No One Wants a Loan [Podcast]

November 7, 2016 Iris Maslow

 

jtbd-csbm2Your customers aren’t coming to you because they want a loan. They’re coming to you because they need what the loan will help them do. Whether that’s starting a business or keeping one running smoothly, understanding the “why” behind your customers’ desires is key to better serving them and maintaining lasting relationships.

In this podcast, Bob Moesta and Chris Spiek, pioneers and now educators of the “Jobs To Be Done” framework, share how to uncover what it is your customers need.

   

 

Podcast Transcript

Dallas: Hello, and welcome to The Purposeful Banker, the podcast brought to you by PrecisionLender where we discuss the big topics on the minds of today’s best bankers. I’m your host, Dallas Wells. Thank you for joining us.

The title of today’s podcast is No One Wants a Loan. It’s a bit jarring, I know, but for good reason, and we’ll explain as we go through this podcast. This podcast is the precursor to our third installment of the BankOnPurpose webinar series. We’ll be hosting the third webinar on November 15th and 16th. We encourage all of you to attend, and after you listen to this, I’m sure you’ll see the value in that. We’ll have links to the details in the show notes for this episode. And so with us today, and joining us for that webinar as well, will be Bob Moesta and Chris Spiek, co-founders of Re-Wired and innovators of the Jobs-To-Be-Done framework. Thank you both so much for being here.

Bob: Hi Dallas. Our pleasure. Thanks Dallas.

Dallas: First, let’s start with the background stuff. Can you tell us about your backgrounds and how you two came to work together?

Bob: My background is, I’ll give you the abbreviated version is I started actually developing products when I was very young. I actually happened to be Doctor Deming’s intern when in 1985. Doctor Deming is the father of Lean if you will. I learned all the Lean methods at Toyota. And I happened to work for Ford at the time, and Ford actually employed me to be an intern so I’ve learned pretty much known how to do all the lean thing but for product development and so I was part of Fords effort to reduce the cycle time from 72 months to 36 months.

In that I learned basically all the different methods and tools to do that and Jobs To Be Done is one of the methods that kind of came out of the customer struggles of to try and understand customers, listening to the voice of the customer, realizing that they didn’t really, they could articulate clearly a lot the things they were talking about and jobs were really was a way to really boil it down that important thing. There are 6 start ups and met Chris along the way at 2 of the start-ups where he was my web guy. Right.

Chris: Yeah. So my background is in software engineering I ran a development shop out of Detroit for a long time. We did a lot of, we developed e-commerce platforms and conference management systems and things like that for our clients.

Bob essentially appeared to me as my product development angel at some point, I was doing work for a lot of different clients we had products that would be really really successful and products that would fall flat on their face and it felt very random to me. People would come to me with great ideas and say were going to develop this business were going to put competitors out of business, steal all of their share and that sort of thing. Sometimes it would work out and sometimes it wouldn’t.

I was always left scratching my head saying how do I identify what’s going on here and I would always talk to my clients and say you know can we talk to the end user can we get some more information about what’s going on? And they would do persona research and stay in the office all that sort of thing and then eventually Bob started developing, basically came on like a client of mine, I had to do all this work and all of his projects where just genetically more successful than anyone else I had worked with so I, over a series of conversations over beers I finally got around to to like, what questions are you asking, how are you figuring out what motivates customers to do what they do and I say we almost didn’t have words for it back in the day, now we have diagrams we have jobs to be done.

Dallas: Yeah.

Chris: It was like scribbling on napkins, talking about interviews with customers all that sort of thing and eventually he brought me into the fold. Here’s how you’ve got to think about a consumer and the decisions that they make and here’s how you can tease the details out of that story to really fuel product development in a way that makes thing’s successful.

We in 2007-2008 we both exited the business that we were a part of and we started the Rewired group really under the premise that we were going to help evolve the framework, it was very new and a little rough back at the time and then we also spread the gospel and spread the word about it. Yeah.

Dallas: Okay and so Rewired that kinda tells the origin story, tell me about what you guys do now with Rewired.

Bob: The way I describe it we are, we are almost like the product development or innovation pit crew. We help innovation teams basically we develop products and or services and or new businesses better, faster, cheaper. So for us it’s working side by side, hand in hand with everything from fortune 500 to down to start ups and incubators and helping them basically get to the core of what the jobs are but then at the same time we have all of these other methods around helping people basically develop and prototype and use lean methods to basically get to market faster.

So it’s not just, for us every project starts at jobs but it doesn’t necessary end at jobs. We’ve done a lot of workshops around the world where innovators, marketers, people like that have come and learned from the end to end jobs to be done, processes as well.

Dallas: Right.

Bob: Now I’m teaching, I’m teaching, I teach at MIT and Harvard and Northwestern and I’ve just finished a book with Clay called competing against luck and it’s kind of, Clay has really take, it’s, we’re the practitioners Clay is the theorist and he’s taken what we’ve been doing and kind of other people in the industry and has taken it up a level to say here’s the, here’s job to be done theory and here’s how it applies and here’s how it impacts organizations and thinking of how, how to think.

Dallas: Right and we’ll make sure that there’s links to that stuff again in the show notes for this episode and to that book as well. One thing we will link to is a YouTube video Chris, of a talk you did, talking about this Jobs to be Done framework. For anybody who find’s this interesting, go listen to that talk, it’s excellent. Again we will have the link for it.

But do you mind kinda going through the abridged version, we’ve said it a couple of times now, jobs to be done framework, kinda lay out what that means.

Chris: Yeah so for me it’s a tool you can apply to understand how a person comes to make a decision. I start sort of as vague I can most of the time because most often when we apply it to a consumer making a purchase. So if we want to sell more beer, we’re going to say what lead a person to pull up there car, park, walk into the store do what we call shopping, evaluating his options and then end up grabbing the six pack off the shelf and walking out. When you look at it at face value we have all kinds of demographic, psycho-graphic information that we use to understand that purchase “oh he’s in this income segment so he bought Budweiser and he’s in this age group so he bought a craft beer”.

We can try to explain it in a lot of different ways but what we find is the closest thing we can get to quote unquote truth but the quotes are important because but the closest thing to the truth is basically saying what was going on in your life, what happened that day, you’re driving down the road, what got you to stop, walk in, basically what pushed you to make the decision that you made and if we get enough of those stories around decisions sort of stacked up we find that people basically group into clusters and that there are certain situations that prompt people act certain ways and buy certain things.

There’s a lot of application in consumer goods, it’s sort of the sweet spot of the product but we also work in business to business because people are decision maker’s, even though you say business buys a piece of software or whatever it’s really a person making that decision, they have a job that they want to be done. We apply to literally anywhere where there’s a decision being made. But the real importance is we don’t focus on the product being purchased we focus on the story and the things that happen to the person that sort of move them through time to the point of decision and we understand how basically how every factor in their life acts on them up to that point of saying this is sort of the situation that I’m in, this is the progress I am trying to make and this is everything I’ve learned in my story to make me believe if I make this decision the right thing will happen, if I buy this product I’ll get the desired outcome.

And then once we have all of that information we can say okay we’re going to sell a product to people in this situation and we have all of the details of what leads them up to the decision. We can now craft our marketing message as closely as possible to their story and we can craft our product as closely as possible to the progress that they are trying to make. I like how we say the product development in the marketing decisions sort of become easy at that point because we have so much, so much data around.

Bob: So much resolution around it.

Chris: To me it is ultimately it’s around the progress that people are trying to make and so the product really is just part of that progress and so ultimately it’s that context and outcome I call it that vector of progress that they are trying to achieve and so what we ultimately trying to understand is that vector and where value is actually created. If we can understand what situation they’re in and where they are trying to go then we can actually create design requirements of what that is and what we find is that consumers don’t behave in categories. So at some point a beer doesn’t necessary compete with other beers, a beer might compete with wine it might compete with a rum it might compete with a whole bunch of different things in the category because I had a horrible, stressful week.

So all of a sudden you realize that it might be going home and watching movies and Netflix it might compete with going to the bar it might compete with going and working out and so all of a sudden the competitors say they don’t buy a product they hire a solution and so if we understand what they are hiring and why they are hiring it and what the role that product play in that hiring situation then we can actually figure out kind of how to actually design a better product and not to be honest over engineer it.

So that to me it really came about from the notion of as an engineer and a developer I end up over engineering everything and I, because I give customers everything they say they wanted and then all of a sudden they say “nah I didn’t want that” and you’ll be like wait a second.

Dallas: Right.

Chris: Yeah but I didn’t want that and to me it’s ultimately trying to find the trade-offs that they make, what in the moment put that out there. To me it’s seeking of those trade-offs that we’re looking for so it’s the, the method is actually based more off interrogation and both criminal and intelligence interrogation techniques than it is traditional interviewing and market research.

Dallas: I really love the analogy you guy use of nobody really wants a drill with a quarter inch drill bit what they actually want is a quarter inch hole. So they hire the drill to actually to make the hole and to take that very simple concept and make it into the framework you guys have created. I like that way of thinking about it.

Bob: Right. When I was in Japan what they did, they said, you know it’s really based off the 5 why’s method you know I don’t need a drill, why drill a drill hole, I want a hole, I want a plug, why do I want a plug, I want a light, why do I want a light, I want to read better, well why don’t you create a kindle.

Dallas: Right.

Bob: So we’re in a completely different space and if you don’t ask why 5 times you don’t end up in the right space to innovate and so part of it is making sure that you are down at that understanding of where things are otherwise you end up walking in to loads and realizing there’s 30 or 40 different drills with different voltages and different colors and you’re real hard to pick.

Dallas: Yeah.

Bob: And then you pick by how cool something looks and it’s ridiculous.

Dallas: Also you can read something better.

Bob: That’s it, that’s exactly all because you want to read something better right.

Dallas: So let’s bring this back to the PrecisionLender world just a bit, so how can this apply to banking how can this framework be used in our industry.

Chris: I think that at the end of the day the difficult part about so many industries is that we’re used to not asking the questions that Bob just rattled off about why. So we’re focused on our product attributes what’s the rate you want, what’s the turn you want, what’s the you know, all these things around but are very very close and what we’re doing is we are leaving it to the consumer to do the translation in their mind. To try and figure out if all of the features and technical aspects of your offering going to build up to help me make the progress I want to make right. When we’re rambling off features they’re trying to do the calculus in their mind okay if I go with this loan or that loan, or this bank or that bank, really which one gets me closer to making the progress I want to make.

I think one of the tricks that needs to happen is that we need to get closer to understanding the situation they’re in and the progress that their going to want to make, so we can do some of that calculus for them and not really and not leave it up to them so much to decode everything that we’re talking about. I think that can come through a greater understanding of what’s going on before they walk in, what’s going on in the years, months, weeks before they sit down and actually start to have that conversation around I need this loan, I need this banking product that sort of thing.

Bob: I think the other thing is there’s just so much anxiety that builds up that they don’t think anyone else is they don’t think in some cases it’s like well if I switch banks is it really going to be better anywhere else, there’s no notion of better banking or progress.

Dallas: Yeah.

Bob: So part of it is helping people understand of what it’s like so the thing I really like is that the title which is people really don’t want a loan. I truly believe that they want to, like my wife is building an industrial laundry she wants a tunnel washer, she wants to buy a piece of property in Detroit, she wants to do these things the loan is the means to get there and so what it is how do you actually help her to do those kinds of things. I was in the home building business and again nobody wants a loan they want a house.

Dallas: Right.

Bob: The notion is understanding what people are trying to get done and the progress that they’re trying to make because again if I’m refinancing it’s really not about finding a place to live. Refinancing is about helping you save money right, so there’s different things there’s the progress that people are trying to make and be explicit about when did they have the first thought, when do they start to actively look, how do they make the trade off because at some point it takes time and it takes money and in some cases people say well if its free they should do it, money or time is still to me the most valuable of all assets and so because I only have so much of it and once I spend it I can’t get it back and so to me it’s those 2 that you have to be constantly be looking at.

Chris: I think in addition, anytime I look at a category and I see what we call hand to hand combat.

Like Bob’s example of the drill isle at home depot is a great example of it’s all the accompany, they’re sitting there in there R&D department going how do we squeeze out a little more battery life, how do we add more torque and they’re, all they’re doing is looking across the street going those guys, it’s the left and right Twix commercial I don’t know why they’re working on that.

Dallas: Yeah.

Chris: Anytime I see that I want to walk in and say guys you have so much capacity, so much knowledge let’s learn a little bit about the kindle job and we can pull ourselves out of this and we’re not going to be grappling with each other we’re going to be able to say, you know my baking store is great for people in this situation and nobody else is talking about it but man people in those situations are clamoring for my help because they know that I understand the progress they are trying to make and I’m able to really pull them along. Nobody else in the industry is really talking about it right, so I feel like anytime you feel like you’re really grappling with your competitors like that, it’s time to look in a different direction and try something different.

Bob: Right so just to follow the tool thing you know the one company that has really done this is Milwaukee, Milwaukee power tools. The premise for us the struggling moment is the seed for all innovation so if you look where people struggle, so Milwaukee is the one that came up with the sawzall right, and the notion here is that it’s like where do you want to cut but you don’t have the saw to cut with. It literally is like the universal saw that can cut through everything but is never really set up to cut through anything.

Dallas: Yeah.

Bob: And so they really set it up that way so my thing is that in the loan business it’s like so I’ve done some work in the peer to peer lending space right, and it’s one of those things that when you start to understand what people look at the peer to peer lending, everybody is dismissing it but the notion is both on the lending side the people putting the investing side and the people who actually going for loans the funniest part on that one is where people go to say go to say yeah I want a $30,000 loan for this and then there like maybe we don’t need $30,000 it’s all of a sudden in some cases people are willing to give loans on some cases where they haven’t actually thought through it well enough.

It’s very interesting to start to understand that getting money, to me the interesting part that so Clay and I have been talking a lot about this notion of what we call the capitalist dilemma where in the past, I’ll say looking backwards the capital had literally been a scarce resource but to date it is actually a commodity its almost, there’s almost so much cash and so much money that the fact that more and more people want to be able to get it. So the notion is what we are looking for is actually people who have ideas where to put money and where you can get a return for that money. So what happens is that most people are only investing in what you call efficiency innovations but there’s very few people putting things into what we would call market creating innovations so how do you actually change the way that people start to look at investment and really change the way you do investments.

We have a innovation concept right were talking about now called loyalty capital where you actually, you don’t actually lend the money, you actually give expertise and money and its paid back on a loyalty basis. So it enables private equity to actually hit singles, doubles and triples as opposed to only hitting home runs and it changes the whole way that things work. It’s all looking at the job that basically, private equity or venture capital is trying to do as well as the job that the entrepreneur needs the money for and so you start to realize that there’s way in which to change that whole way to look at that capital. It’s a very interesting market right now, I think.

Dallas: Yeah and I think that’s a great way for our banking clients to think about it is it’s not about your fixed rate loan verses the guy across the streets fixed rate loan. It’s really about what is your customer hiring that loan to do and what’s that money going to do for them and what are they going to turn around and do with that money, that’s so beneficial to their business.

Good stuff guys. You guys will be joining us for the second BankOnPurpose conference which will be in Austin in May, what in addition to this kind of stuff you guys been talking about, what can we expect to hear there.

Chris: So I think we’re interviewing a few. We will set up so we have an interview something we did alone, so we can actually show people kind of, so we can actually show people kind of like let’s find exactly how far you have to dig and what we mean by these because what you’ll realize is there’s things where you almost assume the answers and they are never the answers you think they are.

Dallas: Yeah.

Chris: So one of the things what we would call the beginners bind and that you realize you have to dig, you have to ask that “why” 5 times and as they give an answer you got to say well I don’t know that, even though I might know that what that means you have to answer lie I don’t know what that means and you keep digging and as you start to realize that it means something completely, they use the same words but they mean completely different things. I think part of it is to demonstrate the method and then I think the other thing would be to have some more tangible kind of examples because I believe we are going to do some interviews for you guys to show exactly how this kind of roles out.

Dallas: Yeah yeah.

Chris: Yeah so we’ll do an interview at the conference and then the most of this jobs we do train work for is down to a handful of tools that once you understand the tools and you see the sort of how interviews are conducted you can apply it to your business you can apply it to your thinking so I think our goal is going to be to do that demonstrations so people can see how an interview actually flows and how we get it to the sort of core of how a decision is made and then really walk people through, here are the real fundamentals, so they have a complete understanding of the framework.

Bob: Yep. Should be exciting.

Dallas: Yeah, great I, we’re excited for that and I think it will be good for the attendees to have something they can walk away with and use when they get home to really reshape the way they think about this. Really excited about that so I think we will wrap it up here for now and we will of course encourage you to sign up for the webinar next week to get more of these insights from Bob and Chris.

Again those dates are November 15th and 16th we will have information on sign ups and all that stuff at precisionlender.com so Bob and Chris thanks again for coming on, really appreciate the time.

Chris: Thanks Dallas.

Bob: Thanks Dallas.

Dallas: Yeah and thanks to everybody for taking time to listen, if you like what you’ve been hearing make sure to subscribe to the feed in iTunes, Soundcloud or Stitcher and we love to get ratings and feedback on any of those platforms. You can always find more episodes as well as all our show notes at precisionlender.com/podcast.

Thanks for listening, until next time I’m Dallas Wells and you’ve been listening to the Purposeful Banker.

The post No One Wants a Loan appeared first on PrecisionLender.

 

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