Kicking Off Co-Creation

Even as more and more C-level executives are embracing co-creation as a strategy and transformation paradigm, most companies start with the redesign of a single operational process. This is a practical way to test what your company can do with co-creation. It is easiest for people to grasp co-creation as "the new reengineering."

Reengineering and quality are about "the process." Conventionally, the aim is to remove as much variability of outcomes as possible and make the process predictable. This is for example what Six Sigma does. The idea is to standardize steps around a cost-effective "average" experience for the customer. The reengineering and quality approaches design steps that flow one-way from the company to the customer.

Co-creation is about people. They want to generate personalized experiences for themselves, not be automatons in a process, whether they're employees or customers in that process. In other words, they want to exert their creativity in some fashion in that process and co-create. It's just the way we're built: we like to use our intelligence to influence things that touch us. We don’t simply want to "execute."

Many people carry a false dichotomy in their minds that process design and quality are about cost and efficiency, while strategy formulation and innovation management are about growth, and never the two shall meet. This is a complete misconception, which co-creation challenges. Co-creation is a process design methodology, or more accurately, an interaction design methodology, that has a lot to say about reducing cost and improving efficiency in operations, but it is also an innovation and strategy approach that will drive revenue growth in your organization. In fact, innovation and strategy nearly always starts with a change in an operational process.

Starting from that premise, we have developed an analytical arsenal that defines what the experiences of all players are, how interactions can be conceptualized, and how transparency and dialogue can fundamentally change the experiences of all parties and dramatically reduce the cost and risk of those interactions.

Co-Creation in Practice

Co-creation is driven by both employees and customers working together. This is in fact why we call it co-creation. The ultimate vision has to be to engage the customers in co-creation, but if you're not co-creating inside with your employees first, you'll have no credibility with customers. So the first step in the chronology of your transformation has to be to work with your own people and prepare them for co-creation. The best place to start is with the people at the point of contact with the customer because they, by definition, represent the frontier between the internal and external worlds for the organization.

Many companies make the mistake of wanting to start with customer co-creation. They typically open a customer community website in the hope that if they build it, customers will come, but they then discover that it has very low traffic and does not amount to a hill of beans. We often get calls from companies that tell us, "we tried the co-creation thing and it did not work." But what can you really expect if there's nothing behind the site, except perhaps a couple of low-level employees in the marketing department or the partner advertising agency, without any connection to the rest of the organization? Customers will see through that in about two minutes and will not bother coming back. Making your site into a real co-creation site requires connecting the website moderators to product design people, customer service people who could do something about the ideas, and so on. This requires internal co-creation within your firm. Without that, you’re only offering a façade that will crumble in short order.

Ultimately, the company with the longest, most energized co-creative chain wins the competitive battle. Few people actually measure the experience of employees and customers on the same scale and in the same format – typically, HR runs the employee survey and Marketing the customer satisfaction ratings – but the few organizations that connect the two know how the quality of experience massively correlates all along the chain of employees and customers. To see that intuitively, just think back to your last negative customer service call, and imagine how frustrated the call center person at the end of line must have been because he or she couldn't do anything about your problem. Most companies are hopelessly disconnected in their measurement of customer and employee experience, which prevents them from seeing the co-creation opportunities.

Co-creation is happening in the United States, Europe, Asia, and all over the world right now. It is of interest to developed and emerging markets alike. For example, there are vibrant applications of co-creation at the "bottom of the pyramid" in countries like India and Brazil. But there are also many co-creation initiatives in developed markets, in industries such as software development, fast-moving consumer goods, financial services, and telecommunication. One of the fastes-growing areas for co-creation is in the business-to-business world. We are also seeing an increased propensity on the part of governments and regulators to co-create.

The greatest challenge of co-creation for many executives is "letting go." Co-creation requires some humility. Many industries and functions have had a dominant expert logic for many years, and that often makes it hard to accept the notion of engaging a large number of people in co-creating what you have been an expert at. The pharmaceutical and healthcare industries, for example, have traditionally relied on the brilliance of the scientist or the doctor more than on the wisdom of engaging their employees or patients, for example, but even that is changing rapidly. The marketing field is also rapidly warming up to co-creation.

We look forward to co-creating the future with our clients.