Why is innovation so hard to predict—and sustain? Because we haven’t been asking the right questions. Despite the success and enduring utility of disruption as a model of competitive response, it does not tell you where to look for new opportunities. It doesn’t provide a road map for where or how a company should innovate to undermine established leaders or create new markets. But the Theory of Jobs to Be Done does.
Why is success so hard to sustain?
That question nagged at me for years. In the early years of my career, I had the opportunity to work closely with many companies that were in trouble, first as a consultant for Boston Consulting Group and then as the CEO of my own company, CPS Technologies, a company I founded with several MIT professors to make products out of a set of advanced materials they had developed. And I witnessed firsthand how a lot of smart people were unable to fix the problems of once-great companies. At that same time, I watched the rise of a local Boston company, Digital Equipment Corporation (DEC), as it became one of the most admired in the world. Whenever you read explanations about why it was so successful, inevitably its success was attributed to the brilliance of the company’s management team. Then about 1988 Digital Equipment fell off the cliff and began to unravel very quickly. When you then read explanations about why it had stumbled so badly, it was always attributed to the ineptitude of the management team, the same folks running the company who had earned unfettered praise for so long.
For a while, the way I framed it was, “Gee, how could smart people get so stupid so fast?” And that is the way most people accepted the demise of DEC: somehow the same management team that had its act together at one point was out of its league at another. But the “stupid manager” hypothesis really didn’t hold up when you considered that almost every minicomputer company in the world collapsed in unison.
So when I returned to Harvard Business School (HBS) for my doctorate, I brought with me a set of puzzles to try to answer as an academic. Was there something other than bad management that played a key role in the demise of these great companies? Were they only successful in the first place because they’d gotten lucky in some way? Had these incumbents fallen behind the times, relied on antiquated products, and just lost their step as more nimble competitors appeared? Was the creation of new successful products and businesses intrinsically a crapshoot?
But after diving into my research, I realized that my initial assumptions were wrong. What I found was that even the best professional managers—doing all the right things and following all the best advice—could lead their companies all the way to the top of their markets and then fall straight off a cliff after arriving there. Nearly all the incumbents in the industry I studied—disk drive manufacturers—were eventually beaten by new entrants with cheaper and initially far inferior offerings—what I called “disruptive innovations.”
That work led to my theory of disruptive innovation,1 which explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost have become the status quo—eventually completely redefining the industry.
At its core, it’s a theory of competitive response to an innovation. It explains and predicts the behavior of companies in danger of being disrupted, providing insight into the mistakes incumbent leaders make in response to what initially seem to be minuscule threats. It also provides a way for incumbents to predict what innovations on the horizon are likely to be the greatest disruptive threats. But over the past two decades, the theory of disruption has been interpreted and misapplied so broadly as to mean anything that’s clever, new, and ambitious.
But 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.
In the mid-1990s, two consultants from Detroit asked if they could visit my office at Harvard Business School to learn more about my then newly published theory of disruptive innovation. Bob Moesta and his partner at the time, Rick Pedi, were developing a niche business advising bakeries and snack-food companies on developing new products that people would predictably buy.
As we discussed the theory of disruption, I could see that it predicted very clearly what the established companies in the market would do in the face of an impending disruption from small bakers and snack-food companies. In that regard, it offered a clear statement of cause and effect. But as we talked, it became apparent that the theory of disruption did not provide a roadmap for their clients. The theory of disruption does not offer a clear and complete causal explanation of what a company should do offensively to be successful: if you do this and not that, you will win. In fact, I realized that even if a company has the intent to disrupt a vulnerable incumbent, the odds of creating exactly the right product or service to achieve that are probably less than 25 percent. If that.
For years, I’d been focused on understanding why great companies fail, but I realized I had never really thought about the reverse problem: How do successful companies know how to grow?
It wasn’t for months that I finally had an answer. Moesta shared with me a project for a fast-food chain: how to sell more milk shakes. The chain had spent months studying the problem in incredible detail. It had brought in customers that fit the profile of the quintessential milk shake consumer and peppered them with questions: “Can you tell us how we can improve our milk shakes so you’d buy more of them? Do you want it cheaper? Chunkier? Chewier? Chocolatier?” Even when customers explained what they thought they would like, it was hard to know exactly what to do. The chain tried many things in response to the customer feedback, innovations specifically intended to satisfy the highest number of potential milk shake buyers. Within months, something notable happened: Nothing. After all the marketers’ efforts, there was no change in sales of the chain’s milk shake category.
So we thought of approaching the question in a totally different way: I wonder what job arises in people’s lives that causes them to come to this restaurant to “hire” a milk shake?
I thought that was an interesting way to think about the problem. Those customers weren’t simply buying a product, they were hiring the milk shake to perform a specific job in their lives. What causes us to buy products and services is the stuff that happens to us all day, every day. We all have jobs we need to do that arise in our day-to-day lives and when we do, we hire products or services to get these jobs done.
Armed with that perspective, the team found itself standing in a restaurant for eighteen hours one day, watching people: What time did people buy these milk shakes? What were they wearing? Were they alone? Did they buy other food with it? Did they drink it in the restaurant or drive off with it?
It turned out that a surprising number of milk shakes were sold before 9:00 a.m. to people who came into the fast-food restaurant alone. It was almost always the only thing they bought. They didn’t stop to drink it there; they got into their cars and drove off with it. So we asked them: “Excuse me, please, but I have to sort out this puzzle. What job were you trying to do for yourself that caused you to come here and hire that milk shake?”
At first the customers themselves had a hard time answering that question until we probed on what else they sometimes hired instead of a milk shake. But it soon became clear that the early-morning customers all had the same job to do: they had a long and boring ride to work. They needed something to keep the commute interesting. They weren’t really hungry yet, but they knew that in a couple of hours, they’d face a midmorning stomach rumbling. It turned out that there were a lot of competitors for this job, but none of them did the job perfectly. “I hire bananas sometimes. But take my word for it: don’t do bananas. They are gone too quickly—and you’ll be hungry again by midmorning,” one told us. Doughnuts were too crumbly and left the customers’ fingers sticky, making a mess on their clothes and the steering wheel as they tried to eat and drive. Bagels were often dry and tasteless—forcing people to drive their cars with their knees while they spread cream cheese and jam on the bagels. Another commuter confessed, “One time I hired a Snickers bar. But I felt so guilty about eating candy for breakfast that I never did it again.” But a milk shake? It was the best of the lot. It took a long time to finish a thick milk shake with that thin straw. And it was substantial enough to ward off the looming midmorning hunger attack. One commuter effused, “This milk shake. It is so thick! It easily takes me twenty minutes to suck it up through that thin straw. Who cares what the ingredients are—I don’t. All I know is that I’m full all morning. And it fits right here in my cup holder”—as he held up his empty hand. It turns out that the milk shake does the job better than any of the competitors—which, in the customers’ minds, are not just milk shakes from other chains but bananas, bagels, doughnuts, breakfast bars, smoothies, coffee, and so on.
As the team put all these answers together and looked at the diverse profiles of these people, another thing became clear: what these milk shake buyers had in common had nothing to do with their individual demographics. Rather, they all shared a common job they needed to get done in the morning.
“Help me stay awake and occupied while I make my morning commute more fun.” We had the answer!
Alas, it wasn’t that simple.
Turns out that plenty of milk shakes are purchased in the afternoon and evening, outside of the context of a commute. In those circumstances, the same customers could hire a milk shake for a completely different job. Parents have had to say “no” to their children about any number of things all week long. “No new toy. No, you can’t stay up late. No, you can’t have a dog!” I recognized that I was one of those dads, searching for a moment to connect with my children. I’d been looking for something innocuous to which I could say “yes”—so I can feel like a kind and loving dad. So I’m standing there in line with my son in the late afternoon and I order my meal. Then my son pauses to look up at me, like only a son can, and asks, “Dad, can I have a milk shake, too?” And the moment has arrived. We’re not at home where I promise my wife to limit unhealthy snacks around mealtime. We’re in the place where I can finally say “yes” to my son because this is a special occasion. I reach down, put my hand on his shoulder, and say, “Of course, Spence, you can have a milk shake.” In that moment, the milk shake isn’t competing against a banana or a Snickers bar or a doughnut, like the morning milk shake is. It’s competing against stopping at the toy store or my finding time for a game of catch later on.
Think about how different that job is from the commuter’s job—and how different the competition is for getting those jobs done. Imagine our fast-food restaurant inviting a dad like me to give feedback in one of its customer surveys, asking the question posed earlier: “How can we improve this milk shake so you buy more of them?” What is that dad going to tell them? Is it the same thing that the morning commuter would say?
The morning job needs a more viscous milk shake, which takes a long time to suck up during the long, boring commute. You might add in chunks of fruit, but not to make it healthy. That’s not the reason it’s being hired. Instead, fruit or even bits of chocolate would offer a little “surprise” in each sip of the straw and help keep the commute interesting. You could also think about moving the dispensing machine from behind the counter to the front of the counter and providing a swipe card, so morning commuters could dash in, fill a milk shake cup themselves, and rush out again.
In the afternoon, I’m the same person, but in very different circumstances. The afternoon, placate-your-children-and-feel-like-a-good-dad job is very different. Maybe the afternoon milk shake should come in half sizes so it can be finished more quickly and not induce so much guilt in Dad. If this fast-food company had only focused on how to make its product “better” in a general way—thicker, sweeter, bigger—it would have been focusing on the wrong unit of analysis. You have to understand the job the customer is trying to do in a specific circumstance. If the company simply tried to average all the responses of the dads and the commuters, it would come up with a one-size-fits-none product that doesn’t do either of the jobs well.
And therein lies the “aha.”
People hired milk shakes for two very different jobs during the day, in two very different circumstances. Each job has a very different set of competitors—in the morning it was bagels and protein bars and bottles of fresh juice, for example; in the afternoon, milk shakes are competing with a stop at the toy store or rushing home early to shoot a few hoops—and therefore was being evaluated as the best solution according to very different criteria. This implies there is likely not just one solution for the fast-food chain seeking to sell more milk shakes. There are two. A one-size-fits-all solution would work for neither.
For me, framing innovation challenges through the lens of jobs customers are trying to get done was an exciting breakthrough. It offered what the theory of disruption couldn’t: an understanding of what causes customers to pull products or services into their lives.
The jobs perspective made so much sense to me, intuitively, that I was eager to test it with other companies struggling with innovation. That soon came in an unexpected form. It was margarine—what was unglamorously known in the industry as the “yellow fats”—that provided the opportunity. Shortly after we worked through the milk shake dilemma, I was preparing for a visit from Unilever executives to my classroom at Harvard Business School. Among other goals for the week was to discuss innovation in the margarine category, at the time a multibillion-dollar business. Unilever commanded something like 70 percent of the market in the United States. When you have such a large market share and you already have created a wide variety of margarine-type products, it’s difficult to see from where growth can possibly come. I was optimistic that Jobs Theory would offer Unilever a chance to rethink its potential for growth, but that’s not what happened. In fact, Unilever’s dilemma helped me understand why one of the most important principles in innovation—what causes customers to make the choices they do—doesn’t seem to get traction with most organizations.
Here’s how it played out: Inspired by our milk shake insights, my daughter Ann and I sat in our kitchen thinking about what job we might hire margarine to do. In our case, it was often hired to wet the popcorn just enough for the salt to stick. But not nearly as well as the better-tasting butter. So we headed into the field to our local Star Market to see if we could learn more about why people buy this substitute for butter. We were immediately struck by the overwhelming variety of products available. There were something like twenty-one different brands of margarine right next to its nemesis, butter. We thought we understood the basic benefits of margarine: with its lower fat content, it might have been considered healthier at the time.2 And it was cheaper than butter. Yes, those twenty-one options were slightly different, but those differences seemed focused only on improving an attribute—percentage of fat—that was irrelevant to any job we would hire margarine to do. As we stood there watching which choices people made, we couldn’t quite figure out why people would choose one over the other. There was no obvious correlation between the demographic of the shoppers and their choices, as had been the case with milk shakes.
We watched people make their selections and asked ourselves, “What job are we seeing?” The longer we stood there, the clearer it became that the decision wasn’t quite as simple as margarine versus butter. Standing in the cold foods aisle, we realized we weren’t even seeing all of margarine’s possible competitors. Margarine could be hired for the job of “I need something that moistens the crust on my bread so that it is easier to chew.” Most margarine and butters are so hard that they tear apart the bread—giving you a big chunk of fat in the middle of the bread that already is easy to chew and doesn’t spread well to the periphery where it needs to be moist. Competitors for that job could include butter, cream cheese, olive oil, mayonnaise, and so on, although all are, in my opinion, essentially tasteless.3 Or was margarine being hired for a completely different job—help me not to burn my food when I’m cooking. Competitors for that job would include Teflon and nonstick cooking spray, products that were in two completely different aisles, neither of which I could see from the cold foods section.
When you consider the market for margarine from the perspective of what it was actually competing with in consumers’ minds, new avenues for growth open up. When a customer decides to buy this product versus that product, she has in her mind, a kind of résumé of the competing products that makes it clear which does her job best. Imagine, for example, writing a résumé for every competing product. Butter—the product that we originally thought was margarine’s prime competitor—might be hired to flavor food. But it’s not always margarine’s competitor. You can also write a résumé for Teflon. For olive oil. For mayonnaise. People might hire the same product to do different jobs at different times in their lives—much like the milk shake. Unilever might have had a large share of what marketers have defined as the yellow fats business, but no customer walks into the store saying, “I need to buy something in the yellow fats category.” They come in with a specific Job to Be Done.
We may not have correctly identified all the other products margarine was competing with that day in our local grocery store, but one thing became clear: seen through the lens of Jobs to Be Done, the market for margarine was potentially much larger than Unilever may have previously calculated.
I was so sure of the power of this insight that we presented this thinking to the Unilever executives who came to HBS for the executive education program. I suggested that if they could determine all the jobs customers were hiring margarine to do, they might think about how to grow the business differently.
Alas, the conversation did not go well. Perhaps we didn’t have the right language at the time to explain our thinking, but the Unilever executives in the room were not moved by what we were trying to say. I actually called an early break and suggested we just move on to a new topic. We didn’t revisit the subject of Jobs to Be Done.
I have no doubt that the Unilever executives in the room that day were seasoned, sophisticated leaders. But their tepid response made me wonder how many companies are operating within such fixed assumptions about how to think about innovation that it’s difficult to step back and assess whether they’re even asking the right questions. Executives are inundated with data about their products. They know market share to the nth degree, how products are selling in different markets, profit margin across hundreds of different items, and so on. But all this data is focused around customers and the product itself—not how well the product is solving customers’ jobs. Even customer satisfaction metrics, which reveal whether a customer is happy with a product or not, don’t give any clues as to how to do the job better. Yet it’s how most companies track and measure success.
In the years since the Unilever executives visited Harvard, the yellow fats business (more recently called “spreads”) has not fared particularly well. I have only an outsider’s perspective, but as far as I can tell, Unilever more or less pursued the same strategy it had pursued for margarine in 1997: it continued to differentiate its products in traditional ways. By the mid-2000s, butter surpassed margarine in American households—in part due to health concerns about the trans fats in margarine.4 Margarine has yet to recover. By 2013 one analyst went so far as to suggest that Unilever put its spreads category on notice to be fired. “We question whether it’s getting to the stage when Unilever needs to start considering disposal in this persistently disappointing category,” Graham Jones, executive director of equity research for consumer staples at Panmure Gordon, wrote. By the end of 2014 Unilever announced its intention to separate its struggling spreads division into a stand-alone company to help stabilize sales in a business that had become a drag on overall growth as margarine fell out of favor with shoppers. By early 2016 the head of Unilever’s margarine group was replaced and speculation about Unilever’s future in the margarine business was renewed.
By contrast, the global olive oil market is one of the fastest growing in the food industry. Unilever is a world-class company that’s done a lot of things right in the past two decades. But I can’t help but wonder how a different lens on the competitive landscape may have altered Unilever’s path.
That experience made me realize that part of the problem is that we’re missing the right vocabulary to talk about innovation in ways that help us understand what actually causes it to succeed. Innovators are left to mix, match, and often misapply inadequate concepts and terminology designed for other purposes. We’re awash in data, frameworks, customer categories, and performance metrics intended for other purposes on the assumption that they’re helpful for innovation, too.
As an academic, I fear we must take some of the blame. In business schools we teach myriad forms of analytics—regression, factor analysis, principal components analysis, and conjoint analysis. There are courses on marketing at the bottom of the pyramid and on marketing for not-for-profit organizations. For years, a popular course at HBS was one in which PET brain scanners showed how different advertising images affected the flow of blood in the brain. But we haven’t given students in our classrooms and managers on the front lines of innovation the right tools, forcing them to borrow and adapt tools intended for other purposes. And in spite of all this, a lot of innovation effort is ultimately assumed to be a consequence of good luck anyway. How often do you hear a success dismissed as simply the right product at the right time? We can do better than that.
I’ve spent the last two decades trying to refine the Theory of Jobs to Be Done so that it actually helps executives transform innovation. There are a handful of aficionados who have also focused on Jobs Theory, including the partners at Innosight, a strategy-and-growth consulting firm I founded, and Bob Moesta, whose consulting work now focuses exclusively on Jobs Theory. Innosight senior partner David Duncan and Nielsen’s Taddy Hall, two of my coauthors on this book, have both used the theory on an almost daily basis with their clients for years. Together, with the help of colleagues and thought-leaders whose perspective we deeply value, we’ve shaped the theory that we offer here.
We recognize that there are other voices in the developing “Jobs” space and we welcome that conversation. We might all use slightly different words or emphasize slightly different methods of divining the right solutions for jobs, but we hope this book serves to create a common language around the Theory of Jobs to Be Done so that we can strengthen and improve our collective understanding. At its heart, we believe Jobs Theory provides a powerful way of understanding the causal mechanism of customer behavior, an understanding that, in turn, is the most fundamental driver of innovation success.
If you consider some of the most surprising innovation successes in recent years, I’ll wager that all of them had implicitly or explicitly identified a Job to Be Done—and offered a product or service that performed that job extremely well. Consider the exponential success of Uber, which has succeeded remarkably despite staunch resistance from entrenched, government-backed competitors. As we’ll discuss later in the book, what Uber did was recognize and then nail the unsatisfactorily filled job of urban transportation.
It is always tempting to look at innovation success stories and retrofit the explanation for why it succeeded (though I do believe that a well-defined job was implicitly at the core of most innovation success stories in history). But we don’t intend to rely on looking at those successes in hindsight. Instead, we will illustrate how the theory (which we’ll explain fully in the chapters ahead) can fundamentally improve innovation—making it both predictable and replicable through real-world examples of companies that consciously used Jobs to Be Done to create breakthrough innovations. The value of Jobs Theory to you is not in explaining past successes, but in predicting new ones.
You may be asking, if Jobs Theory is so powerful, why aren’t more companies using it already? First, as we’ll explain later, the definition of what we mean by a job is highly specific and precise. It’s not an all-purpose catchphrase for something that a customer wants or needs. It’s not just a new buzzword. Finding and understanding jobs—and then creating the right product or service to solve them—takes work.
There are multiple layers to the Jobs Theory construct to ensure that you create products that customers will not only want to buy, but also products they’re willing to pay premium prices for, as we’ll discuss throughout this book. Identifying and understanding the Job to Be Done is key, but it’s just the beginning.
After you’ve uncovered and understood the job, you need to translate those insights into a blueprint to guide the development of products and services that customers will love. This involves creating the right set of experiences that accompany your product or service in solving the job (as we’ll discuss more fully in chapter 6). And finally you have to ensure that you have integrated your company’s internal capabilities and processes to nail the job consistently (chapter 7). Creating the right experiences and then integrating around them to solve a job, is critical for competitive advantage. That’s because while it may be easy for competitors to copy products, it’s difficult for them to copy experiences that are well integrated into your company’s processes.
But to do all this well takes a holistic effort—from the original insight that led to the identification of the job all the way through to the product finding its way into the hands of a consumer—involving the decisions and influence of virtually everyone in the company. Even great innovators who are crystal clear on the jobs their customers are hiring their products and services to do can easily lose their way. Pressures of return on net assets (RONA), well-intended efficiency drives, and decisions made every day on the front lines of business can have a profound effect on the successful (or unsuccessful) delivery of a great solution to a job (as we’ll discuss in chapter 8). There are so many ways to stumble on the journey. But the payoff for getting it right is enormous.
Most of the world’s most successful innovators see problems through a different lens from the rest of us. Why didn’t Hertz come up with a Zipcar-like product first? Kodak came close to creating a kind of Facebook product long before Mark Zuckerberg did. Major yogurt manufacturers understood that there might be a demand for Greek yogurt well before Chobani founder Hamdi Ulukaya launched what is now a $1 billion business. AT&T introduced a “picture phone” at the 1964 World’s Fair, decades before Apple’s iPhone. Instead of looking at the way the world is and assuming that’s the best predictor of the way the world will be, great innovators push themselves to look beyond entrenched assumptions to wonder if, perhaps, there was a better way.
And there is.
Chapter Takeaways
1. Christensen, Clayton M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press, 1997.
2. A preponderance of evidence has since revealed the adverse effects of trans fats (something my daughter and I were admittedly unaware of at the time). Jobs Theory helps you understand why your customers make the choices that they make—not whether you should offer a solution to their job. Cigarettes, for example, could be hired to satisfy an array of jobs, but are not good for the health of the customer. Ethical choices are, of course, equally important to get right.
3. Maybe “tasteless” is a bit unfair. My family recently spent a long weekend in Bar Harbor, Maine—one of the lobster capitals of the world. At every corner there seems to be another lobster shack of some sort. As seafood lovers, we thought this was heaven! We sat down at one lobster shack and I spotted “lobster burgers” on the menu. Now, I love hamburgers. And I love lobsters. So I thought two-in-one was neat. But when they handed me my lobster burger, it was simply a lobster tail in a bun. No dressing. No tartar sauce. No butter. When I took a bite, I had a surprising revelation: the lobster itself had absolutely no taste! The reason it usually tastes so good is that ordering lobster gives you license to drown it in butter. It’s the butter that tastes good, not the lobster. This experience made me think: how many other “substrates” was I eating, unaware that they themselves had absolutely no taste! I realized all of these things—the substrates—are essentially platforms upon which you build wonderful flavors and textures. So perhaps the industry is cut the wrong way! You could sell substrates, but then profitably sell “augmentation” stock as well.
4. The American Heart Association currently recommends buying soft, trans fat–free spreads instead of regular butter or stick margarine.