Porter's Value Chain and Jobs to be Done
Porter's Value Chain and Jobs to be Done
How the former can unlock value for the latter
I've engaged in debates with fellow Product Managers regarding the utility of Jobs to be Done (JTBD). We reached a consensus that JTBD is not merely a methodology but a mindset—a perspective that requires some level of seniority to truly extract value. However, some remained skeptical, asserting that they could not discern its practicality. Consequently, in this post, I aim to illuminate how I harness this transformative way of thinking, particularly when I align it with the Value Chain framework.
The Value Chain
One of the most invaluable tools in my product management arsenal is Michael Porter's Value Chain analysis. This method aids in dissecting your product's components into primary activities that generate value, elucidating their interconnections, and identifying supporting activities.
I apply the Value Chain analysis to discern how our product aligns with our customers' value chains. This examination aids in determining the following:
Is my product addressing a primary or supporting activity? If it doesn't align with a primary activity that creates value and I cannot substantiate the value it adds, it may indicate a cost-cutting operation. Consequently, a tailored pricing strategy is necessary, but it may also encounter substantial resistance to change.
Does my product encompass an entire primary activity from end to end, or does it only address a segment of the value chain? In the latter scenario, are there potential threats from competing products or opportunities for expansion? If I perceive that we offer significant added value, it triggers consideration of potential integrations.
Additionally, I contemplate the workflows during my analysis. After multiple iterations and industry scrutiny, I've often come to the realization that there isn't a single monolithic value chain. Instead, there are often multiple chains, which can be categorized as (a) parallel or alternative ones based on customer types or (b) a network of value chains operating across different departments or user groups. In this interconnected web, the output of one chain serves as the input for the next.
Through this comprehensive analysis, several advantages emerge:
SWOT Analysis for Value Chain Components: We can conduct a SWOT analysis for each segment of the value chain. This strategic assessment illuminates opportunities for end-to-end expansion, enabling us to take greater control over the user experience and fortify our lock-in strategies. Simultaneously, it helps us identify potential threats posed by competitors encroaching on our core business.
User Role and Context Definition: This approach allows us to define user roles and their contextual frameworks more precisely. By crafting a narrative from the outset, even when the immediate need isn't fully addressed, we gain insights into how users engage with our product. This perspective guides our thinking towards identifying the ideal set of integrations to prioritize.
Clearer User Job Definitions: With this analysis, we can articulate user jobs at a granular level, breaking them down step by step. This avoids the pitfalls of overly high-level analysis and steers our focus toward providing solutions that address our customers' real problems, rather than merely adding superficial or flashy features. This is where our competitive analysis finds its foundation, as we delve into how our customers currently solve their problems – a reality that often involves something as humble as an Excel file, particularly in the realm of B2B offerings.
Naturally, the depth of this analysis hinges on precisely identifying primary and supporting activities and elucidating the intricate flows and relationships, particularly within diverse user segments. However, what makes this approach particularly adaptable and powerful is its flexibility.
You can access my generic template as a starting point, but the beauty of the Value Chain framework is that it's not one-size-fits-all. You have the latitude to define custom dimensions and parameters at each step of the value chain, aligning them with the unique characteristics of your business and product.
JTBD for different User Types
One common challenge that some encounter with the concept of Jobs to be Done (JTBD) is the perceived difficulty of putting it into practical use. JTBD is more than a methodology; it's a transformative way of thinking that can influence how you build your products, select features, and target your audience. However, it's not the sole approach, and its suitability, especially for marketing, can vary based on market maturity and competitor positioning.
After conducting a comprehensive Value Chain analysis, you'll have already begun to identify tasks that occur within your domain of interest. It's important to recognize that not every user type may be involved in every step of the process. Thus, it's time to delve deeper into each user's unique experiences—whether directly through your product or within the broader ecosystem of solutions.
One effective approach is to construct distinct value chains for different user types (or personas if you prefer). You can begin to add context to comprehend their behaviors better. In the example below, I've outlined four contextual dimensions:
Existing Pains: What challenges or frustrations are users currently facing within their tasks?
Expected Gains: What outcomes or benefits do they anticipate from using your product or service?
Social Proof and Beliefs: What external influences, such as social validation or personal beliefs, might affect their decision-making?
Obstacles: What barriers or impediments might hinder their progress?
These contextual dimensions serve as a starting point. Feel free to adapt and expand upon them based on what aligns with your team's objectives and the data available. Personally, I opt not to create highly detailed user personas during this stage of analysis. Instead, I categorize users into broad types based on key characteristics, such as technical proficiency or business intensity. Subsequently, with input from strategy, qualitative research, and data, I refine these generic user types to construct indicative customer profiles and then tell a complete story.
Practice and Iterate: Your Path to JTBD Utilization
This is the path I've forged for leveraging JTBD, and it's a journey you can tailor to suit your specific product area and its maturity. My hope is that by sharing these insights, I've assisted some of you in more effectively uncovering the jobs within your domain, all while harnessing one of my personal favorites, Porter's Value Chain analysis.
I eagerly await your feedback and the exchange of ideas on how you apply Jobs to be Done in your product analysis and mapping. Together, we can continue to refine and evolve this invaluable approach to product management.
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