Introduction

In the recent past, strategies for alliances, technology integration and/or knowledge management were embryonic. There were few guidelines, no text books, scant research and minimal training available. Today, there are a plethora of services dedicated to enhancing such capabilities. This rapid learning decade of the 90's has been enabled by an explosion of computer/ communications infrastructure. Executive management learns daily from the success - and failures - of company experiments. In fact, the learning laboratory is no longer confined to the classroom. Every interaction - both inside and outside the corporation - becomes an opportunity to create and apply new ideas.

Although a customer focus is essential for the entrepreneurial, niche vendor firm, many medium and large scale enterprises are finding difficulty practicing these concepts of customer innovation. The simple fact is that it does require thinking differently about your interaction with customers and how you allocate your resources accordingly.

In preparing these examples of building 'customer intimacy,' we discovered that companies were not eager to share their results. In some respects, they are fearful that competitors may discover valuable information about how they are managing the interaction (i.e., similar to the Japanese protection of process information referenced before). Moreover, they are concerned that customers who do not currently enjoy such an integral relationship will be alienated when they discover research being performed with others. Nonetheless, every company contacted was, indeed, experimenting. Most had confidential examples of how the interaction actually led to a new competitive product or service. Many had begun to systematize the process with an established innovation office, staff and initiatives.

There are some examples of this customer interface providing significant results to the economic viability of the company.

Profile: Steelcase, Inc

Industry: Office furniture/environments
Contact: Dr. Bill Miller, - V.P., Research and Business Development
Scope of Activity: 4th Generation R&D; field test sites w/ customers
Details of the Interaction:

• Core Strategy: New-to-the-world product innovation
• Change Factors: Unmet customer needs; market maturity
• Performance Measures: Effective work/learning; productivity; customer project cycle time reduction; customer success
• Organization Structure: Multi-disciplinary stakeholder teams - including customers, dealers, field sales and R&D
• People Motivation/Skills: Knowledge Infrastructure Engineering
• Cross-Boundary Processes: Iterative validation of experimentation; mutually dependent learning and design by doing
• Information Technology: Spatial learning environments, information persistence; A/V; ATM, embedded processing, smart agents; simulation; visualization; virtual reality

Results-to-Date: 300% reduction in customer project cycle time
Comments: Personal Harbor R Workspace product won the Business Week award for 1995 Best Product of the Year

Profile: Hoechst - Celanese

Industry: Chemical
Contact: Mr. Tom Wojcik, Business Manager, Office of Innovation
Scope of Activity: Business Portfolio Focus/Review by R&D
Details of the Interaction:

• Core Strategy: R&D as key connect point for customers
• Change Factors: Success factors=Creativity and Commercialization Process
• Performance Measures: Traditional investment criteria (Coopers Stage Gate)
• Organization Structure: Corporate function with interdependent R&D centers (i.e., ATGs) in Corpus Christi (TX), Charlotte (NC) and Summit (NJ); Parent -The Hoechst Group/Germany
• People Motivation/Skills: Focus on the environment - not rewards, awards or recognition
• Cross-Boundary Processes: Research scientist/customer teams; involvement in all stages; co-discovery more than relationship; expanded to competitors Information Technology: Decision-support software; multi-media; computer networks

Results-to-Date: Elevated positioning of the Office of Innovation; definition of future needs of key customers; (re)targeting of products/services
Comments: Provides insight on (1) whats wanted; (2) expressed need and (3) unexpressed needs.

Profile: Nortel (Northern Telecom)

Industry: Communications
Contact: Mr. Cecil Raynor, Assistant Vice President
Scope of Activity: Integrated Product Introduction (IPI)
Details of the Interaction:

• Core Strategy: Replace serial process with integrated, simultaneous cycle which includes customers from design to deployment (i.e., 5-stage)
• Change Factors: current system - too time-consuming, outdated
• Performance Measures: Detailed metrics for each stage (e.g., lead customer identification; customer value-added; highest mkt./customer business value; partner commitment; achievable customer schedule; 100% spec. compliance
• Organization Structure: Customized, team-based innovation; customer/supplier involvement; teams include development, eng'g, mfg., services, customer, et al.
• People Motivation/Skills: Trust-building; need to team globally
• Cross-Boundary Processes: 3-day off-site (Visioning, current reality, gaps, actions); outcome = contract; disciplined up-front planning through strategy formulation; application of product design principles to process
• Information Technology: Human factor more important that the technology

Comments: Contracting Phase is critical for determining
commitment. Results-to-Date: 2 products; 42% - 50% reduction in time-to-market.

If you have candidates who should be featured as Profiles of Customer Innovation, please let us know. If you have organizations interested in treating customers as 'sources of knowledge' rather than someone to whom you deliver services, we're interested in talking with you!