Certain business processes and methods have been worked out to a fine science. For example, in research and development, teams work to discover new products and services customers need and develop ways to create and deliver those products and services. Some firms spend an obscene amount of money on Research and Development. But is that all necessary? This essay argues that it isn’t.
Stefan Thomke and Eric von Hippel write about how the customer is the best innovator. After all, they understand what they want more than anyone else. By putting innovation in the hands of the customers, firms can cut down drastically on development costs as well as have a higher success rate for developing new features for customers. We’ve seen this type of crowd sourcing work in the open source community with Linux and countless applications. When people started hacking into Lego’s NXT programmable brick, they embraced community involvement instead of suing. Lego opened up development of Lego products to the public and have seen tremendous demand, profits, and growth as a consequence. That all being said, is the customer really your best innovator?
As often as customers know exactly what they want, they also have no idea what’s possible. Crowd sourcing to improve and create features for products is an easy choice. The model works and benefits both the consumer and the company. However that should not be the only source of innovation within a company. While it was probably a consumer that thought it would be nice to have a cup holder in the car, I doubt your average joe developed the catalytic converter, a device allowing cars to run off unleaded gasoline. The incredibly famous case of Howard Moskowitz involves showing the consumers possibilities they hadn’t fathomed, even when asked. Try to ignore the crazy hair and watch the video, it’s worth it!!
Overall the customer is a fantastic resource that should be tapped into for information whenever possible. If a company is able to offload some development costs onto the customers, that’s even better. However, if a business relies solely on the consumer to innovate, they will be surpassed by those willing to make much riskier ventures. Customer development is simply low-hanging fruit that every business should take advantage of when possible. In house research and development is about imagining the impossible, and delivering that innovation to eager adopters.