Innovation 101: COMPETING AGAINST LUCK by Clayton Christensen | Animated Core Message

if you were the owner of a fast food restaurant that sold milkshakes and your milkshakes weren't selling well how would you go about improving your milkshakes would you buy higher quality ingredients would you survey customers to see what flavors they would like to see on the menu or would you focus on one popular flavor say chocolate and make the chocolate shake a richer and more decadent any one of these innovations might increase sales but you can't be sure the success of each innovation relies heavily on luck it's like throwing out a bunch of seeds and hoping that one of them takes root and grows into something people want to buy author of the book competing against luck Clayton Christensen says great companies take this hopeful approach to innovation far too often they waste millions of dollars and often go out of business because they don't know how to innovate when global executives were recently surveyed by McKenzie a shocking 94 percent said they were unsatisfied with their own innovation performance author and Harvard professor Clayton Christensen has studied innovation for over two decades and he says that those who fail to innovate are simply asking the wrong question instead of asking how can I get people to buy my product we need to ask what job are my customers hiring this product to do in his book competing against luck Clayton Christensen says when we buy a product we essentially hire something to get a job done some jobs are little like past the time while waiting in line some jobs are big find a more fulfilling career some surface unpredictably like dress for an out-of-town business meeting after the airline lost my suitcase and some happened regularly like pack a healthy tasty lunch for my daughter to take to school right now you might be hiring this video to feel like you're taking a productive break from work now with this new lens let's go back to the milkshake problem and ask what job does a customer hire a milkshake to do luckily in the mid-1990s two fast-food consultants from Detroit answered this question for us they stood inside a fast-food for 18 hours and observed people buying milkshakes and stopped people to ask them what are you hiring this milkshake for after a puzzled look a customer would reflect and reveal an answer that was deeper than just satisfy my hunger one set of customers was hiring a milkshake in the morning just before going on a long and boring commute to work they were hiring a milkshake to make the boring ride to work more enjoyable the milkshakes were thick so they could last a long time and it was better to hire a milkshake for the job than to hire a chocolate bar or a bagel or even a bag of carrots the chocolate bar was too quick the bagel was too messy and the carrots were just as boring as the commute another set of customers hired milkshakes for an entirely different reason they hired milkshakes in the afternoon to help them feel like they were being a fun parent a milkshake allowed a dad or mom to feel like they were doing something nice for their child like treating their daughter for passing a test at school the parents were hiring a milkshake instead of hiring an expensive toy or a long movie at the theater or some other food item that would make them feel guilty like a bag of gummi bears and a milkshake would also help keep the child quiet for longer now notice how asking the customers what job they were hiring a milkshake to do has provided innovation insights by learning about the exact circumstance that a customer would pull a milkshake into their life you and I can uncover specific innovation clues innovation is now a matter of improving a specific experience for the commuters this can mean making the milkshakes even thicker it could also mean adding chunks of fruit in with the milkshake to make the drinking experience even more interesting and stimulating or you could move the milkshake stand closer to the checkout counter and have pre-mixed milkshakes since the commuters are probably in a rush and they need to get in and out as fast as possible for the parents in the afternoon you could improve the experience by introducing smaller cup sizes so the parents wouldn't feel as guilty for buying their kid a milkshake or you could pair the milkshake with a small toy both of these innovations would make the customer more likely to hire your milkshake when they have the job of I need to give my kid a treat but I don't have much time and I don't want to spend a bunch of where most innovators would try to make a higher-quality milkshake for everyone the smart innovator focuses on improving an experience for a person in a specific circumstance author clay Christensen and his co-authors has seen this jobs to be done Theory revolutionized companies Christensen says it's been validated and proven in the work of some of the most respected business leaders and innovators Amazon's Jeff Bezos and into it's Scott cook for example as well as in the founding of highly successful entrepreneurial ventures in recent years like Airbnb if you have the desire to create an innovative product or improve an existing product in an innovative way here are three steps you can take to rely more on creativity and skill and less on luck step 1 find a job that needs to be done aim to understand why you or your customer or your target customer would want to pull the product you're thinking of making into their lives don't just focus on the rational reasons like satisfying hunger dig deeper and focus on the emotional and social reasons like those parents who were buying a milkshake to feel like a better parent when looking for a job to be done think of yourself as less of an entrepreneur and more of a psychologist you want to find out what people care about and determine where they specifically want to make progress in their life step 2 document the journey from the moment a customer or potential customer hires the product for the job to the moment that product completes the job or they give up you want to be like a documentary filmmaker your goal is to find out where when and what they're doing at the moment they have the desire to hire a product and then create a storyboard or map of the experience that follows for the morning commuters who bought the milkshake this would look like a commuter driving by the fast food restaurant seeing a sign for milkshake buying the milkshake and drinking it on the way to work the key is to focus on the obstacles they face and the moments of frustration they endure like when the commuter tries to hire a milkshake but it takes too long to order and now he or she is late for work step 3 remove the obstacles and remedy the frustrations to create a better experience in the milkshake example this was making quick pre-made milkshakes or making milkshakes even thicker to enhance the experience the customers were looking for the new experience that you create must be at least twice as good as their current experience why because most of us get anxious when hiring something new new is often scary behavioral economist Daniel Kahneman and Amos Tversky have done several studies to show that loss aversion the tendency to avoid loss and maintain the status quo is psychologically twice as powerful as a prospect of gaining something now executing these three steps won't be easy but it's far easier than the alternative trying several innovations relying on luck and wasting a whole bunch of time and money along the way you don't need a bunch of luck to be innovative you need the right mindset a discipline focus on improving a specific experience for someone and a skills to bring that experience to life that was the core message that I gathered from competing against luck by Clayton Christensen it's an excellent thought-provoking book for any aspiring business leader I highly recommend it if you would like a one-page PDF summary of insights that I gathered from this book just click the link below and I'd be happy to email it to you if you already subscribe to the free productivity gain email newsletter this PDF is sitting in your inbox as always thanks for watching and have yourself a productive week

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Id: auedNplxnu8

Length: 8min 4sec (484 seconds)

Published: Thu Feb 08 2018