My Customer, My Co-Innovator

Michael Schrage writes:

What portion of your cell phone’s myriad features do you use? Market research shows that most mobile phone owners use less than 20 percent. The innovation that matters isn’t what the innovator offers; it’s what the customer adopts. And as organizations recognize this, they’re starting to use their customers as a source of innovative introspection.

One company that understands this is the networking giant Cisco Systems Inc. Over the years, Cisco’s architects and engineers have developed scads of internal tools that allow them to design, configure, optimize, and compare alternative network infrastructures. How did Cisco come to share this inside information? In the past, Cisco’s engineers and architects felt, often correctly, that most customers and prospects simply wouldn’t understand their internal, informally assembled aids. However, Cisco had several highly sophisticated customers who weren’t satisfied with “solutions”; they wanted to see and understand the thought process behind the company’s proposals

.“We’ve found that when we share our tools with customers rather than just demonstrate how much we’ve improved our technologies, we learn a lot more,” Randy Pond, Cisco senior vice president of operations, processes, and systems

Of course, many companies resist the idea of bringing in customers as innovation partners. Eric von Hippel, head of the Innovation and Entrepreneurship Group at the Massachusetts Institute of Technology Sloan School of Management, hypothesizes that internal innovators frequently view customer innovators as rivals who might undermine their creative role.

To externalize innovation, organizations must add value to tools they’ve already designed, developed, and deployed. To do this, companies need to audit the very tools they most take for granted and see how — or whether — they should be externalized. That kind of introspection may be the most customer-oriented innovation a company can make.

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