The significance of lead users as an important source for innovating new products or services is commonly acknowledged. Conventional accounts frequently elaborate upon ways to improve lead user integration with regard to opening up new avenues for further collaboration. Against this background, this study concentrates on qualitative data from the field of mechanical engineering and suggests that companies often deliberately refuse
to engage with lead users. This unanticipated finding thwarts the supremacy of an uncritical integration of lead users and indicates that the extent to which lead users are integrated depends upon the nature of the product and the particularities of the relationship between the company and the respective lead user. The article concludes with a discussion, critical reflection and
suggestions for future research.
2. About this presentation and the author
§ Background:
o The main content of this presentation was presented at IPDMC 2008 in
Hamburg. Additional material was added to the original presentation.
o The study was published in: Reger, G. and Schultz, C. (2009): Lead-using or
lead refusing – An examination of customer integration in mechanical
engineering firms, in: International Journal of Technology Marketing, Vol. 4,
Nr. 2-3, pp. 217-229.
o The article is available for download here:
https://www.inderscienceonline.com/doi/pdf/10.1504/IJTMKT.2009.026871
§ You can follow my current publications here:
o Google Scholar
o Researchgate
o Slideshare
4. Definition
§ “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate
internal innovation, and expand the markets for external use of innovation, respectively.”
Chesbrough, Vanhaverbeke and West (2006): Open Innovation: Researching a New Paradigm.
Research Questions
1. Chesbrough and colleagues recognize a lack of research regarding open innovation processes
in non-multinationals as well as on lower technology or more mature industry sectors (see
Chesbrough, Vanhaverbeke and West 2006).
2. Furthermore Helfat et al. (2006, 88) ask:
o Under what circumstances and in which types of industries and companies does greater
openness in the various elements of innovation activity work well and under what
circumstances and in which types of industries and companies does open innovation not
work well to promote technological advance?
§ We ask these questions in the context of the mechanical engineering companies in Germany. A
sector which is dominated by SMEs (see No. 1). Our aim is to find out if there are differences
and commonalities between companies and sectors and why they exist (sse No. 2).
Theoretical Background (I): Open Innovation
9. § Research Team
o The research team consisted of of three researchers with engineering and
management science backgrounds.
§ Data sources
o In order to analyze the overall innovation and R&D processes, we choose a case study
approach that is in line with the proposed method by Eisenhardt (1989) and Yin
(2003).
- Data sources are: Semi-structured interviews with managers on different
hierarchical management levels (mostly managing and R&D director) in sixteen
companies.
- Each interview lasted 2-4 hours and took place at the company’s headquarters.
- Informal conversations on-/offsite
- Content analysis of archival material
- Quantitative survey data
§ Selection
o First four out of 27 industry segments of mechanical engineering were selected.
o These included: textile, printing, testing and drive engineering.
Methodology (I): Research team, data and selection
12. The foresight process
§ In General a shortening of the product and technology-lifecycle is observed by the
surveyed companies
§ While larger mechanical engineering companies have build a designated staff of
employees specialized on this task, in smaller companies with less than 1000
employees the R&D director or the managing director carries out this assignment
additionally to his duties.
§ A company with less than 1000 employees collects basic information fast and
costless through internet desk research and internal and external data bank
inquiries which focus on supplier and competition, then different publications of
technical press is scanned.
§ The customer is widely considered as the most powerful source of foresight.
Although customer information is not exploited systematically e.g. through
customer surveys or structured interviews.
Results (I): Foresight process
13. Results (II): Lead User
Focus Testing Textile
Foresight Process Strong size dependency
§ Larger mechanical engineering companies have build a designated staff of employees
specialized on this task.
§ Smaller companies with less than 1000 employees the R&D director or the managing director
carries out the foresight additionally to his duties.
Innovation and
Innovation Process
The degree of innovation is homogenous for both groups. Incremental innovations constitute the
main part of innovations.
The internal innovation process is the most important source for future product development.
Collaboration International Partners The textile-engineering firms interact pre-
dominantly with German partners,
Usage of
Lead Users
Drivers for the innovation process even though the initiation of innovations is more internally
founded.
All companies already use lead users as part of
their innovation process.
Especially for developing new technologies and
generate innovations.
No company plans to integrate lead users in
the innovation process.
15. Discussion: Our findings thwart the supremacy of an uncritical
integration of lead users in all sectors and every company
§ Two distinctive patterns of behaving towards lead users
(1) Testing companies make use of lead users
(2) Textile engineering companies do not make use of lead users
§ Two central reasons
(1) Nature of the product
- Testing market:
-> Innovations are common and the customer has a self-interest in cooperating with
the manufacturers
-> Main drivers of competition: quality and product differentiation
- Textile market:
-> Highly saturated and innovations are rather seldom
-> Main driver of competition: costs
(2) Scope and quality of the customer relationship
-> Testing market: Domestic or regional orientation,
predominantly European markets; emotional attachment due to close and long
established ties
-> Textile market: International orientation, primarily Asian
markets; professional distance between the business partners