Performance Assessment of the Lead User Idea-Generation Process for New Product Development

Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The “lead user process” takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user idea generation process relative to more traditional methods. 3M is known for its innovation capabilities – and we find that the lead user process appears to improve upon those capabilities. Annual sales of lead user product ideas generated by the average lead user project at 3M are conservatively projected to be $146 million after 5 years more than 8 times higher than forecast sales for the average contemporaneously-conducted “traditional” project. Each funded lead user project is projected to create a new major product line for a 3M division. As a direct result, divisions funding lead user project ideas are projecting their highest rate of major product line generation in the past 50 years.