Organizations typically structure themselves around function or business unit or geography—but successful growth companies optimize around the job. Competitive advantage is conferred through an organization’s unique processes: the ways it integrates across functions to perform the customer’s job.
For much of 2015 I was battling an ailment that stumped my doctors. I’d been through rounds of testing and hypothesis, but they just couldn’t figure out what was wrong with me. So I was sent to the Mayo Clinic for a week of specialist appointments to see if they could get to the root of my problem. The best way to describe it is the nerves in my body got inflamed and got mad at me. At the time, I was in near constant pain and my trip to the Mayo Clinic was a bit of a blur. But in hindsight, I realized that the clinic had perfectly integrated the experiences and helped me overcome obstacles to getting my job done, something I had never noticed before in years of visits to other medical facilities.
Unlike the situation at a traditional hospital, the Mayo Clinic puts somebody in charge of the process. So, for example, when someone like me comes for a diagnostic visit, that person thinks about all the medical specialties that are involved, which are most likely to have the best insight, and in what order I’d be likely to need to see them. That process person will set up the appointments—sometimes in real time—for me to see all the right specialists while I’m there in that one visit. Every specialist is required to keep openings in the day to accommodate real-time needs. The person in charge of my visit took all the burden of figuring out who I needed to see, what data they’d need for that appointment, which groups of specialists needed to talk to me together, and so on. She made it her problem to move me seamlessly through the day. So as I was barely getting through the day in my pain, someone else was making sure that if I had to see a certain specialist at 2:00 in the afternoon, my MRI was completed by 11:30 at the latest. Whatever anxieties I might have had navigating that visit—“Will I see everyone today? Is it going to take two months for a follow-up? Does my insurance cover this extra appointment?” and so on—were eliminated before they could even form into a thought in my mind.
On the surface, the Mayo Clinic is organized around the specialties of the doctors, like many other health organizations. But really, the main organizing principle is a process to get the right things in the right sequence to get the job done.
When you think of the word “process” you might instantly conjure images of a manufacturing assembly line or a bureaucratic standard. But processes touch everything about the way an organization transforms its resources into value: the patterns of interaction, coordination, communication, and decision making through which they accomplish these transformations are processes. Product development, procurement, market research, budgeting, employee development and compensation, and resource allocation are all accomplished through processes. Helping customers have a delightful experience using your product is made up of processes. What information do we need to have in order to decide what to do next? Who is responsible for each step? What do we prioritize over other things?
Resources, generally speaking, are fungible. They can be bought and sold. Products can, often, be easily copied. But it is through integrating processes to get the job done that companies can create the ideal experiences and confer competitive advantage.
By contrast to my experience at the Mayo Clinic, in a traditional hospital, there would be a personal-care physician to coordinate my care. He would coordinate it, with the best of intentions, so that every patient has a different experience. But that’s different than having a deliberate process. The hospital wants to help everybody so badly, but that help comes in an ad hoc way: everyone goes through a different sequence of who they see when. So, for example, whenever there appears to be something going on at the confluence of two different pathways in my body, it can take months, and a series of separate appointments, before I can get the two right specialists in the room together. It is clear, from my personal experience, that it is much easier and faster for good doctors to get answers when they work at the Mayo than when they work in a traditional hospital setting.
Processes are invisible from a customer’s standpoint—but the results of those processes are not. Processes can profoundly affect whether a customer chooses your product or service in the long run. And they may be a company’s best bet to ensure that the customer’s job, and not efficiency or productivity, remains the focal point for innovation in the long run. Absence of a process, as is the case with most traditional hospitals, is actually still a process. Things are getting done, however chaotically. But that’s not a good sign. W. Edwards Deming, father of the quality movement, may have put it best: “If you can’t describe what you are doing as a process, then you don’t know what you are doing.”
For years, Toyota freely opened its doors to competitors. Twice a month, the Japanese auto manufacturer allowed rival auto executives and engineers into its manufacturing complex to observe how Toyota makes cars. Not only were the executives allowed to see every aspect of the famous Toyota Production System, the tours also included a robust question and answer session. Nothing was off-limits.
To an outsider, Toyota’s openness might seem shocking. After all, the American rivals were clearly trying to learn Toyota’s secrets in order to emulate or even improve upon them. Why would Toyota so willingly give competitors a hand?
Toyota wasn’t really worried that it would give away its “secret sauce.” Toyota’s competitive advantage rested firmly in its proprietary, complex, and often unspoken processes. In hindsight, Ernie Schaefer, a longtime GM manager who toured the Toyota plant, told NPR’s This American Life that he realized that there were no special secrets to see on the manufacturing floors. “You know, they never prohibited us from walking through the plant, understanding, even asking questions of some of their key people,” Schaefer said. “I’ve often puzzled over that, why they did that. And I think they recognized we were asking the wrong questions. We didn’t understand this bigger picture.”
It’s no surprise, really. Processes are often hard to see—they’re a combination of both formal, defined, and documented steps and expectations and informal, habitual routines or ways of working that have evolved over time. But they matter profoundly. As MIT’s Edgar Schein has explored and discussed, processes are a critical part of the unspoken culture of an organization.1 They enforce “this is what matters most to us.”
Processes are intangible; they belong to the company. They emerge from hundreds and hundreds of small decisions about how to solve a problem. They’re critical to strategy, but they also can’t easily be copied. Pixar Animation Studios, too, has openly shared its creative process with the world. Pixar’s longtime president Ed Catmull has literally written the book on how the digital film company fosters collective creativity2—there are fixed processes about how a movie idea is generated, critiqued, improved, and perfected. Yet Pixar’s competitors have yet to equal Pixar’s successes.
Like Toyota, Southern New Hampshire University has been open with would-be competitors, regularly offering tours and visits to other educational institutions. As President Paul LeBlanc sees it, competition is always possible from well-financed organizations with more powerful brand recognition. But those assets alone aren’t enough to give them a leg up. SNHU has taken years to craft and integrate the right experiences and processes for its students and they would be exceedingly difficult for a would-be competitor to copy. SNHU did not invent all its tactics for recruiting and serving its online students. It borrowed from some of the best practices of the for-profit educational sector. But what it’s done with laser focus is to ensure that all its processes—hundreds and hundreds of individual “this is how we do it” processes—focus specifically on how to best respond to the job students are hiring it for. “We think we have advantages by ‘owning’ these processes internally,” LeBlanc says, “and some of that is tied to our culture and passion for students.”
Unlike resources, which are easily measured, processes can’t be seen on a balance sheet. If a company has strong processes in place, managers have flexibility about which employees they put on which assignments—because the process will work regardless of who performs it. Take, for example, consulting firm McKinsey & Company, which is hired to help companies around the world. McKinsey’s processes are so pervasive that consultants from very different backgrounds and training can be “plugged” into the processes by which they habitually do their work—with confidence that they will deliver the needed results. They can also churn the resources—the consultants—every few years without fear of diminution of quality because their processes are so robust.
Putting Jobs to Be Done at the center of your process changes everything about what an organization optimizes for. Before refocusing around jobs, for example, SNHU would have measured success in responding to prospective student inquiries in terms of weeks. “How many packages got mailed out?” SNHU would then wait for interested students to follow up with a call. If they did, SNHU would ask them to chase down their historic transcripts to get to the next phase of consideration. And so on. The impetus for the process was left in the hands of the prospective student. SNHU simply responded. By traditional measures, the “cost” of acquiring that prospective student was relatively low and it was easy to staff an office that simply mailed out packages of information.
By contrast, SNHU now tracks response time in minutes. The goal is to call back in under ten minutes. While on the phone with a trained admissions representative, the prospect will be asked to give permission to chase down existing transcripts—and SNHU will pay the usual ten-dollar fee incurred to do that. Success is now measured in whether the university can come back to the prospect with transfer-credit determination and all other necessary information in a matter of days. But it’s far, far more successful because it’s focused around the prospective student’s Job to Be Done. Talking to a live human being, within minutes or hours, is a completely different experience from arriving home after a long, hard day at work to find a big white envelope nestled among the junk. The real payoff for SNHU is in successful acquisitions. If prospective students believe SNHU fulfills their Job to Be Done, they’ll stop shopping around—and gladly pay a premium price for the solution that best solves their job.
There’s another important lesson in the story of SNHU’s success: it systematically removes the complexity and frustrations from the prospective student—such as navigating the financial-aid process and tracking down transcripts—and resolves them through the structured processes of SNHU. This is what processes aligned with customer jobs do: they shift complexity and nuisances from the customer to the vendor, leaving positive customer experiences and valuable progress in their place.
Without the clear job spec of SNHU’s students’ Jobs to Be Done, the university would never create such a high-intensity process, but nor would it be as productive. Nor would any standard operating data suggest it should. SNHU’s old system might have generated, for example, the number of information packages sent out compared with the number of new student applications. But nothing about that ratio would tell the university why that number is good or bad. By contrast, the right job spec leads to the right processes that will generate the right data to know “How are we doing?” Jobs Theory focuses you on helping your customers do their jobs, rather than narrow internally measured efficiencies.
It’s the rare exception that a senior executive visiting my office isn’t in the midst of some kind of corporate reorganization—or complaining that it’s time for another one. What’s striking to me is that these reorgs are not rare, they are remarkably common and in many companies have almost become a routine part of the business cycle: every three to four years a new wave of changes affecting job responsibilities, reporting lines, spheres of authority, P&L ownership, and decision rights—just to name a few dimensions of change—rips through many major companies promising a better future.
More often than not, though, these painful restructurings fail to deliver desired results. A 2010 Bain & Company study reported that fewer than one-third of major reorgs reviewed delivered any material improvement and many actually destroyed value.3 Why would managers ever put themselves through the hardships and hassles and endless meetings and conference calls—not to mention opportunity costs—endemic to reorgs? There’s clearly a widespread dissatisfaction with current performance.
Jobs Theory suggests that all this effort is focused on the wrong things. You don’t have to sit through many board meetings or strategic planning sessions or acquisition-integration meetings to determine that the focus of most organizational restructurings are the boxes and lines on the org chart, signifying defined roles and reporting lines. Of course it’s necessary to have an organizational structure that helps navigate the complexity of running a business. You need experts in finance and marketing and customer service and so on, and you need a way to organize reporting lines and P&L responsibility. But there’s something critical missing in these discussions.
Through a jobs lens, what matters more than who reports to whom is how different parts of the organization interact to systematically deliver the offering that perfectly performs customers’ Jobs to Be Done. When managers are focused on the customer’s Job to Be Done, they not only have a very clear compass heading for their innovation efforts but they also have a vital organizing principle for their internal structure.
This is not a subtle distinction. We have managers in charge of every major function or set of activities. We have executives in charge of product lines. But in most cases, nobody is in charge of understanding—and ensuring that the company is delivering on—the job of a customer. It’s only through predictable, repeatable processes that organizations can fully integrate around a customer’s Job to Be Done.
Intensive care medicine offers a perfect example. In 1952 surgical pioneer Dwight Harken (who also happens to be the grandfather of coauthor Taddy Hall) noted that, while patients were routinely surviving increasingly complex surgical procedures, alarming numbers were dying in post-op recovery because patients were simply transferred from the surgical theater back to the general wards. There simply was no set of processes to ensure that fragile patients in critical care would receive the array of interventions required for survival. In short, the critical-care job had no owner within any one of the hospital’s established medical functions.4
The radical question Harken asked himself was, “How is it that everyone’s doing what they’re supposed to be doing, all of the hospital’s existing processes are functioning as designed—yet patients are dying?” Something wasn’t right. In posing the question, Harken created the space in his mind to continue to seek and find the answer. His ensuing insight enabled him to pioneer the concept of intensive care medicine as we know it, leading to the now ubiquitous intensive care unit that we’ve come to take for granted. This was only possible by the realization that the hospital’s preexisting processes were failing to deliver desired patient experiences—in this case, successful surgical recovery and survival.
My colleague at Harvard Business School, Ethan Bernstein, spent two years away from HBS working with Elizabeth Warren to set up the Consumer Financial Protection Bureau (CFPB) in the aftermath of the financial crisis. Armed with Jobs Theory, he made a conscious choice to try to avoid the org chart trap. The promise of the CFPB was to bring the tools and authorities into one place so that the fragmentation of responsibilities that some believed allowed the financial crisis to go uncorrected would not continue into the future.
The focus of the CFPB was around consumers’ Job to Be Done—in essence, to “know before they owe”—but Bernstein and the CFPB Implementation Team took it a step further, consciously designing the organization structure of the bureau to support that job. “It just seemed natural,” Bernstein says now. “Instead of seeing divisions, we saw Jobs to Be Done.”
With a clear Job to Be Done for consumers who had been badly burned in the financial crisis at its center, it became clear that some of the typical DC functional silos didn’t make sense for the CFPB. Research, markets, and regulations were organized in a single division. Supervision, enforcement, and fair lending in another. In a typical regulatory structure, these groups would have all had slightly different—and occasionally conflicting—missions. Enforcement, for example, is all about punishing the bad guys and repairing the past. Supervision, by contrast, might focus on preempting future problems by forming close relationships with those being supervised. Traditionally, that represented not only very different approaches, but also very different processes. But put into the same division, people with very different backgrounds, career tracks, and world views were aligned around a similar job: prevention of future consumer financial issues and restitution of past ones. “The organizational structure, and the collaboration processes we put in place helped to create co-identification with professional identities and the CFPB’s Job to Be Done,” Bernstein says.
For example, the CFPB’s policy committee, comprising senior levels of staff from across the entire bureau, met once a week for two hours. That conversation, Bernstein says, was entirely focused on one of the organization’s Jobs to Be Done and what tools were going to be used over time to understand and address it. The meeting was run, perhaps not surprisingly considering Elizabeth Warren’s background as a Harvard professor, more or less like a Socratic law school class. The conversation focused on the organization’s Job to Be Done, but everyone was invited to bring their expertise and opinions on how best to solve it with the issues at hand that week. “If you don’t have that focus,” Bernstein recalls, “then you start falling into individual opinions and politics. The organization thrived in the early days because we brought in all kinds of people—consumer advocates, Wall Street veterans, other government agency staff. But everyone in that room had scars. If you didn’t focus around a Job to Be Done, then you focused on the scars. You’d just sit there and argue with each other and get nothing done. Solving a job was our unifying cause. Our reason for being. It was easy to rally around that. And we got action, rather than typical DC paralysis, as a result.” Jobs Theory provided a diverse team with a language of integration, enabling diverse functional specialties to communicate and interact to fulfill the ultimate purpose of the CFPB.
Jobs Theory changes not only what you optimize your processes to do, but also how you measure their success. It shifts the critical performance criteria from internal financial-performance metrics to externally relevant customer-benefit metrics. SNHU tracks how many minutes it takes to respond to an inquiry, for example, because it realizes that time is critical to the process of its online prospects. Amazon focuses on when orders are delivered not when they are shipped. For each new product, Intuit develops a unique set of performance metrics based on the specific customer benefit that the specific Intuit solution delivers.
Keeping what matters in focus is challenging for any organization, especially with the forces at play as a company grows. “Now that we’re a much larger company, it’s been a challenge to keep the various parts of the company focused on the customer benefit,” says Intuit founder Scott Cook. “It’s so tempting for parts of the organization to start looking at other things. In our kind of business, you get all this data about ‘conversions’ and ‘retention,’ and so on. We got seduced by that.” It is, to be sure, easier to focus on efficiency rather than effectiveness. Most businesses are very, very good at that. Creating the right metrics is hard. But so important.
For example, Cook recounts, as Intuit was rolling out a new version of QuickBooks for small businesses, the sales organization suggested that trial users be forced to register before they could access and test the product. “Why not force them to call us? That way we can sell them more stuff,” Cook says. “Buy our payroll service!” On the surface, testing suggested it could be the source of immediate new revenue for Intuit. So the company set up an internal process to field the registration calls and try to upsell them more services. “But it turns out, we made it hard for customers to register. Now they had to call us. Sometimes the line was busy. They had to talk to a salesperson when really they just wanted to register. People got focused on revenue instead of delivering the customer benefit.” But that line revenue number, Cook says, can be deceiving. Yes, maybe Intuit converted some of those callers to other products or services. New revenue. But that number doesn’t take into account how much of that revenue Intuit might have gotten anyway if it had focused better on solving customers’ jobs, rather than the jobs of salespeople to generate new sources of revenue.
If Intuit wanted to accurately measure how well the company was responding to customers’ Jobs to Be Done, it needed to find new ways to think about it. How much time did we save this customer? Did we allow them to not spend time doing something they didn’t want to do? Did we improve their cash flow? Are our processes supporting the things customers are hiring us to do?
But measuring the success in achieving these goals is not easy, Cook admits. “This is hard stuff in our business. The metrics don’t fall out of our systems. There is no way to continuously and automatically measure the labor hours avoided by accountants. We have to interpolate survey and server data,” Cook says. “Because without it we just don’t know how we’re doing on the job the customer wants done.”
Having the right measurements in place helps institutionalize a process. It’s how your employees know they’re doing the right thing, making the right choices. As the old saying goes, “What gets measured, gets done.” From its inception, Amazon has laser-focused on three things that solve customers’ jobs—vast selection, low prices, and fast delivery—and designed processes to deliver them. Those processes include measuring and monitoring how it’s achieving those three ultimate goals on a minute-by-minute basis. The end goal is getting the customers’ jobs done—everything works backward from there. “We always start with the customers and look at all the metrics that matter for the customer,” explains Amazon’s senior vice president for international retail Diego Piacentini.
Think about the signal sent by this simple line on every Amazon product page, for example: “If you order within the next 2 hours and 32 minutes, you’ll receive your product Tuesday.” But hundreds of processes have been designed to ensure that happens. The customer’s click of the “checkout” button triggers a series of processes that extend all the way to the fulfillment center or to the vendor. Amazon then tracks and measures if it meets its promise. Did it arrive tomorrow, as promised?
Process acts as a sort of the subconscious of an organization—it subtly pushes companies toward or away from a Jobs to Be Done–aligned strategy by governing thousands of decentralized events, decisions, and interactions each day. “We’re much more focused on processes than organization,” says Piacentini. “It’s one of the reasons we can move fast. We have the same technology, the same platform, the same guiding principles across all of our companies.” New innovations at Amazon famously start with a mock “press release” that is presented to the team that will consider and work on that innovation. The press release contains the guiding principles for that innovation—all experiences and processes are derived from the clarity of what job customers will hire this product or service to do, as outlined in the press release at the innovation kickoff meeting. In that room are not just marketing people, but engineers, analysts, and so on—everyone whose work will play a role in fulfilling that Job to Be Done. “It all starts with that press release,” Piacentini says. “No matter who owns the pieces of the product, you’re part of that process.”
The textbook definition tells us that process optimization relates to efficiency. But what Jobs Theory—and Amazon’s example—says is, “Yes, but . . .” The “but” is that optimization should also incorporate a factor for job alignment—otherwise you’re focusing on getting better and better at the wrong things.
There is a second very important lesson in the Amazon story: there is a degree of ambidextrousness that enables processes to be both highly efficient and flexible. Jobs are not flexible—they have existed for years and years, even centuries. But how we solve for jobs varies over time. The important thing is to be attached to the job, but not the way we solve it today. Processes must flex over time when a better understanding of customer jobs calls for a revised orientation. Otherwise you’ll risk changing the concept of the job to fit the process, rather than the other way around.
Interestingly, this principle of a modular internal-process structure in which some pieces persist and others change is fundamental to what computer coders know as subroutines. The idea is that repeated functions—say basic arithmetic and trigonometry, for example—can be coded as subroutines and then essentially copied and pasted wherever that operation is called for in a different process. In programming, this is a very big deal. The right use of subroutines will decrease the cost of developing and maintaining a program, while simultaneously improving its quality and reliability. Solutions to common challenges are not invented ad hoc by programmer X or Y sitting at a desk in the basement. They’re universal, logical, and easily inserted in the right places.
Amazon has imported what are essentially subroutines into its operating processes, too, and their power and efficiency are very apparent. This is a huge advance over the traditional practice of “sharing best practices” across regions. Instead, the use of subroutines poses the question of “Are we likely to need to repeat this process (or subroutine) in other activities?” This creates a very dynamic view of an organization as a collection of processes wherein each process is a string of subroutines—some custom and some modular imports—that align perfectly with a customer’s Job to Be Done.
Aligning with jobs is considering what “process optimization” means. In so doing, you avoid the trap of allowing today’s critical processes to become tomorrow’s inhibitors to growth.
I have a friend who has never been particularly bothered about cutting it too close for a plane departure. I don’t think he’s ever arrived at the airport more than a few minutes before the gate is scheduled to close. But it doesn’t bother him enough to change his pattern; somehow it always works out. Once when I was dropping him off at the airport, I was doing the worrying for both of us. Somehow in the hurried moment of getting him to the right door, we managed to lock the car doors with the motor still running. And we saw, suddenly, that his wallet had fallen out of his pocket and was in plain sight on the passenger seat. He couldn’t get on the plane without the identification in that wallet. I panicked and started looking around for rocks to possibly smash in the window to get to his wallet. And then it hit me: we have a subscription to General Motors OnStar. Within a few moments, we were able to borrow a phone to call OnStar and our car was unlocked from outer space, my friend’s wallet was retrieved, and I was waving him goodbye—with my car still fully intact. I don’t think I’d ever actually used my OnStar service before that moment, but in that moment I deeply appreciated its value.
I can’t imagine the complexity of designing a system that can identify my particular car, wherever it may be, from a phone call—and then remotely unlock my door in a matter of seconds. It wasn’t by accident that OnStar, the service that provides subscription-based communications, in-vehicle security, hands-free calling, navigation, and remote diagnostics systems throughout the United States and Canada, could solve my problem in that exact moment of struggle. It’s a marvelous product.
There are a million reasons it shouldn’t have succeeded, but it did. At one point OnStar generated annually, by my estimate, $2.5 billion in revenue and about $500 million in net profit for General Motors with negative net assets. During his fourteen-year tenure as CEO of OnStar at GM, Chet Huber and I spoke frequently about the challenges he faced and the obstacles he overcame. He and I were classmates at Harvard Business School back in the 1970s and I’d followed his career with interest. At the time, I thought the usual corporate barriers to a truly breakthrough division would be impossible to surmount at culture-bound General Motors, but to his credit, Huber found a way. He didn’t use the language at the time, but in hindsight, Huber says, OnStar succeeded because it focused relentlessly on the Job to Be Done. Everything fell into place from there.
At first OnStar was designed as a kind of Chinese menu of many random cool things that GM and its initial partners in the venture could put into the service to demonstrate synergies among the joint-venture companies. The company would create features and benefits that made for good press coverage at the annual auto shows—things such as “intensity discharge lighting” that would allow you to see seven miles down the road or night-vision systems that had been used in the military. The goal was to get buzz and make the brochure look good, Huber says, but it didn’t really matter if a lot of customers actually bought them. OnStar initially was only intended to be the “coolest brochure ware ever.”
That made it fun to build. The OnStar team assembled all the features and benefits it could make work and bundled them into the initial offering to customers. It was all singing, all dancing: if you are just looking for a good Italian restaurant for a break on a long road trip, you could push the OnStar button in your car and be given recommendations for the best options. Or you could get routed on back roads through a traffic jam. Somewhere buried on that list of benefits was the concept of a truly integrated communications system in your vehicle. If you have an accident, for example, it will immediately alert emergency services. Or if you lock yourself out of your car, you can call OnStar and it will remotely unlock it for you.
The OnStar team conceived of this as a high-end service, suitable for luxury cars. Akin to adding a fabulous stereo system or leather seats. Except things didn’t go exactly as initially planned. GM’s CEO at the time, Rick Wagoner, decided that the OnStar division would not get any internal credit for helping sell cars. That was not the goal. OnStar had to create a sustainable business model of its own and a product that customers could actually be willing to pay for. If it had any hope of creating the profitable business Wagoner had challenged it to build, it needed to understand what exactly it was actually selling—and what customers were buying.
At first, the OnStar team couldn’t really make sense of how and why customers were hiring OnStar. They’d fool around with it: “We’re on a long road trip and we’re having a debate we can’t settle. Can you name the seven dwarfs?” or the creepier “What are you wearing?” It was a toy. And a toy that lost its charm soon after it was out of the box. People started canceling, noting that they didn’t really need the concierge service after all. It was nice, but not necessary.
And there was one other surprise. Not only did some of the luxury car owners start canceling the service, but there was also an unexpected customer base as well. It turned out Chevy drivers, historically the budget-conscious segments of GM’s market, were just as likely to purchase OnStar as Cadillac buyers. Those two segments overlapping on the OnStar made no sense to the team. To get to the bottom of it, Huber required every member of his then three-hundred-person OnStar team to spend an hour listening in on real customer calls with the call center team.
They may have grumbled about the extra work at first, but what the team members heard in those hours of monitoring would change everything. The team members who weren’t normally part of the call center were shocked at the pressure those employees were under—and the size of the problems they were trying to solve. The OnStar system would trigger when people had just been in an accident. “Our OnStar team would find themselves right in the middle of horrific crashes. In some cases the cars hadn’t even stopped moving yet, people were screaming. Or they’d get hit again in a ricocheted series of collisions.”
Understanding those moments—the circumstances of struggle—became critical to uncovering the real Job to Be Done for customers. “When you realize that directions are much less about ‘find me a good Chinese restaurant’ and much more about ‘I’m in an unfamiliar location and it’s dark. Can you route me through safe streets?’ it changes how you approach not only the design, but the way we interact with our customers in those situations,” Huber says.
OnStar was being hired to provide peace of mind when you’re driving. A whole series of ideas flowed from that crystallization of the Job to Be Done. Imagine that it’s 2:00 a.m. and you’re on a long drive. Think about what would happen if your “check engine” light comes on in your car. Can I keep driving? Will the engine blow up? Help me decide what to do right now. “That service is much more valuable to you than a diagnostic that tells you how your gas mileage is performing,” Huber says. So not only does the technology need to be able to communicate what’s going on in your engine to the OnStar service, the call center representatives also need to know how you’re feeling when that light comes on and what you need to hear. Understanding the Job to Be Done also demystified the surprise of Chevy buyers subscribing to OnStar at the same rates as Cadillac buyers: peace of mind is an essential, not a luxury upgrade.
By necessity, the OnStar team had to create a panoply of processes to deliver experiences consistent with that specific job. And it took rapid iterations to improve things—something that was not common in the glacially moving auto industry. For example, the processes GM had invented to support the dealers, who were the front line of sales, were terrible. It started with how hard it was to explain OnStar to customers in the showroom. How did this work? Was it hooked to satellites or did it require a cell phone? Did somebody always know where the driver was? Can somebody eavesdrop on the car without the driver knowing it? There were hundreds of questions that could easily derail a sale—and the salesmen were not likely to be motivated. One sale would gain the dealership a 20 percent cut of ten dollars in monthly service fees, nothing more than pocket change to car dealers who could make more adding heated seats to a sale, and be done with their responsibility, rather than selling hundreds of OnStar subscriptions.
“You don’t have the luxury of thinking that you’ve done it perfectly the first time,” Huber says. “There’s so much at stake and you’re learning as you go. This is the source of your competitive advantage. Your processes have to get better and better, based on what you’re learning. And all of it has to align with the job your customers are hiring you to do.”
Perhaps most significant of all in differentiating the OnStar product was the process that Huber and his team navigated to continually upgrade and improve the OnStar technology being installed in cars. In the auto industry, it can typically take three to five years to develop and bring a new car to market and then it’s likely to stay in the market as is for up to ten years. The long window of development and sale is intended to ensure that new cars are thoroughly vetted and tested before they reach the public and then they’re efficiently manufactured and produced for a long time. Technology typically rapidly iterates and improves so that each successive generation is of higher quality and cheaper to produce. Huber knew that vetting upgrades and improvements to OnStar through GM’s established validation test cycles would be the kiss of death. Nobody wants to buy last year’s hot technology this year.
While Huber knew next to nothing about wireless technology when he took over what would become the OnStar division of GM, he did know that any successful wireless product-development cycle would have to move much, much faster than the usual automotive life cycle. “My suggestion very early on was that unless we could suspend those rules, then we shouldn’t even bother with the business, because we’d end up selling eight-track tapes when everyone else was selling CDs,” says Huber.
That was an incredibly complex process—and it had to work in not just one car model that offered OnStar. It had to work in all of them. That meant testing and considering every possible combination of how the system could be used, under what conditions, and in conjunction with whatever else could possibly be happening with the car. What if all the windows in the car were down? What if it was pouring rain? What if the driver had the CD player on? Would it work if the airbag had been deployed? “We had to validate it working with every different mechanism in the vehicles,” Huber recalls. “And every car was different.” The first round of validation involved testing OnStar in hundreds of scenarios. But as the OnStar team continually improved the product itself, there were literally thousands of validation tests that needed to be run. The existing GM validation system couldn’t possibly handle that outside of its regular cycles.
So the OnStar team created its own processes to make that happen out of sequence—a first for the auto giant. Working with the existing validation teams, OnStar developed midcycle processes and tests and used its own staff’s expertise to ensure that the upgraded product met GM’s overall quality standards. Making this process work was a really, really big deal.
That allowed OnStar to continually upgrade the versions of OnStar it offered in its cars. Even when competitors opted to buy the OnStar technology for their automobiles, their own processes couldn’t compete with the internal GM team’s ability to validate and test new versions in GM’s cars. So competitors’ cars might be offering version three of OnStar while GM cars were on to the far superior fifth-generation version.
What OnStar built in its first years was not a product that competitors couldn’t copy, but a set of experiences and processes that perfectly aligned with customers’ Jobs to Be Done. And that, it turned out, was exceedingly hard. In 2000 Ford announced a joint venture with Qualcomm to create Wingcast, a competitor to OnStar, with a promise to be in the market by 2003. Ford didn’t focus on the Job to Be Done as OnStar did, but rather suggested that Wingcast would be the next great thing in mobile connectivity. That never happened. Ford scrapped the project two years later. It simply couldn’t match the processes that GM had already developed to solve customers’ jobs through OnStar.
Ford’s core mistake—of focusing on the product spec rather than the job spec—gets repeated all the time. In fact, the misstep is so common in the high-tech world, that Anshu Sharma of Storm Ventures has earned justifiable recognition for calling attention to the problem, which he has dubbed “stack fallacy.” Stack fallacy highlights the tendency of engineers to overweight the value of their own technology and underweight the downstream applications of that technology to solve customer problems and enable desired progress. “Stack fallacy is the mistaken belief that it is trivial to build the layers above yours,” Sharma says. It’s the reason that companies fail so often when they try to move up the stack. “They don’t have first-hand empathy for what customers of the product one level above theirs in the stack actually want. They’re disconnected from the context in which their product will actually be used.”
Stack fallacy applies outside of the technology sphere, too. For instance, it might be easy for you to have a vegetable garden. You know what herbs and vegetables you like—and all you have to do is to learn how to grow them and use them in your own cooking. On the other hand, your understanding of growing and using herbs does not prepare you to open and run a restaurant. In fact, eight out of ten restaurants fail within five years. Knowledge of production, Sharma says, is not the same thing as knowing what customers are looking for.
In short, stack fallacy and Jobs Theory shine light on the same hazard: to mistake technical know-how—which Ford and Qualcomm had in spades—for the customer’s Job to Be Done, about which they understood very little. The high-stakes consequence is to dismiss the specific customer application as trivial when it is, in fact, essential. By contrast, Huber and his team maintained clear focus on the Job to Be Done. They invented, reinvented, and reinforced an entire set of processes to ensure that they were delivering peace of mind to customers. By 2009 OnStar, by itself, had become a key reason that people bought certain GM cars.
Processes are powerful. By their very nature, processes are set so that employees perform tasks in a consistent way, time after time. They are meant not to change. When processes are organized around the customer’s Job to Be Done—optimized to facilitate the progress and deliver the experiences that customers seek—processes are the source of competitive advantage.
Over the past six years, FranklinCovey has doubled revenue and increased profit tenfold by shifting focus from selling its own products—training modules—to optimizing customer business outcomes. Historically, FranklinCovey operated like a typical training company. It created content that potential customers, such as sales people, would find useful and designed courses that enabled client training managers to perform their job of offering sales training to their employees. But it discovered that training budgets are highly vulnerable in tough economic times. This is where jobs played a critical role. Over time FranklinCovey transformed itself from, say, focusing on supplying sales training tools to focusing on enabling sales transformation. “We took responsibility for helping our customers to achieve their business goals,” says CEO Bob Whitman. Having identified critical Jobs to Be Done for its customers, FranklinCovey is now focusing on perfecting how to integrate the right processes within the company to make sure they deliver on that job for every customer, every time.
“Jobs gives you a very clear innovation trajectory,” Whitman says. “I can see how we need to improve for the next ten years. It’s less product oriented now than process oriented.” For example, Marriott was willing to devote nearly ten full-time employees on its staff to implementing the FranklinCovey “4 Disciplines of Execution” program. But not every customer will have the resources to do that. So FranklinCovey is figuring out how to make it cheaper, faster, and easier to roll out. “Two-thirds of our R&D budget is spent on process innovation,” Whitman says. The goal is to create offerings that shift complexity out of the client’s process, making the experience of using FranklinCovey’s products easier. “It’s no good if they thought they signed up for an exercise class and realized once they got there, they had to commit to climb Mount Everest!” Whitman says.
The converse is equally true: when processes are not aligned with a compelling customer job, optimizing the process means getting better and better at doing the wrong thing. There’s a reason that the fast-food company didn’t implement the changes that Moesta and his colleagues recommended to boost milk shake sales. It may have been a great idea, but the organization’s “immune system” rejected it out of hand. Local managers deemed the required changes in their routine processes and resource allocations too difficult to implement and the idea died a quiet death. Many smart companies unwittingly undermine their own great ideas with hidebound processes.
This is a good thing when the processes are perfectly aligned with the Job to Be Done. But as OnStar demonstrated, introducing new processes to an established organization is very, very hard. Often the solutions you must deliver seem impractical from a financial perspective or cumbersome from a cultural perspective. As I’ll discuss in the next chapter, even the most perfectly constructed experiences and processes are vulnerable to powerful forces within a company. The gravitational pull of existing process is very, very strong. But forewarned is forearmed. In the next chapter we will focus on how to ensure that your processes align with the Job to Be Done and deliver results for both your customers and your shareholders.
Chapter Takeaways
Questions for Leaders
1. Regarded as one of the most influential management books of all time, Organizational Culture and Leadership by Edgar Schein transforms the abstract concept of culture into a tool that can be used to better shape the dynamics of organization and change. Schein, Edgar H. Organizational Culture and Leadership. San Francisco: Jossey-Bass, 1985.
2. Catmull, Ed. “How Pixar Fosters Collective Creativity.” Harvard Business Review, September 2008. https://hbr.org/2008/09/how-pixar-fosters-collective-creativity. Catmull, Ed, and Amy Wallace. Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration. New York: Random House, 2014.
3. A 2010 Bain & Company study of fifty-seven major reorganizations found that fewer than one-third produced any meaningful improvement in performance. Some actually destroyed value.
4. In his 2009 book The Checklist Manifesto, Harvard Medical School professor Atul Gawande chronicled dramatic improvement in patient safety simply by virtue of creating and following a process—checklists—in patient care. Gawande, Atul. The Checklist Manifesto: How to Get Things Right. New York: Metropolitan Books, 2009.