Innovation and web 2.0

The Customer: An Overlooked Component of the Innovation Process


Where would YouTube be today if not for its millions of users? What good would Wikipedia be without all of those contributors? And how successful could IKEA possibly be if its customers weren't willing to assemble their own furniture?



Stephen Brown says the answer is simple: If not for the contributions of their customers, all three of those remarkable business successes would be anything but successful.



And there's a lesson in that, says Brown, for companies of all kinds.



"Our view is that the customer has been a truly forgotten component of innovation," says Brown, a professor of marketing and executive director of the W. P. Carey School's Center for Services Leadership. "We're not necessarily saying that customers are completely ignored. But we are advocating a much more substantive effort on the part of companies to get their customers involved in the innovation process."



In a new paper that challenges some long-standing theories about both what innovation is and how it's achieved, Brown and co-authors Stefan Michel, an assistant professor of marketing at the Thunderbird School of Global Management and Andrew Gallan, an ASU doctoral candidate, argue that the time has come for companies to rethink the ways they approach the innovation process.





Rethinking the process



Innovation, according to Brown, Michel and Gallan, is no longer solely the domain of techies or engineers working in isolation in a lab. Innovation now includes the collaboration of creative customers, who find ways to address their own wants and needs in the product or service.



In other words, Brown and Michel say, just as users were responsible for making YouTube a global sensation, customers have power to create value for any number of other products and services.



"The premise for this research is that when people typically think about innovation they tend to only think about products," Brown said. "They think of something tangible, and imagine a process that the company undergoes that is somehow completely independent of their customers. … But now, we are seeing that innovations will not be successful unless customers co-create value for it. YouTube is a dramatic example, because YouTube would be nothing if not for what its customers did with it."



Added Michel: "The major question we asked was this: Are there some things out there that are truly innovative, but cannot be explained by the traditional innovation literature -- things that were, for example, not developed by R&D labs but nonetheless changed the lives of millions of people?"



The answer to that question is yes.



The researchers say customer-based innovation has played a role in the development of any number of products, goods and services that, today, people may take for granted.



IKEA, for example, leveraged the power of its customers to create an innovative, completely new and remarkably successful furniture retailing experience. The Swedish company provides hip, exciting and inexpensive furniture, presents those pieces in their all-inclusive destination stores, but then relies on their customers to both transport the furniture home and put it together.



In Switzerland, the newspaper 20 Minuten has changed the newspaper business by crafting something specific to their customer's daily lives. The short, easily digestible newspaper takes just 20 minutes to read -- about as long as the average train commute.



According to Michel, 20 Minuten harnessed customer co-creation of value in a much broader way than co-producing content (YouTube) or assembling chairs (Ikea). 20 Minuten changed the role of the user. Firtst, it altered the anatomy of the transaction; payers became non-payers, because 20 Minuten is free. And obtaining the paper no longer depended on customers making a decision to pick it up. Instead, it is handed to them (a push) when they are boarding the trains. As a result, many non-readers became readers -- the ultimate role transformation.



Another example is the medical technology sector, which has developed revolutionary glucose monitoring systems that employ customers -- in this case, diabetes patients -- to improve diabetes self-care and create long-term value for a useful product.



"In the past, these patients would rely totally on their physicians to measure glucose levels," Brown says. "Now, using this system, patients are self-monitoring. The whole system, the value of it, was co-produced and co-developed by engaging the customers."



All of these products, services and ideas, Michel, Brown and Gallan argue, have enjoyed success -- and have derived much of their value -- because of the way customers used them. All of them are also clearly innovative.





An expanded perspective



According to traditional models of innovation theory, however, they wouldn't be recognized as such.



The old innovation theories, the researchers say, are flawed because they have focused almost solely on products and have ignored service offerings. They've also recognized firm-level innovation -- the work of R&D departments, for example -- while ignoring the value-added contributions of customers.



Brown, Michel and Gallan’s approach breaks down that long-standing wall separating product innovation from service innovation, counting the contributions of customers as every bit as important as those of a company's R&D experts.



"We are basically asking companies to focus a lot more on how customers are actually going to use what they're offering," Brown said. "The tendency of many companies has long been transactional -- 'How can we get the customer to buy this?' -- but we're saying what you want to know is how the customer is going to use the product. It's very powerful for a software vendor to know, for example, how their customers are going to use their products."



The researchers say their new approach to innovation challenges firms "to take a broader view of innovation," looking at customers not just as "payers," as traditional models do, but rather as "payers, buyers and users."



"This expanded perspective," Brown, Michel and Gallan write, "enables managers to see more … innovation opportunities that are not related to the discoveries made in R&D laboratories."



The idea is not all that complicated, nor is it anything new. Customers have been adding value to products for years -- it's just that companies haven't always recognized those contributions as important to their bottom line.



But that may be changing.



"Think about the way you use your PC," Brown says. "Everyone has their own unique way of using their PC, and a PC is basically as innovative as the way a customer uses it. There are millions of customers all over the world using PCs, and they're all using those PCs somewhat differently. … I guess the key idea that we want to get across is that, increasingly today, customers are the ones co-creating the value in what companies and firms offer."



Adds Michel: "The thing that is important is that the customer is not just the receiver of value. But rather, the customer is always co-creating value. The customer is not a passive recipient of value."





Bottom Line:



A new paper from W.P. Carey's Stephen Brown and Andrew Gallan and Thunderbird's Stefan Michel, to be published in the Journal of the Academy of Marketing Science, proposes a new theoretical model for looking at innovation -- a model that takes into account the contributions of customers in the development of innovative products and services.
This new approach also eliminates the distinction between innovative products and innovative services. That distinction, the researchers say, is artificial and outdated.
Among the products that have benefited from customer contributions are YouTube, Wikipedia and the Swiss newspaper 20 Minuten.
The researchers say forward looking companies would be smart to stop thinking about innovation as something that happens only in their R&D labs. Customers, they say, can add value to a product long after they've purchased it.
Companies should not just focus on innovating products; they need to focus on innovating customers.

Definition web 2.0

Web 2.0 refers to a perceived second generation of web-based communities and hosted services — such as social-networking sites, wikis and folksonomies — which aim to facilitate collaboration and sharing between users. The term became popular following the first O'Reilly Media Web 2.0 conference in 2004.[1][2] Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but to changes in the ways software developers and end-users use the web. According to Tim O'Reilly, "Web 2.0 is the business revolution in the computer industry caused by the move to the internet as platform, and an attempt to understand the rules for success on that new platform."[3]

Some technology experts, notably Tim Berners-Lee, have questioned whether one can use the term in a meaningful way, since many of the technology components of "Web 2.0" have existed since the early days of the Web.[4] [5]

Conservative Checks regarding media mogul

Responsible for B2B magazines in publishing house and he lecture in “theory of publishing” at the university. Examples on magazine; marketing, retail, hotel & spa business.

Trend in publishing is that people want to read less and less or rather that they want only the mot important content to be summed up in up to 30 lines. Not more! This due to more and more information, faster paste I life. They want to get the feeling of being informed in “the information ghetto” as he calls it. Magazine has the same stile as always though, there might be more of them in the market but they have not developed. When creating magazines and being innovative he says he looks at the west way of doing it. Most important influences for the Check are Germany (he even calls the Check people as small Germans). Everything from cars, clothes and cheap food. The Check are just as price concerned as Germans. Sweden, Holland and Belgium are the other origin of strong influences. The UK magazines do not work. Most popular magazine “themes” are; cooking, science (high tech things) and lifestyle.

When starting to talk about the Check people he describes them as very conservative and anti capitalism. They where thrilled when entering the “west way” but are now rather disappointed and want to draw back into the old ways. “We live in the past” he says. He describes them as active. Going out in the nature or into a bar to meet with friends and family is a popular way of spending spare time. He clames that they take more and more time from work to spare time. General attitude is: why should I work so much? Until 5 is enough and then I want to have my time off. People have more money to spend and they spend it. Mainly on bars and restaurant visits, cinema and theatre. The spending on magazines is decreasing.

He thinks that approx. 50 % of the Check people are online. Young people use for email, chat and shopping he does not talk about the social communities as a big thing though.

We enter the Academic subject he says that he consider the quality of education to be in level with German.

Prof. Drüner on web 2.0, communities and the online World

Prof. Dr. Marc Drüner, Innovation & Media management Steinbeis University Berlin (private)

Observations:
A goodlooking, smiling, sun tanned, fit and VERY trendy professor meet us for ½ hour interview. Luckily we got 2 hours.

4 major areas of observations and statements.

1. Analysis /Attention management

• “Arena thinking”, i.e. in the fight for attention, don’t forget the surrounding world; not only the closest competitors fight for your customers attention and in the long run money
• Topic specific sites and communities may be “cut” differently, look at the users interest, not own business limits
• digg.com

2. Web 2.0 is definetely here to stay.

• Content driven communities where the users create the content via their own experiences. Eg. Programmableweb.com
• Massups (user generated content) services for different target groups
• Facebooks is an industry in itself
• Community in Germany was 2% in 2000. Today 16% of germans are part of a community on the web.
• Innovation is created by new content built by the users themselves! Brilliant.
• Communities belong to all ages. Generation 45+ is just as active as the unger generation.
• Internal communities within the company

3. Behavior & media

• The big new thing is the shift between offline and online marketing
• The “old” industry (media agencies) holds on to their old business model.
• Consumer behavior has NOT changed! But the channel has changed
• The tipical consumer behavior both online and offline
• Local, personal and regional experiences are of interest to the individual
• Retention and involvement management is the KEY in the future (via communities).
• In 5-10 years all industries will have a mix of online and offline channels.

4. Vertical travel industry

• Holiday and travel is a highly emotional product – perfect for the web 2.0
• Experiences are the most important thing for people – and to share them with others is even better.
• Using communities, user driven content and start with a selected areas of interest to the customers is the way to move forward
• Nice brand and big companies are commercial – users know that. As long as the site facilitates the content creation this is fine with the consumers
• LET GO OF THE CONTROL…Let the users built the site…But before launching, be aware that considerable internal resources are needed!
• Infiltrations of communities is possible – but not recommendable.
• Travel shops will remain. New form (conceptstores, megastores) with focus on experiences with all senses (not a salesperson and a catalogue).
• Less but bigger travel shops
• Blue concepts community

A session worth thinking about!

Kolla in detta ;) !!

Academic teman

Vad är det senaste inom respondentens område? Tecken och trender.

Framtidsprognos för respondentens område?

Forskning vs. hur det fungerar "in real life" inom respondentens område?

Vad är det som får vissa att lyckas och andra inte inom respondentens område?

Hur "lär man ut kreativitet"? Pedagogik - nya trender generellt.

Be om exempel hela tiden!!

Wellness

http://www.svd.se/dynamiskt/kultur/did_7115632.asp