Customer Innovation Guide: Core Competency 3

Mastering the Third Core Competency: Customer Co-Design

July 12, 2007

Co-designing your company’s future with your customers is imperative to ensuring continuing innovation. Make your lead customers part of your design team and take advantage of their inventions and insights as you work on your next-generation of products, services, process, and business models. In this self-assessment guide, you can see how far along your company is in taking advantage of customer co-design.


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 3: Nurture Customer Communities

Chances are your customers are already members of a number of communities, most of which do not revolve around your products or services. But it is important for you to become part of the customer communities that your customers are part of so that you know what they are talking about. Executives and employees at all levels of your organization should be hanging out with customers in these communities.

It’s also important to build and nurture your own communities, specifically for the purpose of “hiring” customers as consultants to help you shape your business strategy, brainstorm new solutions, co-design new products, and debug and test new offerings thoroughly. Look at the breakthrough ideas that came from the online communities of customer consultants from Hallmark (bulk birthday cards for classrooms) and Kraft (100 Calorie Snack Packs).

Remember that we’re not talking only about online communities. Punctuate a strong set of focused online communities with physical get-togethers. Use these face-to-face meetings as an opportunity to co-design customers’ ideal scenarios, and then validate your findings with the broader community online. Leverage your online customer communities to provide you with continuous feedback and to help you with trade-offs and prioritization decisions.

You should dedicate a focused effort to harnessing the inventiveness of a solid community of your lead customers. Make this a special “in crowd,” one that customers belong to not because they spend the most money or make the most noise, but because they have the most to offer in helping you co-design the future of your business. Make sure that your most thoughtful and influential executives are engaging with these customers on an ongoing basis. Monitor the results of this collaboration carefully.

Keep track of how well you’re doing in helping these customers achieve their outcomes and how you’re doing in delivering on their metrics. (Look at the way Phil Gibson at National Semiconductor tracks the hours saved by the design engineers who use his co-design tools as well as their design wins and time-to-market.) Also track the new business breakthroughs that come from this design collaboration. What customer-impacting business processes have you streamlined? What new markets have you penetrated? What new solutions do you now have that you didn’t have before? And what’s the value of those solutions to your business?

Fill in Step 3 of the Assessment and Action Guide

Here’s an assessment guide and an action plan you can use. See which actions you’ve already taken and which ones you still need to take...

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