Author of Competing Against Luck
Karen Dillon is the author of Competing Against Luck (2016), a book on innovation and customer choice built on the Theory of Jobs to Be Done. The thing most worth learning from it: customers hire products to make progress in a specific circumstance, so find that job and innovation stops being luck.
What causes us to buy products and services is the stuff that happens to us all day, every day.
Competing Against Luck: The Story of Innovation and Customer Choice
Dillon opens with innovation's poor record despite huge spending. In a McKinsey poll, 84 percent of global executives called innovation extremely important to growth, yet 94 percent were unsatisfied with their results. In 2015 one thousand public companies spent $680 billion on R&D, up 5.1 percent.
Stage-gates, rapid iterations and six-sigma rules look scientific but create the feeling of progress without causing it. Any process is built to produce exactly the results it produces.
The book argues customer data shows who buys, not why. Christensen's profile (age sixty-four, six feet eight, a Honda minivan, a Boston suburb) does not make him buy the New York Times. He might hire it to skip dull lobby magazines, follow March Madness, or look informed to neighbors.
The Air Force measured more than four thousand pilots to build cockpits for the average pilot. No pilot was average, and the fix was the adjustable seat.
It treats failed launches as anomalies with causes, not bad luck. Fields became reliable once they found the causal mechanism: Pasteur's germ theory ended about two thousand years of trial-and-error medicine, and Deming and Juran taught Japanese carmakers to trace each defect to its root cause.
Innovation sits where carmaking stood before the quality revolution. Managers accept failure as inevitable and patch around it.
It says disruption theory predicts incumbents' moves, not what to build. Digital Equipment Corporation collapsed around 1988, and even a firm setting out to disrupt has under a 25 percent chance of building exactly the right product.
The open question is the reverse one: how do successful firms know where to grow? The book's answer is what makes customers pull a product into their lives.
Customers hire a product to make progress in a specific circumstance. A fast-food chain made its shakes cheaper, chunkier and chocolatier, and sales did not move. Eighteen hours of observation showed many shakes sold before 9:00 a.m. to lone commuters who wanted something to fill a boring drive.
The shake lasted about twenty minutes and beat bananas, doughnuts, bagels and a Snickers bar for keeping hunger away until midmorning.
The same person hires the same product for different jobs. In the afternoon, parents hired a shake to say yes to a child, a job whose rivals were a toy store stop or a game of catch.
Averaging feedback across jobs yields a product that does none of them well, so split the jobs and design for each.
Every job has functional, social and emotional sides. A Facebook break at work delivers rest and a virtual water cooler, so Facebook partly competes with cigarettes. The social and emotional sides can outweigh the functional one.
P&G's Pampers sold weakly in China as cheap containment. Reframed around better sleep, with research showing babies slept thirty more minutes, it reached about $1.6 billion in sales and roughly 30 percent share by 2013.
A valid job is written in verbs and nouns, never adjectives. 'A chocolate shake in a twelve-ounce cup' is a spec, because every answer is a shake. 'Stay occupied and full until a 10:00 a.m. meeting' is a job that bananas, bagels and coffee all compete for.
If every option comes from your own category, move up a level. A spec for moisture-proof house wrap leaves Tyvek or nothing. One level up, staying comfortable at low energy cost also invites fiberglass, sweaters and fans.
The book states where the theory stops working. It does not help where there is no real struggle, where choices are pure math such as commodities trading, or on whether you should offer a solution at all. Cigarettes do many jobs yet harm the customer.
Stretched too far, a theory loses its power, as happened when 'disruption' came to mean anything clever and new. The same risk applies if every motive gets called a job.
Real rivals often sit in other categories, or are nothing at all. Unilever held about 70 percent of US margarine with roughly twenty-one brands that differed mainly on fat percentage. Shoppers hired spreads to moisten bread or stop food burning, and cream cheese, olive oil and nonstick spray competed for those jobs.
Butter overtook margarine by the mid-2000s while olive oil became one of the fastest growing food markets. The book notes caveats: trans fat worries partly drove butter's rise, and Unilever is still a world-class company.
Netflix, BMW and Airbnb all competed with things outside their category. Asked if Netflix competed with Amazon, Reed Hastings named video games, wine, other video networks and board games. Chip Conley says 40 percent of Airbnb guests would not have traveled, or would have stayed with family.
BMW studied car jobs as the industry collapsed in 2008 and launched the BMWi line and DriveNow car sharing in Berlin, Vienna, San Francisco and London.
Counting nonconsumers can reveal a market far bigger than rivals' sales. Small businesses were jury-rigging Quicken to keep books. QuickBooks offered half the functionality at twice the price and became the global leader, and Intuit reached $4 billion in revenue and a $25 billion market cap.
Its real rivals were bookkeepers, extra hours, spreadsheets and shoeboxes of receipts. Owners wanted confidence that invoices went out and bills got paid, not accounting software.
Customers who look identical can hire you for unrelated jobs. SNHU separated campus students from online adult learners, moved the online team two miles away to a former mill yard, and replaced a 24-hour email reply with a counselor's call within ten minutes.
Online revenue grew from $32 million to nearly $535 million, with 34 percent compounded growth over six years to fiscal 2016. SNHU slowed recruiting when growth strained delivery.
Dillon's book says jobs show up wherever people struggle. Perspective, not a new tool, finds them. It names five places: your own frustrations, people who buy nothing, workarounds, chores people dread, and odd uses of your product.
Sal Khan's rough math videos for his cousin beat tutorials he called 'cheaper and crappier'. Kimberly-Clark's Depend Silhouette earned $60 million in year one, and ING Direct sold to Capital One in 2012 for $9 billion.
Workarounds and odd uses point to hidden jobs. Arm & Hammer baking soda was used in laundry, carpets and fridges, and is now under 7 percent of consumer revenue. ZzzQuil came from people taking NyQuil just to sleep.
MinuteClinic serves the negative job of not wanting to see the doctor, and has more than a thousand locations in thirty-three states.
Go deep on one buyer's story, working back from the purchase. Brian Walker looked like an impulse buyer of a $699 Costco mattress. His $2,000 pillow top had given him a year of pain, he had researched for three months, and Costco's easy returns removed his last fear.
The interview skips feature questions and pins down day, place and who was there. 'Great innovation insights have more to do with depth than breadth.'
A switch happens only when push and pull beat habit and anxiety. Losses weigh about twice as much as gains, so the new must be far more appealing, not slightly better. Health clubs found annual contracts made people not join at all.
Reassurance is a design job. ING Direct's cafés handle no teller cash transactions and exist to show the virtual bank is real, and Mercer built a module to model pension buyouts before committing.
The book trusts what people do over what they say. Pleasant Rowland sat through one focus group for American Girl, where mothers rejected history dolls with accessories. She trusted her own read of the job and sold to Mattel thirteen years later for $700 million.
Sony's research said buyers would reject a player that could not record. Akio Morita overruled marketing, and the Walkman sold over 330 million units.
Every hire means a firing, and use matters more than purchase. Mobile phones fired wristwatches, and Depend Silhouette buyers fired staying at home. The Big Hire is the purchase, while repeated Little Hires prove the job is getting done.
Before launch, Airbnb storyboarded forty-five emotional moments for hosts and guests, treating the guest's arrival as the first Little Hire.
Removing buyers' anxieties moved a condo builder's numbers. A Detroit builder found buyers stuck on where the dining table would go. It shrank the second bedroom 20 percent, added moving help and storage, and cut options to three. Cancellations fell from five or six a month to one.
A $3,500 price rise held, and by 2007 the builder grew 25 percent while industry sales fell 49 percent. 'I realized we were instead in the business of moving lives.'
Write a job spec before you design anything. The spec lists functional, social and emotional dimensions, accepted tradeoffs, every competitor including nonconsumption, and the obstacles and anxieties to remove.
Medtronic's better pacemakers sold poorly in India. Interviews with over a hundred stakeholders found four barriers, and free screening, bridge loans approved in two days and patient counselors followed. About 167,000 patients were screened and about 15,000 treated through December 2015.
Small experience details that serve the job are hard to copy. Rowland kept American Girl's belly band although it added two cents and twenty-seven seconds to packing, because the wait makes unboxing exciting.
Cheaper lookalikes from Toys"R"Us, Walmart and Disney made no dent. American Girl has sold 29 million dolls, and a typical buyer spends over six hundred dollars.
A premium earned by nailing the job leaves customers grateful. Milwaukee's Sawzall and HOLE HAWG have held more than 80 percent of their job markets for decades against comparable rivals. A premium forced through lock-in, like printer ink, breeds resentment.
'With jobs-based innovations, customers don't resent the price, they're grateful for the solution.'
Tell customers who should not hire you. A restaurateur's early Yelp raves drew foodies hunting a hidden gem to a decent local place, and they wrote the bad reviews.
Airbnb's Chip Conley pictures an invisible report card on each guest's forehead, so listings stress the neighborhood and the kind of stay.
A purpose brand needs protecting from feature creep. Volvo stood for safety from 1927. After Ford bought it in 1999 it chased luxury, was unprofitable by 2005, and was sold to Geely at a loss in 2010.
Volvo grew again in 2015 after refocusing on safety, but the book says it may have lost purpose-brand status for good.
Processes are the hardest asset to copy. Toyota let rival executives tour its plant twice a month and ask anything, yet visitors asked the wrong questions and missed the bigger picture. Pixar's Ed Catmull published the studio's processes and rivals still have not matched its results.
SNHU gives tours to would-be competitors, and Paul LeBlanc says richer rivals still cannot easily copy hundreds of linked processes.
Put someone in charge of the customer's job, not a reorg. In a 2010 Bain study, fewer than a third of 57 major reorgs produced meaningful improvement. At the Mayo Clinic one coordinator sequenced specialists and booked same-day slots, and Christensen's MRI was done by 11:30.
Functional silos have value and will likely stay. The change comes through processes, metrics and culture.
Measure the customer's progress, not internal efficiency. Intuit tested making QuickBooks trial users phone in to register so sales could upsell them. Revenue rose, but users hit busy lines, and Intuit now builds a benefit metric per product, such as time saved.
Amazon opens each project with a mock press release that states the customer job, presented to every function at once, and tracks delivery rather than shipping.
Hearing real customer calls turned OnStar's job into peace of mind. CEO Chet Huber had all 300 staff spend an hour on call-center calls, where they heard crash victims mid-accident. OnStar later earned an estimated $2.5 billion a year in revenue.
Ford announced rival Wingcast in 2000, built around a product spec rather than a job spec, and scrapped it two years after announcing it.
New processes trigger the organization's immune system. The milk shake chain never implemented Bob Moesta's recommendations. Local managers found the changes to routines too hard, and the idea died quietly rather than being killed.
Clear insight into the job does not survive on its own, so plan for resistance before launch.
After launch, give the job a champion or drift follows. V8 pitched itself against peeling and boiling carrots and sales quadrupled in under a year. Once that team moved on, the line sprawled into variants like Picante and V8 Splash!, and the brand went back to fighting other juices.
The book admits whether V8 truly lost the job is a suspicion based on partial knowledge of its internal workings. 'Passive data needs active management.'
Selling more to existing customers blurs what you do. DeWalt built its name on the best radial arm saw. After Black & Decker bought it in the 1960s, it copied drills and clamps from store shelves and outsourced cheap manufacturing.
Confused customers hire the wrong product, then fire it, and focused rivals take each job.
Numbers are no more objective than stories. Google Flu Trends compared 1,152 data points with fifty million search terms, yet a 2014 study in Science showed it had greatly overstated US flu cases for over two years.
The researchers blamed 'big data hubris'. Leaders must choose what data to create, and some value never appears in data at all.
A stated job works like commander's intent for the whole company. TurboTax teams ranked about 150 requested features until the job became 'taxes are done'. Prefilling W-2 data in one interview chapter in 2015 raised completion.
Before Hurricane Rita, OnStar gave every caller in the crisis area all services free, with approval taking about fifteen seconds. 'American Girl is story, not stuff.'
Focus on one job and drop the ones others now do better. Deseret News left breaking news to TV and Twitter and focused on next-morning analysis for 'like-minded believers', about 56 percent of news consumers.
It covered only five of thirty legislative bills, and its social followers grew to over 100 million.
Customers do not buy products. They hire them to make progress in a specific circumstance, and that progress has functional, social and emotional sides. Seeing the job, the forces that block switching, and the experiences and processes needed to deliver it turns innovation from luck into something you can predict and build around.
Dillon opens with innovation's poor record despite huge spending. In a McKinsey poll, 84 percent of global executives called innovation extremely important to growth, yet 94 percent were unsatisfied with their results. In 2015 one thousand public companies spent $680 billion on R&D, up 5.1 percent.
Stage-gates, rapid iterations and six-sigma rules look scientific but create the feeling of progress without causing it. Any process is built to produce exactly the results it produces.
The book argues customer data shows who buys, not why. Christensen's profile (age sixty-four, six feet eight, a Honda minivan, a Boston suburb) does not make him buy the New York Times. He might hire it to skip dull lobby magazines, follow March Madness, or look informed to neighbors.
The Air Force measured more than four thousand pilots to build cockpits for the average pilot. No pilot was average, and the fix was the adjustable seat.
It treats failed launches as anomalies with causes, not bad luck. Fields became reliable once they found the causal mechanism: Pasteur's germ theory ended about two thousand years of trial-and-error medicine, and Deming and Juran taught Japanese carmakers to trace each defect to its root cause.
Innovation sits where carmaking stood before the quality revolution. Managers accept failure as inevitable and patch around it.
It says disruption theory predicts incumbents' moves, not what to build. Digital Equipment Corporation collapsed around 1988, and even a firm setting out to disrupt has under a 25 percent chance of building exactly the right product.
The open question is the reverse one: how do successful firms know where to grow? The book's answer is what makes customers pull a product into their lives.
Customers hire a product to make progress in a specific circumstance. A fast-food chain made its shakes cheaper, chunkier and chocolatier, and sales did not move. Eighteen hours of observation showed many shakes sold before 9:00 a.m. to lone commuters who wanted something to fill a boring drive.
The shake lasted about twenty minutes and beat bananas, doughnuts, bagels and a Snickers bar for keeping hunger away until midmorning.
The same person hires the same product for different jobs. In the afternoon, parents hired a shake to say yes to a child, a job whose rivals were a toy store stop or a game of catch.
Averaging feedback across jobs yields a product that does none of them well, so split the jobs and design for each.
Every job has functional, social and emotional sides. A Facebook break at work delivers rest and a virtual water cooler, so Facebook partly competes with cigarettes. The social and emotional sides can outweigh the functional one.
P&G's Pampers sold weakly in China as cheap containment. Reframed around better sleep, with research showing babies slept thirty more minutes, it reached about $1.6 billion in sales and roughly 30 percent share by 2013.
A valid job is written in verbs and nouns, never adjectives. 'A chocolate shake in a twelve-ounce cup' is a spec, because every answer is a shake. 'Stay occupied and full until a 10:00 a.m. meeting' is a job that bananas, bagels and coffee all compete for.
If every option comes from your own category, move up a level. A spec for moisture-proof house wrap leaves Tyvek or nothing. One level up, staying comfortable at low energy cost also invites fiberglass, sweaters and fans.
The book states where the theory stops working. It does not help where there is no real struggle, where choices are pure math such as commodities trading, or on whether you should offer a solution at all. Cigarettes do many jobs yet harm the customer.
Stretched too far, a theory loses its power, as happened when 'disruption' came to mean anything clever and new. The same risk applies if every motive gets called a job.
Real rivals often sit in other categories, or are nothing at all. Unilever held about 70 percent of US margarine with roughly twenty-one brands that differed mainly on fat percentage. Shoppers hired spreads to moisten bread or stop food burning, and cream cheese, olive oil and nonstick spray competed for those jobs.
Butter overtook margarine by the mid-2000s while olive oil became one of the fastest growing food markets. The book notes caveats: trans fat worries partly drove butter's rise, and Unilever is still a world-class company.
Netflix, BMW and Airbnb all competed with things outside their category. Asked if Netflix competed with Amazon, Reed Hastings named video games, wine, other video networks and board games. Chip Conley says 40 percent of Airbnb guests would not have traveled, or would have stayed with family.
BMW studied car jobs as the industry collapsed in 2008 and launched the BMWi line and DriveNow car sharing in Berlin, Vienna, San Francisco and London.
Counting nonconsumers can reveal a market far bigger than rivals' sales. Small businesses were jury-rigging Quicken to keep books. QuickBooks offered half the functionality at twice the price and became the global leader, and Intuit reached $4 billion in revenue and a $25 billion market cap.
Its real rivals were bookkeepers, extra hours, spreadsheets and shoeboxes of receipts. Owners wanted confidence that invoices went out and bills got paid, not accounting software.
Customers who look identical can hire you for unrelated jobs. SNHU separated campus students from online adult learners, moved the online team two miles away to a former mill yard, and replaced a 24-hour email reply with a counselor's call within ten minutes.
Online revenue grew from $32 million to nearly $535 million, with 34 percent compounded growth over six years to fiscal 2016. SNHU slowed recruiting when growth strained delivery.
Dillon's book says jobs show up wherever people struggle. Perspective, not a new tool, finds them. It names five places: your own frustrations, people who buy nothing, workarounds, chores people dread, and odd uses of your product.
Sal Khan's rough math videos for his cousin beat tutorials he called 'cheaper and crappier'. Kimberly-Clark's Depend Silhouette earned $60 million in year one, and ING Direct sold to Capital One in 2012 for $9 billion.
Workarounds and odd uses point to hidden jobs. Arm & Hammer baking soda was used in laundry, carpets and fridges, and is now under 7 percent of consumer revenue. ZzzQuil came from people taking NyQuil just to sleep.
MinuteClinic serves the negative job of not wanting to see the doctor, and has more than a thousand locations in thirty-three states.
Go deep on one buyer's story, working back from the purchase. Brian Walker looked like an impulse buyer of a $699 Costco mattress. His $2,000 pillow top had given him a year of pain, he had researched for three months, and Costco's easy returns removed his last fear.
The interview skips feature questions and pins down day, place and who was there. 'Great innovation insights have more to do with depth than breadth.'
A switch happens only when push and pull beat habit and anxiety. Losses weigh about twice as much as gains, so the new must be far more appealing, not slightly better. Health clubs found annual contracts made people not join at all.
Reassurance is a design job. ING Direct's cafés handle no teller cash transactions and exist to show the virtual bank is real, and Mercer built a module to model pension buyouts before committing.
The book trusts what people do over what they say. Pleasant Rowland sat through one focus group for American Girl, where mothers rejected history dolls with accessories. She trusted her own read of the job and sold to Mattel thirteen years later for $700 million.
Sony's research said buyers would reject a player that could not record. Akio Morita overruled marketing, and the Walkman sold over 330 million units.
Every hire means a firing, and use matters more than purchase. Mobile phones fired wristwatches, and Depend Silhouette buyers fired staying at home. The Big Hire is the purchase, while repeated Little Hires prove the job is getting done.
Before launch, Airbnb storyboarded forty-five emotional moments for hosts and guests, treating the guest's arrival as the first Little Hire.
Removing buyers' anxieties moved a condo builder's numbers. A Detroit builder found buyers stuck on where the dining table would go. It shrank the second bedroom 20 percent, added moving help and storage, and cut options to three. Cancellations fell from five or six a month to one.
A $3,500 price rise held, and by 2007 the builder grew 25 percent while industry sales fell 49 percent. 'I realized we were instead in the business of moving lives.'
Write a job spec before you design anything. The spec lists functional, social and emotional dimensions, accepted tradeoffs, every competitor including nonconsumption, and the obstacles and anxieties to remove.
Medtronic's better pacemakers sold poorly in India. Interviews with over a hundred stakeholders found four barriers, and free screening, bridge loans approved in two days and patient counselors followed. About 167,000 patients were screened and about 15,000 treated through December 2015.
Small experience details that serve the job are hard to copy. Rowland kept American Girl's belly band although it added two cents and twenty-seven seconds to packing, because the wait makes unboxing exciting.
Cheaper lookalikes from Toys"R"Us, Walmart and Disney made no dent. American Girl has sold 29 million dolls, and a typical buyer spends over six hundred dollars.
A premium earned by nailing the job leaves customers grateful. Milwaukee's Sawzall and HOLE HAWG have held more than 80 percent of their job markets for decades against comparable rivals. A premium forced through lock-in, like printer ink, breeds resentment.
'With jobs-based innovations, customers don't resent the price, they're grateful for the solution.'
Tell customers who should not hire you. A restaurateur's early Yelp raves drew foodies hunting a hidden gem to a decent local place, and they wrote the bad reviews.
Airbnb's Chip Conley pictures an invisible report card on each guest's forehead, so listings stress the neighborhood and the kind of stay.
A purpose brand needs protecting from feature creep. Volvo stood for safety from 1927. After Ford bought it in 1999 it chased luxury, was unprofitable by 2005, and was sold to Geely at a loss in 2010.
Volvo grew again in 2015 after refocusing on safety, but the book says it may have lost purpose-brand status for good.
Processes are the hardest asset to copy. Toyota let rival executives tour its plant twice a month and ask anything, yet visitors asked the wrong questions and missed the bigger picture. Pixar's Ed Catmull published the studio's processes and rivals still have not matched its results.
SNHU gives tours to would-be competitors, and Paul LeBlanc says richer rivals still cannot easily copy hundreds of linked processes.
Put someone in charge of the customer's job, not a reorg. In a 2010 Bain study, fewer than a third of 57 major reorgs produced meaningful improvement. At the Mayo Clinic one coordinator sequenced specialists and booked same-day slots, and Christensen's MRI was done by 11:30.
Functional silos have value and will likely stay. The change comes through processes, metrics and culture.
Measure the customer's progress, not internal efficiency. Intuit tested making QuickBooks trial users phone in to register so sales could upsell them. Revenue rose, but users hit busy lines, and Intuit now builds a benefit metric per product, such as time saved.
Amazon opens each project with a mock press release that states the customer job, presented to every function at once, and tracks delivery rather than shipping.
Hearing real customer calls turned OnStar's job into peace of mind. CEO Chet Huber had all 300 staff spend an hour on call-center calls, where they heard crash victims mid-accident. OnStar later earned an estimated $2.5 billion a year in revenue.
Ford announced rival Wingcast in 2000, built around a product spec rather than a job spec, and scrapped it two years after announcing it.
New processes trigger the organization's immune system. The milk shake chain never implemented Bob Moesta's recommendations. Local managers found the changes to routines too hard, and the idea died quietly rather than being killed.
Clear insight into the job does not survive on its own, so plan for resistance before launch.
After launch, give the job a champion or drift follows. V8 pitched itself against peeling and boiling carrots and sales quadrupled in under a year. Once that team moved on, the line sprawled into variants like Picante and V8 Splash!, and the brand went back to fighting other juices.
The book admits whether V8 truly lost the job is a suspicion based on partial knowledge of its internal workings. 'Passive data needs active management.'
Selling more to existing customers blurs what you do. DeWalt built its name on the best radial arm saw. After Black & Decker bought it in the 1960s, it copied drills and clamps from store shelves and outsourced cheap manufacturing.
Confused customers hire the wrong product, then fire it, and focused rivals take each job.
Numbers are no more objective than stories. Google Flu Trends compared 1,152 data points with fifty million search terms, yet a 2014 study in Science showed it had greatly overstated US flu cases for over two years.
The researchers blamed 'big data hubris'. Leaders must choose what data to create, and some value never appears in data at all.
A stated job works like commander's intent for the whole company. TurboTax teams ranked about 150 requested features until the job became 'taxes are done'. Prefilling W-2 data in one interview chapter in 2015 raised completion.
Before Hurricane Rita, OnStar gave every caller in the crisis area all services free, with approval taking about fifteen seconds. 'American Girl is story, not stuff.'
Focus on one job and drop the ones others now do better. Deseret News left breaking news to TV and Twitter and focused on next-morning analysis for 'like-minded believers', about 56 percent of news consumers.
It covered only five of thirty legislative bills, and its social followers grew to over 100 million.