Customer Driven Open Source Strategy – Is this Possible?

The short answer is yes.  We have found that some leading companies are allowing customers to play an active role in the yearly product strategy process – and these organizations are getting real benefits by doing this.  It is taking Voice of the Customer to the highest level.

What’s the opportunity? One best practice we have recently uncovered is that some leading software organizations are having user communities help to drive the overall corporate product strategy and product roadmap.  In one case, the roadmap turned out to be closely aligned with the crowd - 80% of the priorities aligned with external input.  This company uses a closed loop process where the users get to see potential initiatives, allow them to vote, and then tell them how the voting turned out.  The steps below are the sequence of activities that lead to a truly customer driven strategy:

  • A ‘Brainstorm’ site has ranked development priorities (Top 10), with the list published at the annual user conference.
  • Feedback and acknowledgement is given to those who have submitted suggestions that were adopted.
  • This closed community creates a forum for peer review & discussion of ideas which influences corporate strategy.
  • Not only can participants indicate how strongly they support a priority, but they can indicate that a priority should not be on the list.

What’s our basis of authority? The increasing trend of powerful social networking platforms and the complexity and challenge of product development triggered our interest in this timely topic.  Although we have led development organizations for over 20 years, we wanted to see what new, cutting edge methods might be recently available to improve the generation of breakthrough products. Joined by three Santa Clara University Professors (Tammy L. Madsen, Kumar Sarangee, and Jennifer L. Woolley) who shared our interest and passion, we performed a multi-client benchmark study including Amway, Cisco, HP, IBM, NetApp, and Solidworks.  However, we are not alone in the discovery as indicated by a recent piece in the Harvard Business Review.  You can read more about this in the HBR, October 2010 issue (page 32) which sites a case about Wikipedia, written by Barry Newstead.

So What? Allow users to influence development direction at many levels – strategic and tactical

  • Besides the strategic example above, users can interact within the customer portal to contribute cutting edge designs at a more tactical level.
  • For example, special purpose forums allow interaction around a feature being considered by a newly formed team, and many teams have this ability at their disposal.
  • Users have also contributed in design contests to submit best examples of designs that highlight the use of the software.

What do I do about it? The process is pretty well laid out in the paragraphs above, but one has to consider some key questions before proceeding.  The most obvious challenge is the degree to which an organization is willing to share its strategy, often the most secret of all secrets, with the outside world.  Even though this is a closed community, you have to assume that all of this information falls into your competitor’s hands.  Let’s assume that you are willing to have customers provide input on your strategic product priorities.  Given that, then there are ways to incorporate their input without giving away the store – and that is by not fully disclosing what you actually plan to do.  If the CEO and the General Counsel can agree to collecting input on strategy, they you can moderate the closing of the loop and be limited and selective about what you will do with the input.

From the case in the HBR about Wikipedia and its Open Sourcing its strategy, Barry Newstead found the following to be elements to doing it properly:

  • Get ideas out early
  • Share the raw data
  • Give people time
  • Recognize when a crowd is just a crowd

Results: Up to 80% of user driven priorities are implemented

  • The company emphasizes a “closed loop” communication, reinforcing that the customers’ voice was heard.
  • This closed loop approach is used in other areas of social innovation.

If you would like to know more, please send us an email and we will send you a copy of our benchmarking study “How Social Media Methodologies are Applied to High-Technology Companies in New Product Development”.