There may be a Thomas Edison lurking in
you - and plenty of companies are banking on it.
You might think that the buyers of magnetic resonance imaging
machines (with price tags starting in the seven figures) wouldn't
think of tinkering with such expensive instruments. Guess again.
Several hundred purchasers of the MRI machines produced by GE
Healthcare bought the machines with every intention of modifying
them, says Michael Wood, general manager of research collaboration
with GE's global magnetic resonance business in Waukesha,
Wisconsin. "They almost throw away the instruction book."
Think GE is shocked by this? Wrong again. GE actually encourages
its buyers to alter the machines. In fact, the company negotiates
agreements with many users to allow them some access to the imaging
software.
James Pipe, PhD, a senior staff scientist at St. Joseph's Hospital
and Medical Center in
Phoenix, modified the machine's software to
change the way in which the machine collects images. Previously,
even slight movement - say, a cough - could blur the images and
make it difficult for doctors to diagnose a patient's condition.
Now, the machine generates clean, clear images even when a patient
moves.
"We go out of our way to find ideas like that," Wood says.
The MRI tinkerers are hardly alone, and businesses couldn't be
happier. A growing number of leading-edge companies are inviting
the users of their products to participate in their
product-development efforts. The process is known as "lead-user
innovation," says
Eric von Hippel, head of the innovation and
entrepreneurship group at
MIT's Sloan
School of Management and
author of
Democratizing Innovation. While no firm statistics
are available, von Hippel has seen a marked increase in the trend,
in industries ranging from semiconductor design to electronic-game
creation.
Driving this popularity is the fact that bringing lead users -
those at the leading edge of major market trends and who have a
strong need to solve the new problems they encounter, often by
developing new products - into the development process helps
companies to commercialize the product innovations that the lead
users have developed, thus serving the companies' leading-edge
needs. As a result, the products they develop are more likely to
succeed in the market. A 2002 study by von Hippel and others
compared products developed at 3M via the lead-user method with
those developed in other ways, and found that after five years,
average market share for the lead-user products was 68 percent -
more than double the 33 percent share for the rest.
Of course, the desire to participate in product development is
nothing new. "At the beginning of mankind, you saw innovations like
the controlled use of fire and the development of weapons," says
Nikolaus Franke, professor of business administration at Vienna
University of Economics and Business Administration in Austria.
These breakthroughs didn't come from a corporate R&D lab but
from people who needed to stay warm and protect themselves from
enemies.
However, user innovation declined during the Industrial Revolution
in the 1800s, when the production of many goods moved from people's
homes to assembly lines in factories. "Mass production knocked user
innovation off center stage," von Hippel says. Even so, the
tendency of users to tinker with the products they bought never
went away. Studies show that today, between 10 and 40 percent of
lead users modify a product so that it better meets their needs.
TO APPLY THIS INNOVATION approach to their own
organizations, executives need to identify the lead users of their
products. Somewhat surprisingly, lead users aren't necessarily a
company's customers. Instead, these individuals possess two key
attributes, says Mary Sonnack, a Minneapolis-based senior
consultant with Lead User Concepts. First, they have a strong need
for a particular product or function before the mass market
does.
They also have the ability to address their need. Many lead users
have, on their own, developed solutions or prototypes. At GE, for
instance, many of the institutions with which it has inked research
agreements employ scientists that lead the world in the study of
different diseases.
Having identified its lead users, a company needs some way of
tapping into their expertise and insight. Office supplies retailer
Staples, of
Framingham,
Massachusetts, does this by issuing an open
invitation to its Invention Quest contest. Just about any U.S.
resident over age 18 can submit ideas for innovative, useful office
products.
A panel of inventors and product designers, along with members of
the
Staples management team, review the submissions, looking at
their market potential and the originality of the concept, among
other qualities. Winners can earn royalties (as well as prize money
for those in the top 10) if Staples brings their idea to market.
More than 13,000 potential Thomas Edisons, with backgrounds ranging
from singers to homemakers to flight attendants, submitted ideas
for the most recent contest, which ended in May 2005.
Staples' management believes ideas for cool products can be found
anywhere, says Jevin Eagle, senior vice president of Staples Brand
Products. "The ideas are there, and we have to find them."
TINKERERS' CONCEPTS have definitely resonated with
consumers. For example, Staples sold 280,000 WordLock padlocks in
the first three months after the product's introduction. The
WordLock, winner of the 2004 Invention Quest, uses easy-to-remember
letters, rather than numbers, to form combinations.
At St. Paul, Minnesota-based 3M, the process has worked a bit
differently. In 2004, the
aerospace division introduced a testing
device that mechanics can use to check for shorts in aircraft
wiring or other faults.
To come up with the new tester, employees from 3M's aerospace
division looked to their colleagues in the telecommunications
division. They already had developed a tester to locate faults in
voice, video, and data circuitry, says Paul Neary, market segment
manager for 3M's aerospace MRO (maintenance, repair, and overhaul)
business.
Neary and his colleagues brought the telecommunications tester to
maintenance workers, mechanics, and engineers at their aerospace
customers, looking for their insight into the functions that would
be most useful in that industry. They discovered that the concept
of existing telecommunications tester would work, with
modifications. "The baseline product had existed in the telecom
division but just hadn't made it to aerospace," Neary says.
The result was 3M Advanced Systems Tester 900AST. Workers can check
for faults from wherever they can access the wire; previous testers
required workers to visually inspect the wires, which often meant
taking down wall panels. What's more, the new tool is about the
size of a loaf of bread; previous testers were closer in size to
ovens.
Electronic Arts, the Redwood Shores, California-based developer of
computer games, reaches its lead users via the Internet. Once
they've purchased the original game, users can download portions of
the code used to develop it.
They then can create "mods," or modifications, to the game. In
2005, a "modder" tweaked the company's
Battlefield 1942
game. While the original game takes place on the battlefields of
World War II, the modified version occurs in the desert. Other
Battlefield players also can download and play the modified
version.
Although the mods don't generate revenue, they still contribute to
EA's bottom line, says spokesperson Steve Groll. Most
significantly, mods keep users engaged in the product. "They keep
playing the mods until the next official title in the franchise
ships," he says.
To be sure, not all user innovations end up in the marketplace
right away. Just ask Felix Kramer, founder of the Palo Alto-based
California Cars Initiative, a nonprofit whose mission is to bring
plug-in hybrid vehicles to the market.
Kramer and other Calcars volunteers rigged a 2004
Toyota Prius with
a battery pack so that it can be plugged into a 120-volt outlet and
then operated on the resulting charge. "It's as if you added
another small fuel tank to the car," Kramer says. That modification
boosts the overall miles per gallon of gas of the Prius past 100.
But Kramer isn't interested in manufacturing plug-in hybrids. "Our
whole goal is to get the car companies to do this; we promote
awareness and enthusiasm," he notes.
However, given today's technology, the price tag for a plug-in
battery system retrofilled on a Prius would hit about $10,000, says
Dave Hermance, executive engineer at Toyota. "Plug-ins are an
interesting concept, but they don't today offer a good value to
customers."
That doesn't mean Toyota doesn't gain anything from Kramer's work.
"It will still benefit by learning how many users pick up the
idea," says von Hippel. If the number grows large enough, Toyota
may decide it makes sense to pursue the concept.
TOYOTA'S RESPONSE TO Calcar's invention isn't unusual. Many
companies are leery of working directly with users, if only because
of the legal issues to consider.
Most companies go to great steps to avoid putting themselves in a
position in which they could be accused of stealing someone's
invention. That's why many prohibit their product-development
employees from even looking at ideas submitted by individuals
outside their companies.
Before organizations work with customers or others outside the company to develop ideas for new products, both sides need to agree on the way in which any intellectual properties resulting from the collaboration will be divided. “You have to tread carefully,” says Stephen Noe, deputy executive director of the American Intellectual Property Law Association in
Arlington, Virginia.
Certainly, these legal and marketing concerns are significant, and companies need to think through them. At some organizations, however, ideas are given consideration only if they’re generated from within, von Hippel says. “Companies have the idea that only they should develop things.”
That’s a mind-set that will need to change if an organization is to thrive long-term.
Current technology is allowing more users and customers to participate, to varying degrees, in developing the products they buy and use. For instance, consumers can go online to configure the cars they’d like to buy and to design the jeans they’d like to wear.
While chances are slim that we’ll revert to the days when we built our own furniture and grew our own food, the prevalence of user innovation is likely to keep rising. People like that they can get products that more precisely fit their needs. “It’s kind of another industrial revolution,” says Franke.
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