Grounding innovation through convergence on jobs-to-be-done

Discovering intersections are where ideas collide, according to a theory brilliantly put together in a book some years ago by Frans Johansson called “The Medici Effect”. Johansson recommends we step into these intersections and then you can see how different thinking can meet head to head, as in this case from numerous innovation experts, to give you a deeper insight into your own innovation thinking.

I often have a habit of opening up a file on a subject when I feel it needs further exploring and jobs-to-be-done has become one of these. It is the convergence of many experts repeating sometimes their personal mantra has finally given me a growing realisation on how important this understanding of satisfying these jobs-to-be-done becomes too successful innovation.

Now this ‘light bulb’ moment of mine may not come as such a great a surprise to some of you selected few  but I’d argue it might be worth reflecting upon by taking a fresh look at this ‘idea’ of jobs-to-be-done a little deeper in your thinking also. There are many who tell you we should.

The power of many innovation thinkers

Firstly why is it that many of those renowned exponents of innovation are all beating the same drum? There is Tony Ulwick, CEO of Strategyn in countless articles and in his book “What Customers Want” talking about “Outcome-Driven Innovation” that really has mastered the methodology of addressing unmet customer needs. Recently Lance Bettencourt, a colleague of Tony’s , has delved even deeper into customer needs in his book “Service Innovation” arguing we must shift our focus away from the solution and back to the customer and stop taking those often educated guesses into a clear model to guide us to help people solve problems. Clayton Christensen talking about customers buy products and services, to help get jobs done in his book ‘The Innovator’s Solution”. Christensen went even further into this with in many articles and subsequent books as he expanded on his “Disruptive innovation theory”, including references in the one “Seeing What’s Next” with Scott Anthony and Erik Roth. Scott Anthony then picked up on this even further when he returned to this jobs-to-be-done in “The Innovator’s Guide to Growth” with Mark Johnson, Joseph Sinfield and Elizabeth Altman. Also Scott brings this out again in his “The Silver Lining”- an innovation playbook for uncertain times”. You also see further reference in articles entitled “Finding the right job for your product” in MIT Sloan Management Review, Spring 2007 by Christensen, Scott Anthony, Gerald Berstell & Denise Nitterhouse . There are so many references to this subject you must wonder why it is not more ‘top of mind’ in all that we do in innovation?

Their ‘collective wisdom’ is focus on the job trying to be done.

All focus upon specific techniques, methodologies,  processes to understand the customer and what they are trying to get done, that is a present day potentially  unmet need –something being missed by a product or service in any space applied to business-to-business or business-to-consumers. Some talk of designing a “jobs tree” others a “universal job map”.

A key takeaway is placing unmet needs, jobs-to-be-done BEFORE simply idea generation. Open-ended idea generation gives you an abundance of ideas but if you don’t really understand the customer needs and don’t have a clear standard that defines just what the structure, content or format of a valid customer statement need then all your efforts will potentially not lead to that more predictable innovation expected from all the innovation activity. In Tony Ulwicks clear view “it is the job the customer is trying to get done will offer the stable, long-term focal point around which value creation should be centred” He calls these the ‘desired outcomes’ customers want and to achieve this point they ‘hire’ products and services to do the job. It is how we see the world in innovative opportunity that will lead to better innovation and this collective insight argues this well.

So ‘jobs-to-be-done’ is a fundamental building block to presenting possible business opportunity as customers want to buy solutions. An often quoted comment from Professor Theodore Levitt “people don’t want to buy a quarter-inch drill- they want a quarter-inch hole”. We need to learn the difference through closer observation and clarity of our thinking perhaps?

Recently we are going one step further- Jobs-to-be-done for Business Model Innovation

Mark Johnson in his recent book “Seizing the White Space– Business Model Innovation for Growth & Renewal” returns to jobs-to-be-done as essential for future Business Models. They form the customer value proposition and he suggests three important metrics come from this approach. 1. How important the job-to-be-done is to customers. 2. How satisfied customers are with the current solutions and 3. How well the new offering gets the job done, relative to the other options. The more important the job, the better the match between the job and the (final) offering will generate a potential new value proposition for Business model innovation- discovering unsatisfied jobs-to-be-done that might take you beyond the existing offerings in the market into a new terrain.

He argues you must first develop this ‘eye’ for discovering the most-promising opportunities, his ‘white space within’ so as to alter the basis of competition.

Needs-based is different

I think it is important to clarify something here. This jobs-to-be-done is not needs-based analysis. You must stop asking “what do you need?” and start asking “What are you trying to get done?” In Mark’s view and all the others before him “this will set you down the road to the jobs-based approach”. Reduce asking “what is desired?” you need to certainly delve a little deeper it seems.

Equally when you get into this unfilled jobs-to-be-done you have not just the functional aspects but you can explore the social and emotional aspects that all make up the experience to accomplish something. Service approaches need to think more about the social and emotional parts; again you can gain a greater insight into this from Lance Bettencourt’s book “Service Innovation” to grasp the real differences that could make a product, service or new business model truly innovative.

Adding even a further voice to this jobs view is Alexander Osterwalder & Yves Pigneur

Additionally Alex and Yves are lending their innovation weight to the value of jobs-to-be-done and often refers to this in focusing here in the application of their book “Business Model Generation” aim- a book for visionaries, game changers striving to defy outmoded business models to design tomorrow’s enterprise”. To describe the rationale of how and organization creates, delivers and captures value it has to go back to the job-to-be-overcome. His suggests value proposition needs to seek to solve customer problems and satisfy customer needs (and unmet ones especially) with a newly selected bundle of products, services, concepts etc. It can be an aggregation of existing combined in new ways or a new, sometimes disruptive offer.

Jobs-to-be-done offers a clear way to innovate

So whatever we do, we need to understand the unfilled job that needs satisfying, no matter if it is a product, service or business model. It comes from a distinct mix that could be quantitative or qualitative but it must contribute to new customer value creation. This could be in the form of newness (entirely new set of unmet needs), performance, customization, design, reduction on the existing offer (cost, price, risk, and complexity), giving accessibility, convenience and improved usability.

When thinking ‘collides’ we do need to understand it far deeper.

I’ve tried to step into this specific jobs-to-be-done intersection of thinking so you can see how such diverse innovation thinkers can converge too finally given me a growing realisation on how important this understanding need of satisfying these jobs-to-be-done becomes so important for successful innovation. It requires plenty of back tracking, researching and reading to fill in the gaps but if you recognise “Outcome-Driven Innovation”, “Disruptive Innovation theory”, the assorted guides to growth and wants, “Service Innovation”, “the Silver Lining” along with “Seizing the White Space” and “Business Model Generation” you realize this is a powerful point of convergence we cannot relegate or delegate, we need to fully understand it totally to make it connect in most of what we do in innovation discovery.

One final caution though is from Scott Anthony in his book ‘The Silver Lining”, “really nailing the job-to-be-done is not an easy task. It typically requires blending together multiple market-research techniques and acting like an investigative reporter or detective piecing together multiple clues”.

Who said successful innovation was easy anyway? It is certainly my ‘job-to-be done need’ in exploring the DNA of innovation.

Business model innovation can really help the VC assessment

I believe the Business model canvas, presented by Alexander Osterwalder & Yves Pigneur in their book “Business Model Generation”, holds a very powerful way for Venture Capital to use in their assessments of promising ventures they are considering for investment.

Traditional pitches to VC’s are loaded with financial numbers, providing crisp, well written business plans pitched by teams oozing with optimism but much of this is still highly intangible in reality. There is often a decision made on the people chemistry more than anything else. There is nothing wrong with that if you are the lucky one, but tough on the countless thousands that face rejection after rejection for their ideas to attract the necessary funding needed to move their business forward.

Where the Business model canvas can fit in the VC pitch.

You can often feel that there are different thinking through conversations going on, one from the presenter of the pitch and another in parellel in the way the investor is thinking this through at the same time and they so often on such different thinking plains  or planets, and you as the presenter need a way to bring them back to ‘seeing’ the same opportunity. To do this a more highly visual way is needed, well beyond the classic PowerPoint presentation. I think the Business model canvas could be that very ‘meeting point’ tool to strengthen and convey many of the important points being looked for by the VC.

These important points are a real clarity on the value proposition- the what– by providing something new from a market/ customer perspective that is different and exciting to invest in. Then “how does it work” in key partners, activities and resources, the “who it appeals to” in customers, channels, segments and the vital part for many investors point of view- showing them the money in revenue streams and cost structure for the “how much” it will provide in return for their investment. All of this can be covered off well, within the Business Model Canvas.

I can see the Business Model Canvas as a strong compliment the VC’s Strategic Market Map (their need for the external analysis) and the Strategic Competencies Map (the internal core part).

The Four Critical Parts of the Canvas

  1. Describing the Customer part Within the Canvas you would need to have an increased emphasis for that often understated part, the Customers- in showing the discovery of the job-to-be-done that your proposal addresses, your ability to test the hypothesis by providing customer facts and having validation that indicates or shows a repeatable, scalable business sales model. It takes the Canvas a little deeper than normal but within its sections of Customer relationship, Channels and Customer Segments you can specifically address this need to address for the VC investor. This becomes a strong selling story of the distinct offer you have seen and validated.
  2. Clarifying the needed infrastructure needed to support this proposal. Often these remain far to hidden in any plan. The Partners, the Activities and the Resources are the very structure of a successful business. These are more often the intangible part, the part that resides, needs to be found to fulfil the plan. Knowing the present gaps of what is needed to create the value intellectually and where this knowledge resides is important to know. These help you see beyond the present and can help the VC quantify the risks that level more. The BM Canvas can provide a powerful support to filling out the Strategic Competence Map required by a VC in what is core, what is needed to be ‘purchased’ ,the technology/ patents, action plan and why this is a ‘winning combination’.
  3. Showing where the money lies underpins the Financial Numbers. Numbers are the ‘meat and drink’ of VC’s, this is where they do their countless calculations of risks, attractiveness, cash flows, exit forecasts, returns etc. Showing where the money lies within the Business Model is showing the repeating, scalable part that can lead to a profitable business. So often business plans have those magic spreadsheets showing a classic ‘hockey stick’ outcome but do they clarify the ‘willingness to pay’ and the breakdown of the different ways to generate revenue streams, not just in tangible products and services but in usage fees, subscription fees, lending/ renting/ leasing grants and licensing, all growing in increasing importance today in the business model. The BM Canvas can ‘flesh’ these out in potential to strengthen the business case by being a little more imaginative. Also offering some potential concepts of different fixed/ variable costs, economies of scale and scope all can show a determination of wanting to minimize costs and maximise opportunities.
  4. The Value Proposition shows the VC investor the strength of your concept. It needs to address the newness or novelty of what it is addressing in customer needs; it needs to clarify performance and how it will be customizable to take advantage of economies of scale and scope. It states how it is getting the ‘job-done’ in broad design and convenience and usability. It states and describes ‘resolution’ and ‘context’ to all the other aspects within the Business model canvas. It articulate the vision that everything else supports, that piece of innovative thinking based on the customer value proposition, that is better than ‘something’ already in existence, and why it is valuable to financially support by the VC.

In a highly visual one page diagram using the Business model canvas you can bring those ‘divergent’ thoughts of the people clustered around the table into your thinking in new ways, so all can share and better understand many of the often ‘hidden’ parts of the pitch. The Business model canvas ‘speaks’ more powerfully due to its simple but effective building block approach in some highly visual ways, that focus everyone’s attention onto a single page and the shared place to think together and ‘see’ the opportunity in new ways.

The case for a more systematic understanding of Business Model Innovation design

Business model innovation is shaping up to be one of the most challenging aspects for leadership of existing business or that aspiring leaders need to fully understand.  The question today being faced by many is how to transform existing business models so as to avoid that race to commoditization and decreasing shareholder value and so to provide improved value.  Equally business model innovation increasingly needs to be able to reduce the threat of new competition that is constantly finding ways to undermine your present business. The Entrepreneur is snapping at your heels like never before.

Leaders need the tools, skills and experience to envision, test and implement new business models more than ever and certainly faster than ever. The worrying aspect today it seems  is that many leaders are still not knowing what it is within their existing  business model that ‘combines’ to make the existing profit engine of the business, those ‘value points’ that really provide the innovation opportunity to sustain or challenge their existing business models.

So what is Business Model Innovation?

There are numerous definitions of a BMI- let me provide three that I trust build the understanding.

In Alexander Osterwalder’s & Yves Piqneur’s book “Business Model Innovation” they simply explain this as “creating value, for companies, customers and society, replacing outdated models that respond to emerging user needs and pressing environmental concerns. A business model describes the rationale of how an organisation creates, delivers and captures value”. The authors offer nine basic building blocks that build up the complete logic of how a company intends to make money through a new BMI. It basically covers the four main areas of the business: customers, offer, infrastructure and financial viability. They suggest you construct a business model canvas through exploring key partners, key activities, key resources, customer relationships, channels (to market), customer segments and the value proposition with cost structure and revenue streams.

In Mark Johnson’s book “Seizing the White Space”, he firstly starts with White space as defined as “the range of potential activities not defined or addressed by the current business model, beyond its core and adjacencies that require a different business model to exploit”. He sees a BMI to have four parts requiring a clear, strong customer value proposition (CVP), secondly the show me the money part- a profit formula that defines how and where the company will capture value for a given set of customers at a given price. The third and fourth element of this framework is key resources and key processes as the means by which the company delivers the value to the customer and itself.

Thirdly, Boston Consulting Group argues a business model consists of two essential elements- the value proposition and the operating model. Within the value proposition you need to be explicit on your target segments, product or service offering and revenue model. In the operating part you need to address three critical parts- the value chain, cost model and organization.

So in summary:

Tackling the 4 main tasks

Business model innovation is really all about game-changing moves, partly dependent on the industry and the circumstances. BMI should be seen as a proactive need for all to explore new avenues of growth and opportunity before others steal in and take the space from right under you.

Understanding your value-added points is essential

Articulating the (existing) business model as a first step leads to exploring ways to add further value. Customers want to be served in increasingly different, more exciting ways that often need lower cost delivery, greater convenience or improved functionality or are genuinely novel to the world. Knowing these value points is vital.

The role of the business model is capturing that value from new innovative insight. Increasingly this is coming from articulating your purpose more than the product or service and discovering the value promise that will gain customers attention and then delivering on it through your redesigned business model. You need to be really clear on the scope of your business and be ready to outsource the rest to others who specialise in that part more efficiently than you can do. This might be in the area of supply chain, technology platforms, research and development, warehousing and storage, support services etc.

The Catalysts of Change needed for a new Business Model Innovation.

The starting point of a new Business Model is to know what the customer is trying to do that they cannot do as effectively as they would wish today. These are regarded as jobs-to-be-done or knowing the unmet needs and often not unarticulated as they have not been recognised or even appreciated  as needed when you ask.  You can recognise these more often through deeper observation to discover the opportunities that are presently not being served correctly. So the executing of the task or job is becoming increasingly more important to focus upon and today I feel less attention should be given to (existing) known product or services that often over-serve the real need of the customer. The critical aspect here though is that it must be delivering something the consumer wants resolving not what you might just think from your own internal perspective, it needs identifying and then validating. If you can correctly identify these then you have a potential innovation match that might need a new business model to support this.

For me, there are four powerful drivers that can galvanise BMI- increased visibility, reducing complexity, providing a different effect than the present and altering the perception with significant impact on today’s understanding.

The reason for today’s emphasis on Business Model Innovation

The challenge is to unravel the (increasing) complexities of a business. There is a consistent need to beat back intensifying competition, not just coming from the normal competition but from emerging entrants that have spotted these breaking opportunities or seen a unmet job that need to be changed and resolve a customer needs. They can quickly translate this into a viable business alternative and scale rapidly to disrupt the existing business providers. This ‘disruptive process’ is happening across all sectors of the manufacturing industry and service and has given rise in these times of increased uncertainty, accelerating global competition and increasingly more choice for the buyer. As a consequence it is getting harder to not evolve constantly and this is increasingly coming through a closer ongoing review that Business Model Innovation provides.

To summarize why you need a clear understanding of BMI

Business Model Innovation is becoming essential to understand and explore. Luckily there is numerous references available to refer too, to draw down examples and to gain encouragement to experiment. It is not something that I would suggest you push away or delegate to others, BMI offers a powerful concept to change the existing ways and to help you identify the present unknowns that can offer new value and growth paths for you and your future business.

  • A business model defines a broad competitive approach to business and you need to articulate this
  • A successful business model needs to ‘earn’ some sort of competitive advantage to the extent it changes the existing offerings available in worthwhile ways, for the consumer to ‘do something better’ than what is presently available.
  • Having a comprehensive understanding on the focus of competition must also mean a greater focus on innovation, as the relentless changing conditions ensures any business and its model must evolve.

Today you simply cannot afford to stand still, you need to innovate your business model consistently.

The Innovation Pathway Curve of Understanding

One of my recent articles outlined a three horizon framework for innovation. Let me extend this a little further. I’m sure we all agree Innovation needs to be worked at, it needs to be understood and often many people do get confused by not taking a more measured approach to the need to break innovation down into its manageable parts. Innovation does not just have a time axis that the three horizons framework refers too but it has a complexity and scope axis in learning as well.

By taking a more systematic approach to any innovation you achieve a greater understanding over time of what is involved.

Firstly you have to ask what you are trying to achieve, is it incremental innovation, distinctive, disruptive or even radical white space innovation? Do you approach innovation differently for each of these? I would argue you need to learn and build from one to another as you learn on the way, this is my going up a curve that increases in complexity and its scope/ outcome. Continue reading

The Three Horizon Approach to Innovation

Thinking through the management of innovation have you ever considered the Three Horizons approach?  It is likely through this approach business leaders can adopt an evolutionary perspective across the entire innovation business portfolio.

If you are using a three horizons type approach to innovation, it becomes clear that you need to continue investing in innovative activities across all three time horizons, even if you’re in the middle of a present day crisis. To do this effectively, you need to have some idea of where you’re heading in the future, and that’s why I think it’s a useful tool for linking innovation to strategy. Continue reading

Drawing fresh innovating oxygen into the body

This must be the time of year for all those innovation reports to resurface for fresh innovation thinking. Recently I went back to the OECD report (opener here. and began to breathe in more innovating air. Not bad from the OECD but that is one of their purposes in life I suppose. Why? A number of points stand out and using OECD summary headings, these were:

Policies need to reflect innovation as it occurs today.

We all do get stuck in repeating old ways yet the world and how it explores, experiments and investigates is constantly changing. It has become highly interactive and a multidisciplinary process with so much more need for collaboration across a diverse network of stakeholders. Although it is getting more complex to focus on performance through innovation is very much a today thing.

People should be empowered to innovate

I felt a little like yawning here, I needed more oxygen quickly as this has been a mantra of “people make innovation work” for years but seemingly still ignored by many. This report placed its focus on the way we educate and equip people with new skills. For Entrepreneurs I found a new mantra “Experimentation, entry and exit” and how the population should be provided entrepreneurial education and this comes from encouraging the circulation of knowledge, its creation and diffusion. I liked that- fresh or more life giving oxygen at least!

Innovation in firms should be unleashed

The question raised here was how can you relocate resources quickly; to more efficient and innovative firms, when between 20% to 40% of all new firms fail in the first two year? They rightly suggest that firms are essential to translate good ideas into jobs and wealth and new and young firms are particularly important, as they are usually the ones that exploit technological and commercial opportunities often neglected by established companies. Again we came back to experimentation- try, succeed or fail but move on. The other point made here was providing ‘sufficient head room’ for healthy risk taking.

The creation, diffusion and application of knowledge is critical.

This is all about the thriving part. Knowledge networks need to be underpinned. This is arguing for the development of a knowledge networking infrastructure so exchange of knowledge can freely happen. Perhaps open innovation is part of this change process but we do need a greater exchange mechanism to stimulate innovation brain activity- more oxygen please!

Innovation can be applied to address global and social challenges.

Innovation is a real means of dealing with global and social challenges that I’m totally convinced. My heart races at the prospect, no oxygen needed here, however we need an awful lot of factors to come into play to get this really moving. This is a real frontier still. How can we achieve more concerted efforts, encourage diffusion and transfer of the relevant aspects that would benefit another part of the world in overcoming one of its social challenges. This is so important but we are at such early days to frame this in a better way to gain the needed momentum. We need a social innovation framework, like a National Innovation Agenda but on a global scale.

The governance and measurement of innovation

The argument is to deal with innovation in medium and long term perspectives. There lacks today a coherence in capturing the positive benefits of innovation to drive it up the agenda and position it in the top of minds of everybody to make their contributions to solving social challenges, country ones and personal ones. We need better evaluation techniques to diagnose innovation and its effects.

We can’t allow oxygen to be strapped onto our backs so we can up the pace on the same treadmill, we do need to stop and reflect on the positive power of innovation but in new ways. The OECD makes the case and let me finish off by a summary by  one of the most distinguished thought leaders of innovation, C. K. Prahalad, who died recently.

“This report by the OECD on the new nature of innovation is an important milestone. It represents four significant philosophical departures.

First, from a traditional ‘firm centric view’ of innovation, this study moves us to a ‘personalized, co-created view’ of innovation, from the centrality of the firm to the centrality of the individual.

Second, it demonstrates the institutional interdependencies in the innovation process where specialized skills are sourced from around the world.

Third, innovation is seen not as episodic but as interactive, iterative and continuous.

Fourth, it is a call for the democratization of innovation. Consumers’ not just institutions will have a voice in the innovation process. The entire ecosystem – of suppliers, nodal firms and consumers, will be involved in the creation of value. Collaborative capacity will be critical for innovation.

This is a bold and timely departure from the traditional view. I recommend this report to policy makers, managers and students of management.”

This report is giving me renewed energy, that fresh innovation oxygen into my system, to stimulate and motivate me in the pursuit of innovation, my 100% focus in what I do. A timely reminder of the help we all need for injecting fresh oxygen into the thinking.

Will we ever learn to manage innovation?

I was asking myself when are we ever going to really learn about how to manage innovation? Reading through the latest global survey results from McKinsey entitled ‘Innovation & Commercialization, 2010’ at and you must wonder with all the activity (and hype) surrounding innovation why we do not make the type of positive progress you should expect in innovation management.

There are very positive signs innovation is emerging stronger than ever from the recent bout of economic ‘flu’ we all have been going through. The report starts on the high note “84% of all executives say innovation is extremely or very important to their companies’ growth strategy”- yippee! The darker side is the ‘but’- “little has changed in the way they generate ideas and turn them into products and services plus many other challenges remain remarkably consistent”- oh dear!

Do we ever learn?

The core barriers to successful innovation have not changed according to this survey. What will make the connection if innovation is so important yet not changing in the way we manage it? The answer does lie in the reports tentative suggestion “formalize processes” but that does need a more detailed grasp of what makes up innovation management and much of corporate management does not seemingly have the willingness or commitment to learn this.

How can we change this lack of progress in learning?

I’ve been working on this in different ways that include some detailed researching, collaborating with like minded people and exploring the different aspects that do connect the multiple strands that make up innovation.

McKinsey’s report does confirm (thankfully) that the biggest challenge is organization and suggests “improvement in understanding in this area would make the most profound difference in innovation performance.” So I and my collaborating partners are on to something here.

I have been amazed at the different attributes needed to make the multiple types of innovation work, be this open innovation, business model innovation, design-led, needs driven, operational, service excellence innovation, technology focused or research & development innovation. Add in simply ‘management innovation’ and you really begin to see the complexity to grasp for improving the chances of a sustaining success in innovation as more likely. No wonder it becomes difficult for CEO’s, HR Managers to structure and organise their innovation efforts in better ways but you can.

More on this emerging work will be outlined later in future blogs. For this blog let me suggest simply:

Steps to help  improve the innovation process include:

  • Recognizing, allocating and aligning the talent to the required task and training them in the required attributes needed to be in place for the ‘type’ of innovation needed
  • Ensure leadership is clear in its needs to achieve and which options within the innovation types available can best be applied to realise this.
  • Have a process that is well thought through and tightly managed so as to reduce the ad hoc parts right down so the necessary ‘resource energy’ is channelled appropriately to meet the strategic needs.
  • Keep constantly attentive to the relationships that go within and beyond the company walls and focus on the techniques that reduce ‘destructive tension’ and replace this with ‘constructive tension’
  • Simply recognizing innovation does require a formalized process and the appropriate attention and efforts are constantly at ‘top of mind’ and clearly understood within the organization to align strategic- innovation priorities and this ‘need’ is paramount to succeed.

If innovation is a real priority then management within organizations does need to invest and learn about it more. They do need to have this necessary fuller understanding of the process from beginning to the end and what makes it tick repeatedly, and work effectively and efficiently, otherwise the next survey will be telling us the same repeating story, that little has changed in innovation understanding in a world of arguably constant change.

It is strange if this lack of learning continues on the required understanding of what does need organizing and recognizing in structuring the required innovation management. I, for one, would like to change this.