Clayton Christensen Innovation Quotes

Motivation is the catalyzing ingredient for every successful innovation. The same is true for learning.

Disruptive technologies typically enable new markets to emerge.

There are more than 9,000 billing codes for individual procedures and units of care. But there is not a single billing code for patient adherence or improvement, or for helping patients stay well.

disruptive technology should be framed as a marketing challenge, not a technological one.

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.

To succeed consistently, good managers need to be skilled not just in choosing, training, and motivating the right people for the right job, but in choosing, building, and preparing the right organization for the job as well.

New products succeed not because of the features and functionality they offer but because of the experiences they enable. If

None of that data, however, actually tells you why customers make the choices that they do.

the best way to get a good idea is to get a lot of ideas.

Three classes of factors affect what an organization can and cannot do: its resources, its processes, and its values.

One quarter of Medicare beneficiaries have five or more chronic conditions, sees an average of 13 physicians each year, and fills 50 prescriptions per year.

The techniques that worked so extraordinarily well when applied to sustaining technologies, however, clearly failed badly when applied to markets or applications that did not yet exist.

In contrast, investing time and energy in your relationship with your spouse and children typically doesn’t offer that same immediate sense of achievement. Kids misbehave every day. It’s really not until 20 years down the road that you can put your hands on your hips and say, “I raised a good son or a good daughter.” You can neglect your relationship with your spouse, and on a day-to-day basis, it doesn’t seem as if things are deteriorating. People who are driven to excel have this unconscious propensity to underinvest in their families and overinvest in their careers—even though intimate and loving relationships with their families are the most powerful and enduring source of happiness.

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

The reason is that good management itself was the root cause. Managers played the game the way it was supposed to be played. The very decision-making and resource-allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies: listening carefully to customers; tracking competitors’ actions carefully; and investing resources to design and build higher-performance, higher-quality products that will yield greater profit. These are the reasons why great firms stumbled or failed when confronted with disruptive technological change.

Competitiveness is far more about doing what customers value than doing what you think you’re good at. And

This is one of the innovator’s dilemmas: Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.

When commercializing disruptive technologies, they found or developed new markets that valued the attributes of the disruptive products, rather than search for a technological breakthrough so that the disruptive product could compete as a sustaining technology in mainstream markets.

Research suggests that in over 90 percent of all successful new businesses, historically, the strategy that the founders had deliberately decided to pursue was not the strategy that ultimately led to the business’s success.

Sound managerial decisions are at the very root of their impending fall from industry leadership.

recent IBM poll of fifteen hundred CEOs identified creativity as the number-one “leadership competency” of the future.

Necessity remains the mother of invention.

Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.

With few exceptions, the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms’ managers set up an autonomous organization charged with building a new and independent business around the disruptive technology.

They must be plans for learning rather than plans for implementation.

For innovators, understanding the job is to understand what consumers care most about in that moment of trying to make progress.

Data is always an abstraction of reality based on underlying assumptions as to how to categorize the unstructured phenomena of the real world.

We adhere to the saying, “if it ain’t broke, don’t fix it,” while not really questioning whether “it” is “broke.

cost reductions meant survival, but not profitability,

If you can’t describe what you are doing as a process, then you don’t know what you are doing.

definition of infrastructure as the most efficient mechanism through which a society stores or distributes value.

It turns out that for most people who have chronic diseases with deferred consequences, "improve my financial health" is a much more pervasively experienced job than "maintain my physical health.

An organization’s capabilities reside in two places. The first is in its processes—the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. The second is in the organization’s values, which are the criteria that managers and employees in the organization use when making prioritization decisions.

Disruptive innovations, in contrast, don’t attempt to bring better products to established customers in existing markets. Rather, they disrupt and redefine that trajectory by introducing products and services that are not as good as currently available products. But disruptive technologies offer other benefits—typically, they are simpler, more convenient, and less expensive products that appeal to new or less-demanding customers.3

The key point here is that large companies typically fail at disruptive innovation because the top management team is dominated by individuals who have been selected for delivery skills, not discovery skills. As a result, most executives at large organizations don’t know how to think different. It isn’t something that they learn within their company, and it certainly isn’t something they are taught in business school. Business schools teach people how to be deliverers, not discoverers.

Focus is scary—until you realize that it only means turning your back on markets you could never have anyway. Sharp focus on jobs that customers are trying to get done holds the promise of greatly improving the odds of success in new-product development.

The key to getting hired is to understand the narrative of the customer’s life in such rich detail that you are able to design a solution that far exceeds anything the customer themselves could have found words to request. In hindsight, breakthrough insights might seem obvious, but they rarely are. In fact, they’re fundamentally contrarian: you see something that others have missed.

If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies, problems—planning better, working harder, becoming more customer- driven, and taking a longer-term perspective—all exacerbate the problem.

When we buy a product, we essentially “hire” something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we “fire” it and look around for something else we might hire to solve the problem.

There are whole industries, such as venture capital, that are currently organized around the belief that innovation is essentially a game of playing the odds. But it’s time to topple that tired paradigm. I’ve spent twenty years gathering evidence so that you can put your time, energy, and resources into creating products and services that you can predict, in advance, customers will be eager to hire. Leave relying on luck to the other guys.

They must be plans for learning rather than plans for implementation. By approaching a disruptive business with the mindset that they can’t know where the market is, managers would identify what critical information about new markets is most necessary and in what sequence that information is needed.

Creating the right experiences and then integrating around them to solve a job, is critical for competitive advantage. That’s because while it may be easy for competitors to copy products, it’s difficult for them to copy experiences that are well integrated into your company’s processes. But to do all this well takes a holistic

But differentiation loses its meaning when the features and functionality have exceeded what the market demands.

Robert B. Barr and John Tagg, “From Teaching to Learning—A New Paradigm for Undergraduate Education,” Change,

Innovation is less about producing something new and more about enabling something new and important for customers.

It is very difficult for a company whose cost structure is tailored to compete in high-end markets to be profitable in low-end markets as well.

Predictable marketing requires an understanding of the circumstances in which customers buy or use things. Specifically, customers—people and companies—have “jobs” that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can “hire” to get the job done.

this is a serious development for our medical training establishment is that a host of technological enablers will fuel the disruption of specialists by primary care physicians in the future.

Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use. There

Will flash cards invade the disk drive makers’ core markets and supplant magnetic memory? If they do, what will happen to the disk drive makers? Will they stay atop their markets, catching this new technological wave? Or will they be driven out?

At a more serious level, the desirability of aligning our actions with the more powerful laws of nature, society, and psychology, in order to lead a productive life, is a central theme in many works, particularly the ancient Chinese classic, Tao te Ching.

the breakthrough researcher first discovers the fundamental causal mechanism behind the phenomena of success. This allows those who are looking for “an answer” to get beyond the wings-and-feathers mind-set of copying the attributes of successful companies.

Keeping high-volume procedures within general hospitals allows hospitals to subsidize the unique, low-volume specialized capabilities that are so central to the value proposition of their solution shops- being able to diagnose and embark on a therapy for anything that might be wrong.

Notwithstanding the intense pressure on faculty members to publish, nationwide surveys indicate that they value teaching as highly as scholarly research.6 For every research superstar seeking international acclaim and association only with graduate students, there are many professors who value not only scholarship but also teaching and mentoring undergraduates.

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies. By and large, a disruptive technology is initially embraced by the least profitable customers in a market. Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late.

Here’s one example to illustrate the point. When a smoker takes a cigarette break, on one level he’s simply seeking the nicotine his body craves. That’s the functional dimension. But that’s not all that’s going on. He’s hiring cigarettes for the emotional benefit of calming him down, relaxing him. And if he works in a typical office building, he’s forced to go outside to a designated smoking area. But that choice is social, too—he can take a break from work and hang around with his buddies. From this perspective, people hire Facebook for many of the same reasons. They log onto Facebook during the middle of the workday to take a break from work, relax for a few minutes while thinking about other things, and convene around a virtual water cooler with far-flung friends. In some ways, Facebook is actually competing with cigarettes to be hired for the same Job to Be Done. Which the smoker chooses will depend on the circumstances of his struggle in that particular moment.

Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you’re good at. And staying competitive as the basis of competition shifts necessarily requires a willingness and ability to learn new things rather than clinging hopefully to the sources of past glory. The challenge for incumbent companies is to rebuild their ships while at sea, rather than dismantling themselves plank by plank while someone else builds a new, faster boat with what they cast overboard as detritus.

But was the Newton a failure? The timing of Newton’s entry into the handheld market was akin to the timing of the Apple II into the desktop market. It was a market-creating, disruptive product targeted at an undefinable set of users whose needs were unknown to either themselves or Apple. On that basis, Newton’s sales should have been a pleasant surprise to Apple’s executives: It outsold the Apple II in its first two years by a factor of more than three to one. But while selling 43,000 units was viewed as an IPO-qualifying triumph in the smaller Apple of 1979, selling 140,000 Newtons was viewed as a failure in the giant Apple of 1994.

The larger and more complex a company becomes, the more important it is for senior managers to train employees at every level, acting autonomously, to make prioritization decisions that are consistent with the strategic direction and the business model of the company. That is why successful senior executives spend so much time articulating clear, consistent values that are broadly understood throughout the organization. Over time, a company’s values must evolve to conform to its cost structure or its income statement, because if the company is to survive, employees must prioritize those things that help the company to make money in the way that it is structured to make money.

Toyota wasn’t really worried that it would give away its “secret sauce.” Toyota’s competitive advantage rested firmly in its proprietary, complex, and often unspoken processes. In hindsight, Ernie Schaefer, a longtime GM manager who toured the Toyota plant, told NPR’s This American Life that he realized that there were no special secrets to see on the manufacturing floors. “You know, they never prohibited us from walking through the plant, understanding, even asking questions of some of their key people,” Schaefer said. “I’ve often puzzled over that, why they did that. And I think they recognized we were asking the wrong questions. We didn’t understand this bigger picture.” It’s no surprise, really. Processes are often hard to see—they’re a combination of both formal, defined, and documented steps and expectations and informal, habitual routines or ways of working that have evolved over time. But they matter profoundly. As MIT’s Edgar Schein has explored and discussed, processes are a critical part of the unspoken culture of an organization. 1 They enforce “this is what matters most to us.” Processes are intangible; they belong to the company. They emerge from hundreds and hundreds of small decisions about how to solve a problem. They’re critical to strategy, but they also can’t easily be copied. Pixar Animation Studios, too, has openly shared its creative process with the world. Pixar’s longtime president Ed Catmull has literally written the book on how the digital film company fosters collective creativity2—there are fixed processes about how a movie idea is generated, critiqued, improved, and perfected. Yet Pixar’s competitors have yet to equal Pixar’s successes. Like Toyota, Southern New Hampshire University has been open with would-be competitors, regularly offering tours and visits to other educational institutions. As President Paul LeBlanc sees it, competition is always possible from well-financed organizations with more powerful brand recognition. But those assets alone aren’t enough to give them a leg up. SNHU has taken years to craft and integrate the right experiences and processes for its students and they would be exceedingly difficult for a would-be competitor to copy. SNHU did not invent all its tactics for recruiting and serving its online students. It borrowed from some of the best practices of the for-profit educational sector. But what it’s done with laser focus is to ensure that all its processes—hundreds and hundreds of individual “this is how we do it” processes—focus specifically on how to best respond to the job students are hiring it for. “We think we have advantages by ‘owning’ these processes internally,” LeBlanc says, “and some of that is tied to our culture and passion for students.

What could happen if we changed our emphasis from push to pull? What if much more of the $143 billion spent on official development assistance in 2016 was channeled to support direct market-creation efforts in poor countries, even when the circumstances seemed unlikely? Imagine how many markets could be created; imagine how many Tolarams, Nollywoods, M-PESAs, and other new-market creators could emerge; imagine how many jobs could be created. As I think about this problem, I can’t help but wonder how many fathers and mothers would be afforded the dignity of work and the resources to provide simple things for their families—like food, health care, and quality education. Imagine how many people would have a renewed sense of hope and purpose when they begin to see their suffering can become a thing of the past.

As successful companies mature, employees gradually come to assume that the priorities they have learned to accept, and the ways of doing things and methods of making decisions that they have employed so successfully, are the right way to work. Once members of the organization begin to adopt ways of working and criteria for making decisions by assumption, rather than by conscious decision, then those processes and values come to constitute the organization’s culture. 7 As companies grow from a few employees to hundreds and thousands, the challenge of getting all employees to agree on what needs to be done and how it should be done so that the right jobs are done repeatedly and consistently can be daunting for even the best managers. Culture is a powerful management tool in these situations. Culture enables employees to act autonomously and causes them to act consistently. Hence, the location of the

The foundation of our thinking is the Theory of Jobs to Be Done, which focuses on deeply understanding your customers’ struggle for progress and then creating the right solution and attendant set of experiences to ensure you solve your customers’ jobs well, every time. “Theory” may conjure up images of ivory tower musings, but I assure you that it is the most practical and useful business tool we can offer you. Good theory helps us understand “how” and “why.” It helps us make sense of how the world works and predict the consequences of our decisions and our actions. Jobs Theory5, we believe, can move companies beyond hoping that correlation is enough to the causal mechanism of successful innovation. Innovation may never be a perfect science, but that’s not the point. We have the ability to make innovation a reliable engine for growth, an engine based on a clear understanding of causality, rather than simply casting seeds in the hopes of one day harvesting some fruit.

By that time, Bezos and his executives had devoured and raptly discussed another book that would significantly affect the company’s strategy: The Innovator’s Dilemma, by Harvard professor Clayton Christensen. Christensen wrote that great companies fail not because they want to avoid disruptive change but because they are reluctant to embrace promising new markets that might undermine their traditional businesses and that do not appear to satisfy their short-term growth requirements. Sears, for example, failed to move from department stores to discount retailing; IBM couldn’t shift from mainframe to minicomputers. The companies that solved the innovator’s dilemma, Christensen wrote, succeeded when they “set up autonomous organizations charged with building new and independent businesses around the disruptive technology.”9 Drawing lessons directly from the book, Bezos unshackled Kessel from Amazon’s traditional media organization. “Your job is to kill your own business,” he told him. “I want you to proceed as if your goal is to put everyone selling physical books out of a job.” Bezos underscored the urgency of the effort. He believed that if Amazon didn’t lead the world into the age of digital reading, then Apple or Google would. When Kessel asked Bezos what his deadline was on developing the company’s first piece of hardware, an electronic reading

American Girl dolls are nice. But they aren’t amazing. In recent years Toys“ R” Us, Walmart, and even Disney have all tried to challenge American Girl’s success with similar dolls (Journey Girls, My Life, and Princess & Me)—at a fraction of the price—but to date, no one has made a dent. American Girl is able to command a premium price because it’s not really selling dolls. It’s selling an experience. When you see a company that has a product or service that no one has successfully copied, like American Girl, rarely is it the product itself that is the source of the long-term competitive advantage, something American Girl founder Pleasant Rowland understood. “You’re not trying to just get the product out there, you hope you are creating an experience that will do the job perfectly,” says Rowland. You’re creating experiences that, in effect, make up the product’s résumé: “Here’s why you should hire me.” That’s why American Girl has been so successful for so long, in spite of numerous attempts by competitors to elbow in. My wife, Christine, and I were willing to splurge on the dolls because we understood what they stood for. American Girl dolls are about connection and empowering self-belief—and the chance to savor childhood just a bit longer. I have found that creating the right set of experiences around a clearly defined job—and then organizing the company around delivering those experiences (which we’ll discuss in the next chapter)—almost inoculates you against disruption. Disruptive competitors almost never come with a better sense of the job. They don’t see beyond the product.

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The most vexing managerial aspect of this problem of asymmetry, where the easiest path to growth and profit is up, and the most deadly attacks come from below, is that “good” management—working harder and smarter and being more visionary—doesn’t solve the problem. The resource allocation process involves thousands of decisions, some subtle and some explicit, made every day by hundreds of people, about how their time and the company’s money ought to be spent. Even when a senior manager decides to pursue a disruptive technology, the people in the organization are likely to ignore it or, at best, cooperate reluctantly if it doesn’t fit their model of what it takes to succeed as an organization and as individuals within an organization. Well-run companies are not populated by yes-people who have been taught to carry out mindlessly the directives of management. Rather, their employees have been trained to understand what is good for the company and what it takes to build a successful career within the company. Employees of great companies exercise initiative to serve customers and meet budgeted sales and profits. It is very difficult for a manager to motivate competent people to energetically and persistently pursue a course of action that they think makes no sense.

is embedded in an organization in which most people are continually questioning why the project is being done at all. Projects make sense to people if they address the needs of important customers, if they positively impact the organization’s needs for profit and growth, and if participating in the project enhances the career opportunities of talented employees. When a project doesn’t have these characteristics, its manager spends much time and energy justifying why it merits resources and cannot manage the project as effectively. Frequently

One of the most vexing dilemmas that stable corporations face when they seek to rekindle growth by launching new businesses is that their internal schools of experience have offered precious few courses in which managers could have learned how to launch new disruptive businesses. In many ways, the managers that corporate executives have come to trust the most because they have consistently delivered the needed results in the core businesses cannot be trusted to shepherd the creation of new growth. Human resources executives in this situation need to shoulder a major burden. They need to monitor where in the corporation’s schools of experience the needed courses might be created, and ensure that promising managers have the opportunity to be appropriately schooled before they are asked to take the helm of a new-growth business. When managers with the requisite education cannot be found internally, they need to ensure that the management team, as a balanced composite, has within it the requisite perspectives from the right schools of experience.

the deliberate strategy process often becomes a subsequent impediment to a company’s efforts to launch new waves of successful disruptive growth. This happens in two ways. First, the filters in the resource allocation process of successful companies become so well attuned to the successful strategy that they filter out all but the initiatives that sustain the existing business—causing them to ignore the disruptive innovations that create the next waves of growth. Just as important, once deliberate strategy processes have become embedded within organizations, they find it difficult to employ emergent processes again when launching new businesses.

In fact, the prospects for growth and improved profitability in upmarket value networks often appear to be so much more attractive than the prospect of staying within the current value network, that it is not unusual to see well-managed companies leaving (or becoming uncompetitive with) their original customers as they search for customers at higher price points.

Research suggests that in over 90 percent of all successful new businesses, historically, the strategy that the founders had deliberately decided to pursue was not the strategy that ultimately led to the business’s success.12 Entrepreneurs rarely get their strategies exactly right the first time. The successful ones make it because they have money left over to try again after they learn that their initial strategy was flawed, whereas the failed ones typically have spent their resources implementing a deliberate strategy before its viability could be known. One of the most important roles of senior management during a venture’s early years is to learn from emergent sources what is working and what is not, and then to cycle that learning back into the process through the deliberate channel.

A new-market disruption is an innovation that enables a larger population of people who previously lacked the money or skill now to begin buying and using a product and doing the job for themselves.

No, you can’t stay up late. No, you can’t have a dog!” I recognized that I was one of those dads, searching for a moment to connect with my children. I’d been looking for something innocuous to which I could say “yes”—so I can feel like a kind and loving dad. So I’m standing there in line with my son in the late afternoon and I order my meal. Then my son pauses to look up at me, like only a son can, and asks, “Dad, can I have a milk shake, too?” And the moment has arrived. We’re not at home where I promise my wife to limit unhealthy snacks around mealtime. We’re in the place

In a small, independent organization, these small wins will generate energy and enthusiasm. In the mainstream, they would generate skepticism about whether we should even be in the business. I want my organization’s customers to answer the question of whether we should be in the business. I don’t want to spend my precious managerial energy constantly defending our existence to efficiency analysts in the mainstream.

Helping me feel like a good dad is not a Job to Be Done. It’s important to me, but it’s not going to trigger me to pull one product over another into my life. The concept is too abstract. A company couldn’t create a product or service to help me feel like a good dad without knowing the particular circumstances in which I’m trying to achieve that. The jobs I am hiring for are those that help me overcome the obstacles that get in the way of making progress toward the themes of my life—in specific circumstances. The full set of Jobs to Be Done as I go through life may roll up, collectively, into the major themes of my life, but they’re not the same thing.

Harvard Business School alum Rick Krieger and some partners decided to start QuickMedx, the forerunner of CVS MinuteClinics, after Krieger spent a frustrating few hours waiting in an emergency room for his son to get a strep-throat test. CVS MinuteClinic can see walk-in patients instantly and nurse practitioners can prescribe medicines for routine ailments, such as conjunctivitis, ear infections, and strep throat. Because most people don’t want to go to the doctor if they don’t have to, there are now more than a thousand MinuteClinic locations inside CVS pharmacy stores in thirty-three states.

So Medtronic adjusted not only its marketing efforts, but also the services it provided to directly target potential patients. For example, in conjunction with local cardiologists, Medtronic organized heart-health screening clinics across the country—providing prospective patients with free, direct access to specialists and high-tech equipment without having to go through an overwhelmed GP first. The question of paying for a pacemaker and the attendant medical services was no small concern. So Medtronic created a loan program to help patients pay for the pacemaker procedure. The company initially assumed that patients might be drawn to loans that actually expired upon the patient’s death, so that they were not saddling the family with the burden of debt—the emotional and social component of their Job to Be Done. And, as the Medtronic team learned from patients themselves, that was what they often wanted. But friends and family wanted something different: they tended to rally around a patient to find the money necessary. In those cases, the patient was more likely simply to need a bridge loan until those funds could be gathered. Medtronic made sure that the loan process was not daunting for the family: a loan is typically approved within two days, requiring minimum paperwork and entailing no asset mortgage. The experience of navigating the complex web of health care in India could be overwhelming for both patients and their families. So the company began to work with local hospitals to create a patient counselor role, initially calling them “Sherpas,” that helped patients navigate the often mind-boggling bureaucracy of a hospital, keeping their procedure and aftercare as top priorities. The patient counselor role became so popular that hospitals asked if the company would allow patients obtaining pacemakers through traditional routes to seek assistance from a counselor, too. Seeing an opportunity to further identify Jobs to Be Done from within the hospital system, Medtronic jumped at the chance. “At the end of the day, we realized the role was such an important position, we adjusted the role. And we were OK with it,” Monson recalls. “It ingrained the value of that person into the entire hospital system, and thus our business model. And it made us the partner of choice. To me that was a clear example of hitting a Job to Be Done.” The first Medtronic pacemaker distributed through the Healthy Heart for All (HHFA) program in India was implanted in late 2010. Medtronic currently has partnerships with more than one hundred hospitals in thirty cities. India is considered to be one of the most high-potential growth markets for the company.

Over the years, I’ve come to the conclusion that good theory is what has been missing in the discussions about how companies can create successful innovations. Is innovation truly a crapshoot? Or is innovation difficult because we don’t know what causes it to succeed? I’ve watched so many smart, capable managers wrestle with all kinds of innovation challenges and nagging questions, but seldom the most fundamental one: What causes a customer to purchase and use a particular product or service? We believe Jobs Theory, at last, provides an answer.

Walkman cassette player was temporarily put on hold when market research indicated that consumers would never buy a tape player that didn’t have the capacity to record and that customers would be irritated by the use of earphones. But Morita ignored his marketing department’s warning, trusting his own gut instead. The Walkman went on to sell over 330 million units and created a worldwide culture of personal music devices.

Most of the world’s most successful innovators see problems through a different lens from the rest of us. Why didn’t Hertz come up with a Zipcar-like product first? Kodak came close to creating a kind of Facebook product long before Mark Zuckerberg did. Major yogurt manufacturers understood that there might be a demand for Greek yogurt well before Chobani founder Hamdi Ulukaya launched what is now a $ 1 billion business. AT& T introduced a “picture phone” at the 1964 World’s Fair, decades before Apple’s iPhone. Instead of looking at the way the world is and assuming that’s the best predictor of the way the world will be, great innovators push themselves to look beyond entrenched assumptions to wonder if, perhaps, there was a better way. And there is.

What are the important, unsatisfied jobs in your own life, and in the lives of those closest to you? Flesh out the circumstances of these jobs, and the functional, emotional, and social dimensions of the progress you are trying to make—what innovation opportunities do these suggest? If you are a consumer of your own company’s products, what jobs do you use them to get done? Where do you see them falling short of perfectly nailing your jobs, and why? Who is not consuming your products today? How do their jobs differ from those of your current customers? What’s getting in the way of these nonconsumers using your products to solve their jobs? Go into the field and observe customers using your products. In what circumstances do they use them? What are the functional, emotional, and social dimensions of the progress they are trying to make? Are they using them in unexpected ways? If so, what does this reveal about the nature of their jobs?

To understand how revolutionary Pasteur’s contributions were, consider the previously popular ideas that attempted to explain why people got sick. For nearly two thousand years, the medical profession believed that four different bodily fluids—blood, phlegm, yellow bile, and black bile—dominated the health and moods of people. When they were in harmony, all was right with the world. When they were out of sync, people fell ill or into “bad humor.” The theory was known as humorism. Doctors were never quite certain what caused imbalance among these humors—ideas ranged from seasons to diet to evil spirits. So they experimented by trial and error to restore the necessary harmony of fluids—often with now seemingly barbaric methods such as bloodletting, which at the time was said to remedy hundreds of diseases. Sometimes, people got better. But most of the time, they got worse. And doctors were never sure why. By the nineteenth century, people began to blame disease on “miasmas” or “bad airs” that floated around dangerously. As hare-brained as it sounds today, “miasma theory” was actually an improvement over humorism because it spawned sanitary reforms that had the effect of removing real disease agents—bacteria. For example, in 1854, when cholera gripped London, the miasma explanation inspired massive, state-sponsored clearing of the air by draining cesspools. A physician of the time, John Snow, was able to isolate the pattern of new cholera cases and to conclude that new cases correlated to proximity to a specific water pump on Broad Street. Disease, he concluded, correlated with that pump—and therefore cholera was not transmitted through miasma, but likely through contaminated water. Snow’s work saved countless lives—and he has subsequently been recognized as one of the most important physicians in history. But while an improvement, Snow’s analysis still didn’t get to the root cause of what actually made those people sick.

Because Aristotle’s was the accepted lens on the universe, centuries of medieval scientists and thinkers went to great lengths to make epicycles work. It wasn’t until the sixteenth century, with one simple but profound observation, that Renaissance astronomer Nicolaus Copernicus reframed our view of the universe. The planets revolved not around the earth, but around the sun. Finally, understanding that provided a foundation for some of the most important advances in history and the foundation for modern astronomy and calculus. Of course, it took eighteen centuries for someone like Copernicus to see and articulate the flaws in Aristotle’s logic. And even he died without knowing that the world would accept he was right. Changing a well-established view of the world rarely happens overnight—and even when it happens, it still takes time to refine and perfect the right new perspective. In the world of innovation, many companies are stuck in a world of creating “epicycles”: elaborate approximations, estimations, and extrapolations. Because we gather, fine-tune, and cross-reference all manner of data, it seems like we should be getting better and better at predicting success. But if we fail to understand why customers make the choices they make, we’re just getting better and better at a fundamentally flawed process. Without the right understanding of the causal mechanism at the center of the innovation universe, companies are trying to make sense of the universe revolving around the earth. They’re forced to rely on an array of borrowed best practices, probabilistic tools, and tips and tricks that have worked for other companies, but which can’t guarantee success. As you look at innovation through the lenses of the Jobs Theory, what you see is not the customer at the center of the innovation universe, but the customer’s Job to Be Done. It may seem like a small distinction—just a few minutes of arc—but it matters a great deal. In fact, it changes everything.

With the lens of Jobs to Be Done, the Medtronic team and Innosight (including my coauthor David Duncan) started research afresh in India. The team visited hospitals and care facilities, interviewing more than a hundred physicians, nurses, hospital administrators, and patients across the country. The research turned up four key barriers preventing patients from receiving much-needed cardiac care: Lack of patient awareness of health and medical needs Lack of proper diagnostics Inability of patients to navigate the care pathway Affordability While there were competitors making some progress in India, the biggest competition was nonconsumption because of the challenges the Medtronic team identified. From a traditional perspective, Medtronic might have doubled down on doctors, asking them about priorities and tradeoffs in the product. What features would they value more, or less? Asking patients what they wanted would not have been top of the list of considerations from a marketing perspective. But when Medtronic revisited the problem through the lens of Jobs to Be Done, Monson says, the team realized that the picture was far more complex—and not one that Medtronic executives could have figured out from pouring over statistics of Indian heart disease or asking cardiologists how to make the pacemaker better. Medtronic has missed a critical component of the Job to Be Done.

Making that possible involved creating relationships with several partners who helped Medtronic accomplish customers’ jobs. “Through the assessment of Healthy Heart for All, Medtronic understood the need for partners in different stages of the patient care pathway who can be a strong support in removing the barriers to treatment access,” says Dasgupta. “In this case, partners with capabilities in financing, administration of loans, screening and counselling of patients played a major role. With programs like Healthy Heart for All, Medtronic is delivering greater value to patients, healthcare professionals and hospitals. And it is this value which brings true differentiation where product differentiation may not be easy to demonstrate.

By contrast, one company that clearly understands the stakes is Uber. In the last several years, few companies have captured the media’s attention like Uber. In my opinion, Uber has been successful because it’s perfectly nailed a Job to Be Done. Yes, Uber can often offer a nice car to take you from point A to point B, but that’s not where it’s built its competitive advantage. The experiences that come with hiring Uber to solve customers’ Jobs to Be Done are better than the existing alternatives. That’s the secret to its success. Everything about the experience of being a customer—including the emotional and social dimensions—has been thought through. Who wants to have to outmaneuver other poor schlubs on the same street corner who are trying to hail a cab? You don’t want to either pay for a car service to wait outside your meeting or be at its mercy when you’re finally ready to call it to come back and get you. With Uber, you simply push a few buttons on your mobile phone and you know that in three minutes or seven minutes a specific driver will arrive to pick you up. Now you can relax and just wait. You don’t have to worry if you have enough cash in your wallet or fear that if you swipe your credit card in that taxi machine, you’ll get a call from your bank wondering if you’ve recently made purchases in some state you’ve never even been to. Calling an Uber has even more potential to ease your anxieties about getting into a cab alone. With Uber there’s a record of your request, you know specifically who is picking you up, and you know from the driver’s ratings that he or she is reliable.

Correlation is enough,” 2 then-Wired editor in chief Chris Anderson famously declared in 2008. We can, he implied, solve innovation problems by the sheer brute force of the data deluge. Ever since Michael Lewis chronicled the Oakland A’s unlikely success in Moneyball (who knew on-base percentage was a better indicator of offensive success than batting averages?), organizations have been trying to find the Moneyball equivalent of customer data that will lead to innovation success. Yet few have. Innovation processes in many companies are structured and disciplined, and the talent applying them is highly skilled. There are careful stage-gates, rapid iterations, and checks and balances built into most organizations’ innovation processes. Risks are carefully calculated and mitigated. Principles like six-sigma have pervaded innovation process design so we now have precise measurements and strict requirements for new products to meet at each stage of their development. From the outside, it looks like companies have mastered an awfully precise, scientific process. But for most of them, innovation is still painfully hit or miss. And worst of all, all this activity gives the illusion of progress, without actually causing it. Companies are spending exponentially more to achieve only modest incremental innovations while completely missing the mark on the breakthrough innovations critical to long-term, sustainable growth. As Yogi Berra famously observed: “We’re lost, but we’re making good time!” What’s gone so wrong? Here is the fundamental problem: the masses and masses of data that companies accumulate are not organized in a way that enables them to reliably predict which ideas will succeed. Instead the data is along the lines of “this customer looks like that one,” “this product has similar performance attributes as that one,” and “these people behaved the same way in the past,” or “68 percent of customers say they prefer version A over version B.” None of that data, however, actually tells you why customers make the choices that they do.

As Nate Silver, author of The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t, points out, “ice cream sales and forest fires are correlated because both occur more often in the summer heat. But there is no causation; you don’t light a patch of the Montana brush on fire when you buy a pint of Häagen-Dazs.” Of course, it’s no surprise that correlation isn’t the same as causality. But although most organizations know that, I don’t think they act as if there is a difference. They’re comfortable with correlation. It allows managers to sleep at night. But correlation does not reveal the one thing that matters most in innovation—the causality behind why I might purchase a particular solution. Yet few innovators frame their primary challenge around the discovery of a cause. Instead, they focus on how they can make their products better, more profitable, or differentiated from the competition. As W. Edwards Deming, the father of the quality movement that transformed manufacturing, once said: “If you do not know how to ask the right question, you discover nothing.” After decades of watching great companies fail over and over again, I’ve come to the conclusion that there is, indeed, a better question to ask: What job did you hire that product to do? For me, this is a neat idea. When we buy a product, we essentially “hire” something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we “fire” it and look around for something else we might hire to solve the problem. Every day stuff happens to us. Jobs arise in our lives that we need to get done. Some jobs are little (“ pass the time while waiting in line”), some are big (“ find a more fulfilling career”). Some surface unpredictably (“ dress for an out-of-town business meeting after the airline lost my suitcase”), some regularly (“ pack a healthy, tasty lunch for my daughter to take to school”). Other times we know they’re coming. When we realize we have a job to do, we reach out and pull something into our lives to get the job done. I might, for example, choose to buy the New York Times because I have a job to fill my time while waiting for a doctor’s appointment and I don’t want to read the boring magazines available in the lobby. Or perhaps because I’m a basketball fan and it’s March Madness time. It’s only when a job arises in my life that the Times can solve for me that I’ll choose to hire the paper to do it. Or perhaps I have it delivered to my door so that my neighbors think I’m informed—and nothing about their ZIP code or median household income will tell the Times that either.

People hired milk shakes for two very different jobs during the day, in two very different circumstances. Each job has a very different set of competitors—in the morning it was bagels and protein bars and bottles of fresh juice, for example; in the afternoon, milk shakes are competing with a stop at the toy store or rushing home early to shoot a few hoops—and therefore was being evaluated as the best solution according to very different criteria. This implies there is likely not just one solution for the fast-food chain seeking to sell more milk shakes. There are two. A one-size-fits-all solution would work for neither.

As long as Toyota is continually identifying “anomalies” in the manufacturing process, every single defect is seen as an opportunity to make the process better. There are, in effect, a set of rules that ensure that this happens. For example, an employee must never add value to a part until it is ready to be used in the next step of adding value. It must be done in the same way, every time. That way managers know, definitely, that the value-adding step worked with the next step in the process. That creates an environment of repeated scientific experimentation. Each time it’s done the same way constitutes a test of whether doing it that way, to those specifications, will result in perfection every time. For Toyota, the theory was embodied in the set of processes they developed to lead to defect-free manufacturing. Each activity can be seen as an individual if-then statement: “If we do this, then that will be the result.” Through this theory of manufacturing, the quality movement was born. As a consequence, the Americans took what they’d learned from their Japanese competitors to heart and the US automobile industry today churns out very reliable cars. Innovation, in a very real sense, exists in a “pre–quality revolution” state. 1 Managers accept flaws, missteps, and failure as an inevitable part of the process of innovation. They have become so accustomed to putting Band-Aids on their uneven innovation success that too often they give no real thought to what’s causing it in the first place.

That realization helped Moesta and his team begin to understand the struggle these potential home buyers faced. “I went in thinking we were in the business of new home construction,” recalls Moesta. “But I realized we were instead in the business of moving lives.” With this understanding of the Job to Be Done, dozens of small, but important, changes were made to the offering. For example, the architect managed to create space in the units for a classic dining room table by reducing the size of the second bedroom by 20 percent. The company also focused on helping buyers with the anxiety of the move itself, which included providing moving services, two years of storage, and a sorting room space on the premises where new owners could take their time making decisions about what to keep and what to discard without the pressure of a looming move. Instead of thirty pages of customized choices, which actually overwhelmed buyers, the company offered three variations of finished units—a move that quickly reduced the “cold feet” contract cancellations from five or six a month to one. And so on. Everything was designed to signal to buyers: we get you. We understand the progress you’re trying to make and the struggle to get there. Understanding the job enabled the company to get to the causal mechanism of why its customers might pull this solution into their lives. It was complex, but not complicated. That, in turn, allowed the housing company to differentiate its offering in ways competitors weren’t likely to copy—or even understand. A jobs perspective changed everything. The company actually raised $ 3,500 (profitably), which included covering the cost of moving and storage. By 2007, when sales in the industry were off by 49 percent and the market all around them was plummeting, the developers had actually grown the business 25 percent.

Processes are invisible from a customer’s standpoint—but the results of those processes are not. Processes can profoundly affect whether a customer chooses your product or service in the long run. And they may be a company’s best bet to ensure that the customer’s job, and not efficiency or productivity, remains the focal point for innovation in the long run. Absence of a process, as is the case with most traditional hospitals, is actually still a process. Things are getting done, however chaotically. But that’s not a good sign. W. Edwards Deming, father of the quality movement, may have put it best: “If you can’t describe what you are doing as a process, then you don’t know what you are doing.

What are they really trying to accomplish and why isn’t what they’re doing now working? What is causing their desire for something new? One simple way to think about these questions is through storyboarding. Talk to consumers as if you’re capturing their struggle in order to storyboard it later. Pixar has this down to a science: as you piece together your customers’ struggle, you can literally sketch out their story: Once upon a time . . . Every day . . . One day . . . Because of that, we did this . . . Because of this, we did that . . . Finally I did . . . You’re building their story, because through that you can begin to understand how the competing forces and context of the job play out for them. Airbnb’s founders clearly understood this. Before launching, the company meticulously identified and then storyboarded forty-five different emotional moments for Airbnb hosts (people willing to rent out their spare room or entire home) and guests. Together, those storyboards almost make up a minidocumentary of the jobs people are hiring Airbnb to do. “When you storyboard something, the more realistic it is, the more decisions you have to make,” CEO Brian Chesky told Fast Company. “Are these hosts men or women? Are they young, are they old? Where do they live? The city or the countryside? Why are they hosting? Are they nervous? It’s not that they [the guests] show up to the house. They show up to the house, how many bags do they have? How are they feeling? Are they tired? At that point you start designing for stuff for a very particular use case.

Data is not the phenomenon. It represents the phenomenon, but not very well.

As Harvard Business School professor and author Clayton Christensen has taught, successful companies will get pushed aside if they do not hearken to the threat of disruptive innovations and adjust their strategies in response. We would emphasize that strategic change is not what’s hard. What’s really hard is organizational change to accommodate strategie change. Processes, structures, measures, information systems, people systems, continuous improvement protocols, and cultural beliefs all must coalesce around a new strategic idea, or it will never deliver the desired results.

If you do not know how to ask the right question, you discover nothing.” After decades of watching great companies fail over and over again, I’ve come to the conclusion that there is, indeed, a better question to ask: What job did you hire that product to do?

In dealing with disruptive technologies leading to new markets, however, market researchers and business planners have consistently dismal records.

Put simply, innovative thinkers connect fields, problems, or ideas that others find unrelated.