It seems like a simple equation: product plus innovation equates to a better product, which means better sales and company growth, right?

Not necessarily, said Clayton Christensen, a professor at the Harvard School of Business and author of The Innovator’s Dilemma.

Speaking at the Qualtrics Insight Summit Thursday, Christensen said what many companies fail to do is define just what problem their products are solving—what job, in a sense, customers have that needs doing.

“Whenever we find we have a job to do, we have to find something we can hire to get the job done,” he said.

Take McDonald’s’ milkshakes. Christensen was among a handful tasked with finding ways to increase sales of the restaurant’s desserts. The restaurant tried increasing their quality, but it had no effect on sales. Christensen said they stood in a McDonald’s for 18 hours, carefully taking note of each customer—their demographics, what they ordered, if they were alone or with others, and if they ate it at the restaurant or took it with them. They found a disproportionate number of the orders of milkshakes were occurring before 8:30 a.m. by people who didn’t order anything else and took them to go.

The following day, when they waited outside for those people and asked them why they had ordered the milkshakes, he said, they found a common thread. The people had long, boring commutes and would get hungry by the middle of the morning. The job they were “hiring” the milkshakes to do, then, was to satiate their hunger and help distract them from the monotony of the road.

“[They said] ‘When I come to McDonald’s and hire a milkshake, it is so viscous—it takes 23 minutes to suck it through that straw. Who knows what the ingredients are; I don’t care, I’m still full at 10 o’clock,'” he said. “Understanding the job to be done is just critical to creating products and services that will create growth. You can see in understanding the job how you can improve the milkshake for the jobs that need to be done.”

Understanding the role a product is playing is also crucial for understanding who and what the competition is, he said. In the case of the milkshake, then, McDonald’s’ competition wasn’t Burger King or Wendy’s—it was bananas, donuts, bagels and candy bars.

“The markets that you’re serving are probably much bigger than you think they are, and you can understand it if you understand the job people are hiring it to do,” he said. “To realize that the markets we are in are stable, predictable, understandable—and knowing that, kind of like the north star, then as I develop and buy and this product and don’t do that one, then we can decide which does the job better and who we compete against.”

Understanding the markets can also help a company target its marketing and offerings to make its brand synonymous with that “job,” he said. For example, when a person needs to furnish an apartment, the first store that often comes to mind is Ikea. For a family looking for a fun, wholesome getaway, many stop at the word “Disneyland.” When April 15 draws near, a person without an accountant is likely to think of TurboTax. While synonymous brands might not be, say, the most cost-effective or highest-quality solutions to people’s needs, Christensen said, they do mean a person doesn’t have to shop around and compare various offerings to find the best fit.

“The process of finding the thing to do the job well is very costly, and a result of that is when something like Ikea with a product that does the job perfectly, people are willing to pay a premium price for an average product,” he said. “That’s why it’s so important as we think about it to build a purpose brand so it pops into their heads when they have a job to do.”

But if a company doesn’t understand their market, the real competition, or the “job” customers are hiring their products out for—or if they try to fill too many needs at once—the results can be costly. Christensen pointed to Dollar General, a chain of discount stores primarily in the South that was thriving. Some customers saw it as a place to go for a cheap treasure hunt (competing, then, against flea markets and garage sales), with others regarding it as a store with low-priced home goods (competing against Walmart and Target), and still others seeing it as a place to pop in for last-minute supplies such as napkins (competing against CVS and 7-Eleven). When the company tried to cater to all three groups simultaneously, Christensen, “profitability went off a cliff.”

“The data would say we should try to fill all of these needs,” he said. “Focus makes a big difference.”

The same principle applies to newspapers and banks—businesses that used to fill a variety of needs have each become threatened by more specialized companies, he said. Not understanding why a customer is buying a product, or why that product fills a need in their life, can be very detrimental to profitability and growth, he said.

“Understanding the job to be done is critical to developing the product the customers will predictably buy because I need to find something that can get the job done,” Christensen said. “We have to guide our customers so every time they have a job to be done instinctively they will buy yours because their purpose brand will guide them in your direction.”