I’m writing this book review from lockdown during the COVID-19 crisis. While so much is changing, it’s important to remember that in every disaster there is both risk and opportunity.
One thing that’s definitely true right now is that customer behavior has changed. Overnight. Completely.
It’s a hard thing to get your head around.
However, such huge behavioral shifts happening in literally a few days, are incredibly rare.
For once, you can see and feel the change happening, rather than it taking so long that you only realised later what was going on.
It’s immediately clear what customers are going to want for the next few months. It’s clear that businesses need to be conservative and yet kind, protective and yet community-spirited. It’s true that we will all need to be flexible and fleet of foot to serve those new customer needs.
Funny how, as this crisis started to unfold, I had already picked out “Competing Against Luck: The Story of Innovation and Customer Choice” by Clayton M Christensen for my review this month.
In it, he describes how innovation is normally a game of chance. That most models of innovation in business mean you are essentially competing against luck as to whether your product will fly or fail.
He argues instead for creating innovation through “jobs theory’. When a customer buys a product or service, Christensen says, they don’t actually want that product or that service. Instead they want to hire that product or service to complete a “job to be done.”
Given where we all currently find ourselves economically, the best thing we can all do is understand what “jobs” customers want done at the moment. It will change daily, as we find our way to a new normal. Let’s dive in…
Competing Against Luck: Top 5 takeaways
- Customers “hire” products to do jobs for them. We are all familiar with the concept of market disruption; one of the major case studies being Apple’s seismic iPhone disrupting Nokia and Blackberry. The theory goes that we should all try and disrupt ourselves before someone else does it for us. Christensen argues that the disruption concept is useful but it does not help companies know where to look for opportunities, or what kinds of products and services to create. So what does cause people to bring products or services into their lives? We need to ‘look for progress a person is trying to make in a particular circumstance.’ Jobs are not only functional but social and emotional too.
- Your competitive landscape shifts (often uncomfortably) when you view it through a Jobs to Be Done lens. Are you limiting yourself to only looking at your traditional competitors? If you widened your view of the market you might find a whole raft of new competitors but therefore a whole raft of new potential customers too. New markets, and refrain what you do brings fresh potential but are also challenging. However, reframing a market can mean that you change with one leap who your customers are, ie. BMW realized that customers want mobility in this new world, not necessarily to own a car. This widened their addressable market from just potential BMW buyers to anyone wanting to get themselves or others about – enveloping the electric car market, rental, car shares, taxi buyers and more.
- Are you competing with nothing? Many of us are actually competing with our customer, or potential customer doing nothing. In other words, if they don’t buy our product or service, they wouldn’t buy anything at all. We are basically a discretionary purchase and (especially in these times we find ourselves in) we need to remove all hurdles and friction along our customer journey to get them from awareness to purchase and then onto value right away.
- Look for the improvement in the customer’s life that matters the most to them in selecting the product, and organize around delivering that. Christensen makes the point that most companies organize around functions, geographies, product lines. However, the most successful companies, he says, organize around the job the customer wants done. He argues (and I agree wholeheartedly with this) that competitive advantage actually comes from a company’s unique processes, and the way it organizes itself to deliver the job for the customer. This is why IKEA’s secret weapon is the fact you can take their stuff away that day (job to be done is furnishing a room immediately so you can get on with other stuff) and one of Amazon’s many secret weapons are its many product reviews, allowing you to make a purchase with peace of mind on selection.
- Is your product being hired repeatedly, or just once? One of my favourite points in this book comes in the chapter “how to hear what your customers don’t say”. The author talks about how his wife might buy a dress (the big hire) but only actually consumes it when she cuts the tag off and wears it. (repeated little hires.) If a product really does the job, there will be repeated moments of consumption. Never has this been more true than now, when customers are scrutinising their purchases for ongoing value and finding many products not making the cut.
Competing Against Luck: Top 5 quotes
- “…businesses have never known more about their customers. The big data revolution has greatly increased the variety, volume and velocity of data collection, along with the sophistication of the analytical applied to it… Hopes for this data trove are higher than ever… Ever since Michael Lewis chronicled the Oakland A’s unlikely success in Moneyball organizations have been trying to find the equivalent of customer data that will lead to innovation success. Yet few have.”
- “It’s important to note that we don’t create jobs, we discover them. Jobs themselves are enduring and persistent, but the way we solve them can change dramatically over time. Think, for example of the job of sharing information across long distances. That underlying job has not changed, but our solutions for it have: from Pony Express to telegraph to air mail to email and so on.”
- “…from a Jobs Theory perspective, the competition is seldom limited to products that the market chooses to lump into the same category. Netflix CEO Reed Hastings made this clear when recently asked…if Netflix was competing with Amazon. “Really we compete with everything you do to relax… We compete with video games. We compete with drinking a bottle of wine… Playing board games.””
- “Rarely can customers articulate their requirements accurately or completely – their motivations are more complex and their pathways to purchase more elaborate than they can describe. But you can get to the bottom of it. What they hire – and equally important, what they fire – tells a story.”
- “Seemingly objective data about customer behavior is often misleading as it focuses exclusively on the Big Hire (when the customer actually. buys a product) and neglects the Little Hire (when the customer actually uses it). The Big Hire might suggest that a product has solved a customer’s job, but only a consistent series of Little Hires can confirm it.”
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Looking for more book reviews?
- 100 Practical Ways to Improve Customer Experience – a bookshelf asset to browse for models to help you solve certain challenges.
- Fanocracy: Turning Fans into Customers – an endearing way to point up some routes towards building fans for your company.
- The Ultimate Question 2.0 NPS – What was once a subject-broaching instructional book has become a portfolio of customer success stories and lessons learned.