Author of Competing Against Luck
Taddy Hall is the author of Competing Against Luck (2016), a book on how customer choice can be understood and innovation made predictable. The lesson most worth taking is to study the progress a customer is trying to make in a specific circumstance, not the customer's profile or your own product.
With jobs-based innovations, customers don't resent the price, they're grateful for the solution.
Competing Against Luck: The Story of Innovation and Customer Choice
Hall's book says firms track who customers are, not why they buy. In a McKinsey poll, 84 percent of 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 iteration and six-sigma rules look scientific but create the feeling of progress without causing it. The book borrows the joke "We're lost, but we're making good time!"
Correlation describes customers but cannot explain a purchase. Clayton Christensen's profile (age sixty-four, six feet eight, a Honda minivan) does not make him buy the New York Times. He might hire it to skip lobby magazines, follow March Madness or look informed.
The Air Force measured more than four thousand pilots to design cockpits for the average pilot. No pilot was average, and the fix was the adjustable seat.
Hall treats failed launches as anomalies with causes, not bad luck. The book compares innovation today to carmaking before the quality revolution. Deming and Juran taught Japanese carmakers to trace each defect to its root cause, while Detroit added inventory and inspectors.
It also recommends discovery-driven planning: list the assumptions a strategy rests on and test them early, instead of bending projections to fit results.
Disruption theory predicts incumbent behavior but not what to build. Digital Equipment Corporation collapsed around 1988 along with almost every other minicomputer maker, so bad management could not be the whole explanation. Even a firm setting out to disrupt has under a 25 percent chance of building exactly the right product.
The open question is how successful firms know where to grow. The book answers it with what makes customers pull a product into their lives.
The circumstance, not the customer's profile, decides what gets hired. 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 last a boring drive and fit the cup holder.
The morning shake beat bananas, doughnuts, bagels and a Snickers bar because it lasted about twenty minutes and held off hunger until midmorning.
One product can be hired for different jobs, so design for each. In the afternoon the same buyers hired a shake for a different job: a parent wanting to say yes to a child. Its rivals were a toy store stop or a game of catch.
Averaging feedback across jobs produces a product that does none of them well.
Every job has functional, social and emotional sides. A smoker's break and a Facebook break both deliver rest and time with friends, so Facebook partly competes with cigarettes. The social and emotional sides can outweigh the functional one.
Pampers sold weakly in China as a cheap containment device. Reframed around better sleep, with research showing babies fell asleep 30 percent faster and slept thirty more minutes, it reached about $1.6 billion in sales and roughly 30 percent share by 2013.
Hall says to write the job in verbs and nouns. "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 compete for.
If every option you list sits in your own category, move up a level. A moisture-proof wrap leaves Tyvek or nothing, while keeping a Boston family comfortable at low cost also invites fiberglass, sweaters and fans. Words like "convenient" describe an experience, not a job.
Industry categories hide the real competition. 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 keep food from burning, so cream cheese, olive oil and nonstick spray competed too.
Butter overtook margarine by the mid-2000s, and at the end of 2014 Unilever said it would spin spreads into a stand-alone company. The book notes trans fat worries also drove butter's rise.
Real rivals are often other categories, or doing nothing at all. Reed Hastings said Netflix competes with everything people do to relax, naming video games, a bottle of wine and board games. Chip Conley says 40 percent of Airbnb guests would not have traveled or would have stayed with family.
BMW redefined its job as mobility, found rivals in Tesla, Uber and Zipcar, and launched BMWi and DriveNow car sharing.
QuickBooks won by serving owners who were jury-rigging Quicken. Owners wanted confidence that invoices went out and bills got paid, not accounting software. QuickBooks offered half the functionality at twice the price and became the global leader, and Intuit reached $4 billion in revenue.
Its real rivals were bookkeepers, spreadsheets and shoeboxes of receipts, a market far bigger than software sales. Hall's source quote: "They choose to hire nothing, rather than something that does the job poorly."
SNHU split online adults from campus students and responded in minutes. Southern New Hampshire University replaced a 24-hour email with a counselor's call within ten minutes and settled aid and credit transfer in days. Online revenue grew from $32 million to nearly $535 million by fiscal 2016.
It moved the online team two miles away to a former mill yard, free of legacy rules, and slowed recruiting when growth strained delivery.
Perspective, not a new research tool, finds the job. Personas, ethnography, focus groups and competitive analysis stay useful when read through a jobs lens. The book offers no step-by-step manual and says no flash of inspiration is required.
Asking how to tweak the current offering, such as faster, cheaper or more colors, starts from the wrong assumption.
Look for struggle: your own frustrations, nonconsumers, workarounds, dreaded chores. Sal Khan's rough math videos for his cousin won against polished tutorials. Kimberly-Clark's Depend Silhouette, made to look like normal underwear, earned $60 million in year one, and ZzzQuil came from people taking NyQuil just to sleep.
Once a vein looks promising, the book says to go deep before going wide, and to record functional, social and emotional dimensions before designing anything.
Interview recent buyers as a timeline back to the first thought. Brian Walker looked like an impulse buyer of a $699 Costco mattress. In fact his $2,000 pillow top had caused a year of pain, he researched for three months, and Costco's easy returns removed his last fear.
Start at the purchase with concrete details, skip feature questions, and cluster many whole stories to find the pattern. One interview gives a hypothesis, not an answer.
A switch needs push and pull to outweigh habit and anxiety. Losses weigh about twice as much as gains, so the new must be far more appealing, not slightly better. Health club annual contracts stopped people from joining at all.
Reassurance is design work. ING Direct built cafés with no teller transactions to show the virtual bank was real, and Mercer built a module to model pension buyouts before committing.
Every job involves a Big Hire, Little Hires and a firing. The Big Hire is the purchase and each later use is a Little Hire, and only repeated Little Hires show the job is getting done. Hiring a product means firing something, even if that is doing nothing.
Airbnb storyboarded forty-five emotional moments before launch and treated the guest's arrival as the first Little Hire. Mobile phones fired wristwatches, and Depend buyers fired staying at home.
A condo builder found buyers worried about their dining table. Timeline interviews showed no demographic pattern but a recurring worry about where the table would go. The builder shrank the second bedroom 20 percent to fit one, 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 it grew 25 percent while industry sales fell 49 percent. The builder said it was in "the business of moving lives."
Write a job spec before designing anything. The spec lists the three dimensions, the tradeoffs customers accept, every competitor including nonconsumption, and the obstacles and anxieties to remove. Medtronic's better pacemakers sold poorly in India until interviews with over a hundred stakeholders found four barriers.
It added free screening clinics, a bridge loan approved within two days, and patient counselors. Through December 2015 about 167,000 patients were screened and about 15,000 treated.
Sweat small experience details that serve the job. American Girl's belly band added two cents and twenty-seven seconds to packing, and Pleasant Rowland refused to drop it 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. Products can be copied, but integrated buying and using experiences are hard to copy.
Charge a premium for nailing the job, not for lock-in. Customers weigh price against the full cost of failed options: wasted time, frustration and money. Premiums forced through interdependence, like printer ink, breed resentment.
Milwaukee's Sawzall and HOLE HAWG have held more than 80 percent of their job markets for decades against comparable rivals.
Tell customers who should not hire the product. A restaurateur's early Yelp raves drew foodies hunting a hidden gem to a decent local place, and they wrote bad reviews. Airbnb helps hosts state who should not book.
Reviews let customers find others with the same job, so overselling backfires.
Hall warns that a purpose brand is lost by drifting off its job. 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.
It 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, and they still missed the bigger picture. Pixar's Ed Catmull published the studio's processes, and rivals have not matched its results.
SNHU gives tours to would-be competitors. Paul LeBlanc says richer rivals cannot easily copy hundreds of linked processes.
Put someone in charge of the job instead of reorganizing. In a 2010 Bain study, fewer than a third of 57 major reorgs produced meaningful improvement. At the Mayo Clinic one coordinator picked specialists and booked them from same-day openings, so Christensen's MRI was done by 11:30.
The ICU, created after surgeon Dwight Harken saw patients survive surgery and die on general wards, is a unit that owns the critical-care job.
Measure customer 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 pitches, so Intuit now builds a benefit metric per product, such as time saved.
Amazon starts each project with a mock press release naming the customer job, presented to every function at once, and tracks when orders are delivered, not shipped.
Hearing real customer calls turned OnStar into peace of mind. OnStar began as a bundle of features for luxury cars. 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. Ford's rival Wingcast, built on a product spec, was announced in 2000 and could not match OnStar's processes.
Expect the organization to resist new processes. Processes are built not to change. The milk shake chain never implemented Bob Moesta's recommendations because local managers found the changes too hard, and the idea died quietly.
Clear insight into the job does not survive on its own.
After launch, loud sales data pulls teams back to products. V8 sold against peeling and boiling carrots and sales quadrupled in under a year. After that team moved on, the line sprawled into variants like Picante and V8 Splash! and went back to fighting other juices.
Passive data has no champion, so someone must seek it out on purpose. The book admits that V8 losing the job is a suspicion based on partial knowledge of its internals.
Selling more to existing customers blurs what the company is for. DeWalt built its name on the best radial arm saw. After Black & Decker bought it, it copied drills and clamps from store shelves.
Confused customers hire the wrong product, then fire it, and focused rivals take each job.
A clearly stated job works as a compass for decisions. TurboTax teams ranked about 150 feature requests until Sasan Goodarzi reframed the job as "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 free service after about fifteen seconds of approval. At SNHU, 95 percent of surveyed graduates said they would do it all again.
Drop jobs others do better and focus on one. Deseret News left breaking news to TV and Twitter and focused on next-morning perspective and analysis for "like-minded believers," about 56 percent of news consumers. Social followers rose to over 100 million.
The book says a broad mission inspires but only a specific job enables action. Lifebuoy soap changes color at ten seconds so children wash long enough.
The theory has boundaries, and the book names them. It does not help where there is no real struggle or current solutions are good enough, or where choices are pure math, such as commodities trading. It explains why people choose, not whether you should offer the solution.
Cigarettes do many jobs yet harm the customer, so ethics stay a separate question. When a case does not fit, go back to the phenomena and either refine the theory or mark a boundary.
Stretching a theory too far drains its power. "Disruption" came to mean anything clever and new. The book says "job" risks the same fate if every motive gets the label.
Finding the right level of abstraction is more art than science.
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.
Hall's book says firms track who customers are, not why they buy. In a McKinsey poll, 84 percent of 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 iteration and six-sigma rules look scientific but create the feeling of progress without causing it. The book borrows the joke "We're lost, but we're making good time!"
Correlation describes customers but cannot explain a purchase. Clayton Christensen's profile (age sixty-four, six feet eight, a Honda minivan) does not make him buy the New York Times. He might hire it to skip lobby magazines, follow March Madness or look informed.
The Air Force measured more than four thousand pilots to design cockpits for the average pilot. No pilot was average, and the fix was the adjustable seat.
Hall treats failed launches as anomalies with causes, not bad luck. The book compares innovation today to carmaking before the quality revolution. Deming and Juran taught Japanese carmakers to trace each defect to its root cause, while Detroit added inventory and inspectors.
It also recommends discovery-driven planning: list the assumptions a strategy rests on and test them early, instead of bending projections to fit results.
Disruption theory predicts incumbent behavior but not what to build. Digital Equipment Corporation collapsed around 1988 along with almost every other minicomputer maker, so bad management could not be the whole explanation. Even a firm setting out to disrupt has under a 25 percent chance of building exactly the right product.
The open question is how successful firms know where to grow. The book answers it with what makes customers pull a product into their lives.
The circumstance, not the customer's profile, decides what gets hired. 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 last a boring drive and fit the cup holder.
The morning shake beat bananas, doughnuts, bagels and a Snickers bar because it lasted about twenty minutes and held off hunger until midmorning.
One product can be hired for different jobs, so design for each. In the afternoon the same buyers hired a shake for a different job: a parent wanting to say yes to a child. Its rivals were a toy store stop or a game of catch.
Averaging feedback across jobs produces a product that does none of them well.
Every job has functional, social and emotional sides. A smoker's break and a Facebook break both deliver rest and time with friends, so Facebook partly competes with cigarettes. The social and emotional sides can outweigh the functional one.
Pampers sold weakly in China as a cheap containment device. Reframed around better sleep, with research showing babies fell asleep 30 percent faster and slept thirty more minutes, it reached about $1.6 billion in sales and roughly 30 percent share by 2013.
Hall says to write the job in verbs and nouns. "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 compete for.
If every option you list sits in your own category, move up a level. A moisture-proof wrap leaves Tyvek or nothing, while keeping a Boston family comfortable at low cost also invites fiberglass, sweaters and fans. Words like "convenient" describe an experience, not a job.
Industry categories hide the real competition. 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 keep food from burning, so cream cheese, olive oil and nonstick spray competed too.
Butter overtook margarine by the mid-2000s, and at the end of 2014 Unilever said it would spin spreads into a stand-alone company. The book notes trans fat worries also drove butter's rise.
Real rivals are often other categories, or doing nothing at all. Reed Hastings said Netflix competes with everything people do to relax, naming video games, a bottle of wine and board games. Chip Conley says 40 percent of Airbnb guests would not have traveled or would have stayed with family.
BMW redefined its job as mobility, found rivals in Tesla, Uber and Zipcar, and launched BMWi and DriveNow car sharing.
QuickBooks won by serving owners who were jury-rigging Quicken. Owners wanted confidence that invoices went out and bills got paid, not accounting software. QuickBooks offered half the functionality at twice the price and became the global leader, and Intuit reached $4 billion in revenue.
Its real rivals were bookkeepers, spreadsheets and shoeboxes of receipts, a market far bigger than software sales. Hall's source quote: "They choose to hire nothing, rather than something that does the job poorly."
SNHU split online adults from campus students and responded in minutes. Southern New Hampshire University replaced a 24-hour email with a counselor's call within ten minutes and settled aid and credit transfer in days. Online revenue grew from $32 million to nearly $535 million by fiscal 2016.
It moved the online team two miles away to a former mill yard, free of legacy rules, and slowed recruiting when growth strained delivery.
Perspective, not a new research tool, finds the job. Personas, ethnography, focus groups and competitive analysis stay useful when read through a jobs lens. The book offers no step-by-step manual and says no flash of inspiration is required.
Asking how to tweak the current offering, such as faster, cheaper or more colors, starts from the wrong assumption.
Look for struggle: your own frustrations, nonconsumers, workarounds, dreaded chores. Sal Khan's rough math videos for his cousin won against polished tutorials. Kimberly-Clark's Depend Silhouette, made to look like normal underwear, earned $60 million in year one, and ZzzQuil came from people taking NyQuil just to sleep.
Once a vein looks promising, the book says to go deep before going wide, and to record functional, social and emotional dimensions before designing anything.
Interview recent buyers as a timeline back to the first thought. Brian Walker looked like an impulse buyer of a $699 Costco mattress. In fact his $2,000 pillow top had caused a year of pain, he researched for three months, and Costco's easy returns removed his last fear.
Start at the purchase with concrete details, skip feature questions, and cluster many whole stories to find the pattern. One interview gives a hypothesis, not an answer.
A switch needs push and pull to outweigh habit and anxiety. Losses weigh about twice as much as gains, so the new must be far more appealing, not slightly better. Health club annual contracts stopped people from joining at all.
Reassurance is design work. ING Direct built cafés with no teller transactions to show the virtual bank was real, and Mercer built a module to model pension buyouts before committing.
Every job involves a Big Hire, Little Hires and a firing. The Big Hire is the purchase and each later use is a Little Hire, and only repeated Little Hires show the job is getting done. Hiring a product means firing something, even if that is doing nothing.
Airbnb storyboarded forty-five emotional moments before launch and treated the guest's arrival as the first Little Hire. Mobile phones fired wristwatches, and Depend buyers fired staying at home.
A condo builder found buyers worried about their dining table. Timeline interviews showed no demographic pattern but a recurring worry about where the table would go. The builder shrank the second bedroom 20 percent to fit one, 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 it grew 25 percent while industry sales fell 49 percent. The builder said it was in "the business of moving lives."
Write a job spec before designing anything. The spec lists the three dimensions, the tradeoffs customers accept, every competitor including nonconsumption, and the obstacles and anxieties to remove. Medtronic's better pacemakers sold poorly in India until interviews with over a hundred stakeholders found four barriers.
It added free screening clinics, a bridge loan approved within two days, and patient counselors. Through December 2015 about 167,000 patients were screened and about 15,000 treated.
Sweat small experience details that serve the job. American Girl's belly band added two cents and twenty-seven seconds to packing, and Pleasant Rowland refused to drop it 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. Products can be copied, but integrated buying and using experiences are hard to copy.
Charge a premium for nailing the job, not for lock-in. Customers weigh price against the full cost of failed options: wasted time, frustration and money. Premiums forced through interdependence, like printer ink, breed resentment.
Milwaukee's Sawzall and HOLE HAWG have held more than 80 percent of their job markets for decades against comparable rivals.
Tell customers who should not hire the product. A restaurateur's early Yelp raves drew foodies hunting a hidden gem to a decent local place, and they wrote bad reviews. Airbnb helps hosts state who should not book.
Reviews let customers find others with the same job, so overselling backfires.
Hall warns that a purpose brand is lost by drifting off its job. 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.
It 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, and they still missed the bigger picture. Pixar's Ed Catmull published the studio's processes, and rivals have not matched its results.
SNHU gives tours to would-be competitors. Paul LeBlanc says richer rivals cannot easily copy hundreds of linked processes.
Put someone in charge of the job instead of reorganizing. In a 2010 Bain study, fewer than a third of 57 major reorgs produced meaningful improvement. At the Mayo Clinic one coordinator picked specialists and booked them from same-day openings, so Christensen's MRI was done by 11:30.
The ICU, created after surgeon Dwight Harken saw patients survive surgery and die on general wards, is a unit that owns the critical-care job.
Measure customer 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 pitches, so Intuit now builds a benefit metric per product, such as time saved.
Amazon starts each project with a mock press release naming the customer job, presented to every function at once, and tracks when orders are delivered, not shipped.
Hearing real customer calls turned OnStar into peace of mind. OnStar began as a bundle of features for luxury cars. 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. Ford's rival Wingcast, built on a product spec, was announced in 2000 and could not match OnStar's processes.
Expect the organization to resist new processes. Processes are built not to change. The milk shake chain never implemented Bob Moesta's recommendations because local managers found the changes too hard, and the idea died quietly.
Clear insight into the job does not survive on its own.
After launch, loud sales data pulls teams back to products. V8 sold against peeling and boiling carrots and sales quadrupled in under a year. After that team moved on, the line sprawled into variants like Picante and V8 Splash! and went back to fighting other juices.
Passive data has no champion, so someone must seek it out on purpose. The book admits that V8 losing the job is a suspicion based on partial knowledge of its internals.
Selling more to existing customers blurs what the company is for. DeWalt built its name on the best radial arm saw. After Black & Decker bought it, it copied drills and clamps from store shelves.
Confused customers hire the wrong product, then fire it, and focused rivals take each job.
A clearly stated job works as a compass for decisions. TurboTax teams ranked about 150 feature requests until Sasan Goodarzi reframed the job as "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 free service after about fifteen seconds of approval. At SNHU, 95 percent of surveyed graduates said they would do it all again.
Drop jobs others do better and focus on one. Deseret News left breaking news to TV and Twitter and focused on next-morning perspective and analysis for "like-minded believers," about 56 percent of news consumers. Social followers rose to over 100 million.
The book says a broad mission inspires but only a specific job enables action. Lifebuoy soap changes color at ten seconds so children wash long enough.
The theory has boundaries, and the book names them. It does not help where there is no real struggle or current solutions are good enough, or where choices are pure math, such as commodities trading. It explains why people choose, not whether you should offer the solution.
Cigarettes do many jobs yet harm the customer, so ethics stay a separate question. When a case does not fit, go back to the phenomena and either refine the theory or mark a boundary.
Stretching a theory too far drains its power. "Disruption" came to mean anything clever and new. The book says "job" risks the same fate if every motive gets the label.
Finding the right level of abstraction is more art than science.