Have You Taken the Second Step towards Customer-Led Innovation?

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 Desired 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 2: Provide Customers with Tools to Use to Reach Their Desired Outcomes

Innovation is about inventing a new approach and taking it to market. That approach may be a new product or service, a whole new business, or new way of doing things. Your goals will vary depending on whether you want to start a new business (like Koko Fitness), find a new customer set to serve (like Zopa and National Instruments), design new solutions for existing customers (like SEI Wealth, LEGO, and the American Institute of Physics), and/or design a distinctive brand experience (like Karmaloop, Flickr, National Semiconductor, and GE Plastics).

Whatever your innovation target, the technique is the same: find the most insightful and passionate “lead users”--the people who are trying to get something done that isn’t as easy as it should be to accomplish--and work with them to co-design innovations that will be evolutionary or revolutionary.

There are three main ways to harness customer-led innovation:

• Watch customers improvise new approaches to achieve their goals. Commercialize their successful approaches.
• Give customers tools that enable them to create their own ideal solutions. Leverage their work to extend and improve your own capabilities.
• Work closely with lead customers to co-design innovative solutions that will help them achieve their outcomes.

Give Customers Tools to Co-Design Innovative Solutions for Themselves (and for You)

The purpose of offering co-design tools is to make it easy for customers to design their own ideal solutions, leveraging your domain knowledge, learning what’s possible as they do so. By empowering your customers to create their own solutions, through the use of co-design tools, you transfer to your customers the hard part of the problem--specifying exactly what it is that they want and need.

Interactive design tools allow customers to ...