How dynamic businesses of every size can unleash innovation by inviting customers to co — design what they do and make.

Reading line: The 8 Roles Customers Play in Trend — Setting Companies

The refrain is familiar for Patricia Seybold in her journeys as a top technology and management strategist: "I want our company to be acknowledged as the most admired and most customer — valued in our industry and to be recognized as the company that has forever changed the way things are done." "How can we become the Google of banking?" "How can we be the eBay of software?" "I want to be the JetBlue of manufacturing."

"How can we become the undisputed trend — setter in our industry — with a competitive bar no one can topple?"

In Outside Innovation, bestselling author Seybold taps her close relationship with dozens of high — innovation companies to reveal the untold strategy behind the trendsetters and the next HUGE leap forward in customer strategy. Seybold shows that companies that are dominating their category and staying ahead of the pack are collaborating at every level of their business with their customers.

Co-Design Business Models, Business Processes, and Solutions with Customers to Help Them Accomplish Their Goals

How do you figure out what customers really want, need, and will pay for? This is the foundational question for any business. It's also a question to which many business theorists and practitioners have devoted a lot of thought (and ink). We were delighted to discover that Clayton Christensen, the author of two well-regarded business books — The Innovator's Dilemma and The Innovator's Solution — has discovered and documented a basic business truth that we've been practicing for almost twenty years: You design solutions to help customers accomplish their desired outcomes. We call these Customer Scenarios^®; Clayton refers to them as "the jobs that customers need to get done."

Customers — people and companies — have "jobs" that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can "hire" to get the job done. . . . The functional, emotional, and social dimension of the jobs that customers need to get done constitute the circumstances in which they buy. In other words, the jobs that customers are trying to get done or the outcomes that they are trying to achieve constitute a circumstance-based categorization of "markets." Companies that target their products at the circumstances in which customers find themselves, rather than at the customers themselves, are those that can launch predictably successful products.¹

We believe that what Clay Christensen groups together under the rubric "circumstances" actually includes several distinct concepts: the customers' context, the "job" they need to do (our Customer Scenario), their desired outcomes, and their constraints (what we refer to as "conditions of satisfaction"²).

This concept of "jobs that customers need to do" or Customer Scenarios® is subtly different from traditional customer segmentation and needs analysis. But that subtlety is important. It's not enough to identify a group of customers who have certain things in common for whom you are going to develop a solution; you also need to know what scenarios these customers actually care about accomplishing. What outcomes are they trying to achieve?

What's the Relationship Between Customer Scenarios^® and Innovation?

Innovation occurs naturally as a result of the structural or creative tension between what you ideally want and what you currently have. The secret to mastering the creative process is to understand and to leverage the structural tension that powers it. Once you've created the correct structures, creativity will take the "path of least resistance," according to Robert Fritz, who authored a seminal book by that title.³ "People think innovation is about brainstorming; it's not. It's a very focused activity,"⁴ Fritz explained. "People studying innovation should start by understanding the creative process."

Innovation is a form of creation. Like any creative endeavor, innovation emerges from the structural tension between current reality — the way things are — and a vision — what we'd like to achieve.⁵

The keys to unleashing customer innovation are to:

1. Find lead users who are already closing the gap between how they do things today and what they'd ideally like to be able to do and commercialize their innovations.

2. Engage with your most...

Patricia B. Seybold is the author of the international best-seller Customers.com and The Customer Revolution. She is the founder and CEO of the Boston-based The Patricia Seybold Group (www.psgroup.com), which for more than 25 years has specialized in helping Fortune 500 companies design and continuously improve their customer-focused business strategies.