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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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    « Celebrate the Inauguration Through Service (with your Mom!) | Main | Smart Customization Comes of Age »

    January 14, 2009


    Graham Hill

    Hi Patty

    Your post catalysed me to write a post of my own on How the Recession Increases Customer Centricity. By building on the five customer-centric characteristics, companies can both increase their customer-centricity and respond dynamically to the recession.

    Keep up the great work.

    Graham Hill
    Customer-driven Innovator

    Graham Hill

    Hi Patty

    I couldn't agree more. Smart customisation is a critical component of, lets call it, 'value-based customer-centricity'. Frank Piller of the Smart Customisation Group at MIT is perhaps the leading academic exponent of this approach.

    There are five key divers in value-based customer centricity, including:

    1. Having a deep understanding of customer needs (based on customer jobs and outcomes)
    2. Mass customisation of products, services & experiences
    3. Dynamically reconfigurable delivery system
    4. Lean business support systems
    5. Customer value management across the customer portfolio.

    You can see the linkage with smart customisation through #2 & #3. But this is much more than just smart customisation, as Frank points out in his book 'The Customer-centric Organisation'.

    I blogged about this further in a May 08 post on How Customer-Centricity Drives profits.

    For those not able to fly over to Boston for the next Smart Customisation Seminar, Frank is running a week long course on Building the Customer-Centric Organisation at the IE Business School in Madrid in March.

    I for one intend to be there.

    Graham Hill
    Customer-driven Innovator

    The comments to this entry are closed.

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