Customer Innovation Guide: Taking the Fifth Step

Open Up Your Products and Engage Customers in Peer Production

January 18, 2007

A key to innovation is to assume that customers will want to roll up their sleeves and customize your products and services to meet their needs. Make it easy for them to do so. Provide customization and configuration tools. Capture customers’ customized solutions and leverage customers’ customizations in your next generation product designs. And give customers control of their innovations—reward them for their efforts and understand that you don’t own the customer-created designs; they do.

Have You Taken the Fifth 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 5: Open Up Your Products and Engage Customers in Peer Production

A critical success factor in enabling customer-led innovation is to open your products and services up so that customers can customize and/or extend them to meet their own special-purpose needs. Provide customization and configuration tools that enable customers to customize and/or configure their own products or services, whether these are automobiles, software, apparel, or cereal.

Capture customers’ customized solutions and leverage customers’ customizations in your next-generation product designs. Let customers build on each others’ customized solutions.

If you publish product or content updates, let customers subscribe to these as digital feeds. Let customers mix and match your electronic feeds and supplement them with their own content, and/or with other companies’ offerings. Let customers mix and match their favorites and add to them. Apple didn’t create the podcast industry. Its customers did. They began recording their own radio (and now video) shows and uploading them in iTunes format.

If any part(s) of your products or services are digital or electronic, let customers repurpose and/or extend those products. Provide open APIs to make it easy for customers to add their own functionality or content. For example...


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