Customer Co-Innovation Lab
"Alone we can do so little; together we can do so much." – Helen Keller
Goal
Establish an on-going program connecting your customers with your internal design and development teams to identify opportunities and potential solutions for the platform.
Description
Developing new products and services is a critical growth driver, unfortunately, most new products fail to deliver on their objectives. The chance of creating a truly innovative and successful solution rises dramatically by increasing the number — and more importantly the diversity of the brains engaged in generating ideas to solve the problem.
Historically most companies operated under the paradigm that customers had little interest or aptitude for creating new products. That paradigm is being challenged by empowered customers seeking greater input over the products they are being asked to license. Frequently in the case of B2B customers they themselves have adopted a co-innovation model with their own customers–putting pressure on their suppliers to follow suit. Companies can enhance corporate growth and profitability by allowing customers to take a more active role in the co-design and co-definition of new products and services.
Benefits
Understanding the customer
Customer co-innovation allows you to understand the underlying reasons beyond your customer’s issues, needs, and pain points. It also gives you greater insight to how as an organization they approach problem solving and how they see your solution fitting into their toolkit. Working directly with the people using your solutions will allow you to gain knowledge and understanding of your customer that will pay off well beyond a particular co-innovation project.
It is also important that the business value for the customers participating in the co-innovation project is identified. With that in mind it is critical to approach the customer’s problems and needs with an open mind, and to understand how they are currently understanding the problem and framing potential solutions rather than looking at it through the lens of possible solutions that have already been developed.
Closing portfolio gaps
Often, individual customer requirements are very specific, making their inclusion impractical for consideration in the product roadmap process. Because co-innovation integrates the requirements from a range of companies, representing a cross section of industries, co-innovation can help close gaps while balancing the company’s product portfolio.
Accelerating Innovation
Portfolio development always seems to take longer than expected, however with the emergence of greater competition, including start-ups delivering point solutions, customers may no longer feel they can wait for us to develop the solution they are looking for. By participating in our co-innovation lab, customers may enjoy the benefits of innovation much sooner; as a participant they can directly participate in defining and developing the designs they are looking for.
Additionally, given some of our customers are themselves software development companies, bringing fresh eyes to our routine processes may allow us to identify potential areas for innovation within our own organization.
Developing new markets
Co-creation should not just be limited to problem solving or new product definition; it can also be used to define new markets to grow into, or new uses for existing products. Working with a diverse set of customers, each from different market segments provides the opportunity to think laterally and explore adjacencies, opening the possibilities of new applications for our current platform and its capabilities
Attracting amazing talent
While not part of the initial plan for our co-innovation lab with customers, we can plan to expand our program to include academic co-innovation labs, allowing us to work with universities around the world. These labs could take on more nascent technologies and for ideation or incubation to explore their potential application within our portfolio. Additionally, this would allow us to focus on recruiting and promoting your organization as an innovative company.
Note, Co-innovation can also be expanded to include partners as well, again not only diversifying the participants and ideas being contributed but this also provides access to an expanded breadth of customer challenges. Opening co-innovation to partners can also identify possible pain points that they are experiencing, potentially different challenges from those of the end-customers, and by participating in the lab they may be able to identify new ways for delivering value with existing solutions to the full customer base.
Approach
By establishing a Customer Co-Innovation Lab as a virtual community where you can bring together a diverse set of problem solvers, working together with your internal teams to tackle challenging and complex problems around data integration and to develop new solutions and services.
In addition to the virtual community you schedule a range of face to face events to bring together members to work on complex problems but also to build a strong community and network of support for your products and services. These events could include:
Customer Discovery
Conducting a combination of on-site observational studies, shadowing, journaling etc., with your users as they initially use our platform to create pipelines, troubleshoot their work, deploy and maintain pipeline, the goal will be to identify areas for targeted improvements (ie. navigation, recommendations, notifications, dashboards, etc.) The results can be shared collectively within the cohort for discussion with facilitators from your development team.
Co-Design Workshop (a.k.a., Design Thinking Workshop)
These would be facilitated workshops teaming up members of your development team (i.e. engineers, designers, product managers, support, etc.) with customer employees to first deconstruct the opportunity, redefine its scope, and then develop solutions. These workshops could be focused on specific capabilities or features, net-new services, or improving existing platform capabilities.
Competitive Assessment
Working with the cohort we could explore other products– both adjacent and analogous products/services, in order to learn from our customers what makes and other offerings appealing. Whether it’s the capabilities, pricing, brand, etc. or a combination of things we can explore what makes alternative solutions appealing.
Operational Considerations
Each cohort will be comprised of 4-5 companies, each providing 2-3 employees
Participating companies need to provide access to both their core IT department members, as well as their “citizen integrators”.
Participants need to be hands-on users, not executives.
Ideally we would have one person from Data Engineering/IT, one business technologist, and one business stakeholder from each company.
Participants should be those people from within customer organizations who frequently raise their hand, ask a lot of questions, provide suggestions for improving your products/services or have ideas for new functionality.
Companies considered for participation should have the desire to move to decentralize integration, pushing for business technologists outside the central IT organization to build and maintain pipeline (citizen integrators)
No two companies within a single cohort can be competitors
Over time by adding more cohorts, you will be able to look through the results of these co-innovation sessions for trends across industry segments, company size, lifecycles, etc.
Scope
Co-Innovation programs are not limited to just products or services, using Doblin’s Ten Types of Innovation, you can expand your co-innovation to include all aspects of your company’s operations.
Configuration Innovations
Profit Model
Innovations here often challenge industry assumptions about offerings, pricing, and revenue models. It requires finding new ways to develop, deliver, and most importantly, capture value – including moving beyond the current customer base by opening new markets.
Network
This form of open innovation provides firms the ability to learn from each others’ processes, technologies, offerings, channels, etc, with knowledge sharing, including examining the relationships between network partners and the strategies behind those relationships.
Structure
Innovation at a structural level starts with organizing company assets — hard, human, or intangible — in unique ways that create value. Such innovations also help attract talent to the organization by creating supremely productive working environments or fostering a level of performance that competitors can’t match.
Process
Process innovation is commonly used to improve efficiency, reducing production time, costs, etc, while improving quality and customer satisfaction, it requires a dramatic change from “business as usual”, ideally resulting in that “special sauce” competitors cannot replicate.
Offering Innovations
Product Performance
Product performance innovation focuses on the value, features and quality of the products. This could include developing new products or by improving existing products in order to add substantial value.
Product System
Product System Innovation focuses on the portfolio and how individual products and services connect or bundle together to create a robust and scalable system with the goal of building an ecosystem that captivates and delights customers. More precisely, what complementary offerings can you add to satisfy customers’ needs better while increasing profitability.
Structure
Innovation at a structural level starts with organizing company assets — hard, human, or intangible — in unique ways that create value. Such innovations also help attract talent to the organization by creating supremely productive working environments or fostering a level of performance that competitors can’t match
Experience Innovations
Service
This area focuses on improving the relationship between your customer and the company: How do you attract and engage customers, from motivating them to try the product for the first time, through repeated use and adoption, and eventually advocating the product to their peers.
Channel
Channel innovations encompass all the ways that you connect your company’s
offerings with your customers and users. Regardless whether it’s in-person or online, the focus is on improving the ability to connect with customers.
Brand
This area focuses on refining and improving your strategies for ensuring customers and users recognize, remember, and prefer your offerings to those of competitors or substitutes, including touchpoints, communications, channels, etc.
Customer Engagement
Innovation in this area focuses on understanding the deep-seated aspirations of customers and users, and leveraging those insights to develop meaningful connections between them and your company.
Examples
There are a number of other companies who have set-up similar programs with great success, including Unilever, Starbucks, Lego, BMW, DeWalt Tools, etc.
There are also a number of scholarly articles here, here, here, here, here, and here on co-innovation. There are how white papers here and here. Even books on the topic. Some companies have even transformed their internal co-innovation program into a customer facing service