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  • What is Outside Innovation?
    It’s when customers lead the design of your business processes, products, services, and business models. It’s when customers roll up their sleeves to co-design their products and your business. It’s when customers attract other customers to build a vital customer-centric ecosystem around your products and services. The good news is that customer-led innovation is one of the most predictably successful innovation processes. The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall.

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      Observations

      • LEAD USERS
        Eric von Hippel coined the term "lead users" to describe a group of both customers and non-customers who are passionate about getting certain things accomplished. They may not know or care about the products or services you offer. But they do care about their project or need. Lead users have already explored innovative ways to get things done. They're usually willing to share their approaches with others.
      • LEAD CUSTOMERS
        I use the term "lead customers" to describe the small percentage of your current customers who are truly innovative. These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about.
      • LEAD CUSTOMERS AND LEAD USERS
        We’ve spent the last 25 years identifying, interviewing, selecting, and grouping customers together to participate in our Customer Scenario® Mapping sessions. Over the years, we’ve learned how to identify the people who will contribute the most to a customer co-design session. These are the same kinds of people you should be recruiting when you set out to harness customer-led innovation.
      • HOW DO YOU WIN IN INNOVATION?
        You no longer win by having the smartest engineers and scientists; you win by having the smartest customers!
      • CUSTOMER CO-DESIGN
        In more than 25 years of business strategy consulting, we’ve found that customer co-design is a woefully under-used capability.
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      « WEB 2.0, SOCIAL NETWORKING, AND CUSTOMERS IN CONTROL | Main | THINK CUSTOMER EMPOWERMENT; NOT CUSTOMER SERVICE »

      November 20, 2006

      Nice Review in the Economist!

      This week The Economist ran a nice mention of Outside Innovation along with three other books on Innovation and Entrepreneurship in a piece entitled "No Fear of Flying" . The three other featured books include: Mavericks at Work by William Taylor and Polly LaBarre, which I recommend highly,  Joe Wilson and The Creation of Xerox by Charles Ellis, and Carl Schramm's The Entrepreneurial Imperative.

      The Economist said:

      "Patricia Seybold focuses on the potential for using customers more in the innovation process. In “Outside Innovation”, she does a decent job of justifying her Martin Lukes-esque subtitle, “How Your Customers Will Co-Design Your Company's Future”. Her case studies cover a number of web-based companies and are written up with even more breathless enthusiasm than those of Mr Taylor and Ms LaBarre. These examples will be especially useful to anyone looking to innovate on the internet, particularly if open-source software is involved.

      Ms Seybold reckons that most companies make two common mistakes about their customers. First, they think that customers can't envision what they don't know about—so innovation has to be driven by a company's in-house visionaries. Second, they believe that they already do a good job of listening to their customers. Citing companies ranging from Lego, which got customers to design its bestselling Mindstorms robot products, to “boutique streetwear retailer” Karmaloop, whose trendsetting customers are its sales force, she argues that companies urgently need to identify their most important customers and engage deeply with them about what they want."

       

      I loved the reference to Martin Lukes! For those who aren't loyal readers of the Financial Times, Martin Lukes is the main character of a hilarious email soap opera that runs every Thursday in the FT. I admit to being an addict--so much so that on a recent Thursday on which the column was inexplicably missing from my edition of the paper, I was miffed all day. Martin Lukes is delightfully depicted (by his creator, Lucy Kellaway) as a complete fool and idiot. He is particularly prone to coining over-the-top terms like "creovation" and to sexist and boorish, insensitive behavior. His escapades never cease to delight and amaze!

      It's a good thing I have a sense of humo[u]r or I would be really dismayed to have my writing characterized as Martin Lukes-esque!

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      » Are you really listening? from The Marketing Minute
      Innovation is certainly one of the buzzwords of the day. Business leaders are wrestling with how to create a culture that inspires innovation and expecting their RD team to create the new wonder product. But, it's not just RD's job. [Read More]

      Comments

      Patty

      You also got a great review in the MadeForOne.com blog "One Word for many Trends" posting at http://www.madeforone.com/Articles/index.php/technology/one-word-for-many-trends/

      The posting traces the origins of Customer Co-creation in its many guises (CCC, lead user innovation, crowdsourcing, open innovation, etc).

      It is as much a should read as Tim O'Reilly's more famous "What is Web2.0" posting at Oreilly.com.

      Graham Hill

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