The future does not have to be so gloomy. Newspapers need only consider the jobs readers are trying to get done when they turn to a newspaper. Once the newspaper understands those jobs-to-be-done, it will understand ways it can offer its readership unique value.

Consider the culture section. Maybe not the first place you’d look to save the newspapers, but even this section provides interesting opportunities to generate revenues. What job are readers of the culture section trying to get done? An off-the-cuff response might be that they are trying to:

• learn about current exhibitions and other cultural events
• get background information on artists and learn about new artists
• collect various other types of information about cultural subjects

But let’s expand that first job. Why does a person want to learn about current exhibitions and other cultural events? For many, it’s because they want to identify events to attend. If that’s the case, in what other ways could a digital newspaper help readers get the job done?

• It could let readers select events they are interested in attending and drop them directly into the readers’ agenda.
• It could let readers send a message about the event to friends, asking them whether they want to attend.
• It could sell readers tickets so they do not need to wait in line.
• It could sell readers ancillary materials associated with the event, such as an exhibition catalogue.
• If readers desired, it could organize transport to the event and reserve them lunch there.
• It could alert readers to similar events in the future as they come up.

None of these services fall within the typical job description of the culture section of a newspaper, and yet by providing them, the culture section would be helping its readers get their job done much more completely. Newspapers—wellsprings of information on new ideas—should not let themselves be trapped by hidebound definitions. By embracing the opportunity to provide new services, newspapers can blaze a trail to success.

Tony Ulwick, Strategyn CEO and founder, recently spoke at the 10th annual Innovation Forum in Vienna, Austria, about how to use jobs-to-be-done thinking to successfully grow into new markets.

During his talk, “New Market Creation: How to Successfully Grow into New Markets Based on Jobs-to-Be-Done Thinking,”  Tony shared several examples of successful new market creation.

Nest, a self-teaching thermostat, does more than just provide a specific room temperature; it alters other room parameters (humidity, scent) and delivers comfort.  The result: it successfully commands a price that is seven times higher than that of conventional thermostats, reaping a 20% share of the profits despite having only a 5% share of the thermostat market.

Apple’s iPhone, in addition to helping its users with the job of communication, performs thousands of clearly defined tasks for its customers through its many apps.

Tony predicts that Apple’s anticipated iTV will continue in the iPhone’s innovative tradition. While most producers of TV sets focus on improving image quality and increasing screen size, the iTV will cover the needs of the customer based not on the TV itself but on customers’ TV consumption–for example, helping them organize programs and automatically adjusting content depending on the viewer.

Prerequisites for Success

Knowing all your customer’s needs. Many companies today still ask the wrong questions when trying to develop new products and businesses. They think they are customer oriented, but relying on the “voice of the customer” rarely leads to groundbreaking innovations. Customers can only articulate what they know, but companies can find out what customers really want by asking about the job they are trying to get done. By analyzing the job and the multiple products or services customers currently rely on to get it done, companies can learn all the customers’ needs and help them successfully get the whole job done.

Providing significant improvement in execution of a job. Customers will pay more and switch brands only for a product or service that is a significant improvement over current solutions.

The formula for success is knowing all the customer’s job-related needs, focusing on the ones that are most important and yet poorly addressed by current solutions, and creating a product or service that meets those needs much better.

Tony shows companies that focusing on what customers need to get the job done better is the key to successfully breaking into new markets. Slides from his presentation are below.

But we have a different view. We think Ron Johnson actually didn’t understand what makes Apple successful. This may seem difficult to believe given Apple’s retail success. But let’s look at what Ron Johnson has said and contrast it to what Steve Jobs has said. We believe most people, including Ron Johnson, take away the wrong lessons from some famous Steve Jobs quotes.

Johnson’s tenure at JC Penney was clearly a disaster. Sales dropped 25% in 2012. Johnson decided JC Penney customers didn’t want the hassle of dealing with coupons and sales and would prefer an upscale atmosphere in lieu of bargain racks.

Johnson rejected testing any of his radical changes because he claimed, “just like at Apple, customers don’t always know what they want.”

This myth, that “customers don’t know what they want” has frequently been attributed to Steve Jobs. So what was Steve Jobs really saying? And how does Apple really innovate?

The key to answering these questions is using precise language to describe the innovation process. If you look at two quotes from Jobs, you can see how he could be misinterpreted, even by someone like Johnson who worked for Jobs.

First, Steve Jobs said: “you can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” And second he said, “you‘ve got to start with the customer experience and work back toward the technology – not the other way around.”

So what do these two statements mean? And how could Ron Johnson misinterpret them? In our view, the key to these statements are two missing words: “products” and “jobs-to-be-done”.

If you combine these two statements and add the missing words, you can clearly see what Steve Jobs was saying: “customers don’t know what products (i.e. solutions and technologies) they want, but they certainly know what job-to-be-done (i.e. customer experience) they need to accomplish.”

This is profoundly different than saying “customers don’t know what they want,” meaning that they don’t know what needs they have. Companies make this mistake all the time. Here is a simple example. If you asked a thousand cooks what products they wanted, they would almost certainly never come up with the microwave, which would require extensive technical knowledge and expertise.

But if you asked the same cooks about preparing food (the job-to-be-done), they could tell you absolutely everything about the difficulty and frustrations of preparing food quickly, predictably, and successfully. These metrics related to speed, stability, and output of executing the jobs-to-be-done are the customer needs. They are knowable, measurable, and actionable. Understanding the “experience” of cooks (i.e. their jobs-to-be-done) is critical to increasing the innovation success rate and mitigating the risk of investing in a failed product.

Ron Johnson took away the wrong message from Apple and decided not to analyze the jobs-to-be-done for JC Penney customers. Like almost every innovation effort that fails to analyze the customer’s job-to-be-done first, Johnson’s effort was a failure. But his biggest failure may be learning the wrong lesson from Apple and his former boss.

But Apple doesn’t create products based on what the competition is doing. It creates products to improve the lives of its customers, which is why Apple has been and will continue to be successful.

When asked about Apple’s fight for market share in the ever-growing smartphone industry, CEO Tim Cook stated that Apple’s goal is simply to make good products for its customers. While this customers’ needs first approach frustrates investors who only care about the bottom line, it works over the long-term. Apple’s products are inherently more user-friendly, thus more people are happy with their purchases and stay loyal to the brand. This vision is what has made Apple so prosperous, and they have accomplished it by using jobs-to-be-done thinking.

Jobs-to-be-done thinking is about focusing on the goal (or job) a person wants to accomplish and creating a product to meet that goal rather than just creating a product and then trying to find a use for it, which is how most companies innovate. By using this method, Apple hones in on what is most necessary for their phones to be useful to consumers and improves upon those aspects instead of just adding a bunch of pointless new features or technologies.

Neither Jobs nor Apple invented the smartphone. What they did invent, however, was the fastest selling smartphone of all time. How? By focusing on the jobs customers wanted to achieve through their phones. People aren’t buying a phone. They are buying something that helps them accomplish a job – whether it’s communicating with other people (remember voicemail before the iPhone!), checking e-mail (remember email on a phone before iPhone!), or looking up directions – in the best way possible. Apple’s iPhone was easy to use, incredibly functional and got these tasks done better than other competitors, which is why it continues to sell today.

As the iPhone has evolved, Apple has continued to reinvent it through the jobs-to-be-done lens. Critics have complained that now that other smartphones have entered the market with fancier features Apple isn’t going fast enough. They assume that if each new generation doesn’t add on at least ten new extravagant extras then consumers’ needs won’t be met. So then why do customers continue to buy the iPhone in record numbers?

Because the iPhone is satisfying customer needs, and importantly, the iPhone is not over-satisfying needs. Apple has always focused on improving the customer experience and avoiding unnecessary elements. It’s tempting for companies to add new components to each new product, but that doesn’t make them innovative. If we look at the different iPhone specs over the years, we see that the iPhone 5 has made huge advancements over the original iPhone. It has a great deal more memory, higher resolution, a faster processor, a larger screen, and lighter weight. And Apple constantly releases software updates in between phones. All these improvements help people get jobs done quicker and easier, leaving them satisfied with their iPhone purchase and not wanting for more.

With the smartphone market becoming saturated with cool apps and frills, it’s easy to criticize the simplicity of Apple that was once so highly praised. But customers aren’t stupid. They aren’t buying into more for the sake of more. They want the best phone for the job, and that is still the iPhone. Apple will continue to innovate and update their products based on the job consumers need to accomplish and not on what everyone else is doing. It is why they dominate the market.

As the pioneers of jobs-to-be-done thinking, we have learned that much of this failure can be explained by looking at the problem from a different perspective. As we worked with over a third of the Fortune 100 companies over the past two decades, we analyzed the innovation process through a jobs-to-be-done lens. Through this work, we have concluded that these are the top ten reasons products fail:

1. The chosen market doesn’t hold significant revenue potential. It is impossible to have a billion-dollar idea in a million-dollar market. Targeting a market that has few job executors, or customers that don’t struggle to get the job done, may never result in revenue growth.
2. The market is defined too broadly. Focusing on helping customers get loosely defined, lofty, or emotional jobs done makes innovation more challenging and success less likely.
3. The market is defined too narrowly. Focusing on helping customers get one or two steps of a job done, when the actual job is much larger and complex, will likely lead to underwhelmed customers.
4. A product improvement strategy is followed when what is needed is a new product. When the only unmet needs in the market cannot be addressed by adding new features to the existing product, a new product is needed to get the job done better. Improving the existing product is a waste of time.
5. The product doesn’t get the job done any better. The product may address the same needs as competing solutions, but fail to address additional unmet needs and add additional value.
6. The product isn’t targeted at the most underserved segment. Every market has a segment of customers that struggle more than others to get the job done. Not knowing who these early adopters are makes success less likely.
7. The product doesn’t address all consumption chain jobs. Products won’t succeed if customers find it difficult to acquire, set up, use, maintain, or upgrade them. The product is less attractive if it fails to address all the consumption chain jobs.
8. The product doesn’t address the entire job. It may help customers get parts of the job done well, but not the whole job, leaving customers to cobble together the rest of the solution.
9. The product gets the job done better, but not enough to matter. People may not buy or switch to a product that gets the job done 1 or 2 percent better. Significant improvement (20 percent or more) is usually required to gain a market leadership position.
10. The product isn’t priced to win profit share. A great product may be underpriced if it is unclear just how much value the product is delivering customers. This leaves revenue and profit on the table.

Products fail along these fronts because the innovation process companies use to create them do not mitigate these risks. This is why our innovation process, Outcome-Driven Innovation, is different and works. It was built from the ground up to mitigate these and other risks. Doing so has enabled us to launch products with a success rate that is five times the industry average. Seeing innovation through a jobs-to-be-done lens offers insight that explains why products succeed and fail.

Let’s address the first prerequisite. While nearly everyone in a company is responsible for product improvement, it is management, and management alone, that is responsible for new product creation. New investments require strategic decisions to be made. How those investment decisions are made will ultimately determine whether or not the company achieves its long-term growth objectives. Consequently, this group of people should be chosen wisely and formally entrusted with a charter to drive new growth.

If all companies had such a team, the companies that would prevail would be those that made the best decisions with the fewest mistakes. Here is where we come to the second prerequisite of an effective innovation strategy: companies need the processes and tools to answer four key questions that drive higher new product creation success rates:

1. When is the right time to replace an existing product with a new one?
2. What new markets should we enter?
3. What new products do customers want that will generate the needed revenue growth?
4. What segments do we target to optimize profit share?

My team and I have spent the past 22 years working with Fortune 100 companies to create an innovation process that effectively answers these four questions and more. It is called Outcome-Driven Innovation. This process was first introduced to HBR readers in 2002 in the article Turn Customer Input into Innovation. After being introduced to this thinking, Clayton Christensen dedicated a chapter in The Innovator’s Solution to “jobs-to-be-done” thinking, citing our work and the Outcome-Driven Innovation process. We revealed how we map the customer’s job-to-be-done in the 2008 HBR article The Customer-Centered Innovation Map. We have five patents on this process, and our latest (issued in 2012) relates to market sizing and pricing.

Our two decades focused on this problem have produced remarkable advancements: our innovation strategy increases the new product creation success rate to well over 50 percent. As discussions on reinventing innovation take place within your company, we are happy to share what we have learned (download the Outcome-Driven Innovation white paper). Our mission is to help companies implement an innovation strategy that delivers predictable growth.

This just isn’t true. The ideal customer experience is dependent on far more than picture quality: it must help people get the entire job done, not just part of it. When my wife and I find that we have an hour or two to sit down and watch TV, we often spend 20 minutes or more trying to find something of interest to watch. The frustration is often more than its worth and we end up doing something else. If we do select content we are unfamiliar with, we are often disappointed. We are not alone. The process of finding, organizing and viewing desirable content is archaic.

Today’s solutions fail us because they do not help us get the entire job done. We are left to cobble together a number of incompatible solutions to help us try and find, organize and view content so we can enjoy ourselves for an hour or two. SmartTV leaves a lot to be desired. Samsung’s hardware mentality leaves them at risk for disruption from new entrants, like Apple, which has declared this a market of “intense interest”. If Apple uses the same thinking here as it did to create the iPhone or the iPad, its iTV will succeed. They get it, and here is what they get:

First, they know that people want to view content that they are interested in and enjoy, whether it originates from a major network, a film producer, a family member, YouTube or from anyone with the desire to create it. I suspect the iTV will accommodate these options.

Next, because Apple has historically looked at customer problems through a jobs-to-be-done lens, I also suspect that once again they will have correctly identified all the steps in the job that I, and thousands of others, are struggling to get done. They know the ideal solution must get the entire job done, not just part of it. For this reason, I believe the iTV will enable viewers to quickly, conveniently and effectively:

1. Identify who it is that wants to watch the TV.
2. Identify what content is of most interest to them.
3. Prioritize the order in which the content should be viewed given how much viewing time is available.
4. Organize content in the optimal order for viewing.
5. View the content without interruption.
6. Execute other “jobs” while viewing the content.
7. Make changes in what content should be viewed, given changes in who is watching and available viewing time.
8. Learn about other content as tastes change.
9. Share their experiences with others.

No longer will my wife and I have to search 20 minutes for something to watch. Our best options will be queued up for us in advance so we can say “watch” and we will be suitably entertained.

Lastly, if history is any indicator, Apple will make sure that the iTV is easy to purchase, set-up and interface with. It will also be easy to upgrade and never require maintenance or repair. As Steve Jobs told his biographer “I’d like to create an integrated television set that is completely easy to use.” Doing this will ensure the customer’s emotional jobs are also satisfied.

Can Apple create such a television? Well, of course it could, but will they? Under Steve Jobs, Apple had a history of creating such products. Apple is big enough to take on the incumbents in this market and win. The iTV will be telling. Will it address the job-to-be-done like previous Apple products, or not? The answer will say a lot about Apple’s ability to innovate without Steve Jobs, and its future.

We have the utmost respect for Christensen, who has been a steadfast advocate of jobs-to-be-done thinking for nigh on a decade. However, our own two decades of experience with jobs-to-be-done thinking compel us to point out that his milkshake marketing example is fundamentally flawed. The flaws show just how hard it is to apply jobs-to-be-done thinking correctly and to launch successful innovations as a result.

In the video and article, Christensen ponders why, at the beginning of a working day, commuters go into a fast-food establishment and buy a milkshake. “What job are they hiring the milkshake for?” he asks. He concludes that this segment of milkshake consumers are hiring the milkshake because “they face a long, boring commute and need something to keep that extra hand busy and to make the commute more interesting.” In other words, the job-to-be-done is “to face a long, boring commute.” Or perhaps it is “to keep that extra hand busy” or “to make the commute more interesting.”

The end result of any market insight should be innovation, but to our knowledge, no restaurant or fast-food establishment has capitalized on Christensen’s insight and introduced a breakthrough breakfast milkshake that garnered skyrocketing sales. Why not? In our view, it is because both Christensen’s view of what the job-to-be-done is in this case and his starting point for the market segmentation analysis are incorrect. Consequently, he ends up reaching the wrong conclusions about what the restaurant should do to innovate and grow its revenues.

Let’s start with the first problem. The jobs Christensen identifies are not jobs-to-be-done. Specifically, they are not outcome-driven jobs, which means they are not jobs that can be addressed with products. Nor are they markets. In order to be considered a market, a job-to-be-done needs to be the key task or goal the customer is trying to accomplish. Facing a long, boring commute, by contrast, is not a key task or goal. It is a context within which you execute a job. Put another way, if the commute is long and boring, then it might be nice to make it more interesting, but the commute itself is not a goal you set for yourself, it is only a situation you find yourself in. To define the job-to-be-done correctly, the first thing we must ask is, “What job are people trying to get done when they stop at the quick-service restaurant in the morning?”

Using our proprietary techniques and rules to define the customer’s job-to-be-done, we researched this market and concluded that morning commuters are not buying milkshakes to make the commute more interesting or to keep their extra hand busy. Instead, morning commuters are trying to “get breakfast on the go.” This is the job-to-be-done. They want to get and eat breakfast in their cars while driving to work.

Identifying the job correctly is critical because everything else in the innovation process (identifying the customer needs, segmenting the market, sizing the growth opportunity, generating feature ideas, creating messages, etc.) depends upon that first step.

Now for the second problem: market segmentation. After identifying the job-to-be-done, we segment the market based on differing ways in which customers (the job executors) struggle to execute the job. We segment markets to identify under- and overserved customers and new opportunities to pursue. So we always start with the job-to-be-done and then segment the customers (the job executors) to determine if and how they struggle differently when executing the job.

Christensen’s does the opposite, and this is a mistake. Instead of asking, “What job are people trying to get done when they stop at the quick-service restaurant in the morning?” he asks, “What job are people hiring a milkshake to do for them?” He then calls the different jobs he discovers, such as making the morning commute more pleasant or keeping the kids quiet, “segments.” But these are not segments of customers that are struggling in different ways to get a job done. These are customers that are engaging in altogether different jobs. Christensen fell into the product-centric trap that most companies fall into: making the goal of innovation to sell more of an existing product (milkshakes) instead of creating the best product (which may not be a milkshake). The customer-centric goal of innovation should only ever be to create the best product to get a job done, without reference to particular solutions.

If the focus is on morning commuters trying to get breakfast on the go, here’s how jobs-to-be-done market segmentation should be executed:

Once we define the job correctly (getting breakfast on the go), we uncover all the metrics customers use to measure the successful execution of the job. These metrics are the customer’s needs or desired outcomes. They are uncovered by first creating the job map (defining the steps in the job) and then uncovering the metrics in each step. In this market, more than 100 needs exist, including needs related to ordering, receiving, organizing, eating and disposing of the meal.

With all the needs uncovered, we then quantify with hundreds of customers which needs are most important to them, but poorly satisfied with the current solutions (biscuits, milkshakes, eggs, etc.) they choose today. It is with this data that we segment the market. Using factor and cluster analysis, we uncover groups of morning commuters that struggle differently when executing the job-to-be-done. These different groups of commuters are our segments.

Using this approach, we may find a segment that has underserved needs related to ordering and eating the meal, while another segment may have underserved needs related to receiving, organizing, and disposing of the meal. Many possibilities exist. Different products and services may be required to address the different unmet needs of each segment. With this insight, new opportunities for growth are revealed: opportunities that milkshakes cannot address.

This is exactly what we discovered when we helped Bosch create the CS20 circular saw. We studied carpenters (the job executor) who needed to cut wood in a straight line (the job-to-be-done). Using the segmentation methods described above, we discovered one segment of carpenters who struggled because they had to make very complicated cuts. They had 14 unmet needs. We also found a segment of carpenters that make simple cuts and were overserved. The CS20 saw didn’t address the overserved segment, but it did address the 14 unmet needs in the segment that had to make complicated cuts. Eight years after its introduction, this award-winning saw is still very successful for Bosch. This is how we intended jobs-to-be-done market segmentation to be performed.

The way we apply jobs-to-be-done theory not only offers a fruitful new approach to market segmentation, it also opens the door to new ways of thinking about market sizing, ideation, concepting testing, product positioning, and other aspects of innovation. All this thinking is embodied in our innovation process, Outcome-Driven Innovation (ODI).

The goal of the innovation process is to come up with breakthrough ideas that address unmet customer needs. To execute this process, many companies have adopted a “failing fast” approach to innovation. Using this approach, companies generate lots of ideas and then work to quickly and inexpensively determine which ideas customers like best.

Unfortunately, failing fast is a high-risk guessing game that cannot be won. It is built around a gambling mentality that is doomed to failure. First off, the chances of randomly coming up with an idea that addresses all the customers’ unmet needs significantly better than competing solutions is near zero. The new product success rate is less than 2 percent. Given these low odds, companies have reached a flawed conclusion: just like spinning the roulette wheel more frequently doesn’t change the odds of winning, neither does generating more ideas and failing fast. Thinking that it does defies the logic of probability and statistics. The good news is, companies do not have to keep gambling away their future.

Over the past 21 years we have reinvented the innovation process. We did it by looking at the problem through a jobs-to-be-done lens. From this perspective we discovered a systematic method for creating breakthrough product and service concepts. It is called Outcome-Driven Innovation. This process is designed from the ground up to mitigate the risks that cause new products to fail. To start, the process does not begin with an idea. It begins with a series of steps that are designed to acquire the inputs (the insights and information) that are needed to systematically construct a breakthrough solution in an attractive market.

Here are the innovation process steps associated with Outcome-Driven Innovation and the order in which we execute them to dramatically improve the innovation success rate:

1. Select the customer: define who it is that will use the product or service you want to create.
2. Define the job you want to help that customer get done: after all, people buy products and services to get jobs done.
3. Uncover all the customers’ needs: these are the metrics customers use to measure success when executing the functional job-to-be-done.
4. Determine which needs are unmet: uncover market opportunities by discovering where customers struggle to get the “job” done.
5. Discover the most attractive segment to target: this is often the segment of customers that struggle most to get the job done. They have the greatest need and will often pay more.
6. Evaluate the market potential: size the market based on the number of underserved job executors in the target segment and what they will pay to get the job done perfectly.
7. Identify your competitor’s weaknesses: evaluate competitive products against the customer needs to see where they fail to get the job done well.
8. Formulate the product strategy: decide what segments and unmet needs to target and decide whether to pursue a disruptive, breakthrough, sustaining, or product improvement strategy.
9. Target a price: determine what price the target customers are willing to pay to get the job done perfectly.
10. Construct the product or service concept: systematically construct a solution that will best address the customer’s unmet needs, helping the customer get the job done significantly better.
11. Test the concept: test it against all the customer metrics to ensure it gets the job done well enough to justify the price point and win in the market.
12. Position the concept: do it in a way that appeals to the customer’s unmet needs and emotional jobs.

This innovation process works because it links a set of customer-defined metrics to every step in the process and enables the systematic creation of valued products and services that help customers get their jobs done better. The Outcome-Driven Innovation process is a breakthrough in innovation.

With the advent of jobs-to-be-done theory comes an opportunity to redefine innovation from the customer’s perspective. Over the past decade or so, we have made it top priority to create a new language of innovation; a language that provides a common framework to understand the innovation problem – and a new solution.

This language of innovation looks at the process through a new lens. It is very precise and useful in understanding how an effective innovation process works. Here are the terms we use to define the concepts that comprise jobs-to-be-done theory and our innovation process, Outcome-Driven Innovation (ODI).