It's interesting that most of this discussion about innovation focuses on developing relationships with known/established stakeholders, such as your customers. Yet all the evidence points to the greatest innovations being generated from the most unlikley places. Sure, it's important to develop/maintain relationships with customers, clients and the like....but the most disruptive innovations are more likley to arise from developing relationships with those on the extreme periphery of the organisation - the fringe stakeholders - that you don't know and who don't know you. The big challenge is how do you go about developing relationships with people you don't even know you want to develop relationships with! Outcoem driven innovation has its place but the innovation process is already restricted by the perceived outcomes.

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Following up Martin's comments, thought I should mention that my company, The OMC Group, is providing Strategyn's outcome-driven innovation in the UK and Ireland.

It seems Lafley is edging toward the reality of the "brand chain," the brand equivalent of the value chain. One definition: "The Brand Chain begins where the classic Value Chain ends. While the Value Chain is made up of value-adding inputs along the production process, ending at the customer, the Brand Chain begins with the customer and is largely made up of downstream interactions between customer, product and company." However one defines the effect, the bottom line is that brands are gaining their rightful place as a prime-time value driver at core customer levels.

Great info! Maybe it's offtopic, but i just wanted to say, that O, it's really interesting to read everything this with comments... You,professionals, discuss here a lot of interesting things on different news =). Thanks =)

just wondering if you meant reputation of sellers at eBay. How since rarely do people who bid auctions have a first hand knowledge of the seller. And that seller reputations are a matter of how buyers rate them. So if a seller has screwed up in the recent past, his reputation takes a hit...

Have a look at white papers at http://www.strategyn.com. There is a very compelling and reasoned critique by Anthony Ulwick about "voice-of-the-customer" Mainly this revolves around not having the right kinds of information for the innovation process. He offers an antidote in the form of "outcome-driven" innovation. This systematic approach has implications for segmentation as well.

Ebay's reputation system represents the perceptions of buyers and sellers. It does not directly reflect on Ebay's reputation itself. Reputation management sevices like Opinity are working with identity management players like SXIP while others like Identity Commons are leading the "open profile" movement. I think this is closer to what consumers will prefer, not necessarily to be "part of the brand" but to have portable, persistent identities, complete with reputation management, and adjudication services, which can be exposed, or not, on services we choose to trust.

reputation ! you expressed it pretty good, nice done!

Amazon is an excellent example of reputation. A survey done at M.I.T. in the U.S. found that even though people can find products for cheaper prices elsewhere, they still choose Amazon because of its reputation for speed, reliability and trust. That is pretty big endorsement for how reputation can be a company's most competitive asset. lgr

The fluid reputation marketplaces, like ebay and Amazon, have certainly challenged the power of branding. Isn't it more that they've managed to embed this into their overall brand strategy, and it's become a greater part of their brand. I'm not sure I'd term it a challenge to the power, but increasing the power of the participants. Each person that particiaptes (especially in terms of EBay) has a stake in their own reputation as well as the other party in the deal. And therefore, each participant becomes a part of the 'brand' in how they define themselves to other participants.

Cool post. I like this whole Corante idea! Nicely done.

Whilst slavishly listening and responding to every dissatisfaction and whim of the customer may indeed limit a firm’s innovation potential, the “Ignore the Customer” school of thought tends to miss the point. To co-create with customers requires a deep ability to see past their sometimes short-sighted and superficial inputs. It means asking them different questions, devising new assumptions and finding alternative ways to continuously learn about their problems and unmet needs. Critics of customer input often fail to recognise the difference between asking customers to identify problems and expecting them to come up with solutions. It is true that 15 years ago, most customers were not demanding books over the internet, downloadable music or in-car navigation systems. Yet there were ongoing problems and limitations to be solved, as well as deep-seated, latent needs to be uncovered and satisfied – otherwise these innovations would not be as successful as they are. OK, it may be true that not all customers are a blessed with the brains (or the motivation) in the innovation department. Yet it is true that every company will have some customers that possess a deep understanding of their products, and maybe even those of their competitors - as shown by Jennifer's burrito experience. And nearly all customers will have some opinion on a recent experience they have had, whether good or bad. In fact, every day, customers are trying to tell firms how to serve them better. Through the questions they raise and the problems they report, companies are already sitting on a potential goldmine of proprietary, customer intelligence. To tap into effectively demands a new mindset and attitude to customer learning. Unfortunately, most CRM systems are not designed with such knowledge capture and use in mind. But that's another story..

I think something else to explain why listening to customers results in failed products is that, well, customers aren't very good at articulating wants or solving their own problems. If they were in a position to do so, they wouldn't be problems any more. Focus groups and satisfaction surveys routinely praise crap and kill great ideas. Guy Kawasaki tells a great story about a focus group where everybody verbally affirmed a brightly-colored design for a portable CD players over a more classic black design; as a thank-you for participating, each person was allowed to take one home. To a one, they all chose the black on their way out. So it is with problems, too; the customer may be able to identify their pain, but they often can't articulate how to solve it best for them (and can't predict, any better than the engineers, what new pain will come with the cure for the old). I'd say the solution lies in listening to the customers, and listening hard, but understanding that they aren't going to tell you how to win them over; many a company has focus-grouped and test-marketed a New Coke in their day, only to have the public in general pan it.

Wendy - Great point. It's not only those who represent a company that can effect a brand it can also be negatively and positively effected by the customers that buy the brand. Careful selection of customers is something that happens all of the time with youth brands.

What you say is absolutely true... As you articulate the common discomforts of air travel, discourtesy and disregard, the only product you mention just created a mental picture by describing a specific person who happened to use it. Now, your comment on one executive from one brand may have (inadvertently) caused an impact on another company's brand!

OK, this is very funny (or sad)... a reader pointed out this statement on Mission Foods web site: "In an industry battling negative trends, Mission Foods has cracked the code, gained valuable insight into consumer desires and applied that insight to the marketplace with much success." Hmmm... ok...

Your article is on Target and businesses do not practice Customer Service. Being courteous, kind, respectful, thoughtful are missing for me when I walk into a store, a restaurant, talk on the phone, ask for donations for charity, driving. It not only is missing in business, it is missing in every aspect of our communities. And you raised the issue, how to put Customer Service back into existence. The first thing is to do as you are doing, presenting it as an issue to be discussed. And the next step is to put it into action...

Toffler, Naisbett and others wrote about this in the 90's from memory. The point they made was that information inherently has no value unless it is shared. The paradox is the more you share it the more valuable it becomes.