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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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      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.
      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.
      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.
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    March 16, 2006


    Frederick Anthony

    What should be the customer knowledege management focus be for a telecommunication firm in Africa.

    Patty Seybold

    Hi Steve,
    I agree that inspirational "aha's" often come out of our own experience. That's how Netflix was formed, for example. Reed Hastings, Netflix' founder, went from dropping off an overdue video to his 24-hour health club and wondered why he couldn't have a "use it when I want to" video rental experience...the rest is history.

    I believe ethnography is ONE way to give you the ground truth/current reality that you need to juxtapose with your ideal vision in order to create the structural tension needed to fuel the innovation process. If it's a current reality that, excuse my language, sucks, in your own life and a vision of how you'd like to have it be better, that works. If, on the other hand, you want CUSTOMERS to Innovate things/processes/new business models that will close their current reality to ideal state gap.. then you need a way for you and them to capture current reality and vision and a way/place/mechanism to hold onto that structural tension to let them co-create the innovations, or, in the case of arming them with toolkits, let them create their own...

    Account Deleted

    Thanks for the examples of companies that are using ethnography - I hadn't heard of some of those, and it's always good to know more about who is doing what, as the field is of course always shifting.

    I think I come across an online example just about every day; it's clearly an exciting area, just one that doesn't interest me very much. I am firm believer in the types of inspiration that come from your own direct experiences; that when you get out of your comfort zone and experience something unusual or surprising, that's when you truly become able to grasp the world from someone else's perspective. That empathy - going from etic to emic, as they say - is crucial. IMHO, of course.

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