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Empower Your Business With The Magic Of Machine Learning!
In today’s digital age, business executives collect large amounts of data trying to develop the next must-have product for consumers, but corporate innovation efforts remain painfully hit or miss.
A recent McKinsey poll found that 84% of CEOs said that innovation was extremely important for business growth, yet 94% were dissatisfied with their own innovation performance.
Why do so many innovation initiatives fail?
Clayton M. Christensen, a professor of business administration at Harvard Business School. , widely regarded as the world’s leading expert on innovation and creator of the theory of disruptive innovation, says executives often fail because they study the wrong data about products and customers, which leads them to unintentional design innovation processes that “produce mediocrity.”
He writes about this problem in the book, Competing Against Luck: The Story of Innovation and Customer Choice
“For years, I was focused on understanding why big companies fail, but I realized I had never thought about the reverse problem:
“How do successful companies know how to grow?”
writes Christensen.
The secret to winning the innovation game lies in understanding what makes customers make choices that help them make progress on something they struggle with in their lives.
To get the right answers, Christensen says, executives need to ask:
What job would consumers want to hire a product to do?
“YOU HAVE TO LOOK AT THE WAY YOUR CUSTOMERS NEED YOUR PRODUCT. IT BECOMES A REAL SOURCE OF MANY INSIGHTS”
“To me, this is a good idea,” Christensen writes of the Theory of Work That Must Be Done.
“When we buy a product, we are essentially ‘hiring’ something to complete a job.
Here’s an important example of how McDonalds has succeeded with the milkshake!
If it does the job right, when we tackle the same job, we hire the same product again.
And if the product does the job miserably, we’ll look around for something else we could hire to solve the problem.”
Just look at the companies that have been successful in innovation.
Uber’s founders recognized that public transportation was failing to do a good job and found a way to take a taxi and provide car service, allowing consumers to get around in minutes from their phones.
The job here is to get from point A to point B quickly.
The jobs remain relatively the same over time, but technology gives us the ability to do it better.
Care.com, the online service for child care, elder care and pet care, was developed 10 years ago by Sheila Marcelo after she struggled to fulfill her own child care needs.
The company now has more than 20 million members covering 18 countries, and its revenue for 2015 was $140 million.
It helps if a company can sell not just a product, but an experience.
Pre-teen girls “recruit” American Girl dolls to validate their sense of self-worth, while mothers (the ones who actually buy the dolls) pay a premium – more than $100 per doll – in part as a way to connect with their daughters.
The company has sold 29 million dolls and sells more than $500 million in sales each year.
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In an interview with Clayton Christensen with the Dina Gerdemann from the Harvard Business Review reports:
Dina Gerdemann:
Can you discuss the belief that customers do not just buy products or services, but “hire” products to do a job?
Clayton Christensen:
Every day things happen to us.
Tasks are created in our lives that we have to do. Some are small jobs, some are big jobs. Some jobs appear unpredictably. Other times we know they are coming.
When we realize we have a job to do, we reach out and put something into our lives to get the job done.
Let me illustrate this with a personal story. I am 2.09 meters tall. My wife and I sent all of our children to college. I live in a suburb of Boston and drive a Honda minivan to work. I have many other characteristics and qualities. But those attributes haven’t yet compelled me to go out and buy the New York Times today. There may be a correlation between some of these attributes and the tendency of customers to buy the Times. But those characteristics don’t compel me to buy this newspaper – or any product.
If The New York Times does not understand why I might choose to “hire” its product in certain circumstances and why I might choose something else , data about me or people like me is unlikely to help them create new innovations for me.
Correlation does not reveal the one thing that matters most in innovation – the causality behind why I might buy a particular solution.
That answer, I believe, lies in the job for which I hire a product or service.
Dina Gerdemann:
It seems like a lot of companies make the mistake of picking and choosing data that fits their biases, right?
Clayton Christensen:
In writing the book, I thought that God does not create data for humanity. He has done many things for us, but data is not one of them. Every piece of data we see is a small fraction of the phenomena the theory is trying to summarize. It doesn’t tell the whole story.
You do not realise that the data you see does not have the substance needed to answer the (innovation) question you want answered.
Dina Gerdemann:
So, is it important to observe the customer and ask the right questions?
Clayton Christensen:
Yeah, I… You are trying to learn about your product: Is there some work for our customers that needs to be done, but no product for not doing the job right?
When someone has a job to do and there is no product that is obviously designed to do the job, they get involved in workarounds.
Thinking…..
“I have to do this and it frustrates me, but I’m going to deal with it all to get the job done.”
My third son, Michael, went to Stanford, called me, and said,
“I have to furnish my apartment tomorrow.”
So Michael found himself having to do this work.
When I talk about this job, I ask:
“Is there a brand that comes to people’s minds when they realize that this is the job they should be doing?”
And over 95% say IKEA.
IKEA exists to do a job. I need to furnish my apartment quickly.
For 50 years they have been developing their business model around the world, and no one has copied it.
There are other companies that are furniture sellers, but no one has organized around this particular project that needs to be done.
The owner is one of the richest men in the world.
How can he get rich by making furniture that is essentially disposable and sell it to the lowest level of humanity, college students who have no money?
If I have to look around and shop around to get the job done perfectly, that’s very expensive and time consuming.
If someone comes in and says, “I can do this job perfectly for you,” I’m happy to pay a higher price for an average product.
Dina Gerdemann:
You say that many managers fail to innovate because they don’t take into account the specific context of a job that needs to be done. Can you discuss why this is important in defining a job and developing an innovative solution?
Clayton Christensen:
You need to take circumstances into account when understanding the work to be done.
If this idea of jobs to be done is such a good idea, why are so few companies organizing around it?
I realized that managers are data-driven, and so when they start their company, they live in the broader context and they are very observant about the broader context.
But the broader context has no voice.
So he can’t scream at me: “You don’t understand the content!” I have to notice her.
“YOU LOSE THE CONNECTION TO WHAT CAUSES YOUR CUSTOMERS TO BUY YOUR PRODUCTS IN THE FIRST PLACE”
If I succeed and the company starts to take off, suddenly as a manager I find myself with data swirling around me, and the data is about customers, competition, products, recalls, distribution problems, and I have to respond to that data even when the environment isn’t transmitting any data anymore.
Very quickly companies can inadvertently define their business as: We make these products and sell them to these customers with these features.
And you lose touch with what causes customers to buy your products in the first place.
Dina Gerdemann:
You say that companies should think about what work will replace their product or service. In other words: What needs to be fired to hire my product?
Clayton Christensen:
That’s exactly right. As managers, if we think there is a job that our product needs to do, we don’t think too often about how others are doing it now.
People are used to solutions.
So, you need to ask your customers to lay off something to hire your product
Dina Gerdemann:
For the business executives reading this interview, can you indicate what you consider to be some important steps in implementing the “work to be done” theory?
Clayton Christensen:
If you understand the experiences you need to provide to customers, it tells you what you need to integrate and how you need to integrate it in order to provide experiences to get the customer to do the job right.
The delivery of experiences is done by a process that produces these results.
You need to organize your company around processes that get the job done, that provide customers with the experiences they need.
Most companies have lost the scope of the work that needs to be done.
They are organized by customer or competitor or product categories so that no one is responsible for the experiences.
No one is responsible for the processes leading to the experiences.
So very quickly you lose that focus.
Once you understand the work to be done, there must be someone responsible for providing that experience.
If there are six experiences that are important for creating a job, we need six people to manage these processes. This is critical.
Dina Gerdemann:
You state that what gets measured gets done.
Southern New Hampshire University tracks how many minutes it takes to answer a question. Amazon focuses on when orders are delivered, not when they are shipped. The key here is to keep things in focus, right?
Clayton Christensen:
Isn’t that a great idea? Many companies don’t do that. I’ve spent my life developing theories about management. A theory is a statement of causality. Every time you take action as a manager, it’s based on a theory: If I do this, this will be the result. If we do it this way, we will be successful. Managers are voracious consumers of theory.
In all our research, we have not developed a good theory of measurement. We measure the right thing or the wrong thing, and how do you know if it’s right or wrong? You wait until all the data comes in and then you say, “Oh!
Linking the work to be done and the measurement system is really an important idea.
We know there must be a great theory there.
We haven’t developed it yet.
The Artificial Intelligence and recommender systems help consumers complete the work they need to do in an easy way.
An important point here is the surrounding atmosphere at that moment.
Our clients don’t know exactly what to choose at the time of purchase to get the job done and we have to help them!
The system should take notice of similar trips of your other customers , which are stored within your shopping data and help the customer reach their goal.
Many customers have reached their goal through your services and mobiplus shopping recommender uses these trips to help others reach their goal.
It tries many times new routes in real time, sees what works and what doesn’t and tries to make your customer happy !
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