Revisiting "Jobs to Be Done" Clay Christensen | HBR IdeaCast

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1:10Clayton Christensen:Welcome to the HBR IdeaCast from Harvard Business Review. I'm Alison Beard.

1:21Clayton Christensen:The business world has lost one of its most influential thinkers. Harvard Business School professor Clayton Christensen died on January 23rd, 2020, at the age of 67. Christensen is perhaps best known for coining the term disruptive innovation in his groundbreaking 1997 book, The Innovator's Dilemma. But his impact went well beyond that. His theories and research influenced a generation of students, executives, and companies, and he's remembered by those who knew him personally as an exceptional colleague, teacher, mentor, and community member. Christensen was also a great friend of Harvard Business Review.

2:01Clayton Christensen:Not only did he contribute so many important articles and books, but everyone who worked with him can tell you he was a generous, creative, and kind collaborator. To honor his legacy, we wanted to revisit our most recent IdeaCast interview with him. It's from 2016 and about his jobs-to-be-done theory. He was interviewed by HBR editor Amy Bernstein at an event in London. It's a great show, and we're glad to play one small part in making sure Clay Christensen's voice continues to inspire business leaders around the world.

2:42McDonald's, a number of years ago, as this idea of the jobs to be done was emerging, they decided that they needed to increase the sales of their milkshakes. And as you know, McDonald's, these are very sophisticated marketing people. They have data about the gazoo, about anything you need. And they had a demographic profile of the quintessential milkshake customer. Actually, I fit the profile perfectly. And so they would invite people like me into offices, explain that they were trying to improve the milkshakes so that people will buy more of them. Can you give us any guidance? And the customers would give them very clear guidance.

3:33They would then improve the milkshake, and the impact on sales or profits was negligible. So we convinced them, as this idea of the jobs to be done began to emerge in our minds, if they would let us put that lens on to understand milkshakes. And the question is, you know, somewhere out there, there's a job that arises in the lives of some people sometimes that causes them to hire a milkshake to get the job done. And we need to understand what's the job. So, one of my colleagues stood in a McDonald's restaurant for 18 hours one day and just took very careful notes. What time was it that he bought the milkshake at?

4:30What was he wearing? Was he alone? Did he buy other food with it? Did he eat the milkshake in the restaurant or get in the car and go off with it? and it turned out that about half of the milkshakes were sold before 8 30 in the morning it was the only thing they bought they were always alone and they always got in the car and drove off with it so to figure out what was the job we came back the next morning and we positioned when you need to build up your team to handle the growing chaos at work use indeed sponsor jobs it It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more.

5:12Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Palmolive. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra. Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean.

5:51And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com. We put ourselves outside the restaurant so that we could confront these people as they were emerging with their milkshake. And we'd say, I'm having a real problem here with your behavior. What job are you trying to get done that caused you to come to McDonald's to hire a milkshake at 6.30 in the morning? And as they would struggle to answer the question, we said, I'm sorry for the tough question. Try this. Think about the last time you were in the same situation where you needed to do the same job, but you didn't come here to hire a milkshake from McDonald's.

6:38What did you hire? And it turned out that they all had the same job to do. That is, they had a long and boring drive to work. And they just needed something to have while they were driving to stay engaged with life and not fall asleep. one hand had to be on the wheel but gee somebody gave me another hand and there's nothing in it and I just needed something to do while I'm driving I'm not hungry yet but I know I'll be hungry by 10 o 'clock so I also need something that will just go thunk and stay there for the morning so what do I hire to get that job done when I don't hire a milkshake And one guy said, yeah, I never thought about it this way before, but last Friday I hired a banana to do the job.

7:33Take my word for it, never hire bananas. They're gone in less than a minute. You're hungry by 7.30? Yeah, as you can say, I hire donuts a lot. I can never hire just one. But that creates problems on their own. And I do bagels sometimes, but bagels are dry and tasteless, you know. And so I have to steer the car with my knees while I put the cream cheese on. And then if the phone rings, I have three problems and two hands and, you know. One guy said, I hired a Snickers bar once, but I felt so guilty I've never hired Snickers again. But let me tell you, when I come here to McDonald's and hire this milkshake, It is so viscous.

8:20It takes 23 minutes to suck it up that thin little straw. What the ingredients are, I don't care. All I know is that I'm still full at 10 o 'clock. And it actually fits right here in this cup holder. And it turns out that the milkshake does the job better than any of the competitors. And the competitors are not just Burger King milkshakes. But from the customer's point of view, the milkshake competes against bananas and donuts and bagels and coffee and Snickers bars and probably some other things. And so that's one job that accounted for about half of the... And then later in the day, customers hired a milkshake to do something totally different.

9:12And that essentially is between a parent and a child. I want to just have a venue in which they believe that I'm listening. And I just need to have some kind of a mechanism to put us on the same. I want to know what's going on. Would you please let them know how much I care for them? That's a very different job to do. and understanding what the job is puts you on a very different trajectory. So how could you improve the milkshake for the morning job to be done? It turns out that the reason why they had worked so hard to get input from the customer. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs.

10:06It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Palmolive. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra.

10:43Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean. And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com. and it had no impact on sales or profits, is that they had been improving the milkshake on dimensions of performance that were irrelevant to the job to be done. So how would you improve it knowing that you understand what the job is? Well, I'd move the milkshake from behind the counter to the front of the counter and give people a prepaid swipe card so you could just dash in, gas up, and go.

11:27and never caught behind a line when we're late for work. You'd probably make it thicker to take longer to suck it up, and so on. Last question. How big is the milkshake market? It's a serious question. Well, of course, you wouldn't know the answer. But it turns out that the size of the market is much bigger than the sum of the milkshakes sold by McDonald's, Burger King, and Wendy's. Because from the customer's point of view, they compete also against bananas and donuts and so on. And in the part of the market in America where they implemented this, the sales of the milkshakes increased by 7x when they improved it in ways that really connected.

12:20because competing against bananas is like duck soup. Unfortunately, Peter Drucker figured this out before we did when he said the customer rarely buys what the company thinks it's selling. And understanding the job to be done, we found, really helps us in making innovation predictable because the job exists, and if we make the job so that it does it better, we can predict that the customers will buy it. Why don't we organize ourselves around a job to be done? And what happens is the original job to be done that was the basis of starting a new company, almost always successful companies were focused on a job to be done.

13:16at the beginning. And then the logic takes over and the logic is well we have these customers and they use us to get a job done. Our customers have other jobs and so maybe we ought to offer other products so that they can get those jobs done as well. And so the New York Times the job that it was organized around was they publish anything that was fit to print. But we have this relationship with our customers. Surely we ought to offer more things. And so one job that arises is I'm on the tube for 45 minutes every morning. I don't want to waste my time. So can I hire something just to help me be productive?

14:12and for a while you had the New York Times to read but it was very cumbersome and so then a company called Metro came just a simple product that you could go from beginning to end in about 25 minutes and now we have smartphones but we hire those things to get that job to be done if I need to get rid of junk or if I want to buy junk The New York Times had personal advertisers. Now you can hire Craigslist. Sometimes I need to buy a car. Sometimes I have a car I want to sell. And so the New York Times offered advertisements to get that job done too. I need a job. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs.

15:06It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Palmolive. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra.

15:44Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean. And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com. or I need to hire somebody to fill a job and so they have advertisements to do that job well I need to buy a home or sell a home and so on and so the New York Times added all of these things to their product thinking that they will do better and then they have been being disrupted by companies that focused around a single job to be done and we do it better than anybody else.

16:32And the newspapers, most of them, are just falling off the cliff because they're not focused. Innovation around a job to be done starts with the understanding that there is a job given the situation that I'm in. And each job has a functional dimension but an emotional and a social dimension to get the job done. If we understood that, then we can answer the second question, which is, so given this, what are the experiences in purchase and use do we need to provide in order to nail the job perfectly? And if I can provide those experiences to nail that, then I can ask the next question. So if we need to provide these experiences to the customers, what do we need to integrate?

17:29And how do we need to integrate them? And if we can go through that architecture in a consistent and insightful way, this is where we differentiate our product versus the competitors. It's not by making a better product than the competitors. That is very easy to copy. But if we put into place experiences that the customers need, that's where differentiation occurs, and that's the place where customers decide to buy my product rather than your product. You know, when I realize I have a job to do, the next step is, oh, darn it, I have to buy something to get the job done. what should I hire to do the job?

18:20And I look around, and if I can't find a product to get the job done, then I have to shop and test drive and bring it home and put it on and return it and get this and add it to that because nobody developed a product that does the whole thing well. and looking for something to get the job done can be very costly in terms of time and money. And if we instead have a brand that just pops into people's minds so that when they realize I have this job to do, what can I hire? If a brand pops into our mind, then I will be delighted to pay a premium price to get the job done, because buying a product that doesn't do the job well is very costly.

19:19So the third of our five children, Michael, went to Stanford to get a PhD. And after he'd been there for about a week, he called us up and said, Mom and Dad, I found my apartment. I need to furnish my apartment tomorrow. So Michael found himself with a job he had to do. That is, he needs to furnish his apartment tomorrow. When you find you needing to get that job done, which is the job I need to do is I have to furnish my apartment tomorrow, is there a brand that pops into your mind? When you need to build up your team to handle the growing chaos at work, Use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more.

20:13Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. This episode is brought to you by Palmolive. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra. Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean.

20:51And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com. IKEA has been rolling out its business model around the world for 50 years. And they have no competitors. And why? Well, they don't have any secrets. It's not that there's no money in it. Their owner is the third richest guy in the world. and he got rich by selling substandard furniture to the low end of humanity, college students. And why is it that they will pay a premium price because it does the job well? And if they didn't hire something that did the job well, then they'd have to go to this store and this store and buy this piece of furniture and throw that away.

21:58And going for a product that doesn't do the job well is so costly that they're delighted to pay a premium price. So Clay, what you were saying about integrating around a job and you introduced the idea with the New York Times Makes me wonder what you think about the AT &T Time Warner proposed merger. Doesn't it just rip your heart out? Because two good companies, you know. And so they have no sense of merger there at all, you know. And this has been done before. Right. So in finance, not many years ago, Citibank went through the same logic. And that is, oh, geez, we have credit cards and customers who have checking accounts.

23:01And they also invest their savings. And so they need financial, your investment help. And they are buying a home. and so some of them need mortgage, you know, and their customers need all of these things arise in their lives. And so Citibank buys all of these companies because the customer needs all of these things, you know. The problem with that is the job that causes me to need a credit card arises at a different point in life than when I hire life insurance. And so they put them together, and because these jobs arise at different points in time and space, integration around the customer just doesn't make sense.

24:00And so for these guys, we need to pray for them. Well, the regulators may do it for them. Yeah, that's right. So talk about how your theory of jobs to be done helps us identify threats and opportunities. For me, it allows me to go to that second level. If I just simply think that I'm in the business of making a product, and I win if my product is better in functionality than the competitors, then I win. and if I get behind in that race, then I lose, it doesn't give me any guidance about where and how can I differentiate what I'm offering so that they will pay a premium price for an average product.

24:57And you have to understand, so what are all the experiences? And I can't provide experiences unless I understand what the fundamental job is. So to me, that helps me be a better innovator because I have, it's kind of like a North Star. And my innovators in my company can do all of this work sometimes out of the line side of the executives. But if you have that North Star, the job to be done, they will, I think, collectively do a better job in innovating. Amy, can I say one other thing? Of course. So this question kind of helped me a lot to understand what happened to Kodak. This is a wildly successful company.

25:57And we assume that they were just disrupted by digital imaging. And if the idiots had just been invested in the right thing, they would have survived. And the jobs-to-be-done theory helped me frame it very differently. that Kodak saw digital imaging coming and starting in the early 1990s they invested eight billion dollars to get really good at digital imaging really invested the people they hired were from Bell Labs and you know but they didn't get the job right nor did any of us get the job done right. And we thought that the job that people hired a camera with film to do was to preserve memories for posterity.

26:58But it turns out that 98 % of all of the images ever taken have only been looked at once. And think about it, what you would do is you get the prints and you go through them and then what would you do? Put him in the envelope, put it in a box, in a drawer and you'd never look at him again. And so there must not be a job there that people were trying to do. It's just we assumed but they didn't, you know. And then looking back on it inadvertently Kodak and their distributors made a different proposition that we will give you double prints, not single, when you bring your film in for processing. And the nice thing about that was when we were doing this, if there was really a photograph that just clicked, we had an extra that we could put in an envelope and send it to my mom.

28:06And that was a different job to be done. and mom I love you but I'm busy today and I can't write to you but look at this photograph and the photograph the job to be done was I want to communicate and actually you can communicate a lot with an image and little by little I think the job coalesced in our minds is that we could use imaging rather than writing to communicate to people who are not here and now. And so as a new technology emerged that wasn't what Kodak developed, but it was just a tiny little lens flash memory, you could put it in a smartphone, and I can send you 20 images just like this, and you can see them and you know so much more of what's going on in your family's life that the next generation, actually, they don't want to have to be bothered to write letters at all.

29:21But we, little by little, the job to be done became clearer and clearer in our minds. And I think Facebook is a part of that. we use these things to communicate and there's a very different job which is I actually don't want to be in communication I'm a nerd, I've got a deadline and the last thing in the world I want is to have to communicate with humans and that's a very different job

29:56Clayton Christensen:That was HBS professor and management legend Clay Christensen HBR editor Amy Bernstein interviewed him in 2016. Christensen passed away in January of 2020.

30:14Clayton Christensen:This episode was produced by Mary Du and Kurt Nickish. We get technical help from Rob Eckhart and Ramsey Kabaz. Adam Buchholz is our audio product manager. Thanks for listening to the HBR IdeaCast. I'm Alison Beard. Thank you.