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

  • 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)

Registered author(s):

    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.

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    File URL: http://dx.doi.org/10.1287/mnsc.48.8.1042.171
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    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 48 (2002)
    Issue (Month): 8 (August)
    Pages: 1042-1059

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    Handle: RePEc:inm:ormnsc:v:48:y:2002:i:8:p:1042-1059
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