Cornelius Herstatt

From experience: Developing new product concepts via the lead user method: A case study in a “low-tech” field

Conventional market research methods do not work well in the instance of many industrial goods and services, and yet, accurate understanding of user need is essential for successful product innovation. Cornelius Herstatt and Eric von Hippel report on a successful field application of a “lead user” method for developing concepts for needed new products. This method is built around the idea that the richest understanding of needed new products is held by just a few users. It is possible to identify these “lead users” and then draw them into a process of joint development of new product concepts with manufacturer personnel. In the application described, the lead user method was found to be much faster than traditional ways of identifying promising new product concepts as well as less costly. It also was judged to provide better outcomes by the firm participating in the case. The article includes practical detail on the steps that were used to implement the method at Hilti AG, a leading manufacturer of products and materials used in construction.

The Fuzzy Front End of Japanese New Product Development Projects: Impact on Success and Differences between Incremental and Radical Projects

This study of Japanese New Product Development (NPD) projects explores the fuzzy front end of innovation. The goal of the paper is twofold: First, we analyse the impact of the fuzzy front end on the success of all the NPD projects. We develop a conceptual model based on the information-processing approach. A structural equation model was fitted to data from 497 NPD projects in Japanese manufacturing firms to test the proposed model. The empirical analysis suggests that an early reduction of market and technical uncertainty as well as an initial planning before development have a positive impact on NPD project success. The model accounts for 17% of the variance of the efficiency and 24% of the variance of the effectiveness-dependent variable. Thus, the front end phase is an important driver of NPD project success. Second, we compare the fuzzy front end of incremental to radical NPD projects. Although these projects differ in many aspects of newness, we found only a few differences with regard to the fuzzy front end. For instance, it was more difficult to estimate the market size and price sensitivity of the customers during the fuzzy front end of the radical NPD projects compared with the incremental projects. Implications of the empirical results and limitations of the study are discussed.

On the open design of tangible goods

Open source software development has received considerable scholarly attention, much of which is based on the presumption that the ‘open source model’ holds some lessons of broader applicability. Nonetheless, our knowledge of its deployment outside the software industry is very limited. This paper focuses on the open source development of tangible objects, the so-called open design. We propose a generalised definition of open source development. Drawing on 27 exploratory interviews and six comparative case studies selected from a pool of more than 75 projects, we analyse the workings of open design. The analysis reveals that open design is already being implemented in a substantial variety of projects with different organisational and institutional structures.

THE DYNAMICS OF USER INNOVATION: DRIVERS AND IMPEDIMENTS OF INNOVATION ACTIVITIES

AbstractThe following sections are included:IntroductionLiterature ReviewOverview of the Moth ClassEmpirical Findings on User Innovation ActivityCharacteristics of user innovatorsSailing tinkerers and tinkering sailorsKnowledge-sharingDifferences in community cultureThe Dynamics of the Innovative Activity of UsersRevolution and adoptionThe dynamics of user innovation in the Moth classTechnology complexityTechnological maturityMarket structureCustomer satisfactionBarriers to innovationFactors driving the development of user innovation across timeSummary and Discussion of FindingsSummary of resultsGenerality of findingsImplications for managerial practiceReferences

Learning from users for radical innovation

In todays environment of rapid technological change companies can not rely on incremental innovations alone. To sustain long-term competitiveness companies need to develop radical innovations as well. Such innovations typically incorporate new and highly complex technologies, create new markets or shift existing market structures, and require user learning as they often induce significant behaviour changes on side of the users. To systematically develop radical innovations firms need to involve the proper actors. One such important external actor in the development process of new products is the user. Our study focuses on the question what kind of users are able to actively contribute to the development of radical innovations and what firms can learn from them to improve their innovative capability. A multiple case study analysis was conducted in the field of medical technology. Five radical innovation projects were selected including medical robots and computer-assisted navigation systems. The case study analysis reveals that users with a unique set of characteristics can contribute substantially to the development of radical innovations. These users have a high motivation toward new solutions, are open to new technologies, possess diverse competencies, and are embedded into a very supportive context. Manufacturers that took over the ideas and prototypes of the inventive users benefited significantly. By learning from these users, firms were able to significantly improve their radical innovative capability. The paper contributes to technology and innovation management research in two ways. First, by exploring critical user characteristics for distinct phases of the radical innovation process, we provide first insights how manufacturing firms can more effectively identify and leverage valuable users for their radical innovation work. Thereby, we highlight the involvement of capable users as an effective learning mechanism to improve the radical innovation capability of a firm. Second, new perspectives on lead user research are provided by enriching the lead user concept with other crucial characteristics of innovative users.

The process of user-innovation: a case study in a consumer goods setting

Manufacturers benefit by dividing their innovation processes into distinct phases in order to ensure that development activities are performed efficiently. Users are expected to follow a more intuition-driven approach. In this paper, we analyse the way users improve or develop novel products. The field of our research is a new and rapidly evolving consumer market, the sport of kite surfing. We identified a sequence that underlies the approaches of user inventors. This sequence consists of two major stages, (1) idea generation and (2) idea realisation, each stage is further subdivided. We propose that a manufacturer can significantly profit from more closely observing such user activities.

Assessing India's lead market potential for cost‐effective innovations

Purpose – The purpose of the present study is to assess Indias potential as a lead market for cost‐effective frugal innovations. This is of special interest since lead markets have traditionally existed in economically highly developed countries, whereas developing countries have faced negative country‐of‐origin effects. In the case of India a reversal of this trend may be observed, for some time. The paper aims to identify factors which are impacting Indias emerging role as a fountainhead of frugal innovations. The research will have implications for locational decisions in setting up global innovation/ research and development (R&D) activities.Design/methodology/approach – The study crystallizes the inherent characteristics of frugal innovations, their development process and market success in the domestic and overseas markets by undertaking in‐depth analysis of four successful product innovations from India from multiple industries. The obtained results can be treated as critical success factors for ...

Management of “technology push” development projects

Discussion of market pull versus technology push approaches in the field of busi-ness innovation research has followed a certain trend. The empirical research under-taken until now has been concerned in particular with the question of how each of these approaches differently influence the subsequent success of the innovation. We do not wish to continue this discussion in our paper, rather we assume that both ap-proaches are justified depending upon the importance of the relevant innovation source, the desired degree of innovation and the respective characteristics of the industry in question. We concern ourselves with the characteristics that result in the technology push for the management of innovation projects and what implications can be derived from practical project management organization. In doing so, we concentrate upon all market-related activities, in particular the identification and verification of application areas for new technology. After contrasting the various characteristics of the technology push and market pull approaches, the market-related characteristics of technology push projects are outlined. In this context, current instruments and methods of qualitative market re-search are introduced and their usefulness discussed. In addition, organizational-structural aspects as well as strategic and operative aspects of technology push pro-ject management will be highlighted.

Mobile Services in Banking Sector: The Role of Innovative Business Solutions in Generating Competitive Advantage

The wide-ranging economic developments of the previous decade, e.g. the integration of world economies, have made a significant impact towards increasing the mobility of the working populace and their families. At the same time, technological developments especially in the field of telecommunication have made it possible to offer innovative, location sensitive services on ubiquitous basis to customers on the move. Our paper examines innovative mobile solutions in the field of mobile financial services (MFS) by using four case studies from Germany and Switzerland - representing two banks and two different technology solutions. The paper scrutinizes the strategic relevance of MFS to the competitive position of the firm concerned. Finally, we present five propositions about the role of innovative business solutions in the banking sectors and recommend that a large scale empirical study to test these propositions be conducted in the future.

The Fuzzy Front End of Innovation

The fast transformation of technologies into new products or processes is one of the core challenges for any technology-based enterprise. Within the innovation process, we believe, the early phases (fuzzy front end) to have the highest impact on the whole process and the result (Input-Output Process), since it will influence the design and total costs of the innovation extremely. However the Fuzzy Front End is unfortunately the least-well structured part of the innovation process, both in theory and in practice. The focus of the present chapter is on methods and tools to manage the fuzzy front end of the innovation process. Firstly, the activities, characteristics, and challenges of the front end are described. Secondly, a framework of the application fields for different methods and tools is presented: Since a product upgrade requires a different approach compared to radical innovation, where the market is unknown and a new technology is applied, we believe such a framework to be useful for practitioners. Thirdly, a selection of methods and tools that can be applied to the fuzzy front end are presented and allocated within the framework. The methods selected here address process improvements, concept generation, and concept testing.