www.ndu.edu/inss DH No. 82 1 

Prior to America’s entry into World War II, President Franklin D. Roosevelt coined the term Arsenal of Democracy to refer to U.S. industrial activity supporting the Allied war effort.1 President Dwight D. Eisenhower subsequently named the collection of private firms, universities, and 

Federally funded research and development centers that emerged during the 

World War II the military-industrial complex. The industry component of the 

military-industrial complex, or what is now commonly known as the Defense 

Industrial Base (DIB), has grown to become one of the largest sectors of the U.S. 

economy, accounting for nearly 4 percent of gross domestic product—a substantially greater percentage if the impact of military-derived technology such as the 

Internet is included in the calculation.2

The modern DIB reached its apex in the Cold War. During this period, 

massive weapon systems development programs led the Department of Defense 

(DOD) to evolve a complex, heavily managed, deliberate approach to new product development (NPD). Confronted with an adversary in the Soviet Union 

that mirrored a centralized, planning-centric NPD model, the DIB successfully 

built sophisticated military products that had a decisive role in determining the 

outcome of the Cold War.

Today, however, the national security environment is characterized by increasingly diverse, reactive threats that can evolve at the pace of Moore’s Law, 

a concept that refers to the doubling of transistors in a dense integrated circuit 

every 2 years.3

 One example of the reactive threat phenomenon is improvised 

explosive devices (IEDs). Constructed from commercially derived components, 

IEDs began appearing on the battlefields of Iraq and Afghanistan as early as 

The Pentagon’s Pivot: How 

Lead Users Are Transforming 

Defense Product Development

by Adam Jay Harrison

DEFENSE HORIZONS

National Defense University

CENTER FOR TECHNOLOGY AND NATIONAL SECURITY POLICY

About the Author

Adam Jay Harrison is the Director of 

the MD5 National Security Technology 

Accelerator and a National Security 

Research Fellow at New York 

University.

Key Points

◆ Historically, the Department of Defense (DOD) has relied on strategic 

forecasting to determine specifications for new military products. 

These specifications are codified in 

formal product requirements that 

drive new product development 

(NPD).

◆ The rapid rate of technology 

change combined with increasing 

uncertainty in the global security 

environment challenges the ability of DOD to make accurate longterm predictions about future 

military product needs.

◆ To improve the efficacy of capability development, many DOD 

agencies and the Defense Industrial Base are exploring NPD 

strategies based on the insights 

of lead users with direct exposure 

to emerging military-technology 

problems.

◆ This paper details emerging approaches to military NPD that 

incorporate lead users; that is, 

practitioners who experience and 

proactively solve needs ahead of 

the market.

August 2017
2 DH No. 82 www.ndu.edu/inss

2002, where they have been responsible for most U.S. 

combat fatalities.4

 It is generally accepted that the main 

challenges in mitigating the effect of IEDs are their lack 

of standardization combined with a NPD cycle that 

measures in weeks to months. At the height of the fighting in Iraq, new IED variants began appearing on the 

battlefield nearly coincident with the deployment of U.S. 

countermeasures to the previous generation threat.

Within this context, DOD and its primary industry suppliers have started to actively explore alternate 

NPD models that promise to accelerate the development of military products in line with the accelerated 

evolution of threats and associated military product demand. While the defense market today continues to be 

driven by a multiyear formal planning cycle, the companies comprising the DIB, ranging from agile startups 

to the “big six” defense contractors (Lockheed Martin, 

Boeing, Northrup Grumman, General Dynamics, Raytheon, and BAE Systems), are experimenting with new 

NPD approaches that incorporate the real-time insights 

of military practitioners into novel product concepts. 

Leveraging lead users (that is, practitioners who address 

experienced needs ahead of the market), the DIB seeks 

to capitalize on early demand signals that anticipate scalable military needs.

Lead User Innovation

Eric von Hippel, professor of Management of Technology at the Massachusetts Institute of Technology, defined lead users as those whose “present strong needs that 

will become general in a marketplace months or years in 

the future.”5

 Such users represent two principal opportunities for firms pursuing NPD strategies that anticipate 

general market demand. First, lead users are a source of 

market research based on their exposure to experienced 

needs ahead of most users. Second, lead users are a source 

of product improvements and new product concepts, 

arising from their attempts to satisfy these needs.

Unlike conventional market-led approaches to 

NPD, which may be constrained by the experience of 

most users regarding felt needs and potential solutions, 

lead user innovation discounts prevailing products and 

applications in favor of emerging niche needs and associated product and process concepts. Per von Hippel, lead 

users express attributes applicable to the identification of 

emerging market opportunities to the extent that they 

face needs before the bulk of the marketplace experiences them and “are positioned to benefit significantly by 

obtaining a solution to those needs.”6

 This characteristic 

makes lead users a source of market research particularly 

in fast-moving fields such as high technology, where the 

experience of most users may be obsolete due to what 

Everett Rogers and later Geoffrey Moore identified as 

the uneven rate of technology diffusion.7 In markets such 

as information and communications technology (ICT), 

the rate of product innovation may be less than the time 

required for an innovation to be communicated to most 

potential users. Rogers models the diffusion of innovations in a regular distribution based on the speed of 

adoption, where groups of users are classified from most 

innovative to most conservative as “innovators, “early 

adopters,” “early majority,” “late majority,” and “laggards.” 

Lead users are assigned to the first segment of the user 

population (that is, “innovators”), which accounts for a 

small fraction (2.5 percent) of the total user population 

but plays a critical role in driving the process of technology diffusion. Therefore, a firm’s ability to identify the 

needs experienced by lead users and the self-generated 

solutions invented to address these needs can provide 

what Lieberman and Montgomery defined as a technological leadership-based first-mover advantage.8

In addition to the market research function, lead 

users may also serve as the agents of minimum viable 

MIT Professor Eric von Hippel 

defined lead users as those whose 

“present strong needs that will 

become general in a marketplace 

months or years in the future”
www.ndu.edu/inss DH No. 82 3 

product (MVP) development. Ries defined a minimum 

viable product as a “product with just enough features to 

gather validated learning about the product and its continued development,” undertaken to satisfy the unmet 

needs experienced by the user.9 Von Hippel postulated 

that the greater the perceived benefit that the user can 

derive from a solution, the more effort the user will expend to obtain or invent a solution. Moreover, the users 

likely to perceive the most benefit from a solution are 

those who will devote the most time to understanding 

the application domain.10 Due to their deep technical 

experience and motivation to form solutions in domains 

where they are deeply invested, lead users are a potentially rich source of innovation. Firms capitalizing on 

this behavior may incorporate lead user MVPs to jumpstart or otherwise de-risk NPD.

In scenarios where the cost of knowledge transfer 

from lead users to firms may be high, lead users can 

play an increasingly important role in driving NPD. 

Von Hippel characterized information that is costly to 

acquire, transfer, and use in a new location as “sticky.”11

Sticky information exists in many contexts, however, a 

prominent example is the “learning by using” scenario, 

which is a heuristic process that as Rosenberg concluded, 

“involves problem solving carried out in the use environment by, typically, product users.”12 Polanyi observed that 

some knowledge earned in praxis is difficult to “encode 

in explicit terms.”13 Such tacit information may be difficult or impossible to transfer. One strategy for firms 

seeking to capitalize on sticky or tacit information in 

NPD involves shifting NPD development activities to 

lead user locations, where lead users can directly participate in the development of prototypes or MVPs. Here, 

prototypes serve as artifacts that encode and transfer 

sticky information.

Domain expertise, early exposure to needs potentially indicative of broader market trends, and motivation to develop technology interventions addressing experienced needs make lead users increasingly important 

resources in NPD, particularly in areas where the rate of 

technology change is high. As DOD and the DIB seek 

to accelerate military NPD in line with the increasing 

speed and reactivity of the national security environment, 

lead user innovation stands out as one potential solution. 

For this reason, DOD and the defense industry have begun to explore a variety of mechanisms to incorporate 

lead user input into NPD. In the following sections, I 

describe how the DIB traditionally executes NPD and 

explain how lead user innovation is being incorporated 

into military NPD through a variety of different government and industry-led initiatives.

The Defense Industrial Base and 

New Product Development

No nation is more representative of the modern military-industrial complex than the United States. Shaped 

during World War II and tempered in the Cold War, 

the American military-industrial complex is an extreme 

example of a co-evolutionary economic model built in 

response to two existential global conflicts but sustained 

and even reinforced by internal pressures ranging from 

economic interests to regulatory conditions and cultural 

predispositions, to name a few.

The DIB is a collection of private companies, universities, and Federally-funded research and development centers (FFRDCs) that provide products and 

services for the U.S. Armed Forces. Companies that 

comprise this group, including the six largest defense 

contractors, are partially if not entirely underwritten 

by public military spending. Defense prime contractors 

produce equipment that is generally not available in the 

commercial marketplace. The DIB, however, also incorporates firms like Kraft Foods, United Parcel Service, 

and Amazon Web Services, whose sale of goods and 

services to the military constitutes a small fraction of 

their total addressable market.14 Per Watts, the commercial-facing firms represented in the DIB traditionally do 

not produce critical components or systems required to 

“ensure DOD’s competitive advantage in the core military competitions.”15

The closed, reciprocal relationship between the 

American military and its industrial base is predicated 
4 DH No. 82 www.ndu.edu/inss

first and foremost on the sustainment of military-technology superiority. In World War II the competitive 

advantage enjoyed by the U.S. military was based on industrial output, and the American Soldier fought with 

machines bearing the names of great commercial firms 

such as Ford, General Electric, and General Motors.16

In the Cold War, however, a different set of geostrategic 

realities demanding a new industrial strategy confronted 

the United States. The Soviet Union and its satellites 

maintained a two- to five-times numerical advantage 

over the United States and its Allies in most categories of 

conventional forces. This numerical asymmetry led U.S. 

military strategists to adopt what came to be known as 

the technology offset strategy, which sought to counter 

or “offset” Soviet military mass using increasingly sophisticated, force-multiplying weapons systems. More than 

any other factor, the offset strategy shaped the development of the military-industrial complex in the West.17

The insatiable demand for advanced technology 

implicit in Western military strategy eventually resulted 

in a gap between civilian and military markets. Where, 

in the early days of the Cold War, commercial firms in 

the West sought to leverage military investments for the 

development of products applicable to more scalable civilian markets, military-technology specialization eventually led to a near complete exit of legacy commercial 

firms from the business of defense and a failure to attract 

new firms with primarily commercial market aspirations. 

Per Gansler, the residual firms persisting in the military 

market were a collection of predominantly Federallyfunded companies, laboratories, and nonprofit organizations exclusively optimized to produce technologies and 

systems for the military.18 This group of public and private institutions is most commonly associated with the 

modern DIB.

With the segregation of commercial firms from the 

military marketplace, the military-industrial complex 

evolved increasingly complex business rules and regulatory frameworks antithetical to commercial industry 

norms. Practices common in the military-industrial 

complex such as cost-type accounting and governmentuse rights for intellectual property represented significant transactional barriers to firms for which the military 

was a secondary market. Thus, over the four-plus decades 

of the Cold War, the military-industrial complex grew 

somewhat independently of civilian high-tech industry 

punctuated by a few notable exceptions, like the Internet 

and the Global Positioning System, where technology 

“spill-over” from the military laid the groundwork for 

new civilian-use products.

Over the course of the Cold War due to the exit 

of dual-use firms from the defense market, the residual 

U.S. defense industry internalized business practices 

consistent with a monopsony centered on DOD. From 

a product development standpoint, the evolution of the 

DIB away from the dynamics of the commercial marketplace has had profound implications. Like any large 

bureaucracy, DOD has implemented complex business 

rules that support the development and deployment of 

new products and services at scale. The strict formalism 

of product development is further exacerbated by the 

context of national security where a conservative military 

culture presides and product decisions may have life or 

death implications. In toto, these factors have combined 

to produce a byzantine NPD model composed of three 

overlapping business systems that the Defense Science 

Board has criticized as favoring predictability and reliability over responsiveness and accuracy (that is, productmarket fit).19

The three business systems associated with defense 

NPD combine to address the entire product development life cycle, from design and development to obsoleswith the segregation of commercial 

firms from the military marketplace, 

the military-industrial complex 

evolved business rules and 

regulatory frameworks antithetical to 

commercial industry norms
www.ndu.edu/inss DH No. 82 5 

cence management. These business systems include the 

Joint Capabilities Integration and Development System 

( JCIDS), which manages the development of requirements (product specifications) that reflect future military 

capability needs; the Planning, Programming, Budgeting, 

and Execution (PPBE) process, which allocates resources for product development activities; and the Defense 

Acquisition System (DAS), which manages the government-to-industry contractual transactions governing 

NPD.20 These three systems, referred to collectively as 

the Defense Acquisition Enterprise (figure 1), impose 

a prescribed order over military NPD as instantiated in 

artifacts like the Federal Acquisition Regulation System, 

which codifies contracting rules and consists of approximately 180,000 pages of regulation.21 Simply initiating 

military NPD can take years to accomplish, requiring the 

development of policy like the national defense strategy 

as well as program-specific analyses reflected in Capabilities-Based Assessments and Initial Capabilities Documents, each subject to a rigorous approval process.

Given the significant constraints of the DOD 

NPD model along with the increasing sophistication of 

modern military weapons systems, it is not surprising, 

as Lorell and Levaux noted, that more military aircraft 

designs were developed in the 1950s than the following four decades combined and nearly 70 percent of all 

post–World War II jet fighter development programs 

took place between the end of the war and 1961.22 The 

bureaucracies that have evolved in parallel with the increased complexity have also become a major check on 

innovation and NPD. Today, hundreds of thousands of 

people are employed by the many government agencies 

that make up the Defense Acquisition Enterprise. The 

roles, missions, and functions of these agencies are optimized to the unique business requirements of the legacy 

NPD model. The internal reference to the existing business systems at the expense of external, market-driven 

Defense 

Acquisition 

System

DOD 5000 Series

Milestone Decision 

Authority 

Oversight

VCJCS/JROC Oversight

CJCS 3170.01 Series

Planning, Programming, 

Budgeting, and Execution 

Process

DEPSECDEF Oversight

PPBE

Joint Capabilities 

Integration and Development 

System

Figure 1. Department of Defense Decision Support System
6 DH No. 82 www.ndu.edu/inss

factors has led to a myopic focus on process. Bureaucratic 

inertia and workforce incentives consign military NPD 

to what Baghai, Coley, and White identified as Horizon 1–type innovation, which refers to managing mature 

product development processes and product categories at 

the expense of new, potentially disruptive (that is, Horizon 3) products that are not predicted by the established 

model.23 The resulting dissonance between traditional 

military NPD and the rapidly emerging needs of military users has influenced the DIB and some government 

agencies to start exploring alternate NPD approaches 

based on lead user innovation.

Lead Users and Military Product 

Development

Following the invasion of Afghanistan in late 2001, 

U.S. and coalition forces began experiencing the deadly 

effects of IEDs. Constructed from repurposed consumer 

electronics and (initially) Soviet-era munitions, remotely 

triggered, vehicle-based, and victim-triggered IEDs have 

claimed the lives of more than 3,100 U.S. military personnel and wounded more than 33,000, accounting for 

up to two-thirds of U.S. combat-related casualties in Afghanistan and Iraq. Current research suggests that the 

full extent of IED-related injuries is only now being discovered with military personnel suffering from late onset 

traumatic brain injury and post-traumatic stress disorder 

numbering many times original casualty estimates.24

The upsurge in IED incidents beginning in 2003 

laid bare the inadequacy of existing military wheeled vehicles like the ubiquitous High Mobility Multipurpose 

Wheeled Vehicle, or “Humvee,” to withstand an IED attack. The problem gained widespread public notoriety in 

December of 2004, when a Tennessee National Guardsman told then Secretary of Defense Donald Rumsfeld 

during a visit to a U.S. military base in Kuwait that troops 

had been reduced to foraging for scrap metal to weld to 

their vehicles for added protection.25 This incident led in 

part to a massive response on the part of DOD. Zoroya 

estimated that to date the Defense Department has invested some $75 billion in armored vehicles and technologies for detecting and defeating IEDs since the onset of 

the threat.26

Despite the massive investment in IED countermeasures, U.S. military efforts to mitigate the deadly 

effect of IEDs at the point of attack can only be considered modestly successful. Higginbotham documented 

the “cat and mouse” nature of IED innovation starting 

first with the development of remotely controlled, radio 

frequency–activated IEDs appearing in 2003, followed 

by the emergence of IEDs triggered by the engine heat 

of passing vehicles in 2004, decoy-proof IEDs in 2006, 

and finally IEDs triggered by the emissions of radiocontrolled IED “jammers” in 2010.27 In each case, the 

evolutionary leap came in response to a U.S. countermeasure that undermined the efficacy of the preceding 

generation of IED. 

Given the lethality and strategic effect of the threat 

on popular support for military operations in Afghanistan and Iraq, countering IEDs emerged as a focus for 

DOD research and development in the early years of 

both conflicts. Regardless, IED-based incidents rose 

dramatically between 2003 and 2007. In addition to 

the dramatic overall increase in the number of IED incidents reported by Cordesman, Loi, and Kocharlakota 

for the 2003–2007 period, data suggest another interesting phenomenon—regular, short-term cycles of IED 

activity (figure 2).28 Colonel Pete Newell, USA (Ret.), 

former director of the Army Rapid Equipping Force, attributed the waxing and waning of IED incidents over 

2- to 6-month periods in part to the rapid IED innovabureaucratic inertia and workforce 

incentives consign military NPD 

to managing mature product 

development processes at the 

expense of new, potentially 

disruptive products not predicted by 

established model
www.ndu.edu/inss DH No. 82 7 

tion cycle, where the deployment of new U.S. countermeasures initially reduced the number of IED incidents 

for a short period of time. The down-cycle was followed 

closely by an increase in the number of incidents associated with the implementation of new IED variants and 

employment techniques immune to U.S. countermeasures. Importantly, the timescale associated with the IED 

innovation cycle was inconsistent with the decades-long 

military NPD model—an asymmetry that resulted in the 

selective proliferation of lead user innovation based approaches to counter new IED variants.

Within the context of DOD, military personnel in 

direct contact with the threat environment are an important lead user group. In the case of the DOD experience 

with IEDs in Afghanistan and Iraq from 2003–2013, 

lead users consisted of Soldiers, Marines, Sailors, and 

Airmen engaged in combat and combat support operations. Several cases from this timeframe are indicative of 

how military personnel confronted with the emergence 

of IEDs expressed lead user characteristics. For example, 

wheeled vehicles supplied by U.S. forces in Afghanistan and Iraq in the 2001–2004 timeframe were not 

equipped with blast mitigating armor.29 As the exchange 

between the National Guardsman and Secretary of Defense Donald Rumsfeld underscores, frontline military 

personnel were ahead of the military market and most 

military users in experiencing and recognizing the need 

to improve armor protection on wheeled vehicles like the 

HMMWV. Because of their vulnerability to the devastating effects of IEDs, these lead users would disproportionately benefit from potential solutions. Thus, military 

lead users in Afghanistan and Iraq were among the first 

to experiment with improvised vehicle armor based on 

reinforcing “thin-skinned” vehicles with whatever was 

available including scrap metal, Kevlar blankets, ballistic 

glass, and even plywood.30 While subsequent experience 

would reveal that these field expedient solutions (that is, 

minimum viable products) had a more palliative than 

practical effect on improving the survivability of wheeled 

vehicles, feedback from early lead user experimentation 

0

500

1,000

1,500

2,000

2,500

3,000

Jul-03

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Figure 2. Total IED Incidents, June 2003–April 2010
8 DH No. 82 www.ndu.edu/inss

became an important factor in the design of follow-on 

“applique” or add-on armor packages.

As late as February 2006, DOD was still in the process of retrofitting wheeled vehicles in Afghanistan and 

Iraq with basic add-on armor protection. From 2003, 

when the upsurge in IED incidents began, to 2006, when 

the deployment of baseline “up-armored” vehicles to U.S. 

military personnel was nearing saturation, insurgents in 

Afghanistan and Iraq introduced multiple generations of 

new IED threats including Explosively Formed Penetrators designed to overcome add-on armor, jammer-proof 

bombs that use a vehicle’s heat signature as a trigger, and 

decoy-proof targeting designed to overcome pre-detonation schemes.31 To the extent that the emergence of new 

IED threats outpaced the diffusion of countermeasures, 

military lead users would continue to play an important 

role in driving counter-IED NPD. For example, when 

insurgents introduced IEDs triggered by heat signatures 

in response to the U.S. military’s introduction of radiocontrolled IED jamming devices, military lead users improvised a contraption consisting of a hot metal box (for 

example, a toaster heating element) affixed to the end of 

a long pole extending in front of the vehicle. The heat 

signature emanating from the metal box served to detonate a heat-triggered IED ahead of the vehicle.32 This solution became the basis for a new military product called 

the Rhino, which was widely distributed to U.S. forces in 

Afghanistan and Iraq.

IEDs are but one example of the accelerated rate 

of change in the threat environment driven by what 

Schwab refers to as the fourth industrial revolution—the 

acceleration of innovation due to ubiquitous information 

exchange and the emergence of cyber-physical systems 

like cloud computing and the Internet of Things.33 To 

keep pace with the development of new threats and the 

demand from military personnel for solutions to mitigate these threats, DOD agencies and the DIB alike are 

at least tentatively internalizing the lessons of the IED 

experience in several lead user innovation programs. 

Two prominent examples of how lead user innovation 

is influencing military NPD are the U.S. Army Rapid 

Equipping Force (REF) and the Joint Improvised Threat 

Defeat Organization ( JIDO).

Both the REF, which was established in 2002, and 

JIDO, which was established in 2006, were chartered 

with operating outside of the traditional Defense Acquisition Enterprise and capitalizing on lead user insights 

to quickly address the emerging needs of U.S. military 

personnel. These organizations have developed processes 

that allow for insights from the field to be collected, analyzed, and actioned through rapid NPD that incorporates prototyping and experimentation. The REF has implemented a streamlined process called the “10-liner” to 

solicit inputs from military lead users and initiate NPD. 

For fiscal year 2014, the REF collected 554 10-liners 

leading to the delivery of 6,472 new or nonstandard 

products in an average of 140 days from identification of 

need to product delivery (REF 2015). In addition to lead 

user information push, the REF and JIDO deploy liaisons and field teams to pull sticky information relevant 

to NPD by working alongside lead users in real-world 

problem-solving environments. Knowledge derived from 

such interactions provides a basis for new product specifications that drive prototyping activities in DOD labs 

and industry.

DOD agencies are also engaging military lead users 

to participate directly in the conceptualization, design, 

and prototyping of new products. In 2013, the REF initiated a pilot program called Army CoCreate, which conto keep pace with the development 

of new threats and the demand from 

military personnel for solutions 

to mitigate these threats, DOD 

agencies and the DIB are tentatively 

internalizing the lessons of the IED 

experience in several lead user 

innovation programs
www.ndu.edu/inss DH No. 82 9 

nected military lead users with scientists, engineers, and 

development resources to accelerate NPD. The program 

was based on the crowdsourcing and web-enabled codevelopment of product concepts incorporating inputs 

from military lead users. NPD activities were facilitated 

by an Internet-based CoCreate platform and followed by 

ideation and prototyping events called Make-a-Thons, 

where product concepts were refined and built.34 More 

recently, the Marine Corps deputy commandant of Installation and Logistics, in partnership with the MD5 

National Security Technology Accelerator, initiated an 

Innovation Challenge program to collect lead user concepts to improve logistics. The first Innovation Challenge 

was launched on June 15, 2016, and focused on lead user 

concepts in the advanced manufacturing and Internet 

of Things technology areas.35 Selected winners from the 

challenge will be prototyped by DOD laboratory and 

DIB partners and circulated back to the lead user community for experimentation.

The U.S. Special Operations Command (USSOCOM) is another early adopter of lead user innovation 

techniques in military NPD. Long familiar with rapid 

product development to support the diverse, unconventional missions of the special operations community, USSOCOM has embarked on two recent efforts to incorporate lead users into the formal acquisition process for 

NPD. In the case of one high visibility program called 

the Tactical Assault Light Operator Suit (TALOS), or 

“Iron Man” suit, the Special Operations Forces (SOF) 

Acquisition, Technology, and Logistics (AT&L) organization has assigned top special forces personnel with 

recent combat experience to the TALOS acquisition 

team. One technique employed by the TALOS program 

involves using lead user feedback to frame capability 

challenges that are then socialized with industry. Potential solutions resulting from initial outreach to the DIB 

are subsequently refined through collaborative product 

design sessions involving both lead users and industry.36

Based on experience with the TALOS program, SOF 

AT&L has launched a new initiative called SOFWERX 

to expand opportunities for lead user collaboration with 

innovators in government, academia, and industry. SOFWERX consists of a collaboration space and associated 

programming such as Warfighter Council Wednesdays, 

where Active-duty special operators discuss needs and 

potential solution concepts.

As DOD agencies have moved toward lead user innovation to enhance NPD, the DIB has followed suit. 

A company called Local Motors stands out as a leader 

in developing the methodologies and tools required 

for DOD to capitalize on lead user innovation. As the 

industry partner behind the Army CoCreate program, 

Local Motors built the online platform used to facilitate co-development of a mobile command post vehicle 

based on inputs from military lead users and civilian innovators.37 Army CoCreate derived its origins from a 

2011 effort undertaken by Local Motors in partnership 

with the Defense Advanced Research Projects Agency 

(DARPA) called the Fast, Adaptable, Next-Generation 

Ground Vehicle (FANG). In this program, Local Motors and DARPA demonstrated techniques for crowdsourcing military vehicle design from lead users representing a variety of fields and competencies. The result 

was an Experimental Crowd-derived Combat-support 

Vehicle built in less than 4 months.38

Large defense contractors have also started to take 

note of lead user innovation as a method to accelerate and improve NPD. Opened in 2005, the Lockheed 

Martin Center for Innovation (also known as The Lighthouse), uses virtual and live collaboration to involve 

long familiar with rapid product 

development to support the diverse, 

unconventional missions of the 

special operations community, 

USSOCOM has embarked on recent 

efforts to incorporate lead users into 

the formal acquisition process for 

NPD
10 DH No. 82 www.ndu.edu/inss

military lead users in activities that inform independent 

research and development and anticipate scalable military NPD opportunities. Taking a slightly different tact, 

General Dynamics has created what they call the EDGE 

Innovation Network—a government, university, industry 

collaboration network that connects technology to lead 

user–identified needs.

While lead user innovation is becoming an important tool for military NPD, capitalizing on the full 

potential of lead users in the development of military 

products will not be possible until these approaches are 

reconciled with DOD’s legacy NPD business systems. 

Current instances of lead user innovation in the military 

context tend to be associated with applied research and 

development activities, where technology prototyping 

is prevalent. A very small percentage of DOD research 

and development programs, however, successfully transition to scalable military products, a phenomenon that 

is referred to as the valley of death. An effort working 

to apply lead user techniques to scalable military products is Tactical Advancements for the Next Generation 

(TANG). Leveraged primarily by the Navy, TANG uses 

design thinking (that is, a methodology that matches 

people’s and organizations’ needs with what is technologically feasible) to capture lead user insight, which may 

aid in the optimization of large product programs.39 To 

date, the TANG methodology has been used in product 

areas ranging from undersea surveillance to food services.

Conclusion

As the DOD grapples for product-based solutions 

that keep pace with the rapid rate of change in the modern operational and technology environments, lead user 

innovation is emerging as an important element of military NPD. By incorporating the insights of lead users, 

DOD agencies and the DIB gain early exposure to the 

needs and product opportunities that will drive future 

demand—a critical factor in accelerating the timeliness 

and efficacy of military capabilities. Given the formalism 

surrounding military NPD, however, fully capitalizing 

on lead user innovation involves crafting strategies that 

relate lead user inputs to the business systems that govern NPD. Such an outcome relies first and foremost on 

successfully consolidating lead user feedback in the development of requirements for new military capabilities 

via JCIDS and associated Service-led combat development and force modernization processes. Expansion of 

programs like TANG, which reconcile lead users to the 

acquisition phase of military NPD, are also necessary to 

ensure that work-in-process capabilities reflect emerging 

opportunities and threats.

Notes 1 Gregory Hooks and Leonard E. Bloomquist, “The Legacy of 

World War II for Regional Growth and Decline: The Cumulative 

Effects of Wartime Investments on U.S. Manufacturing 1947–

1972,” Social Forces 71, no. 2 (1992), 303–337. 2 Robert Levinson, Sopen Shah, and Paige K. Connor, “Impact 

of Defense Spending: A State-by-State Analysis,” Bloomberg Government (November 2011), available at <www.ct.gov/ecd/lib/ecd/futures/6._bloomberg_defense_spending.pdf>. 3 Gordon Moore, “Cramming More Components onto Integrated Circuits” Proceedings of the IEEE 86, no. 1 (1965), 82–85. 4 Anthony H. Cordesman, Charles Loi, and Vivek Kocharlakota, “IED Metrics for Iraq, June 2003–September 2010,” Center for 

Strategic and International Studies (November 11, 2011), available at 

<https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/

publication/101110_ied_metrics_combined.pdf>. 5 Eric von Hippel, “Lead Users: A Source of Novel Product 

Concepts,” Management Science 32, no. 7 (1986), 791–805. 6 Ibid.

7 Everett M. Rogers, “Methods of Measuring Opinion Leadership,” Public Opinion Quarterly (1962), 435–441; Geoffrey A. Moore, 

Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers (New York: HarperCollins, 1991). 8 Marvin B. Lieberman and David B. Montgomery, “First-Mover Advantages,” Strategic Management Journal 9, special issue (Summer 

1988), 41–58. 9 Eric Ries, “Minimum Viable Product: A Guide,” Startup Lessons Learned (August 2009), available at <www.startuplessonslearned.

com/2009/08/minimum-viable-product-guide.html>. 10 Eric von Hippel, “Lead Users,” 791–805.

11 Eric von Hippel, “‘Sticky Information’ and the Locus of Problem Solving: Implications for Innovation,” Management Science 40, no. 

4 (1994), 429–439. 12 Nathan Rosenberg, Inside the Black Box: Technology and Economics (New York: Cambridge University Press, 1982).

13 Michael Polanyi, Personal Knowledge: Towards a Post-Critical 

Philosophy (Chicago: University of Chicago Press, 1958). 14 Barry D. Watts, Sustaining the U.S. Defense Industrial Base as a 

Strategic Asset (Washington, DC: Center for Strategic and Budgetary 

Assessments, September 18, 2013). 15 Ibid., 3.

16 Arthur Herman, Freedom’s Forge: How American Business Produced Victory in World War II (New York: Random House, 2012). 17 Robert Martinage, Toward a New Offset Strategy: Exploiting 

U.S. Long-Term Advantages to Restore U.S. Global Power Projection 

Capability (Washington, DC: Center for Strategic and Budgetary 

Assessments, October 27, 2014), available at <http://csbaonline.org/
www.ndu.edu/inss DH No. 82 11 

research/publications/toward-a-new-offset-strategy-exploiting-u-slong-term-advantages-to-restore>. 18 Jacques S. Gansler, Democracy’s Arsenal: Creating a TwentyFirst-Century Defense Industry (Cambridge, MA: MIT Press, 2011). 19 Jacques S. Gansler, “Fulfillment of Urgent Operational Needs,” 

Defense Science Board Report (2009), available at <www.acq.osd.mil/

dsb/reports/ADA503382.pdf>. 20 Moshe Schwartz, Defense Acquisitions: How DOD Acquires 

Weapon Systems and Recent Efforts to Reform the Process, RL34026 

(Washington, DC: Congressional Research Service, January 2, 2013), 

available at <www.defenseinnovationmarketplace.mil/resources/

RL340261.pdf>. 21 Patrick A. McLaughlin, “On the Human Costs of the U.S. 

Regulatory System: Should Congress Pressure Agencies to Make 

Rules Faster?” Testimony before the Senate Judiciary Committee, 

Subcommittee on Oversight, Federal Rights, and Agency Action 

(Arlington, VA: Mercatus Center at George Mason University, 

August 1, 2013), available at <www.mercatus.org/publication/humancosts-us-regulatory-system-should-congress-pressure-agencies-makerules-faster>. 22 Mark A. Lorell and Hugh L. Levaux, The Cutting Edge: A Half 

Century of U.S. Fighter Aircraft R&D (Santa Monica, CA: RAND 

Corporation, 1998). 23 Mehrdad Baghai, Steve Coley, and David White, The Alchemy 

of Growth: Practical Insights for Building the Enduring Enterprise (New 

York: Perseus Publishing, May 2000). 24 Gregg Zoroya, “How the IED Changed the U.S. Military,” 

USA Today, December 19, 2013, available at <www.usatoday.com/

story/news/nation/2013/12/18/ied-10-years-blast-wounds-amputations/3803017/>. 25 Bruce Wallace, “Humvees No Match for Crude Bombs,” Los 

Angeles Times, December 11, 2004, available at <http://articles.latimes.

com/2004/dec/11/world/fg-humvees11>. 26 Zoroya.

27 Adam Higginbotham, “U.S. Military Learns to Fight Deadliest Weapons,” Wired Magazine, July 28, 2010, available at <www.

wired.com/2010/07/ff_roadside_bombs/>. 28 Cordesman, Loi, and Kocharlakota.

29 Wallace.

30 Michael Moran, “Frantically, the Army Tries to Armor Humvees: Soft-Skinned Workhorses Turning into Death Traps,” MSNBC, 

April 15, 2004, available at <www.nbcnews.com/id/4731185/ns/

world_news-brave_new_world/t/frantically-army-tries-armor-humvees/#.WEw1GnfMxE4>. 31 Higginbotham.

32 Peter Cary and Nancy Youssef, JIEDDO: The Manhattan Project That Bombed (Washington, DC: Center for Public Integrity, March 

27, 2011), available at <www.publicintegrity.org/2011/03/27/3799/

jieddo-manhattan-project-bombed>.

33 Klaus Schwab, The Fourth Industrial Revolution (Geneva: 

World Economic Forum, 2016). 34 John Moore, “Army Taps Crowd for Rapid, Tactical Tech 

Solutions,” GCN, February 5, 2014, available at <https://gcn.com/

articles/2014/02/05/armycocreate.aspx>. 35 Lance M. Bacon, “3-Star Challenges Marines to Submit Top Ideas to Improve the Corps,” Marine Corps Times, 

June 15, 2016, available at <www.marinecorpstimes.com/story/

military/2016/06/15/3-star-challenges-marines-submit-topideas-improve-corps/85930892/>. 36 Dan Lamothe, “New Competition Launched in Development of U.S. Military’s ‘Iron Man’ Suit,” Washington Post, October 

27, 2014, available at <www.washingtonpost.com/news/checkpoint/

wp/2014/10/27/new-competition-starts-in-development-of-u-smilitarys-iron-man-suit/?utm_term=.d721db98c845>. 37 Moore.

38 Rebecca Boyle, “How the First Crowdsourced Military 

Vehicle Can Remake the Future of Defense Manufacturing,” 

Popular Science, June 30, 2011, available at <www.popsci.com/cars/

article/2011-06/how-first-crowdsourced-military-car-can-remakefuture-defense-manufacturing>. 39 Tim Brown, “Design Thinking,” Harvard Business Review, 

June 2008, available at <https://hbr.org/2008/06/design-thinking>.

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Developing an InnovationBased Ecosystem at the U.S. 

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