Marrying Technology and Customer Collaboration

Gerard Tellis and Ashish Sood wrote an interesting article last week in the Wall Street Journal on How to Back the Right Technology. 

Briefly, the article states that in figuring out which technologies to back executives make three fundamental mistakes:

• they fail to distinguish between different levels of technology
• they assume that technologies evolve along a linear path from innovation to obsolescence
• they fail to recognize that innovations fundamentally shape and alter consumers' tastes

The authors recommend that in the end companies are better off betting on more than one horse in deciding which technology to back.

Mistakes 1 and 3 grabbed my attention because of their strong implications for designers of customer collaboration and value co-creation programs . 

• Mistake 1: When I hear Tellis and Sood urge executives to distinguish between three levels of technological innovation - platform, design, and components - questions such as what are the relative roles of the company and the customer, where does technology begin and where does customer intuition take over, come to mind.
  
• Mistake 3: The authors caution executives about concluding that shifts in customer decision criteria or preferences are due to whims.  They argue instead that these shifts are due to and driven by emergence of new platform technologies.  To illustrate, it is likely that with the emergence of hybrid technologies, traditional auto selection criteria such as sporty, fun to drive, etc., will exert less influence on auto brand purchased than in the past, when hybrid technologies were less developed.

The consequences for co-creation activities are significant.  Consumer psychologists and behavioral economists inform us that customers collaborate and contribute most effectively when they operate in zones consistent with their knowledge and intuition.  This is the main reason why customers find it easier to gripe, vent, and express angst, but more difficult to give a concrete voice to their future objects of preference or consumption.

No doubt that engaging customers in their optimum zones of knowledge and intuition can result in a short-term competitive advantage through feature and design innovation  - example cell phones, smart kitchen appliances, i-drives in cars, and multi-function document handling machines (printer, copier, scanner, and fax).  However, excessive reliance on customer conversations focused on design and feature innovation can also have negative long-term side effects:

• Barry Schwartz (Paradox of Choice) and Roland Rust, et.al. (Defeating Feature Fatigue) draw attention to the diminishing quality of customer purchase and usage experience due to feature bloat and increased design complexity of products and services
  
• Design and feature innovation are necessary, but not sufficient for long-term competitive advantage.  Sony was impressive in design and feature innovations related to its CRT TV's, but Samsung overtook it by investing in an LCD platform.  Nokia, Samsung, and Motorola were impressive in the number of new cell phone models they introduced every year, but Apple was able to leapfrog all of them with its new iPhone platform

The interplay between platform innovation and consumer choice criteria, where platform innovation irreversibly alters how consumers choose, reminds us that companies should not underestimate the role of technology and technical know-how in designing and executing customer collaboration and co-creation programs. 

Samsung's Value Innovation Center provides an excellent role model for way it marries its focus on technology with an ongoing concern for feature and design innovation.  During a recent visit to the center in October, I had the opportunity to witness and learn about this relay between technology and customer-driven co-creation.  

Take for example the Bordeaux TV.  Science led off the relay with the LCD platform, giving rise to desirable features such as thinness and flat screen.  The customers took over from here and helped Samsung rethink the TV, not as an electronics appliance, but as an attractive accessory capable of blending in with the furniture in a room.  The black casing, the hidden speakers, and the Bordeaux glass-like lines, all came about as a result of customer collaboration and co-creation efforts. 

Pundits remind us everyday that context is key!  Technology must play a key role in providing context for open innovation programs.  As Samsung's Value Innovation Center teaches us, the marriage of technology with customer collaboration and co-creation efforts has the potential to ensure that companies win the design and feature innovation battles, without losing the platform innovation war!