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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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    November 21, 2009


    Patty Seybold

    Thanks, Richard,
    Yes Wells Fargo does do a good job with their Internet strategy and implementation and their cross-channel implementation. I am overdue to write an update for my chapter on them (originally published in in 1998). I also wrote about American Airlines in the same book. And, to be fair, I think that is doing a pretty good job, but I liked the point that Duncan made and the way that a brave employee responded. I will look up your articles about Wells Fargo. Thanks for the tip!

    Richard Anderson

    I (@Riander) tweeted your post, and while I agree that "visionairies" are needed, I don't believe they have to "rule their Web sites with an iron hand" and "set the strategy." Consider the example of Wells Fargo which employs a highly collaborative process involving all sorts of business personnel; their process is described in various places, including an EPIC 2006 paper by Beers and Whitney within the downloadable pdf of the conference proceedings and a Jan+Feb 2008 interactions magazine article by the SVP of Internet Channel Strategy (The Business of Customer Experience: Lessons Learned at Wells Fargo -- sorry, but a subscription is needed to access the full article in ACM's digital library). I also refer to their work and approach in several blog entries, including Breaking Silos.

    Patty Seybold


    I am sorry to now be on your "clueless" list.
    I agree with you on two points:

    1. Most companies operate exactly the way the does, and for good reasons. Internal processes and controls are important.

    2. A single Web page design is not the same as a well-thought out and thoroughly tested navigation path.

    Here's why I promulgated this story.

    1. I think we should be encouraging customer feedback, ideas and suggestions. I like the fact that Dustin took the initiative.

    2. I admire people and companies who respond honestly to customers' complaints and suggestions and Mr. X at did exactly that. He shouldn't have been fired.

    3. The heads of Web and Online strategy that I admire the most have managed over the years to do several things right, in my opinion. That's what makes them "Patty's Visionaries." They:

    - Have held the same job driving their company's online strategy for, on average, 10 years.

    - Are highly respected in their organizations because they deliver real value and drive the company to be more customer-adaptive.

    - They have small, nimble teams. Not 100 or 200 people, but usually 6 to 10.

    - They get this kind of customer input all the time and they would never fire an employee who erred on the side of honesty and authenticity. In fact, I've seen them risk their jobs to protect the folks who work for them.


    Patty I continue to be amazed at how much 'traction' this story gets when it's a really BAD story, especially from a UX perspective.

    1. While the offered design may have some greater visual appeal, it's functional appeal is questionable.

    2. For the designer to assume that there was someone who could/should receive his design inside of AA was entirely naive. Not only does AA not do most of their own work internally, the scenario that was described by the employee is indeed fairly common across MANY companies. I've not found one that HASN'T operated this way.

    3. Let's look at the data. The current design is fundamentally the same architecture that was done by a company I worked for back in 1999. Even when we won the contract for the redesign, American Airlines had in their posession a report that I swear I must have been the only one who read. Conducted in 1997 and published in 1998, it was an industry report that looked at all the major airline web sites and evaluated them across a number of factors (the report was effectively 150 pages of graphs). But there was one telling page among all of them. The only one attribute across ALL airlines that even in 1997 they all EXCEEDED expectations was in the visual design...and yet, our company won the contract because of the visual design comps that were built out in advance of winning the bid (a VERY costly and not too smart way of doing business).

    By my estimation, everyone who is jumping in to support this story is just as clueless as the story itself.

    Tom McKay

    A great David vs. Goliath story with a twist, Patricia. I just re-told this story on my Attract More Customers blog.

    Thanks for fighting the good fight!

    PS: Thanks for joining my mailing list, too. I'm honored.

    The comments to this entry are closed.

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