Thursday, November 23, 2006

End of Walled Gardens- How your customers will co-design your company's future

A new book worth reading is called "Outside Innovation: How your customers will co-design your company's future" Patricia B Seybold

HarperBusiness. There is a good review in this week's Economist. In her

book she argues that companies should focus on customers rather than employees in the innovation process. She covers a number of case studies of several new web based companies that are using open source software, web services and Web 2.0 to give more customer control of the business processes. (See my earlier posts on this subject). She argues that most companies make two common mistakes about their customers: First they think customers can't innovate and so innovation must be driven internally and second that they believe they already do a good job of listening to their customers. A good example of this type of thinking is how many carriers want to build walled gardens in the belief that they can provide the innovative services that their customers need. But this archetypical business model is being undermined by new open source tools like the Linux phone mentioned in David Isenberg's blog below. As with the Internet the new innovative cell phone features will come from open source solutions and web services - not the traditional walled gardens. Companies that embrace this vision and tear down their walled gardens will win. These lessons not only apply to commercial organizations, but to research facilities, governments and other organizations. In almost all of these environments the software, network and organizational processes are fixed and immobile limiting the ability for users or customers to innovate and create new custom solutions. Grids and cyber-infrastructure are the first steps in this direction of user control and management in the research community. Just as the web revolutionized the distribution of information and made creation and distribution accessible to all, web 2.0 and web services promises to transform business and research processes in a similar way. Thanks to David Isenberg for this blog--BSA]