PIVOTING INNOVATION: How the ‘Jobs-to-Be-Done’Approach Dramatically Improves Innovation Results

Study after study has shown that the key to innovation and growth is having a clear understanding of customers’ unmet needs. About 75% of unsuccessful new products fail

In a recent McKinsey survey of global executives, 84% agreed that innovation is important to growth strategy. Yet, only 6% are satisfied with their innovation performance. Additionally, the survey revealed that very few executives know what to do about it. Clearly, there is a big need for improvement. The jobs-to-be-done approach to innovation promises to close this gap.

By Urko Wood, President of Reveal Growth Consultants

In a recent McKinsey survey of global executives:

INNOVATION IS IMPORTANT to growth strategy

with their current innovation performance

WERE SATISFIED

agreed that

yet only

because of “deficient” market research support at the front end of innovation1. That is, companies do not adequately understand what customers want before developing solutions. By some estimates, 90%2 of new businesses fail for this reason. Why is it so hard to understand what customers want?

The late great Harvard Business School professor, Theodore Levitt, said “People don’t want to buy a ¼ inch drill; they want a ¼ inch hole!” This quote reveals the difference between a true customer need and a solution. The “drill” is just a solution. The solution could be a pick, a punch, a laser, or some yet-to-be-invented tool, but none of these is a customer need. The job of “making a ¼ inch hole” is the true customer need. From this insight, the jobs-to-be-done innovation approach has developed into a robust innovation process that complements other innovation processes and dramatically improves results.

1. Cooper, Robert G., Winning at New Products, Basic Books, 2011. pp. 27.

2. Furr, S., Ahlstrom, P., Nail It Then Scale It, Self-published, 2011, pp. 26.

“People don’t want to buy a ¼ inch drill; they

want a ¼ inch hole!”

Professor Theodore Levitt,Harvard Business School

The number one reason why companies struggle to understand what customers want is the widespread confusion about what a “customer need” really is. Many people mistakenly believe that customers cannot tell us what they want. This is simply false when we ask customers what they want to accomplish rather than asking for product or service specifications. People confuse needs with solutions.

WHAT MOST COMPANIES GET WRONG

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The market value of Airbnb will soon surpass that of Marriott:

The jobs-to-be-done innovation approach is based on marketing fundamentals and the insight that people buy products and services to get their functional, emotional, and social ‘jobs’ done. When people have a job (or task) they want to get done, they look around for a product or service to ‘hire’ to help them do it. Jobs are the objectives people want to accomplish and the problems they want to avoid or resolve. Jobs are totally independent of solutions, and if we can keep this distinction in mind, we can turn innovation into a high impact best practice and a predictable business process. “Jobs thinking” can be applied to any industry:

Market research has fallen into disrepute in many circles because researchers have been asking the wrong question: “What do you want?” This ambiguous question invites people to talk about solutions rather than what they want to accomplish. In many markets, customers simply don’t have the expertise to answer questions about the best solution. That would be like doctors asking their patients to tell them what the best treatment plan should be. That’s not the patient’s responsibility; it’s the doctor’s responsibility based on his/her expertise and a thorough understanding of the patient’s needs. To prescribe a treatment plan without first conducting a thorough diagnosis would be considered medical malpractice. And yet, companies routinely commit marketing malpractice by launching new offerings before they understand what customers are trying to get done.

Customers can tell us what they want to accomplish, how they want to feel and be perceived. When companies understand that this is the type of customer input they need for innovation – i.e., job statements obtained directly from customers – it becomes possible to obtain a comprehensive set of the target customers’ needs in any given market.

Uber and Airbnb (and other companies leading the “sharing economy”) understand that people don’t want to buy a car or a condo; they want to enjoy the benefits of having access to them. This insight, along with new digital technology, has made it possible for these companies to gain market capitalization that will soon surpass their brick-and-mortar competitors, without a fleet of cars, and without any real estate. Nike understands that people don’t want to buy athletic shoes and apparel; they want to become better athletes and feel like one.” This has enabled them to grow to a $32 billion-dollar behemoth with new offerings that have nothing to do with shoes and apparel, but do help customers become better athletes and feel like one. And people don’t want to buy your products or mine; they want to get something done, have an experience, feel and be perceived in a certain way. These jobs are customers’ true needs and all of them are totally independent of solutions, and they are discoverable.

© 2017 Reveal Growth Consultants, Inc. I revealgrowth.com2

WHAT MOST MARKET RESEARCHERS GET WRONG

Lastly, this approach enables leaders to establish a valued and unique position in their markets. We know this because, if your offering addresses an important need, then customers will value it. And, if your offering addresses an unsatisfied need, then it will be unique in the market because no competitor is satisfying it.

Discovering your target customers’ unmet needs as jobs-to-be-done is extremely powerful because it reveals how to create new value in a predictable manner: help your customers get their jobs done better.

A need that is important and unsatisfied is unmet. The more important and less satisfied it is, the more unmet it is, and the greater the opportunity for innovation and growth it presents. This information reveals where clients should focus and how to

3. Castellion, G., Markham, S. K., “Myths About New Product Failure Rates,” Journal of Product Innovation & Management, 2013, pp. 976- 979.

4. Strategyn, Innovation Track Record Study, 2010.

First, discover your target customers’ jobs-to-be-done and rank them according to how unmet they are.

Then, and only then, focus your creativity and expertise on addressing the best opportunities to help customers get their jobs done better.

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The “pivot” from current innovation practices that every company should consider is two-fold:

Once a comprehensive set of the target customers’ needs has been obtained, the need (job) statements can be put into a web-based survey that is deployed to a representative sample of target customers. The survey asks customers to rate each job for its importance to get done, and for their satisfaction in getting it done given their current solution.

customers’ needs as is extremely powerful because it reveals

how to create new value in a predictable manner: help your customers get their

jobs .

This simple two-step process turns innovation into a high impact best practice and more than doubles innovation success rates from an average of 41%3 to 86%4. This approach gives leaders great confidence about where to focus and what to do to create new value in a predictable manner. Companies can now avoid wasting time and money developing products and services that customers don’t want. It also minimizes the politicking that can lead to a poor allocation of resources based on pet projects rather than market demand.

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HOW TO IDENTIFY AND RANK MARKET OPPORTUNITIES

apply their expertise to the issues that their target customers care about most. This is how Reveal can guarantee to find the best opportunities in any given client market with statistical validity.

Discovering your target

done better

Most companies don’t lack creativity or ideas; they lack focus. They lack clarity about where the best opportunities in the market lie. That makes it difficult to differentiate, innovate, and grow.

Instead of trying to generate “good” ideas and then testing them with customers, start by discovering the jobs your customers are trying to get done and where they struggle. Obtaining this information provides rich targets for innovation, differentiation and revenue growth. It then becomes surprisingly easy to generate ideas to help them get those jobs done better. This is how leading

URKO WOOD Urko Wood is founder and president of Reveal Growth Consultants. He is an expert at helping organization’s drive innovation and growth using the Jobs-to-be-Done approach. Some of his clients have included Battelle Memorial, Cintas, General Motors, Herman Miller, Ingersoll Rand, Microsoft, Morgan Stanley, and NetJets. In his free time, he enjoys friends, family, and good conversation over food. Urko can be reached at uw@revealgrowth.com.

Connect with Urko:

© 2017 Reveal Growth Consultants, Inc. I revealgrowth.com

Most companies don’tlack creativity or ideas,

. They lack clarity about where the best opportunities in the

market lie.

they lack focus

companies consistently launch winning new offerings, gain market share, and drive revenue growth. You can, too.

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About the Author

4

SUMMARY

Additional growth insights written by Urko, first published in The Business Journals:

To explore how you can turn innovation and growth into a predictable business process, contact Urko Wood at uw@revealgrowth.com.