For years, IT has been involved in a formal dance with its customers, but in the disruptive world of co-creation, it now needs to change its shoes and learn to tango. The question is: are you experienced?
Marketing organisations were early adopters of the co-creation dance, realising that focus groups could play an active role in defining new products, not just passively reacting to suggestions put before them.
For example, GE partnered with crowdsourcing community Local Motors to co-create the future of the appliance. The first result is the Green Bean Maker Module, which gives access to the electronics inside GE appliances so you can build apps to control them from your computer or phone.
Now the moves are heating up and competition is shifting from products and services into customer experience as businesses use co-creation to develop what they offer.
A decade ago, University of Michigan professors CK Prahalad and Venkat Ramaswamy published their seminal work on co-creation, The Future of Competition – Co-Creating Unique Value with Customers. A decade later and we find firms are still dancing with two left feet.
To help organisations succeed with co-creation, the LEF with Ramaswamy have published A Guide to Co-Creating Value with Your Customers. In the co-creation tango, our experience has led us to outline the following four dance steps that form the basis of effective co-creation:
Read more opinion from the LEF
- Traditionally, enterprise IT controlled the choice and supply of information technology within the firm – but that relationship is changing.
- As information technology becomes ever more strategic and pervasive, effective digital leadership is needed by just about every organisation.
- Today’s highly interconnected customers, industry ecosystems and cloud computing platforms are pushing the business centre of gravity outside the walls of the firm.
Identify all your stakeholders
Customers are not your only co-creators. Groups within your organisation have a stake in how you operate and need to be involved in co-creation. For example, most firms have gatekeepers – such as tax, legal and HR – who have a stake in how you operate. There is an opportunity to “get the gate to swing both ways”, so they not only protect the brand but also identify and promote opportunities.
You should include external stakeholders, such as suppliers and regulators, too. In the past, before the internet, it was difficult and time-consuming for stakeholders outside the organisation to find each other, converge on a position and then engage with the organisation. Now this kind of engagement can happen in minutes, across the globe. This new ability to mobilise at scale makes it risky for organisations to ignore these other stakeholders.
Discover what it is that they value
Not all stakeholders are in it just for the money. Some (such as NGOs) are looking for recognition and publicity, such as a nice article in The Economist; gatekeepers may be seeking internal approval from the board. The beauty of co-creation is that it is not a zero-sum game. The goal is to make the pie bigger, but to recognise that some of the slices may be made of different stuff.
Figure out how they can be a resource to you
Co-creation is not just linking arms and singing Kumbaya. You need to see how working with each stakeholder can help you – remembering that financial goals are not the only goals that require resources. For example, Reebok’s Nano shoe was designed by the user community who will train with it.
Think hard about how IT can help
Nearly all business interactions involve some use of IT. Co-creation creates many opportunities for IT to improve the effectiveness and efficiency of working together with stakeholders, and the key to co-creation is establishing effective engagement platforms that connect stakeholders to your business. This will depend on the nature of the stakeholder.
Co-creation creates many opportunities for IT to improve the effectiveness and efficiency of working together with stakeholders
Doug Neal, Leading Edge Forum
So, for a stakeholder group concerned about the materials used in manufacturing, you might insert an engagement platform at the very beginning of the supply chain; while for another concerned about the way the purchase of your product is affected by the interest rates set on long-term purchases, the engagement platform would be at the end of the supply chain, in the sales function.
There is already a wide variety of new technologies that can be combined in interesting ways to create and test engagement platforms, but because they are new, few of us have enough experience to use them in this way. Many of these technologies are inexpensive and lend themselves to hands-on learning within a safe, sandbox-style environment, open to a diverse range of stakeholders, for the purpose of creating and testing engagement platforms.
This is what we call an Xperience Lab, and we recommend it as a priority for enterprise IT in contributing to co-creation.
We have found that it works well to make our Xperience Lab a portable capability that we can take to stakeholders. We fill a foam-padded travelling box with a mix of technologies, ranging from iBeacons to virtual reality/augmentation, and take this kit to business units and stakeholders so they can learn what is now possible and reasonable to expect.
These four steps give you an “elevator speech” to respond to questions about co-creation and what is involved. More importantly, explicitly carrying them out can reduce the risk and increase the value of your co-creation efforts.