The excellent Business Week design/innovation blog has a piece on Eric von Hippels thoery of user led innovation. If you don’t know the theory, it focuses on getting what von Hippel terms ‘lead users’ to generate new product/service ideas for you, based on the idea that as a ‘lead user’ they know the use – and intended use – of your product.
While this is a step in the right direction for many corporations there are a couple of issues :
1. It assumes that even within a strict framework users know your product best. At face value this may seem logical, but if you read Anthony Ulwicks thoughts on innovation you will see the flaws in this approach
2. It’s damn expensive, and probably prohibitively so for all but the largest companies (I wrote an article about how you combat this for the Stanford University d.School magazine which you can find here)