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Your customers and business partners might have great insights into how you can improve your products and services. But do you know how open up your business development process to outsiders?
Also See:
How IT Ignites Innovation At Intel
CIOs: Don't Constrain Innovation
By Ellen Pearlman
Strategic Thinkers:
Jacques Bughin, Michael Chui and Brad Johnson
Credentials:
Bughin is a director in McKinsey's Brussel's office, Chui is a consultant in McKinsey's San Francisco office, Johnson is a principal in the firm's Silicon Valley office
Big Idea:
It's not too soon to start looking at how your customers and suppliers may help you find your next great product or service
Article:
"The Next Step in Open Innovation" published by The McKinsey Quarterly, June 2008
As companies race to find the next great product or service they are increasingly finding that relying solely on the sparks of innovation inside their company doesn't always work. It's not that your employees can't come up with original ideas, they can. But your customers, who actually use your products and services, and your suppliers, who make critical product parts, may have insights that your own team members may not dream of. This model of open innovation is known by the term "distributed cocreation" and is being used successfully by a small number of companies who are gaining expertise in this new product development process.
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Jacques Bughin, Michael Chui and Brad Johnson, authors of "The Next Step in Open Innovation," published in the June 2008 issue of The McKinsey Quarterly, say that distributed cocreation is "too new" for them to draw definitive conclusions about how companies should use it. But they do say that it "isn't too soon for senior executives to start seriously examining the possibilities for distributed cocreation or to identify the challenges, such as the ownership of intellectual property and increased operational risk, they face in adopting it."
So how have companies opened their product development process to the external world?
The authors identified numerous examples.
Everyone in the IT community knows about the success of the open operating system Linux that continues to be improved and enhanced by its user community of software developers. And some may know that LEGO encouraged ardent users of its click-together building blocks to suggest new product concepts and then financially rewarded those people who submitted marketable ideas. But few may know how tee-shirt retailer Threadless invites would-be-tee-shirt designers to submit their ideas online, makes it easy for its user community to vote daily on the best shirts and then offers artists whose ideas win and get printed a cool $2,500.
And it's not just about cocreating new products. Peugeot used cocreation to help create a marketing campaign. The company invited people to submit car designs online and built a demo model of the winning design that it exhibited at an automotive event and managed to get included in a video game.
And the Myelin Repair Foundation (MRF) has scientists from five universities working together to develop a drug to treat multiple sclerosis. MRF expects to complete its work within five years, 75 percent faster than the typical research effort.
Next: The Challenges Of Distributed Cocreation
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