TUM Management Insights

Embedded Lead Users – The benefits of employing users for corporate innovation

It is crucial for every company to learn from the users of its products. Interestingly, and overlooked by many, some of the most insightful users may be nearby – the company’s own employees.

This study by Dr. Tim Schweisfurth and Prof. Dr. Christina Raasch (TUM) introduces the concept of “embedded lead users” – employees who are lead users of their employer’s products or services. Lead users are users who perceive new product-related needs ahead of others and would particularly benefit from a solution. Embedded lead users are ubiquitous in many consumer goods industries, e.g., in food and beverages, automotive, consumer electronics, software, and leisure products. Unlike external lead users, these are regular employees with employment contracts and secrecy clauses that align their activities to the goals of their company, and a deep understanding of its strategic objectives and corporate culture. Unlike other employees, however, they are also deeply embedded in the user domain and possess first-hand knowledge of present-day problems and emerging needs in the use of their employing firm’s products or services.

Such was the case with a scientist at Beiersdorf AG who, apart from being a research group leader, was also a user – a frustrated user – of deodorants. The stains existing products left on white and black shirts were both annoying and costly to him personally. He therefore developed a new solution “under the radar”, did his own market research to back it up, and then promoted it internally against organizational resistance and colleagues’ ridicule. The result has become well known as Nivea’s “Black and White” deodorant series, a stunning product success.

This new study presents quantitative survey-based results describing the innovation behavior of such internal lead users. It finds, e.g., that embedded lead users excel in terms of their innovative work behavior, boundary spanning activities across different organizational functions, and customer orientation. We show that these effects are associated with their capacity as lead users, not just their general product involvement and interest in the product.

The findings from this study can benefit management practice in several ways. They highlight both the prevalence and the value of embedded lead users in many consumer-goods companies. They also indicate avenues for systematically leveraging these internal users through hiring and job design decisions, and enrich the portfolio of open innovation strategies. For producers, it pays to have a foot in the user domain.

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