Dialogue with the Authors of The Power of Co-Creation
Newness test
I like the stuff they wrote but soon I found myself confronted with the challenge to understand the newness of their thoughts. The challenge pushed me back into my library to do the “newness test”
I did put all my books on my desk which are related to innovation.
They counted by the 100s.
All of them claimed to add knowledge to the innovation demain.
Some did.
I then made a tough but well (I do hope) educated decision.
I picked nine of the key authors who added newness to the topic of innovation.
My guess.
They will be my benchmark to make the newness test for book.
The first important thought was spelled out by Joe S. Bain in 1956.
For him innovation was initiated outside of the market structure and thus outside the enterprise.
A change in basic economic conditions and technological breakthroughs forces change on the market structure. Structure-conduct-performance was the mantra for the believers.
Joseph A. Schumpeter challenged this point of view. As early as 1942 he suggested that changes of an industry landscape can come from within the system. He named as the main source of innovation a “creative entrepreneur”. How this would work, he let to our own imagination.
Up until then academics had introduce the notion of exogenous and endogenous innovation.
Peter Drucker shed some light into the black box of a “creative entrepreneur” (Discipline of Innovation).
1985 he suggested instead of trusting the myth of a “creative entrepreneur” to apply a systematic practice of innovation. It would purposefully search for innovation opportunites within and outside the enterprise.
In the same year Michael E. Porter pushed the Bain view ahead. He claimed to have found the “structural determinants” which shape three generic strategies. Again: structure vs. entrepreneur.
This school of thought shaped the agenda of managers quite significantly. It was all around the “conduct” or “competitive strategy” and with that the core competence concept of C.K. Prahalad and Gary Hamel (1990). With some distance one realizes that the fokus was pretty much on the supply side of the equation.
Interestingly enough in 1986 two researchers pushed the endogenous growth back on the agenda. Paul M. Romer published “Origins of Endogenous Growth” and Eric van Hippel published his research on “The Sources of Innovation”.
Romer separated theoreatically the recipe for innovation from the lone entrepreneur. Thus supporting what Drucker had suggested in the same year from a practical point of view.
Van Hippel went down this route and introduced many sources of innovation one of which is the enterprise. He introduced also the user as a source of innovation.
In 1994 C.K. Prahalad and V. Ramaswami generalised van Hippels concept and named it Co-Creation. They introduced two new thoughts
First: Innovation is more about value than abaout a product or services.
Second: Value is a joint creation of partners in the value chain. Value creator is not the enterprise. Value creation takes place
when a buyer and user experience the features of a product or service.
1999 Chan Kim and Renee Mauborgne built on the idea that value is the key to innovation. They pushed ahead two thoughts.
Let us move from the focus on the supply side, which is in access anyway, to the demand side of the equation.
Innovation should take place on the demand side. We should systematically explore value expectations of the non customers.
Their format is well known under the brand “Blue Ocean Strategy” and has pulled a lot of pretty successful strategic moves till then.
Back to the new book on Co Creation:
The “heros” on which the ideas stand are Schumpeter, Drucker ,Romer and van Hippel.
What is new though is a much more sofisticated view on how value is created. The introduction of an experience environment in which the value creation takes place pushed the value innovation concept ahead.
They suggest rightly so that innovation has not only transient from the enterprise to the user but also from features to experience in which value is being created.
Cut a long strory short.
The book advances our thinking about innovation.
by The Nice Company,
11/02/2010 - 10:20
Not sure if this is an example that's between the enterprise and its employees, but here's a business built entirely on the idea of customer co-creation. It's called quirky.com. What's interesting is the role of influencers in deciding what ideas get created and the fact that there are monetary incentives for participating. That would seem to encourage engagement. The whole idea of a business model based on co-creation is interesting -- a great example being CrushPad, a wine making operation where you plan, make, design, and bottle your own wine. The entire value chain is open to co-creation.
by M.Deck,
10/22/2010 - 21:07
Yesterday, I had a conversation with the person who leads the Open Innovation program at a Fortune 50 company. How would you compare and contrast Open Innovation vs. Co-Creation?
by Francis Gouillart,
09/20/2010 - 21:24
This site's video on Cisco Systems shows how the company practices co-creation with its employees on a very large scale. Cisco uses an innovative organizational design and its own leading-edge networking technology to tap into the expertise of tens of thousands of employees. Its system of distributed leadership is unique, and 54,000 out of 66,000 employees were taking part in internal online discussion forums by the middle of last year.
by Ed Prewitt,
08/06/2010 - 13:16
Orange, the operating brand of France Telecom, established broad co-creation innovation platforms with employees with a goal of supercharging innovation. The internal partnerships generated over 21,000 ideas in just one month in 2007 and grew to higher levels in 2008. More than 2,300 of these ideas have been implemented, generating over 400 million Euros of earnings and savings for the company.
by Rob Shelton,
08/06/2010 - 12:50
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This is a question for all.
How would you differentiate Co-Creation from Open Innovation. For example P&G started its Connect+Develop initiative several years ago to achieve something very similar to what is mentioned above about BMW's Co-Creation Lab. P&G's initiative was considered a successful example of Open Innovation implementation. Can we also classify Connect+Develop a succesful example of Co-Creation? Or does a firm have to do more than just collaborate with external parties for its product innovation to be considered a Co-Creative enterprise?
by Vijesh Unnikrishnan,
09/28/2010 - 20:07
BMW is running a co-creation lab that does innovation contests with consumers. From their website "The Co-Creation Lab is a virtual meeting place for individuals interested in car related topics, eager to share their ideas and opinions on tomorrow’s automotive world with one of the leading car manufacturers. The Co-Creation Lab will be launched as a platform for future co-creation projects soon after the BMW Group Idea Contest. Members can then share their ideas for the automotive future and collaborate with other users and the team of the BMW Group." So far it seems like most of it is the idea contest but it has the potential to do more. Also interesting is thier use of the Hyve innovation community. Is this a company doing business as a co-creation platform for hire?
by M.Deck,
09/22/2010 - 20:58
Hi Francis/Venkat and friends,
I have been keeping my eye on Local Motors (http://www.local-motors.com) for the last year or so, and thought you may either have or want to have them on your radar. They are making great efforts to launch a co-creative car company, whose car designs are community generated, vetted and open sourced. I wrote an impromptu blog post about an experience i had with them here: http://www.socialens.com/2010/07/31/changing-times/
Of particular interest to me was the effect that this interaction had on me--a person who probably won't be shelling out the 50k for one of their cars in the near future, but who is a potential word-of-mouth advocate--of the energy created in and around the community.
by cbriggs,
09/22/2010 - 08:33
A good example of customers and enterprises co-ceating is in the field of counterfiet drug detection. Experts estimate counterfiet drugs to cost anywhere between $75-$200B lost revenue for global pharma each year http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=16943895&subjectID=531766&fsrc=nwl . Additionally fake malaria and tuberculosis drugs alone kill 700,000 people a year, most of them in developing nations. While top-down regulation and safety precaution approaches are the obvious choices, the enforcement of such measures especially in poor countries can be spotty if at all. An innovative approach by a Ghanian company mPedigree http://mpedigree.net/ is a great example of how customers are co-creating with drug companies to safeguard themselves from fake drugs. Drugs are authenticated with a scratch-off security code on the back of each drug strip/dispenser of partcipating pharma products. The customer then sends an SMS message with this number using his/her cellphone. The system authenticates the number and sends a text back on the cellphone validating the drug to be counterfiet or not. Shows how customers are willing to work with enterprises to solve a problem which affects them gravely.
by Vijesh Unnikrishnan,
09/21/2010 - 14:25
Danny Wong posted an interesting note at http://thenextweb.com/au/2010/06/18/the-business-case-for-co-creation/, where he lists both some new examples of customer co-creation. He also introduces the beginning of a typology of "countries and co-creation", arguing for example that Germany is good at food co-creation (who would've thunk it?) and the US at fashion co-creation. From our end, Venkat Ramaswamy and I would argue that emerging counties are generally better at co-creation than developed Western countries.
by Francis Gouillart,
10/21/2010 - 08:30
The messenger bag company Timbuk2 has always been a deeply co-creation oriented company. First, bags are made to order after customers design and create custom bags on the Timbuk2 website. Additionally, they solicit flickr pictures on how their customers have used and/or "hacked" their bags, and what they fill their bags with, to better innovate new products. Finally, their customer service is "community-powered" and wiki-oriented, so they have a captive group that is helping each other get more value out of their bags.
by Keith Katz,
08/22/2010 - 11:20
Chocomize is applies the concept of co-creation to chocolate. Consumers get to create their perfect bars by choosing their favorite chocolate base and adding up to five ingredients from a selection of over 100.
by Guest,
08/21/2010 - 19:18
Co-creation provides an emotional connection with products that even the best traditional design and execution can't provide. With co-created products like Blank-Label shirts, people say "I really had a part in creating this." It is a point of distinction and pride that adds to the value proposition and creates strong loyalty.
by Rob Shelton,
08/19/2010 - 19:38
Thanks for the mention, Ed.
To contribute to the conversation, co-creation has taken on a new form (in addition to open innovation / crowdsourcing), co-creation is also empowering consumers to 'be the decision maker' so companies can produce ONLY what individual consumers demand. That's an ideal world right?
by Danny Wong,
08/19/2010 - 13:52
Blank Label is a startup company that has discovered a demand for custom men’s dress shirts. Blank-Label.com is easy and interesting to use; visitors can focus on fabric design options rather than technical details. The process takes about 10 minutes, and shirts are delivered in three weeks or less, for a lower total cost than high-end shirts in US retail shops. As Blank Label says. “Custom 2.0 = Co-Created.”
by Ed Prewitt,
08/19/2010 - 13:21
Many companies these days are figuring out that it’s important to co-create with customers. Toyota’s Scion line is currently running a “Battle of the Builds” contest, in which members of the US military compete for cash prizes and fame to design the coolest xB model. Online voting from friends and fans will help determine the winner. The winning team’s car will be shown at the 2010 Specialty Equipment Market Association (SEMA) convention in November. Scion has worked closely with SEMA for several years to produce accessories for enthusiasts to add to their cars. Presumably the designs from Battle of the Builds will follow suit.
by Ed Prewitt,
08/06/2010 - 13:17
Innovation co-creation continuously generates powerful insights from the experiences of customers and builds a two-way, mutually valuable innovation process that stretches from concept to commercialization and all the way to positive cash flow. When Wacoal, an established Japanese apparel maker, planned to expand into adjacent markets in 2001, they mobilized dual-career, young women in their product development process using co-creation platforms. The engagement platforms allowed Wacoal to identify hidden consumer needs and engage lead customers in rich new product development collaboration.
by Rob Shelton,
08/06/2010 - 12:51
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In an article in the Boston Globe on September 5, Jenn Abelson described how Starbucks, Tim Hortons, and Dunkin Donuts are joining forces with their suppliers to create a more sustainable coffee cup. "So now they have decided to join forces. For the first time, Dunkin’, Starbucks, and Tim Hortons are working together to conquer the sustainable container. On Earth Day this April, the competitors convened with cup manufacturers, waste haulers, and municipal officials at a cup summit held at MIT. Since then, they have been sharing prototypes of innovative designs, researching ways to make it financially worthwhile for communities to recycle used coffee cups, and designing a pilot program for a waste-free zone at Faneuil Hall Marketplace where everything would be recycled or composted. The rivals, including Tim Hortons, are working together to persuade owners of paper mills that recycled coffee cups make for good boxes and other products. And that is why collaborating — and offering the recyclers a large volume of cups from all the chains — makes good business sense." It seems like more than just collaboration to me, especially if there is an engagement platform to help this be more than a one shot deal. The idea of co-created sustainability seems compelling.
by M.Deck,
10/22/2010 - 20:41
Companies such as HP have applied Co-Creation concepts to launch “reverse scorecards” to obtain supplier feedback and continuously improve their own supplier development processes and methods. These companies realize the limitations of current practices and are developing Enterprise Co-Creation capabilities to improve the interactions with their suppliers. These leading companies recognize that many of their suppliers have extensive knowledge and positive experiences from working with other leading customers.
by Albert Sun,
08/06/2010 - 13:48
Co-creation practices are increasingly common in business situations where an enterprise has a widely dispersed supplier base and the products that are being produced are complex, often R&D intensive. A case example would be Airbus who makes the A380. It has a large network of EU-based strategic partners, each responsible for design, development and production of major assemblies for the plane. Each one of these partners also manages an even deeper and broader network of suppliers. Developing the program management framework to efficiently and effectively manage critical interactions and decisions throughout the design, prototyping and manufacturing lifecycle would require extensive sharing of knowledge and experiences; the methods that Airbus employed to establish their program management framework are essentially the same as those used in Enterprise Co-Creation.
by Albert Sun,
08/06/2010 - 13:46
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Today, the Boston Globe has an article about the White House Office of Science and Technology sponsoring a co-creation contest to improve the condition of Type 1 diabetes patients, using Harvard as the community of people generating ideas. The interesting aspect of this contest is that the chosen ideas will now be turned over to the community of Harvard researchers who can get grants to go test the hypotheses that have been generated.
http://www.boston.com/news/health/blog/2010/09/_kevin_dolan_do.html
by Francis Gouillart,
09/28/2010 - 18:34
Francis. While Welldoc's "product" is indeed the analytical software to help a diabetic asssess how well they are managing their condition and gives them guidance on steps to take to improve it, I believe Welldoc's also contributes to a co-creative experience for the diabetic patient. The analytical information that comes from Welldoc's software is not only shared with the patient but also the patient's doctor/care givers. It can also share this information with the insurance company. The doctor and insurance company can then send the patient additional information using the same systems to help the patient better manage the disease. This allows new types of interactions between the patient, the doctor and the insurance company. I believe this is in many ways a co-creative approach to disease management that Welldoc enables along with their partners (the cellphone company for example).
by Doug Billings,
08/31/2010 - 14:15
I've seen some great examples of co-creation in government, but I'm curious if any research has been done around co-creation in politics. In essence, town hall meetings and similar forums can be seen as simple engagement platforms (if utilized correctly), but have any politicians (or aspiring ones, at that), brought more of a focused ECC discipline to developing/refining their platform? This would seem to be the next evolution in not only listening to ones constituents, but increasing transparency to the point where the candidate is actually co-creating his "agenda" alongside his voters.
by Keith Katz,
09/22/2010 - 11:06
Doug, I don't know much about Welldoc. I just looked their site up, but it is hard to see how successful they are. It also looks like their focus is more analytical, i.e., building outcome models, rather than designed for the patient's experience. Is this impression correct?
by Francis Gouillart,
08/13/2010 - 22:04
Welldoc is an example of a company founded based on co-creation among public, private, and social entities. It has an enduring engagement platform (operated on a specialized cellphone) that integrates the relationship of the patient, the physician/nurse and the health insurer with the goal of improving patient compliance and care. The Welldoc concept originated with Becton Dickinson’s diabetes care business. BD worked with a variety of potential partners for the effort including Sprint and the precursor to Welldoc. Ultimately, BD decided to withdraw from the effort but the strength of this co-creative approach to a very important medical problem ultimately become the Welldoc Diabetes Care solution.
by Doug Billings,
08/06/2010 - 13:55
Many municipalities around the world have taken to e-government to involve citizens more deeply in their operations. Just one example is the London borough of Lewisham, which operates a website, LoveLewisham.org, on which people can report trash, graffiti, and other problems that need fixing. People typically upload photos, the site of the problem is mapped, and the municipality reports on progress in resolving the issue. This high degree of transparency keeps government accountable and creates confidence in the citizenry.
by Ed Prewitt,
08/06/2010 - 13:17
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The Power
of Co-Creation
Build it with them to boost growth, productivity, and profits
by Venkat Ramaswamy & Francis Gouillart
TAG CLOUD:
Albert Sun
3PL
co-creation
Ryder
crowdsourcing
employees
ITC e-Choupal
public entities
Freightliner
innovation
private entities
mass collaboration
Wacoal
supplier ecosystem
government public-sector co-creation campaigns
suppliers
Orange Telecom
B2B2B...2C
social entities
enterprises
open innovation
customers
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