The researchers observed that at other times of the day, it was often parents who purchased milkshakes, in addition to a complete meal, for their children. What job were they trying to get done? They were emotionally exhausted from repeatedly having to say “No” to their kids all day, and they just needed to feel like they were reasonable parents. They hired milkshakes as an innocuous way to placate their children and to feel like they were loving parents. The researchers observed that the milkshakes didn’t do this job very well, though. They saw parents waiting impatiently after they had finished their own meal while their children struggled to suck the thick milkshake up the thin straw. Many were discarded half-full when the parents declared that time had run out.
Segmenting the market along demographic or psychographic lines indeed provides information on individual customers.6 But the same busy father who needs a viscous, time-consuming milkshake in the morning needs something very different later in the day for his child. When researchers asked customers who have multiple jobs in their lives what attributes of the milkshake they should improve upon, and when the researchers then averaged each consumer’s response with those of others in the same demographic or psychographic segment, it led to a one-size-fits-none product that didn’t do well any of the jobs that customers were trying to get done.7
Who is the quick-service chain really competing against in the morning? Its statistics compare its sales with the milkshake sales of competing chains. But in the customers’ minds, the morning milkshake competes against boredom, bagels, bananas, doughnuts, instant breakfast drinks, and possibly coffee. In the evening, milkshakes compete against cookies, ice cream, and promised purchases in the future that parents hope their children won’t remember.
Knowing what job a product gets hired to do (and knowing what jobs are out there that aren’t getting done very well) can give innovators a much clearer road map for improving their products to beat the true competition from the customer’s perspective—in every dimension of the job. To tackle the boring commute job, for example, the chain’s managers could swirl in tiny chunks of real fruit. This would nail the boring commute job even better, because the drivers would at random suck crisp, flavorful chunks into their mouths, adding a dimension of unpredictability and anticipation to a monotonous morning routine. (Remember, fruit might make it healthier, but improving health is not the primary job that the shake gets hired to do.) The chain could make the shake even thicker, so it would last longer. And they could set up a self-service machine in each restaurant that customers could operate with a prepaid card, to get in and out fast.
Addressing the evening job-to-be-done would entail a very different product—one with lower viscosity for quicker consumption, and served in a small, entertainingly designed container. It would be an inexpensive add-on to the bundled children’s meal, so that when a child begged the parent for it, the parent could readily say “OK” with little forethought.
If the restaurant chain implemented innovations such as these that really helped get the jobs done and discarded improvements that were irrelevant to the jobs that the product is hired to do, it would succeed—but not by capturing milkshake sales from competing quick-service chains or by cannibalizing other products on its menu. Rather, the growth would come by taking share from products in other categories that customers sometimes employed, with limited satisfaction, to get their particular jobs done. And perhaps more important, the products would find new growth among “nonconsumers.” Competing against nonconsumption often offers the biggest source of growth in a world of one-size-fits-all products that do no jobs satisfactorily. We will return to this topic in chapter 4.
Using Circumstance-Based Segmentation
to Gain a Disruptive Foothold
The first time that builders of a new-growth business need to assess what the target customers really are trying to get done is when they are searching for the disruptive foothold—the initial product or service that is the point of entry for a new-market disruption. When managers position a disruptive product squarely on a job that has been poorly addressed in the past that a lot of people are trying to get done, they create a launch pad for subsequent growth through sustaining innovations that build on the initial platform.8
How can managers identify these foothold opportunities? It may never be possible to get every dimension of a product introduction in a new-market disruption right at the outset, which makes it very important to use the methods of strategy discovery we outline in chapter 8. We believe, however, that a jobs-to-be-done lens can help innovators come to market with an initial product that is much closer to what customers ultimately will discover that they value. The way to get as close as possible to this target is to develop hypotheses by carefully observing what people seem to be trying to achieve for themselves, and then to ask them about it.9
Sony’s founder, Akio Morita, was a master at watching what consumers were trying to get done and at marrying those insights with solutions that helped them do the job better. Between 1950 and 1982, Sony successfully built twelve different new-market disruptive growth businesses. These included the original battery-powered pocket transistor radio, launched in 1955, and the first portable solid-state black-and-white television, in 1959. They also included videocassette players; portable video recorders; the now-ubiquitous Walkman, introduced in 1979; and 3.5-inch floppy disk drives, launched in 1981. How did Sony find these foothold applications that yielded such tremendous up-side fruit?
Every new-product launch decision during this era was made personally by Morita and a trusted group of about five associates. They searched for disruptive footholds by observing and questioning what people really were trying to get done. They looked for ways that miniaturized, solid-state electronics technology might help a larger population of less-skilled and less-affluent people to accomplish, more conveniently and at less expense, the jobs they were already trying to get done through awkward, unsatisfactory means. Morita and his team had an extraordinary track record in finding these footholds for disruption.
Interestingly, 1981 signaled the end of Sony’s disruptive odyssey, and for the next eighteen years the company did not launch a single new disruptive growth business. The company continued to be innovative, but its innovations were sustaining in character—they were better products targeted at existing markets. Sony’s PlayStation, for example, is a great product, but it was a late entrant into a well-established market. Likewise, its Vaio notebook computers are great products, but they too were late entrants into a well-established market.
What caused this abrupt shift in Sony’s innovation strategy? In the early 1980s Morita began to withdraw from active management of the company in order to involve himself in Japanese politics.10 To take his place, Sony began to employ marketers with MBA’s to help identify new-growth opportunities. The MBA’s brought with them sophisticated, quantitative, attribute-based techniques for segmenting markets and assessing market potential. Although these methods uncovered some underserved opportunities on trajectories of sustaining improvement in established markets, they were weak at synthesizing insights from intuitive observation. In searching for an initial product foothold in new-market disruption, observation and questioning to determine what customers are trying to do, coupled with strategies of rapid development and fast feedback, can greatly improve the probability that a company’s products will converge quickly upon a job that people are trying to get done.
Innovations That Will Sustain the Disruption
Gaining a foothold is just the first battle in the war. The exciting growth happens when an innovation improves in ways that allow it to displace incumbent offerings. These are sustaining improvements, relative to the initial innovation: improvements that stretch to meet the needs of more and more profitable customers.
With low-end disruptions, it can be easy to determine the right sequence of product improvements in the up-market march. After the steel minimills established their foothold in the rebar market, for example, t
he next logical step was fairly obvious: Tackle angle iron and thicker bars and rods—the grades of steel that were just above rebar. For Target Stores, the goal was to replicate the product line, brands, and ambiance that previously were only available in expensive, full-service department stores. The low-end disruptor’s marketing task is to extend the lower-cost business model up toward products that do the jobs that more profitable customers are trying to get done.
With new-market disruptions, in contrast, the challenge is to invent the upward path, because nobody has been up that trajectory before. Choosing the right improvements is critical to the disruptive march up-market. Here again, job-based segmentation logic can help.
Let’s examine one of the hottest markets of the last decade—hand-held wireless electronic devices. The BlackBerry, a handheld wireless e-mail device made by the Canadian company Research in Motion (RIM), is an important competitor in this field. RIM found the BlackBerry’s disruptive foothold at a new spot on the third axis in the disruption diagram, competing against nonconsumption by bringing the ability to receive and send e-mail to new contexts such as waiting lines, public transit, and conference rooms. So what’s next? How does RIM sustain the product improvement and growth trajectory for its BlackBerry? Surely, dozens of new ideas are pouring into RIM executives’ offices every month for improvements that might be introduced in the next-generation BlackBerry. Which of these ideas should RIM invest in, and which should it ignore? These are crucial decisions, with hundreds of millions of dollars in profits at stake in a rapidly growing market.
RIM’s executives could believe that their market is structured by product categories characterized by some moniker such as “We compete in handheld wireless devices.” If so, they will see the BlackBerry as competing against products such as the Palm Pilot, Handspring’s Treo, Sony’s Clié, mobile telephone handsets made by Nokia, Motorola, and Samsung, and Microsoft Pocket-PC-based devices such as Compaq’s I-Paq and Hewlett-Packard’s Jordana. In order to get ahead of these competitors, RIM would need to develop better products faster than the competition. Sony’s Clié, for example, has a digital camera. Nokia’s phones offer not just live conversation and voice messages, but short text messaging as well. The Palm Pilot’s consummately convenient calendaring, rolodexing, and note-keeping features have almost become industry standards. And does the fact that Compaq and Hewlett-Packard offer stripped-down versions of Word and Excel software mean that RIM will be left behind if it does not follow suit?
Defining the market by the characteristics of the product causes managers to think that in order to beat the competition, RIM would need to build some number of these features into its next-generation BlackBerry device. RIM’s competitors, of course, would be thinking the same thing—all trying to cram their competitors’ superior features into their products in a race to get ahead of the pack. As suggested in table 3-1, our worry is that defining market segments in a product-based way actually causes a headlong, arms race–like rush toward undifferentiable, one-size-fits-all products that perform poorly any specific jobs that customers might hire them to do.
Alternatively, RIM’s executives might segment their market in demographic terms—targeting the business traveler, for example—and then add to the BlackBerry those product improvements that would meet those customers’ needs. This framing would lead RIM to consider a very different set of innovations. Stripped-down customer relationship management (CRM) software might be considered essential, because it would allow salespeople to review account histories and order status quickly before contacting customers. Downloadable electronic books and magazines would obviate customers’ having to carry bulky reading material in their briefcases. Wireless Internet access, with the attendant capabilities to alter travel reservations, trade stocks, and find restaurants via global positioning satellites, could be very appealing. Expense-reporting software coupled with the ability to transmit reports to headquarters wirelessly might be a must.
Every executive who has participated in decisions to define and fund innovation projects will empathize with the tortured difficulty of answering questions such as these. No wonder that many have come to regard innovation as a random crap shoot—or worse, a game of Russian roulette.
TABLE 3 - 1
How You View the Market for Handheld Devices Will Determine What Product Features You Consider to Be Relevant
Product View Demographic View Job-to-Be-Done View
Market Definition
The handheld wireless device market Market Definition
The traveling salesperson Market Definition
Use small snippets of time productively
Competitors
Palm Pilot, Handspring Treo, Sony Clié, HP Jordana, Compaq I-Paq, wireless phones Competitors
Notebook computers, wireline Internet access, wireless and wireline telephones Competitors
Wireless telephones, Wall Street Journal, CNN Airport News, listening to boring presentations, doing nothing
Features to consider
Digital camera Features to consider
Wireless Internet access; bandwidth for data Features to consider
E-mail
Word Voice mail
Downloadable CRM
Excel data/functionality Voice phone
Outlook Wireless access to online Headline news, frequent
travel agencies updates
Voice phone
Online stock trading Simple, single-player games
Organizer
E-books and e-technical Entertaining “top ten” lists
Handwriting recognition manuals
Always on
E-mail
Voice
But what if RIM structured the segments of this market according to the jobs that people are trying to get done? We’ve not conducted serious research on this, but just from watching people who pull out their BlackBerries, it seems to us that most of them are hiring it to help them be productive in small snippets of time that otherwise would be wasted. You see BlackBerry owners reading e-mails while waiting in line at airports. When an executive puts an always-on BlackBerry on the table in a meeting, what is she trying to do? Just in case the meeting gets a little slow or boring, she wants to be able to glance through a few messages unobtrusively, just to be a bit more productive. When the pace of the meeting picks up, she can slide the BlackBerry aside and pay attention again.
What is the BlackBerry competing against? What gets hired when people need to be productive in small snippets of time and they don’t pick up a BlackBerry? They often pick up a wireless phone. Sometimes they pick up the Wall Street Journal. Sometimes they make notes to themselves. Sometimes they stare mindlessly at the CNN Airport Network, or sit with glazed eyes in a boring meeting. From the customer’s point of view, these are the BlackBerry’s most direct competitors.
What improvements on the basic BlackBerry wireless e-mail platform does this framing of the market imply? Word, Excel, and CRM software are probably out—it’s just really hard to boot up, shift mental gears, be productive, and gear down these activities within a five-minute snippet of time. Snap-on digital cameras likewise aren’t likely to be hired to get this job done.
However, wireless telephony is a no-brainer for RIM, because leaving and returning voice messages is another way to be productive in small snippets of time. Financial news headlines and stock quotes would help the BlackBerry compete more effectively against the Wall Street Journal. And mindless, single-player games or automatically downloaded Letterman-like lists of ten might help the BlackBerry gain share against boredom. Viewing the market in terms of the jobs that its customers are trying to get done would define for RIM an innovation agenda that is grounded in the way its customers live their lives. The good news for RIM shareholders is that this appears to be the trajectory the BlackBerry is on.11
Doing this make-me-productive-in-small-snippets-of-time job perfectly is not trivial, of course. Adding voice telephony to the BlackBerry would increase
power consumption. This, however, is the type of challenge classically associated with sustaining innovation. RIM’s biggest issue is probably not a lack of engineering talent; it is deciding which problems it should deploy that talent against.12
What should Palm do? In the context of the job that the BlackBerry is hired to do, a camera makes no sense. But might it make sense on a product like the Palm Pilot that is used to keep track of people? In addition to just displaying a name card, a camera would enable users to store the person’s image as well—helping Palm Pilot users be better organized by remembering not just people’s names but their faces, too.13
In the Japanese mobile phone market, the strategies of mobile telephony providers J-Phone and NTT DoCoMo to add a camera and photo viewer to the mobile phone and to provide the data services required to send and receive low-quality digital photos met with instant success in the early 2000s. Why? A few years earlier these firms had created a booming new-market disruption selling wireless Internet access through services like DoCoMo’s I-Mode. Their customers were primarily teenagers, who had hired mobile access to the Internet in order to have fun with their friends downloading wallpaper and ring tones. The popularity of limited-functionality cameras and photo viewers on these teenagers’ phones makes sense when viewed through the lens of jobs to be done: Mobile phones that send and receive photos offer these young people more and newer kinds of fun.
Should European and North American service and handset providers attempt to emulate this success by incorporating this functionality in their phones? At this writing, we expect camera-equipped phones to take off much more slowly in these markets, because many mobile phone users in these markets are adults who seem to have hired mobile phones to get work done or exchange important information in small snippets of time. Cameras and viewers rarely help get these jobs done better. If these companies were to market phones and these services to teenagers and children as a new way to have fun by taking and transmitting images, this product feature could create substantial growth. But if they follow their demonstrated propensity to deploy the functionality as a high-priced feature on phones that serious multitasking adults have hired to get down to business rather than play, our bet is that little growth will result.
The Innovator's Solution Page 11
