Outside Innovation

Wikipedia: Example of Customers as Collaborators (Complete with Unintended Consequences)

In my upcoming book, Outside Innovation, I’m using as one organizing principle the different roles that customers can (and should) play in shaping your business and its products. I’ve identified lots of different roles. Now the challenge is to describe and differentiate them.

Engaging customers as collaborators is one of the most advanced, and the most challenging, business propositions. Open source software development is a prototypical example of customers as collaborators. Customer collaboration is when customers band together to co-create something new and complex. They work together in an open, transparent environment to co-create new products, solutions, and works of art. Each customer contributes his or her own intellectual property and/or builds on a contribution made by a colleague.

Wikipedia is a good example of the power and pitfalls of the “customer as collaborator” role. Launched in January 2001, and based on the open source model of collaborative development, Wikipedia is the world’s fastest growing, most current, and largest encyclopedia. Wikipedia provides a great example of how complex projects like writing software, solving really difficult problems, and creating and classifying knowledge are increasingly becoming customer-collaborative projects.

Great Paper by Frank Piller and Susumu Ogawa on Threadless

Frank Piller, MIT Sloan School Visiting Professor from TUM Business School in Munich, sent me an enthusiastic welcome and a link to a recent paper that I recommend highly. You can find it at http://userinnovation.mit.edu/papers.php . Scroll down to his paper Collective Customer Commitment: Turning market research expenditures into sales, published in October, 2005. The two authors describe the customer involvement and business models at Threadless and Muji. Here's the final version published in the Sloan Review in February, 2006. MIT Sloan Review: Reducing the Risks of New Product Development.

I had heard of Threadless.com from a colleague who frequents their site all the time. It's a great example of customers as creators. Customers design T-Shirts. Other customers vote on their favorites and pre-commit to purchase them. When enough votes have been received, the shirt is manufactured and sold. The designer gets a $1,000 prize.

Making Sense (of it All)

Most of the recent Web-related news—Yahoo's acquisition of Delicious, Jeff Bezos' Alexa search engine opening up its APIs (See John Battelle: Alexa [Make that Amazon] Looks to Change the Game), the launch of Seth Godin's Squidoo, the many bookmarking services (ClipMarks, Looklater), the many blog networks (9Rules Network, Technorati)—all have one theme in common: making sense of it all.

Announcing "The Pattys"

      Accepting nominations now through February 1, 2006.

We are announcing our first-ever Customer Innovation Awards. Nicknamed “The Pattys”, the awards will honor the business leaders who have empowered their customers to challenge their business models, co-design their products, and redesign their business processes.

Customers have become more demanding. They want to do things their way, and not necessarily the way a business thinks they should behave. As a result, many companies struggle to become more customer focused.

The Pattys will celebrate the best practices in customer innovation, including, but not limited to, the use of our proven Customer Scenario® Mapping methodology for co-designing business processes with customers.

The Pattys will acknowledge customer innovation leaders in 12 categories which represent the different roles customers play in innovation. Customer innovation leaders typically engage customers in multiple roles, so we encourage you to enter more than one category.

The deadline for nominations is February 1, 2006. Finalists will be announced in April 2006. Award winners will be honored in an awards ceremony in September 2006. Winners will gain global recognition and acclaim by being featured in my upcoming book on customer innovation, Outside Innovation, to be published in the fall of 2006.

Learn how to submit nominations here.

Getty Images: Making It Easy for Customers to Do Their Jobs

We've been following Getty Images since the mid-90s. We profiled the first Getty company, Photodisc, in Customers.com. Here's an update on the Getty Images case study. Getty is about to launch a new Web site—designed for and with its customers. This new site will be customer adaptive in nature. As customers do their jobs, the site will adapt to their work patterns. Getty's customer experience and online team did a ton of customer research—segmenting customers by industry and by roles, watching how they do their jobs, learning from how they interacted with their Web sites today. But when Getty piloted role-based Web experiences, customers rebelled. They didn't want to be pigeon-holed. Sometimes the same person starts in a creative, brainstorming mode/role—let me find the right images for this project—and in the same session also flips into a transactional role—let me check to be sure that the right images wound up on that client's bill. So, Getty has opted for an approach that begins by recognizing customers as they log in and interact, but adapts to their preferences, as they do their jobs. We'll be checking back in, in about six months to see how this approach is working.

Getty has continued to streamline the rights management procurement process for the photographs, video clips, and other images the company licenses to professional graphic designers all over the world. If your business involves managing licenses, entitlements, access rights, and/or usage rights, take a look at how Getty has ruthlessly continued to push the envelope from the customers' perspective. Getty continues to be a leader in making it easy for customers to do their jobs, and, as a result, is a leader in transforming digital rights management and entitlements.

Why CRM Doesn't Work

I had dinner last month with a long-time client—someone whose customer-centric work I have followed and respected for many years. She's moving on to a new career and it was great to have an opportunity to get a synopsis of some of her lessons learned over the 10 years that I've been following her work. I was taken aback when she, a long-time reader of our weekly advisory service, said: "You never told us that CRM wouldn't work!"

My Upcoming Book Has a Title! Outside Innovation!

Titling a book is like naming a product. You’re creating a brand as well as, hopefully, a self-explanatory description. Customers.com worked well for my first book—it said it all: Customers and the Internet. The subtitle—“How to Create a Profitable Strategy on the Internet and Beyond”—was a mouthful. But the tag line really stuck: “Make it Easy for Customers to Do Business with You.” My second book was titled The Customer Revolution: How to Thrive When Customers Are in Control. I can’t even remember the tag line. For this upcoming book, we were directed by our publisher, Harper-Collins, not to use the word “customer” in the title. They’re afraid it will get buried in the hundreds of books with “customer” this and that. Probably good advice.

   

This new book—due out in September 2006—was originally titled “Outside In.” But we were scooped by Barbara Bund of MIT, whose book The Outside In Corporation was published in October. (Stay tuned for my review of her book—it’s quite useful.) So, through the usual creative brainstorming process, we tried lots of alternatives and finally settled on “Outside Innovation.” We like it. It says what I plan to convey: that true innovation—the innovation that will keep you ahead of the curve forever—is customer-led innovation. The subtitle is currently Let Your Customers Co-Design the Future of Your Business. We’re still in search of a catchy tag line, so please give us your suggestions. Maybe you’ll come up with the equivalent of “make it easy for customers to do business with you”--a phrase that I owe to my semantics coach, Marilyn Darling. Your prize? How about a stimulating dinner together at a mutually-agreeable location, my treat?

Early Book Fodder

So much for branding/titling—what’s in the book? Here’s some early fodder:

Customer Innovation: Can You Harness It for Competitive Advantage?

What is customer 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 customers to build a customer-centric ecosystem around your products and services. It’s big business. It’s inevitable. It’s scary. It’s exciting. It’s dangerous to your business if you’re not prepared.

12 Roles Customers Play in Customer Innovation

What are the roles your customers should be playing in helping your business harness the energy of customer innovation to power its growth? In studying the best practices in customer-led innovation, we’ve discovered 12 key roles that customers are playing in reshaping companies and their products to better meet their needs. The smart companies are the ones that have recognized these roles and formalized them. They’ve given customers key roles to play in driving their businesses forward.