In 2016, Clayton Christensen (father of the Innovator's Dilemma and professor extraordinaire at Harvard Business School) discovered that products didn't have intrinsic value and formatted the "job to be done" principle.
In his own words:
For me, this is a neat idea. When we buy a product, we essentially ‘hire’ something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we ‘fire’ it and look around for something else we might hire to solve the problem.
The aha moment for him? Consulting on why McDonald's would sell more or fewer milkshakes on any given day.
This wonderful insight rediscovered one of the fundamental contributions to business and the economic theory from Joseph Schumpeter more than a century ago. You don't sell products; products are only vehicles for creating value for your customers. And the way you'll divide the total value created between you and them defines your price (I paraphrase). And if you don't create value? Then you're a commodity and can only sell for as cheap as possible, without bargaining power.
In the late nineties, I was myself educated the hard way on this basic principle by having to digest how balanced scorecards worked in the pharmaceutical industry.
A balanced scorecard is a structured performance report tool that is implemented like Russian dolls in every part of a corporation's activity and that agglomerates in a (theoretically) simple dashboard to let the executive committee know if the business is performing or not. Actions and consequences in terms of value creation.
Later on, in late 2007, when I launched my consulting business on innovation, the question of value creation was center-stage. Soon enough, and admittedly after a few mishaps, I found a way to make industrial-grade tools focused on value creation palatable for startups and corporate incubators.
I'm still working with these principles daily, and my customers are all probably fed up with my 15 years-old ice-breaker: "Your product is not interesting."
Anyway, you understand that I wasn't very much impressed with Christensen's 2016 breakthrough.
But that sparked a quite bizarre questioning: Why someone as genuinely bright as this Harvard professor would only rediscover a basic business principle so late in his career? Why, even when publishing a book about his epiphany, did he offer very superficial (if not embarrassingly clumsy) tools to do proper value analysis? The only logical answer for me was that he was coming at this age-old problem only from a theorist's point of view. Not that he never worked with businesses, obviously, but he never worked in a business or in charge of one.
My best way to explain this is if you ask a Nobel prize physicist to understand and explain how to make bread, you'll get a proper and very solid framework within a few days.
The only thing?
It will always be a worse bread than the one made by a possibly illiterate sixteen-years old apprentice that woke up for the last six months at 4 am and got shit done in your neighborhood's bakery.
The other thing?
The day this junior baker has enough experience and decides to teach you how to do bread, he'll be the best bread teacher you'll ever have.
PS. I still give this article on how finance kills innovation written by Christensen in 2008 as an absolute must-read. I'm comfortable with my contradictions 🙃