Lead user
Encyclopedia
Lead user is a term developed by Eric von Hippel
in 1986 . His definition
for lead user is:
In other words: Lead users are user
s of a product
or service that currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs.
(MIT) and first described in the July 1986 issue of Management Science. In contrast to the traditional market research techniques that collect information from the users at the center of the target market, the Lead User method takes a different approach, collecting information about both needs and solutions from the leading edges of the target market and from analogue markets, markets facing similar problems in a more extreme form. The methodology involves four major steps: 1. Start of the Lead User process, 2. Identification of Needs and Trends, 3. Identification of Lead Users and interviews, 4. Concept Design (Workshop). The methodology is based upon the idea that breakthrough products may be developed by identifying leading trends in the to-be-developed product’s associated marketplace(s). Once the trend or broader problem to be solved has been identified, the developers seek out “Lead Users”- people or organizations that are attempting to solve a particularly extreme or demanding version of the stated problem.
For example, a company seeking to create a breakthrough in flashlight design may seek out policemen, home inspectors, or others who require bright, efficient lights as part of their day to day business. Once these “lead users” have been identified, networking is employed and the lead users are interviewed so as to gain their insight into how they solve the problem for themselves. The lead users are also queried to determine whether they have knowledge of individuals or organizations who are considered to be “outside the market” and have even more extreme portable lighting needs than the policemen or home inspectors; in our example, these users might be photographers, divers, or movie lighting designers. (See the “Examples of Lead User Method” section of this article for more examples of lead user identification.) By learning from both the lead users and the outside-the-market users, companies may identify new methods or approaches towards creating innovative products that are true breakthroughs via ideas that may not have surfaced by simply examining existing users with traditional market research techniques.
Various studies have explored the effectiveness of this theory in terms of identifying any user innovations. The effect found in these studies tends to be very large; for example, Urban and Von Hippel (1988) found that 82 percent of a given lead-user cluster had developed their own version of, or had modified a specific type of, the industrial product under study… whereas only 1 percent of the non-lead users had done this.
Empirical studies have also found that many of the innovations developed by users have commercial attractiveness. For example, Urban and Von Hippel (1988) found that lead user theory can be effectively utilized in industrial software product development; Morrison, Roberts, and Von Hippel (2000) found that many IT innovations developed by libraries had broader potential value; and Luthje (2003) found that 48 percent of surgical innovations developed by surgeons in university clinics in Germany could be produced as commercial products.
Based on its widespread success, it has been suggested that the lead user methodology should be integrated into corporate new product development efforts (Urban and Von Hippel, 1988). Companies may benefit (to a large extent) as they try to learn from lead users about the needs and solutions encountered at the leading edge of the market. Increasingly, this type of customer integration is being discussed among innovation management scholars (Enkel, Javier, and Gassmann, 2005; Luthje and Herstatt, 2004). The idea is also spreading rapidly in the business world (Coyne, 2000; Dehne, 2003; Intrachooto, 2004); for example, lead-user concepts developed and used at 3M showed product sales potential that was an average of eight times higher than for sales of products using more traditional development concepts / processes (Lilien et al., 2002).
http://techiteasy.org/2007/10/14/connecting-technology-to-market-the-lead-user-methodology/
Literature also suggests that an additional obstacle to the adoption of this kind of process is related to a general resistance to innovation and / or change that can be found in typically bureaucratic organizations; these organizations tend to resist disruptive changes in processes which many force the company to evolve, (although this is exactly the purpose of such an approach). While the lead user methodology can reliably lead to breakthroughs, adopting the approach can be difficult for some organizations and on the whole, the technique itself is useful to the extent that the product and / or service under study is lead user friendly (i.e. if it’s not a top-secret or quick time-to-market idea). [need reference to the mention literature]
3M
The lead user method was utilized in 3M’s Medical-Surgical Division to develop a breakthrough surgical drape product. 3M assembled a team of lead users which included a veterinarian surgeon, a makeup artist, doctors from developing countries and military medics.
(Reference: http://www.leaduser.com videos)
Hilti AG
Hilti utilized the lead user method to develop a simplified pipe hanger. Hilti put together a lead user group consisting of lead layout engineers, researchers from construction departments of institutes, an engineer from a professional organization in Bonn, and two engineers from municipal building departments.
(Reference:http://web.mit.edu/evhippel/www/papers/Herstatt-EvH%20Journal%20Product%20Innov%20Management.pdf)
Nortel
Nortel utilized the lead user method to develop a new class of web applications for voice, video and data. Nortel put together a group of lead users including law enforcement professionals, paramedics, military personnel, animal trackers and professional storm trackers.
(Reference: http://www.leaduser.com videos)
Papers
Eric von Hippel
Eric von Hippel is an economist and a professor at the MIT Sloan School of Management, specializing in the nature and economics of distributed and open innovation. He is best known for his work developing the concept of user innovation – that end-users, rather than manufacturers, are...
in 1986 . His definition
Definition
A definition is a passage that explains the meaning of a term , or a type of thing. The term to be defined is the definiendum. A term may have many different senses or meanings...
for lead user is:
- Lead users face needNeedA need is something that is necessary for organisms to live a healthy life. Needs are distinguished from wants because a deficiency would cause a clear negative outcome, such as dysfunction or death. Needs can be objective and physical, such as food, or they can be subjective and psychological,...
s that will be general in a marketMarketA market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
place – but face them months or years before the bulk of that marketplace encounters them, and - Lead users are positioned to benefit significantly by obtaining a solution to those needs.
In other words: Lead users are user
User (computing)
A user is an agent, either a human agent or software agent, who uses a computer or network service. A user often has a user account and is identified by a username , screen name , nickname , or handle, which is derived from the identical Citizen's Band radio term.Users are...
s of a product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
or service that currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs.
Lead User Method Introduction
The Lead User Method is a market research tool that may be used by companies and / or individuals seeking to develop breakthrough products. Lead User methodology was originally developed by Dr. Eric von Hippel of the Massachusetts Institute of TechnologyMassachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
(MIT) and first described in the July 1986 issue of Management Science. In contrast to the traditional market research techniques that collect information from the users at the center of the target market, the Lead User method takes a different approach, collecting information about both needs and solutions from the leading edges of the target market and from analogue markets, markets facing similar problems in a more extreme form. The methodology involves four major steps: 1. Start of the Lead User process, 2. Identification of Needs and Trends, 3. Identification of Lead Users and interviews, 4. Concept Design (Workshop). The methodology is based upon the idea that breakthrough products may be developed by identifying leading trends in the to-be-developed product’s associated marketplace(s). Once the trend or broader problem to be solved has been identified, the developers seek out “Lead Users”- people or organizations that are attempting to solve a particularly extreme or demanding version of the stated problem.
For example, a company seeking to create a breakthrough in flashlight design may seek out policemen, home inspectors, or others who require bright, efficient lights as part of their day to day business. Once these “lead users” have been identified, networking is employed and the lead users are interviewed so as to gain their insight into how they solve the problem for themselves. The lead users are also queried to determine whether they have knowledge of individuals or organizations who are considered to be “outside the market” and have even more extreme portable lighting needs than the policemen or home inspectors; in our example, these users might be photographers, divers, or movie lighting designers. (See the “Examples of Lead User Method” section of this article for more examples of lead user identification.) By learning from both the lead users and the outside-the-market users, companies may identify new methods or approaches towards creating innovative products that are true breakthroughs via ideas that may not have surfaced by simply examining existing users with traditional market research techniques.
Review of Existing Literature
Research on lead users emerged from studies on sources of innovation. It was first found that users (as opposed to manufacturers) are often the first to develop new products that are commercially successful ( ). Additionally, it was found that innovation by users tended to be concentrated among the “lead users” of those products and processes . These “lead users” were individuals or organizations who had experienced needs for a given innovation earlier than the majority of the target market . Recent research highlights the fact, that lead users exist for service, too (Skiba and Herstatt 2009, Skiba 2010, Oliveira and Von Hippel 2011).Various studies have explored the effectiveness of this theory in terms of identifying any user innovations. The effect found in these studies tends to be very large; for example, Urban and Von Hippel (1988) found that 82 percent of a given lead-user cluster had developed their own version of, or had modified a specific type of, the industrial product under study… whereas only 1 percent of the non-lead users had done this.
Empirical studies have also found that many of the innovations developed by users have commercial attractiveness. For example, Urban and Von Hippel (1988) found that lead user theory can be effectively utilized in industrial software product development; Morrison, Roberts, and Von Hippel (2000) found that many IT innovations developed by libraries had broader potential value; and Luthje (2003) found that 48 percent of surgical innovations developed by surgeons in university clinics in Germany could be produced as commercial products.
Based on its widespread success, it has been suggested that the lead user methodology should be integrated into corporate new product development efforts (Urban and Von Hippel, 1988). Companies may benefit (to a large extent) as they try to learn from lead users about the needs and solutions encountered at the leading edge of the market. Increasingly, this type of customer integration is being discussed among innovation management scholars (Enkel, Javier, and Gassmann, 2005; Luthje and Herstatt, 2004). The idea is also spreading rapidly in the business world (Coyne, 2000; Dehne, 2003; Intrachooto, 2004); for example, lead-user concepts developed and used at 3M showed product sales potential that was an average of eight times higher than for sales of products using more traditional development concepts / processes (Lilien et al., 2002).
Potential Disadvantages of the Lead User Method
While the lead user methodology has proven to be very successful, select literature highlights some product development scenarios in which the Lead User method may be less effective. For example, the following was pointed out on October 14, 2007 on “TechITEasy.org”:- “Highly secretive industries where lead users may not feel comfortable or may not be able to disclose information and knowledge are not suited for this [lead user] process;”
- “The lengthy [nature of the lead user] process can prevent this methodology from being applied effectively in industries with really short term innovation cycles or where quick turnaround from research to market delivery is required;”
- “The [lead user method] LUM is better suited to meet the needs of the industrial goods market rather than consumer goods market as lead users of industrial goods can typically be identified more reliably than lead users of most consumer goods.”
http://techiteasy.org/2007/10/14/connecting-technology-to-market-the-lead-user-methodology/
Literature also suggests that an additional obstacle to the adoption of this kind of process is related to a general resistance to innovation and / or change that can be found in typically bureaucratic organizations; these organizations tend to resist disruptive changes in processes which many force the company to evolve, (although this is exactly the purpose of such an approach). While the lead user methodology can reliably lead to breakthroughs, adopting the approach can be difficult for some organizations and on the whole, the technique itself is useful to the extent that the product and / or service under study is lead user friendly (i.e. if it’s not a top-secret or quick time-to-market idea). [need reference to the mention literature]
Examples of Lead User Method
The lead user method can be utilized in any industry and at any level of product complexity. The following are examples where the Lead User method was utilized to create a new product which satisfied a specific need:3M
The lead user method was utilized in 3M’s Medical-Surgical Division to develop a breakthrough surgical drape product. 3M assembled a team of lead users which included a veterinarian surgeon, a makeup artist, doctors from developing countries and military medics.
(Reference: http://www.leaduser.com videos)
Hilti AG
Hilti utilized the lead user method to develop a simplified pipe hanger. Hilti put together a lead user group consisting of lead layout engineers, researchers from construction departments of institutes, an engineer from a professional organization in Bonn, and two engineers from municipal building departments.
(Reference:http://web.mit.edu/evhippel/www/papers/Herstatt-EvH%20Journal%20Product%20Innov%20Management.pdf)
Nortel
Nortel utilized the lead user method to develop a new class of web applications for voice, video and data. Nortel put together a group of lead users including law enforcement professionals, paramedics, military personnel, animal trackers and professional storm trackers.
(Reference: http://www.leaduser.com videos)
See also
- Crossing the chasmCrossing the ChasmCrossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers or simply Crossing the Chasm , is a marketing book by Geoffrey A. Moore that focuses on the specifics of marketing high tech products during the early start up period...
- Eric von HippelEric von HippelEric von Hippel is an economist and a professor at the MIT Sloan School of Management, specializing in the nature and economics of distributed and open innovation. He is best known for his work developing the concept of user innovation – that end-users, rather than manufacturers, are...
- InnovationInnovationInnovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...
- MarketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- Product lifecycle managementProduct lifecycle managementIn industry, product lifecycle management is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal...
- Technology adoption lifecycleTechnology Adoption LifeCycleThe technology adoption lifecycle is a sociological model developed by Joe M. Bohlen, George M. Beal and Everett M. Rogers at Iowa State University, building on earlier research conducted there by Neal C. Gross and Bryce Ryan...
- Toolkits for user innovationToolkits for User InnovationToolkits for user innovation allow manufacturers to " abandon their attempts to understand user needs in detail in favor of transferring need-related aspects of product and service development to users along with an appropriate toolkit"...
- User innovationUser innovationUser innovation refers to innovation by intermediate users or consumer users , rather than by suppliers ....
- Empathic designEmpathic designEmpathic design is a user-centered design approach that pays attention to the user's feelings toward a product. The empathic design process is sometimes mistakenly referred to as Empathetic design.- Characteristics of empathic design :...
- Whole ProductWhole productIn marketing, a whole product is a generic product augmented by everything that is needed for the customer to have a compelling reason to buy. The core product is the tangible product that the customer experiences. The whole product typically augments the core product with additional elements...
External links
Websites- Eric Von Hippel's books on user innovation, available under the creative commonsCreative CommonsCreative Commons is a non-profit organization headquartered in Mountain View, California, United States devoted to expanding the range of creative works available for others to build upon legally and to share. The organization has released several copyright-licenses known as Creative Commons...
license. - OpenInnovators.de The official Open Innovation Community for Germany, Switzerland & Austria
- http://www.leaduser.com Information about Lead User Research
Papers