User Innovation

excerpted from HBS Working Knowledge

User innovations occur when customers of a product improve on that product with their own designs.

Baldwin and her fellow researchers wanted to better understand this path from user innovation to commercial product. What role do user communities play in this process? Are “user-manufacturers” —users who turn their improvements into commercial products—usually industry leaders? How competitive are existing, well-capitalized companies when they compete against user-manufacturers? Although there have been a number of studies on user innovation, little if any work has been done on the commercialization of user innovations, the authors believe.

The research can be found in their working paper How User Innovations Become Commercial Products: A Theoretical Investigation and Case Study

I’m interested in how designs are created and then turned into real things. Many management scholars and economists fall into the habit of thinking that innovation is something that firms uniquely do in order to make money. But Eric von Hippel and his colleagues have shown that many product innovations originate with users. This makes sense when you think about it—users are the direct beneficiaries of better products. And it’s users’ willingness to pay for better products that makes innovation profitable for firms.

The research has been conducted by Harvard Business School professor Carliss Baldwin and her colleagues Christoph Hienerth and Eric von Hippel.

The HBS Working Knowledge recently published an article on The Accidental Innovator. The article starts with:

Companies spend many hundreds of billions of dollars on R&D each year, but the microwave oven was conceived from a melted candy bar, saccharin from an accidental chemical spill, and the Daguerre photo process via a shattered thermometer. Accidents happen—and we’re all better off because they do.

And robert Austin goes on to say that:

Actually, though, I would not really label this “accidental innovation.” The innovation itself can’t really be said to be “accidental,” even though it involves accident. It takes a considerable capability to see the value in an accident, and to build upon it to create even more value.

To the question:

Is there a way innovators can encourage good accidents? In other words, is there anything we can control to foster this process?

Robert Austin replies:

Great question. Artists think they develop a talent for causing good accidents. Equally or perhaps even more important, they believe they cultivate an ability to notice the value in interesting accidents. This is a non-trivial capability. Pasteur called it the “prepared mind.” There’s an interesting analogy to evolutionary models of creativity here. In 1960, a guy named [Donald] Campbell proposed that we think of creativity as “Random variation + Selective Retention.” That is, we need two processes, one to generate things we can’t think of in advance, and another to figure out which of the things we generate are valuable and are worth keeping and building upon. In science, the arts, and other creative activities, the ability to know what to throw away and what to keep seems to arise from experience, from study, from command of fundamentals, and—interestingly—from being a bit skeptical of preset intentions and plans that commit you too firmly to the endpoints you can envision in advance. Knowing too clearly where you are going, focusing too hard on a predefined objective, can cause you to miss value that might lie in a different direction.

It’s a fascinating article – well worth reading in completion.

Again, What is Innovation?

Does it mean that for the sake of being ‘in’ and sounding like we get it, we re-invent the wheel? Do we do the same stuff in a different way? Do we reach the same results using different-from-normal methods?

To innovate, do we reap the same rewards by sowing different seeds?

All organizations want more profit.
So what’s new? Should they think up new ways to cut costs, fire people, manufacture something different or sell differently? Is that what innovation is?

Or is it just another way of ‘doing it right’?
But there never is a way of doing/getting it right! Because all organizations have peculiar problems that are indigenous only to them.

Instead of looking for tailor-made solutions and innovation, organizations would do much better to look within and use their everyday knowledge. Processes and systems only work well till they allow work to be done. Slowing down and obstructing work means that the process needs to be changed or gotten rid of.

What is innovative about that?
It’s common sense.

But most of the times, it takes a third person to come in and tell you that your processes need to change. I still have to understand why one needs to hire external help when your own internal team has been telling you about the problems AND suggesting solutions.

It is all about trust and communication.