#Innovation# Open Innovation / Lead User Innovation

For a long time we have being bombarded with the idea that globalization promotes the integration and connection of people around the world. But there is another result of this process that has been observed in the recent past and has an enormous impact on companies’ ability to compete, which is the gain of importance of the final consumer on setting up the characteristics of companies’ supply chain and products. Regardless the main causes for this, which could range from the quick diffusion of consumer’s level of satisfaction among other potential ones (fear) to the perception that it’s possible to capture people needs easier and faster (proactive), this trend has been observed in many markets.

In innovation it’s not different. Companies realized that their costumers can be part of the innovation process, having an input as important as or even more important than those inputs emerged inside the institutions by professionals. It led some companies to apply the ideas of open innovation and lead user innovation. As stated by Baldwin, Hienerth and von Hippel (2006), most of the relevant innovation in many sectors emerged from consumers’ interaction with producers.

There are many well succeed cases of this theory. One good example of co-creation involving costumers and company is the rodeo kayak industry, also presented by Baldwin, Hienerth and von Hippel (2006). The industry started its commercial activities basically during the 70’s when some users responded to potential purchasers’ demand designing and producing boats similar to those that they made for themselves. The whole industry was then created by users and afterwards it evolved to a very collaborative market.

An example among the big players in the world is the program Connect+Develop of Procter & Gamble. The program calls costumers and institutions to innovate, applying a wide range of alternatives which involves co-creation¹ and crowdsourcing². Examples of these approaches are, respectively, partnerships with universities or other institutions and direct channels to be used by the final individual costumer.

3M, a company recognized for its ability to innovate is also promoting open innovation processes. They work with external scientists and institutions, interacting with final costumers through communication tools, such as blogs.

There are a countless number of initiatives like this being undertaken by companies and this theory is gaining support worldwide. According to Gassmann, Enkel and Chesbrough (2010), “taking stock of these different trends, it seems clear to us that open innovation has quite a long life left ahead of it, as there is a long and growing list of phenomena that it can help us understand and interpret. However, we should note that it is unlikely that ‘the last word’ will ever be spoken on a topic as dynamic as innovation. Open innovation should instead perhaps be viewed as ‘the next word.’” To conclude, it’s clear that innovating in the innovation process is a key factor to assure competitiveness to companies and opening it for external participants seems to be critical for the success of companies.

¹ Co-creation is the act of involving consumers directly, and in some cases repeatedly, in the product creation or innovation process. Companies engage with consumers on initial product concepts and ideas, and they use consumers as a resource throughout the product development life cycle

² Crowdsourcing is “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call

References:

Baldwin, C. Y., Hienerth, C., & von Hippel, E. (2006). How user innovations become commercial products: A theoretical investigation and case study. Research Policy, 35(9), 1291-131

Gassmann, O., Enkel, E. & Chesbrough, H. (2010), The future of open innovation. R&D Management, 40: 213–221.

http://www.businessweek.com/magazine/content/06_17/b3981401.htm

http://www.pgconnectdevelop.com/

 


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