Identifying Customer Needs
Clayton M. Christensen is a professor of business administration at the Harvard Business School. He is the bestselling author of five books, including his seminal work, The Innovator's Dilemma, which received the Global Business Book Award for the best business book of the year, and most recently, The Innovator's Prescription, which examines how to fix our healthcare system. Christensen serves on several public and privately traded boards and is the founder of a successful consulting company and an investment management firm. He holds a B.A. with highest honors in economics from Brigham Young University and an M.Phil. in applied econometrics and the economics of less-developed countries from Oxford University, where he studied as a Rhodes Scholar; he received an MBA with high distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar, and was awarded his DBA from the Harvard Business School in 1992.
Question: How can company identify future customer needs?
Christensen: There is a concept from our research that really has proven to be powerful, and that is that the customer is the wrong unit of analysis when you’re trying to innovate, and that goes against the gospel that’s taught in most business schools and marketing programs. But rather than the customer you need to understand what it is the customer is trying to accomplish. What’s the job that the customer is trying to get done? And the job is a very stable thing. It exists whether or not there is a market for products that could be hired to do the job. And if you just start [cognoscente] of watching what people do and asking yourself, I wonder why she is trying to do that? You know, what’s she trying to accomplish through this, whatever it is she’s doing? You know, for example, there’s been a job forever, which is I’ve got to get this from here to there, with perfect certainty, as fast as possible. And that need has always existed out there, disembodied. You think of, you know, the game board, The Game of Life? It’s got all these serpentine paths across The Game of Life and you land on this space and you find yourself needing to get something done. Well, that’s actually not a bad representation of the way the world works, you know? I as a consumer one day may not need to get this from here to there with perfect certainty, as fast as possible, but, on occasion, I land on that space and I do. And so, then I ask myself, gosh. What can I hire to get this job done? And I look around and, gosh, back in Julius Caesar’s day, the only thing you could hire was a horseman with a chariot, and you’d give it to him and send him off over the hill and hope he got there safely. And then airmail coalesced, and you could hire airmail to get this from here to there, with perfect certainty, as fast as possible, and it wasn’t very certain or fast. And then FedEx came in, with a system that really does the job just about as fast and as certainly as anyone can possibly do it. And so, the job has always been there. It’s stable. You can, if you’re looking for it, you can see that the job is there. And then, as products and services were developed to do the job, a market emerges. But that’s the kind of mindset you have to have. In the automobile industry, there everybody makes cars, and everybody’s trying to copy the best features of everybody else’s cars and, as a consequence, they’re very difficult to differentiate. But if you watch what people are trying to accomplish when they drive a car, there are about six jobs for which a car is hired, and one of those jobs is, I’m a salesperson, I’m a service person, and I’ve got to work out of my car. My car is my office. And you look around, there are no cars that are designed to be an office, even though there are between 5 and 8 million people a year who have to work out of their car, you know? So, they’ll go to the dealer and buy a one size fits none automobile, chisel them down on the price as far as they can go, and then as soon as they drive off the lot, they begin spending thousands of dollars every year trying to transform the car into an office. So, to get access to the internet, they’ve got to pull over to Starbucks to use the T-Mobile hotspot. They’ve got their BlackBerry and they’re just pecking out answers to their e-mails. At 11:00, they’ll just go to the back tables of McDonald’s and spread all their paper out to fill out their expense reports and the customer progress reports. They stop at a traffic light and the notebook computer falls onto the floor because there’s no docking station there. They’re driving with one hand, talking on the phone with another, you know? They’re spending a lot of time and effort trying to transform the car into an office because no car company designed a car to do the job well. But if the car companies would… And this job exists, you know? It’s, there’s no market yet because nobody’s developed a product for that job, but just watching what people are doing, you can imagine what extraordinary opportunities a car company would have to design the cockpit of a car to work perfectly as a mobile office.
The Harvard Business School professor on how to predict future customer behavior.
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