”CO-CREATION BY CUSTOMERS VIA EMBEDDED

TOOLKITS – A NEW WAY TO OPEN INNOVATION

WITH CUSTOMERS”
Frank Piller, RWTH Aachen University
January 2010
”CO-CREATION BY CUSTOMERS VIA EMBEDDED
TOOLKITS – A NEW WAY TO OPEN INNOVATION
WITH CUSTOMERS”
Frank Piller, RWTH Aachen University

January 2010

In this paper, Prof. Frank Piller summarizes a research paper presented

in a track on “Collaboration Systems for Open Innovation” at The Hawaii
International Conference on Systems Sciences. It was nominated for the
best paper of the conference.

Product definition has been shown to be critical to new product success.

User satisfaction (and, thus, adoption) context specific and difficult to

with a new product regularly formalize and transfer. Stickiness of
increases with the degree of fit customer (need) information is a
between a user’s needs and the function of multiple factors, including
characteristics of a product. characteristics inherent in the
Conventionally, the manufacturer tries information itself, such as the way
to understand this causal network information is encoded. Customers
with detailed often use a different
information either Customers often language to describe
acquired via market use a different their demands and think
research or assumed language to in different design
via professional describe their parameters than the
knowledge. Previous demands and manufacturer. As a
research has shown, result, firms regularly
think in different
however, that many have to change design
design parameters
companies fail to parameters as the
gather this required
than the requirements
input in an efficient manufacturer. (representing
and effective way: information about the
Despite ever increasing customers’ needs) are not stable
methodological knowledge in market during NPD. Even in highly specialized
research, new product development industrial markets, customers face an
(NPD) flop rates continue to rise. inherent difficulty in accurately
specifying their needs at the outset of
MIT researcher Eric Von Hippel has a NPD project, resulting in a co-
explained the problem of firms to evolution of the technological
understand what customers really solution with the revision of
want by the stickiness of need customers’ articulated needs.
information. Sticky information is
”CO-CREATION BY CUSTOMERS VIA EMBEDDED
TOOLKITS – A NEW WAY TO OPEN INNOVATION
WITH CUSTOMERS”
Frank Piller, RWTH Aachen University
January 2010
Research further has shown that
familiarity with existing product
attributes can interfere with an
individual’s ability to express needs
for novel products. Needs become
more refined as users come in direct
contact with (a prototype of) a new
product.
Embedded toolkits as enablers for
open innovation
In our paper, my co-authors Christoph
Ihl and Frank Steiner and I propose a
new approach to accomplish this
objective by applying a typical
process of user innovation as a form
of open innovation: embedded
toolkits for user co-design.
Our idea is to shift some
specifications of the product into the
domain of the user. This strategy
isolates the source of uncertainty, i.e.
sticky information about user needs.
A product with a respective toolkit
should hence contain (1) a flexible
architecture where the values for each
design parameter are not fixed, but
adaptable, (2) a set of rules about
possible combinations of selection of
values for each design parameter, and
(3) an interface for individual users
could differentiate the product
according to their preferences by
manipulating the values. Note that
our idea is NOT to configure a
product with an internet-based toolkit
BEFORE it is being manufactured, as
typical for a mass customization or
build-to-order strategy. These
configuration toolkits have already
been subject of a rather intensive
discussion; and there are many
examples of this strategy in practice
(e.g., NikeID, Dell, BMW). In our
concept, users shall be enabled to
modify the product AFTER it has been
manufactured and has reached the
user domain. The key requirement of
this concept is a user interface that
allows users themselves to adapt a
product according to their own
requirements, hence addressing a
core characteristic of open innovation
with users. The embedded toolkit
shall equip users with the possible
solution capabilities to substitute the
lack of professional training and
experience.
In our concept, the toolkit is being
embedded in the product
architecture, allowing its real-time
modification during the usage stage.
Consider the example of a dashboard
of an automobile. A conventional
interface allows the user just to
interact with the car and to control
specific predefined functionality. In
our approach, the user interaction
could go much further.
”CO-CREATION BY CUSTOMERS VIA EMBEDDED
TOOLKITS – A NEW WAY TO OPEN INNOVATION
WITH CUSTOMERS”
Frank Piller, RWTH Aachen University

January 2010

She could design the layout of the

dashboard, the functions accessible
by it, and also parts of the
performance controlled by the
customized dashboard. Still, all
functionality would stay within the
safety requirements of the system
and would allow full interface
functionality with the rest of the car.
Obviously, such a solution has much
larger opportunities for users to find
an exact product fitting to their
needs, but demands much larger
requirements in designing the
solution space of such a flexible
system. As demonstrated further in
the video (last segment), the
modifications of a user could be
transferred to the manufacturer
during a service check, providing
input for the development of future
product generations.

To test the idea of an embedded

toolkit, we conducted a technology
acceptance study that analyzed the
feedback of 163 consumers on
different scenarios of embedded
toolkits in the automotive industry.
Our results demonstrate the
feasibility and the acceptance of the
basic concept. ¶
 ”CO-CREATION BY CUSTOMERS VIA EMBEDDED
TOOLKITS – A NEW WAY TO OPEN INNOVATION
WITH CUSTOMERS”
Frank Piller, RWTH Aachen University
Frank Piller is a chair professor of management and the director of the Technology & Innovation
Management Group at RWTH Aachen University, Germany, one of Europe’s leading institutes of
technology. He also is a founding faculty member and co-director of the MIT Smart Customization
Group at the Massachusetts Institute of Technology, USA. His recent research focuses on value co-
creation between businesses and customers/users, customer-centric value creation, strategies to
increase the productivity of technical problem solving, and models to cope with contingencies of the
innovation process. Frequently quoted in The Financial Times, The Economist, and Business Week,
amongst others, he is regarded as one of Europe's leading experts in the fields of mass
customization, customer-centric value creation and open innovation.

Further reading

Ihl, C., Piller F. & Steiner F. (2010). Embedded Toolkits for User Co-Design: A Technology
Acceptance Study of Product Adaptability in the Usage Stage. Proceedings of the 43rd
HICSS Conference, January 2010.

Von Hippel, E. (1994). “Sticky Information” and the Locus of Problem Solving: Implications
for Innovation. Management Science, 40(4), 429-439

Open Innovation
From the Open Innovation Forum’s perspective open innovation involves all aspects of
creating new business opportunities by engaging end-users in co-creative activities. Web
2.0 technologies has caused electronic collaboration to evolve, hence paving the way for
companies to invite customers and employees to be involved in the refinement of their
offerings. Ideally open innovation will create win-win situations where users get services
that are more oriented to their needs and organizations will offer services that are more
desired by the market.

The Open Innovation Forum

The Open Innovation Forum aims at being a knowledge hub and rallying point for user-
oriented open innovation, where innovation experts and researchers can collaborate on
improving theories and practices, while open innovation novices are invited to follow, or
take active part, in the development of the area.

www.openinnovationforum.com
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