Customers as a Source of Ideas

New product development - Sourcing new product ideas from customers - PCB conceived by US Army’s Signal’s Corps

Exhibit 9.15   US Army’s Signal’s Corps needing miniaturized communication equipment, seized on the idea of PCB, designed, produced it and then sought potential suppliers. (Photo courtesy T/4 Harold Newman, U.S. Army Signal Corps).

Considering the nature of business markets, it is not surprising that the highest proportion of new product ideas originate with customers. Customers however do differ in many ways, and some are more innovative than others.

“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation.” This observation by Levitt applies especially to big companies that tend to be process-centric, focusing on streamlining and minimizing costs. Their heavy investments in existing technologies become a burden when disruptions occur in their markets. Big customers therefore can be relied more on incremental innovations that help improve processes, rather than breakthroughs that disrupt the existing market dynamics.

Lead users on the other hand tend to be innovative companies that identify solutions well before their competitors and suppliers. For example, the U.S. Army Signal Corps (Exhibit 9.15), needing miniaturized communication equipment, conceived of the use of the PCB (printed circuit board) in their equipment, designed and produced the required PCBs, and sought potential suppliers.

Leap-Frog users are aggressive companies, possibly new entrants pursuing riskier development strategy. Tesla was an apt example of a leap-frog user of lithium batteries, which changed public and industry perception of what an electric car can be.

Salespeople, suppliers, market research agencies and competitors are also important sources that need to be regularly tapped for new product ideas.

Importantly, for ideas to flow, it requires the development of systems to encourage sourcing, and facilitate the submission of ideas. At the most basic level this requires a destination such as the NPD department, where the ideas may be submitted.

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