Using Consumers to Innovate is a Brand New Idea

Corporate innovation activities are more and more in the hands of the customers. For instance, Dell has recently created the IdeaStorm online forum to gather ideas from its customers and has gone back to installing Linux in some of its PCs. Japanese Muji lets consumers rate the attractiveness of new product concepts and only manufactures those receiving a sufficient amount of pre-orders, while P&G involves consumers in the drafting of the communication campaigns of its many product brands.

These cases show that, in an increasingly global and convergent world, it's more and more complex for the firm to manage all the processes of innovation in a self-sufficient manner. Also, recent developments in digital technology make the sharing of knowledge and skills across different types of actors much easier, enabling consumers to contribute with their own ideas. Collaborative innovation is thus a crucial tendency which is emerging.

The consumer can now play a role in orienting the process of the definition of supply. The objective of those doing product research is to develop collaborations with customers, in order to gain insights into new generations of products.Value-creation for customers turns into value-creation with customers, in a move from industrial to consumer goods markets. New organizational models are thus needed for the mechanisms of value co-generation enabled by digital technology to operate effectivelyIn particular, the community-centric model shifts the locus of innovation beyond the boundaries of the firms, by involving a community of individuals and organizations collaborating to create shared intellectual property.

Input coming from third parties might well be deemed more reliable by users to guide their purchasing process. These third parties are known as virtual knowledge brokers, the online equivalent of knowledge brokers connecting, recombining, and transferring knowledge across firms.

Companies are interested in this type of knowledge for at least two reasons. Firstly, they are limited by cognitive constraints and their core competencies; secondly, their reach is limited by geographic and sectoral boundaries. Working globally across industries, virtual knowledge brokers strengthen the connections between firms and the actors that can supply knowledge for innovation.

Lastly, open source systems are most heterarchical organizational mechanisms. These are user-managed communities linked by mutual technical aid to create new products and services. In open source programs, users do not develop everything they need by themselves; they stand to benefit from the contributions freely shared with others by other users. Value co-creation, virtual communities, virtual knowledge brokers and open source systems thus become complementary approaches to create continuous innovation with the help of customers.