Customers are a “necessary evil”. Please don’t take that the wrong way. I think almost everyone can agree that our businesses live and die with our customers’ willingness to support us, but it’s also true that they can be unfair critics, demanding and needy, and don’t always reward your efforts to please them with their wallets. They will often say one thing and mean something completely different. It’s like every other relationship you probably have except this one pays your mortgage.
Open Innovation is a tool that often implores you to engage stakeholders from all channels, customers very much included, as sources of breakthrough product ideas. There are many case studies and examples of how customer portal websites and other “crowdsource” methods have led companies to new products and features much more efficiently than traditional internal-only efforts.
However, in his article on Fast Company, “User-Led Innovation Can’t Create Breakthrough Products,” Jens Martin Skibsted points to Apple and Ikea as companies that shun attempts to have their designs led by users. Among the issues he highlights is that users can’t predict future demand, that the issues they are focused on can stifle creativity and the that the majority of user input will lead to a lack of differentiation. He makes some good points.
Diving further, one could say that customers and users certainly CAN be valuable sources of innovation, if employed for the right reasons and not just to give them a “seat at the table.” At Ericsson, for example, they proclaim to be moving to a more Open model because of how mobile technologies are creating networks and communication access that couldn’t be tapped before. Should he listen to Skibsted and ignore that new found access?
On a deeper note, Lead User Innovation, as researched by MIT’s Eric von Hippel, very much can be a predictor of future demand and a source of bleeding edge innovation. Lead Users, if you are aware, are highly engaged customers who often take it upon themselves to alter and modify products to better suit their specific uses. For example, farmers who hack tractor configurations to be more efficient for certain crop types have exposed manufacturers to very lucrative emerging market segments and product design innovations.
So are customers useless for innovation? Are projects such as Kraft Foods running customer contests that result in multiple new lines of cream cheese not a worthwhile exercise? I don’t know the P&L of how that particular business has performed, but reports are that they are a major success. But for every one of these, it’s not difficult to imagine a wake of failures where listening to customers too closely have resulted in money pits and market embarrassments.
I think the important lesson isn’t to stop getting ideas from customers, but to be careful in how they’re used. Like any type of external idea you receive for your business, from customers, consultants, research firms or anywhere, it is still your responsibility to make a disciplined business case for its implementation, the part of product development that customers just won’t do for you.