As companies strive to remain competitive in today's fast-paced global markets, some of the best ideas for new product innovation are coming from customers around the world.Companies that tap into the collective wisdom of their customers find themselves better positioned to respond quickly with the types of products that customers are asking for--and in some cases, helping to design themselves. "There are more brains not only outside your company but outside your country," says Mohan Sawhney, a management consultant and the Robert R. McCormick Tribune Foundation Clinical Professor of Technology at the Kellogg School of Management at Northwestern University.
Sawhney, who spoke at the World Innovation Forum in New York this morning, notes how innovation works better "when people collaborate. A community is wiser than the sum of its contributors."
Sawhney, who is also a fellow of the World Economic Forum, stresses the strength of networked or connected innovation which relies on harnessing the creativity and expertise of external contributors to increase innovation reach, accelerate innovation speed, and improve the quality of innovation outcomes.
Collaborative innovation includes what Sawhney calls "customer co-creation" where companies such as McDonald's, P&G, and the maker of smart cars have tapped the creativity and expertise of their customers to help define and design product ideas in exchange for social and economic rewards. Such rewards can include customer recognition. Sawhney points to a Wall St. Journal article published a few years ago about a woman who had reviewed thousands of books on Amazon.com. She's done all this, says Sawhney, because she likes to help people.
"Amazon has effectively created a currency for social reputation," says Sawhney. "It's an interesting currency because it doesn't cost them anything. But it's a valuable reward for customers."
Sawhney also points to McDonald's in Germany, which ran a promotion last year called Mein Burger in which it encouraged customers to design their own burgers. 97,000 unique designs were submitted and one winner named Steve was selected. Steve's burger was launched in March by McDonalds in Germany and Sawhney notes how the concept may be applied to other McDonald's divisions around the world.
Customer co-creation not only provides companies with a font of new ideas, it's also an extremely effective way to engage customers. Sawhney notes how Smart, the maker of smart cars, encouraged consumers to submit new design ideas for its vehicles. Ideas were submitted from Zambia to Brazil, says Sawhney. The ideas not only generated "enormous amplification" across social media channels, the movement was then picked up on and reported by the mainstream media, thus creating additional buzz for Smart.
The program generated more than 50,000 design ideas and led consumers to spend more than 13,000 hours on the company's web site, says Sawhney.
Of course, it's not enough to simply recruit customers to share new product ideas. Companies also need to close the loop and communicate how and whether those ideas were put into action. For its part, Dell posts the number of customer ideas it has implemented on its website, says Sawhney.
Without question, the execution of customer ideas is the toughest part, says Sawhney. He points to how Starbucks has more than 50 employees who are tasked with following up with customers on ideas.
Says Sawhney, "You have to hard wire customer ideas throughout the company."