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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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    « SPOTLIGHT ON OUTSIDE INNOVATION AT THE BBC | Main | Tools for Lead Users to Use »

    October 18, 2006


    Patty Seybold

    I'm honored that you stopped by! Right--there are lots of different kinds of customer engagement and not all are right for each client.

    For example, if your clients are NIH folks when it comes to new product development, they may be much more open-minded when it comes to customer co-creation of product positioning and guerrilla marketing.

    On the other hand, you may have clients who are quite willing to be "porous" in co-designing new services and products by working directly with end-customers and/or by co-opting consumers' good ideas!

    Thanks for the pointer (on your blog) to Pete Blackshaw's Engagement by Engagement Blog!


    Jonathan Narducci

    The first Guide is an innovation in itself. The concept of "Guides" is particularly useful and, I believe, rarely used. The evaluation criteria starts the thinking process necessary to get company folks out of their "normal" customer relationship activities and into a "change" mindset. Good job.

    John Bell

    We are wrestling with where each of our clients reside on teh "engagement" scale - that is to what level are the willing and best suited to go in terms of engaging their customers - co-creation being a somewhat advanced state (and not right for everyone). I like your observation that the most innovative companies "have customers playing active roles in many different parts of their business." Too often we are trying to find that 'one' program that will thrust a client into this practice and it really must be more organic and more pervasive.

    I can't wait for the book.

    Patty Seybold

    Hi Lincoln,
    You're right, working closely with customers in partnership will certainly help you drive your business priorities from the outside in. I'm curious to know how many of these roles your customers actually play:

    Lead customers

    If you have time, download my questionnaire and let me know what you discover!

    My bet is that you've probably got at least 4 out of these 5 roles covered..


    Lincoln Torcelli

    "Partnership" is the word which best describes customers shaping our business.
    I manage 400 people in my business unit, security business(certainly a booming industry)and we work every day with our clients to get the job done in a win-win relationship.

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