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Collaborating with customer communities

Introduction

Thomas Gilbert’s behavior engineering model can be used to evaluate information gaps in two areas – environmental (data) and personal (knowledge). But organizations don’t often realize that the data and knowledge factors can also be engineered through collaborating with their consumers. The following case study conducted at the Lego Group shows how data obtained by reaching out to and collaborating with adult user communities not only enhanced product development, but also filled knowledge gaps by providing access to expertise employees in the organization lacked.

Article

Antorini, Y.M., Muniz Jr., A.M., & Askildsen, T. (2012). Collaborating with customer communities: Lessons from the Lego group. MITSloan Management Review, 53(3), 73-79. Retrieved from  http://libproxy.boisestate.edu/login?url=http://search.proquest.com.libproxy.boisestate.edu/docview/963962186?accountid=9649

Background

The Lego Group is a Danish company that makes children’s creative construction toys. Prior to the 1990s, their market was primarily young children who, as they grew older, abandoned the toys for other interests. In the late 1990s, the company began producing new products that appealed to older users (e.g., themed construction sets tied to movies). Soon, adults who had played with the blocks as children became interested in the new products. For some, Legos went from a childhood preoccupation to a serious adult hobby.

At the same time, the advent of the Internet provided a medium for Lego hobbyists to communicate and interact. In 1999, there were 11 known Lego user groups, mostly in North America. By 2006, that number expanded to 60 groups globally. By 2012, there were more than 150 user groups worldwide, with 100,000 Lego hobbyists. Communicating amongst themselves, Lego users pioneered advanced ways of designing Lego models using freeware. They found new ways to customize certain Lego products to better mirror specific interests. As of 2012, more than 4.5 million photos, drawings, and instructions have been posted online. Thus, a vast library of information on product use and improvements was created.

The Lego company had maintained a strict privacy policy up through the 1990s regarding its products and intellectual property; they publicly stated that they “don’t accept unsolicited ideas.” Events tied to the introduction of a small customizable and programmable Lego robots caused them to reconsider. Customers found ways to hack into the software and hardware components of the kits to improve their functionality, and then posted these ideas in online Lego user groups. The company was faced with either pursuing legal action against their customers or invite them to collaborate on new products and applications.

Accessing Data to Improve Knowledge

Rather than engage in lengthy and costly lawsuits, Lego management decided to leverage the wealth of information being posted by its customers. The company established a team to interact with users in their groups. When the company experienced financial losses for several years due to increased competition, its new CEO decided to formalize collaborations with some of its users through its Ambassador Program. Lego community representatives enlisted the help of users to contribute to designs of its 2005 product lines. The quality of their contributions convinced management that the collaborative relationship with users offered significant benefits.

In addition to feedback on product development, user expertise in areas where internal Lego was lacking provided solutions to identified problems. In one instance, tech-savvy users advised management that a larger selection of sensors would provide more design options for a robotics kit. One of the users making the recommendation was a manufacturer of sensors. Lego established a business partnership with this user to provide not only expertise, but also product components at a reasonable cost. Another example involved tapping into the expertise of an architect customer to help design kits that accurately depicted landmark buildings.

Outcomes and Recommendations

Lego’s experiences with customer collaborations have proven highly beneficial. The relationships forged have resulted in knowledge-intensive innovations that would not have occurred otherwise. Since starting its Ambassador Program, Lego has hired 20 users from its customer base, enabling it to benefit from knowledge and skills the users accumulated over the years.

The company’s experiences led it  to develop the following core principles for successful interaction with its user community:

  1. Be clear about rules and expectations. Lack of collaboration guidelines at the outset caused frustration on both sides. Users sometimes felt that they were being asked to do too much. It’s better to have negotiations between employees (not managers) and users to establish roles and parameters for the exchange of information.
  2. Ensure a “win-win.”  Consider not only what the company will get from these interactions, but also the users. Ad hoc collaborations can be rewarded through product samples or listing user names as part of the product development team. Long-term collaborations may require more substantial financial rewards as a quid pro quo for the knowledge and skills users are providing.
  3. Recognize that outsiders aren’t insiders.  For users, the collaboration is inspired by passion driven by interactions with each other. Users are part of an active, passionate community; they are not extensions of the company.
  4. Don’t expect one size to fit all. Different types of innovation require different modes of communication. Lego relied on many different collaboration platforms, from polls and surveys, to an advanced design platform that allowed users to create product prototypes, to user panels and virtual project rooms.
  5. Be as open as possible. Initially the company required all its Ambassadors to sign NDAs. This stifled interaction between users who feared they might violate the agreement. The company now uses NDAs sparingly in narrowly defined situations.

Questions for OPWL-N Members

What opportunities do you see for collaboration with customers or clients in your organization? How might such collaborations help fill data or knowledge gaps?

Workplace Oriented Research Central (WORC)
Prepared by OPWL Graduate Assistant, Susan Virgilio
Directed by OPWL Professor, Yonnie Chyung
Posted on December 10, 2013