Berlin, September 6, 2004

1. Berlin, September 6, 2004 User Integration in the Development Process of Innovative Communication Products and Services – An Interdisciplinary Approach15. ITS Conference Matthias KempfThilo v. Pape Institute for Information, Organization and ManagementInstitute for Communication Science Ludwig-Maximilians-University, Munich

2. 1950 1960 1970 1980 1990 1990s – today: 5th Generation Innovation Middle 1980er – early 1990er: • Faster cycles of innovation • Increasing customer demands • Individualization • Cost pressure • Innovation as „Networking Process“ • Systems • Suppliers • Customers Integrated Model Early 1970s –middle 1980s: • Cooperations, especially integration of suppliers • Parallelized activities • Focus on speed of development Coupling Model Middle 1960s – early 1970s • Phase of consolidation and rationalization • Combination of TP and MP • Innovation as „…complex net of communication paths“1 Market Pull 1950s – middle 1960s: • Linear model • Strategies of differentiation • Rationalization of R&D comes to the fore Technology Push • Linear model • Seller markets • Marketing of minor importance Customer not considered Customer in central role at start Market in continuous alignment with R&D s. Coupling Model Innovative approaches of customer integration DevelopmentCaused by the strong increase in importance of the resource “customer”, new models of innovation have evolved.

3. Lead UserThe prominent Lead User model and User Communities respectively have achieved remarkable results in some cases Lead User • … are users who… • …have high motivation to industrialize the innovation • …have a high competence • … are not able to conduct production themselves • Lead User are not representative • Lead User anticipate the market demands previous to the majority (they are not „Early Adopters“) • Lead Users conduct the innovation– function themselves, directed by and with the technological realization of the enterprise. Examples • pipe suspensions (Hilti) • parlor games (Ravensburger) • Numerous adhesive products (3M) • Also works in User Communities: • Sport communities (surfing, mountain biking, snowboard,…) • Open Source Software (Apache, Linux) Products are usually deployed in specific and quite limited technical environment with clearly defined target segments

4. User ToolkitsToolkits empower the user find Innovations themselves in a defined solution space Difficulties for the Lead Users • Information often hardly transferable („sticky information“) • Often user do not have the possibilities and resources to provide information. • Solution: • Manufacturers provide a Toolkit • Solution space limited– inside these limits there are possibilities of variation by users (pre-defined solution modules) • Complete trial-and error-cycles • „Design side of mass customization“ Examples • Nestle: Production of customized foods for restaurant chains • Open Source Software: STATA • Statistics software with standardized software-modules for multivariate data- analysis • Market Entry early 1990ies , today market leader Toolkits make the User innovate – in contrast to the Lead User approach the solution space is limited.

5. Success StoriesLead User projects at 3M, for example, have achieved great successes Criteria LU Com. p tools • Novelty relative to competition 3,95 3,14 0,026 • Fit with current strategic plan 2,40 3,96 0,001 • Time to market 3,58 1,26 0,000 • Global marketing potential 3,89 3,02 0,027 • people resources required 2,11 1,19 0,005 • Regulatory requirements for entry 2,85 0,96 0,000 • Capital required 1,68 0,57 0,000 • Manufacturing fit / capacity 2,53 3,44 0,047 • Probability of success 3,42 4,52 0,002 Quelle: Lilien/Morrison/Searls/von Hippel 2000)

6. Innovation Management in ServicesIn contrast to the development of physical goods, service innovation seems not to have strong backing of methods and proven concepts Market for physical goods • fully developed und advanced conceptual approaches of Innovation management • Factors for success empirical researched • Well usable in practice • Innovative approaches of user integration exist in form of the Lead User concept and User Toolkit Markets for immaterial Goods • Hardly any mature conceptional model for services • Partly empirical dubiously if innovation is performed systematically • Not clear whether user integration / participation is relevant or not

7. Key Question Are the concepts approved in the market for physical goods appropriate to successfully assist with the development of communication products and services?

8. Three levels of innovation • Technical design Based on innovations in microelectronics, software development and transmission technology Technical artifacts • Individual appropriation Highly flexible integration into everyday life Personal objects/services • Social institutionalization Negotiation of social functions and “roles of the game” Social Institutions Three moments of innovation in the diffusion process Social Institutionalization Technical Design Personal Appropriation time A Communication Studies-PerspectiveUser Integration in the creation of interactive media Three levels of communication products and services

9. technical personal social Simulation of everyday uses Abstraction from limited frame of reference Selection of Lead Users • Rapid Prototyping • User Toolkits • Lead User Approach Anticipated Social Institutionalization Anticipated Personal Appropriation Social Institutionalization User integration is too much considered as a technical Problem. The personal and social levels are neglected. Technical Design Personal Appropriation A Communication Studies-PerspectiveInnovation phases in the course of diffusion ? Technical problem: functional fixedness User integration in the diffusion process time

10. technical personal social Integrating users in the innovation process should not mean isolating them from their everyday context. A Communication Studies-PerspectiveProblems of user integration on the personal level Drawbacks of Abstraction and Simulation The personal everyday context triggering re-invention through appropriation often cannot be simulated. • Empathic Design „Watching consumers use products or services [...] in the course of normal, everyday routines.“ Leonard & Rayport, 2000

11. technical personal 70 60 50 40 30 20 10 • Lead User Selection is not representative • Lead Users are not representative for the mass of end consumers • Technology-friendly and -competent • Financially well-off social Mio. Users 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Cell phone connections in Germany 1993-2003 • The dynamics of social institutionalization • Diffusion of interactive media is unlike diffusion of technical artifacts • Media are changed in the course of their social institutionalization • The effects of critical mass • Numerous applications depend on a critical mass of users which cannot be anticipated by small user groups. User-Innovations generated by a small number of Users (e.g. Lead Users) often cannot be scaled to a future market. A Communication Studies-PerspectiveProblems of user integration on the social level

12. Modeling the personal process of appropriation • Indications can be empirically deducted from existing or already terminated appropriation processes of established media products and services. Modeling the social processes of institutionalization on different social levels • Exploring how social functions are being defined and negotiated among - small groups (families, peer-groups) • - fragments of society (generations, professions) as well as • - society as a whole, communicating through mass media Exploring the underlying processes of appropriation and social institutionalization through fundamental research on existing innovations. A Communication Studies-PerspectiveEmpirically modeling appropriation and social institutionalization technical personal social

13. technical personal social prediction persuasion Social Institutionalization Social Institutionalization Technical Design Technical Design Personal Appropriation Personal Appropriation An interdisciplinary approach to sensitize user integration for personal and social levels. An interdisciplinary approachGuidelines for a complementary research Complementing existing approaches • Pointing out the limits to existing approaches • Better Predicting future appropriation and institutionalization • Influencing future processes of appropriation and institutionalization through persuasion. Future diffusion process Anticipated Social Institutionalization Anticipated Personal Appropriation Past diffusion process time

14. i n t e r m e d i a Veronika Karnowski Institut für Kommunikationswissenschaft Lehrstuhl für Kommunikationswissenschaft und Medienforschung Ludwig-Maximilians-Universität München Oettingenstr. 67 D - 80538 München Tel.: +49 (0)89 / 2180 – 9495 E-Mail: karnowski@intermedia.lmu.de WWW: www.ifkw.uni-muenchen.de Thilo v. Pape Institut für Kommunikationswissenschaft Lehrstuhl für Kommunikationswissenschaft und Medienforschung Ludwig-Maximilians-Universität München Oettingenstr. 67 D - 80538 München E-Mail: pape@intermedia.lmu.de WWW: www.ifkw.uni-muenchen.de Matthias Kempf Department für Betriebswirtschaft Institut für Information, Organisation und Management Ludwig-Maximilians-Universität München Ludwigstraße 28 VG II D - 80539 München Tel. +49 (0)89 / 2180 – 3767 E-Mail: kempf@bwl.uni-muenchen.de WWW: www.iom.bwl.uni-muenchen.de Prof. Dr. Werner Wirth Institut für Publizistikwissenschaft und Medienforschung der Universität Zürich Andreasstr. 15 CH - 8050 Zürich Tel.: +41 (0)1 / 634 – 4661 Fax: +41 (0)1 / 634 – 4934 E-Mail: w.wirth@ipmz.unizh.ch WWW: www.ifkw.uni-muenchen.de www.ipmz.unizh.ch www.intermedia.lmu.de Ein Projekt im Rahmen der Gefördert vom