The customer is the wrong unit of analysis when you’re trying to innovate.
Flat-line sales of McDonald’s shakes back in the 90s had the fast-food giant looking for ways to innovate. Focus groups convened, data rolled in and product changes were made accordingly. But sales remained the same. Why?
It turns out McDonald’s, like so many other companies, subscribed to the notion that innovation hinged on knowing who your customer was. But as Clayton M. Christensen, Harvard Business School professor, co-founder of Innosight, and author of Competing Against Luck says, “My characteristics and attributes have not yet caused me to buy the New York Times today. There might be a correlation between the propensity I have to buy The Times, but they don’t cause me to do that. Nor do our characteristics or attributes cause us to buy any products or services.”
So Christensen’s colleagues set up shop in McDonald’s. For 18 hours, careful attention was paid to everyone who purchased a shake. Time of day, additional food purchases, dine in or carry out, what were the customers wearing? A clear—yet unexpected picture emerged.
Eighty percent of McDonald’s shakes were sold before 8:30 in the morning, mostly to men. They were always alone, and they took them to go.
Are You Asking the Right Questions?
Innovation has gained an unflattering and inaccurate reputation for being messy, imperfect and unknowable. Some companies look at innovation as a necessary crapshoot. They sink a lot of money and time into ideas they throw out into the proverbial universe—a few win, most lose—then the company figures out how to mitigate the damage and live with the fallout.
Even when innovation is more strategic, it often follows a customer discovery route that may teach companies a great deal about their customer base but doesn’t accurately predict which innovations will increase sales or productivity.
“The customer is the wrong unit of analysis when you’re trying to innovate.”
– Clayton Christensen, author and professor Harvard Business School
It is little wonder innovation is such a daunting task within direct selling companies. Think about it. The full budgetary and data mining weight of McDonald’s built a quintessential customer profile, and the fast-food giant still couldn’t convert that knowledge into increased shake sales. It wasn’t for lack of resources or effort. It was because they were asking the wrong questions. Maybe you are too.
Successful Innovation Lies in Finding Answers to the Right Questions
“The customer is the wrong unit of analysis when you’re trying to innovate…Rather than the customer, you need to understand what it is the customer is trying to accomplish. What’s the job the customer is trying to get done?” Christensen says.
Within the direct selling industry, this can mean searching for the job that not only your end-user customer is trying to accomplish, but also the job the distributor is trying to accomplish. They likely aren’t the same job. This means direct selling innovation needs to be two-fold—bringing new products to market that the company can sell and creating better incentive programs for distributors. So what job is your customer or your distributor “hiring” your product or business opportunity to do?
Jobs to Be Done
The Jobs to Be Done Innovation Theory says we all have numerous jobs to be done every day of our lives. Some are small, like passing time while waiting in line. Others loom large, like finding a more fulfilling career. They spring up unexpectedly like lost luggage on a business trip and can be as routine as packing healthy food for your daughter’s school lunch.
These jobs cause customers to get out of the house, get online and ask their family and friends for solutions. Customers essentially “hire” products and services to do the job. And if that product or service completes the task well, they will re-hire it. If not, that product or service gets fired and customers re-evaluate their options.
And jobs are stable things over time. If Julius Caesar needed to get something from here to there, he hired a horseman. Queen Victoria hired a telegraph or railroad. Churchill hired an airplane. We hire FedEx or the internet. The job has always been there, whether or not there was a product or service available to do it. Innovate the product or service, then a market emerges.
Direct selling companies can transform their understanding of customer choice with Jobs Theory, in ways that no amount of data ever could. At the heart of Jobs Theory are the causal drivers that lead customers to invite products, services and opportunities into their lives. Jobs Theory can tell you precisely “why” a customer is or is not purchasing your product, and it comes down to whether or not your product is doing the job they need it to do.
Back to McDonald’s
So what on Earth were these guys trying to accomplish buying a shake that early in the morning? Christensen sent his team back to McDonald’s to figure that out, and they pulled innovation clues from McDonald’s shake customers.
Rather than simply ask why they selected a shake, Christensen’s team re-shaped the inquiry around Jobs Theory. “What job were you trying to do that caused you to come here to McDonald’s at 6:30 in the morning and hire that shake?”
The customers were a bit confounded and struggled to answer. So they asked them to think about the last time they were in a similar situation and needed to get the job done, but didn’t come to McDonald’s to hire the shake. “What did you hire?”
A pattern emerged. Those men all had the same job to do that morning. They needed something to do while making a long, boring commute to work. They needed to be engaged in life, and they needed to stay awake. They weren’t hungry yet, but they wanted to stave off that mid-morning stomach rumble.
So what did they hire when they didn’t hire the McDonald’s shake? One guy hired a banana, but it was gone in three minutes, and he was hungry by 7:30 a.m. Another turned to doughnuts, but they were crumbly and gooey, and it was a fiasco if the phone rang. Spreading the cream cheese on bagels was problematic, and the guilt from hiring a Snickers bar was nearly unbearable.
“The customer rarely buys what the company thinks it’s selling him.”
— Peter Drucker, Management Consultant, author and educator
“When I have this job to do and come to McDonald’s and hire this milkshake, it is so viscous it takes me 23 minutes to suck it up the thin, little straw. Who knows what the ingredients are and I don’t care because I know it’s still in my stomach at 10 o’clock. And it fits right in my cup holder, and if I forget what I’m doing and turn it sideways, it doesn’t flow out,” Christensen summarizes.
Utilizing Jobs Theory showed McDonald’s new competitors and differing priorities. Suddenly innovation options to get the job done better became clearer. In essence, thicker shakes would last longer, chunks of fruit or chocolate could improve engagement, or a self-serve, lobby shake machine with a card swipe might speed transactions.
Peter Drucker said, “The customer rarely buys what the company thinks it’s selling him.” This was true for McDonald’s.
“They realized they had been improving the shake on dimensions of performance that was irrelevant to the job to be done. But once they understood what it was, they could improve it in salient dimensions so that it would be successful every time,” Christensen says.
All you have to do is look to the successful innovations efforts of Amazon’s Jeff Bezos and Scott Cook’s work with Intuit, eBay and Procter & Gamble to see Jobs Theory in action. Maybe you’ve used the services of Airbnb?
Christensen reminds us that you don’t need a bunch of luck to be innovative. “You need the right mindset, a disciplined focus on improving a specific experience for someone and the skills to bring that experience to life.”
Jobs to Be Done Innovation Action Steps
- Find a job that needs to be done. Understand why someone would want to pull a product into her life. Think beyond functional dimensions; explore emotional/social reasons. Think less like an entrepreneur and more like a psychologist to find out what people care about.
- Document the journey. Do the work of a documentary filmmaker, find out where, when, and what they are doing the moment they hire a product. Create a storyboard or map of the experience and focus on the obstacles and moments of frustration.
- Remove the obstacles and frustrations to create a better experience. Make the new experience twice as good as the current one to avoid customer anxiety over hiring something new. People tend to avoid loss and maintain the status quo, so show them what they are gaining so they don’t miss what they are losing.