Customer Creativity. About three-quarters of attempts at innovation fail because of the way corporations go about it, says Eric Von Hippel of M.I.T., as reported by in The Economist (3/10/05). According to Eric, who is also about to publish a book called Democratizing Innovation, the mistake is that the firms typically send market researchers out into the field to identify "unmet needs" and then turn the results over to product-development teams. He says they should instead identify "the few special customers who innovate" and invite them in to brainstorm the possibilities. That's the way GE's healthcare does it. GE calls these special customers "luminaries" and they meet regularly to discuss GE's latest technologies and how to turn them into products. You know, to bring good things to light, or life. Imagination at work. Whatever.

Staples, the office supplies retailer, applies a similar concept but in a different way. It held "a competition among customers to come up with new ideas. It got 8,300 submissions," according to Michael Collins of Big Idea Group, bigideagroup.net, which helped Staples stage the competition. One result is a new product called "wordlock -- a padlock that uses words instead of numbers" that Staples will launch this spring. About two years ago, BMW "posted a toolkit on its website" that allowed its customers to suggests ways in which the carmaker "could take advantage of advances in telematic and in-car online services." About 15 of the 1,000 customers who used the kit were invited to meet with BMW's engineers in Munich and some of the resulting ideas are now in concept stage.

Sometimes, however, the customer innovation happens whether the marketer asked for it or not. For example, back in 1997, Lego was about three weeks away from launching a "build-it-yourself robot development system" called Mindstorm, when about 1,000 hackers "downloaded its operating system, vastly improved it, and posted their work freely online. After a long stunned silence, Lego appears to have accepted the merits of this community's work: programs written in hacker language may now be uploaded to the Mindstorms, mindstorms.lego.com, website." Indeed, one person's hacker is another's open-source software developer. In any case, as Eric Von Hippel notes, the concept doesn't cost much because many customers consider being "listened to" compensation enough. As BMW's Jeorg Reimann explains: "They were so happy to be invited by us, and that our technical experts were interested in their ideas. They didn't want any money."

Tim Manners, editor