Horizontal Innovation Networks: By and for Users

Horizontal Innovation Networks: By and for Users

Assessing the Viability of Horizontal Innovation Networks

In evaluating whether user generated innovation is good or bad for a company including if user innovation can happen independently from manufacturers, the insights and knowledge provided in Horizontal innovation networks - By and For Users (von Hippel, 2007) serves as the basis of this analysis. The integration of user-generated innovations into the product development process, and to the extent to which innovations' benefits and unique position within a manufacturers' marketing mix are analyzed in the context of social networks being the platform for open innovation (Bernoff, Li, 2008).

Defining the Value of User-Generated innovation

Relying on microeconomic analysis and the frameworks of free revealing supported by examples from open source software and the development of the Apache Server software in addition to several other examples Horizontal innovation networks - By and For Users (von Hippel, 2007) illustrates the value of user-generated innovation. Based on an analysis of the data provided the argument can be made that user-generated innovation is highly effective as a means to collaboratively create products and services that can differentiate themselves over the long-term in competitive markets. The analysis does not however go into enough depth of analysis about the potential of horizontal innovation to create disruptive innovation over the long-term, which is critical for any innovative process to re-order an industry (Bucci, Parello, 2009). The reliance on horizontal innovation throughout social networking is prevalent in the rapid growth of Facebook and Twitter followers and the continual redefining of the new product development process in each of these companies as it relates to user's concerns about privacy, security and the scalability of each into being e-commerce platforms over the long-term (Bernoff, Li, 2008). User-generated innovation is highly effective for companies who must stay in step with their customers as product lifecycles and the pace of disruptive innovation from multiple sources can quickly redefine the competitive landscape (Jaspers, Van den Ende, 2010). Missing however from the von Hippel analysis is the path to disruptive innovations driven by customers' passion to completely re-order and augment a brand over time, which is what Apple is seeing in the ecosystem surrounding the iPod, iPhone and now the iPad. Apple has successfully creating multiple ecosystems around these product platforms, freeing their loyal and passionate fans to create their own product lines, businesses, and most important, user experiences every time these devices are used (Scanlon, 2007).

Integrating Customers into the New Product Development Process

Many manufacturers struggle with this aspect of their new product development and introduction (NPDI) process, often having highly formalized advisory councils and methods for gaining their feedback. It is rare to have customers actually involved daily in the new product design and development process, yet the efforts at software companies who do this show significant financial benefits. One example is Intuit, which is one of the most forward thinking in this area, concentrating on the use of ethnographic techniques and having their engineering, development and product management teams actually visit accountants and finance professionals to understand their unmet needs and what they need in small business software (Lal, Kochikar, 2001). Another example of the integration of customers directly into the product development process is the Toyota Production System (TPS, their global supply chain management network that actively solicits feedback from suppliers on how to better manage the forecasting and replenishment systems (Dyer, Nobeoka, 2000). This has led to disruptive innovations in how knowledge is shared throughout the company and has also created entirely new platforms for other companies to better manage their supply chains as well (Hilletofth, Eriksson, 2011). This illustrates how suppliers, a critical link in any business' value chain, can make significant contributions to disruptive process innovations over time.