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Performance Assessment of the Lead User Idea-Generation Process for New Product Development

Author

Listed:
  • Gary L. Lilien

    (Smeal College of Business Administration, Pennsylvania State University, University Park, Pennsylvania 16802)

  • Pamela D. Morrison

    (Faculty of Commerce and Economics, University of New South Wales, Sydney NSW 2052, Australia)

  • Kathleen Searls

    (Strategic Services, ASI Associates, 333 N. Washington Avenue, Minneapolis, Minnesota 55401)

  • Mary Sonnack

    (3M Company, 7840 Mississippi Lane, Brooklyn Park, Minnesota 55444-2152)

  • Eric von Hippel

    (MIT Sloan School of Management, Cambridge, Massachusetts 02139)

Abstract

Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The "lead user process" takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities--- and we find that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after five years---more than eight times higher than forecast sales for the average contemporaneously conducted "traditional" project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.

Suggested Citation

  • Gary L. Lilien & Pamela D. Morrison & Kathleen Searls & Mary Sonnack & Eric von Hippel, 2002. "Performance Assessment of the Lead User Idea-Generation Process for New Product Development," Management Science, INFORMS, vol. 48(8), pages 1042-1059, August.
    • Handle: RePEc:inm:ormnsc:v:48:y:2002:i:8:p:1042-1059
    DOI: 10.1287/mnsc.48.8.1042.171
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    References listed on IDEAS

    as
    1. Eric von Hippel, 1986. "Lead Users: A Source of Novel Product Concepts," Management Science, INFORMS, vol. 32(7), pages 791-805, July.
    2. N/A, 1968. "Chemical Process Plant : Innovation and the World Market," National Institute Economic Review, National Institute of Economic and Social Research, vol. 45(1), pages 29-51, August.
    3. Pamela D. Morrison & John H. Roberts & Eric von Hippel, 2000. "Determinants of User Innovation and Innovation Sharing in a Local Market," Management Science, INFORMS, vol. 46(12), pages 1513-1527, December.
    4. Jacob Goldenberg & Donald R. Lehmann & David Mazursky, 2001. "The Idea Itself and the Circumstances of Its Emergence as Predictors of New Product Success," Management Science, INFORMS, vol. 47(1), pages 69-84, January.
    5. Glen L. Urban & Eric von Hippel, 1988. "Lead User Analyses for the Development of New Industrial Products," Management Science, INFORMS, vol. 34(5), pages 569-582, May.
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    7. Donald S. Tull, 1967. "The Relationship of Actual and Predicted Sales and Profits in New-Product Introductions," The Journal of Business, University of Chicago Press, vol. 40, pages 233-233.
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