theory: customers don’t buy products or services; they pull them into their lives to make progress.

 

Or as the popular maxim states: “people don’t want to buy a quarter-inch drill; they want a quarter-inch hole.”

Although it’s not primarily about competition, this new theory will actually help broaden the category of people you’re competing against. Using Jobs Theory, you’ll look beyond companies with similar products to what your customer is using your product to accomplish in their lives. In that sense, Facebook may compete with Twitter as a social media company, but it also competes with cigarettes for the job of taking a break from work. Netflix competes not just with Amazon and other video streaming services, but also competes, as Netflix CEO Reed Hastings has said, with “everything you do to relax.”

Another dynamic at work in Jobs Theory is that, when you frame“innovation challenges through the lens of jobs customers are trying to get done,” you’ll realize that the jobs your products are being “hired” to do can vary from customer to customer. In the case of the milkshake, you have commuters with long drives ahead of them in the morning that want something easy to hold, lasts a long time, and fills them up, which is a different job than that of a father coming in the afternoon, who is “hiring” the milkshake to provide a special occasion for their child.

So, perhaps counterintuitively, your focus is not necessarily be on improving your product, per se. Rather, you focus on improving how well it performs the job your customers are hiring it to do. 

Here I think it is necessary to say that there is really no easy way to fully explain Jobs Theory—its multiple layers, the acute observation, identification, and understanding of the “Job to Be Done” that is just the beginning of the process, and how to integrate it not only into the culture of your company, but into the customer experience you are designing (both in purchase and use)—in the space I have here. It is academic in nature, and it is going to take a lot of hard work to put it into practice in a meaningful, consistent, and sustainable way.

That said, Christensen and his coauthors do make it easy to understand. The writing is clear, the ideas are well illustrated with diverse examples, and the chapters all end with key takeaways and questions for leaders to begin putting the pieces together and a plan in place. So while it is by no means pedestrian, it is perfectly understandable and, more importantly, actionable. And that it is important because the word “innovation” is thrown around so often, and so loosely, that it has become essentially meaningless. What Christensen and company have done is rescue the word by turning innovation into an executable process. Just as the ideas of W. Edwards Deming and Joseph Juran sparked a quality revolution in automobile manufacturing in Japan that has spread around the world, the authors think their ideas can spark a quality revolution in innovation, and take errors and dumb luck out of the equation. We accept failures in innovation just as we used to accept flaws and failures in our automobiles—as the unavoidable result of a complex process. But with the right toolbox, we can take the errors out of that process, just as we did in manufacturing a generation ago.

It all starts with the right theory. It doesn’t require being an expert in any specific field, as much as it requires asking the right questions. And as someone whose opinion is highly sought after, Christensen helps people ask those questions, even in arenas he has no expertise in, because, as he puts it:

 

I’m able to provide insight because there is a toolbox full of theories that teach me not what to think but rather how to think.

 

In Competing Against Luck, he helps you do the same. One thing I love about the book is that it doesn’t just ask you to change the way you think about business, it helps you change the way you view the world. Yes, you’ll read about Uber and Airbnb, but you’ll also learn a little bit more about how Louis Pasteur and Nicolaus Copernicus changed and expanded basic human understanding of the reality of the universe we inhabit. And even the contemporary examples aren’t limited to the usual suspects. There’s a housing developer in Detroit that realized that their job wasn’t actually selling homes, but to help people move their lives from bigger homes to smaller ones as they downsized after retiring or divorce. There is Southern New Hampshire University, which used Jobs Theory to turn a sleepy regional college into an online education powerhouse by shifting their online faculty’s focus to the working parents, members of the military, and first-generation college students that needed them. The great lesson of SNHU is that when you broaden your view of the competition, you may realize, as SNHU president Paul LeBlanc did, that their competition was “nonconsumption.” So, on top of their traditional strategy of competing with other area colleges for the roughly three thousand students coming out of high school that they enroll every year, they changed the way their College of Online and Continuing Education operated, changed how they recruited and who they recruited, how they communicated with those students and supported them, and they now have “more than seventy-five thousand students in thirty-six states and countries around the world.” Many, if not most, of those students are people who would have never furthered their education without the innovative, agile, and understanding programs and staff SNHU made available and proactive in helping these students reach their goals.

What that example helps illustrate is just how many jobs out there to be done—even in institutions we consider stodgy or anitquated. And they are jobs that not only help build more successful organizations, but that help people make progress in their lives, and help make the world work better as a whole. So, I guess all that’s left to say is… get job-hunting.


About Dylan Schleicher


Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.