Systematic “Listening” Equals Strategic Advantage

Tom Peters

MIT Professor Eric von Hippel makes his living studying the sources of innovation. He says that sophisticated early adopters of new products, whom von Hippel labels “lead users,” can be worth their weight in gold to manufacturers. The trick is finding those pioneers and engaging them in the next round of product development.

Von Hippel developed his ideas with scientists and engineers in the chemical and computer industries. Now he’s taken a big step toward universalizing his principles. With Cornelius Herstatt of the Swiss Federal Technical Institute, von Hippel recently published An Implementation of the Lead User Market Research Method in a ‘Low-Tech’ Product Area: Pipe Hangers (Alfred P. Sloan School of Management, MIT). Working with Hilti AG, a leading European manufacturer of fastening-related products, von Hippel and Herstatt validate the “lead user” concept in an unlikely nook of the economy and present a step-bystep methodology for getting customers in on the act.

1. Survey of experts. The researchers and Hilti examined the industry and determined that specialists who plan, specify and purchase pipe networks were likely their best sources of what’s up (or ought to be) in the field. Eight specialists from Switzerland, Germany, and Austria were systematically polled for characteristics that should mark the next generation of pipe-hanging hardware—e.g., easy to put together (no need for instruction books); fewer components; lightweight (plastic instead of steel).

2. Survey of lead users. Demonstrated unease with current products marks a customer as a lead user. So a random sample of 120 Hilti customers were asked: “Do you/did you ever build and install pipe-hanging hardware of your own design?” “Do you/did you ever modify commercially available pipe-hanging hardware to better suit your needs?” Seventy-four front-line practitioners (“tradesmen who actually installed pipe hangers”) were subsequently interviewed in depth, and 22 were determined to be true pacesetters.

3. Concept development workshop. Based on judgments about personal interest in new-product development, the 22 “finalists” were further culled to 12. Joined by two of the eight industry “specialists” and a marketing manager, product manager, and three design engineers from Hilti, they participated in a three-day “product-concept generation workshop.”

The first day, participants reviewed the specialists’ findings, then broke into five subgroups to consider various design and installation issues. They spent half the second day in their groups, then did generic creativity exercises. The third day, groups presented their solutions, which the entire workshop evaluated on originality, feasibility, and comprehensiveness. Then they formed new groups to explore the most promising concepts (even producing informal engineering drawings to be examined by their peers). In the end, all hands converged on a single product concept.

4. Validity testing. But were these pacesetters too far ahead of the industry? To find out, Hilti tested the workshop’s idea on a dozen “routine” users—regular customers, not at the leading edge. Ten preferred the new “product” and said they’d pay up to 20 percent more for it.

Hilti claims a recent, analogous product-development project took 16 months and cost $100,000, using the time-consuming “sequential” design approach still typical among American and European manufacturers. The lead user approach, with customers, engineers, and marketers working together, took only nine months and cost just $51,000.

It’s significant, von Hippel and Herstatt argue, that these lead users are “not characterized by advanced technical training.” They add that the process yielded unanticipated benefits: Morale soared among Hilti’s engineers and marketers, working together from the start for the first time. Both groups also shared a greater sense of urgency, and the translation of user needs between marketers and engineers was smoother than in the past. Plus, Hilti ended up with a superb product—and an already enthusiastic set of early adopters! (Von Hippel has recently captured this step-by-step approach in a video course, available to the public via MIT’s Sloan School.)

The morals of this story include:

* Listening to customers is a lousy idea. Listening to the “right” customers, on the other hand, is a matchless idea.

* “Listening” to the right customers doesn’t do it either. All the steps above, or a set like them, are required to turn listening to lead users into hearing.

* Go beyond listening. This was not a story about “listening.” It was about several types of listening—and talking and creativity training and a host of “beyond ears” factors.

* “Beyond listening” is not enough. Instead, get organized to listen first (e.g., the expert survey). Who listens and how they listen is as important as what’s heard. That engineers and marketers from Hilti listened/heard at the same time, in the same place, made all the difference.

In short, listening is a big deal!