- On October 26, 2016
- In B2B, Customer Needs, Innovation, Jobs-to-be-done, JTBD
- By Rob Schade
A lot has been, and is currently being, written about the jobs-to-be-done (JTBD) model of innovation (see Clay Christensen’s new book on the topic here). If you who are not familiar with this theory, it can be summarized into the following.
Customers buy products and services to help them get an underlying activity or “job” done. The value the customer seeks from the product or service is to help them get the underlying job done more effectively, reliably, conveniently, or affordably. Therefore, companies should focus their innovation on customers’ metrics for successful execution of one or more jobs – more so than on what they currently build and sell. This orientation enables companies to see beyond where they are today and identify new opportunities for growth for tomorrow.
Great business theory is characterized by two main criteria. First, the theory has to have strong explanatory power. Does it reveal some truth that we can apply in our business? Second, is it easy to understand and implement? The easier to understand, the more it will be adopted and implemented. The JTBD theory has broad explanatory power and is easy to understand – that is why thought-leading companies all over the world are starting to use it.
And while the theory has been around for more than a decade, it is still in its infancy as it relates to its development of practical tools and its widespread adoption in industry. There is still a long way to go. However, in the spirit of moving this theory forward, this blog shares a JTBD tool that we believe will make it even easier for companies to use JTBD thinking in their business. We call this tool the JTBD Growth Compass.
The basis for what we share in this blog was originally written about by Lance Bettencourt in his book, Service Innovation, and in his article, Shaping a Job-Centric Service Innovation Strategy in Marketing Management. Our goal in revisiting this information was to continue to evolve the thinking and to make it easier to use and turn it into practitioner-level tool.
We use the JTBD Growth Compass as we help our clients think through new possibilities for growing their business. It helps us frame the discussion so they can make some important decisions on where they want to look for new growth opportunities. Do they want to grow in their current markets (jobs) or do they want to go further afield and look at new jobs?
Now let’s be clear, this tool, or this blog post, will not answer all the questions the company will face as they think about their innovation plan. For example, it will not clarify if the company has the capabilities to succeed in a particular job area, nor will it give insight into whether customers believe the company’s brand is relevant in a new market. There is much that still needs to be done after using the tool, but the benefit of the JTBD Growth Compass is that it helps frame and answer a very important question. Where might we grow?
Diagram 1 – JTBD Growth Compass
You see, to answer that question, the team collectively needs to think about, and then decide, where they should be looking for new growth opportunities. Should we stay near what we are doing today or look beyond? Without a structure for having this complex conversation, a team can quickly get overwhelmed with options and get paralyzed by the decision. With the JTBD Growth Compass, teams now have a methodical way to discuss, explore, and decide on new options for growth. To understand how to use the compass, we must define each of the “job” areas on the compass.
For the rest of this blog I will use one company as the primary example case for the JTBD Growth Compass. This way you can see how one might apply this thinking in a specific business case. The example company is Intuit and my focus is the QuickBooks product line. These examples are purely illustrative and not based upon our work with them. See Diagram 2
A focal job represents a market in which the company is already competing and providing products or services. Creating value here means companies must understand how customers measure the successful execution of the job for which current products and services are being hired. A particular job might have 50, 60, 70 or more success metrics (needs). Then, measuring those needs for importance and satisfaction, the company can determine which needs are the best opportunities for growth.
For example, the focal job of Intuit’s Quickbooks product is to account for revenue and expense for a small business. In talking with small business owners / accountants you may hear success criteria for the job like the following:
- Ensure the business has enough cash to meet current cash needs
- Quickly know who still owes the business money
- Quickly invoice a client
If it turns out that “ensure the business has enough cash to meet current cash needs” is the most important and poorly satisfied success criteria, then Intuit should focus on improving along that dimension – as well as the other top underserved criteria.
Improving value for the successful execution of a focal job is a big part of a company’s product development efforts – as it should be. Every company needs to become great at understanding their customers’ job and their related success metrics – this is the baseline for sustaining growth in any market. In addition, by understanding the job and focusing on the success metrics the company can:
- Evaluate new, competitive solutions
- Understand how their solutions measure up against competitor offerings
- Evaluate new technologies and business models that may transform or disrupt their market
When a company talks about market adjacencies, they are often talking about related jobs. Related jobs are jobs that customers do today that are related to use of the company’s product or service to get the focal job done. The thinking goes that if we are already helping them in this area, perhaps this related job is something that we can also migrate into. Talking to customers to better understand their business and important related jobs can be an extremely fertile area to look for new growth.
As previously stated, the focal job of Quickbooks is to “account for revenue and expenses for a small business”. So what are some related jobs where Intuit could add value to their customers? Besides accounting for revenue and expenses, small business owners / accountants do many other jobs, including:
- Prepare income taxes
- Identify cost reduction areas
- Benchmark financials against other companies, e.g., competitors, peer group, etc.
- Find lower cost suppliers
Clearly some of these jobs are closer to what Intuit does today so some of these jobs will be easier to develop solutions than others (due to capabilities, brand, etc.). For example, consider the job of “find lower cost suppliers”. What if Intuit created a marketplace of suppliers where their QuickBooks’ users could look for lower cost providers of the goods and services that they buy today? Clearly this is beyond what Intuit does but not so far afield that their current customers would have a problem engaging them for this type of help. And since they have tens of thousands of small businesses using QuickBooks online, they already have access to potential suppliers and buyers for this two-sided marketplace.
There is obviously more work than this to sort through all the opportunities that might present themselves when looking at related jobs; however, the general premise is quite simple. Your customer is looking for new ways to get related jobs done – just ask them.
Diagram 2 – Quickbooks Growth Compass
Sometimes offering something very specific and slightly different based upon a context or scope can be a great place to find growth opportunities for your business. This is especially important as a market matures. For specific jobs, we break them down into two categories. The first is bounded jobs. This means the job may be a subset of the overall focal job but requires deeper expertise or functionality to do justice to the job in an optimal manner.
An example of a bounded job for our Intuit illustration is to “collect receivables”. As you can see this is a sub activity of the focal job of “account for revenue and expenses” but it requires additional information and activities to accomplish it. Helping small businesses to collect receivables is a natural fit into the focal job but there is plenty of room for additional value creation, especially if you can help businesses collect receivables faster and with less hassle. This job falls within Intuit’s brand equity and customers could easily envision a solution from the company.
The second type of a specific job is one that is defined by its context, such as where and when a job is done. Keeping with the QuickBooks example, accounting for revenue and expenses for a not-for-profit or a professional services organization are two contexts where Intuit could grow their business. The primary job is the same but with some nuances that are specific to the context. I suspect you can think of a lot of these very quickly – taking pictures and taking pictures underwater, or listening to music, and listening to music on the go.
A company doesn’t always have to focus on the functional reasons the product or service is hired as they look for ways to create value for their customers. Sometimes it is as simple as helping customers to consume the product or service more easily. Consumption jobs includes things like:
- Learn about a product
- Buy a product
- Install a product
- Learn how to use a product
- Update and maintain a product
- Get support for a product
Of course, companies should always be trying to make it easy for customers to work with them but surprisingly not enough do. For the companies that do focus on consumption jobs, the market benefits can be extraordinary. Obviously, QuickBooks has already done this by moving QuickBooks online years ago – reducing the need to update and maintain the software on local computers. Likewise, SalesForce rose to CRM dominance through leveraging consumption jobs – beating out much more mature and full-featured competitors like Seibel Systems.
Or think about the explosive growth of Uber and Lyft where their new consumption model is decimating the old taxi business and perhaps in the long run, disrupting the automobile industry. Likewise, consider how Chick-fil-A’s new app is transforming how people order their food at a quick-serve restaurant. All of these innovations are about consumption – simply improving on the focal job is no longer enough.
The final job category is strategic jobs. A strategic job is the overarching or higher-level job that your focal job fits into. To think through strategic jobs, ask questions like ‘why are customers trying to do the focal job today?’ and ‘what other things are they trying to achieve by doing the focal job?’ One should also consider if the focal job is just a step in getting another, higher-order job done? The idea is that the company might be able to grow into that higher order and perhaps more sophisticated or complex job. For Intuit and its QuickBooks franchise, the company might consider the more strategic job of “proving financial viability to capital markets” as one they could migrate into.
One reason a small business keeps track of their finances is to prove to investors and financial institutions that they are financially viable and worthy of providing capital for growth. In this example, one could imagine that QuickBooks could calculate financial ratios for a business and compare those with hundreds of thousands of other businesses and provide a score that financial institutions and investors could use as part of their credit evaluation. Here are a few some examples of focal and strategic jobs:
Focal Job Strategic Job
Account for revenue & expenses ⇒ Prove financial viability to capital providers
Book flight reservations ⇒ Plan a vacation
Pay a bill ⇒ Manage personal finances
Lose weight ⇒ Improve overall health
Lock my house ⇒ Protect my family
Search for information ⇒ Create a report
The most important innovation question is “where should we create value?” With the JTBD Growth Compass companies have a structured tool to help them methodically explore that question. And this tool should not be one that companies pull out once in a while but one posted in every office and cube so teams are thinking about new potential growth areas constantly. In fact, in B2B settings, sales people should be taught this model right along with product management and marketing – so when important customer conversations happen, the right questions are being asked.