Know Your Customers’ "Jobs to Be Done" PDF

REPRINT R1609D PUBLISHED IN HBR SEPTEMBER 2016 ARTICLE SPOTLIGHT ON CONSUMER INSIGHT Know Your Customers’ “Jobs to Be Done” Is innovation inherently a hit-or-miss endeavor? Not if you understand why custom...

REPRINT R1609D PUBLISHED IN HBR SEPTEMBER 2016 ARTICLE SPOTLIGHT ON CONSUMER INSIGHT Know Your Customers’ “Jobs to Be Done” Is innovation inherently a hit-or-miss endeavor? Not if you understand why customers make the choices they do. by Clayton M. Christensen, Taddy Hall, Karen Dillon, and David S. Duncan This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited. SPOTLIGHT ON CONSUMER INSIGHT SPOTLIGHT Know Your Customers’ “Jobs to Be Done” Is innovation inherently a hit-or-miss endeavor? Not if you understand why customers make the choices they do. BY CLAYTON M. CHRISTENSEN, TADDY HALL, KAREN DILLON, AND DAVID S. DUNCAN 2 Harvard Business Review September 2016 This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited.  FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG ARTWORK Marijah Bac Cam, Blue Landscape Charcoal, ink, marker, and pencil on paper F or as long as we can remember, innovation has been a top priority—and a top frustration—for leaders. In a recent McKinsey poll, 84% of global executives reported that innovation was extremely important to their growth strategies, but a staggering 94% were dissatisfied with their organizations’ innovation September This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the 2016 Harvard Business Review course: 3 ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited. SPOTLIGHT ON CONSUMER INSIGHT performance. Most people would agree that the vast Madness time. Marketers who collect demographic majority of innovations fall far short of ambitions. or psychographic information about him—and look On paper, this makes no sense. Never have busi- for correlations with other buyer segments—are not nesses known more about their customers. Thanks going to capture those reasons. to the big data revolution, companies now can col- After decades of watching great companies fail, lect an enormous variety and volume of customer we’ve come to the conclusion that the focus on cor- information, at unprecedented speed, and perform relation—and on knowing more and more about cus- sophisticated analyses of it. Many firms have estab- tomers—is taking firms in the wrong direction. What lished structured, disciplined innovation processes they really need to home in on is the progress that the and brought in highly skilled talent to run them. Most customer is trying to make in a given circumstance— firms carefully calculate and mitigate innovations’ what the customer hopes to accomplish. This is what risks. From the outside, it looks as if companies have we’ve come to call the job to be done. mastered a precise, scientific process. But for most of We all have many jobs to be done in our lives. them, innovation is still painfully hit-or-miss. Some are little (pass the time while waiting in line); What has gone so wrong? some are big (find a more fulfilling career). Some The fundamental problem is, most of the masses surface unpredictably (dress for an out-of-town busi- of customer data companies create is structured to ness meeting after the airline lost my suitcase); some show correlations: This customer looks like that one, regularly (pack a healthful lunch for my daughter to or 68% of customers say they prefer version A to ver- take to school). When we buy a product, we essen- sion B. While it’s exciting to find patterns in the num- tially “hire” it to help us do a job. If it does the job bers, they don’t mean that one thing actually caused well, the next time we’re confronted with the same another. And though it’s no surprise that correlation job, we tend to hire that product again. And if it does isn’t causality, we suspect that most managers have a crummy job, we “fire” it and look for an alternative. grown comfortable basing decisions on correlations. (We’re using the word “product” here as shorthand Why is this misguided? Consider the case of one of for any solution that companies can sell; of course, this article’s coauthors, Clayton Christensen. He’s 64 the full set of “candidates” we consider hiring can years old. He’s six feet eight inches tall. His shoe size often go well beyond just offerings from companies.) is 16. He and his wife have sent all their children off to This insight emerged over the past two decades in college. He drives a Honda minivan to work. He has a course taught by Clay at Harvard Business School. a lot of characteristics, but none of them has caused (See “Marketing Malpractice,” HBR, December him to go out and buy the New York Times. His rea- 2005.) The theory of jobs to be done was developed sons for buying the paper are much more specific. He in part as a complement to the theory of disruptive might buy it because he needs something to read on innovation—which at its core is about competitive a plane or because he’s a basketball fan and it’s March responses to innovation: It explains and predicts the behavior of companies in danger of being disrupted and helps them understand which new entrants The focus on pose the greatest threats. But disruption theory doesn’t tell you how to knowing more create products and services that customers want to buy. Jobs-to-be-done theory does. It transforms and more about our understanding of customer choice in a way that no amount of data ever could, because it gets at the causal driver behind a purchase. customers has The Business of Moving Lives taken firms in the A decade ago, Bob Moesta, an innovation consultant and a friend of ours, was charged with helping bolster wrong direction. sales of new condominiums for a Detroit-area build- ing company. The company had targeted downsizers— retirees looking to move out of the family home and 4 Harvard Business Review September 2016 This document is authorized for use by Jason COPYRIGHT Him), from© 2016 HARVARD BUSINESS 2024-10-21 SCHOOL PUBLISHING to 2024-12-10 CORPORATION. ALL RIGHTS RESERVED. in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited.  FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG Idea in Brief WHAT’S WRONG WHAT’S NEEDED WHAT’S EFFECTIVE Innovation success rates are Marketers and product developers Successful innovators identify shockingly low worldwide, and focus too much on customer profiles poorly performed “jobs” in have been for decades. and on correlations unearthed customers’ lives—and then in data, and not enough on what design products, experiences, customers are trying to achieve and processes around those jobs. in a particular circumstance. divorced single parents. Its units were priced to living room, a large second bedroom for visitors, and appeal to that segment—$120,000 to $200,000— a breakfast bar to make entertaining easy and casual; with high-end touches to give a sense of luxury. on the other hand, they didn’t need a formal dining “Squeakless” floors. Triple-waterproof basements. room. And yet, in Moesta’s conversations with ac- Granite counters and stainless steel appliances. A tual buyers, the dining room table came up repeat- well-staffed sales team was available six days a week edly. “People kept saying, ‘As soon as I figured out for any prospective buyer who walked in the door. A what to do with my dining room table, then I was generous marketing campaign splashed ads across free to move,’” reports Moesta. He and his colleagues the relevant Sunday real estate sections. couldn’t understand why the dining room table was The units got lots of traffic, but few visits ended such a big deal. In most cases people were referring up converting to sales. Maybe bay windows would to well-used, out-of-date furniture that might best be be better? Focus group participants thought that given to charity—or relegated to the local dump. sounded good. So the architect scrambled to add But as Moesta sat at his own dining room table bay windows (and any other details that the focus with his family over Christmas, he suddenly under- group suggested) to a few showcase units. Still sales stood. Every birthday was spent around that table. did not improve. Every holiday. Homework was spread out on it. The Although the company had done a cost-benefit table represented family. analysis of all the details in each unit, it actually What was stopping buyers from making the de- had very little idea what made the difference be- cision to move, he hypothesized, was not a feature tween a tire kicker and a serious buyer. It was easy to that the construction company had failed to offer speculate about reasons for poor sales: bad weather, but rather the anxiety that came with giving up underperforming salespeople, the looming reces- something that had profound meaning. The decision sion, holiday slowdowns, the condos’ location. But to buy a six-figure condo, it turned out, often hinged instead of examining those factors, Moesta took an on a family member’s willingness to take custody of unusual approach: He set out to learn from the peo- a clunky piece of used furniture. ple who had bought units what job they were hiring That realization helped Moesta and his team the condominiums to do. “I asked people to draw a begin to grasp the struggle potential home buyers timeline of how they got here,” he recalls. The first faced. “I went in thinking we were in the business of thing he learned, piecing together patterns in scores new-home construction,” he recalls. “But I realized of interviews, was what did not explain who was we were in the business of moving lives.” most likely to buy. There wasn’t a clear demographic With this understanding of the job to be done, or psychographic profile of the new-home buyers, dozens of small but important changes were made even though all were downsizers. Nor was there a to the offering. For example, the architect managed definitive set of features that buyers valued so much to create space in the units for a dining room table by that it tipped their decisions. reducing the size of the second bedroom. The com- But the conversations revealed an unusual pany also focused on easing the anxiety of the move clue: the dining room table. Prospective customers itself: It provided moving services, two years’ worth repeatedly told the company they wanted a big of storage, and a sorting room within the condo September This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the 2016 Harvard Business Review course: 5 ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited. SPOTLIGHT ON CONSUMER INSIGHT development where new owners could take their Jobs are never simply about function—they time making decisions about what to discard. have powerful social and emotional dimen- The insight into the job the customers needed sions. Creating space in the condo for a dining room done allowed the company to differentiate its offer- table reduced a very real anxiety that prospective ing in ways competitors weren’t likely to copy—or buyers had. They could take the table with them even comprehend. The new perspective changed if they couldn’t find a home for it. And having two everything. The company actually raised prices by years’ worth of storage and a sorting room on the $3,500, which included (profitably) covering the cost premises gave condo buyers permission to work of moving and storage. By 2007, when industry sales slowly through the emotions involved in deciding were off by 49% and the market was plummeting, what to keep and what to discard. Reducing their the developers had actually grown business by 25%. stress made a catalytic difference. These principles are described here in a business- Getting a Handle on to-consumer context, but jobs are just as important the Job to Be Done in B2B settings. For an example, see the sidebar Successful innovations help consumers to solve “Doing Jobs for B2B Customers.” problems—to make the progress they need to, while addressing any anxieties or inertia that might be Designing Offerings Around Jobs holding them back. But we need to be clear: “Job A deep understanding of a job allows you to innovate to be done” is not an all-purpose catchphrase. Jobs without guessing what trade-offs your customers are complex and multifaceted; they require precise are willing to make. It’s a kind of job spec. definition. Here are some principles to keep in mind: Of the more than 20,000 new products evaluated “Job” is shorthand for what an individual in Nielsen’s 2012–2016 Breakthrough Innovation re- really seeks to accomplish in a given circum- port, only 92 had sales of more than $50 million in stance. But this goal usually involves more than just year one and sustained sales in year two, excluding a straightforward task; consider the experience a per- close-in line extensions. (Coauthor Taddy Hall is son is trying to create. What the condo buyers sought the lead author of Nielsen’s report.) On the surface was to transition into a new life, in the specific circum- the list of hits might seem random—International stance of downsizing—which is completely different Delight Iced Coffee, Hershey’s Reese’s Minis, and from the circumstance of buying a first home. Tidy Cats LightWeight, to name just a few—but they The circumstances are more important than have one thing in common. According to Nielsen, customer characteristics, product attributes, every one of them nailed a poorly performed and new technologies, or trends. Before they under- very specific job to be done. International Delight stood the underlying job, the developers focused on Iced Coffee let people enjoy in their homes the taste trying to make the condo units ideal. But when they of coffeehouse iced drinks they’d come to love. And saw innovation through the lens of the customers’ circumstances, the competitive playing field looked totally different. For example, the new condos were competing not against other new condos but against Jobs are never simply about the idea of no move at all. Good innovations solve problems that for- function—they have merly had only inadequate solutions—or no solution. Prospective condo buyers were looking for simpler lives without the hassles of home ownership. But to get that, they thought, they had to endure the stress of selling their current homes, wading through powerful social and emotional exhausting choices about what to keep. Or they could stay where they were, even though that solution dimensions. would become increasingly imperfect as they aged. It was only when given a third option that addressed all the relevant criteria that shoppers became buyers. 6 Harvard Business Review September 2016 This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited.  FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG Identifying Jobs to Be Done Jobs analysis doesn’t Do you have a job that needs to be SNHU found when it reached out to spent a frustrating few hours waiting require you to throw out done? In a data-obsessed world, it older learners. in an emergency room for his son to might be a surprise that some of the get a strep-throat test. MinuteClinics the data and research greatest innovators have succeeded What work-arounds have people can see walk-in patients instantly, you’ve already gathered. with little more than intuition to invented? If you see consumers and their nurse practitioners can Personas, ethnographic guide their efforts. Pleasant Rowland struggling to get something done prescribe medicines for routine research, focus groups, saw the opportunity for American by cobbling together work-arounds, ailments, such as conjunctivitis, Girl dolls when searching for gifts pay attention. They’re probably ear infections, and strep throat. customer panels, that would help her connect with deeply unhappy with the available competitive analysis, and her nieces. Sheila Marcelo started solutions—and a promising base of What surprising uses have so on can all be perfectly Care.com, the online “matchmaking” new business. When Intuit noticed customers invented for existing service for child care, senior care, that small-business owners were products? Recently, some of the valid starting points and pet care, after struggling with using Quicken―designed for biggest successes in consumer for surfacing important her family’s own care needs. Now, individuals—to do accounting for packaged goods have resulted from insights. Here are five less than 10 years later, it boasts their firms, it realized small firms a job identified through unusual uses more than 19 million members represented a major new market. of established products. For example, questions for uncovering across 16 countries and revenues NyQuil had been sold for decades as jobs your customers approaching $140 million. What tasks do people want to a cold remedy, but it turned out that need help with. avoid? There are plenty of jobs in some consumers were knocking back Where do you see nonconsump- daily life that we’d just as soon get a couple of spoonfuls to help them tion? You can learn as much out of. We call these “negative jobs.” sleep, even when they weren’t sick. from people who aren’t hiring any Harvard Business School alum Rick Hence, ZzzQuil was born, offering product as from those who are. Krieger and some partners decided consumers the good night’s rest they Nonconsumption is often where the to start QuickMedx, the forerunner wanted without the other active most fertile opportunities lie, as of CVS MinuteClinics, after Krieger ingredients they didn’t need. thanks to Tidy Cats LightWeight litter, millions of cat also essential to create the right set of experiences for owners no longer had to struggle with getting heavy, the purchase and use of the product and then inte- bulky boxes off store shelves, into car trunks, and up grate those experiences into a company’s processes. the stairs into their homes. When a company does that, it’s hard for com- How did Hershey’s achieve a breakout success petitors to catch up. Take American Girl dolls. If you with what might seem to be just another version don’t have a preteen girl in your life, you may not of the decades-old peanut butter cup? Its research- understand how anyone could pay more than a hun- ers began by exploring the circumstances in which dred dollars for a doll and shell out hundreds more Reese’s enthusiasts were “firing” the current prod- for clothing, books, and accessories. Yet to date the uct formats. They discovered an array of situations— business has sold 29 million dolls, and it racks up driving the car, standing in a crowded subway, play- more than $500 million in sales annually. ing a video game—in which the original large format What’s so special about American Girls? Well, it’s was too big and messy, while the smaller, individu- not the dolls themselves. They come in a variety of ally wrapped cups were a hassle (opening them re- styles and ethnicities and are lovely, sturdy dolls. quired two hands). In addition, the accumulation They’re nice, but they aren’t amazing. Yet for nearly of the cups’ foil wrappers created a guilt-inducing 30 years they have dominated their market. When tally of consumption: I had that many? When the you see a product or service that no one has success- company focused on the job that smaller versions fully copied, the product itself is rarely the source of of Reese’s were being hired to do, it created Reese’s the long-term competitive advantage. Minis. They have no foil wrapping to leave a telltale American Girl has prevailed for so long because trail, and they come in a resealable flat-bottom bag it’s not really selling dolls: It’s selling an experience. that a consumer can easily dip a single hand into. The Individual dolls represent different times and places results were astounding: $235 million in the first two in U.S. history and come with books that relate each years’ sales and the birth of a breakthrough category doll’s backstory. For girls, the dolls provide a rich extension. opportunity to engage their imaginations, connect Creating customer experiences. Identifying with friends who also own the dolls, and create and understanding the job to be done are only the unforgettable memories with their mothers and first steps in creating products that customers want— grandmothers. For parents—the buyers—the dolls especially ones they will pay premium prices for. It’s help engage their daughters in a conversation about September This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the 2016 Harvard Business Review course: 7 ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited. SPOTLIGHT ON CONSUMER INSIGHT the generations of women that came before them— box. It’s not the same as walking down the aisle in about their struggles, their strength, their values the toy store and picking a Barbie off the shelf.’” and traditions. In recent years Toys “R” Us, Walmart, and even American Girl founder Pleasant Rowland came Disney have all tried to challenge American Girl’s up with the idea when shopping for Christmas pres- success with similar dolls—at a small fraction of the ents for her nieces. She didn’t want to give them hy- price. Though American Girl, which was acquired persexualized Barbies or goofy Cabbage Patch Kids by Mattel, has experienced some sales declines in aimed at younger children. The dolls—and their the past two years, to date no competitor has man- worlds—reflect Rowland’s nuanced understanding aged to make a dent in its market dominance. Why? of the job preteen girls hire the dolls to do: help artic- Rowland thinks that competitors saw themselves in ulate their feelings and validate who they are—their the “doll business,” whereas she never lost sight of identity, their sense of self, and their cultural and why the dolls were cherished: the experiences and racial background—and make them feel they can stories and connections that they enable. surmount the challenges in their lives. Aligning processes. The final piece of the There are dozens of American Girl dolls repre- puzzle is processes—how the company integrates senting a broad cross section of profiles. Kaya, for across functions to support the job to be done. example, is a young girl from a Northwest Native Processes are often hard to see, but they matter American tribe in the late 18th century. Her backstory profoundly. As MIT’s Edgar Schein has discussed, tells of her leadership, compassion, courage, and processes are a critical part of an organization’s loyalty. There’s Kirsten Larson, a Swedish immigrant unspoken culture. They tell people inside the com- who settles in the Minnesota territory and faces hard- pany, “This is what matters most to us.” Focusing ships and challenges but triumphs in the end. And so processes on the job to be done provides clear on. A significant part of the allure is the well-written, guidance to everyone on the team. It’s a simple but historically accurate books about each character’s life. powerful way of making sure a company doesn’t Rowland and her team thought through every unintentionally abandon the insights that brought aspect of the experience required to perform the job. it success in the first place. The dolls were never sold in traditional toy stores. A good case in point is Southern New Hampshire They were available only through mail order or at University, which has been lauded by U.S. News & American Girl stores, which were initially located in World Report (and other publications) as one of the just a few major metropolitan areas. The stores have most innovative colleges in America. After enjoying doll hospitals that can repair tangled hair or fix bro- a 34% compounded annual growth rate for six years, ken parts. Some have restaurants in which parents, SNHU was closing in on $535 million in annual children, and their dolls can enjoy a kid-friendly revenues at the end of fiscal 2016. menu—or where parents can host birthday parties. Like many similar academic institutions, SNHU A trip to the American Girl store has become a spe- once struggled to find a way to distinguish itself and cial day out, making the dolls a catalyst for family survive. The university’s longtime bread-and-butter experiences that will be remembered forever. strategy had relied on appealing to a traditional stu- No detail was too small to consider. Take the dent body: 18-year-olds, fresh out of high school, sturdy red-and-pink boxes the dolls come in. continuing their education. Marketing and outreach Rowland remembers the debate over whether to were generic, targeting everyone, and so were the wrap them with narrow cardboard strips, known as policies and delivery models that served the school. “belly bands.” Because the bands each added 2 cents SNHU had an online “distance learning” aca- and 27 seconds to the packaging process, the de- demic program that was “a sleepy operation on a signers suggested skipping them. Rowland says she nondescript corner of the main campus,” as presi- rejected the idea out of hand: “I said, ‘You’re not get- dent Paul LeBlanc describes it. Yet it had attracted ting it. What has to happen to make this special to the a steady stream of students who wanted to resume child? I don’t want her to see some shrink-wrapped an aborted run at a college education. Though the thing coming out of the box. The fact that she has to online program was a decade old, it was treated wait just a split second to get the band off and open as a side project, and the university put almost no the tissue under the lid makes it exciting to open the resources into it. 8 Harvard Business Review September 2016 This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited.  FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG Doing Jobs for B2B Customers Des Traynor is a cofounder of We had too many “typical new. And two, the words they Intercom, which makes software users” who had little described our product with were in common, going by traits really different from the words that helps companies stay in like demographics or job we used. People using it to sign touch with customers via their titles. Because we didn’t up new customers kept using websites, mobile apps, e-mail, really understand why people the word “engage,” for example. and Facebook Messenger. were coming to the platform— We used the term “outbound what they were using it for—we messaging,” which has a very Intercom, which now has more than charged a single price for access to different feel. 10,000 customers and grew fourfold the entire platform. According to Bob, this is really common: in 2015, adopted a jobs-to-be-done As soon as I grasped the distinction between Companies fall in love with their own jargon. They perspective to clarify its strategy in 2011, “customers” and “problems people need help focus on the technology being offered rather than when it was still an early-stage start-up. with,” a lightbulb went off. I called my cofounder the value being delivered. Traynor spoke about that experience Eoghan McCabe and said, “We’re going to build a with Derek van Bever and Laura Day company that is focused on doing a job.” What did you learn about the jobs you were being hired to do? It turned out that people of Harvard Business School’s Forum And how did you figure out what the relevant had four distinct jobs: First, help me observe. for Growth & Innovation. Here is an job was? We got in touch with innovation Show me the people who use my product and edited version of their conversation. consultant Bob Moesta, who has a lot of practical what they do with it. Second, help me engage— experience with this approach. Bob and his team to convert sign-ups into active users. Third, help FORUM: How did you come across the “jobs” conducted individual interviews with two types me learn—give me rich feedback from the right approach to innovation and strategy? of customers: people who had recently signed on people. And finally, help me support—to fix my TRAYNOR: Somewhat by accident! In 2011 with us, and people who had dropped the service customers’ problems. Intercom had just four engineers and some or changed their usage significantly. modest VC backing. I was asked to speak He wanted to understand the timeline of How much did you change the business about managing a start-up at a conference. events that led up to a purchasing decision and once you understood the different jobs your Clay Christensen opened the conference and the “forces” that ultimately pushed people into customers had? A lot. We now offer four mentioned “jobs to be done.” that decision. Bob has a theory that customers distinct services, each designed to support one always experience conflict when considering a of those jobs. Our R&D group—120 people―has And that made an impression because…? new purchase—what he calls “the struggling four teams, one for each job, and we’ve gone We were searching for direction at the time. We moment.” There are pressures pushing them to deeper and deeper on each job. knew we wanted to help internet companies talk act―to solve a problem by “hiring” a solution— Essentially, we realized that we’d been offering to their customers―and to make that personal. and forces like inertia, fear of change, and a one-size-fits-none service. The initial price felt We knew that the features we shipped were anxiety holding them back. His overall objective high because no customer needed everything we valuable—but we didn’t really know who was was to explain, in the customers’ words, what were selling. using us. Customer support? Marketing? Market caused people to resolve the conflict and “hire” research? Nor did we know exactly what they Intercom, and then how well Intercom performed. How did that change work out? Our conversion were using us for. I listened in on four interviews live—and tried rate has increased, since prospects can now buy not to jump to judgment. Two things stood just the piece of the site that suits their initial job, How had you approached those questions out. One, prospective clients who sampled our and we’re able to establish multiple points of sale until then? We were using a personas-based services were usually flailing. Their growth had across client organizations, since there is now a approach to segmentation, but it wasn’t working. flattened, and they were ready to try something logical path for relationship growth. On paper, both traditional and online students SNHU’s online program was in competition might look similar. A 35-year-old and an 18-year-old not with local colleges but with other national on- working toward an accounting degree need the same line programs, including those offered by both courses, right? But LeBlanc and his team saw that the traditional colleges and for-profit schools like the job the online students were hiring SNHU to do had University of Phoenix and ITT Technical Institute. almost nothing in common with the job that “com- Even more significantly, SNHU was competing with ing of age” undergraduates hired the school to do. On nothing. Nonconsumption. Suddenly, the market average, online students are 30 years old, juggling that had seemed finite and hardly worth fighting for work and family, and trying to squeeze in an educa- became one with massive untapped potential. tion. Often they still carry debt from an earlier college But very few of SNHU’s existing policies, struc- experience. They’re not looking for social activities or tures, and processes were set up to support the a campus scene. They need higher education to pro- actual job that online students needed done. What vide just four things: convenience, customer service, had to change? “Pretty much everything,” LeBlanc credentials, and speedy completion times. That, the recalls. Instead of treating online learning as a team realized, presented an enormous opportunity. second-class citizen, he and his team made it their September This document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the 2016 Harvard Business Review course: 9 ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited. SPOTLIGHT ON CONSUMER INSIGHT FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG focus. During a session with about 20 faculty mem- But perhaps most important, SNHU realized that bers and administrators, they charted the entire ad- enrolling prospects in their first class was only the be- missions process on a whiteboard. “It looked like a ginning of doing the job. The school sets up each new schematic from a nuclear submarine!” he says. The online student with a personal adviser, who stays in team members circled all the hurdles that SNHU constant contact—and notices red flags even before was throwing up—or not helping people overcome— the students might. This support is far more critical in that process. And then, one by one, they elimi- to continuing education students than traditional nated those hurdles and replaced them with experi- ones, because so many obstacles in their everyday ences that would satisfy the job that online students lives conspire against them. Haven’t checked out this needed to get done. Dozens of decisions came out week’s assignment by Wednesday or Thursday? Your of this new focus. adviser will touch base with you. The unit test went Here are some key questions the team worked badly? You can count on a call from your adviser to through as it redesigned SNHU’s processes: see not only what’s going on with the class but what’s What experiences will help customers make going on in your life. Your laptop is causing you prob- the progress they’re seeking in a given circum- lems? An adviser might just send you a new one. This stance? For older students, information about unusual level of assistance is a key reason that SNHU’s financial aid is critical; they need to find out if con- online programs have extremely high Net Promoter tinuing their education is even possible, and time Scores (9.6 out of 10) and a graduation rate—about is of the essence. Often they’re researching options 50%—topping that of virtually every community col- late at night, after a long day, when the kids have fi- lege (and far above that of costlier, for-profit rivals, nally gone to sleep. So responding to a prospective which have come under fire for low graduation rates). student’s inquiry with a generic e-mail 24 hours SNHU has been open with would-be competitors, later would often miss the window of opportunity. offering tours and visits to executives from other ed- Understanding the context, SNHU set an internal goal ucational institutions. But the experiences and pro- of a follow-up phone call within eight and a half min- cesses the university has created for online students utes. The swift personal response makes prospective would be difficult to copy. SNHU did not invent all its students much more likely to choose SNHU. tactics. But what it has done, with laser focus, is en- What obstacles must be removed? Decisions sure that its hundreds and hundreds of processes are about a prospect’s financial aid package and how tailored to the job students are hiring the school for. much previous college courses would count toward an SNHU degree were resolved within days instead MANY ORGANIZATIONS have unwittingly designed of weeks or months. innovation processes that produce inconsistent and What are the social, emotional, and func- disappointing outcomes. They spend time and money tional dimensions of the job? Ads for the online compiling data-rich models that make them masters program were completely reoriented toward later- of description but failures at prediction. But firms life learners. They attempted to resonate not just don’t have to continue down that path. Innovation with the functional dimensions of the job, such as can be far more predictable—and far more profitable— getting the training needed to advance in a career, if you start by identifying jobs that customers are but also with the emotional and social ones, such as struggling to get done. Without that lens, you’re the pride people feel in earning their degrees. One doomed to hit-or-miss innovation. With it, you can ad featured an SNHU bus roaming the country hand- leave relying on luck to your competitors. ing out large framed diplomas to online students HBR Reprint R1609D who couldn’t be on campus for graduation. “Who did you get this degree for?” the voice-over asks, Clayton M. Christensen is the Kim B. Clark Professor as the commercial captures glowing graduates in at Harvard Business School. Taddy Hall is a principal with the Cambridge Group and the leader of Nielsen’s their homes. “I got it for me,” one woman says, hug- Breakthrough Innovation Project. Karen Dillon is the ging her diploma. “I did this for my mom,” beams former editor of Harvard Business Review. David S. Duncan a 30-something man. “I did it for you, bud,” one fa- is a senior partner at Innosight. They are the coauthors of the forthcoming Competing Against Luck: The Story ther says, holding back tears as his young son chirps, of Innovation and Customer Choice (HarperBusiness/ “Congratulations, Daddy!” HarperCollins, October 2016). 10 Harvard Business Review September This2016 document is authorized for use by Jason Him), from 2024-10-21 to 2024-12-10 in the course: ITOM 6268 Section 121: Business Analytics Consulting - Raghunath (Fall 2024), Southern Methodist University (SMU) Any unauthorized use or reproduction of this document is strictly prohibited.