Spark innovation through empathic design.

Companies are used to bringing in customers to participate in focus groups, usability laboratories, and market research surveys in order to help in the development of new products and services. And for improving products that customers know well, those tools are highly sophisticated. For example, knowledgeable customers are adept at identifying the specific scent of leather they expect in a luxury vehicle or at helping to tune the sound of a motorcycle engine to just the timbre that evokes feelings of power. But to go beyond improvements to the familiar, companies need to identify and meet needs that customers may not yet recognize. To accomplish that task, a set of techniques called empathic design can help. Rather than bring the customers to the company, empathic design calls for company representatives to watch customers using products and services in the context of their own environments. By doing so, managers can often identify unexpected uses for their products, just as the product manager of a cooking oil did when he observed a neighbor spraying the oil on the blades of a lawn mower to reduce grass buildup. They can also uncover problems that customers don't mention in surveys, as the president of Nissan Design did when he watched a couple struggling to remove the backseat of a competitor's minivan in order to transport a couch. The five-step process Dorothy Leonard and Jeffrey Rayport describe in detail is a relatively low-cost, low-risk way to identify customer needs, and it has the potential to redirect a company's existing technological capabilities toward entirely new businesses.

The coming battle for customer information.

Companies collect information about customers to target valuable prospects more effectively, tailor their offerings to individual needs, improve customer satisfaction, and identify opportunities for new products or services. But managers' efforts to capture such information may soon be thwarted. The authors believe that consumers are going to take ownership of information about themselves and start demanding value in exchange for it. As a result, negotiating with customers for information will become costly and complex. How will that happen? Consumers are realizing that they get very little in exchange for the information they divulge so freely through their commercial transactions and survey responses. Now new technologies such as smart cards, World Wide Web browsers, and personal financial management software are allowing consumers to view comprehensive profiles of their commercial activities-- and to choose whether or not to release that information to companies. Their decision will hinge, in large part, on what vendors offer them in return for the data. Consumers will be unlikely to bargain with vendors on their own, however. The authors anticipate that companies they call infomediaries will broker information to businesses on consumers' behalf. In essence, infomediaries will be the catalyst for people to start demanding value in exchange for information about themselves. And most other companies will need to rethink how they obtain information and what they do with it if they want to find new customers and serve them better.

Knee-deep and rising: America's recycling crisis.

Every year, Americans generate 180 million tons of solid waste, 70% of which goes into landfills. Since 1979, the United States has exhausted more than two-thirds of its landfills; another one-fifth will close over the next five years. Solving the problem will require a new understanding between industry and government--an understanding that combines industry competence and government authority. But the two sides are mired in an unfortunate combination of good intentions and failed systems. A classic example that epitomizes the problem is the recycling of plastics. Two stories capture the sense of chaos that pervades the recycling of plastics. The first is a comedy of errors played out in Minneapolis, Minnesota, where the city council passed a measure that would have banned all plastic packaging from the city. In this case, the government acted without the competence of industry. The second story involves McDonald's decision to abandon its polystyrene packaging and switch to plastic-coated paper. In this case, a single business's approach to recycling proved fruitless because of the lack of government authority. According to the authors, five principles provide the underpinnings to a new solid-waste management infrastructure: business and government are partners; the infrastructure is a system and must operate in balance; economics and politics must act as partners; all levels of government have roles to play; and generating less trash and recycling more depends on a workable system. Setting up the system will require an infrastructure that balances supply and demand, an advisory committee to manage the infrastructure, and a management system that uses incentives and disincentives to balance the system.