Corporate practices to deploy user-driven innovations
The study explores the corporate practices and procedures to deploy user-driven innovations. Presented study also discusses key terms of the user-driven innovation approach based on the strong analysis of research papers and various concepts comparison.
Рубрика | Менеджмент и трудовые отношения |
Вид | дипломная работа |
Язык | английский |
Дата добавления | 28.08.2016 |
Размер файла | 867,0 K |
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Wide applicability. One more advantage of user-driven innovations is the applicability in various industries. The literature review showed that there are lots of examples of user-driven innovations deployment projects [von Hippel, 1976 (A); Thomke et al., 1999; Zahay et al., 2011]. This approach can be applied not only to the industrial segment but also in such spheres as banking services, tourism and other non-productive industries [Riggs & von Hippel, 1996; Magnusson et al., 2003]. The conducted analysis allowed to identify the perspective industries for users' engagement where companies receive maximum benefits from applying this approach.
Collaboration extensibility. Users can contribute to innovation process almost on all the stages - from idea generation to product launch [Lagrosen, 2005, Voss et al., 2009]. But product launch is not the final point for customer-user collaboration. The single project can become a start for long-term partnerships with an individual user or group of users within an innovation community. Users who approved themselves can be engaged by companies into further collaboration, attracted as contractors or even hired as employees. Therefore, the appropriate approach to building relationship with the user-innovator is of strategic importance for companies.
The analysis showed that company-user collaboration focused on improved or new products development can be beneficial for both parties. That explains the need for companies to develop their innovation strategies taking into account innovating users' expectations and cooperation demands. One more party that is interested in company-user collaboration is the government as results of this approach can lead to advantages for the society. That is why policymakers pay attention to the user-driven innovations stimulation [Jin & von Hippel, 2009; Flowers et al., 2010]. Moreover, the government can attract users into welfare innovation projects and use their knowledge and ideas for social goods improvement.
2.1.2 Limitations
The theory that user is a driver of innovation has become an up streamed since von Hippel conducted research on the leading role of a consumer [von Hippel, 1976 (A)]. The theory contributed much to the scientific researches regarding the production management, personnel motivation, technological forecast and many others, that made significant impact on scientific progress [Rogers & Everett, 1995; Gruner & Homburg, 2000; Bin, 2013]. User-driven innovations have obvious advantages for all participants, involved into deployment process. But at the same time user innovation activity is limited by conceptual boundaries that demand actualization or modernization.
Significant part of the user-driven innovations, presented by von Hippel, refers to small modifications of existing products [von Hippel, 1976 (A)]. There is a stated point of view that modification is not equal to innovation [Trott et al., 2013]. Therefore, the fact that most of companies stimulate rather innovation than modification programs decrease users' motivation. Moreover, competition among innovative users is permanently high. Even obtaining different original ideas they limit each other's chance for success just because they apply to one innovation supporting program.
At the beginning of innovation process user has the leading role. He brings an extraordinary idea that may result in innovation product [Taylor, 2015]. But as soon as company starts to collaborate with user and begins to develop the idea, user losses the leading role giving it to manufacturer [Trott et al., 2013]. Thus user is limited with company's requirement who starts to build on his idea, probably even changing it in the process.
The next limitation of the user-driven innovations is represented by Brockhoff, who pointed out to the threat of consumers' reward. Monetary and other incentives may force people to apply formal ideas, similar to innovative ones, just to get reward [Brockhoff, 2003]. So, there is a risk that such type of behavior may lead to counter innovative effect: decrease of idea originality, minimization of its' scale, usability and other important characteristics. User may start to act only at their own favor, leaving behind real interest of consumers.
Final limitation of users involvement is that they know what to improve in a product or service, but don't know how technically to realize it or don't know how to start the innovative process [Lagrosen, 2005]. To eliminate this negative side corporations are creating different innovation support centers and programs that help to decrease the level of innovative losses. Still the number of such organizations is not enough to meet the needs of innovative users [Kretschmer, 2010] therefore users are limited by the corporate (or industry) openness to user-driven innovations.
2.2 Trends & perspective spheres for users' involvement into innovation process
The World system of manufacturing is intensively changing. Corporations relocate production among the countries [Bryson, 2015]. In Asia region enormous financial resources are accumulating mainly because of incredible growth of China [Kroeber, 2016; Li Yang Chinas & Kuhn, 2007]. Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China, Bank of China Ltd. and other financial organizations are the biggest companies in the world [Forbes Global 2000, 2015; The Fortune Global 500, 2015; PwC, 2015]. Along with the banks there are plenty of Asian companies that refer to oil and gas sphere. They compete with American and European enterprises, including Russian giants (Gazprom, Lukoil, Rosneft). However, for these types of organizations user-driven innovations are not the basis of business. That is why the current research on corporate user-driven innovations practices is focused on the biggest consumer-oriented companies in the world.
The analysis of top 50-70 world largest companies for the latest fifteen years shows that the most successful organizations are [Forbes Global 2000, 2015; The Fortune Global 500, 2000-2015; PwC, 2015]:
Volkswagen, Toyota motors [Magee, 2013], Daimler, General Motors [Wдldchen, 2014], BMW Group [Shimokawa, 2013] (auto and truck manufacturers);
Microsoft, IBM, Google [Buxmann, 2012] (software and programming);
Apple, Verizon Communications, AT&T, Samsung Electronics [Michell, 2011; Diab, 2016] (telecommunication and electronics);
AmerisourceBergen, Phillips, Johnson & Johnson, Pfizer [Morgon, 2014], Procter & Gamble, McKesson [Langabeer II, 2015] (personal/healthcare);
Wal-Mart Stores [Lichtenstein, 2013], Kroger, Tesco, Carrefour [Halabi, 2015] (food and drug stores).
In accordance with the research of the PwC the major positive movements are visible in such industries as consumer services, healthcare, consumer goods [PwC, 2015]. Dynamics in a number of the biggest companies included in Global Top 100 ranking of companies by market capitalization is demonstrated in figure 4.
Figure 4: Dynamics of the biggest companies included in Global Top 100 ranking
Source: PwC, 2015
At the same time, there is a significant decrease in oil & gas, telecommunications and utilities industries. For example, a strategy for smart, sustainable and inclusive growth sets a triple "20/20/20" target: to reduce greenhouse gas emissions by at least 20% in comparison with 1990 level; to increase the share of renewable energy sources in final energy consumption up to 20%; to increase energy efficiency up to 20% [EC, 2010]. Some of EU Members achieved these indicators a long time ago. Moreover, there are plenty of alternative and renewable fuel programs established in the EU. In Canada, the ecoENERGY Efficiency program aims to improve energy consumption at home, at work, and on the roads. It consists of plenty subprograms for buildings, housing, equipment standards and labeling, industry, vehicles [NRCan, 2012]. USA (California) authorities target to reduce greenhouse gas emissions to 1990 levels, petroleum fuel use to 15% below 2003 levels, the carbon intensity of transportation fuels by 10% and reach other high-standard goals by 2020 [ARFVTP, 2007]. Japan [The Kyoto Protocol, 1998], Philippines [DE.P, 2010], Australia [Jamison group, 2008] and other countries actively develop alternative fuel technologies and implement them on their territories. The oil and gas industry is excluded from the research area because of the global trend of fossil energy substitution. In spite the fact that the number of telecommunication communication companies decreased in Global Top 100 ranking of companies by market capitalization, companies from this industry actively involve users into the innovation process. That is why telecommunication organizations should be observed for the purposes of the current research.
The major negative movements recorded in oil and gas, telecommunications and utilities industries are shown on figure 5.
Figure 5: Major negative movements in oil and gas, telecommunications, and utilities industries
Source: PwC, 2015
The further analysis demonstrates that the biggest companies, referring to determined industries, implement innovations. Besides the mentioned above organizations, the list of leading innovative companies include Tesla motors, Salesforce.com, Unilever Indonesia, Amazon and others [Murray, 2016; Forbes, 2015]. These companies belong to the five highlighted groups and the majority of them are subsidiary companies of well-known industrial giants. Consequently, the identified industries: auto and truck manufacturers, software and programming, telecommunication and electronics, personal/healthcare, food and drug stores - can be considered as the global spheres of innovations development and distribution. It is worth mentioning that software and programming area are recognized as the most innovative out of named spheres [Ringel, 2015].
In order to identify the perspective spheres of user-driven innovations deployment, it is necessary to analyze the examples of such innovations to be available on the market. Nevertheless, the available information doesn't always open the real source of the innovative idea that underlies the launched product [Kretschmer et al., 2010]. Thus, it is difficult to determine the user-driven innovations out of an enormous number of innovations [Bin, 2013]. In order to keep their innovation processes and know-how in secret, companies are used to disclose only the visible/public side of the innovation [Taylor, 2015; Shapiro, 2008]. Nevertheless, the analysis of the literature and companies innovative portfolios allowed to find the user-driven innovations examples within identified innovative industries. It's necessary to identify examples of user-driven innovations deployment in highlighted spheres in order to identify user-driven innovation trends.
The analysis of auto and truck manufacturers' innovation activity revealed that representatives of these industries are focused on safety auto driving technologies development. The following technologies were developed by manufacturers with application of user-driven innovations deployment practices:
Auto park-pilot systems [Volkswagen, 2016];
pre-production users test-drive [BMW Group, 2016];
Steering and line control assistant [Daimler, 2016];
Connectivity and communication [General Motors, 2016];
Gesture control [Toyota motors, 2016].
The industry of software and programming is rich with innovations being introduced to the market and with user-driven innovations among them. Microsoft within its' Innovation management framework is constantly in touch with users in order to design new or improve existing products. The company obtains such solutions as Microsoft innovation centers and products feedback, integrated into all products. Moreover, the company is a member of practice implementation consortium with 3M, Avanade, Capgemini, Ericsson, Siemens PLM and other industry leaders members which collaborate in order to make innovation more applicable [Microsoft Corporation, 2013]. Another giant, IBM, deploys world class user-driven innovation by over 40 IBM Innovation centers [IMB, 2016] and special labs: Retail, Emerging Technology & Solutions, IOT, IOC [Umeh, 2015]. The first statement of Google Inc. is “Focus on the user and all else will follow”. Three out of eight statements, creating a culture of innovation, deploy user-driven innovations. Launch, then keep listening; Look for ideas everywhere; Focus on users, not the competition - are slogans, helping Google Inc. to achieve mutually beneficial collaboration with users [Google Inc. , 2016]. Software and programming are one of the most rapidly developing spheres. Main players deploy hybrid cloud technologies (drop box), big data conception and even Google maps are maintained with users' innovations, providing the absent data.
Telecommunication and electronics companies are chasing the better technical quality and virtual technologies. Verizon realizes user-driven innovations by its' innovation program, supported by innovation center and theme labs. Moreover, the corporation has “Powerful answers award” and “the Verizon innovative app challenge”. An example of this user-driven innovation deployment is a social project “Hello Navi” [Verizon, 2016]. Legendary AT&T Bell Laboratories [Cooke et al., 2011], established in the late 19th century, released plenty of discoveries, dignified with Nobel Prize. Bell Labs conducted research in physics, math, chemistry, astronomy and other spheres. Samsung Electronics established the Strategy and innovation center and the User experience services lab. Multi industrial user-driven project “Simband” aims to enforce digital health care. It crosses with the next highlighted sphere “personal and healthcare”. ARTIK™ IoT ecosystem, as well as similar IBM project, develops the internet technologies, basing on constructing a family of building blocks for IoT [Samsung Electronics, 2016]. Therefore, telecommunication and electronics organizations basically create multi-industry innovations, driven by user experience.
Personal and healthcare sphere is in deep interaction with all other industries. Philips user-driven innovations deployment allowed to develop easy healthcare monitoring system for adult and to improve cleanness of shaving [Philips industry consulting, 2009]. Johnson & Johnson development is based on corporate and user-driven innovation (Microsoft Corporation example). Its' collaboration with TopiVert allows developing user-driven topical medicines for inflammatory diseases. Partnership with Navitor Pharmaceuticals helps to develop user-driven highly specific modulators of mTORC1 (responsible for cell growth and function process). Cooperation with Amphivena involves consumers in hematological tumors treatment by bispecific TandAb antibodies [Johnson & Johnson, 2016]. Furthermore, there are many other examples of user-driven innovation deployment by AmerisourceBergen, McKesson, Pfizer and Procter & Gamble. All of them explore the biotechnological opportunities in self-treatment and extend patients healthcare beyond the clinic.
Finally, food and drug stores try to change the way of shopping in order to make it quicker and easier. Wal-Mart Stores with its' customers test new types of shops in Lab 415-C, supercenter #5260. [Wal-Mart Stores, 2016]. Carrefour added user-driven wedding and baby gift services [Carrefour, 2016]. Tesco realizes such user-driven projects as Meal Deal Express, Health Hackathon, Insta-Search [Tesco, 2016]. Retailers concentrate on innovative consumers' service, based on meeting customers' needs and appropriate goods offer.
Thus, auto and truck manufacturers, software and programming, telecommunication and electronics, personal/healthcare and food & drug stores are perspective spheres for user-driven innovation deployment. It worth mentioning that all of them are crossing and supplementing each other [Diab, 2016; Magee, 2013].
A variety of user-driven innovation examples helped to form the ground for outlining of user-driven innovations trends. It is reasonable to point that user-driven innovation trends are based on consumers' expectations and level of technological progress. Practice analysis of user-driven innovations allowed to identify industries' innovative trends:
auto and truck manufacturers - intuitive management of the vehicle's assisting functions;
software and programming - deep user self-customization of the product;
telecommunication and electronics - distant communication based on lifetime visualization;
personal/healthcare - substitution of clinic service with professional household technologies;
food and drug stores - instant purchase system of goods selling.
Nowadays it is impossible to imagine a globally leading organization producing ordinary goods. All world leaders are using innovation, including user-driven one. To achieve such result, corporations organize different types of research laboratories and conduct user-driven researches. In order to specify user-driven trends of collaboration between companies and users a field research (interview) with employees, responsible for this work in organizations was conducted.
2.3 User-driven innovation deployment process
Users' involvement into innovation process is a rather new trend that confirmed its efficiency in various industrial and services sectors. Nevertheless, the success of the projects depends not only on the quality of insights from innovative users but also on companies who can face with the wide range of risks of project failure. Therefore, an important question that should be answered in the current research - is how companies actually govern user-driven innovation deployment process.
Innovation development practices require from companies to obtain specific marketing knowledge, technical and integration competencies. Marketing competencies suppose the ability to analyze and translate users' needs [Lagrosen, 2005]. Many companies find, that users insights are a favorable source of valuable information. At the same time, the user can not only share his opinion on product price or quality but can also generate reasonable solutions. Such experienced users are rare and claim careful attitude.
Development of innovation strategy and implementation of stand-alone methods and tools is not enough. That is important to realize that user-driven innovations deployment process is a complex project that requires the cooperation of people from different functions. It aims to create new products and services that fit customers' needs.
There are various concepts and approaches describing the process of company-user collaboration. The user-driven innovation process is a multiple stages and dynamic problem-solving process [Tacer, 2015]. The process comes out of social interactions and differs in terms of the context.
The comprehensive analysis of literature allowed to identify the commonly recognized stages of the innovation process:
Idea generation
Development or design
Testing
Market launch
What is more, the user is considered to be involved in the innovation process from the first stage of the product development till the product launch on the market [Lettl, 2007; Voss et al., 2009; Tacer, 2015]. However, research showed that actually companies rarely involve users in each stage because they are not aware of such possibility and the possible advantages. Therefore, user-driven innovation approach is applied on separate stages of the innovation process but not maintained during the whole process [Tacer, 2015].
Detected classification determines wide stages and doesn't fully reflects the actions taken by companies to develop a new product with users' engagement. The research requires specification of each stage in order to reflect the actual practices of user-driven innovation deployment process. Moreover, this complex process requires the diversity of specific competencies that vary depending on the expert's role and responsibilities. Therefore, researchers suggest a multifunctional teams approach based on the combination of cross-disciplinary and diversified skills, competencies, individual traits and approaches [Grunert et al., 2010].
It is important to emphasize that large companies with multifunctional and multilevel organizational structures need to implement and maintain more structured user-driven innovations deployment process [Lagrosen, 2005]. In order to involve users into innovation process, companies need to ensure availability of specific competencies that are required on the organizational management level [Lettl, 2007].
Thus, user-driven innovation process is not only about innovative users' involvement but also about appropriate organizational structure creation that unites experts from different job families [Tacer, 2015]. Researchers determined that the most actively engaged functions in product development and production activities are marketing, product management and design [Mello, 2001; Lagrosen, 2005]. Representatives of these functions frequently collaborate with users and aim to gather and elaborate users' insights into a commercially attractive product. The essential characteristic of corporate teams participants is a precise focus on customers and competency of effective communications with users and other team members.
Appropriate management of cross-functional teams and their effective collaboration can reduce the costs and increase the probability of successful product launch [Lagrosen, 2005]. Nevertheless, organization and governance of cross-functional teams is a challenging process as management can face organizational and cultural barriers. Moreover, sometimes available internal resources are not enough to the undertake a project. Therefore, besides users' involvement, companies practice engagement of additional experts from external organizations, for instance, consultants who contribute for one or another process stage [Lagrosen, 2005].
Each specialist within a cross-functional team has its own role in the process and is responsible for specific tasks. The proposed user-driven innovation deployment matrix describes the key process steps and correlates them with job functions that are involved in the process.
The layers of the matrix are job functions that group occupations executing similar duties. The analysis of SOC 2010 and ISCO-08 allowed to identify the key job functions that are involved in user-driven innovation deployment process:
Design;
Top executives;
Business transformation;
Intellectual property and standards;
Manufacturing;
Marketing;
Sales;
Research and Development;
Service;
Quality, Regulatory, and Compliance.
The proposed matrix (figure 6) structures the process stages referring to chosen job functions. Job families were determined in order to reflect the responsibilities distribution between the cross-functional team for each process step. Recognition of job families allows demonstrating employees' roles irrespective of position titles and precise scope of activity that differ in the companies.
The analysis of the literature allowed identifying the tasks and activities relevant to each process step. After that description of each step was correlated with job families' descriptions based on SOC 2010 and ISCO-08 classifications. As a result, matrix demonstrates the possibility to involve one or another job family to the certain activities and demonstrates which job families mostly interact with the innovative user.
Figure 6: The user-driven innovation-process matrix
Source: Author's investigation based on literature review; SOC 2010 and ISCO-08 classifications
The user-driven innovation process matrix demonstrates which job families are involved in each step of the user-driven innovation project. It also demonstrates the order of actions and interrelation between different job functions and users. Each process step requires specific actions that should be explained in view of relevant job families' roles in the collaboration with users.
Strategic planning. The first stage of the innovation project is strategic planning [Alam, 2002]. Obviously that without a carefully designed innovation strategy, further efforts and investments can result in project failure. Development of proper strategy is an extremely important process step. At this stage company defines the role of innovations in the company's business strategy, determines the major objectives for innovation process, establishes the appropriate organizational structure [Cooper & Kleinschmidt, 2007], diffuses the corporate innovation policy within the company. In order to develop and implement the strategy, different methods can be applied such as individual consultancy, most active employees' involvement, corporate surveys and others [Enz, 2012]. These methods can help to create the participants-focused strategy that is critical to strategy acceptance by functional teams.
Therefore, the strategic planning step starts from users' involvement policy development. For that purpose, business transformation teams can be created that join such job families:
13-1110 Management Analysts - process with corporate organization evaluations, implement and diffuse procedures aiming to achieve operational efficiency;
11-1021 General and Operations Managers - are responsible for corporate policies development [SOC 2010];
2423 Management consultants and business analysts - assesses the company's objectives, identify problems and provide strategy recommendations [ISCO-08].
The innovation strategy should reflect the strategic vision and objectives of the business and the leadership team. The developed or updated corporate innovation policy should be approved on the top executives level. In corporate structures the approver - is usually a Chief Executive (11-1010) who provides the development directions for the company based on the board of directors' vision [SOC 2010].
One more stage is strategy diffusion within employees as all participants should be aware of company's strategic targets and philosophy. The specific methods and techniques that are applied in the innovation process while working with users can be chosen during the further steps of the process as they can vary depending on the project scope, targets and budget [Kaasinen et al., 2010]. Consequently, employees who are involved in the project can feel free to decide which methods to use and apply their skills and knowledge following corporate business principles.
Trends analysis. This preparation step is very important as the team should be aware of the key trends that currently exist in the marketplace [Riggs & von Hippel, 1996]. Understanding of critical users' characteristics in the preparation stage helps teams to systematically identify users that are able to provide valuable solutions for the innovation development [Lettl, 2007]. Proper preparation provides the basis for later innovation efforts as they specify on which product or market areas it is worth to focus on [Cooper & Kleinschmidt, 2007]. On this stage, the team leaders should specify the major reasons for innovating: existing products improvement, process simplification, ambition to enter the new market, etc. This stage is very important. Getting started with the right objectives and the deep understanding of what team knows and what it needs to learn is essential for an accurate understanding of target group and needs.
The major role during this stage belongs to marketing and R&D functions:
13-1161.00 Market Research Analysts - are responsible for market development opportunities appraisal, initiating projects, proposing and evaluating techniques for collaboration with users and data collecting;
11-2020 Marketing Managers - initiate new product design projects and monitor trends indicating users need for improved or new available products [SOC 2010];
1123 Research and Development Managers who design, direct and govern the research and development activities [ISCO-08];
3543 Marketing associate professionals - conduct an relevant qualitative and quantitative market research methodology [ISCO-08].
At this stage participants should decide on the methods they plan to use in interaction with users and initiate special tools purchase or development if required. They should also consider at which stages of the process they need to involve users and how they can motivate users to innovate [Kaasinen et al., 2010]. Moreover, it is considered that focusing on one method of interaction with customers is not enough for the successful project [Sawhney et al., 2005]. Therefore, several collaboration methods should be chosen and applied simultaneously representing integrated portfolio.
Identification of Lead users. That is obvious that companies should know which users can share valuable insights and propose innovation solutions. Lead users identification can be considered as a good option for marketing managers as this concept allows to identify most experienced users and to attract them to innovation process [Riggs & von Hippel, 1996]. The Lead users approach is focused on identification of progressive users and their involvement in the idea generation stage and product development [Gruner & Homburg, 2000; Kratzer, 2016].
Lead users can provide valuable information to market researchers who collaborate with them [Riggs & von Hippel, 1996]. Therefore, on this stage, the key role belongs to marketing function representatives (13-1161.00 Market Research Analysts, 11-2020 Marketing Managers, 3543 Marketing associate professionals) who search for users who can considerably impact product development process.
There is a number of methods that can be applied such as Snowball and pyramid sampling, Screening, Broadcasting and other [Mдkinen et al., 2013]. Meanwhile, the results depend heavily on employees level of competence in a function as understanding of key users characteristics
Experience in subject classification allows companies to segment capable users based on the type of activities in the innovation process. In this context, a clear understanding of critical user characteristics increases the efficiency of the search for Lead users [Lettl, 2007; Kratzer, 2016].
Idea generation. The idea generation stage requires close cooperation with users [Gruner & Homburg, 2000, Kok et al., 2003; Lagrosen, 2005F; Lettl, 2007; Tacer, 2015]. On the idea generation phase, the inventive users collaborate with companies and share their ideas [Lettl, 2007]. The engagement of job functions depends on the method of innovation gathering:
Customer feedback gathering. A customer shares his feedback and ideas through the available resources (customer care call centers, customer feedback books, retailers' websites, web-communities, etc.). In such cases representatives of sales and service functions communicate with customers:
43-2000 Communications Equipment Operators - assist customers with their requests and complaints, gather customers' feedback [SOC 2010];
7211 Customer service adviser - Respond to customer enquiries, gather customers' feedback and provide data for management review [UK Visas & Immigraion, 2015];
4222 Contact Centre Information workers / 4225 Inquiry workers elaborate customers queries regarding company's products, dispatch information to other units [ISCO-08];
52 Sales workers - directly communicate with a client at the moment of selling or consulting [ISCO-08].
Therefore, it is important to emphasize that representatives of sales and service functions directly communicate with customers. A lot of customers queries flow through these employees. Thus, it is important to make sure that the most valuable customers feedbacks and ideas will be detached and forwarded to representatives of marketing function for further elaboration.
Interaction with users. On these stage marketing representatives focus on company-user advantageous cooperation. Methods that can be applied in the idea generation process can vary in terms of innovation process objectives and on the users' role in the development process [Kaasinen, 2010]. The surveys and tests are more likely to be applied when the emphasis is on testing and improving already designed ideas [Kaasinen, 2010]. In that case, the surveys can be conducted by 4227 Survey and Market Research Interviewers [ISCO-08]. In order to create new ideas it is better to apply such methods as workshops, discussions, focus groups, idea competitions, etc [Kaasinen, 2010]. Such techniques are usually applied by 13-1161.00 Market Research Analysts, 11-2020 Marketing Managers, 3543 Marketing associate professionals. Moreover, the effective way of users' engagement is the implementation of web communities that allows users to interchange their knowledge and share their ideas with co-thinkers [Thurner & Prause, 2014]. With new ICT solutions, especially social media, consumers can make more informed decisions, possess a global view of matters and network with others [Kaasinen, 2010].
Appraisal. As soon as the idea is generated by users it is important to analyze and assess the idea in order to proof its commercial attractiveness [Riggs & von Hippel, 1996]. This stage is very important as Lead users' needs are ahead of market trends [Kratzer, 2016] and sometimes leads users' experience does not fully reflect the real-world tendencies [von Hippel, 1986]. Evaluation function belongs to marketing representatives (13-1161.00 Market Research Analysts, 11-2020 Marketing Managers, 3543 Marketing associate professionals). However, in case of doubts, it is better to keep working on the idea correction or decline the developed idea. That will allow reducing risks of product launch failure.
Proposition generation and confirmation. It is important to emphasize that large companies with multifunctional and multilevel organizational structures need to implement and maintain more structured user-driven innovations deployment process [Lagrosen, 2005]. That is why the obligatory step of any innovation-deployment project is the proposition development by the marketing team who was responsible for project realization and further approval by authorized persons. At this stage of innovation process, the proposition is checked on compliance with quality standards and intellectual property rights violation. Representatives from several job families can be involved in the process:
3520 Legal associate professionals are responsible for checking compliance with intellectual property rights. It is necessary to search and to analyze the product in the market and identify the possible patent infringement [ISCO-08];
3567 Health and safety officer, 2463 Environmental health professionals, 3565 Inspectors of standards and regulations compliance [ISCO-08], 2462 Quality assurance and regulatory professionals [UK Visas & Immigraion, 2015], 13-1040 Compliance Officers [SOC 2010] evaluate and investigate eligibility for or conformity with laws and regulations.
Product design and testing. The innovative user can greatly contribute to product development not only at the idea generation stage but also participate in product design and testing activities [Alam, 2002; Lagrosen, 2005; Voss et al., 2009, Tacer, 2015]. As the initial version of developed innovations usually contains several defects, profound face-to-face company-user interaction is essential obligate for the testing phase[Lettl, 2007]. During the design process user directly communicates with design and R&D teams as designers should receive feedback in actual interaction with innovative users but not just when reading research reports that they were provided with [Kaasinen, 2010; Tacer 2015]. At this stage users' competencies are important as successful testers should be open for new technologies, be prepared for challenging but inspiring activities and for experiments [Lettl, 2007].
Creation of an effective team is essential for successful collaboration. The key participants on the design stage are designers, product engineers, product managers [Lagrosen, 2005]. Participants should be customer-focused and be ready for frequent interactions with customers as well as with other functions in the company. The cross-functional team should involve representatives of following job families:
27-1021.00 Commercial and Industrial Designers [SOC 2010]; 2163 Product designers [ISCO-08] who are responsible for development and design of manufactured products;
214 Engineering professionals; 2129 Engineering professionals researchers apply scientific knowledge related to different fields for problem-solving activities [ISCO-08];
11-9041.00 Architectural and Engineering Managers review and approves project design changes [SOC 2010];
User test of products or services is a common activity that companies undertake in order to verify the users' interest in the designed product and to make required adjustments before product launch on the market [EC, 2012]. The designed product is tested by users and corporate representatives:
7543 Product tester [ISCO-08]; 2462 Quality assurance and regulatory professionals [UK Visas & Immigraion, 2015]; 51-9060 Testers [SOC 2010]; test the product in cooperation with the user to ensure its quality and compliance with the standards.
Manufacturing. This stage of the innovative project is proceeded by the companies [von Hippel, 1976 (A)]. The major role usually belongs to manufacturing departments' representatives:
11-3050 Industrial Production Managers are responsible for planning and supervising manufacturing process [SOC 2010];
17-2199.04 Manufacturing Engineers; 17-3029.09 Manufacturing Production Technicians monitor and measures manufacturing process to assure stable manufacturing [SOC 2010];
51-9199.00 Production Workers [SOC 2010], 932 Manufacturing Labourers, 81 Plant and Machine Operators [ISCO-08] operate machinery required in the production process and perform a variety tasks to assist work of machines.
Product launch. The final part of the user-driven innovation deployment process is the market launch [Alam, 2002; Kok et al., 2003; Lagrosen, 2005; Tacer, 2015]. At this process stage, it is important to ensure that the developed innovation is properly introduced to the market with a compliant marketing strategy. Users involvement at this stage is considered as a good opportunity as users can share insights related to the consumption behavior for the product that can be used for marketing strategy development and implementation [Janssen & Dankbaar, 2008]. Therefore, users' ideas can be applied even for launch strategies strengthening [Kok et al., 2003]. In terms of process step realization 11-2020 Marketing Managers and 13-1160 Marketing Specialists interact with users to develop the successful marketing strategy for product launch [SOC 2010].
The developed user-driven innovation deployment process matrix provides the description of the process basing on a comprehensive analysis of the relevant literature. The matrix reflects job functions assignment to certain process steps and describes interrelations between those functions. Therefore, it allowed to estimate job functions' roles in the user-driven innovation process and to identify which functions are mostly engaged in the user interaction.
Summing up, the conducted analysis showed that marketing, sales and service representatives collaborate with users on the early stages of the innovation process - Lead users' identification and idea generation; design and R&D representatives work with users on the design and testing stages. Moreover, users' contribution is valuable on the product launch stage that is managed by marketing representatives. The identification of job families that can be involved in the project demonstrates that these employees should have the relevant competencies for cooperation with users and should be properly trained on the company-user collaboration techniques and methods.
Nevertheless, the internal procedures that are conducted independently - without users' engagement are not least important: strategic planning, trends analysis, idea appraisal, proposition generation. These stages are essential in terms of goal setting, cost allocation, assignment of duties and company's strategy and opportunities correspondence. The proper management of internal procedures can allow to properly distribute company's innovation policy within employees and to avoid innovation product' launch failures. As a result, it can save company' resources and improve the corporate brand.
2.4 Corporate practices trends
2.4.1 Interview methodology
The empirical data of the conducted research is based on the seven semi-structured interviews aiming the exploratory investigation of the corporate practices of deploying user-driven innovations. In spite the pretty small interviewees group, the results are relevant for research objectives, because interviews were conducted with attraction of business representatives from famous companies who are experts in their field and who are actively connected with new product development projects.
In order to determine and to focus on the most experienced business experts who are most appropriate for the dialog on user-driven innovation deployments process, the interviewees criteria were developed. Firstly, the research was focused on companies that are innovations oriented. Moreover, the companies representing perspective industries for users' engagement into innovation process are mostly relevant for the research. The analysis allowed identifying the job functions that actively cooperate with users during the innovation process. Therefore, it is worth to concentrate on representatives of such functions as they can be considered as experience holders on user-company collaboration practices and process structure. The interviewees selection criteria are summarized in the following table 3
Table 3: Interviewees criteria
Gender |
Any |
|
Age |
Any |
|
Company |
Multinational innovative companies |
|
Industry that company refers to |
* Auto and truck manufacturing * Software and programming * Telecommunications and electronics * Personal care and Health care * Food and drug stores |
|
Interviewee's position held |
Senior management, Middle management, Professional non-sales [Hay group, 2009] |
|
Job function that position refers to |
Marketing: 13-1161.00 Market Research Analysts [SOC 2010]; 11-2020 Marketing Managers [SOC 2010]; 1123 Research and Development Managers [ISCO-08]; 3543 Marketing associate professionals [ISCO-08]; 4227 Survey and Market Research Interviewers [ISCO-08]. Design: 27-1021.00 Commercial and Industrial Designers [SOC 2010]; 2163 Product designers [ISCO-08]. R&D: 214 Engineering professionals [ISCO-08]; 2129 Engineering professionals researchers [ISCO-08]; 11-9041.00 Architectural and Engineering Managers [SOC 2010]. |
Source: Author's compilation
During the interviews preparation stage, the invitations were sent to twelve business experts, seven of which agreed to participate in the structured interviews that in average took about thirty minutes. All interviewees fully matched the selection criteria and shared the valuable opinions on user-driven innovations approach. The interviewees profiles are summarized in table 4
Table 4: Interviewees profiles
№ |
Industry that company refers to |
Interviewee's position held |
Job function that position refers to |
|
1 |
Auto and truck manufacturing |
Middle management |
Marketing |
|
2 |
Auto and truck manufacturing |
Professional non-sales |
Marketing |
|
3 |
Personal care and Health care |
Middle management |
Marketing |
|
4 |
Personal care and Health care |
Professional non-sales |
Marketing |
|
5 |
Personal care and Health care |
Professional non-sales |
Research &Development |
|
6 |
Personal care and Health care |
Senior management |
Marketing |
|
7 |
Software and programming |
Middle management |
Design |
Source: Author's compilation
As shown in table 4 the major amount of interviews was conducted with representatives of the marketing function. The main reason for marketing experts' prevalence is the centralization in huge multinational organizations from central research and design institutions that support regional enterprises distantly. Nevertheless, marketing representatives are the most interesting interviewees in terms of the current research as they play a major role in the user-driven innovations deployment process.
The conducted interviews were semi-structured and individual in order to define the opinion of every participant. The interview was started with the initial list of questions (table 5) and in some cases the additional questions were added in order to follow the stream of thoughts of the experts.
Table 5: Interview questions
|
Key questions |
Guiding questions (if needed) |
|
1 |
Do you consider user as a possible source of innovations for your industry? Please explain why. |
Does user obtain relevant competencies for solution development? What are the corporate benefits? Is it worth spending on users' interaction? What is the purpose to attract users? Could you please give an example of implemented user-driven innovation? |
|
2 |
Does your company obtain a policy or instructions for user-driven innovations deployment? |
||
2.1 |
>If yes: Are they beamed down from the global level or designed locally? Are you/your team aware of this approach? |
||
|
Key questions |
Guiding questions (if needed) |
|
2.2 |
>>If yes - How are you being instructed? |
Do you have special training on user-driven innovations deployment approach? Do you receive practical instructions or recommendations? |
|
3 |
How does the project team usually looks like? |
Which functions are involved in the process? Who leads the process and is responsible for decision-making? Who plays the major role in the process and communicates with the user? Are all activities being proceeded locally? |
|
4 |
On which stages of the user-driven innovation process users are being involved? |
Are users attracted to idea generation/ product design/ prototype testing/ marketing strategy development? How do users contribute? How do you communicate with users? |
|
5 |
Which criteria (factors) you consider as the most crucial for the project? |
Source: Author's compilation
The listed questions were designed based on the findings of the conducted research. The aim of the interviews was to identify business representatives vision and real business cases in order to determine users' involvement trends and to compare them with the research findings
The conducted interviews with representatives of marketing and R&D allowed to discuss the business experts' attitude to user-driven innovations approach and to identify the current trends in users' involvement into the innovation processes.
2.4.2 Interview results
The user-driven innovations deployment approach became widely recognized in the business sphere. The semi-structured interviews with experienced experts in market intelligence allowed gathering qualitative information on corporate practices of user-driven innovations deployment. The interviewees were asked to share their experience on participating in projects of new or improved product development, to describe relations with the user and interaction within the company, to estimate worthiness of collaboration with users. As the result of the responses analysis, the following trends of corporate user-driven innovations deployment practices were identified.
1. Inspired by users.
The user is considered as the possible source of innovations by all interviewees. But at the same time, most of the experts pointed up that users' solutions are the raw and imperfect data that requires intensive adjustments by the company in order to create a commercially attractive product. The examples of provided arguments are summarized in table 6
Table 6: Users role in the innovation process by experts' opinion
User as innovator |
User as source of inspirations |
|
When communicating with customers we try to gather as much valuable information as possible. We appreciate customers' feedback, complaints, queries, suggestions. It can give us a new track for development and revive clients' interest (Expert 2). |
There is a huge gap between understanding of customers' needs and accurate interpretation and implementation. Decisions depend on companies' brand values, resources available, potential project efficiency (Expert 1). |
|
Finally, the user decides whether to use the innovation or not. Why not to ask them to participate in the innovation creation (Expert 3)? |
Not all users' needs have the industrial potential (Expert 5). |
|
Customers are very helpful for incremental innovations creation - as they experience limitations of available products and can propose simple solutions that can be applied (Expert 4). |
Customers are rather to inspire companies than to provide the innovative solutions (Expert 6). |
|
Users sometimes demonstrate very creative mind and propose such ideas that require thinking out of a scale of currently available products (Expert 7). |
We need to be open to new and surprising innovation ideas as users don't think about operational processes limitations and are not aligned with business strategy (Expert 7). |
|
We integrate users into the early stages of the product development process as members of the design team (Expert 5). |
Russian women inspired us to create and add a special knife for kitchen machine that allows to dice ingredients for Russian salad. Their idea underlay a very popular device on local market (Expert 4). |
|
We think that user-driven innovations are more about co-creation (Expert 3). |
||
We communicate with users and ask what limitations they see and how problems can be solved. Then we should decide whether it is worth doing or not (Expert 5). |
||
While the value proposition tells us about the needs of our customers and what would be a solution to address these needs, it doesn't tell us how to execute the way to the market (Expert 2). |
Source: Author's compilation of experts' responses
Based on provided arguments is it possible to conclude that companies consider users mostly as the source of inspiration, rather than the new product developers. Nevertheless, inspiration is very important for the whole project because the idea - is the starting point of the successful innovation. User-driven innovation projects should be planned carefully and with the high level of responsibility to ensure the development of a really-user focused solution.
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