What did I learn about JTBD Growth Strategy Matrix from Tony Ulwick?
A couple of weeks ago, I got to attend a workshop on JTBD and Outcome Based Innovation in Munich from the master himself, Tony Ulwick. I also received a signed copy of his book, Jobs to Be Done. It was a privilege to meet the man in person who has shaped and influenced my product thinking over the years. I have often written about his book, What Customers Want on my blog and podcast. In the workshop though, Tony talked about the JTBD Growth Strategy Matrix, a framework that over the years has helped generate hidden growth opportunities for many organisations that includes Microsoft, Bosch, Arm and Hammer, and many others.
In this post, I would like to summarize the JTBD Growth Strategy Matrix.
It all begins by knowing your customer’s needs. Once a company knows all the customer’s needs, which of the needs are under-served and over-served, and what unique under and over-served segments of customers exist, it must decide if and how it will target each segment.
A company must decide what strategy should be pursued to ensure it wins in the marketplace.
Over years of several client engagement, Strategyn arrived at a strategy framework that:
i) Explains what causes new product and service offerings to win or fail in marketplace, and
ii) helps to select the growth strategy that fits the situation and will ensure a win in the marketplace.
When Strategyn used the Jobs-to-be-Done Theory to examine product successes and failures, they observed the same phenomenon time and time again:
New products and services win in the marketplace if they help customers get a job done better (faster, more predictable, with higher output) and/or more cheaply.
This simple observation led us to the effective classification of five unique growth strategies companies can adopt in the quest to win in a market. This resulted in the creation of the Job-to-be-Done Growth Strategy Matrix, a framework that illustrates when and how these strategies should be used. With these framework, companies can understand past successes and failures and can adopt a strategy to create winning products and services in the future.
JTBD Growth Strategy Matrix
The matrix suggests that companies can create products and services that are:
Better and more expensive
Better and less expensive
Worse and less expensive
Worse and more expensive
Here is what each of the categories mean:
BETTER+More EXPENSIVE: A better performing, more expensive product will only appeal to underserved customers. These are customers who have unmet needs and are willing to pay more to get a job done better.
BETTER+Less EXPENSIVE: A better-performing, less expensive product will appeal to all customers.
WORSE+Less EXPENSIVE: A worse-performing, less expensive product will appeal to over-served customers (those with no unmet needs). It will also appeal to non-consumers.
WORSE+More EXPENSIVE: A worse performing, more expensive product will only appeal to customers for whom limited (or no) alternatives are available. This happens in unique or atypical situations.
Stuck in the middle: Some products are stuck in the middle (to borrow a term from Michael Porter): they only get a job done slightly better or slightly cheaper. Such a product will likely fail to attract any new customers. This is clearly a poor strategy for a new market entrant , but it may help an incumbent company retain existing customers.
Next, we place the customers in the respective quadrants, highlighting the differences in the target customer types:
They concluded that each of the five situations warranted its own distinct strategy:
The product/service strategies introduced in this framework are defined as follows:
Differentiated strategy: A company pursues a differentiated strategy when it discovers and targets a population of under-served consumers with a new product or service offering that gets a job done significantly better, but at a significantly better price.
Dominant strategy: A company pursues a dominant strategy when it targets all consumers in a market with a new product or service offering that gets a job done significantly better and for significantly less money.
Disruptive strategy: A company pursues a disruptive strategy when it discovers and targets a population of over-served customers or non-consumers with a new product or service offering that enables them to get a job done more cheaply, but not as well as competing solutions.
Discrete strategy: A company pursues a discrete strategy when it targets a population of “restricted” customers with a product that gets the job done worse, yet costs more. This strategy can work in situations where customers are legally, physically, emotionally, or otherwise restricted in how they can get a job done.
Sustaining strategy: A company pursues a sustaining strategy when it introduces a new product or service offering that gets the job done only slightly better and/or slightly cheaper.
Here’s my picture with Tony:
