Innovative Customers Are More Important Than Innovative Employees

Last Updated Mar 31, 2011 1:29 PM EDT

What are the key ingredients to becoming a wildly successful company built around innovation? A visionary leader? A crack R&D team? Time?

Of course all those things could help, but innovation expert Michael Schrage points to the one ingredient we hardly ever consider: customers with problems.

Schrage lists a number of change-the-game innovations such as the microprocessor that came about when companies were looking to solve the problems of clients or customers. But here is his real point. Coming up with a solution isn't the key pay off for you. Rather, it's the ability to test different approaches with your customer.

"Solving the problem doesn't go far enough. Sustainable -- transformative -- innovation emerges from the ability to collaboratively explore alternative approaches. Watt, Carrier, and Intel didn't achieve their breakthroughs by solving problems for their strategic clients; success came from testing approaches with their clients. Whether business historians acknowledge it or not, that's equally true for Henry Ford, Bill Gates, and Steve Jobs."
One logical conclusion is that innovative companies need to seek out clients who have great problems and a willingness to partner with you to solve them. Schrage concludes:
"If you want to become a more innovative organization, don't hire more innovative employees, acquire more innovative customers. Your capacity to innovate matters less than your customers' and clients' willingness and ability to exploit it."
Read Schrage's blog post on HBR.org, Great Customers Inspire Great Innovations.

Do you consider your customers to be innovation partners? How do you choose them?

(Photo by Flickr user U.S. Army Environmental Command, CC 2.0)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.