Transform Your Business with “Competing Against Luck”

“Competing Against Luck” revolutionizes innovation strategy. Clayton Christensen and his co-authors present the groundbreaking Jobs-to-Be-Done theory, challenging traditional market research methods. This book offers a fresh perspective on understanding customer needs, helping businesses create products that truly resonate.

Dive into this review to discover how the Jobs-to-Be-Done framework can reshape your approach to innovation and drive lasting customer satisfaction.

Genres

Innovation, Product Development, Customer Behavior, Strategy, Economics, Self-Help, Change Management, Consumer Behavior, Business, Management, Leadership, Entrepreneurship, Design, Economics, Technology, Industries, Business Research and Development, Marketing and Consumer Behavior, Motivation

“Competing Against Luck” introduces the Jobs-to-Be-Done (JTBD) theory as a powerful tool for innovation. The authors argue that customers don’t buy products; they hire them to do specific jobs. This shift in perspective helps companies understand the real reasons behind consumer choices.

The book explores how successful companies like Amazon, Intuit, and Uber have applied JTBD to create products that fulfill unmet customer needs. It emphasizes the importance of focusing on the progress customers want to make in their lives, rather than on product features or customer demographics.

Christensen and his team provide a framework for identifying and analyzing jobs-to-be-done, including:

1. Understanding the circumstances that drive job creation
2. Identifying the functional, emotional, and social dimensions of a job
3. Recognizing the forces that compel or hinder progress
4. Developing solutions that address the entire job, not just parts of it

The authors illustrate these concepts with numerous case studies, from milkshake sales to healthcare innovations. They demonstrate how JTBD can be applied across industries to create meaningful innovations that customers truly value.

Review

“Competing Against Luck” offers a refreshing take on innovation strategy. Its core premise – focusing on the job customers need done – is simple yet profound. The book’s strength lies in its ability to reframe common business challenges and provide a clear methodology for addressing them.

The authors’ writing style is accessible, blending theoretical concepts with practical examples. This approach makes complex ideas easy to grasp and apply. The numerous case studies provide concrete evidence of the theory’s effectiveness, although at times the repetition of examples can feel excessive.

One of the book’s most valuable contributions is its emphasis on understanding the full context of customer decisions. This holistic view challenges businesses to look beyond traditional market segmentation and product-centric thinking.

However, the book could benefit from more guidance on implementing JTBD in organizations, especially in overcoming resistance to change. Additionally, while the theory is compelling, it may not be equally applicable to all industries or product types.

Despite these minor shortcomings, “Competing Against Luck” remains a must-read for innovators, entrepreneurs, and business leaders. It provides a powerful framework for creating products and services that truly matter to customers, potentially transforming how companies approach innovation and growth.

Recommendation

If you were the owner of a fast food restaurant that sold milkshakes, and your milkshakes weren’t selling well, how would you go about improving your milkshakes?

• Would you buy higher quality ingredients?
• Would you survey customers to see what flavors they would like to see on the menu?
• Would you focus on one popular flavor, say chocolate, and make the chocolate shake richer and decadent?

Any one of these innovations might increase sales, but you can’t be sure. The success of each innovation relies heavily on luck. It’s like throwing out a bunch of seeds and hoping for one of them to take root and grow into something people will buy.

The “Theory of Jobs to Be Done” unlocks the mystery of successful product innovation – a mystery often dismissed as luck. “Jobs Theory” holds that people don’t merely buy goods, they “hire” and “fire” products based on whether those products do the “job” that consumers need done. Companies practicing Jobs Theory know their understanding of consumer behavior helps predict successful innovation. Best-selling author and Harvard Business School professor Clayton M. Christensen and his co-authors Taddy Hall, Karen Dillon and David S. Duncan explain that the detailed observation of targeted customers – in their struggle to make progress – leads to a precise narrative that specifies the Job to Be Done. Such a narrative can serve all levels of an organization as a decision-making guide and a map of the need for an innovative product. We recommends this leap forward to professionals tackling product innovation and anxious to get it right.

Take-Aways

• The “Theory of Jobs to Be Done” says consumers “hire” and “fire” products based on whether they do the job that customers want to accomplish.
• A Job to Be Done is the individual progress that a consumer seeks in specific circumstances.
• Concentrating on the consumer’s Job to Be Done can focus your search for successful product innovation.
• The theory clarifies consumer behaviors that impel opportunities for innovation.
• For example, Amazon concentrates on three things that solve jobs for customers: a broad selection of merchandise, competitive prices and rapid delivery.
• Identifying a Job to Be Done requires describing the job in narrative detail.
• Innovation comes from understanding what people are struggling to accomplish.
• Data tabulations are less meaningful than narratives in pinpointing open niches.
• When consumers find ways to work around or compensate for jobs that have no great solutions, this behavior signals new product or service opportunities.
• Often the biggest competitor is not another product, but “nonconsumption” – people’s decisions not to buy anything to solve a job.

Introduction

Companies take this hopeful approach to innovation far too often. They waste millions of dollars and often go out of business because they don’t know how to innovate. When global executives were recently surveyed by McKinsey, a shocking 94 percent said they were unsatisfied with their innovation performance.

Author Clayton Christensen has studied innovation for over two decades, and he says those who fail to innovate are simply asking the wrong question. Instead of asking, “How can I get more people to buy my product?”, they need to ask, “What job are my customers hiring this product to do?”

“As W. Edwards Deming, the father of the quality movement that transformed manufacturing, once said: ‘If you do not know how to ask the right question, you discover nothing.’” – Clayton Christensen

“When we buy a product, we essentially “hire” something to get a job done. Some jobs are little (“pass the time while waiting in line”), some are big (“find a more fulfilling career”). Some surface unpredictably (“dress for an out-of-town business meeting after the airline lost my suitcase”), some regularly (“pack a healthy, tasty lunch for my daughter to take to school”)” – Clayton Christensen

The “Jobs to be Done” theory essentially states that all products are services that promise a better experience for the person hiring them.

If you have the desire to create an innovative product or improve an existing product in an innovative way, and you want to rely more on creativity and skill, and less on luck, here are three steps to get your product hired:

Find a job that needs to be done

Aim to understand why you, a set of existing customers, or a set of target customers would want to pull your product into their lives.

Don’t just focus on the rational reasons like “satisfying hunger.” Dig deeper. Focus on the emotional and social reasons people have for wanting to make progress in their lives.

“In many innovations, the focus is often entirely on the functional or practical need. But in reality, consumers’ social and emotional needs can far outweigh any functional desires. Think of how you would hire childcare. Yes, the functional dimensions of that job are important—will the solution safely take care of your children in a location and manner that works well in your life—but the social and emotional dimensions probably weigh more heavily on your choice. ‘Who will I trust with my children?’” – Clayton Christensen

When looking for a job to be done, think of yourself less as an entrepreneur and more of a psychologist. You want to find out what people care about and determine where they specifically want to make progress in their life.

Document the journey

Document the journey from the moment a customer or potential customer hires the product for a job to the moment the job is complete (or the customer gives up).

You want to be like a documentary filmmaker. Your goal is to find out where, when, and what they are doing at the moment they have the desire to hire your product, and then create a timeline of the experience that follows.

“What progress is that person trying to achieve? What are the circumstances of the struggle? What obstacles are getting in the way of the person making that progress? Are consumers making do with imperfect solutions through some kind of compensating behavior? How would they define what “quality” means for a better solution, and what tradeoffs are they willing to make?” – Clayton Christensen

Remove the obstacles

Remove the obstacles, remedy the frustrations, and create a better experience. The new experience you create must at least be twice as good as their current experience. Why? Because most of us get anxious when hiring something new.

New is often scary. Behavioral economists Daniel Kahneman and Amos Tversky have done several studies to show that “Loss aversion—people’s tendency to want to avoid loss (and maintain the status quo)—is twice as powerful psychologically as the allure of gains.”

Executing these three steps won’t be easy, but it’s far easier than the alternative: spending a bunch of time and money on a series of innovations and hoping one of them leads to more sales.

“New products succeed not because of the features and functionality they offer but because of the experiences they enable.” – Clayton Christensen

Summary

The “Theory of Jobs to Be Done”

According to the Theory of Jobs to Be Done, people do not merely buy products. They “hire” products to help them make personal progress toward a specific objective. Unless the purchase and use of a product helps the consumer make progress toward his or her goal, no amount of fidgeting with its features will translate to successful innovation. Identifying a Job to Be Done calls for a narrative description of a “job” or of the specific type of progress prospective customers seek.

“Every successful company achieves initial success, consciously or not, by performing a valuable job for a group of consumers.”

On the surface discerning what exactly caused a customer to purchase one product over all other choices may be difficult. But if you look more closely, what customers hire – and equally importantly, what they “fire” – tells a story. That story is about the functional, emotional and social dimensions of their desire for progress – and what prevents them from getting there. The challenge is in becoming part sleuth and part documentary filmmaker by piecing together clues and observations to reveal what jobs customers are trying to get done. This construct can help product marketers clarify the processes that drive their consumers’ choices to buy and sell.

“A job is “the progress that a person is trying to make in a particular circumstance.”

Ample anecdotal evidence supports the practical utility of “Jobs Theory.” Quantitative critics may wish to fall back on data, but data obscure “real stories of real people in real companies.” Data tell you how many, but they don’t tell you why. Telling these stories unveils a wealth of data. Observing real people in their moments of struggling to make progress can provide deep insights into their purchasing decisions.

“Jobs Theory changes not only what you optimize your processes to do, but also how you measure their success.”

Akio Morita, the founder of Sony, dismissed market research. Instead, he searched for intuitive inspiration by observing “how people live.” Sony suspended development of its Walkman cassette tape player when market research indicated that consumers wouldn’t buy it because it was a tape player that didn’t record. Morita ignored the research, trusted his beliefs and resumed development. Sony sold more than 330 million units and the Walkman inaugurated the worldwide proliferation of personal music-playing devices.

Doing Jobs That Customers Need Done

Jobs Theory defines a job as the progress a person tries to make in particular circumstances. Buyers integrate products into their daily lives to accomplish specific jobs. A job has not only functional dimensions, but critical social and emotional dimensions as well. Grasping the full dimensions of a job requires identifying the buyer’s struggle to make progress, its situational context, the obstacles impeding that progress and the definition of “quality” in a good solution.

“How often do you hear a success dismissed as simply the right product at the right time? We can do better than that.”

Airbnb identified a Job to Be Done by listing homes and rooms available for short-term rental. At its inception, Airbnb wasn’t competing with mainstream hotels. It was competing with being unable to go somewhere at all or with staying on a friend’s couch. With this Jobs-focused perspective on the market, Chip Conley, head of global hospitality and strategy at Airbnb, said that 40% of Airbnb users would have stayed with family or not traveled if Airbnb were unavailable.

Optimal Level of Abstraction

Jobs Theory can be useful if companies define a targeted job at an optimal level of abstraction. Don’t rely on a loose definition of a job when applying Jobs Theory. Outlining a Job to Be Done takes nouns and verbs, so you can’t describe a supposed job with adjectives and adverbs. And, a simple consumer preference for certain product features isn’t a job.

“Customers don’t buy products or services; they pull them into their lives to make progress.”

Consider the decision to buy a milk shake during your morning commute to work. Just preferring specific product features, like flavor or container size, does not qualify as a Job to Be Done. More abstractly, the milk shake purchase performs a larger job: for some people, it makes driving to work more enjoyable and precludes getting hungry during a morning meeting. Buying or “hiring” the milk shake to do this job means “firing” the diverse set of alternatives to a milk shake, whether a chocolate bar, bagel, doughnut, cup of coffee or banana. When the milkshake does the job best, people will hire it.

Multidimensional Jobs

To ensure that a new product will succeed, companies should address each dimension of the job the product does, including its social and emotional facets, and should deliver customer experiences that fulfill expectations and make it hard for competitors to imitate. Fully defined jobs are complex, but that gives Jobs Theory practitioners an advantage. Their mission is “perfectly satisfying someone’s job,” not just inventing a new product or feature.

“Competitive advantage is built not just by understanding customers’ jobs, but by creating the experiences that consumers seek both in purchasing and using the product or service.”

Focusing on the underlying job the customer wants done is the best guide for innovation. This means companies should jettison pet in-house solutions that fall short of helping customers make personal progress. By understanding the specific circumstances in which consumers make purchases, companies can gain fresh insights.

Margarine and Jobs Theory

For example, would margarine be more prevalent in American kitchens today if Unilever, the leading margarine producer, had focused less single-mindedly on how margarine competes with butter as a flavoring agent. Seen through a jobs’ lens, margarine also competes with olive oil as a flavoring agent, with mayonnaise as a spread and with Teflon as a product that keeps food from sticking to pans.

“Even great companies veer off course in nailing the job for their customers and focus instead on nailing the job for themselves.”

Big companies too often rely on internal research about products and customers to guide their decision making. They should find out what job their customers are hiring a product to do – and then make sure the product responds to that job very well. In the case of Unilever, by the mid-2000s, US households buying butter outnumbered those buying margarine. The so-called “yellow fats business” has not recovered from medical worries about trans fats in margarine. In 2014, Unilever disposed of its weak “spreads” business as a stand-alone firm, rather than retain a margarine-based subsidiary that slowed company growth. Unilever might have found an innovative solution to declining margarine sales if its marketers had identified the jobs customers want margarine to accomplish.

“Data has the same agenda as the person who created it, wittingly or unwittingly.”

A common presumption holds that successful innovation arises from good luck. But companies can create successful innovations without leaving it to chance. Jobs Theory can create a shared language for understanding the “causal mechanisms of human behavior.” Successful innovations are based on such an understanding.

Discovering Customer Jobs

Corporate mission statements are often too vague to guide employees’ decision making. But an identified Job to Be Done defines “a clear job spec” so detailed it can guide daily decision making companywide. Jobs Theory practitioners can discover jobs that are being done poorly or not done at all. They learn to see opportunities in “nonconsumption,” discover work-arounds for flawed solutions and monitor products customers use in unusual ways.

“Stories are hidden when they are parsed and distilled into numbers. When stories are told, they are rich in data.”

Work-arounds, or consumer behaviors that compensate for the shortcomings of unsatisfactory products, provide clues that an opportunity to innovate is at hand. Unusual uses of a product are another harbinger of opportunity, as Church & Dwight, the maker of Arm & Hammer baking soda, found. Consumers used baking soda as a personal deodorant, a laundry additive, a toothpaste, and a deodorizer for refrigerators and kitty litter boxes. Now Church & Dwight markets the brand in a variety of products, including a toothpaste, deodorant, air freshener, and a cleanser for carpets and showers. This generates millions of dollars of revenue atop its baking soda business. Similarly, NyQuil is a decades-old treatment for the common cold. Buyers also use it as a sleep aid, a pattern of unexpected use that led to the introduction of ZzzQuil, a related brand that induces sleep without the cold-symptom medications in NyQuil.

“With all theory building, you have to be open to finding things that the theory can’t explain – anomalies – and use them as an opportunity to strengthen it.”

Sometimes firms win more customers by grasping the full scope of their competition. Southern New Hampshire University (SNHU) found that it was competing not just against other colleges, but also against the choice not to attend college – nonconsumption. SNHU then developed online degree programs and marketed them to a largely overlooked niche: adult students trying to make academic progress while working and raising families.

“Jobs Theory focuses you on helping your customers do their jobs.”

By fiscal 2016, its sharp focus on helping busy adults made SNHU into a fast-growing school with $535 million in annual revenue. SNHU used the language of the Theory of Jobs to Be Done in designing marketing materials aimed at helping older learners bypass obstacles to getting degrees and achieve the progress they want. Among other initiatives, its staffers responded by phone to potential students’ financial aid inquiries within 10 minutes and resolved financial aid queries within days, not weeks or months.

Uncovering Obstacles to Sales

Finding unsolved customer jobs involves observing everyday life and assembling a narrative that details the Job to Be Done. When you’re searching for Jobs, narrative details that identify the real struggle people are having are meaningful.

“If a consumer doesn’t see his job in your product, it’s already game over.”

A construction company asked consultant Bob Moesta to help improve sales of its Detroit-area condos amid a slumping mid-2000s real estate market. The company targeted homeowners downsizing to smaller residences due to divorce, their children’s departure or other circumstances. The company suspected that unfavorable locations, bad weather, poorly performing salespeople, a possible recession, slow holiday traffic and competitive offerings were hurting their sales.

“We don’t ‘create’ jobs, we discover them.”

The company could not distinguish serious buyers from uncommitted shoppers, so Moesta interviewed scores of condo buyers to determine their motives. Post-purchase interviews unveiled a common concern: What would buyers do with their outsized, traditional dining tables? Giving up that embodiment of family history blocked the progress that buyers sought by downsizing.

Moesta grasped the multilayered Job to Be Done: His company was not just building condos; it was “moving lives.” The company responded with redesigns that enlarged the dining rooms by shrinking second bedrooms. The company arranged moving companies for buyers and gave them up to two years of free storage. The result was a 25% business growth in 2007, a time when sales dropped 49% in the rest of the Detroit-area condo market.

What Are “Negative Jobs”?

Negative jobs are tasks consumers would rather avoid. A busy parent whose child has a sore throat raises this Job to Be Done: “I don’t want to see the doctor.” Rick Krieger, a graduate of Harvard Business School, addressed this negative job by developing QuickMedx. This predecessor of MinuteClinics in CVS drugstores offers treatment of routine ailments. CVS drug stores in 33 states have more than 1,000 MinuteClinic locations.

American Girl and Amazon

Merely improving a product will translate to unsuccessful innovation unless the firm delivers the experiences people want when they buy and use the product.

Pleasant Rowland didn’t do any research when she started the firm that became the American Girl doll company. Rowland conceived of American Girl dolls as a way for mothers and daughters to enjoy discussions about past generations of women and the challenges they faced. These high-quality dolls are racially and ethnically diverse. Historically accurate storybooks portray the dolls as girls from different places or historic periods. They express feelings their preteen owners may share. American Girl dolls command premium prices because buyers are purchasing both a well-made doll and a rich emotional experience.

Jobs Theory affects how companies design processes and measure success. For instance, Amazon concentrates on three things that solve jobs for customers: a broad selection of merchandise, competitive prices and rapid delivery. Amazon integrates this mission in its processes by prioritizing delivery times over shipment times to measure performance.

About the author

Harvard Business School professor Clayton M. Christensen’s nine books include The Innovator’s Dilemma. He and co-author Karen Dillon, former Harvard Business Review, also co-wrote the bestseller How Will You Measure Your Life? Taddy Hall is a principal with the Cambridge Group. David S. Duncan is a senior partner at Innosight.

CLAYTON M. CHRISTENSEN is the Kim B. Clark Professor at Harvard Business School, the author of nine books, a five-time recipient of the McKinsey Award for Harvard Business Review’s best article, and the cofounder of four companies, including the innovation consulting firm Innosight. In 2011 and 2013 he was named the world’s most influential business thinker in a biennial ranking conducted by Thinkers50.

TADDY HALL is a Principal with The Cambridge Group and Leader of Nielsen’s Breakthrough Innovation Project. As such, he helps senior executives create successful new products and improve innovation processes. He also works extensively with executives in emerging markets as an advisor to the non-profit, Endeavor.

KAREN DILLON is the former editor of the Harvard Business Review and co-author of New York Times best-seller How Will You Measure Your Life and The HBR Guide to Office Politics. A graduate of Cornell University and Northwestern University’s Medill School of Journalism, she was named by Ashoka as one of the world’s most influential and inspiring women.

DAVID S. DUNCAN is a senior partner at Innosight. He’s a leading thinker and advisor to senior executives on innovation strategy and growth, helping them navigate disruptive change, create sustainable growth, and transform their organizations to thrive for the long-term. He is a graduate of Duke University and earned a Ph.D. in physics from Harvard University.

Table of Contents

Introduction: Why You Should Hire This Book ix
Section I An Introduction to Jobs Theory
Chapter 1 The Milk Shake Dilemma 3
Chapter 2 Progress, Not Products 21
Chapter 3 Jobs in the Wild 47
Section 2 The Hard Work-and Payoff-of Applying Jobs Theory
Chapter 4 Job Hunting 69
Chapter 5 How to Hear What Your Customers Don’t Say 95
Chapter 6 Building Your Résumé 123
Section 3 The Jobs to Be Done Organization
Chapter 7 Integrating Around a Job 151
Chapter 8 Keeping Your Eye on the Job 177
Chapter 9 The Jobs-Focused Organization 197
Chapter 10 Final Observations About the Theory of Jobs 221
Acknowledgments 235
Index 249