Ideas

IDEAS | CLAYTON Christensen, Taddy Hall, Karen Dillon, and David S. Duncan

The customer may be king, but he’s also the boss

Taylor Callery for the Boston Globe

For Southern New Hampshire University’s president, Paul LeBlanc, it was the third commencement ceremony in a single day. Even in the Verizon Wireless Arena, with some 12,000 seats, the number of graduating students and families was too large to fit in one sitting, and the school had to stage three separate events. So this time, instead of wading into the usual jokes and graduation platitudes, LeBlanc decided to go off his script.

“If you served in the military or are serving in the military, and are graduating today, please stand for a moment,” he asked. “If you are, as I am, the first generation in your family to get an undergraduate degree, stand. If you’re getting a degree today, and you also have kids, please stand.” By the time he finished, virtually every member of the graduating class had been on his or her feet.

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As the crowd roared, LeBlanc, usually a poised speaker, choked up for a moment. Achieving that degree, against considerable odds, was an enormous accomplishment for the people in caps and gowns that day. “They recognized what they’d done,” LeBlanc later recalled. “No one in that graduation ceremony had it handed to them. There’s so much that gets in the way of that happening — finances, busy lives, lack of academic preparedness, feeling like you don’t belong. They’d truly earned that moment.”

The vast majority of Southern New Hampshire University’s students will never set foot on its modest Manchester, N.H., campus. But that hasn’t stopped those students from making progress toward their goals. In fact, so many have chosen SNHU that by the end of fiscal 2016, SNHU was closing in on $535 million in revenues — a 34 percent compounded annual growth rate for the past five years. Routinely lauded by U.S. News and World Report (and other publications) as one of the most innovative colleges in America, the school also has the distinction of being ranked one of the best places to work by the Chronicle of Higher Education. In 2012, Fast Company magazine named SNHU as one of the most innovative organizations in the world — ahead of LinkedIn, Starbucks, and the National Football League.

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You may have seen those omnipresent ads for SNHU — with the blue bus that tours the country delivering degrees to people who couldn’t attend commencement in New Hampshire — but you might not have realized the university was so successful. Just a decade before, that might not have seemed possible to anyone, including LeBlanc. In 2003, when LeBlanc first became president of SNHU, the 70-year-old college was a relatively unknown second-tier institution. Enrollment was falling, and budget pressures were overwhelming. Distinguishing itself as a viable college choice against all of the other similar nondescript second-tier institutions was a tall order. LeBlanc and his team had to innovate quickly if they were to change the course SNHU’s trajectory. But how do you achieve that in a decades-old institution with long-established competitors, where finding potential for new growth seems impossible?

LeBlanc realized he had been asking the wrong questions. If he wanted to grow SNHU, he had to understand that students were “hiring” SNHU to do a job — the school’s “job to be done.”

It’s not enough to know every detail and characteristic of a “typical” customer. You have to understand why people make the choices they do. You have to get to the causal mechanism of customer choice. In our language, the theory says that customers don’t simply buy products. They hire them to make progress with something they’re struggling to achieve, an unfulfilled “job” in their lives.

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Identifying consumers’ “jobs to be done” is the key insight of what we call Jobs Theory. This insight comes from two decades worth of research to understand why innovation is so hard to predict and sustain. Until you understand what causes customers to buy particular products or services — over all other available choices — your innovation will be hit or miss. In our work, we define a job as “the progress a consumer seeks in particular circumstances.” What’s key is understanding that jobs are not simply functional — they have critical emotional and social dimensions, too. If you don’t understand the job your customers are hiring your product or service to do, in all its rich complexity and nuance, you can never be certain that your innovations will be successful.

Sharing this insight with LeBlanc provided an “aha” moment for him as he struggled to find that new growth. What job were students actually hiring SNHU to do?

Nearly nothing had changed in SNHU’s approach to recruiting high school graduates in decades. Like most colleges, SNHU essentially treated all students the same. The university’s longtime strategy had relied on appealing to a traditional student body: 18-year-olds, fresh out of high school, continuing on a traditional educational path. The message was simple: “Come to this picturesque New Hampshire campus, and you’ll get a solid education for a reasonable price.”

SNHU relied on traditional marketing and word of mouth to get prospects to the campus, where tour guides would wax poetic about the academics or financial aid or future career prospects. But through a jobs lens, LeBlanc says, the school realized that when these prospective students visited the campus, there were actually very few questions about these subjects. The students’ questions centered on the experiences they hoped to have in college — experiences they’d been anticipating for years. “Give me a sports team I can root for. Do you have climbing walls? Will I have lots of interaction with full-time faculty with whom I can have long conversations about the meaning of life?” The prospective students — in the circumstance of graduating from high school and being away from home for the first time — were hiring SNHU for a coming-of-age experience.

And competition for that coming-of-age experience was tough. A handful of established local colleges, such as the University of New Hampshire or Franklin Pierce, compete every year for more or less the same pool of applicants. In that competition, SNHU knew exactly how it would typically fare — win some, lose some, draw others. That ratio had not moved in years. It was hard to see much potential for growth.

On a nondescript corner of campus, however, SNHU had an online academic program, known as distance learning that had been able to attract a steady stream of students who wanted to resume, at a later stage of their lives, what had been an aborted education. The online program had been launched a decade before, but it was treated as a side project, and the university put very few resources into it.

On paper, all the students might have looked similar. A 35-year-old working toward an accounting degree needs the same courses as an 18-year-old working toward the same degree, right? Don’t they both need quality education at affordable prices?

But with the lens of “jobs to be done,” Leblanc and his team saw that the job these nontraditional students were hiring SNHU to do had almost nothing in common with the job coming-of-age undergraduates were hiring it for. It was framed by a very different circumstance.

The average online student is 30 years old and juggling work and family while trying to squeeze in an education. Many of them have some college credits but stopped their education along the way for a myriad of reasons. Often they were still carrying debt from that unfinished experience. But life has told them it’s time to go back to school; they realize they need further academic credentials to improve their career prospects and thus to improve their family’s lives. They’ve already had all the coming-of-age experiences they can handle.

This, LeBlanc’s team realized, was an enormous opportunity.

SNHU’s online program wasn’t in competition with the same set of local competitors at all. It was often competing with nothing. Nonconsumption. People who find no great choice for helping them make the progress they seek, so they choose to do nothing to further their education at that stage of life. From that perspective, suddenly the potential market went from seeming finite and hardly worth fighting for, to one with enormous untapped potential.

But LeBlanc and his team quickly realized that very little about SNHU’s existing policies, structures, and procedures were set up to support the job of online learners. Take, for example, the way that SNHU typically discussed financial aid with prospective students. For a high school student, a conversation began sometime in their junior year, during which time SNHU would provide some basic information about financial aid. Neither student nor university expected to have to offer any more specifics for at least a year, after formal application and financial disclosure by the student’s parents — when a college admissions offer was made. The financial aid process at SNHU was structured around the ability to have a leisurely, low-level-of-urgency conversation with prospects. Even responding to a query could be expected to take weeks.

If a prospective student asked for information through SNHU’s website, he’d receive a boilerplate response within 24 hours: “Dear Clayton, thank you for your interest . . .” Then a week or so later, a packet of information — the same for everyone who inquired — would arrive in the mail. Then SNHU, like many universities, would simply wait for the prospective student to call or follow up in some way. For many undergraduate candidates, particularly for the coming-of-age segment, that system worked fine. Because as SNHU realized, the decision about financial aid might be important to their parents, but it wasn’t critical to what the students themselves were hiring the university to do for them.

By contrast, financial considerations were enormously important for adult online learners. The job they were hiring a university to do was to provide them with credentials that would improve their professional prospects as quickly and efficiently as possible. When the leaders of SNHU thought about these students, it became clear how flawed the school’s generic response to all prospects was. When an adult learner was actively online seeking information about a continuing education program, he or she was ripe, right then, to make a decision about what to do next. SNHU knew that its students were often moms or dads sitting at a laptop late at night, squeezing in the time to gather information in the first place. For SNHU to wait weeks to provide candidates with any specific information about their own financial aid options was tantamount to not responding at all.

On virtually every level, what online learners required was completely different from what traditional students out of high school required, yet SNHU had been providing a single “average” solution for a “typical” student that didn’t really exist.

LeBlanc and his team at SNHU didn’t need to do any special research to figure out the different jobs the two types of students were hiring the university to do. “I’d like to pretend we did a lot of focus groups,’’ LeBlanc recalls, “but we went for it really fast. We were frustrated and struggling with our inability to grow and focusing on ‘jobs to be done’ felt like a no-brainer.’’ For LeBlanc and his team, the key was finally asking the right question that led them to better answers.

What had to change at SNHU as a consequence? Pretty much everything, according to LeBlanc. Instead of the second-class-citizen status the online portion of the university had been given since its inception, LeBlanc and his leadership team made it their focus. They moved the small online recruitment and administration team two miles away to new offices in a former mill yard in Manchester — a classic “disruptor” positioning that allowed the online team to grow unfettered by the physical and structural limitations of the traditional university policies and procedures. Then LeBlanc and his team led a session of about 20 of the top online faculty and administrators and charted out the entire admissions process — from first inquiry to first class — on a whiteboard. “It looked like a schematic from a nuclear submarine!” he says. The team circled all the hurdles that SNHU was throwing up — or not helping student overcome — in that process, with an eye toward the job of online learners, their unique circumstances, and the functional, social, and emotional dimensions of the job that were important to them.

For example, in order to help online students stay on track, SNHU sets up each new online student with a personal adviser, who stays in constant contact — and notices red flags even before the students might. The unit test went badly? You can count on a call from your adviser to see not only what’s going on with the class, but what’s going on in your life. LeBlanc and his team flagged dozens and dozens of hurdles for online learners — and one by one, eliminated them to make it easier to satisfy the job to be done.

LeBlanc and his team frequently welcome other higher education organizations into their offices in Manchester to learn more about what SNHU is doing, but LeBlanc isn’t worried that he’s tipping off the competition. It’s taken years to craft and integrate the right experiences and processes for its students, and they would be exceedingly difficult for a would-be competitor to copy. SNHU did not invent all of its tactics for recruiting and serving its online students; it’s borrowed from some of the best practices of the for-profit educational sector. But what it’s done with laser focus is ensure that all of its processes — hundreds and hundreds of individual “this is how we do it’’ processes — focus specifically on how to best respond to the job students are hiring them for.

Has SNHU succeeded? If you think about the SNHU ads on television, you know how well the university has built every detail of its online program around the job for later-life learners. The ads are aimed to resonate not just with the functional dimensions of the job, such as getting the training needed to advance in a career, but also with the emotional and social dimensions as well, such as the pride one feels in realizing a goal or the fulfillment of a commitment to a loved one. “Who did you get this degree for?” the voice over asks in one ad, as the commercial captures glowing graduates in their home environment. “I did it for you, bud,” one father says, holding back tears, as his young son chirps: “Congratulations, Daddy!”

SNHU’s staggering growth suggests that LeBlanc and his colleagues deeply understand these students’ “jobs to be done.” There are now 1,200 College of Online and Continuing Education staffers at that site in the former mill yard in Manchester, and more than 75,000 students in 36 states and countries around the world. In a speech in 2013 at the University of Buffalo, President Obama made a point of singling out SNHU for creating programs that allow students affordable options for pursuing advanced degrees.

Would LeBlanc and his team have stumbled onto a better way to grow without asking the “jobs to be done” questions? LeBlanc doesn’t think so. “Thinking about the job we were being hired to do gave us the right language to talk about the potential for growth and provided a roadmap to get there,” LeBlanc says now. “That, it turns out, made all the difference.”

Clayton Christensen, Taddy Hall, Karen Dillon, and David S. Duncan are the authors of “Competing Against Luck: the Story of Innovation and Customer Choice.” This essay has been adapted from the book and reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers. Christensen has served on the board of trustees of SNHU in the past.
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