New ways to engage customers in co-designing your company's future - a weblog to complement the book, Outside Innovation, by Patty Seybold
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.
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!
In more than 25 years of business strategy consulting, we’ve found that customer co-design is a woefully under-used capability.
For many years, I’ve been aware of the value locked up in the design patterns that have emerged as business and consumer customers have co-designed their ideal approaches to everything from how they’d like to invest for retirement, to how they’d like software to install, to how they’d like to make a purchasing decision in our Customer Scenario mapping sessions. We published our first Customer Scenario pattern in 2004 (B2B Select & Buy: Part 1 and Part 2). Nobody seemed particularly interested. But I believe the time has come to put these out into the world. It may be that nobody will notice (Christopher Alexander’s work, which is very profound, is still under-acknowledged 30 years later, even among professional architects).
There are (at least) three different genres of Customer Scenario patterns:
Customer Lifecycle Customer Scenarios. These are closely connected to customers’ discovery, acquisition, and use of your products to fulfill a need they have. How do customers ideally want to interact with your brand and your ecosystem through their product lifecycle?
Event-Triggered Customer Scenarios. These relate to life events or business events that customers need to deal with. For consumers, these might include buying a new home, retiring, welcoming a new baby into the family, sending a child off to college. For business people, these scenarios may include things like launching a new product, opening a new branch, or downsizing the business.
Outcome-Based Customer Scenarios. Some scenarios are focused on a specific outcome, such as losing 20 pounds, getting a promotion, or increasing your revenues by 20 percent while retaining or improving your current profit margins.
Design Patterns are valued by software designers, usability experts, and architects—both technology architects and building and landscape architects. Patterns tell us how to design a construct so that it works
effectively and efficiently to achieve its end. Patterns are esthetically pleasing as well. Simplicity. Form meets function.
I believe that good patterns emerge from the confluence of three things:
1. Watching what people do and noticing what works and what pleases them.
2. Discovering what people want to do but have difficulty doing.
3. Thinking carefully about, and testing, designs that make it easy for people to accomplish their goals (both tangible and emotional goals) in a pleasing manner as efficiently as possible.
Skip Walter turned me onto design patterns in the 1980s. At the time,
Skip was the product manager for Digital Equipment’s very successful
All-in-One office systems. He was also an early practitioner of
customer-led innovation. The design of All-in-One arose from customer
co-development to meet the needs of a small group of customers in the
When Skip told me about design patterns, he referred me to the works of Christopher Alexander, who published The Timeless Way of Building, in 1979, A Pattern Language: Towns, Building, Constructionin 1977, and, in 1975, my favorite, the small gem of a book, The Oregon Experiment,
in which Alexander and his co-authors describe their work with
students, faculty, and community members in redesigning the campus of
Oregon University in Eugene. in 1977, and, in 1975, my favorite, the small gem of a book, in 1977, and, in 1975, my favorite, the small gem of a book,
Those of you who have read Outside Innovation will recall the story about the partnership between LEGO and National Instruments (brokered by Dr. Chris Rogers who promotes engineering in elementary/primary school curricula, catalyzed by a kids’ robotics competition in Austin, Texas, and cemented during a rain-soaked soccer game). As a result, Dr. Truchard, (“Dr. T”), National Instruments’ founder and chairman, authorized an innovative partnership to embed NI’s $2,000 LabVIEW software platform into the software that would be sold as part of a $200 Mindstorms NXT kit to kids and teachers.
Photo by: usfirst.org
On April 17th, National Instruments took a further leap in extending its market to the younger set. They announced a partnership with FIRST to provide the robotics controllers (hardware and firmware) to be used in the robotics kits for the FIRST Robotics Challenge (FRC)—the robotics league for High School kids. This is a multimillion dollar in-kind donation.
So now National Instruments is providing hardware as well as software,
and it is extending its reach from 8-year-old engineers through to high
school age kids.
The benefit to the kids is that this new
platform will be less expensive, reducing the cost of the kits from
approximately $15,000 down to closer to $2,000. (Each team has to raise
the money to purchase the robotics’ kit they’ll need each year.)
LEGO executives celebrated the 10th anniversary of their successful MINDSTORMS robotics kit at the FIRST Championship in Atlanta. Soren Lund, Lego’s Sr. Marketing Director for product and marketing development, joined our Visionaries’ meeting to discuss some of his learnings from 10 years of customer engagement. In talking about the cultural challenges of opening up both your product development and your online presence to customer participation, Soren expressed it this way:
"Like every large company, Lego has a "must" culture - you must do this; the open source developer community has a 'can' culture - I do this because I want to, because I can. The value of the outside-in model is that it brings a different culture inside your company."
Soren Lund at the LEGO booth at FIRST.
“As we launched Mindstorms,” Soren explained, “we thought, wouldn’t it be great if people actually talked about this. So we built a Web community and encouraged customers to engage. It wasn’t a mass marketing thing—we’ll tell you what to think. We wanted people to be able to write about what they thought of Mindstorms, etc. We should listen to our consumers. Corporate didn’t want to do that—they were worried about negative content. We did it anyway and were flooded. We were really excited about the response.”
I was delighted that one of the BIG announcements at this year’s FIRST Championship was a new partnership between the Girl Scouts of America and FIRST.
Every Girl Scout troop will now be supported and encouraged to form a
robotics team. The young women on the Girl Scout’s existing teams will
be tapped as mentors. There are already close to 100 Girl Scout FIRST
LEGO League programs around the country to date. Two high-school-level
Girl Scout teams competed in the World Championship finals in Atlanta.
Emily Tweaks Her Team’s Robot
Photo by Akill11, Flickr
Emily Stephens, a senior at Perry Meridian High School in Indianapolis, tweaks the team's robot at the 2008 FIRST Robotics Competition—the team was a finalist for the Autodesk Inventor award.
In mid-April, we held our semi-annual Visionaries’ meeting in Atlanta where we witnessed the preliminary day of the FIRST
robotics championship. Our goal was to wrap our minds around our
next-gen customers and employees and to absorb some creative energy
from these bright kids. But our visit exceeded my expectations. By
spending time to understand the structure of the design of this very
successful program to inspire kids to engage in science, technology,
engineering, and math, I think we discovered some principles that could
be transferred into our corporate environments to make innovation a
more repeatable and systemic activity.
Thunderchickens Competing in the Final Round
Photo by Akill11, Flickr
“ThunderChickens” of Utica Community Schools from Sterling Heights, Michigan,
maneuver their winning robot, which would eventually reign victorious as part
of the 2008 FIRST Robotics
Championship winning alliance.
Some of the key take-aways:
• Make sure that people are working on intellectually HARD problems.
• Have them work in teams on the same problem.
• Give them incentives to share and cooperate with other teams.
• Build in real-world, real-time feedback and lots of iterations.
Team 868’s robot from Carmel High School in Indiana in the midst of the challenge. The robot is successfully herding a 40 inch. ball around the track. Its next feat will be to lift the ball 6 feet in the air and throw it over the overpass and then collect it again.
At Web Expo 2.0, I attended the session on Google App Engine and listened to the Q&A between the Web applications developer community and the Google App Engine product development team. I also managed to get my own coveted code that will let me in to the beta program. Now, I just need to find a real developer I can work with to take advantage of this application platform. I’ve already gotten some push back from people who have looked at Google App Engine and claim that no real applications will wind up there. So I thought it would be useful to think about the kinds of Web Applications that are most likely to gravitate to Google and the kinds of people who will create them. The short answer is this: If your product or service is information, Google App Engine is of interest. If accessing and manipulating the information about your products and services is increasingly important to your prospects and customers, then Google App Engine should be of interest.
Business Strategists Who See the Potential. As the CEO of a small consulting/publishing business, I may not be Google’s target audience for this development platform, but I believe I actually represent the ideal strategist who can take advantage of this environment. There may be lots of other small business owners and professionals like me who will be early adopters. In my case, I’m looking for a Web applications platform upon which I can start over. I want to re-envision and redeploy Web applications that will provide value for my clients. Not just a new Web site, but a new Web platform. I want to be able to design, throw away, and redesign an iterative series of information-based applications. Why not start fresh with an infrastructure that I know will scale, that will be easy to search, and one that will have hundreds of thousands of developers sharing tips and techniques (as well as applications)?