Dell crowdsources innovation

Last week, Dell launched 'IdeaStorm', a Digg-style customer feedback site which invites users to submit and vote on ways to improve the company's product line and service. Creating such a public and transparent feedback-loop is a brave move by a company that is too often associated with exploding laptops and poor customer support, and which has long been the blogosphere's favorite football. But the pay-off could be significant.

Firstly, just by embracing social software, Dell generates a round of positive blog coverage and earns some much needed goodwill from which it can build on. Secondly, and most crucially, 'IdeaStorm' has already produced some good ideas, and although many seem kind of obvious, a few of the suggestions -- if acted upon -- could lead to some real innovation.

Ideas that have hit the front page so far, include:

• Own the "green' market.Dell recently launched its 'Plant a Tree for Me' program, whereby customers can choose to donate money to a tree planting initiative, when ordering a new PC. "If you sponsor a tree at the time of purchase, could you get a special badge on your computer that shows that you're eco-friendly?", suggests one user. More green themed ideas include producing a special eco-friendly line of computers, and the suggestion that Dell has an opportunity to "own" the green market.
• Organize the sales pages by need, not product line. "The Dell shopping experience is all about Dell -- not the user". Make the Dell shopping experience more 'mum-friendly', by giving customers the option of building an order based on what they want to accomplish with their PC, not on meaningless technical specs.
• No extra software option. "Would love the ability to have a clean Vista install. No AOL software, no earthlink software, no google software - just a clean, original OS." This suggestion has many duplicates, and is something Dell could easily do. Presumably the company gets a kick-back for including all of these wares. My suggestion: make the extra software optional, and transparently share any kick-back revenue with customers who opt-in. I'd guess that most would.
  
• Open-source alternatives. Lots of suggestions to offer Linux and other open-source software as a build-to-order option e.g. Open Office, VLC player etc.

Not only are these good suggestions - I particularly like the idea that Dell could own the green market, given the recent Greenpeace assault on Apple - the 'IdeaStorm' Terms of Service makes it clear that Dell has the right to use any of the ideas "royalty-free" and without compensation. This is obviously a legal necessity, but effectively means that the company isn't just accepting feedback on its own ideas but is in fact crowdsourcing innovation -- for little or no cost.

On a side-note, it's perhaps telling that one of the suggestions is from a Dell employee saying that the company should have an 'IdeaStorm' for internal use. If Dell hasn't empowered its workforce first, then how can it begin to respond to customer wishes?

Overall, however, I'm impressed with the thinking behind 'IdeaStorm'. Though as Mathew Ingram writes:

The big question now, of course, is: How much of this community input will Dell actually put into practice? In other words, the walk must eventually be walked, rather than just having the talk be talked.

Which of the ideas submitted so far, will Dell act on first? And will other companies follow suit and begin crowdsourcing innovation too? For example, I can't see Apple ever going down this route -- not while Jobs is at the helm, at least. Remember, in his view, customers don't know what they really want, until they actually see it. But for companies who seem to have hit an innovation drought or lost touch with customers, crowdsourcing might just be the way to go.