How to Stay Relevant in Turbulent Times
Due to the disruption from coronavirus, many of our societal institutions – companies, schools, non-profits, and government – are scrambling to develop flexible hybrid value delivery platforms, that is, ways to deliver their value through face-to-face platforms and online.
Innovation skills are more important now than ever. Yet, the state of innovation continues to be plagued by high failure rates (about 75-85%) despite significant investments to develop corporate innovation capabilities over the past two few decades.
The number one reason for failed startups and new offerings alike has consistently been misunderstanding customer needs1. This is due, in large part, to the lack of an agreed-upon definition for what a “customer need” really is. Because of this confusion, most companies don’t know what type of customer inputs to obtain or how to get them.
Harvard Business School Professor Theodore Levitt brought some light to this when he famously said: “People don’t want to buy a ¼-inch drill; they want a ¼- hole.” This quote illustrates an essential truth at the heart of all effective marketing and innovation: solutions are separate and distinct from customer needs.
The drill is a solution, not a need. Other solutions include a pick, a punch, a laser or some yet-to-be-invented tool. The customer “need” is a job to be done, in this case, the job of “making a ¼-inch hole.” People buy products and services to get jobs done. When people have a job to be done, they look around for a product or service to “hire” to help them do it.
Customer needs – their jobs to be done and how they measure success – are totally separate and distinct from solutions. If we can keep this distinction in mind, we can turn innovation and growth into a repeatable business process by applying this thinking to virtually any industry.
For example, one client, partners of a regional accounting and consulting firm were seeking new revenue streams beyond audit and tax work. They understood that their target customers – CEOs and CFOs of privately held midsized companies – don’t want to buy accounting services; they want to get their finance and accounting-related jobs done, such as:
- Close the books.
- Determine the profitability of a store, product or service line.
- Plan for succession.
Through interviews with two dozen of their target customers, we discovered dozens of finance and accounting-related jobs. Every important unsatisfied job to be done is a potential new market. The more important and less satisfied a job is, the greater the opportunity for innovation and growth it presents. By identifying their target customers’ important unsatisfied jobs to be done before generating solution ideas, they avoided wasting time and resources that inevitable would have been spent attempting to satisfy unimportant needs or important needs that are already well satisfied.
By getting this information directly from target customers upfront, the firm was able to determine the best way to capitalize on the most attractive opportunities (jobs to be done). For example, to address finance and accounting-related opportunities, the firm was able to build new services with their existing talent. For other customer jobs outside the firm’s core competencies, however, such as “prevent Internet security breaches,” they chose to acquire an Internet security firm. And in another case, because their target customers considered “finding and hiring temporary accountants,” important and unsatisfied, the firm forged a joint venture with an accounting outsourcing firm. Companies are often pleasantly surprised to see how simple it often is to generate winning solutions and features when you know what your target customers are trying to get done and how they measure success.
Stephen R. Covey taught us that, for personal effectiveness, keep the end in mind. This is true for innovation effectiveness as well except that, for innovation, we must discover and then keep the customers’ ends in mind.
Jobs-to-be-done makes it possible to identify customer’s ends-in-mind and thereby provides design teams with concrete actionable targets to focus their creativity. Not surprisingly, this dramatically increases creativity and success rates. Thus, innovation becomes a business process like project management and success rates soar. This is how leading organizations are driving innovation and growth in a repeatable manner and you can, too.
Reveal needs. Create value. Drive growth.
