Open and lead user innovation

Innovation. This word refers to a wide range of meanings. Nowadays, it seems to be a new imperative for business success. However, innovate is a unique human’s capability and it has been par of our whole history, and for so of the business’ history.

Nowadays, the challenges have change. Business should know how to take advantage of the spectacular informational network that has been created, thanks to the social media and technological advances. At the same time, companies should find the way to differentiate from the competitors, in a way that they could create and add value to consumers. And here is where innovation comes to the main stage.

A business can innovate at every stage. Innovation could be understood as a process, as a management approach, as cultural values, or just as the final product. Among different approaches, there are two that deserve our attention.
The lead User Innovation takes advantage of what is done; it helps to create new ideas (using existing products, services or process), to solve problems. “Lead users are users whose present strong needs will become general in a marketplace months or years in the future” (von Hippel 1986). In fact, lead users “job” is to give solutions to problems (or necessities) with higher impact, using products that already available. In some cases, they develop new products that attend their own necessities, so the become innovators. This method allows a better understanding of the customers’ necessities, expectations, and preferences. “Products that lead users develop often become the basis for important commercial products when lead user needs become mainstream.”

The Open Innovation is a method related to the break of boundaries; to “open” and “listen” what the others can say about your business, including, the competence. “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” (Chesbrough, 2003). The idea is to accelerate internal innovation through openly sharing (in both directions) knowledge, research, between companies. The collaborative sprit is potential zed with this approach.

There are many business cases about open and lead user innovation. For example, FINISH is an initiative that believes that financial inclusion could improve sanitation health. Their aim is to innovate in the sanitation technology in a way that address and solve the health problems in most of the developing countries. They use the Open innovation method to identify ideas, potential partners, etc., based on the ideaken platform. See the video!

References: (all consulted by 10/02/12)

Chesbrough, H.W. (2003). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press

Revised paper published as: von Hippel, Eric (1986) “Lead Users: A Source of Novel Product Concepts,” Management Science 32, no. 7 (July):791-805.

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