Synergies among Producer Firms, Lead Users, and User Communities: The Case of the LEGO Producer-User Ecosystem

While many firms today proactively involve users in their new product development efforts using a wide variety of methods such as the lead user method, firm-hosted user communities, or mass customization toolkits, some pioneering firms are experimenting with the creation of sustainable producer-user ecosystems designed for the continuous exploration and exploitation of business opportunities. In this paper, the functioning of such ecosystems is studied with particular emphasis on the synergies they can yield. Based on an explorative and longitudinal multiple case study design, the producer-user ecosystem of the firm LEGO is analyzed, and three main actors in the ecosystem are identified: entrepreneurial lead users who aim to start their own businesses, a vibrant user community, and the LEGO company as the focal producer firm and facilitator for multiple user-to-user and user-to-producer interactions. Our study reveals three kinds of synergies: (1) reduced risk for entrepreneurial lead users and the focal producer firm, (2) the extension of the design space of the focal producer firm's products, and (3) the creation of buzz within the user community. Finally, the theoretical and managerial implications of our findings for innovation researchers and practitioners are discussed. (authors' abstract

Technological competence leveraging projects via intermediaries: Viable means to outbound open innovation and mediated capability building?

Aiming at reaping the benefits of open innovation, a growing number of organizations utilizes innovation intermediaries as external facilitators. However, the effectiveness of such intermediaries, especially in outbound open innovation, such as leveraging existing technologies in new market opportunities, remains unclear. We aim to investigate if and how externally conducted technological competence leveraging (TCL) projects provide value to the focal organization. Based on interviews with key personnel and analysis of reports from such projects conducted in the course of several research consortia at CERN, the European Organization for Nuclear Research, we find that the projects were successful in identifying new application fields. Further, the externally conducted projects also contributed to the development of TCL-related project capabilities within the focal organization. This research also identifies a number of barriers to short- and long-term success such as lack of a company-internal perspective and project owners without management responsibilities

Exploring the nature and implementation process of IT-based user-centric business models

Recent advances in information and communication technologies have allowed companies to interact with external stakeholders, especially users, in a very efficient and effective way. As a result, more and more companies are striving to take advantage of these new opportunities and to harness the creative potential of their users by integrating them into core business processes. Successful companies like Threadless or Dell, which were designed to allow user innovation and co-creation from the outset, clearly demonstrate the potential value of such approaches. However, the introduction of user-centric value creation processes at established companies is a rather complex task, as it requires major adaptations to traditional manufacturer-centered business models. At present, little is known about how established companies can successfully implement user-centric business models. In this paper, we therefore explore (1) the success factors for attracting and engaging users in core business processes, and (2) effective strategies to overcome internal resistance when established companies introduce user-centric business models. We apply a multi-case comparison methodology between three well-known companies (LEGO, IBM and Coloplast) which have successfully integrated users into their core business processes. We find that the successful implementation of user-centric business models requires a comprehensive approach encompassing not only an appropriate social softwaredesign, but also a transparent intellectual property policy, proper incentive systems, evolutional learning and nurturing as well as employee empowerment

Complementing mass customization toolkits with user communities: How peer input improves customer self-design

In this article, the authors propose that the canonical customer-toolkit dyad in mass customization (MC) should be complemented with user communities. Many companies in various industries have begun to offer their customers the opportunity to design their own products online. The companies provide web-based MC toolkits which allow customers who prefer individualized products to tailor items such as sneakers, PCs, cars, kitchens, cereals, or skis to their specific preferences. Most existing MC toolkits are based on the underlying concept of an isolated, dyadic interaction process between the individual customer and the MC toolkit. Information from external sources is not provided. As a result, most academic research on MC toolkits has focused on this dyadic perspective. The main premise of this article is that novice MC toolkit users in particular might largely benefit from information given by other customers. The pioneering research conducted by Jeppesen (2005), Jeppesen and Frederiksen (2006), and Jeppesen and Molin (2003) has shown that customers in the computer gaming and digital music instruments industries are willing to support each other for the sake of efficient toolkit use (e.g., how certain toolkit functions work). Expanding on their work, this article provides evidence that peer assistance appears also extremely useful in the two other major phases of the customer's individual self-design process, namely the development of an initial idea and the evaluation of a preliminary design solution. Two controlled experiments were conducted in which 191 subjects used an MC toolkit in order to design their own individual skis. The authors find that during the phase of developing an initial idea, having access to other users' designs as potential starting points stimulates the integration of existing solution chunks into the problem-solving process, which indicates more systematic problem-solving behavior. Peer customer input also turned out to have positive effects on the evaluation of preliminary design solutions. Providing other customers' opinions on interim design solutions stimulated favorable problem-solving behavior, namely the integration of external feedback. The use of these two problem-solving heuristics in turn leads to an improved process outcome, that is, self-designed products which meet the preferences of the customers more effectively (measured in terms of perceived preference fit, purchase intention, and willingness to pay). These findings have important theoretical and managerial implications. (author's abstract

Designing the Organization for User Innovation

There is increasing consensus among practitioners and academics alike that we are in the midst of a paradigm shift from producer-centered and internal innovation processes toward user-centered and open innovation processes. This paradigm shift induces significant changes to the design of organizations. Even though the research field of user innovation has been developing over a period of more than four decades, there have been only occasional intersections with the research field of organizational design. In this paper we aim to provide an integrated perspective of the two fields. We first identify major user innovation strategies. We then derive the implications of each user innovation strategy on key dimensions of organizational design. We conclude with an outlook on symbiotic producer-user ecosystems and the corresponding implications for organizational design