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Manage customer-centric innovation--systematically
Larry Selden1, Ian C MacMillan
1Columbia Business School, New York, NY, USA. ls49@columbia.edu
Harvard Business Review
|April 4, 2006
Summary
Customer-centric innovation (CCI) shifts R&D from labs to frontline employees, focusing on customer needs for sustained growth. This approach bridges the gap between business plans and market expectations, driving profitable innovation.
Area of Science:
- Business Strategy
- Innovation Management
- Marketing Research
Background:
- Companies often fail to achieve sustained, profitable growth despite R&D investments.
- A significant gap exists between corporate growth plans and market expectations.
- Traditional R&D approaches, isolated from customer input, hinder market-aligned innovation.
Purpose of the Study:
- To outline a systematic approach for achieving sustained, profitable growth through innovation.
- To introduce and define Customer-Centric Innovation (CCI) as a solution to the growth gap.
- To detail the components of a rigorous customer R&D process within CCI.
Main Methods:
- Developing a customer R&D process focused on understanding customer needs and value propositions.
- Integrating frontline employees into the innovation and customer understanding process.
- Utilizing case studies, such as Tumi, to illustrate a step-by-step CCI implementation.
Main Results:
- CCI fosters continuous improvement in customer value propositions.
- Enhanced communication and delivery of value propositions to customers.
- Innovation efforts are decentralized from headquarters to customer-facing personnel.
Conclusions:
- Customer-centric innovation is essential for bridging the growth gap and meeting market expectations.
- A rigorous customer R&D process, involving frontline staff, drives profitable and sustained growth.
- CCI enables companies to create and deliver superior customer value, leading to market success.
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