Innovators need to stay focused on the progress they deliver to customers in solving their tasks. The company must have task-focused processes, culture, and metrics, as this book on innovation and customer choice explains.Madanmohan Rao
Many startups fail because they are unable to understand the customer’s needs properly. Many large enterprises fail when they are unable to understand how tech trends and market shifts have changed the customer’s tasks, or when they take their eyes off the customer’s tasks and focus more on internal metrics and bureaucracy.
It is not the customer who is at the centre of the business universe, but the customer’s tasks. Innovations get adopted not because of their features, but because they get the customer’s job or task done properly, as explained in the book Competing Against Luck: The Story of Innovation and Customer Choice, by Clayton M. Christensen, Karen Dillon, Taddy Hall, and David S. Duncan.
Innovators need to develop a clear picture of what customers are trying to accomplish, the obstacles they face in different contexts, why they would choose to buy and use the product or service, how this helps them progress in their journey, what their earlier existing choices and habits are, how they move away from these competitive offerings, and what tradeoffs are involved to make the switch.
Harvard Business School professor Clayton Christensen is the author of a range of innovation books (see our book review of The Innovators’ DNA here). Taddy Hall heads the Nielsen Breakthrough Innovation Project; Karen Dillon is the former editor of Harvard Business Review; and David Duncan is a senior partner at InnoSight.
Their book features innovation examples from Amazon, Intuit, Uber, Khan Academy, Airbnb, SnapChat, Kimberly Clark, BMW, CVS MinuteClinic, IKEA, Medtronic, Unilever, and GM OnStar. Other examples even look at how mattresses are bought, or how milkshakes serve different purposes for the same customer in different cases. For example, for a driver, milkshakes in the morning compete with breakfast bars and fruits in terms of substance, nutrition, and convenience. In the evening, milkshakes may compete with toys as gifts for the same customer’s kids.
Customer tasks exist in specific contexts or circumstances, and fulfillment must take place at functional, social, and emotional levels. (Broader issues of environmental impact and changing customer behaviour on ethical grounds are not addressed in the book.)
In earlier books, Clayton and his team have explained how disruptive innovation works when a new offering transforms a market by introducing simplicity, convenience, accessibility, and affordability, even when the new entrants are initially inferior.
In this book, the authors show how entrenched assumptions and mindsets come in the way of seeing new customer needs or capitalising effectively on them. For example, Hertz did not come up with a ride-sharing service like Zipcar; Kodak did not come up with social media like Facebook; major yogurt manufacturers understood the demand for Greek yogurt before Chobani was launched; and AT&T introduced a picture phone in 1964, way before the iPhone.
The 10 chapters of the book are spread across 250 pages, and make for a straightforward and informative read. Here are my three key sets of takeaways; see also my reviews of the related books Blue Ocean Shift, The Lean Startup Way, Disruptive Innovation, The Innovation Formula, and Connecting the Dots.
Innovators need to focus not just on big data, customer segmentation and persona, but a thorough understanding of ‘jobs theory’. Such a focus can help create predictable and replicable success, according to the authors.
The process to make progress by a customer is not a discrete event; there are multiple connected factors, which lead to functional, social and emotional complexity. Such a perspective can frame the right questions to ask, as well as competing offerings and even non-consumers.
It involves understanding the time, energy, money, and feelings that go into the sequence of steps in the customer journey. “You can learn a lot just by watching the customers you do – and don’t – already have. But you have to know what you’re looking for,” the authors advise.
They recommend looking out for awkward workarounds, unusual uses of products, and even avoided tasks. This calls for becoming “part sleuth and part documentary film maker”, piecing together the full context.
This examination should cover clues and observations about pain points, anxieties, and present habits, as well as loss aversion, impediments, or hindrances in switching solutions. “You are selling progress, rather than products,” Clayton and team keep advising.
“The insights that lead to successful new products look more like a story than a statistic,” the authors explain. The narratives are rich and complex, and reveal a range of emotional moments that underlie even what may seem to be impulsive purchases.
A key skill to have here is drawing out customer stories. Innovators need to have a “heat-seeking sensor” for the tensions, struggles, stress, imperfect experiences, and anxiety of the purchase and use of a new offering, as well as the switch from the earlier offering. This may yield a set of clustered insights, rather than a single eureka moment.
For example, AirBnB solves the problem of not just finding a place to stay, but getting an authentic, local, participatory experience. SnapChat meets the need for teens to share information without the nosy intervention of parents. Kimberly Clark designed adult diapers that didn’t look like diapers at all, allowing seniors to reclaim life activities without embarrassment.
Sargento offers ultra-thin cheese slices for ‘guilt-free’ consumption of cheese. Franklin Covey expanded from HR training to coaching services and strategy support. Intuit launched QuickBooks to meet the needs of SMEs who were using personal financial software Quicken as a workaround.
Netflix competes with anything that makes people relax, not just Amazon Prime. BMW realised that it is in the business of mobility, not just selling cars; it launched a car-sharing company called Drive Now.
Southern New Hampshire University designed online programmes for students who were not able to complete education earlier, or wanted a mid-career educational boost. It improved its inquiry response times, financial aid packages, and marketing messages to better target this segment.
A Detroit building company targeting retirees realised that it had to help them “move lives”, not just sell homes. It offered moving services, two years of storage space, and even on-premise sorting room space.
Khan Academy’s courses worked well because they were not unnecessarily complicated, were more fun, and helped students get through tough problems. ING Direct (sold to Capital One) offered online banking services for low income customers; it did away with requirements of minimum deposits.
Quick MedX and CVS MinuteClinic address the need of those who don’t want to go a doctor when they or their kids have only a minor ailment. Cold remedy Nyquil was also used by consumers to help get sleep; ZzQuil was created to fill this specific need. Arm & Hammer baking soda was used for a number of other purposes; identifying them helped spawn new ranges of products.
Listening to parents who bought P&G diapers in China helped the company pitch the product as something that helped children sleep better. It thus improved couples’ home life and relationship as well.
American Girl dolls are about “connection and empowering self-belief,” and meet the needs of parents as well as girls. The company publishes books about the back-story of each doll’s character and even ethnic background; the stores have doll hospitals and host parties.
The need and task of information sharing across long distances has not changed over the years; only the solutions have evolved, from post to digital messaging. Students go to campuses not just for education but for the coming-of-age experience; they also want to learn useful skills while not feeling like intellectual failures.
Once the full dimensions of tasks have been uncovered, the next steps are creating the desired experiences and integrating processes around the tasks. Some brands solve the customers’ tasks so well that they have become synonymous with that task or category, such as LinkedIn, Disney, and Uber. Some of these “purpose brands” have even become verbs, such as FedEx and Google.
IKEA’s shopping experience, store layout, product design, and packaging are designed to solve the task of furnishing the home as quickly and easily as possible. Foldable kits and assembly tools inside each kit are designed to help in this regard.
Medtronic’s pacemakers succeeded in India thanks to understanding the needs of patients, doctors and hospitals. The company offers screening clinics, loan programmes, and counsellor roles.
While car rental firms at airports compete on price and variety of vehicles, Uber focuses on the core need of passenger mobility. “Uber isn’t just competing with taxis and car services, it’s also competing with opting to take the subway home or calling a friend,” the authors explain.
Amazon offers consumers wide choice as well as access to reviews from a community of customers. More weight is given to newer reviews, reviews from verified purchasers, and reviews rated by consumers as helpful. Such information helps in choosing the right product, and also reassures consumers that they are not making the wrong choice.
“When competitors do enter markets that seem closed or commoditised, they do it by aligning with an important job that none of the established players has prioritised,” the authors explain, pointing to Pixar (studio) and Apple (tech brand) as examples.
Focusing on the customers’ tasks is the “North Star” guide for an organisation, and can help avoid “overshoot” into areas that customers don’t care about. Unfortunately, some brands veer away from their core offering and customer needs, the authors caution. Volvo as a brand used to represent safety, environment, and family, but lost its way by veering into flashier cars (after being bought by Ford).
Competitive advantage comes from integrating all processes and departments around customer jobs to be done. Such leadership, culture, and processes cannot be copied even when observed and widely documented by others, the authors explain, pointing to Toyota and Pixar as examples.
Technology may change the processes, but the focus for innovation guidelines must always be on the customers’ job and improvement in their lives. Rather than best practices, sub-routines of processes are a better organising principle for knowledge-sharing, the authors emphasise.
Innovators must avoid feature chase and “stack fallacy” (in the words of Anshu Sharma of Storm Ventures), or building unwanted layers of technology. Business metrics should focus not just on revenue, products shipped and delivered, or competitors, but on the benefits derived by customers. “It is easier to focus on efficiency rather than effectiveness,” the authors caution.
Other fallacies of innovation data are surface growth (features, copy-cat additions) and confirmation bias. All measured data are built on human bias and judgment, and managers should be clear on what data they are measuring in the first place.
“Whereas the subjectivity of data from field-based, ethnographic research is glaringly apparent, the subjective bias of numerical data hides behind its superficial precision,” the authors caution. The idea that only quantitative data is objective is a misconception, they rightly warn.
Surgical pioneer Dwight Harken came up with the concept of ICUs in hospitals to solve the patients’ problem of recovery from surgery. The V8 juice blend solves the customer task of eating enough vegetables, and does not compete with other juices. Amazon’s focus is on three key metrics: vast selection, low prices, and fast delivery, on a real-time basis.
General Motors OnStar is designed to provide peace of mind while driving; the wireless service goes beyond restaurant locator services to advice on operating a car when a defect is detected, or special services during natural disasters and accidents. The company’s wireless product development cycle moved faster than the usual automotive lifeycle, and it kept reinventing and reinforcing the offerings. Competitors like the Ford-Qualcomm joint venture WingCast were unable to match OnStar and shut down in two years, the authors explain.
Intuit’s TurboTax team used to ask customers for interview tool features, but then realised that customers would much rather prefer not to have such a tool anyway. The focus shifted to pre-loading data from other sources. The company acts like a “network of startups” with multiple small teams launching product pilots with minimal senior level approval.
A focus on customer tasks leads to clarity of purpose, distributed decision-making, unified culture, and employees who are inspired and empowered, the authors explain. It leads to more moments of shared learning and self-managing without being prompted, and gives a good balance between autonomy and alignment.
Unilever’s Lifebuoy soap is pitched to help children in emerging economies live beyond the age of five by eliminating germs via regular washing with soap; the soap changes colour after the necessary ten seconds of washing. In India, nearly 400,000 children under the age of five die each year from diarrheal disease (averaging more than a thousand deaths a day); Lifebuoy’s mission is to help save children’s lives in this regard.
Deseret News repositioned itself in the digital media world to avoid the “shock and awe” of breaking news and focus on analysis from the point of view of families and faiths. It also built online communities among its members through the FamilyShare Network.
The jobs theory provides causal explanations, and is complementary to and compatible with other methods like design thinking, the authors explain. It is described through actions and verbs, and not just adjectives and adverbs.
In sum, the construct of jobs serves as a “rallying cry” across the organisation to align it to solve customer tasks. In the long run, the authors even hope that such a task focus can help improve education so that children feel successful each day and not drop out or turn to drugs, or realign the health care system away from being only a “sick care” system.