OUTSIDE INNOVATION

The Customer Revolution is in full swing. Customers have taken con- trol. Their rampant comparison shopping is eroding your margins. Their renegade behavior is challenging your business models and endangering your intellectual property. Their demanding expectations for customized products, wonderful experiences and high service levels are draining your resources. Customers’ insistence on open access is exposing your industry’s policies and challenging your inflexible business processes.

Innovation is a form of creation. Like any creative endeavor, innovation emerges from the structural tension between current reality –– the way things are –– and a vision of what we’d like to achieve. The discrepancy between what customers can do today and what they ideally want to be able to do is the structural tension that spawns innovation.

Outside innovation is a process of engaging directly with lead users and passionate customers to harness and commercialize their ideas and to co- design solutions that will better meet their needs. Many companies already do this. What’s new is the exponential growth in the ratio of outside innova- tion to inside innovation in many industries.

What can you do to channel this customer energy into a positive direc- tion –– one that will power your business rather than sink it? Here’s the answer: Engage your customers in more ways to help you redesign your business, your products, your processes and your business models.

This summary will discuss the essential outlook that an organization must hold if it wants to be successful in fostering customer-led innovation.

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