P36 Let Lead Users Helped Bring You to the Big Ideas

This podcast is another very clear best practice that can help virtually any company with its innovation needs. As with every podcast, insights in this podcast are ones that you can immediately use to help you sell more and make.
Today’s podcast is drawn from an excellent article in the Harvard Business Review titled Creating Breakthroughs at 3M. In the 80s and 90s and even the early 2000’s 3M was viewed as one of the most innovative companies in America. They have an innovative culture and leading-edge processes. Even with this great reputation, they pioneered an innovative approach that uses what they call lead users.
They define lead users as “companies, organizations, or individuals that are well ahead of market trends. Their needs are so far beyond those of the average user that lead users create innovations on their own that may later contribute to commercially attractive breakthroughs. The lead user process transforms the job of inventing breakthroughs into a systematic task of identifying lead users and learning from them.
3M with the help of some external experts developed two major lead user findings.
First, researchers found that many commercially important products were first developed by innovative users/customers who, in some cases, actually prototyped and tested a solution. Second, they found that these users/customers were often innovative in their own right and had needs that went well beyond the average user. To meet these greater needs, they internally developed innovative add-ons, new associated products, or additional processes to be sure their needs were met.
The article’s authors identify four phases related to a lead user project. The process typically involves a cross disciplinary team – that is, people from various functions within the company like marketing and technical departments. These teams typically involve 4 to 6 people with one of the members serving as the project leader. Each phase typically takes 4 to 6 weeks and about 4 to 6 months for the entire project, although needs and circumstances can change the schedule significantly. You should not view this as a fixed given.
They call phase 1 laying the foundation. This is a learning phase and using the learning to make some key decisions. They learn about which markets for users they want to target. They become aware of the types of innovations and level of innovation that management is already looking for from their team or business unit. All of this learning concludes with a recommendation to the key stakeholders and/or managers responsible for the team’s results. It is critical at this phase that the team and management are fully aligned before moving on to the second phase.
The second phase is also primarily a learning phase. The primary learning focuses on trends – what’s growing/declining, what’s getting better/worse, and what’s emerging/fading. To do this phase successfully requires going outside the company. They can use external consultants and industry databases. They are most interested in things like emerging technologies and leading-edge software. Sources for this include new patent filings and talking to key industry leaders. At the end of this learning phase, the most important insights are identified – usually no more than three to five. While these may change over time, they mark an important beginning point for what direction the team wants to go in.
In phase 3 they identify lead users. There are many ways to do this and the ways vary by type of product and industry. Here are just a couple of methods used to identify lead users. First, the sales organization that calls on customers – this is especially true for B2B businesses – knows which ones have the greatest and most complex needs. They may actually have seen modified versions of their product being used to meet these unique needs. This can often be a good beginning point for having some customer conversations. Second, companies can use telephone interviews with both customers and consultants in the industry. They are searching for information about customers who fit the lead user profile of unique needs that they solved through internal innovation.
Phase 4 the writers called developing the breakthroughs. The team begins this phase by conducting a creative session/workshop with a mix of lead users and in-house marketing and technical people combined with the lead user team itself. Such sessions can last several days. Typically they work in small groups of 2 to 4 people. The goal is to develop concepts of interesting and even high potential new products. In most cases, the ideas and solutions coming from lead users are starting points for bigger solutions. By combining the capabilities and expertise of the lead users with the company’s internal capabilities and expertise, bigger, more efficient, higher value solutions often are the result. Phase 4 concludes with a recommendation to the team’s management. Next steps can involve a number of possibilities – concept research, quantitative research to estimate your one sales, rapid prototyping, and an agreed to stage gate process to name a few of the possible next steps.
Here are a few of my observations regarding this process.
First, this process is very consistent with many elements of quantum idea generation. The lead user process leverages external expertise with internal experts – a core principle in the diversity element of quantum idea generation. Lead user solutions often provide great stimulus for idea generation. Again, this is a critical component to quantum idea generation’s ability to generate at least 12 X more ideas than brainstorming.
Second, in my business management and innovation responsibilities at companies like Procter & Gamble and Gallo, we identified another group that provided rich learning. We called this group heavy users, usually because they bought the product far more frequently and used it in greater quantity. They often did this because their needs were different than the average user and learning about these needs could be very beneficial. Because they had a much higher level of engagement with the product they could also communicate their likes/dislikes and ways that they thought the product could be better. This was a group that you wanted to visit them in their homes where they actually use the product. It provided very rich learning in many cases.
The major insight in this podcast is that there are groups of your current customers/consumers who can provide you very beneficial learning. This learning can often jumpstart your innovation program. The chances for success tend to be above average because they start and well grounded consumer experience.
You will need to decide which groups are most important to your business. The key point is that every business has groups of users that provide well above average learning.
There’s an important caveat in this process. In my experience, when you ask users, even lead users and heavy users, how a product can be made better their ideas are often fairly modest and close in. Nonetheless, they can mark an important beginning point that can fuel your innovation program.
As always, I think you’ll find these insights can immediately help your innovation program. These insights can lead to the breakthroughs that help you to sell more and make more.