How customer knowledge affects exploration : generating, guiding, and gatekeeping

Abstract

The importance of understanding customers in order to sustain the long-term success of the company has been claimed by academics and practitioners for decades, to the point that the claim has turned into a truism. And still, the role of customer knowledge in organizational renewal, especially via explorative new product development (NPD), remains ambiguous. While existing literature generally emphasizes the value of customer knowledge, critics argue that a strong customer focus can also de-motivate and misguide exploration. This study adds clarity to our understanding of this tension by drawing from an intensive analysis of the corporate archives of a rapidly growing high-tech company. The authors trace the impacts of customer knowledge on twelve explorative NPD projects. The findings reveal three distinct mechanisms through which customer knowledge influences exploration: generating, guiding, and gatekeeping. The impact of customer knowledge on exploration depends on the selective deployment of these mechanisms. The authors further argue that managers should seek to find a fit between the deployment of customer knowledge mechanisms and the exploration project type in order to increase the likelihood of exploration project success.