Jobs to Be Done, Milkshakes, and Online Learning
I recently read Competing Against Luck, Clayton Christensen’s new book on innovation, understanding customer needs, and delivering valuable solutions.
Christensen seeks to answer the question: “What is the causal mechanism that motivates customers to pull a product into their life?”
Christensen advocates for the “Jobs to Be Done” Theory (or Jobs Theory for short). In this theory, customers are not buying specific products. They are hiring products to fulfill a specific job in their lives. As Christensen explains:
“What causes us to buy products and services is the stuff that happens to us all day, every day. We all have jobs we need to do that arise in our day-to-day lives, and when we do, we hire products or services to get these jobs done.”
The Job to Be Done for milkshakes
The canonical example that Christensen uses to illustrate Jobs Theory is a milkshake. Upon first thinking about the milkshake product category, you might think that customers are buying milkshakes because they’re hungry, they like the flavor, they like the consistency. And if you asked customers if they would like bigger milkshakes that made them feel full, or milkshakes with new flavors (like root beer or orange), or thicker milkshakes — the answer to all of these questions might be “yes.” However, you could modify the milkshake to meet what you think their needs are, only to find that this doesn’t cause customers to buy more milkshakes.
If you focus too much on the milkshake as a product category, and if you’re only thinking about “feature enhancements” that could motivate customers to buy more, then you’re thinking about it all wrong. Instead, Christensen argues, you need to really understand what job the customer has and could hire the milkshake for. You need to also understand what the “competitors” are to fulfill this job — not necessarily direct competitors like other milkshakes, but substitutes like doughnuts, bananas, and bagels.
After observing and interviewing a number of customers, Christensen and his team realized that many customers were buying milkshakes in the morning on their way to work. He writes:
“What these milk shake buyers had in common had nothing to do with their individual demographics. Rather, they all shared a common job they needed to get done in the morning: ‘Help me stay awake and occupied while I make my morning commute more fun.’”
Christensen’s team had identified the job for the morning milkshake buyer. However, they also found that other customers were buying milkshakes at other times during the day, outside of the morning commute job. They uncovered another job: the parent who wants to give their child a special treat in the afternoon.
“In that moment, the milkshake isn’t competing against a banana or a Snickers bar or a doughnut, like the morning milkshake is. It’s competing against stopping at the toy store.”
The key insight from the milkshake example is that “People hired milkshakes for two very different jobs during the day, in two very different circumstances. Each job has a very different set of competitors… and therefore was being evaluated as the best solution according to very different criteria.”
Based on understanding the distinct Jobs to Be Done, the fast food company that provides milkshakes can develop two distinct experiences: one for the morning commuter, and one for the parent giving their child a special treat. And because they have broadened the competitive set to substitutes and indirect competitors, they can identify insights around how to differentiate and provide value that they may have missed if they only considered the milkshake product category.
Understanding the Job to Be Done
So how do you define a Job to Be Done? Christensen writes:
“We define a ‘job’ as the progress that a person is trying to make in a particular circumstance.”
The two key words in the definition are “progress” and “circumstance.” Progress implies that the individual is trying to solve a problem, improve a situation, achieve a goal. Circumstance implies that the job arises within a particular context — who were they with, what did they do before/next, where are they, when in the day is it? In addition to considering the functional aspects of the job, it’s also critical to consider the social and emotional context. “Jobs are never simply about the functional — they have important social and emotional dimensions, which can be even more powerful than functional ones.”
One interesting thing about Jobs Theory is that it’s more qualitative than quantitative. As Christensen explains:
“Jobs insights are fragile — they’re more like stories than statistics… Jobs Theory doesn’t care whether a customer is between the ages of forty and forty-five and what flavor choice they made that day. Jobs Theory is not primarily focused on ‘who’ did something, or ‘what’ they did — but on ‘why.’ Understanding jobs is about clustering insights into a coherent picture, rather than segmenting down to finer and finer slices.”
This is an important point. Many of us approach customer research as an exercise in quantitative data gathering — i.e., send out surveys to find out how many people would buy X or prefer Y. In fact, to uncover jobs insights, we need to synthesize qualitative observations and interviews into a coherent story. In fact, Christensen advises us to think about a Job to Be Done as a mini-documentary. Imagine that we are filming a video to capture the mini-documentary, with the following key parts:
“1. What progress is the person trying to achieve? What are the functional, social, and emotional dimensions of the desired progress?
“2. What are the circumstances of the struggle? Who, when, where, while doing what?
“3. What obstacles are getting in the way of the person making that progress?
“4. Are consumers making do with imperfect solutions through some kind of compensating behavior? Are they buying and using a product that imperfectly performs the job? Are they cobbling together a workaround solution involving multiple products? Are they doing nothing at all to solve the dilemma?
“5. How would they define what ‘quality’ means for a better solution, and what trade-offs are they willing to make?”
Christensen points out that most Jobs to Be Done are multifaceted and complex. In order to truly understand a Job to Be Done, you need to understand the details around the progress and the circumstances. And to truly nail a Job to Be Done, it’s likely that you will need to engineer an entire experience for the customer — not just build a product.
The Job to Be Done for online learning
In Competing Against Luck, Christiansen shared the experience of Southern New Hampshire University (SNHU) as they used the Jobs to Be Done process. SNHU was a relatively slow-growth university in the northeastern US. In the early 2000s, they were primarily focused on serving the needs of full-time, in-person college students — the typical 18–22 year-olds who attend college right after high school graduation. They had an online learning program, but that was really a small part of their operations and was treated like a side project.
The SNHU team embraced the Jobs to Be Done process and identified an under-served segment of 30+ year-old adults who hired their online learning program to “resume an aborted education at a later stage of their lives.” Christensen wrote, “it was a miracle that so many students had found SNHU in the first place — and stuck it out to reach graduation.” These customers were essentially “buying and using a product that imperfectly performs the job,” and they were “cobbling together a workaround solution” using SNHU’s suboptimal experience in order to complete their education at a later stage of their lives.
By better understanding the progress, circumstances, and obstacles of these non-traditional customers, SNHU identified a number of ways to create an end-to-end experience that better served their needs. They started by understanding the progress that the customer wanted to achieve, and the circumstances of their struggle.
Unlike traditional college students, the non-traditional students are on average 30 years old, and are juggling a career and family responsibilities. They feel limited by their lack of a college degree, and want to bolster their credentials to improve their career path and family livelihood. According to Christensen, SNHU found “they need higher education to provide just four things: convenience, customer service, credentials, and speedy completion times.” These four needs were very specific to the progress and circumstances of the non-traditional student, and were completely different from the traditional “coming-of-age,” direct from high school students. The needs encapsulated the Job to Be Done for non-traditional customers — why they would “hire” an online learning program to do the job.
Based on this Job to Be Done, SNHU found that they weren’t competing with traditional four-year universities for the non-traditional students — they were competing with other for-profit education companies (like University of Phoenix) and, most importantly, with doing nothing. There were probably millions of people out there who wanted to make progress, but ended up doing nothing. By framing the opportunity this way, SNHU realized that this was huge potential — if they could tap into this new market of people who were currently not doing anything to make progress towards completing their college education later in life, it could be an enormous market.
So the SNHU team began to design an end-to-end experience based on their understanding of the Job to Be Done for the non-traditional student. They synthesized the progress that these customers were trying to achieve, and the circumstances of their struggle, into the four needs: convenience, customer service, credentials, and speedy completion times. And then they engineered their entire experience around these needs.
For example, SNHU revamped their processes for how to respond to inbound inquiries for more information, moving from a 24-hr response time to under 10 minutes, and from boilerplate email to phone call from a well-trained counselor. As Christensen wrote: “In the competitive online-learning world, the first online-learning institution to actually speak to a prospective student is most likely the one to close the sale.”
They changed their processes to make decisions on financial aid — a crucial need for this customer segment — within days, as opposed to weeks or months. They assigned advisers to online students to help them continue to make progress towards their goals. A personal adviser “stays in constant contact — and notices red flags even before the student might — in order to help them continue to make the progress they want to make.”
As a result of pursuing the Jobs to Be Done process, SNHU grew their online learning program to serve 75,000 students in 36 states and countries around the world. By the end of 2016, SNHU is forecasting $535 million in revenue; an impressive 34% CAGR (compound annual growth rate) for 6 years in the highly competitive education market.
Key take-aways from the Jobs to Be Done process
Christensen’s book Competing Against Luck is filled with a number of important insights. Here are some of my key take-aways from his discussion on Jobs to Be Done.
- Customers don’t buy products. They hire products to fulfill a specific job in their lives.
- If you segment customers by demographics or buyer characteristics, you miss the insights on why they hire a particular product. Similarly, if you segment by product characteristics or features, you miss the same insights. Instead, segment customers by the Job to Be Done. You will find that the Job to Be Done can extend across various buyer characteristics or product categories.
- In order to determine the Job to Be Done, you have to understand the progress that the customer is trying to make in a particular circumstance.
- To understand the progress that the customer is trying to achieve, ask what problem they are trying to solve, what situation they are trying to improve, what goal they want to achieve.
- To understand the circumstance, learn more about the context when they hired the product. Who were they with, what were they doing before/after, etc.? Consider the social and emotional context, in addition to the functional.
- Jobs to Be Done insights are qualitative, more than quantitative. They require us to synthesize findings from interviews and observations into a coherent story — a mini-documentary.
- Jobs insights are multifaceted and complex. Chances are, if you have nailed a Job to Be Done, you have created an end-to-end experience for your customer — not just built a product. SNHU redesigned the overall experience for their online learning program, from the response time to an inquiry, to the decision on financial aid, to the assignment of a personal adviser.
- When you segment your customers by Job to Be Done, you may identify other competitors that are not even within your formal product category. Pay attention to these indirect competitors (or substitutes). For example, milkshakes competed with doughnuts and bagels. SNHU competed with online for-profit universities like University of Phoenix.
- Some of the best business opportunities exist when the competitor for your Job to Be Done is nothing. This is how you create a new product category, or disrupt existing product categories by bringing in a large new market of customers.
Christensen’s Jobs to Be Done theory has really changed my perspective on how to approach product development. By truly understanding the progress that the customer is trying to make in a particular circumstance, you have a much better chance of building an experience that the customer wants to pull into their life. In the process, you may identify a completely under-served customer segment, which then allows you to tap into a large potential market opportunity. I plan to incorporate Jobs Theory into my own product thinking moving forward. If you’re building products or starting a new business, I urge you to do so as well.