Co-creation


Given the blistering rate of change, increasingly savvy consumers, and a noisy market, businesses must change the way they engage customers, particularly for new product innovation. Here, the requirements are nebulous, ever-evolving, and customers have as vague a notion of what they really need as their suppliers do. There are tools for navigating this grey-zone of ambiguity. One of them is co-creation.

Co-creation has a variety of related definitions:

From businessdictionary.com:

A business strategy focusing on customer experience and interactive relationships. Co-creation allows and encourages a more active involvement from the customer to create a value rich experience.

From Wikipedia:

Co-creation is a form of marketing strategy or business strategy that emphasizes the generation and ongoing realization of mutual firm-customer value. It views markets as forums for firms and active customers to share, combine and renew each other’s resources and capabilities to create value through new forms of interaction, service and learning mechanisms. It differs from the traditional active firm – passive consumer market construct of the past.

These and a plethora of related definitions contribute to an overall understanding that is broad, and points to a range of opportunities and operating contexts.

WHY we co-create is because we don’t really know what the solution to a problem might be, and we need a customer with a problem to collaborate with a firm that can build a solution. And we don’t know what the final result will look, feel or smell like. But we agree, in this partnership, that we will invest in building something together.

HOW we co-create is we align our processes, build and test potential solutions until we have something that works. This can include embedding a customer’s staff into a development team. It can mean a supplier embeds its staff with customers. It can mean extremely frequent and fast feedback. In other words, the execution can take a variety forms that span the range from shoulder-to-shoulder co-development to an experiment-test-share-learn cycle that repeats until the solution emerges.

There are challenges to deal with.

  • How do you manage intellectual property rights?
  • How do you deal with competing product requirements from multiple customers?
  • How are revenues or profits shared?
  • What is the investment model for the customer and the supplier?
  • When do we pull the plug on something that is not working?
  • How do you manage situations where the supplier’s vision is evolving differently than that of the customer’s?
  • As a customer, how do you manage a situation where the solution may be sold to competitors?

Join me at Agile2013 in Nashville and we’ll explore co-creation challenges, opportunities, risks, and build a set of handrails to help you navigate co-creation for you, your customers, and your suppliers.

Session Details are here.

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2 thoughts on “Co-creation

    • Hi David,
      If I had to choose one single insight from the presentation, it would be the following. Despite having a clear goal to come up with a win-win partnership between the consumer and the supplier, there is a bias toward to getting the best for yourself at the expense of the the other party. Neither side seems willing at first to give anything away fearing that the other side will take advantage. The message to anyone engaging in co-creation is to start by building a relationship with the other party before engaging in a negotiation.

      I ran an exercise where I asked the room to split into two groups with each side taking one of the consumer or producer roles. Each side was given a few minutes to develop a value proposition. When they started their dialogue, it took about 30 seconds before both sides were angling for the best deal rather attempting to solve the problem as a collaborative team. This is fairly normal if you have never engaged in co-creation before. Co-creation is more like a marriage than a typical supplier-consumer relationship.

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