The Power of Co-Creation

Following Albert Sun’s postings on co-creation with suppliers, this is indeed a vast, untapped opportunity space. As he points out, in situations where an enterprise has a widely dispersed supplier base and the products are complex, there are benefits to extensive sharing of knowledge and experiences. But this is also true of commodity businesses. A good example is ITC e-Choupal, which deals with widely dispersed farmers in India to procure soybean, grain, and other commodities, which it processes further and sells as inputs to, for example, food related businesses. By engaging with farmers in a dialogue about their agricultural practices and enabling them to interact with other farmers as a community and connecting them with a network of agribusiness input providers (fertilizers, pesticides, etc.) and services (e.g., micro-insurance of crops), they have enabled a “supplier ecosystem”.

Further, co-creation can push the envelope even when suppliers are less dispersed and more concentrated, or for that matter even with a single supplier. Consider the logistics business, a complex business involving sophisticated information systems. (Thanks to Shomit Manapure, co-creator of this example.) Ryder is one of many third-party logistics (3PL) companies that rely heavily on Freightliner trucks for its fleet. Freightliner offers software packages that allow fleets to monitor their costs, and has become more involved in their 3PL customers’ quest for cost containment, customers who face cost pressures from fuel usage to maintenance to uneven driving performance. Ryder’s fleet size is over 150,000, and its annual consumption of diesel exceeds 400 million gallons. Freightliner is thus an important enabler for Ryder’s operational success. Managers of Ryder’s Fleet Management Services work closely with Freightliner’s design team, so that the trucks have the desired capabilities Ryder seeks. But Freightliner still lacks insight into the engagement experiences of Ryder’s customers down the chain. Freightliner’s design teams value more visibility into the interaction space across the downstream customer chain, so they can have better insights into end user product usage experiences.

The same is true between Freightliner and its suppliers such as engine manufacturers (e.g., Detroit Diesel). For instance, currently, Freightliner and engine manufacturers collaborate by sharing technology, making joint investments in research, and sharing information. This association primarily focuses on developing engines that comply with the emissions standards enforced by EPA, the specs desired by Freightliner, and the outcome of the engine research by the engine manufacturer. There is considerable potential for making this association more co-creative by elevating the interaction to the next level – i.e., enabling the experiences of the end-user of the trucks to be understood by the engine manufacturer. Since the engine development process is R&D-intensive, deviations can be very expensive. Yet the engine designers have to keep in mind not only their immediate customer such as Freightliner, but also the customers further down the value chain such as Ryder and drivers of the trucks. Many features such as idle time performance, fleet maintenance, carbon footprint, etc. could be incorporated more effectively in the design through insights gained from dialogue about people’s engagement experiences along the entire activity chain.

Freightliner is now working on enabling people inside the engine manufacturer organization and other suppliers as a community to provide repair or diagnosis methods directly to the service centers and the Freightliner call center. Going one step further, Freightliner has realized that its customers like Ryder may not know the best practices for usage and maintenance of Freightliner trucks, so one customer who may have “worst-in-class” uptime or fuel economy has little or no insight into what another customer may be doing to achieve best-in-class operational measures.

Co-creation has the potential to unlock the power of concurrent, collective interactions among multiple stakeholders in the system to generate additional value for each stakeholder, through the experiences of the people involved, over a continuous period of time. It can bring all parties together on the same platform to ease mutual goal alignment, enable richer and more meaningful dialogue, and achieve organization-specific outcomes, as well as joint outcomes. The challenges faced by each managerial function in the respective organizations across the activity system can be very diverse and difficult to understand at an industry or corporate level. The success of co-creation across organizations in the activity chain system relies heavily on enabling co-creative interactions among participants in the system and developing much more personal, participative, interactive relationships that generate new experiences of value to people all along the activity system.

Are there examples that people have seen of co-creation across a B2B2B…2C chain? If so, who drove it? Why? What were the challenges? Lessons learned?