Tuesday, January 29, 2008

Change Management Problem Introducing User Toolkits for Innovation

von Hippel and Thomke proposed "user toolkits for innovation" to address the age-old problem of communication breakdowns between engineering teams and product users that result in users not getting what they want. User toolkits are a way for engineering teams to expose enough control over their product for users to be able to customize or configure the product to address their specific need. Examples include a food flavorings company that provides buyers with a toolkit to create their own flavorings, a product category where it is difficult to create products because it is hard for buyers to describe in English the type of flavoring they want. User toolkits are an approach to innovation because they put the solution-building task into the hands of the person who has the problem. Toolkits are another way of applying the maxim that necessity is the mother of invention.

The user toolkit idea has a lot of merit as one solution to the communication problem companies face with their customers. But there is a change management problem in getting manufacturers to develop toolkits for their users. The problem is that some manufacturers believe they erode margins by not providing the full and complete product to end-users. They think that making users have to customize products is tantamount to shipping an incomplete product. If the users have to finish the product, they would not want to pay as much for it as they would if the product did exactly what the consumer wanted right out of the box.

Perhaps companies are right in believing that products are not as valuable if they require additional work on the user's part to configure them to their needs. Then again, maybe companies are misunderstanding the role of a user toolkit. Perhaps what companies are supposed to do is provide user toolkits in addition to complete products. In the beginning, a company may not be able to identify a mass-market for a specific complete product, so it should just put a user toolkit out there and then learn from consumers what are the most popular and valuable ways to configure the toolkit. Once a broadly-applicable adaptation based on the user toolkit is identified, the company can productize that adaptation and sell it for a higher margin than it sells the user toolkit for.

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