Innovation and Web 2.0
"No matter who you are, most of the smartest people work for someone else" -- Bill Joy, co-founder of Sun Microsystems
Innovation is the topic du jour in many companies. Competition from developing nations eats away at market share from below, while the very assumptions of mass markets is being challenged by the bifurcation of buyers into price-sensitive and luxury, with the middle being abandoned.
Clearly, if you want to succeed in tomorrow's economy, pursuing yesterday's strategy won't work -- just look at the travails of US auto companies for a stark illustration. The mantra for companies today is to develop new offerings that are better suited to customer tastes -- whether that customer is an end consumer or a business that uses the product or service to create something that eventually is sold to an end consumer.
But how to do that? The traditional method is to look to the "folks in research." Those boffins, companies feel, are thinking big thoughts and working on things that will become tomorrow's products. The only thing is, the track record of research is quite mixed. While many innovative products have been created in the labs of great companies -- like the disk drive, developed by IBM's research division -- other company's research efforts show dismal outcomes. Microsoft's research division hasn't resulted in much, although the next generation of their OS, codenamed Midori, is supposed to be based on work done there (I plan to blog on this in the near future). And, of course, Xerox's PARC is practically a cliche for unapplied research, although many companies, among them Apple, benefited from Xerox's investments.
The other place that companies traditionally turn for developing new offerings is customers. Focus groups. Surveys. Intuition based on customer interaction. The challenge for many companies is that these methods often are inadequate -- people lie on surveys, and focus groups are artificial settings peopled by unrepresentative participants. And interacting with customers usually provides unenlightening information -- they feedback offered is usually based on a customer addressing shortcomings in the current products, which offers the opportunity for improvement, but little chance for innovation -- as Henry Ford once put it, "If I'd asked people what they wanted, they would have said a faster horse."
There is another way, however, which is to move from internally generated invention or externally gathered research to externally generated invention. In short, apply Web 2.0 principles to product innovation. Web 2.0 offers the ability for internal employees to collaborate with external parties with the aim of generating innovation that can be applied to new products or services. Instead of trying to imagine what customers want (generate innovation internally via expensive research efforts) or collect customer feedback (via filtered information gathering), let outsiders directly participate in product or service creation.
In his book, Democratizing Innovation, MIT Professor Eric von Hippel cites a study done at 3M, in which internally generated innovations were compared with externally generated innovation (3M allowed outside parties to directly participate in product creation). Not only were the outside innovations more creative (versus internal innovations, which tended to be more extensions to existing functionality), they were more profitable as well. Von Hippel also cites the kiteboarding industry, which was entirely end user invented, with kiteboarding startups harvesting user creations to develop new businesses.
If letting external parties help create the product sounds familiar, it should. This is the open source model. Open source projects welcome code contributions from anyone wth a
Print
Innovation is the topic du jour in many companies. Competition from developing nations eats away at market share from below, while the very assumptions of mass markets is being challenged by the bifurcation of buyers into price-sensitive and luxury, with the middle being abandoned.
Clearly, if you want to succeed in tomorrow's economy, pursuing yesterday's strategy won't work -- just look at the travails of US auto companies for a stark illustration. The mantra for companies today is to develop new offerings that are better suited to customer tastes -- whether that customer is an end consumer or a business that uses the product or service to create something that eventually is sold to an end consumer.
But how to do that? The traditional method is to look to the "folks in research." Those boffins, companies feel, are thinking big thoughts and working on things that will become tomorrow's products. The only thing is, the track record of research is quite mixed. While many innovative products have been created in the labs of great companies -- like the disk drive, developed by IBM's research division -- other company's research efforts show dismal outcomes. Microsoft's research division hasn't resulted in much, although the next generation of their OS, codenamed Midori, is supposed to be based on work done there (I plan to blog on this in the near future). And, of course, Xerox's PARC is practically a cliche for unapplied research, although many companies, among them Apple, benefited from Xerox's investments.
The other place that companies traditionally turn for developing new offerings is customers. Focus groups. Surveys. Intuition based on customer interaction. The challenge for many companies is that these methods often are inadequate -- people lie on surveys, and focus groups are artificial settings peopled by unrepresentative participants. And interacting with customers usually provides unenlightening information -- they feedback offered is usually based on a customer addressing shortcomings in the current products, which offers the opportunity for improvement, but little chance for innovation -- as Henry Ford once put it, "If I'd asked people what they wanted, they would have said a faster horse."
There is another way, however, which is to move from internally generated invention or externally gathered research to externally generated invention. In short, apply Web 2.0 principles to product innovation. Web 2.0 offers the ability for internal employees to collaborate with external parties with the aim of generating innovation that can be applied to new products or services. Instead of trying to imagine what customers want (generate innovation internally via expensive research efforts) or collect customer feedback (via filtered information gathering), let outsiders directly participate in product or service creation.
In his book, Democratizing Innovation, MIT Professor Eric von Hippel cites a study done at 3M, in which internally generated innovations were compared with externally generated innovation (3M allowed outside parties to directly participate in product creation). Not only were the outside innovations more creative (versus internal innovations, which tended to be more extensions to existing functionality), they were more profitable as well. Von Hippel also cites the kiteboarding industry, which was entirely end user invented, with kiteboarding startups harvesting user creations to develop new businesses.
If letting external parties help create the product sounds familiar, it should. This is the open source model. Open source projects welcome code contributions from anyone wth a
Most Discussed Posts
Cloud computing has emerged as one of the most significant game changers to hit the technology landscape in the past 20 years. With this massive expansion of the cloud, the perception of the IT organization is shifting from a utility player to a change agent. This eBook breaks down five ways progressive organizations are using cloud-based IT Management solutions to help drive innovation and become more strategic, including: adding visibility and analytics, speeding up time-to-value, lowering costs, improving prioritization, and providing a blueprint for future cloud deployments.
Read the white paper to see how IBM helped Citigroup deliver new services and enhancements to their 200 million customers faster.
There are 3 ways to modernize legacy applications: rewrite completely, acquire packaged solutions or migrate existing code. This paper explains why it's best to migrate and how IBM® Rational® software can help.
Accommodating specific lines of business can result in a hybrid ecosystem of applications and servers. The resulting complexity of this architecture makes for an environment that is costly to maintain and difficult to change when addressing new challenges.
This whitepaper will help you to define a mobile device passcode policy. Security managers must attempt to reconcile two opposing goals. They must: 1) create a passcode policy that is strong enough to protect the device if it is lost or stolen, while: 2) not annoying users with needless length or complexity.
This whitepaper, authored by The Radicati Group, looks at the key reasons organizations should consider moving to a cloud-based archiving solution. Email archiving solutions enable organizations to store, monitor, and collect electronic data exchanged by their users to comply with internal policies and regulations.
ATERNITY will showcase a 30-minute demo on how Fortune 500 companies are leveraging its award-winning FPI Platform to deliver a user-centric approach to Proactive IT Management.
For businesses to move forward and tap into the ever-expanding universe of Internet users and network-enabled devices, it's critical to learn how to make the transition to IPv6. Learn the critical steps your organization must take to make a seamless transition-and keep your business world connected.
Learn how IT teams can protect against spear phishing tactics. Harry Sverdlove, chief technology officer of Bit9 offers a frank discussion about spear phishing - the most common technique used in today's advanced attacks.
Learn how to build a solid business case for your migration to Red Hat Enterprise Linux so you can run leaner, innovate faster, be more flexible and own the New Now.
Social media isn't about you; it's about everything around you. As you consider how your customers want to communicate with you, social media is something that can't be ignored. But what should your strategy be? Is social media "just another channel?" What kind of a plan makes sense for your contact center and for your customers? Join our experts as they share their insight and research results.
Hardware tokens were a popular method of strong authentication in past years but the cumbersome provisioning and distribution tasks, high support requirements and replacement costs have limited their growth. The additional log-in steps that hardware tokens require and the resulting user frustrations have limited adoption and make them impractical for larger scale partner and customer applications.
Sponsored Links
