Customer Integration into the Fuzzy Front End of Smart Innovations

The habilitation project is based on the open innovation paradigm, which studies the active strategic use of sources outside a company`s premises as contributors to a company`s innovative power. Progress in ICT-technologies, increasing global interconnectedness and cost reductions for virtual solutions have led to new ways of integrating external sources into the innovation process via web-based crowd-sourcing initiatives and other open innovation tools. In traditional market research, consumers are usually understood as suppliers of needs information through one-way communication channels. In the open innovation approach, consumers are integrated in interactive, two- way information channels as co-developers who provide not only needs information, but solution information as well. For example, users may contribute a high number of new product ideas or possible technical solutions for new product development through web-based competitions. Yet, the quality of such contributions from different external sources can vary severely. Some opponents criticize that such contributions may entail a lot of screening work that drives resources away from internal R&D while it does not really lead to substantial input for truly new and radical innovations. In the same vein, integrating customers into radical innovation projects is understood as risky because typical consumers may be unable to anticipate or evaluate future product usage beyond their immediate usage experience. Consumers then develop disdain for radical solutions, because they fail to understand them. If project progress is based on such customer evaluations, possibly promising radical innovations might be aborted. To tackle this challenge, companies might either integrate only individuals, who possess such anticipative capabilities (e.g. lead-users), or empower average consumers to make more sophisticated evaluations (e.g. via visualization techniques). This habilitation project focuses on these two approaches. Several multi-part experiments shall be carried out to explore and test 1) whether respondents are in a better position to generate or evaluate radical new product solutions when they are immersed into possible future usage scenarios via multimedia visualization tools 2) and which competences and skills respondents require to contribute a high quantity and quality of information for radical innovation projects. As a result of the empirical studies, practical recommendations for integrating external sources into the innovation process can be provided. The theoretical implications of the results shall be discussed along with possible implications for capabilities and responsibilities of marketing and innovation managers resulting from the active role of consumers within the open innovation approach.

Customer integration into the innovation process promises to make the process more efficient and democratic, while increasing new product success. For example, P&G sources more than 50% of its ideas for new products from customers and other external partners; the company Threadless allows its customers to preselect the T-shirt designs it produces; Lego runs innovation workshops with selected customers; and Swarovski allows customers to create watch designs with an online toolkit. Nevertheless, prior studies show that customer integration into technically radical innovations can be problematic. Customers find it difficult to understand the potential of radical technologies and to imagine future product usage when confronted with radical innovations - particularly if they are still in a concept stage. A lack of imagination inhibits accurate preference statements, meaningful improvement ideas, and can provoke decision failures. The Elise Richter project Customer Integration into the Fuzzy Front End of Radical Innovations dealt with these challenges and developed two approaches to improve the value derived from integrating customers into radical innovation projects. First, the project found that the type of customers integrated into an innovation process plays a vital role in its success. In several studies, Fiona Schweitzer and her colleagues found that the ability to provide input depends on customers domain-specific skills. They identified technologically reflective customers, i.e. customers who think about the impact of a technological product on its users and society in general, as valuable partners in radical innovation projects. Second, integration methods can reduce customers lack of imagination. In a broad-based experiment, the Elise Richter project demonstrated the potential of the narrative transportation method. This method empowers customers to gain a vivid mental image of radically new product concepts and the way to use them by means of a story telling approach. Customers thus understand a radical innovation and its potential advantages and disadvantages better. Based on these insights, customers can generate meaningful suggestions for improving and refining radical product concepts.