Jobs to be Done: Theory to Practice Page 7
Analysis of hundreds of jobs has revealed that all jobs consist of some or all of the eight fundamental process steps: define, locate, prepare, confirm, execute, monitor, modify and conclude (see the universal job map). This insight is essential for creating a framework around which customer needs (desired outcomes) are gathered. (To learn more about job mapping, see “The Customer-Centered Innovation Map” in the May 2008 issue of the Harvard Business Review.)
Once a job map is created for a specific functional job, desired outcomes are captured for each step in the job map. For any given Job-to-be-Done, we often uncover between 50 and 150 desired outcome statements.
Customers know perfectly well how they measure success when executing a job and are very capable of communicating those metrics—and those metrics, simply put, are their desired outcomes. A corn farmer, for example, may want to “minimize the time it takes for the corn seeds to germinate” or to “minimize the likelihood that the plants fail to emerge at the same time.”
THE DESIRED OUTCOME STATEMENT
Desired-outcome statements must conform to a specific structure and follow a set of stringent rules. This is necessary because differences in structure, terminology, and syntax from statement to statement can introduce unwanted sources of variability that alter the importance and satisfaction ratings customers give the statements. This in turn will affect the way customers end up prioritizing innovation opportunities.
A desired outcome statement includes a direction of improvement, a performance metric (usually time or likelihood), an object of control (the desired outcome), and a contextual clarifier (describing the context in which the outcome is desired).
“Minimize the likelihood that the music sounds distorted when played at high volume” is one example of an outcome statement related to the job of listening to music.
When creating a desired outcome statement, remember the following structure:
Outcome statement = direction of improvement + performance metric + object of control + contextual clarifier
(See “Giving Customers a Fair Hearing,” in the Spring 2008 issue of the Sloan Management Reviewfor additional details on what a need is and the rules to follow when documenting outcome statements.)
Desired outcome statements can be uncovered using any of the popular interviewing methods, such as personal interviews, focus groups, or observational or ethnographic interviews.
While most qualitative research has a short shelf life, a complete set of desired outcome statements is an important company asset for years to come as desired outcomes don’t change over time—the solutions that address them do.
With a complete set of desired outcome statements in hand, a company can gain quantitative insights into its market that were never before possible.
IV. FIND SEGMENTS OF OPPORTUNITY
Market segmentation is a method that companies use to target unique offerings to groups of customers that will value them. Over the years, many methods of market segmentation have been developed and implemented.
Qualitative methods, including the creation of personas, are used to segment markets using demographic, psychographic, or behavioral categories or stereotypes. Quantitative methods, such as conjoint analysis, aim for greater precision through the use of numerical values and calculations. Unfortunately, nearly all segmentation methods, whether qualitative or quantitative, fail to distinguish between customers with different unmet needs, which is the only form of segmentation that will deliver real value.
We have conducted hundreds of segmentation studies for companies in dozens of industries and have concluded that the differences in people’s needs do not come from different demographics or psychographics. In fact, we have proven that demographic, psychographic, and behavioral and attitudinal data will nearly always fail to explain why customers have different unmet needs. A 28-year-old man from Montana with a college degree can have the same unmet needs as a 55-year-old woman from Florida who dropped out of high school. Both, for example, may be unhappy with their Internet service.
The only way to discover segments of customers with unique sets of unmet needs is to segment the market around unmet needs.
Until now this has not been possible as customer need statements designed for this purpose had not yet been invented. Desired outcome statements defined around the core functional job make effective needs-based possible.
Customers have different unmet needs because subsets of customers often encounter added difficulties that the other customers do not face. These added difficulties create additional unmet needs for that user. For example, in work we completed for Bosch, we discovered that some tradesmen who use circular saws to “cut wood in a straight line” (the Job-to-be-Done) had to make more finish cuts (for instance, to fit crown molding in a corner) than others. This means they had to make more blade height and angle adjustments. Because they encountered these additional complexities, they had unmet needs that other tradesmen did not have.
In work that we completed with an automotive company, we discovered that some drivers who were trying to “reach a destination on time” (the Job-to-be-Done) struggled more than others because they had to go to multiple locations during the day, rather than simply to the one destination. Because they had to go to many places, they encountered many different traffic patterns and associated problems (backed up traffic, parking difficulties, etc.). These added complexities made predicting travel time (to accomplish the Job-to-be-Done) much more difficult. In other words, this group had unmet needs that other drivers did not have.
In nearly all the markets we have analyzed, some segments of customers struggle more than others to get a job done. We argue that this presents a unique opportunity—but to seize it, companies must segment the market using unmet needs (which we capture in desired outcome statements), and not demographic, psychographic, or behavioral data. Our Outcome-Based Segmentation methodology is executed in four steps:
First we analyze the Job-to-be-Done and capture all the customers’ needs in the form of desired outcome statements. (The special syntax of these outcome statements guarantees precision and comparability).
Next, we field a survey that is administered to a statistically valid representative sample of customers (usually between 180 and 3,000 customers). Their answers reveal how important it is that they achieve each outcome and how well the solution they use today satisfies each outcome. With this data we determine which outcomes are most under-and overserved. Under-and overserved outcomes represent innovation opportunities.
Third, we use factor analysis and cluster analysis to segment the market into groups of customers with unique sets of unmet desired outcomes.
Lastly, we use profiling questions we include in the survey to understand what factors cause complexity and make some customers struggle more than others to get the job done. The survey also collects information that reveals the degree to which the different segments we uncovered are underserved.
Why does all this matter?
If you do not know what underserved segments and desired outcomes exist, you will not know which growth strategy to pursue. You will be guessing at innovation and competing on luck. Knowing if and why segments of customers have different unmet needs is the key to an effective market and product strategy. A new product will fail if it doesn’t address unmet needs in a segment of the market that is large enough to warrant the investment. A value proposition will fail to connect with customers if it does not align with unmet customer needs.
When we conduct segmentation analysis, we find segments of customers that are underserved (they have unmet needs), overserved (they’re getting extraneous features, perks, or services they don’t value), and appropriately served (all their needs are satisfied without any extraneous features). One market may be composed of three underserved segments, while another market may comprise three overserved segments. A disruptive strategy in the former case would fail, as no segment of the market is overserved. A differentiated strategy in the latter case would fail as no
segment of the market is underserved.
Because no market is homogeneous, outcome-based market segmentation is an essential ingredient in the formulation of market and product strategy. The key is to discover meaningful segments—hidden segments that offer the opportunity for value creation.
V. DEFINE THE VALUE PROPOSITION
A number of years ago we worked with Coloplast’s wound care product team. More specifically, we focused on wound care nurses (the end users) whose Job-to-be-Done was “treat a wound.” We used our Outcome-Based Segmentation methodology to reveal a segment of underserved nurses, and the findings resulted in a new value proposition that led to double-digit growth in less than six months. How did Coloplast achieve these results? To paraphrase hockey great Wayne Gretzky, Coloplast “skated to where the puck was going to be.”
At the time, all other wound care companies had built their value propositions around some variation of “we help wounds heal faster.” Coloplast realized that talking about speed of healing was akin to skating to where the puck had been. Sure, at some point in the past, wound care nurses had been underserved along that dimension and that value proposition had resonated with them. But those days were long gone.
When we conducted Outcome-Based Segmentation for Coloplast, we found a segment of wound care nurses whose top unmet needs had nothing to do with speed of healing. Instead, 10 of their top 15 unmet needs—their desired outcomes—related to “making sure the wound doesn’t get worse.” It turns out that in many wound treatment situations, the patient unwittingly makes the wound worse, and avoiding those complications was a challenge for nurses. Coloplast realized that “preventing complications” was where the puck was going to be.
Coloplast went to market with its new wound care value proposition: “We prevent complications.” Without changing its products or its pricing—simply by focusing its messaging and sales efforts on nurses’ unmet outcomes—Coloplast achieved double-digit growth.
This is not an isolated incident. Our first success repositioning an existing product line was with Cordis Corporation back in 1992. Cordis experienced a 3-point increase in market share by aligning the strengths of its products with the unmet needs of the interventional cardiologist. In 2014, Arm & Hammer’s Animal Nutrition division realigned its value proposition and achieved a 30%-plus increase in year-to-year revenue.
What is the secret to a winning value proposition?
The unmet needs of today represent the winning value propositions of the future. Knowing which needs are unmet—which desired outcomes are underserved—enables a company to secure a unique and valued competitive position. This is the essence of strategy, and it is best tackled through the effective use of Jobs Theory. To secure a winning value proposition, a company must (1) know where in the job the customer is underserved, (2) secure the value proposition that communicates to customers that their needs can be satisfied, and (3) do everything in its power to satisfy the targeted unmet needs better than its competitors.
The best way to figure out where the customer is underserved is through the application of Outcome-Based Segmentation. It was designed for this purpose. To create a winning value proposition, a company must know why a segment of customers is underserved, along which dimensions they are underserved, and to what degree. Once a company knows those three things, it can define a value proposition in a way that communicates its intent and ability to address all the unmet needs.
Once the value proposition is defined, the company must fulfill its promise. First, it must point out to customers ways in which its product or service already addresses the unmet needs it has discovered. Next, it must accelerate development of product and service features in the pipeline that further address the targeted unmet needs. Then it must create or invent new features that address any remaining unmet needs that are within the sphere of its value proposition. Coloplast worked over a period of years to address all the unmet needs associated with preventing complications.
A value proposition that is tied to unmet needs aligns company employees around a common vision and is integral to a company’s long-term success.
VI. CONDUCT THE COMPETITIVE ANALYSIS
Why do you conduct competitive analysis? Is it merely to see which features of competitors’ products are technically superior? Or is the goal to gain the insight that is needed to create products and services that get a job done better and/or more cheaply than competing solutions? We argue that the latter should be the goal. Therefore, comparing feature sets—“speeds and feeds”—of competing products is a waste of time. It’s an outdated approach that provides irrelevant information.
We conduct competitive analysis by having customers quantitatively evaluate competing offerings against a complete set of desired outcome statements. That process reveals precisely which offerings get the job done better and which get it done worse. These customer insights help along two fronts: (1) they pinpoint precisely which desired outcomes to address to offset the strengths of competing offerings, and (2) they reveal what underserved desired outcomes exist in the market as a whole, thus offering a path for leapfrogging all competitors and establishing a unique and valued competitive position.
The same survey that is fielded to gather the data needed to perform the Outcome-Based Segmentation analysis is used to gather the information needed for this type of competitive analysis. In the survey we determine the importance of each desired outcome and the level of satisfaction users have with the leading products (the competitive product set).
Once this work is completed, an evaluation of competing products can begin. This can best be understood through the example of Bosch’s ODI-based competitive analysis of the highly competitive North American circular-saw market.
DESIRED OUTCOME STATEMENT
IMP
SAT
OPP
DeWalt SAT
Makita SAT
Minimize the likelihood that debris flies up in the air when guiding the blade along the cut line, e.g., into the users face, eyes, etc.
8.9
3.2
14.5
3.1
3.3
Minimize the likelihood of inadvertently moving off the cut line/path when the cut path/line gets covered with dust
8.7
3.8
13.5
4.2
3.4
Minimize the time it takes to set the angle of the blade, e.g., make a bevel adjustment, etc.
8.6
4.1
13.0
5.0
3.6
Minimize the likelihood of snagging the cord on the material when making a long cut
8.2
3.7
12.7
3.8
3.6
Minimize the time it takes to place a saw back in service when the power cord is cut
7.0
2.5
11.5
2.5
2.5
Minimize the likelihood that the cut goes of track when finishing the cut
7.8
4.2
11.4
3.6
4.8
Minimize the time it takes to secure the saw from falling when it is not in use, e.g., from a ladder, rafter, etc.
6.7
2.7
10.7
3.0
2.6
Minimize the likelihood of dropping the saw when lowering it from a ladder/roof
7.8
5.1
10.5
5.0
4.8
First, we defined the customer and the Job-to-be-Done: tradesmen who are trying to “cut wood in a straight line.” Then we captured 75 desired-outcome statements through customer interviews. Next, we surveyed 270 users of circular saws, including users of the two best-selling brands, DeWalt and Makita. We asked the users of those brands to rate the importance of each of the 75 outcomes and their level of satisfaction with the circular saw they used.
The tableshow
s the results of that survey for eight of the outcome statements. It lists the outcome statement, the average importance of the outcome, the average satisfaction with the outcome, the opportunity score calculation, and the satisfaction scores of DeWalt and Makita circular-saw users.
With this type of quantitative data on each of the 75 outcome statements, Bosch was able to draw some solid conclusions:
Bosch could determine which of the 75 desired outcomes were “table stakes,” which are desired outcomes that were very important and very satisfied, but could not be ignored by a new Bosch entrant into the market.
Bosch could see which outcomes were better satisfied by DeWalt and which were better satisfied by Makita. This not only revealed the strengths and weaknesses of each competitor, but enabled Bosch to determine the technical reasons for their success, thus setting the direction for ideation.
Because 14 of the 75 outcomes had an opportunity score greater than 10, Bosch could safely conclude that these 14 outcomes were underserved outcomes (unmet needs). Eight of these 14 outcomes are shown in the table above.
Bosch knew that satisfying the 14 unmet outcomes significantly better than DeWalt and Makita would enable Bosch to occupy a unique and valued competitive position: it would be satisfying unmet needs that no other competitor had been able to satisfy. This is the essence of strategy and the reason for competitive analysis.