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What is Experience Co-Creation?
In the conventional strategy paradigm,
companies are in the business of designing, producing, and delivering
products and services to groups of customer they target. They put together
a value chain that assembles unique competences. These may
involve insights about the market, access to economies of scale, proprietary
technology, or an advantaged raw material position, among others. Companies
study the market, target segments within it, articulate value propositions,
and customers respond to those propositions by buying or not buying.
This paradigm has served us well for many years. There are many examples
of successful product-centric and service-centric strategies over the
last thirty years. Today, however, changes in the fundamental conditions
of business are causing the traditional value chain view of business
to crumble – at both ends.
The Problem
 Customers have more and more products and services available to them,
yet are increasingly frustrated in their dealings with them. Customer
satisfaction ratings are declining or flat across many industries;
customer loyalty is increasingly a thing of the past. Technology gives
innovators and marketers more and more options in designing products
and services, yet they struggle to differentiate offerings.
Complexity and inflexibility
frustrate time-starved consumers. In spite of their best efforts at
delivering customer value, many companies are locked into a firm-centric
paradigm. They fail to develop the interaction process that would engage
customers in a two-way design of the value that the firm can deliver.
Why Do We Have This Problem?
Customers today are not passive, but instead highly connected
and networked. They no longer rely on the company’s sales force
or corporate marketing to get information about products and services.
Anyone who recently has bought a car, an electronic product, or a financial
product probably found that they knew more than the people from whom
they were buying.
At the company’s end, what were formerly were unique competences
are increasingly outsourced, and readily available on a utility basis
from various suppliers around the world. The outsourcing phenomenon is
most visible in IT services and manufacturing, but also increasingly
manifest in product development, where Asian firms can for example provide
PC or cell phone designs virtually overnight.
The Solution
Customers today have a need to co-create value through compelling experiences
with the firm. Companies must develop interaction processes that let
customers participate in designing their own value outcomes at that
particular point in time. The roles of strategy, innovation and marketing
must be recast to redesign the firm’s interface processes for
the co-creation of customer experiences.
In the conventional product and service paradigm, companies are in the
business of designing, producing and delivering products and services
to groups of customer they target. They put together a value chain that
assembles unique capabilities. These may involve insights
about the market, access to economies of scale, proprietary technology
or an advantaged raw material position, among others. In traditional
strategy, marketing and innovation approaches, customers are passive
recipients of the firm’s offerings. Companies study the market,
target segments within it and articulate value propositions, and customers
respond to those propositions by buying or not buying. Value is thought
to reside in the “value chain,” which is controlled by the
firm. This paradigm has served us well for many years.
 In their groundbreaking book The Future of Competition, C.K. Prahalad
and Venkat Ramaswamy argue that a new paradigm is emerging, which they
call Experience Co-Creation (ECC). In the ECC paradigm,
core competences are no longer located in the “value chain” of
the company, but at the point of interaction between the customer and
the firm. Once a company accepts this premise, it starts on a journey
that will require that it develop four new capabilities.
First, the company needs to focus on the experience of the customer,
no longer on its own products and services. The development of a positive
experience for customers requires that they be allowed to engage in modes
of interaction of their own choosing, not those unilaterally established
by the firm. On the company side, this demand for a more participative
interaction triggers the need for greater flexibility, demanding that
the firm open up its supply chain to other network constituencies outside
its own walls. These new resources may include partners/suppliers or
customer communities interested in providing input. Ultimately, the firm
needs to put in place co-creation platforms that allow an ongoing interaction
between the firm, customers and the extended network, and also allow
a continuous development of new experiences for the customer and generation
of new opportunities for the firm. Put together, experience, interaction,
network and co-creation define the four capabilities that will be required
of firms in the ECC world.
Our Approach
 ECC Partnership conducts a four-part ECC process, consisting of an introduction,
intensive workshops, internal training and coaching.
- Awakening Workshop
The initial phase in the ECC process is a one- to two-day workshop
for senior executives and their direct reports to awaken them to
the possibilities of experience co-creation and the dangers of standing
pat. Awakening workshops are facilitated by ECC Partnership senior
staff and require the concentrated engagement of participants. Prepared
research examples are tailored to industry comparisons. Awakening
workshops typically result in early-stage ideas and hypotheses for
direct ECC action.
- Ideation and Mobilization Phase
Following the Awakening Workshop (or where executives are already committed
to experience co-creation, in lieu of the initial workshop), the I&M
phase is a self-contained, 12-week effort involving a team of client
resources, supported by ECC Partnership staff. The I&M phase is
aimed at identifying specific new opportunities for the company to
co-create experiences internally, with its customers and with its extended
network. The I&M process begins by engaging customer-facing employees
in a series of co-creation workshops, then extending the workshops
to actual customers. These workshops result in a register of ECC solutions;
the creation of a detailed business plan; and an agreed-on project
plan identifying deliverables, milestones and resources.
- Scale & Transform Phase
In the third phase of the ECC process, the projects identified during
the Ideation & Mobilization phase are seen to fruition, typically
by an ECC Center of Excellence. Equally importantly, the practice and
concepts of experience co-creation are incorporated into the company’s
operations. During the S&T phase, leadership of the experience
co-creation initiative transfers from ECC Partnership to the company.
- Learn & Develop Phase
In this final phase, the emphasis is on coaching internal staff to
support the various streams of co-creation that have been launched.
With the proliferation of co-creation into multiple businesses and
multiple processes, it is necessary to bring to bear a larger percentage
of the organization.
Our Practice Areas
ECC Partnership applies the paradigm of experience co-creation in eight areas:
- Innovation and design
Outcome: "Experience innovation."
- Branding, customer insights, marketing, communication and sales
Outcome: "Brand as the co-created experience."
- Process design, process performance and quality management
Outcome: "ECC-enhanced process design."
- Information and communications technology
Outcome: "ECC-enabled IT."
- HR processes, leadership development, organizational change and culture
Outcome: "ECC-enhanced HR."
- Bottom of the pyramid, social innovation, citizen-centric government and corporate social responsibility (CSR)
Outcome: "Social innovation through co-creation."
- Strategy, strategic planning, corporate reporting and governance
Outcome: "Co-created governance."
- Supply chain
Outcome:
"Co-created supply chain."
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