Dr Chunjia Han, Birkbeck, University of London
Lead users are users expert in providing technical supports for firms’ new product development (NPD) to meet advanced market demands. Prior research has suggested that they are regarded as crucial suppliers of innovative ideas to firms and contribute to developing novel products for high-tech firms. Nevertheless, there is limited literature about the correlation between contributive ideas generated by lead users in online communities and their actual implementation in production.
Since the fact that a prevalent idea survives in peer-reviewing process does not guarantee it will be adopted to a firms’ NPD, the focus here will lie on examining the potential factors that influence a firm’s decision of consideration and implementation. Furthermore, we will discuss the possible impact of implementing innovative ideas in motivating lead users’ continuous contribution in online communities. In this study, lead users are defined as those who share ideas through online votes and comments for a firm’s decision-making.
This study
For the empirical analysis, we selected data from Microsoft Power Business Intelligence (Power BI) user-innovation platform. This platform is made up of 11,985 records of ideas from lead users collected in four years (Sep 2014 to Jun 2018) by a Python-programmed web scrapper, with 912 ideas that have been considered as candidates, and 657 ideas that have been implemented. To explore the relationships between ideas generated by lead users and a firm’s decision whether to implement them, the following three indicators are introduced for hypothesis test:
Votes and comments, are participants’ main activities in an online users’ community platform. They are applied as the common mechanisms for firms to screen contributive ideas for actual implementation.
Consideration and implementation, are two specific stages within a firm’s decision-making procedure. Prevalent ideas may be shortlisted by firms as candidates for further consideration, but only a few of them could be implemented into NPD owing to feasibility.
We performed sentiment analysis to highlight the significance of sentiment as a predictor for both idea development and a firm’s NPD decisions. A comparison between sentiment and popularity of an idea was be made to study their impact on a firm’s final implementation.
- What will influence a firm’s decision of implementation on ideas generated by leader users on online platforms?
We observed that the number of votes and comments, sentiment are regarded as good predictors of an idea’s further development and implementation by firms. Existing research has shown that external users’ inputs contribute to NPD and result in incremental innovations (Ooi and Husted, 2016; Poetz and Schreier, 2012). Online activities represented by open votes and comments, are supposed to be proxies of popularity, and help firms to screen innovative ideas generated by lead users. They lay a foundation for strong market alignment in NPD and create value for focal firms when shortlisted ideas are proceeded to implementation. However, it is insufficient to rely solely on these two measurements as predictors of an idea’s likelihood to be considered and implemented, as they ignore the subjective impact of sentiment. Since popularity does not mean producibility, firms need to evaluate whether these prevalent ideas are worthy for further development through sentiment analysis. In this study, we suggest that the type of comments lead users provided to evaluate ideas and sentiment for firms are more valuable than popularity. It is because evaluative comments not only facilitate knowledge sharing but also allow firms to make corresponding NPD decisions. Hence, firms ought to focus on utilizing sentiment analysis and analysing the content of evaluative comments from lead users as quality checks to instruct their decision-making in implementation.
- What kind of impact will arise on lead users’ tendency to contribute on the platform after their idea being implemented?
Previous literature has suggested that the expected benefits would encourage lead users to expend efforts in generating and evaluating ideas posted in online communities. However, our finding reveals a contrary condition that idea implementation will decrease users’ motivation marginally to make continuous contribution in NPD. It could be illustrated by drawing a link between intrinsic motivation and lead users’ participation in firms’ innovation activities. There is a diminishing tendency on users’ enjoyment brought by the reduction in challenges as more ideas are implemented into production. Thus, it is necessary for firms to offer other types of incentives to motivate lead users’ sustainable participation in contributing innovative ideas on the online platform. For instance, a combination of economic and intrinsic benefit helps to mitigate motivational issues faced by lead users and enhance their willingness to engage in innovation discussions with incentive- and innovation-related benefits in return.
- What are the implications of this study for firms?
This research aims to provide high-tech firms with some innovative implications on the design and operations management of online user community platforms. It contributes to understanding idea popularity and sentiment’s impact on a firm’s NPD decisions, and the effect of implementation decision on lead users’ sustainable inputs. First, idea popularity and sentiment analysis are revealed to be good predictors for firms to shortlist contributive ideas for consideration and implementation. Second, firms should pay attention to the internal incentives of lead users’ contributions and develop novel ways to maintain their interest in participation. Firms could concentrate on exploring incentives to sustain stable idea collection from online platforms instead of purely relying on the searching of internal ideas and business new opportunities.
For more information you can read the full paper:
Yang, M., Ooi, Y. M., & Han, C. (2022). Lead users as idea supplier in online community platform: How to choose the right ideas to implement?. International Journal of Production Economics, 244, 108366. The article can be downloaded from this link: https://www.sciencedirect.com/science/article/abs/pii/S092552732100342X
