In my book, "Outside Innovation: How Your Customers Will Co-Design your Company’s Future," we specify the five steps to customer innovation:

• Identify and Study Lead Customers
• Provide Customers with Tools to Use to Reach Their Outcomes
• Nurture Customer Communities
• Empower Customers to Strut Their Stuff
• Open up Your Products; Let Customers Engage in Peer Production

For each step, we provide context and a list of activities (methods/behaviors/programs) you should be implementing to reinvent your organizational culture around customer-led innovation. We also provide you with space to complete your self assessment: how well is your organization/division/department/group doing on fulfilling these requirements? We recommend that you identify those activities broken down into three categories (which mirror our Customer Scenario® Mapping methodology):

• Things “We Can” Do--you already do this activity well.
• Things “We Will” Do--you have already identified this activity as strategic to your organization, and you have a plan for implementation in place, complete with a budget and delivery date.
• Things “We Should” Do--you aren’t currently committed to this activity, but you understand that you should investigate it and prioritize its value to your customers and to your organization.

Finally, we provide a place for you to make note of your next steps for each activity. We recommend that you include the name of a person who is to take responsibility for the next action as well as a target deadline for completion of that action.

Step 1: Identify and Study Lead Customers

The fastest path to true innovation is to harness the creativity and inventiveness of your smartest customers--the ones that are the most knowledgeable and passionate about your field. These may be the sharpest dressers (Karmaloop), the most advanced gamers (Spore), the most adventurous engineers (National Instruments) or the most passionate freeformers (Zopa). Get into their heads. Learn what they care about.

ENGAGE IN ETHNOGRAPHIC RESEARCH. WATCH THESE CUSTOMERS IN THEIR NORMAL CONTEXTS--in their homes, in their offices, in their classrooms, where it is they do what they’re trying to do. Remember that Staples’ usability designers went to customers’ offices and watched them order office supplies. Koko’s founders watched customers exercise. Both Staples and Koko interviewed customers deeply about what frustrated them, what they cared about, and what they were trying to accomplish. Unilever, Hallmark, and others engaged in a different, but equally valid form of ethnography. They engaged customers to bring their lives online--to share photos of their lives, to talk to their peers about the things they enjoyed and the things they needed.

We recommend that you begin by...