The Business Book

312

YOUR MOST UNHAPPY

CUSTOMERS ARE YOUR

GREATEST SOURCE

OF LEARNING

FEEDBACK AND INNOVATION

I

n the past, companies required

their own employees to design

and develop new products. The

knowledge was developed internally

by the in-house research and

development (R&D) department, and

tended to be a closely guarded

secret. This belief that a company

should be in sole control of the

creation of its intellectual property is

known as closed innovation. In more

recent times, a new approach has

emerged. Open innovation is based

on the idea that companies should

be less private with their product-

development programs, reflecting

the view that its customers can

make valuable contributions to the

product-development process.

Internet feedback

The Internet has kick-started a sea

change in how businesses get

feedback from customers. Online

A business asks

its customers

how it could improve a

product or service.

Customers or the public

submit their feedback,

both positive and negative,

to the company.

Good ideas to improve

processes or products

are incorporated

into the business.

Your customers

are your greatest

source of learning.

IN CONTEXT

FOCUS

Open innovation

KEY DATES

1989 The Berlin Wall falls.

Companies inside the former

Iron Curtain must now

respond to customer

complaints.

2000 The travel website Trip

Advisor, which enables users

to rate hotels and restaurants,

is founded by Stephen Kaufer.

2003 Organizational theorist

Professor Henry Chesbrough

publishes Open Innovation: the

new imperative for creating

and profiting from technology,

which urges businesses to be

open to learning from internal

and external sources.

2009 US crowd-funding

website Kickstarter is set up

to encourage individual

investment in small-scale

business projects.