From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Technology makes it possible to involve customers intimately in product development, but experts must still make the decisions.

In 2003, two Australian entrepreneurs accomplished something no one thought was possible. Knowing nothing about the business of brewing and distributing beer, they successfully penetrated the duopolistic Australian beer market and, in four years, achieved a base — and 50,000 customers —  in 46 nations. Brewtopia, which is now a publicly traded company, has since expanded into bottled water and soft drinks.

The secret to their success was their customers. The two founders set up a Web site and invited beer enthusiasts to vote on everything from the style and alcoholic content of the beer to the design of the labels.

Their inspiration was the story of PK-35, a Finnish soccer team. PK-35’s coach tried an experiment, asking fans to vote on nearly every aspect of the team’s operations, even its on-field strategy. What Brewtopia’s founders didn’t know was that the results of the soccer experiment were so bad that the coach was fired and the idea was scrapped after just one season.

Both of these stories are related in an inspiring and entertaining new book, We are Smarter than Me, by Barry Libert, Jon Spector “and thousands of contributors.” Using anecdotes and homespun logic, the authors make a compelling case for involving customers directly in a business’ product design and strategic direction. This idea is all the rage today, thanks to visible initiatives like Procter & Gamble’s pledge to derive half of its new product ideas from its customers by the end of the decade.

IT’s Central Role

IT organizations will increasingly find themselves at the center of these customer campaigns. That’s because only robust technology can effectively harness the contributions of thousands — or millions — of voices.

This is an exciting place for IT folks to be: at the center of corporate strategy. But it’s also an arena that demands discipline. As the soccer experiment demonstrated, community governance is not always the best strategy.

Many business executives will be enchanted by the concepts described in this book and will quickly ask their technology groups to set up forums and voting sites to accept customer contributions. The technology side of this challenge is fairly straightforward, but the business implications aren’t so simple.

Customer input is always desirable, but management by consensus or election isn’t. We know, for example, that democracy is a superior form of government, yet voters sometimes elect terrible leaders.

Businesses aren’t governments. They don’t exist to serve the public good, and they need to make difficult decisions in order to remain viable. Customer input needs to be tested and weighed against business objectives.

Companies that are successfully experimenting with this “crowd-sourcing” concept are finding ways to achieve that balance. Dell Computer, for example, has set up a Web site called IdeaStorm, which invites comments from customers and applies community voting tactics and discussion forums to developing innovations.

P&G has tapped into idea networks like Innocentive to get advice and solve problems. It has had spectacular results, but ideas from the community are still vetted by experts within the company for viability and relevance.

Customer innovation is an exciting opportunity for IT organizations to contribute to the business, but it’s important to resist the temptation to simply throw technology at the problem. Innovative organizations will seek to stretch the limits of what technology can do in order to sift through a mountain of suggestions. But at some point, human beings must still step in and make decisions.