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Posts Tagged ‘Disruption’

The Theory of Jobs to Be Done has the power of shifting perspective in the areas of marketing and consumer behaviour, customer choice in particular: it advocates changing the focus of marketers from consumers as targets to what the consumers or customers wish to achieve by ‘hiring’ their companies’ products or services. The Jobs to Be Done Theory (or Theory of Jobs in short) is the central theme in the book “Competing Against Luck: The Story of Innovation and Customer Choice” (2016) authored by Clayton M. Christensen (with three colleagues). Christensen, a professor of Business Administration at Harvard Business School, passed away in late January 2020 at the age of 67.  His book is one of the more illuminating, and nonetheless captivating, books I have read in the field in recent years; this post is written in tribute to Clayton Christensen and his valued contribution to knowledge and practice.

Christensen is probably known better to many engaged in management for his important, foundational work on disruptive innovation: how enterprises with original and ‘unorthodox’ approaches get to disrupt existing markets and unsettle incumbent companies or non-profit organizations. In many cases the new approach may alter the boundaries defining existing markets. Most often the innovation is technology-enabled, yet it is not all about technology but about a divergent and ingenuine way of thinking. The Theory of Jobs is actually aligned with his previous research: giving an innovative, better answer to a job consumers try to complete, where other solutions failed or disappointed, can cause disruption in a respective market.

Consumers have goals they wish to achieve or tasks they aim to accomplish — a ‘job’ is defined by a task or goal set by the consumer in a certain condition. More punctually, the ‘job’ is the progress consumers are making towards accomplishing their task, or getting the job done. It may often be constituted by a problem the consumer wants to solve. Christensen views consumer needs as something too vague and general, not describing closely enough the issue a customer faces and tries to resolve in a given situation. The job, however, is context-specific, described from the viewpoint of the consumer. The job can have functional, social and emotional aspects or drives that may change with circumstances (e.g., is George driving to work or spending time with his children in the mall? — in each case a milkshake can serve a different job, is Jane looking for something to eat in front of her TV or something to prepare for dinner for her family?)

The approach proposed by Christensen is not entirely new — it is inspired by a concept put forward by Theodore Levitt in the 1960s when criticising ‘marketing myopia’ — it is not the product that is of interest to consumers but what they need it for (e.g., solve a problem) or what they want to do with the product (e.g., people are looking for transportation, not necessarily for trains or cars, one does not buy the electric driller but the hole in a wall that can be made with it, for example to install holders for a shelf). In the same spirit, Christensen suggests that consumers do not buy products or services — they ‘hire’ a product or service to get a particular job done. Furthermore, the job does not dictate any specific type of product — a consumer may consider different types of solutions that lead each to hiring possibly a different type of product or service (e.g., taking a bus, riding a scooter, or walking {shoes}). However, Christensen seems to have evolved such ideas into a much more concrete plan for execution, one that goes beyond abstract needs and preferences to realistic tasks and goals, jobs encountered in specific circumstances in people’s everyday lives.

Customers remain central in the marketing strategies, plans and efforts of companies, but the emphasis of planning and analyses should not be put squarely on the customers and their characteristics (e.g., demographics, personality traits, lifestyles, needs, preferences). From the perspective of Jobs to Be Done, too much attention is given by managers to “who” the customer is, or even to “what” the customer did — the theory is focused  primarily on “why” the customer did something. Marketers have to understand much better the jobs that underlie the eventual choices made by customers. Because if  marketers understand why a certain choice was made, what job led to it in order to make progress, then they (and their associates) might be able to invent or develop an alternative solution (product or service) that customers would consider a better answer for that job the next time it arises. To obtain such understanding, Christensen and his colleagues advise that marketers should observe the behaviour of customers carefully and methodically (with aid of video), and listen to them. They propose five essential elements that should be captured in a struggle of a customer to make progress — what progress, circumstances, obstacles, compensating behaviour, and what makes a better “quality” solution.

A state of struggle is a crucial condition for a company to make impact on a customer’s choice– if a customer does not find himself struggling to get a job done, then one has no reason or motivation to replace his current solution, and is not likely to be open to alternative suggestions and offers. When a struggle does happen, a customer may ‘fire’ a product or service currently in use for the job in progress and ‘hire’ another as a solution to get the job done. Customers may be struggling to complete a job when a product they have so far employed turns out to be inadequate (e.g., terms of the job have changed, not necessarily due to the product’s fault) or its performance is disappointing. The theory seems to be concerned more with situations where the customer is not satisfied by the progress made with available solutions known to him or her and is voluntarily looking for alternative solutions. Additionally, customers may be struggling when they face a job for the first time. Whether a consumer is novice or experienced with a certain type of task or job, he or she may expand the range of product types and brands considered until identifying an apparently suitable solution for completing the job successfully (e.g., from the more usual and familiar options to the more novel and exceptional ones). Customers hire products or services, but may also fire others beforehand, and this can work in favour of a company or against it, thus creating threats as well as opportunities.

Christensen offers five ways where to find and uncover opportunities to create innovative solutions for Jobs to Be Done: (1) Finding a job close to home — gaps may arise in the more essential, daily and ordinary activities and tasks performed by consumers; (2) Competing with nothing — consider non-users who so far avoided tackling an issue or goal they have with available solutions because they believe those to be inappropriate or unsuitable for them — addressing ‘non-consumption’ can awake a new market segment; (3) Workarounds and compensating behaviours — when consumers cannot find a satisfying answer with available products or services offered as solutions they try to improvise and ‘invent’ their own solutions with existing means, often not intended for the made-up application — such cases should be identified to create a ‘tailored’ product-solution; (4) Look for what people don’t want to do — identify ‘negative jobs’ that are necessary but are seen as nuisance or burden (e.g., it comes at the worst time) to offer a relieving service that smoothens or reduces the burden of doing the job; (5) Unusual uses — a product that is consistently and constantly used for a purpose other than intended by the manufacturer may suggest a missing solution for an existing but unrecognised job that may now be fulfilled (this route seems close to the third route above). The five ways are briefly summarised here merely to demonstrate the scope of opportunities that Christensen (with his colleagues) opens up to practitioners to take initiative, not to rely on luck, and create innovative solutions that consumers may appreciate and adopt for their jobs.

The book “Competing Against Luck” is abundant with examples of jobs encountered by consumers and actual products and services developed and created to provide useful (working-functional) and fulfilling (social or emotional) solutions for them. The cases described help to illustrate jobs with different goals and in varying circumstances, and also to demonstrate research and enquiry methods for uncovering the jobs and devising solutions. The products and services cover a wide span of areas and domains for the interested readers to discover (e.g., distant online learning, shopping for matrasses, medical guidance and treatment, lodging, savings for children).

  • A Nugget for Thought: We could contemplate why men are shaving in different ways in the morning. Is M shaving every morning, every other day, or maybe just on weekends? M may be pressed in time for work and he just wants to keep a clean and decent look hassle-free (no time, no cuts, no mess); he can thus leave more time for other duties in the house before going out. His friend L may be keen about a particular look, an exact shape and cut of beard, that fits his self-image or the image he desires to have in the eyes of others (colleagues, friends etc.). We could also think about men who do not shave: N might grow a constant beard for religious reasons, but he may still wish to appear orderly and respectable, maybe even authoritative. The most suitable solution for the job of M may be an electric shaver whereas L may turn to a manual razor; N may be helped for his job by a set of scissors, a trimmer and a small brush. All three men would probably complete their jobs with some form of lotion or cream for their face (and beard). But are there any new devices, toolsets and services that can be made to help M, L, & N get their jobs done to even higher satisfaction and pleasure?

As an exception, I chose to conclude the post with a citation of Clayton Christensen from the chapter of Final Observations in the book “Competing Against Luck”  (p. 231):

I could go on for hours about how the Theory of Jobs helps us see the world in unique and insightful ways. Good theories are not meant to teach us what to think. Rather, they teach us how to think. I encourage you to continue the conversation from here in your home or your office after you put this book down.

I believe that this wish of late Clayton Christensen deserves to be adhered and fulfilled.

Ron Ventura, Ph.D. (Marketing)

Reference: 

Competing Against Luck: The Story of Innovation and Customer Choice; Clayton M. Christensen, with Taddy Hall, Karen Dillon and David S. Duncan, 2016; Harper Business (Harper Collins Publishers).

 

 

 

 

 

 

 

 

 

 

 

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Every once in a while air passengers are bound to suffer from disruptions to their travel plans because of strikes in airlines due to work disputes, primarily with their pilots. Disruptions mean they may get as bad as complete cancellation of planned and paid-for flights whereof passengers are left stranded in their home airport or in some foreign country (strikes mostly affect international flights). The painful outcome of those disputes and strikes is that everybody ends up bruised to some extent — the airlines and their management, employees, and obviously the passengers-customers — whether in the short-term or long-term, monetarily and non-monetarily.

The highest-profile strike of recent times relates most apparently to the German major airline Lufthansa. It is actually a dispute lingering since 2014, causing repeated waves of strikes by its pilots. But this blog article will focus more closely on another dispute and chain of strikes at the Israeli airline El Al because it has brought the airline too close to the brink of business collapse.  Incidentally, as in Lufthansa, this dispute is also going on-and-off since 2014.

Of course there have been strikes in other airlines (e.g., Air France, Korean Air, China Airlines [Taiwan]) but the disruptions at Lufthansa seem to surpass them all in scale. Most strikes, as in the cases listed above, are triggered by the pilots, and that is crucial because the whole operation of an airline depends on them, giving them a lot of power over the management and owners of the respective company. Moreover, the lives of so many people (passengers) are in the hands of the pilots, relying on their professional skills and resourcefulness. The hot public debate surrounding those strikes is usually whether the pilots are abusing that power or are they making justified claims towards their employers.

There are, nevertheless, other types of strikes, as in the case, for example, of British Airways where the latest dispute was called by cabin crew members, specifically those hired after 2010 in apparently worse terms than for their more veteran colleagues. The ensuing strike was particularly disturbing because it was declared on last Christmas and the following days running to New Year (a continued strike occurred in January 2017). But the strikes by pilots tend to differ from strikes by other airline employees in impact on the regular flight schedule and implications of the demands made.

  • Unfortunately for some passengers in Britain, that holidays strike at British Airways coincided with other sanctions by airport workers of a Swiss contractor. The article will refer later on to other sources of disruption to air travel versus strikes originated within the airlines.

The primary demand of the pilots of Lufthansa is for a pay rise at an annual average rate of 3.7% to be paid retroactively to 5,400 pilots over a period of five years since 2012. The pilots’ union claimed that their compensation has eroded with inflation due to a wage freeze, causing them “a significant loss of purchasing power”. Lufthansa offered a rise of 4.4% from now on to be paid in two installments and another one-off payment. Drastic disruptions to the airline’s flight schedule occurred most recently in November 2016 as no agreement was reached by that time.

On a single day starting the latest ‘wave’ on 23rd November Lufthansa had to cancel according to media reports around 900 flights, affecting about 100,000 passengers. That leg of the strike extended for four days, causing overall cancellation of nearly 2,800 flights, affecting 350,000 passengers. The strike resumed on 28th November for two more days, forcing the cancellation of 1,700 flights with around 180,000 passengers in total affected. It was planned to start with short-haul flights and then expand to include also long-haul ones. (Note: Only flights under the banner of Lufthansa were implicated, excluding  Brussels Airlines, Austrian Airlines and Swiss Airlines also owned by the  group). [Sources: The Guardian 23rd Nov.; Reuters 28th Nov. 2016.]

It is hard to put an exact figure on the financial damages from those strikes. Reports suggest that the airline’s cost accrued from each striking day runs in millions of euros; total cost to Lufthansa since 2014 is estimated at €500m. It is hoped the dispute is now coming to a close following arbitration; the airline agreed to a four-stage wage increase of 8.7% plus a one-off payment, awaiting final approval and confirmation.

The pilots in El Al have demands for pay rise and improvement of working conditions. The dispute over working conditions may tell even better how deep and bitter is the conflict between the pilots and the company’s management and owners. Two issues are most striking. First, the pilots complain of an unreasonable workload because the airline is adding too many flights to its schedule, including to new destinations, and which they cannot sustain — the pilots argue they risk arriving to flights too tired and unfit to perform them. The second issue concerns the terms of employment of pilots ages 65-67: Retirement age in Israel for men is currently 67 but recent global regulation (2014) determines that pilots of age 65 and above cannot fly passenger aircrafts. The last strike over the dispute as a whole took place in mid-November 2016. An initial agreement was almost signed when the second issue triggered an additional strike in the past month. To resolve the age gap El Al suggested the senior pilots will work as instructors and examiners and in other managerial jobs but their income will be reduced considerably. The pilots did not agree to this condition. Last week a draft agreement was signed that will hopefully put an end to the dispute and the annoying disruptions of flights — but no one yet is ready to assure passengers of no more surprises.

El Al’s passengers had to suffer from flight delays and cancellations during several strikes. Although there were not too many cancellations that El Al had to announce (certainly not anywhere near as many as for Lufthansa), the ‘surprise’ nature of disruption of normal schedule was hard to tolerate and resolve — pilots would simply inform El Al at the last minute that they are sick and cannot attend their flights. El Al would then struggle to find replacing pilots from within and outside the company, leading in the ‘fortunate’ cases to delays of up to 12 hours in flight departures and in worse cases to flight cancellations. This mode of action by the pilots threatens to destroy customer confidence in the service provider as disruption comes completely with no warning and no preparation — the passenger arrives to the gate for his or her flight, yet the pilot does not. El Al tried to hire other airlines to execute the flights in jeopardy, a reasonable reaction that angered pilots even more (they argued it was more of a routine by management to deliver flights added to the already-busy schedule). All this wrangling was fought on the back of passengers.

The pilots and the airline’s leadership were so embroiled in their dispute, publicly attacking each other with all sorts of allegations, that they may have not been able to see anymore how this conflict appears especially to customers, nor how it affects them. Of course each side apologised and claimed they cared dearly about the customers, but it became increasingly difficult to believe them. Some of the details that were revealed were rather bizarre and difficult to accept. For instance, the allegation that pilots are extending long-haul flights by up to an hour to exceed 12 hours (e.g., to North America) to gain a bonus. Or, the pilots’ requirement that they would return from long-haul flights in Business Class and be paid as if they carried out the return flight to Israel. These claims made it harder to support the pilots’ struggle.

The pilots were not doing too well in gaining the support of the consumer public. They have let their grudge with the employer to be targeted at passengers. For example, during a flight in last November from a European city to Tel-Aviv they refrained from talking to the passengers and giving them customary updates about flight progress, weather conditions and other information. The captain indeed gave a welcome message at the beginning of the flight but not at half-time or towards the end of the journey as in the normal conduct of rapport on El Al’s flights. Before landing there was only a standard recorded message. It has to be understood that the Israeli public holds the pilots at high esteem and credits them with making El Al one of the safest airlines globally. Hearing the voice of the captain or first officer giving their messages to passengers is an important part of the relationship — it goes beyond the information conveyed in carrying a voice of authority, reassuring and friendly. At the end of the flight, while passengers disembarked, the pilots also remained seated in their cockpit cabin, another irregular conduct. It is a sad mistake, just like a statement made on TV by the union’s representative in the last strike that El Al’s pilots “could not find the motivation” to attend their flights, an agitating statement and a poor display of disrespect.

However, the owners and senior management of El Al should not feel comfortable and content either about their performance.  It seems they were not listening close enough to warnings from pilots for months about the course of the company. El Al’s leadership has chosen an aggressive strategy of expansion at all cost in an effort to hold on in an open competition on airway routes. This expansion included addition of destinations, increasing the frequency of flights, and the launch of a low-cost subsidiary (“Up”). El Al is trying to do something it simply cannot — it cannot become Lufthansa and it cannot beat airlines like Ryanair or EasyJet. The airline’s leadership must re-consider  the range and number of its destinations with respect to its resources.

The alternative cost of the expansion is negligence of the quality of service on board its flights — over recent years the airline omitted benefits to passengers in Economy/Tourist Class such as drinks served (including personal servings of wine or beer), free Israeli newspapers on flights home, and failing to upgrade their entertainment systems on airplanes in medium-range flights (3+ hours). Creating tourist sub-classes nowadays from standard to premium may start to correct the existing deficiencies. El Al must re-instate a realistic focus on quality of service and regain a competitive advantage on assets it can support — service onboard in addition to security and safety.

Flight disruptions may result from events other than a strike at the airline: take for example terrorist attacks or threats, strikes of airport workers, and phenomena of nature such as heavy snow or the event of volcanic ash clouds created by the eruption in Iceland in 2010. Yet, on these occasions an airline can justifiably claim to be upset by a “superior force” not in its control. It does not have that kind of protection when the disruption originates within its organization. Travel customers purchase their flight tickets from the airline and hence they least expect the airline to be the source of disruption. Besides the legal terms, there is a contract of the airline’s brand with its customers to be consistent and reliable in serving them and providing them value for their money. That is also the essence of keeping a brand’s promise.

Passengers endure different types of cost due to a flight disruption, foremost in the case of outright cancellation: financial losses (e.g., flight fare itself if cancelled, continued flights missed, ground services in the destination country such as lodging and transportation, and business-related damages when applicable), inconvenience of making new travel arrangements or cancellations, and the anguish of going through the ordeal. In some cases being stranded in a foreign country may cause greater costs than if being still in the home country. Beyond the bad experience of dealing with the disruption itself, one should not underestimate additional less direct costs: (a) putting off the excitement of anticipation before leaving on a vacation or for a special event, causing deep disappointment and frustration; (b) spoiling the enjoyment of a trip at its end on return home, causing anger and sadness (happy or unhappy memories of an experience are affected by its peak-moment, up or down, and its ending).

The disruptions in El Al because of the pilots’ strikes may have not been as severe as in other large airlines, particularly in Lufthansa, but the dispute threatened to have  much more severe consequences for the airline:

  • First, because something basic in the trust and confidence of Israeli consumers in El Al, which is essential for its survival, was in critical danger of being broken.
  • Second, El Al does not have the financial backing of a company like Lufthansa and probably other “big players” and cannot tolerate the same level of losses and damages to its brand stature.
  • Third, El Al allowed the dispute to build-up with increasing animosity and disruptions until it was very close to a tipping-point of collapse — pilots in charge of divisions of its aircraft fleet have officially resigned and the final trigger would have been resignation of El Al’s chief pilot. Was it necessary to threaten to fire the last fatal bullet?

The Israeli public still perceives El Al as its national airline although it is now in private ownership.  All stakeholders within the organization should bear that responsibility and share the interest to act carefully and cleverly to maintain that position. It is highly important for preserving the loyalty of their core target segment of Israeli consumers, but no less vital, remaining a preferred airline for Jews around the world. This strength, and further measures of improved business focus, can also increase its attractiveness to any tourists visiting Israel for flying El Al.

Ron Ventura, Ph.D. (Marketing)

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