Innovation, faster horses and value co-creation with the customers

The concept of value co-creation with the customers is the new trend.  Prahalad and Ramaswamy wrote the book The Future of Competition: Co-Creating Unique Value with Customers, then there are Henry Chesbrough with Open Innovation: The New Imperative for Creating and Profiting from Technology,  E. Von Hippel with Democratizing Innovation, and recently Don Tapscott and Anthony Williams with Wikinomics.

Google has a tool,  Google Moderator, that Matt Cutts describes as  a tool that lets anyone ask a question and then people can vote up the questions that they’d like answered. One application of Google Moderator is to help a company co-create a service/application by asking customers what they would like to have and rate at the same time the suggestions. For example, Google is now using Moderator to ask customers to share and rate ideas regarding Google Mobile.  Google Latitude is an application that  lets you share your location with your friends.  There are certainly several new ways to use, explore and enhance this application and people around the globe can bring value and creativity to improve the concept. This is an excellent example of co-creation with customers.

However, this approach does not cover disruptive innovation or at least it could limit disruptions. Sometimes, customers are limited by today’s constraints and frame of reference. In this context, the famous quote of  Henry Ford describes what would happen: “If I had asked people what they wanted, they would have said faster horses.”  These problems could be overcome by asking for example a different question, not what they would like to have, but what they are trying to achieve, what are their needs, etc.

Asking people around the world to contribute to the innovation of the firm is nowadays accepted as the way to go. At the same time, incremental innovation and disruptive innovation are two ways to create value and each of them requires a different approach, processes, mentality and management.