Three Key Ideas Shaping the Future of Innovation

Source:

Innovation@ Work Blog, MIT

Your company’s key innovators are, most likely, your consumers

The wave of technological innovation we are currently riding has brought us wearable computing and 3D printing, with products like Google Glass and Nike Fuelband becoming the stars of recent tech conferences, including May's All Things D. Continually fueled by the question “what’s next?,” product innovators leave no stone unturned in their quest to produce the next big thing. According to the latest research, however, it’s consumers not the product innovators who should be viewed as the new experts. A new school of innovation thinking says that product innovators who work for manufacturers have received far too much credit for product innovation, while product users have received far too little.

In an MIT Sloan Management Review interview with Eric von Hippel, founder of the Entrepreneurship Program at MIT, the MIT Sloan Professor paints a new picture of the shifting paradigm of innovation from producer to user and how it is effecting change in the global economy.

“Surprisingly often,” von Hippel argues, “ideas for new or improved products come first from users who develop improvised versions to serve their own needs. Manufacturers then may discover, polish, and capitalize on user innovations—particularly if those innovations begin to catch on with a group of users.”

Three Key Ideas Shaping the Future of Innovation

The traditional view of product innovation is flawed: In the traditional view, companies are the innovators who create products that revolutionize the market, while consumers contribute little to the process of product innovation. Today, we are experiencing a profound paradigm shift where users are now recognized as the prime sources of innovation and discovery—and companies are paying attention.

Users are an untapped potential source of innovation that can lead to a market revolution:According to von Hippel, ideas for new or improved products often come first from users who develop custom versions to serve their own needs. Manufacturers then may capitalize on user innovations—particularly if those innovations begin to catch on with a larger market share. Skateboards, for example, were a homegrown product later adopted and improved by manufacturers for profit. Apple, a company that leverages the virtue of user innovation, openly embraces the user-generated mobile applications they initially rejected (and even prevented). Consumer-designed apps are now one of the biggest selling points of new smartphones. And Under Armour, a company founded on the moisture-wicking compression T-shirt that is now a $3 billion category, has launched an innovation lab in its Baltimore headquarters that invites consumers, sports teams, and outside companies to help revolutionize sportswear.

Follow the lead user to stay ahead of the disruption curve: Particularly important, in von Hippel’s view, are lead users—sophisticated consumers and businesses who are the most likely to innovate to satisfy their own needs. LEGO® spent several years developing its LEGO Mindstorms® product in collaboration with MIT. A few months after the product’s release, 1,000 hackers were working on it, too. These users came from the established LEGO user communities—over 20,000 adult fans, many of whom are experienced designers. Thanks to those lead users, Mindstorms is a better product, and the next generation of LEGO Mindstorms products was designed with user-designed parts.

*Don’t forget about design: According to Bill Aulet, an MIT Sloan Senior Lecturer and Managing Director in the Martin Trust Center for Entrepreneurship, the future of innovation embraces design as the key ingredient in creating strong relationships with user/ consumers. Facebook, for example, designs new interfaces around content that users create. Facebook doesn’t create content for users but gives them the tools to design their own. In effect, Facebook empowers every Facebook user to be a lead user, propelling Facebook innovation forward.

Eric von Hippel is a founder of the Entrepreneurship Program at MIT and teaches in the MIT Sloan Executive Education programs, Building, Leading, and Sustaining the Innovative Organization andDriving Strategic Innovation: Achieving High Performance Throughout the Value Chain, as well as theGlobal Executive Academy.

Bill Aulet is a Senior Lecturer and the Managing Director of the Martin Trust Center for MIT Entrepreneurship. He leads the Entrepreneurship Development Program and the MIT Regional Entrepreneurship Acceleration Program (REAP).