There are two trains of thought when it comes to the role customers should play in our innovation efforts. One train is that customers are fundamental to your business and therefore you should do everything they wish. Another is that customers don’t always know what they want (faster horses as Henry Ford might say), and therefore you should work with them to co-create the right solution.
A recent study from the University of Vaasa explored the key value in this latter form of co-creation in helping organizations innovate effectively and efficiently.
“Companies generally strive to produce innovations which do not necessarily have a wide range of demand in the markets. These innovations can be really expensive for companies,” the author says.
Getting close to customers
It’s something that’s gaining a growing level of appreciation, with organizations as diverse as the Queensland government and Nestle launching open innovation platforms recently to begin collaborating with customers.
Queensland are, for instance, taking a challenge based approach, so rather than the traditional tendering process, they are posting up the challenges that they wish to solve, and companies compete to solve them.
Such an approach has a number of virtues, whether it’s increased speed to market and a reduced cost of development.
Perhaps not surprisingly consumer goods companies are also heavily involved in co-creation with their customers. Companies such as Nestle and Unilever regularly turn to their customers for new product ideas and improvements.
Last year, for instance, Unilever launched Foundry IDEAS to solicit ideas from customers and other interested parties to help the company tackle a number of sustainability challenges.
Of course, whether you create more than ‘faster horses’ depends largely on the diversity of the audience that is attracted to your crowd. It is nonetheless further evidence that open innovation is rapidly moving into the mainstream, with research conducted by Henry Chesborough highlighting just how many organizations are dabbling with open innovation.
“Open innovation is adopted by firms from low-tech as well as high-tech sectors. For example, wholesale, trade and retail firms reported engaging in some form of open innovation,” the researchers said. “This suggests that open innovation is not just a high-tech phenomenon driven by firms in the information and communication technology sector.”