New ways to engage customers in co-designing your company's future - a weblog to complement the book, Outside Innovation, by Patty Seybold
Description
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.
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.
In my search for good codifications of the "next gen" business models and customer-driven processes, I came across Warren Jones' blog. The Science of Profitability - Profit Forms. In which he provides 33 different business models -- he calls them Profit Forms. Examples include: Customer Solutions Profit; Flawless Transactions Profit, Time Profit, Switchboard Profit, etc.
For each one, he cites companies that provide good examples of each, as well as CEOs that have mastered one or more of them.
Here's another great blog on innovation, branding, and customer-led approaches--Julie Fleischer's Innovation Ecosystem. Julie is the Innovation Thought Leader for Egg Strategy.
Julie was kind enough to mention my book, Outside Innovation, in her blog.
In fact, Julie
has compiled a really useful reading list on her blog, as well as
providing lots of food for thought for innovators, product designers
and those who are studying human behavior patterns in search of the
next great thing.
To make rapid progress in enabling and empowering your customers to
lead you toward new innovations, you need to coordinate your business
strategy and your IT efforts. I recently published a report,
A Coordinated Game Plan for Business and IT Execs to Spur Outside Innovation (a free PDF download, but you will need to fill out a form), to
start you on your way.
In this game plan, I look at how business and IT strategies must align to address the five steps to customer innovation chronicled in my book:
1. Identify, study, and engage with lead customers 2. Provide customers with tools to use to reach their outcomes 3. Nurture customer communities 4. Empower customers to strut their stuff 5. Open up your products and engage customers in peer production
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