Five Steps for Embracing Consumer Innovation

Five tips show how companies can work with consumer innovators, or “casual entrepreneurs,” by understanding that “lead users” are key.

Using a GPS system and small tags to create a way to find things that get lost in a house. Creating a coat that’s easy to put on and take off while in a wheelchair. Coloring the two halves of a clock different colors to teach children the concepts of “past the hour” and “before the hour.”

Those are some of the consumer innovations that were found by Eric von Hippel, Susumu Ogawa and Jeroen P.J. de Jong in their research into the scope and frequency of how consumers modify existing products and create new ones. “The Age of the Consumer-Innovator,” their report on the first-ever national surveys on consumer innovation in the U.S., Japan and the United Kingdom, is the cover story of the new Fall 2011 issue of MIT Sloan Management Review.

How can companies best work with these “casual entrepreneurs”? Here are five steps, drawn from the article:

  • Understand that “lead users” are key. “Some users — termed “lead users” — are much more likely to develop commercially promising innovations than the average consumer,” write von Hippel, Ogawa and de Jong. “Lead users are those who are both ahead of the majority of users with respect to an important market trend and have a high incentive to innovate.”
  • ID those lead users. Co-author von Hippel, a professor of technological innovation at the MIT Sloan School of Management, offers at his website free training materials to find lead users, including a lead user project handbook and videos.
  • “Stop attacking your innovating users, whether intentionally or by mistake!” The authors are emphatic about this. It is counterproductive, they note, for companies to deter through criminal threat users who might simply be trying to inspect and alter a product to make it better. Ditto for consumer innovators who are using products in new ways that could lead to new markets.
  • Actively support consumer innovation. “Create documented, open interfaces to support modifications to your products,” suggest the authors. Create “developers’ toolkits.” Create websites where users can share information and innovate together. Consider even providing special access to in-house developers.
  • And about those in-house developers: Get them on board. The authors write: “Companies will have to help their own product developers look at consumer-developed innovations with new eyes — not just as poorly engineered amateurish efforts. Product engineering is not the value companies should look for in the consumer-developed prototype product and related usage. The consumer is showing a product prototype that performs a novel function that people have actually demonstrated that they want. That is the priceless information your companies must take on board.”

More details are available in the full article, “The Age of the Consumer-Innovator.” Also see our online-only interview with von Hippel, “The User Innovation Revolution,” for additional suggestions.

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