With increasing global competition and shortened product lifecycles, making strategic technological decisions is a challenge more than ever. Unclear future developments and an unstable present make it even harder to predict which technology is the right one and will be prevail in the market. The solution might sound counterintuitive: to make good technological decisions do not focus on technology, in the first place!
In this article, I will outline why the demand side of your market might be the more stable variable in the equation and why it is hard for some firms to change to a more customer-centric approach in technology management. Finally, let’s look why and how to integrate long-term customer needs as well as social, technological, economic and political developments for successful strategic technological decision making.
You’ve probably heard the screams, or are experiencing firsthand, that in many industries competitive dynamics have been increasing in recent years. Markets are changing at an increasingly rapid pace. This condition has been referred to in many ways, such as “hypercompetition”, “high velocity” or a “VUCA world”.
The consequences of this increasing dynamic environment are manifold. But the most evident are shorter product lifecycles and (therewith) an increased pressure to develop new products and technologies that will have the upper hand in the market. It is hardly surprising that – according to a 2017 study by McKinsey – the life span of companies within the SP500 fell from 61 years to 18 years.
There is a good chance to fall into a technology trap and disappear from the market by investing into technologies that do not serve real market needs – even former market leaders like Blackberry, Yahoo, MySpace, or Compaq failed to avoid this trap, just to name a few.
At no time in the past has the threat of disruption been bigger, and at no time has it been more important to focus on the right technologies. In today’s VUCA world, firms are forced to identify emerging new technologies early, and take decisions whether to switch to new technologies or not. In this unstable environment, the cardinal mistake is to define markets around technologies or solutions. Today’s basic technologies will be tomorrow’s outdated ones – faster than ever before.
Hand on heart: how do things look in your company? Is your company’s identity defined, at least to some part, by the products or technologies offered? And if yes, have you ever asked yourself if you really can decide on technologies, solutions and products, if you do not know which customer’s jobs they shall serve, especially in the future? And what is your customer’s job at all?
In search of alternatives, many companies are trying to define their markets in a customer-centric way. Certainly, you have already heard the quote attributed to Henry Ford that, if he had asked people what they wanted, they would have said faster horses. This points to one of the challenges one might face when focusing on customers a little too much. There is more to it.
Indeed, there is already an increasing focus of firms on their customers, but little to define a firm nor a product strategy around the customers’ job-to-be-done (JTBD). The JTBD perspective does not ask what customers want, but what they are trying to achieve. With this perspective, “markets” are not defined by existing solutions (= products based on certain technologies), but around a job executor who wants to achieve a specific job – and this job is stable for many years, as the following example will outline.
Car bodies for passenger cars have their origins in the carriage. But those who stuck to building carriages for a “carriage market” faced collapsing demand when the first automobiles were developed.
Only wheelwrights, who served a job-to-be-done in the market for carriages at the time, continued to develop. With a self-perception as a supplier of (cabins for) passenger transportation, such companies evolved via the body builder route into manufacturers of passenger or commercial vehicles (sometimes in cooperation with mechanical engineers). Fisher Body & Co for example merged into General Motors, Carrozzeria Mario Casaro into Viberti/Wielton, Carrozzeria Boneschi into Fiat, Karman into VW.
Other wheelwrights, who, in retrospect, may have served other jobs-to-be-done in the former “carriage market” evolved into automobile dealers (Joseph Cockshoot Co. Ltd. distributed Rolls-Royce and Bentley), industrial automobile parts producers (Drauz-Werke into ThyssenKrupp) or seat manufacturers (Reutter into the Recaro Holding).
These examples illustrate, two things. First, there are many jobs to be served in a “market” and a firm must decide which jobs to address. Second, solutions and technologies, namely that a horse is the driving force of a carriage, change over time. The underlying job-to-be-done of transport one or more people (more or less comfortably) from one point to another, has not changed for more than 200 years until today.
In today’s beleaguered automotive industry, both, powertrain technologies are undergoing change, as is the servicing of formerly secondary needs (what we would call related jobs in the JTBD universe). New solutions and new providers with other solution competencies (e.g. autonomous driving/Google, etc.) make an appearance. Again, existing solutions are challenged, whereas the underlying job-to-be-done stays the same.
The key take-away of the above examples is that the solution/technology side of the innovation equation is typically less stable than one might think, whereas a demand base defined with the Jobs-to-be-Done (JTBD) framework is relatively stable. Changing your self-image from a solution provider based on technologies to a solver of a job-to-be-done helps to avoid a trap: the trap of being rendered obsolete by other technologies without even noticing it. What is more, you straight-line your innovation and technology strategy by providing a stable pivot point when searching and developing new technologies and solutions.
Defining a company around a customer’s jobs and the needs attached to it, with all its consequences, is a huge challenge. Companies typically grow up thanks to a successful solution or set of solutions. Over time, it becomes more and more difficult to scale off from past successes (solution family/technology fields) and evolve to serve the job-to-be-done and customer needs by embracing entirely new approaches, whether they are new technologies, new business models or services.
Challenges are posed by so-called path dependencies, e.g. former decision patterns for investments in a certain research field or technologies, as well as the existing organizational culture, knowledge base and people of the organization: people whose tasks, skills and knowledge are often technology-related.
These aspects lead to organizational inertia, which is necessary to a certain extent: put simply, established, well-rehearsed and therefore stable processes make a company successful. However, this stability, or rigidity if you will, hampers change and the ability to adapt to technological changes that may serve today’s job-to-be-done better, or tomorrow’s.
It is desirable for companies to master a balancing act: serving today’s markets (jobs) with existing successful capabilities and technologies, and at the same time developing solutions with new technologies that can serve the current and, even better, also adjacent/related jobs in the future. This balancing act is called organizational ambidexterity – achieving it is a matter of budget and resources, but not only (read more about relevant skills and knowledge in this blog). Analyzing this trade-off can give you a basis to define the jumping off point for technological changes.
However, technologies do not evolve evenly, and whether a technology succeeds or not depends strongly on environmental conditions. Classic concepts like the S-curve model (Foster/McKinsey) and the technology life cycle (Arthur D. Little) have tried to evaluate technologies and give answers when to switch technologies based on their marginal utility and productivity. But these concepts have plenty of issues when applied, as they describe idealistic processes and neglect the role of conditions.
Even though technologies must be differentiated with regards to their potential impact and purpose (e.g., pacemaker technologies vs. basic technologies, etc.), there is a common ground where the JTBD framework can support you in understanding and dealing with these developments.
Let’s come back to our car industry example to illustrate this:
Even before 1886 (Carl Benz), there had been vehicles driven by machine power. However, neither steam-powered vehicles nor vehicles with electric motors were able to establish themselves at that time. The latter technology is currently celebrating its comeback (and the German automotive industry is accused of having slept through this change).
You might have asked, why did the electric motor not achieve its break-through 150 years ago? From an JTBD perspective, the answer is: because the technology was not able to solve the job-to-be-done, customer needs and related jobs better than the gasoline engine, at that time.
Today, a lot has changed: electric car technology is much more advanced to serve customer needs adequately, and it scores high on exhaust emissions and energy costs compared to gasoline and diesel units. Its renaissance is due to STEP changes (social, technological, economic, political developments) – this is a crucial point to keep in mind.
Let’s sum up: in order to decide whether a technology is fit for the future, it is crucial to have a clear job definition on the one hand, and to consider potential social, economic, and political developments, in addition to technological ones. How to address these questions will be pointed out in the following chapter.
The broad field of strategic or corporate foresight enables firms to identify potential external changes early by identifying so-called weak signals, emerging trends and developments. Technologies that have the potential to migrate from niches to primary markets can be detected, and developments of novel technologies facilitated.
Furthermore, by recognizing many potential future paths of STEP changes, and developing different perspectives and strategies how to shape and deal with these potential futures, strategic foresight supports the process of defining a coherent vision and corporate strategy. Various methods such as Scenario Development, Horizon Scanning, (Technology) Roadmapping, Technology Monitoring (see this Blog) or Delphi Technique are used within the processes of this concept.
In addition, the inner view, i.e. the capabilities, goals, and visions of the firm are considered within this framework and complete the picture. Thus, in combination with JTBD, a vision with clearly defined jobs to be served in the future can be developed.
For a successful tech recipe keep in mind: your customer’s jobs are the most important ingredients and give the flavor to the dish. Thus, develop a vision based on your organizational capabilities and clear customer’s jobs definitions, put potential technologies to the test against defined present and future jobs to be served by your firm and analyze relevant impacts of possible STEP changes. Bon Appetit!
You’re interested in Jobs-to-be-Done in the automotive industry and other industries? Register now for the JTBD Master Class Advanced on October 05-06, 2022 at MHP – a Porsche Company in Wolfsburg (Germany). Discuss about “How to Innovate Mobility and Create Measurable Value For People” and get practical examples in the area of Volkswagen AG.
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