Review: Competing Against Luck by Clayton M. Christensen, Taddy Hall, Karen Dillon, et al

This is the book that defines the “Jobs to be Done” (JTBD) theory, which is quite useful & powerful. The organization of this book is a bit weird, and as is often the case with business books, there is a lot of jargon/filler, but JTBD is an important tool to learn about, so it’s still worth reading.

Here are my key takeaways.

1. Introducing JTBD theory

Here’s the core idea behind JTBD theory:

“When we buy a product, we essentially “hire” something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we “fire” it and look around for something else we might hire to solve the problem.”

The idea is to identify the very specific job the customer is hiring you to do, and to organize your product, marketing, sales, and all internal processes around delivering on that job.

A good way to understand this is to look at an example. The classic example used to introduce JTBD theory is the milkshake. Before JTBD theory, people would try to optimize the milkshake based on customer demographics (e.g., age, gender, profession, geography), but it was ineffective. What turned out to be more effective was to understand the “job” a customer was “hiring” a milkshake for. It turns out that there are actually two jobs:

1. I’m a commuter and I need something to eat during a long drive.
2. I’m a parent and I need something fun to entertain my kids.

Note that:

• These are two completely different circumstances.
• The criteria according to which you evaluate options in these two JTBD are completely different.
• The competitors are completely different: for (1), the competitors are bagels, protein bars, and juice, whereas for (2), the competitors are toy stores and sports activities.
• The products, sales, and marketing you’d put in place are completely different: for (1), the product needs to be filling, long-lasting, and easy & clean to eat on the go; the sales process is perhaps a drive-in or rapid takeaway; the marketing is all about business people. For (2), the product needs to be catered to the tastes of a child, smaller, and in fun packaging kids would enjoy; the sales process is in-person, with a place to sit and spend lots of time; the marketing is all about kids, enjoyment, and sharing special moments with your children.
• A one-size-fits-all solution would work for neither one! This is why knowing your exact, specific JTBD is essential.

2. Defining the “job” in JTBD theory

The “job” in JTBD has a very specific definition:

• A job is the progress an individual seeks in a given circumstance.
• To be successful, a product must enable that progress better than previous options.
• Jobs aren’t only functional: they have emotional and social dimensions too.
• Jobs are part of the daily flow of life, so the circumstance in which they happen is the essential unit of innovation. It’s more important to design for that circumstance than for customer characteristics, product attributes, new technologies, or trends.

It’s also worth considering what is not a “job”:

• A job is not just a bunch of adjectives / adverbs: e.g., “convenience” is not a JTBD. A real JTBD consists of verbs and nouns: e.g., “I need a way to write books verbally, without having to type.”
• A job is not a JTBD if it can only be solved by products in the same product class. E.g., “I need a chocolate milk shake in a 12 oz disposable container” is not a job. It could only be solved by one class of product. You need to go one level of abstraction higher: e.g., “I need something I can eat while commuting in the morning that will fill me up for several hours.” The candidates to do this job are all in different product classes: e.g., banana, doughnut, bagel, coffee, milk shake.

3. Figuring out the JTBD

A good way to figure out the JTBD is to imagine you’re filming a mini documentary of a person struggling to make progress in a particular circumstance. The video should include:

• What progress is the person trying to achieve? This should include functional, emotional, and social dimensions. E.g., “I want to have a smile that will make a great first impression in work and personal life.”

• What are the circumstances of the struggle? Who, when, and where, while doing what? E.g., “I see a dentist twice a year and brush my teeth as directed, but they never look white enough to me.”

• What obstacles are getting in the way of making progress? E.g., “I’ve tried whitening toothpastes, but they never seem to work.”

• Are consumers making do with incomplete solutions? E.g., “I bought a home tooth whitening kit but it’s uncomfortable and hurts my teeth.” More on identifying competitors in the next section.

• How would they define what “quality” means for a better solution and what tradeoffs are they willing to make? E.g., “I want the whitening of a professional treatment, but without the cost and inconvenience.”

Note that if you have an existing product, you can sometimes uncover new JTBDs by looking for unusual ways that customers use your product. E.g., In the past, baking soda makers thought it was only used for baking, but learned customers were also using it laundry detergent, getting out carpet stains, absorbing smells in the fridge, etc. These all uncovered new JTBDs and therefore, potential new approaches to product, sales, marketing, etc.

Peter Drucker: “The customer rarely buys what the company thinks it is selling him.”

4. Identifying competitors

• You should identify the full list of competing products for your JTBD.
• Sometimes, you’ll find customers who couldn’t find a product to do the job, so they cobble together a solution themselves. This is often a sign of a big opportunity, as it shows the customer wants a solution so much they are willing to take their own time to try to solve it.
• It’s also possible a consumer isn’t using anything to solve this problem (“nonconsumption”). This can also be a big opportunity: instead of trying to steal customers away from competitors, if you can discover a JTBD with no known solutions, you can uncover a huge market.
• One useful question to ask: what product will have to be “fired” in order for a customer to “hire” your product? Thinking about what you’re replacing can unlock lots of valuable insights.
• Knowing your true competitors (based on the JTBD) is critical to success. Theodore Levitt wrote back in the 1960s that the railroad industry declined not because the need for passenger and freight transport declined—it actually increased—but because cars, trucks, and airplanes stepped in to handle that job. Railroads were in trouble “because they assumed themselves to be in the railroad business rather than in the transportation business.”

5. Organizing around the JTBD

Uncovering your JTBD, creating a product experience around it, and integrating the company and its internal processes around the job can give you a competitive advantage that is hard for your competitors to understand & copy.

If everyone at the company understands the JTBD, you get (a) better distributed decision making, as everyone will understand the progress a customer is trying to make and how to unblock that progress and (b) more motivated employees, as everyone will understand what problem they are trying to solve and why their work matters.

But in order for that to happen, you need to organize the company around your JTBD. Note that most reorgs fail: the book mentions research that shows that fewer than 1/3rd or reorgs deliver any value at all, and most destroy value. The key to a successful reorg is to organize around the JTBD: align your teams and internal processes to deliver an experience that gives the consumer the progress they are looking for.

It’s also critical for the company to track the right metrics. With a well-defined JTBD, you’re more likely to focus on external metrics related to the customer’s success: that is, those that measure whether the customer is making the progress they desire. E.g., Amazon measures how long it takes for something to be delivered (rather than shipped), as that’s the progress the customer needs. Bear in mind that the metrics are always a model and that you don’t want to overly obsess about what’s easy to measure rather than the real progress the customer is trying to make: e.g., medical professionals can become overly obsessed with reducing blood pressure, which is easy to measure, but only a symptom of heart disease, rather than dealing with the real underlying cause of heart disease.

Rating: 4 stars