Co-Creation by Customers Via Embedded Toolkits - a new way to open innovation with customers

The research group behind Open Innovation Forum has organized a track on “Collaboration Systems for Open Innovation” at one of the most prestigious conferences on applied IT: The Hawaii International Conference on Systems Sciences. In this paper, Prof. Frank Piller, a well-known researcher in the open innovation field, summarizes a research paper that will be presented in our track. It is nominated for the best paper of the conference.

Product definition has been shown to be critical to new product success
User satisfaction (and, thus, adoption) with a new product regularly increases with the degree of fit between a user’s needs and the characteristics of a product. Conventionally, the manufacturer tries to understand this causal network with detailed information either acquired via market research or assumed via professional knowledge. Previous research has shown, however, that many companies fail to gather this required input in an efficient and effective way: Despite ever increasing methodological knowledge in market research, new product development (NPD) flop rates continue to rise.[quote]

MIT researcher Eric Von Hippel has explained the problem of firms to understand what customers really want by the stickiness of need information. Sticky information is context specific and difficult to formalize and transfer. Stickiness of customer (need) information is a function of multiple factors, including characteristics inherent in the information itself, such as the way information is encoded. Customers often use a different language to describe their demands and think in different design parameters than the manufacturer. As a result, firms regularly have to change design parameters as the requirements (representing information about the customers’ needs) are not stable during NPD. Even in highly specialized industrial markets, customers face an inherent difficulty in accurately specifying their needs at the outset of a NPD project, resulting in a co-evolution of the technological solution with the revision of customers’ articulated needs. Research further has shown that familiarity with existing product attributes can interfere with an individual’s ability to express needs for novel products. Needs become more refined as users come in direct contact with (a prototype of) a new product.

Embedded toolkits as enablers for open innovation
In our paper, my co-authors Christoph Ihl and Frank Steiner and I propose a new approach to accomplish this objective by applying a typical process of user innovation as a form of open innovation: embedded toolkits for user co-design.

Our idea is to shift some specifications of the product into the domain of the user. This strategy isolates the source of uncertainty, i.e. sticky information about user needs. A product with a respective toolkit should hence contain (1) a flexible architecture where the values for each design parameter are not fixed, but adaptable, (2) a set of rules about possible combinations of selection of values for each design parameter, and (3) an interface for individual users could differentiate the product according to their preferences by manipulating the values. Note that our idea is NOT to configure a product with an internet-based toolkit BEFORE it is being manufactured, as typical for a mass customization or build-to-order strategy. These configuration toolkits have already been subject of a rather intensive discussion ; and there are many examples of this strategy in practice (e.g., NikeID, Dell, BMW). In our concept, users shall be enabled to modify the product AFTER it has been manufactured and has reached the user domain. The key requirement of this concept is a user interface that allows users themselves to adapt a product according to their own requirements, hence addressing a core characteristic of open innovation with users. The embedded toolkit shall equip users with the possible solution capabilities to substitute the lack of professional training and experience.

In our concept, the toolkit is being embedded in the product architecture, allowing its real-time modification during the usage stage. Consider the example of a dashboard of an automobile. (To illustrate this example, watch this video with a mock-up prototype.)

A conventional interface allows the user just to interact with the car and to control specific predefined functionality (as demonstrated in the first segments of the video). In our approach, the user interaction could go much further. She could design the layout of the dashboard, the functions accessible by it, and also parts of the performance controlled by the customized dashboard (as demonstrated in Min. 3:05 and later in the video). Still, all functionality would stay within the safety requirements of the system and would allow full interface functionality with the rest of the car. Obviously, such a solution has much larger opportunities for users to find an exact product fitting to their needs, but demands much larger requirements in designing the solution space of such a flexible system. As demonstrated further in the video (last segment), the modifications of a user could be transferred to the manufacturer during a service check, providing input for the development of future product generations.

To test the idea of an embedded toolkit, we conducted a technology acceptance study that analyzed the feedback of 163 consumers on different scenarios of embedded toolkits in the automotive industry. Our results demonstrate the feasibility and the acceptance of the basic concept.

Recommended reading
Ihl, C., Piller F. & Steiner F. (2010). Embedded Toolkits for User Co-Design: A Technology Acceptance Study of Product Adaptability in the Usage Stage. Proceedings of the 43rd HICSS Conference, January 2010.

von Hippel, E. (1994). “Sticky Information” and the Locus of Problem Solving: Implications for Innovation. Management Science, 40(4), 429-439

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