In December 2012, Clay Christensen and I published "Surviving Disruption" in the Harvard Business Review. (http://bit.ly/Z7DMvY)
This slide deck, old but good, is the first presentation I offered Clay on the subject when proposing that we author an article on the topic.
The presentation offers a framework fro corporate strategists, who are trying to determine where their core businesses can move in the future based on the theory of disruption.
2. So what…
Using this framework, you can predict the best
focus for product innovation
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3. Executive summary
Jobs-to-be-Done theory allows us to discern performance characteristics of businesses
• Product proliferation can be explained by people’s differing preferences when it comes to
how jobs are fulfilled
– This serves to reconcile categorical “needs-based” marketing with a jobs-based
theory, as demographic needs based assumptions serve to approximate how certain
M.E.S. groups will desire jobs to be fulfilled
If we are able to distil jobs to performance characteristics, we can then make
assumptions about future performance leveraging disruptive theory
• Theory will explain the functional value of products moving forward; which is only one
aspect of predicting what consumers will want to buy
• Zeitgeist, scarcity (perceived and real), and the law of diminishing marginal returns
(Products over-serving customers) will impact affect the remainder of the product’s or
company’s market potential
Reconciling JTBD and disruptive theory can provide a
prescriptive theory of product development / marketing
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5. The Jobs-to-be-Done matrix
To be used when evaluating your product’s position in the market
Relative Industry
Functional Willingness to
Performance Pay1 Significance of present position
Where characteristics can be understood
Job Characteristic 1 Hi + Your products excel relative to your competitive
set on functional performance in areas that
customers appreciate and in which customers
Job Characteristic 2 Hi + are willing to pay a premium
through laddering
Your products excel relative to your competitive
Job Characteristic 3 Hi - set, customers may appreciate your
performance, but will not pay a premium
Your products do not excel relative to your
Job Characteristic 4 Mid / Lo + competitive set, but if they were to do so, you
could charge a premium
Your products do not excel relative to your
Job Characteristic 5 Mid / Lo - competitive set, but if they did consumers would
still not pay for these characteristics
Rational Emotional
Brain / Logos Brain / Pathos
1. Where willingness to pay is a function of scarcity (perceived or real) and average relative importance
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6. Breaking down the the JTBD Matrix
Job characteristics: Ex; Ford’s gasoline engine cars
Job Characteristics
To fulfill a given job-to-be-done various
Relative Industry
characteristics can increase user utility
Functional Willingness to Assumptions
• Products can fulfill multiple jobs-to-be-done
Performance Pay1
Companies can compete and attempt to differentiate
Speed / Power High + from one another along different characteristics of
performance
Implications • Individual consumers value each of these
characteristics differently – justifying SKU variety
Capacity High +
While the basic job-to-be-done of a car is to facilitate
Comfort Mid + transportation, there are many characteristics that
fulfill that JTBD
• Speed
Efficiency Mid - • Motorcylces, busses, and trains also
perform here
Example • Efficiency (mileage, ease of usage, etc.)
• Motorcycles, hybrids, EVs, busses and
Convenience High + trains also perform here
• Capacity (how much can I transport)
Rational Emotional • Here vans, SUVs and trucks excel
Brain / Logos Brain / Pathos • Comfort
• Here luxury vehicles surpass others
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7. Breaking down the JTBD Matrix
Relative Functional Performance: Ex; Ford’s gasoline engine cars
Relative Functional Performance
In each category of performance we can both
Relative Industry
compare our relative position and competitive
Functional Willingness to Assumptions improvements follow the Disruptive and Sustaining
Performance Pay1 innovation curves
We can not only understand where we are today
Speed / Power High High + among our relevant competitive set, but also predict
whether any systemic changes will influence our
Implications position in the future
• Because disruption is facilitated by fundamental
Capacity High High + technological advantage in a given characteristic,
we can predict changes with some accuracy
Disruption in the automotive industry today is being
Comfort Mid Mid + facilitated by electric engines. Currently they are not
good enough for traditional uses of automobiles, but
they are disrupting the new “around town” market
Efficiency Mid Low - • While they fail on speed and capacity because of
technical limitations, they are fundamentally
advantaged in efficiency
Examples • Traditional non-electric vehicles are
Convenience High Mid + positioned to lose in efficiency
• While EV’s are currently positioned poorly
in convenience, we know as they improve
Rational Emotional along the disruptive curve, that will
Brain / Logos Brain / Pathos change
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8. Breaking down the JTBD Matrix
Willingness to Pay: Ex; Ford’s gasoline engine cars
Willingness to Pay
Not all of consumer buying behavior can be explained
Relative Industry
by functional product characteristics
Functional Willingness to Assumptions
• Affected by not only products being good enough,
Performance Pay1
scarcity, but also brand and zeitgeist
Despite our abilities to predict functional performance
Speed / Power High ++ changes using the low-end disruptive curve, we need
to incorporate some piece of art in this analysis
Implications • Cultural trends Zeitgeist
Capacity High ++ • Economic, regulatory trends Scarcity
• Interdependent, modular trends Good enough
Currently, the zeitgeist is affecting WtP for efficiency
Comfort Mid ++ and capacity and scarcity is affecting convenience in
the automotive industry
• Efficiency is becoming a more central issue
Efficiency Mid -+ • If cultural changes continue to develop
environmental awareness, (average)
people will start paying premiums for
Examples efficiency in their automobiles.
Convenience High +- • Currently, the sale is focused on lifetime
reduced costs
• People will pay less for convenience when it is
Rational Emotional abundent for gas vehicles and EV’s
Brain / Logos Brain / Pathos • Economic and regulatory incentives
suggest this will develop over time
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9. The predictive power of the model
Ford’s gas automobile business today Ford’s gas automobile business in 5-years
Relative Industry Relative Industry
Functional Willingness to Functional Willingness to
Performance Pay1 Performance Pay1
Speed / Power High + Speed / Power High +
Capacity High + Capacity High +
Comfort Mid + Comfort Mid +
Efficiency Mid - Efficiency Low +
Convenience High + Convenience Mid -
Rational Emotional Rational Emotional
Brain / Logos Brain / Pathos Brain / Logos Brain / Pathos
…however, in the near future Ford will only succeed
marketing gas cars for those segments that value power and
Ford can successfully market a line of gas cars outside of the
capacity far more than efficiency and comfort (i.e, Industrial)
luxury segment because they perform well in each relevant
job characteristic that is valued except comfort…
To avoid significant disruption they should be investing in
electric engines
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11. Suggests business
development prioritization
Example: Stop & Shop grocery
Bricks n’ Mortar facing disruption from Online Grocers
Stop & Shop’s grocery business today Stop & Shop’s grocery business in 5-years
Relative Industry Relative Industry
in theRetail industry (not segment specific)
Functional Willingness to Functional Willingness to
Job Characteristics based on laddering
Performance Pay1 Performance Pay1
Inventory Mid - Inventory Mid -
Price Low + Price Low +
Convenience High + Convenience Low +
Experience High - Experience High -
Distribution Distribution
High + High +
/ Trust / Trust
Rational Emotional Rational Emotional
Brain / Logos Brain / Pathos Brain / Logos Brain / Pathos
As online convenience improves, those products (dry goods)
Currently, retail grocers such as Stop & Shop can maintain
where experience is less valuable will likely shift to that channel,
profitability because they offer convenience and bundle
which maintains inventory and price advantages. However,
distribution and experience (i.e., Customers can experience their
people will still value the uniqueness of produce which suggests
products and cannot trust that online equivalents will distribute
grocers will not be displaced. They must instead concentrate on
equally fresh goods). Customers will pay a price premium and
selling those categories where people value distribution and
sacrifice on inventory selection for these job-characteristics
experience (ie, Fruit, Vegetables, Meat, Prepared Food).
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12. Example: Best Buy Retail (in 2005) Suggests business model
innovation need
Bricks n’ Mortar facing disruption from Online Consumer Electronics
Retailers
Best Buy’s business in 2006 Best Buy’s business in 2011
Relative Industry Relative Industry
in theRetail industry (not segment specific)
Functional Willingness to Functional Willingness to
Job Characteristics based on laddering
Performance Pay1 Performance Pay1
Inventory High - Inventory Mid -
Price Mid + Price Low +
Convenience High + Convenience Low +
Experience High - Experience High -
?
Distribution Distribution
High - Mid -
/ Trust / Trust
Rational Emotional Rational Emotional
Brain / Logos Brain / Pathos Brain / Logos Brain / Pathos
Best Buy built its business in the 90’s and early 00’s based on
Based on the disruptive innovation curve, we could assume that
convenient reliable stores carrying everything. While online
online competitors would be able to surpass BB in those areas
shopping was an option in 2006, shipping issues, return policies,
where they are fundamentally advantaged – Convenience, Price,
and the like were not well understood resulting in high relative
and Inventory. Because Distribution of branded products is
convenience. Best Buy was able to charge higher prices for the
relatively unimportant, this leaves Best Buy needing to change
products in their stores because people were not price comparing
business models to monetize experience or shutter
with online players lacking large fixed cost bases
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13. Suggests major problems
Example: Tower Records(in 1999)
Bricks n’ Mortar facing disruption from Online Music Retailers
Tower Record’s business in 1999 Tower’s business in 2004
Relative Industry Relative Industry
in theRetail industry (not segment specific)
Functional Willingness to Functional Willingness to
Job Characteristics based on laddering
Performance Pay1 Performance Pay1
Inventory High - Inventory Low -
Price Low + Price Low +
Convenience High + Convenience Low +
Experience Low - Experience Low -
Distribution
/ Trust
High +
Distribution
/ Trust
Mid +
?
Rational Emotional Rational Emotional
Brain / Logos Brain / Pathos Brain / Logos Brain / Pathos
However, in 1999, it would be possible to leverage disruptive
In the late 90’s Tower provided almost everything better than it’s theory to predict that improvements in online retailing would lead
competitors. Their were more SKUs, more exclusive distribution to losses in relative performance where the new technology was
agreements, and stores were conveniently located. fundamentally advantaged; Inventory, Price, and Convenience.
For this reason they were able to chanre The only area Tower could have protected was exclusive
distribution which became impossible as Apple gained scale
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14. Experiment: Fill out your own
Pick an industry in disruption or that has been
“ ” in “ ” “ ” in “ ”
Relative Industry Relative Industry
Functional Willingness to Functional Willingness to
Performance Pay1 Performance Pay1
____________________ ____________________
____________________
____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
Rational Emotional Rational Emotional
Brain / Logos Brain / Pathos Brain / Logos Brain / Pathos
… …
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15. Supporting the JTBD Matrix Assumptions
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16. Supporting the JTBD matrix requires reference
to well-documented past theory
1 Support JTBD components
2 Present predictive theories relative functional performance
3 Present predictive theories for willingness to pay
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17. 1
Products perform based on multiple JTBDs
Though Jobs-to-be-done theory provides companies with a wonderful tool to remind
themselves of the right use cases and substitutes for their products, it is an over
simplification to believe that a product should only have one job
• Products, in fact, are hired by users to do multiple jobs
– i.g., My Watch
– I hire my watch, an A.B.Art watch to perform two jobs
– Make me more appealing visually (by accessorizing my outfits)
– Express that I am different (by being a non-mainstream brand)
– Another person might hire the same watch to perform two jobs as well, though it
is quite possible those jobs are not the same
– Make that person more appealing visually (by accessorizing his outfits)
– Provide a sense of nostalgia (by requiring a manual wind)
Because products are hired by different people to perform different roles, companies
optimize product performance by understanding the complete set of job-characteristics
for all jobs to be done, and prioritizing how much to invest in each so that a product can
be manufactured at M.E.S. and best complete a set of jobs-to-be-done
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18. Job characteristics are the primary drivers of
product or service “hiring”
Certain assumptions drive this …which yields individuals choosing
economic theory… among imperfect bundles
People have varying tastes and needs that
for air conditioners
cannot be measured and predicted
Preference tree
(randomness in preferences)
Products cannot be manufactured
efficiently to complete the needs of all
individuals
People seek to optimize utility subject to
We prioritize and judge various bundles of
resource constraints
options that allow us to fulfill the distinct tasks
we “hire” products to do
…Among others • But the job of the corporation is maximize
value by optimizing job characteristics to
drive profitability
Daniel McFadden was awarded the Nobel prize for his work
in discrete choice theory in 2000
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19. Understanding the drivers: Functional
performance
Drivers of Relative Functional Performance
Relative functional performance represents the
Relative Industry
Functional Willingness to technological capabilities of a product, as it relates to a job
Performance Pay1 to be done or job characteristic
Speed / Power High High + • We tend to require at least a minimal level of performance
along these axes, but companies must excel in one or
more to differentiate from a competitive set
Capacity High High +
– i.e., Apple is known for product design
Comfort Mid Mid +
– i.e., Bang & Olufsen is known for sound quality
Efficiency Mid Low - Though some sustaining innovations can influence this
side of the matrix, the only predictable pattern of change
Convenience High Mid +
will occur through disruption
• We know that disruptive products outperform sustaining
Rational Emotional products in at least one job-to-be-done or job
Brain / Logos Brain / Pathos characteristic
• When a low end disruptor is noticed, it is reasonable to
believe it will outperform the incumbent based on its
differentiated characteristic in the near term
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20. 2
The disruptive curve provides some
insight into JTBD future
Disruptive theory tells us how …however, a product’s performance is
products performance will improve.. actually its ability to fulfill JTBDs
A product’s performance must
be thought of as the weighted PsJ1
average value of performance Ps
P P
on the jobs to be done Ps = ∫(wJ1+wJ2)
PsJ2
PD PD
T T
The average performance on all JTBDs will increase over
time, but not necessarily at the same rate
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21. 2
Often the disruptor is fundamentally advantaged
on one or more JTBD axes
Disruptors fundamentally outperform
incumbents on one or more JTBD… …Which can be explained
Disruptive innovations all have one thing in
Ps = ∫(wJ1+wJ2+wJ3+…+wJn) PsJ1 common – a scaleable, systemic, advantage in
P Ps
one or more job characteristic
PDJ1 • Most often these are technical advantages
PsJ2 – i.e., Cloud access, Electronic storage
• Sometimes, true business model
advantages can create legitimate disruptive
PD opportunities
– i.e., Incubators vs. Consulting in
entrepreneurial settings
PDJ2
The performance increase in low end
disruption can be attributed to the ability to
PD = ∫(wJ1D+wJ2D+wJ3D+…+wJnD) improve against other job characteristics
T
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22. 3
Understanding the drivers: Willingness to pay
Drivers of willingness to pay
Scarcity, perceived or real, is the primary driver of
Relative Industry
Functional Willingness to willingness to pay for a job-to-be-done
Performance Pay1
Speed / Power High ++ Scarcity can be influenced through two primary methods
• Perceived scarcity can be influenced through traditional
Capacity High ++ marketing and advertising
– Examples include Apple’s premium for design
Comfort Mid ++ driven by its ability to influence shoppers to accept
no substitute for products despite a range of
Efficiency Mid -+
alternatives
• Real scarcity is influenced through the laws of supply
Convenience High +-
and demand
– Various regulation and economic trends influence
Rational Emotional this driver of WtP
Brain / Logos Brain / Pathos
– In perfect competition (no brands, no IP, etc.) all
pricing should be driven to marginal profit = 0
– This creates a pricing problem where
marginal cost = 0
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23. 3
Traditional marketing changes WtP by increasing
marginal utility and increasing perceived scarcity
LDMR changes influence how much of And branding changes can make
a product the customer demands substitutes seem inadequate
U P
Traditional LDMR is
implicitly acknowledged in
the disruptive curve’s
customer demand
Q Q
If we perform conjoint analysis, willingness to pay for future Traditional economic theory suggests that two identical
product improvements can be predicted – this is real scarcity, products should be in the same supply demand plane
do people consider the market to host an abundance of
products that are good enough… However, often through relative positioning companies are
able to convince consumers that substitutes possible – this
However, this can be influenced by convincing customers creates augmented supply curves (eliminating some
that they need more in the future suppliers)
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