If you want to stand head and shoulders above others in your field, then being innovative is generally the best way to do it. Indeed, most people consider innovation the secret to any successful business. If you can offer customers something they both want and need in an attractive package – which they can’t get elsewhere – then you’re onto a sure-fire winner.
Research shows however, that when it comes to innovation, many business people still find it incredibly difficult and are dissatisfied by their performance in this regard. For example, in 2008, McKinsey & Company found there still exists ‘a wide gap between the aspirations of executives to innovate and their ability to execute.’
With a wealth of information generated by today’s data-driven marketplace, it can be easy to think we have everything we need at our fingertips to innovate in business. We can find out almost everything about our customers – what they like to eat, where they shop, what age they are, where they work and so on – yet still, innovation can be elusive.
For some however, it seems to come naturally – we all know of businesses that seem to have sprouted up overnight and are raking in the rewards. The question is – what are these companies doing to create their success? What makes them innovative?
Why it isn’t all about disruption
Often, when businesses take off, their success is put down to their disruption of the market – or ‘disruption innovation’. Someone assesses the current offerings in their field, then develops a cheaper and better way of delivering those services or products. Think Uber and Airbnb.
However, a more recent theory suggests that while disruption innovation is part of the answer, there’s more to innovation than just this.
According to the Harvard Business Review, the theory of disruptive innovation is about competitive responses to innovation. It models and forecasts the behaviour of market places in danger of being disrupted and helps them identify disruptive threats threats. It finds, though, that real innovation comes from disruption that’s facilitated by the ‘jobs-to-be-done’ theory.
If you haven’t heard of the ‘jobs-to-be-done’ theory, it refers to understanding what ‘job’ your customers need your solution or product to do. Look at it this way; customers are essentially ‘hiring’ a product or service to do a job and, if you know what that job is ahead of time, then you’re on your way to achieving innovation.
So, the first and most important question you need to ask yourself as a business owner is an obvious one, with a less than obvious answer: What do customers really want from your business?
Correlated data vs jobs-to-be-done
Statistics, data insights and all the information we can glean about customers from technology shows key trends and correlations about the people who buy from us. However, correlated data, as we’re discovering, just isn’t specific enough to result in successful innovation.
Over the past 20 years, researchers have found key insights to support the jobs-to-be-done theory that can drive business performance. For example, they’ve found that while correlative data can generate a ‘typical’ customer profile for a particular product, the customer purchase isn’t necessarily attributable to this data. Two people may have the same customer profiles but buy something for very different reasons; or two people with opposing customer profiles may buy the same product/service.
The information businesses actually need therefore, is the information that tells them what job customers need their product or service to fulfil. If they know that, then they can focus on offering the consumer something that truly satisfies them. The other interesting thing to note is that the job may not always be what we as businesses owners expect it to be.
In fact, sometimes, you might think you’re selling a product when in actual fact, you’re actually selling an experience…
Knowing why people buy
If you put yourself in your potential customer’s shoes and think about why you might want to buy something, based on what it will do for you, then you’re starting to get the idea. To truly innovate, businesses must be savvy to what jobs need to be done – and as already mentioned, these jobs might just surprise you.
For example, a five star restaurant with Michelin credentials could invest heavily in the best culinary team and produce money can buy, delivering world class service nightly. Even with special offers, discounts, and introductory deals, the high-roller experience offered might not translate into bums on seats. Next door though, the moderately priced Bistro might be busier. With homely meals served informally to couples and families, their steady flow of visitors shows they’re doing something right.
The answer lies not in the quality of the produce or the accolades on the door. Put simply, they’re delivering on the ‘jobs their customers need done’. Whether it’s a treat, or a lazy evening away from the oven, the Bistro recognises their customers have a need to unwind and relax in a place there they feel comfortable slouching in their chair and slurping a glass of house read. The five star chef is serving a ‘job to be done’ too, of course, but their volume appeal is narrower by design and perhaps so is their growth potential.
Estate agents have a similar challenge. The best home in the world will be rejected simply because ‘there isn’t a good spot for a tv’ or ‘grannys dresser would never fit in there’. The ‘job to be done’ isn’t finding an and curating a great selection of homes, it’s about moving ‘lifestyles’ not moving boxes. So the real challenge is not finding the right house, but finding what the ‘job to be done’ is for every client, lead, and prospect. Even if it is shoehorning a clapped out dresser into a swanky glass apartment.
Back at the office
If you want to innovate using the customers’ jobs-to-be-done theory, start with your systems. Every customer informs and educates the way you handle them – and others – in the future. Record not just their requests, but their emergent (and perhaps initially unarticulated) needs.
- What does the customer actually want your service/product to do (which may not be what you thought)
- Remember that customer circumstances matter more than correlation data or the attributes of what you’re selling
- Truly innovative businesses are those which solve problems much more effectively than anyone else, or they find solutions no-one has ever tried to offer
- Consider the social and emotional factors around a sale
Ultimately, if you can solve the problem of what job’s your services or products are doing for customers, then you can innovate your business by offering exactly what consumers want.
This means embedding flexibility and agility into your work, and not being 100% reliant on correlative data, taking the time to research around why your customers buy from you – or why they don’t. Used alongside other data, the ‘jobs-to-be-done’ theory might just be what you need to push ahead of the competition.