Key elements in User-Centered Innovation

Research finds that users rather than manufacturers are the actual developers of many or most new products and services, and that they are a major locus of innovative activity in the economy. This finding opens up new questions and avenues for exploration and is of relevance to company-based innovation and societal progress. The central challenge for companies and other institutions is how to design of a user-centered innovation process and how to leverage a distributed innovation process that includes users as innovators.

Lead Users
Empirical studies show that many users—from 10 percent to nearly 40 percent—engage in developing or modifying products. Studies of innovating users (both individuals and firms) show them to have the characteristics of “lead users.” That is, they are ahead of the majority of users in their populations with respect to an important market trend, and they expect to gain relatively high benefits from a solution to the needs they have encountered there. The correlations found between innovation by users and lead user status are highly significant, and the effects are very large.

Since lead users are at the leading edge of the market with respect to important market trends, one can guess that many of the novel products they develop for their own use will appeal to other users too and so might provide the basis for products manufacturers would wish to commercialize. This turns out to be the case. A number of studies have shown that many of the innovations reported by lead users are judged to be commercially attractive and/or have actually been commercialized by manufacturers.

Manufacturers can learn to systematically search for lead users of their products – and learn to search for lead users in advanced analog markets as well - in order to find the basis for breakthrough new products that they can produce and supply to target market users. 3M corporation is one firm that has learned to identify lead user innovation systematically. Research has found that new 3M products based upon the insights and solutions of lead users have sales 8 times higher than those developed based upon insights derived from target market users.

User Toolkits for Innovation
Toolkits for user innovation and design are integrated sets of product-design, prototyping, and design-testing tools intended for use by end users. The goal of a toolkit is to enable non-specialist users to design producible custom products that exactly meet their needs. They often contain “user-friendly” features that guide users as they work. Toolkits are specific to a type of product or service and a specific production system. For example, a toolkit provided to customers interested in designing their own, custom digital semiconductor chips is tailored precisely for that purpose—it cannot be used to design other types of products.

A variety of manufacturers have found it profitable to shift the tasks of custom product design to their customers along with appropriate toolkits for innovation. Results to date in the custom semiconductor field show development time cut by 2/3 or more for products of equivalent complexity and development costs cut significantly as well via the use of toolkits. In 2000, more than $15 billion worth of custom integrated circuits were sold that had been designed with the aid of toolkits—often by circuit users—and produced in the “silicon foundries” of custom semiconductor manufacturers such as LSI (Thomke and von Hippel 2002). International Flavors and Fragrances (IFF), a global supplier of specialty flavors to the food industry, has built a toolkit that enables its customers to modify flavors for themselves, which IFF then manufactures. In the materials field, GE provides customers with Web-based tools for designing better plastic products. In software, a number of consumer product companies provide toolkits that allow people to add custom-designed modules to their standard products. For example, Westwood Studios provides its customers with toolkits that enable them to design important elements of their own video games (Jeppesen 2005).

User Innovation Communities
“Innovation communities” consist of individuals or firms interconnected by information transfer links which may involve face-to-face, electronic, or other means of communication. Innovation communities can have users and/or manufacturers as members and contributors. They can flourish when at least some innovate and voluntarily reveal their innovations, and when others find the information revealed to be of interest.

Innovation communities are often specialized, serving as collection points and repositories for information related to narrow categories of innovations. For example, there are user communities specializing in particular types of open source software such as Linux. Similarly, there are communities of sports afficionados interested in a specific sport like mountain biking, communities of Adult Fans of Lego and so on.

Companies can learn to relate to support and benefit from innovations developed by users of their products and services.

Source; Eric von Hippel, Democratizing Innovation (2005).