Conversation on Experience Co-Creation

Children of the web
"We're now at the busy crossroads where globalization meets Web 2.0. This presents both a challenge to the old ways of doing business and an opportunity to gain tremendous leverage via the right goods and services. To thrive in this era, companies will have to figure out how to engage young people from all over the world when they conceive of products and services. Businesses need their help in turning concepts into finished products and, especially, in marketing them. Another angle: Companies can follow the trail of blogs and social networking sites to find and recruit young employees all over the world...
"Google utilizes a worldwide network of friends of employees to help it design new Web services. Google designers send out early mock-ups of Web pages for people in the network to comment on. 'They're co-creating products. They're not writing software code but are offering a huge amount of insight to shape the products,' says Google product manager Marissa Mayer."
— BusinessWeek

An information commons
"Traditionally all resources were considered to be scarce. Nowadays however, we are dealing with resources that are abundant (think of information, ideas, experience), but that also have other characteristics that demand a different way of thinking. In a world of abundance and plentiness we need to rethink our thoughts about values and individuals."
— European Centre for the Experience Economy

The co-creation of creativity
"Over the last few years we’ve seen old barriers to creativity coming down, one after the other. New technologies and services makes it trivial to publish text, whether by blog or by print-on-demand. Digital photography has democratised a previously expensive hobby. And we’re seeing the barriers to movie-making crumble, with affordable high-quality cameras and video hosting provided by YouTube or Google Video and their ilk."
— Strange Attractor

The major impacts of co-creation
"Co-creation is one of those trends that will have a major impact on businesses in the coming months and years... it’s a result of the emerging networked economy: a grassroots, bottom-up, self-organizing way of living and doing business. More on self-organizing systems later; for now, here’s the first in a series of 7 or 8 posts on the subject of co-creation."
— Mantra Brand Consulting

The operations avenue to ECC
"The Experience Co-Creation (ECC) approach starts with the operational process through which customers interact with the company and generate their own experience. It offers a practical starting point on how to change the rules of the game. This 'reengineering' of the interaction process will, at the minimum, lead organizations to new operational insights on how to interface with the customer, creating one of the most effective 'operations innovation' methodologies available.
The true ambition of the Experience Co-Creation process, though, is to go beyond operational innovation. In many cases, the approach will generate new strategic insights and allow the organization to create a new competitive game altogether. Its strength lies in gradually 'morphing' the existing capabilities of the firm toward the new world of Experience Co-Creation, by bringing some of its key capabilities to interact more effectively with the customer. This practicality contrasts with many of the 'discontinuous' methodologies, which require leaps in capabilities which few companies are able to make."
— MAC Partnership

A new perspective on the experience economy
"The experience economy is about more than just offering a staged setting for an experience. The point of departure needs to be the individual’s personal experience: his or her everyday world and societal context.
"In linking personal, social, cultural and economic experiences and making them manageable in practice, A New Perspective on the Experience Economy takes the current state of knowledge in this field a step further. The authors approach the experience economy from the perspective of the individual and his or her potential program of giving meaning to his or her life. We are returning to a human scale in our thought and actions and shift the focus from ‘the supplier’ and ‘the organisation’ to ‘the individual ‘. This article describes the foundations of meaningful experiences, the particular design principles that apply to them and how you can bring the whole concept – from the idea to the reality – Into actual practice. The experience economy is more than just ‘excite me’, ‘feed me’ and ‘entertain me’. Businesses and organisations can play a meaningful role in helping the individual to find his or her own way."
— A New Perspective on the Experience Economy

The power of us
"The nearly 1 billion people online worldwide – along with their shared knowledge, social contacts, online reputations, computing power, and more – are rapidly becoming a collective force of unprecedented power. For the first time in human history, mass cooperation across time and space is suddenly economical. 'There’s a fundamental shift in power happening,' says Pierre M. Omidyar, founder and chairman of the online marketplace eBay Inc. 'Everywhere, people are getting together and, using the Internet, disrupting whatever activities they’re involved in.'
"Behold the power of us. It’s the force behind the collective clamor of Weblogs that felled CBS anchorman Dan Rather and rocked the media establishment. Global crowds of open-source Linux programmers are giving even mighty Microsoft Corp. fits. Virtual supercomputers, stitched together from millions of volunteers’ PCs, are helping predict global climate change, analyze genetic diseases, and find new planets and stars. One investment-management firm, Marketocracy Inc., even runs a sort of stock market rotisserie league for 70,000 virtual traders. It skims the cream of the best-performing portfolios to buy and sell real stocks for its $60 million mutual fund."
— BusinessWeek.com

Co-creation and customer intimacy
"Co-creation is perhaps one of the ways of sustaining customer intimacy. The idea of co-creation has been probably there for some time but the articulation of it perhaps went unnoticed till the book ' The Future of Competition: Co-creating Unique Value with Customers' by C K Prahalad and Venkat Ramaswamy was released last year."
— Guruspeak: Why IT Management Matters

Consumer-to-consumer action
"Consumer-to-consumer interaction suggests, by definition, a concept of mutual action. Different types of consumer-to-consumer interactions can be placed along a spectrum from perfect market interactions to word-of-mouth interactions. Especially, the latter type, i.e. word-of-mouth, signals major implications for businesses and the economy. However, consumer-to-consumer interactions do not certainly occur in a vacuum. Rather, they transpire in, and to a great extent are motivated by, a medium, what Prahalad and Ramaswamy (2004) come to call an 'experience environment.' Consumers interact with products, retailers, devices, employees, channels, and cultural artifacts such as advertising. Hence, the experiences a consumer enters into, undergoes, or lives through play an important constitutive role in consumer-to-consumer interactions."
— Kerimcan Ozcan

The big switch
"Give or take a few hours, our average day follows the 888 pattern: work 8 hours; live 8 hours; sleep 8 hours. Not much changes in the world of work or sleep (thank god), but those 8 hours we actually live are going through a beautiful metamorphosis. Our focus with this blog is on the big switch in media and marketing - the switch of control from marketer to audience - because that’s the world we work in."
— The Big Switch

The Ecosystem of Co-Creation

Several current conceptual approaches can be viewed as part of the larger movement toward experience co-creation.

Chan Kim and Renée Mauborgne – Blue Ocean Strategy
In their best-selling book of this title, INSEAD faculty Kim and Mauborgne outlined a radical departure from the traditional model of corporate strategy, which has focused on internal capabilities. Blue Ocean Strategy recognized that innovation is driven by a value proposition from the customer perspective. The book developed a straightforward economic view of that value proposition in the form of the "value curve," a handy notation at the very aggregate level of a firm’s strategy which has become associated with popular examples of innovation such as Yellow Tail wine and Cirque du Soleil.
Experience co-creation seeks to build on Blue Ocean Strategy by examining company-customer interactions in detail and redesigning experience environments at the individual level, in effect getting customers and their communities to do more of the work that the firm used to do, while allowing them to create a better experience.

Eric von Hippel – user innovation
Von Hippel, a Professor and head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management, is a longtime researcher in the innovation field. He argues that in many industries, new product and service ideas come from lead users – that is, customers who utilize the product or service in extreme conditions and effectively help the company co-create new offerings as a result. After being recognized for his work on this customer-driven innovation, Von Hippel moved on to writing about communities jointly developing new products and services, in the Linux and Apache mode. From the standpoint of experience co-creation, Von Hippel’s work is a special case of co-creation, focused on the product design process (in keeping with MIT’s focus on product innovation). But we believe that the co-creation phenomenon is much larger than product or service design and extends to all interactions.

Henry Chesbrough – open innovation
The open innovation phenomenon is again a special case of co-creation, also focused on product development. Chesbrough is an Adjunct Professor at the University of California–Berkeley and Executive Director of the Center for Open Innovation at the school’s Institute of Management. The best known example of open innovation is Procter & Gamble, which today relies less on captive labs and more and more on a process of tapping the world’s collective intelligence for developing new technical ideas and new product applications. This is P&G’s Connect & Develop initiative (as opposed to Research and Development). Many FMCG companies, including Unilever and Altria, now conduct some form of open innovation program.

Andrew Hargadon – technology brokering
Hargadon is an Associate Professor of Management at the University of California, Davis. He focuses on the sources of new ideas and the concept of “technology brokering.” This approach states that innovation occurs when companies, in attempting to solve new customer problems, are able to assemble existing technologies and solutions in creative fashion. Technology Brokering requires building a structured process that links known customer problems with internally and externally available solutions.

Patricia Seybold – customer-centricity
Patricia Seybold, founder of an eponymous consulting firm and author of several books, focuses on the customer perspective, as obtained through customer scenarios. Her basic argument is that most companies do not understand the true issues in those customer scenarios because they do not know how people use their product or services. Increasingly she is writing about the co-creation nature of these interactions, including the role of communities, although her vantage is mostly limited to marketing.

Don Tapscott – wikinomics
Wikinomics, a book and associated website created by Don Tapscott, is probably the most visible embodiment of co-creation today. Tapscott has long been a guru on the role of information technology in business, and he has now focused his views of IT on what we would call co-creation. His vantage point is essentially economics: companies can change their economics of business by involving customers in doing some of the work that firms historically did themselves.

Mavericks at Work
Bill Taylor and Polly Labarre are former journalists from Fast Company magazine. Their book, Mavericks at Work: Why the Most Original Minds in Business Win, draws insights on innovation from a collection of perceptive case studies. They are focused on communities, the involvement of customers in product definition and the opening of the innovation process.

James Womack – lean consumption
Womack, who is founder of the nonprofit Lean Enterprise Institute and has done much to popularize lean manufacturing concepts, has recently extended his thinking to lean consumption. The basic concept is that, just as firms have an operations process for creating products, there is a customer process in using these products, and analysts should seek to understand the customer process (in a similar fashion to Patricia Seybold’s customer scenarios). From the standpoint of experience co-creation, lean consumption does not focus on interaction; that is, it views company-customer contacts as the overlap of two processes that should be staged as effectively as possible, but there is no examination of how to design an experience environment that allows a very contextual experience to be co-created through interactions.

McKinsey & Company and Jeffrey Rayport – interfaces
Both Rayport, formerly of the Harvard Business School, and McKinsey have written a lot about interfaces, in particular the need to develop an appropriate customer interface. When should companies use a live salesperson, a call center representative, a website, a kiosk or another approach? This detailed operations work, which involves characterizing the type of interaction that the customer wants and matching the most suitable type of interface, is in effect a segmentation of customer needs in terms of mode of interaction, resulting in the design of the most cost-effective and benefit-generating interface. There is no attention to how co-creation should influence the choice of that interaction – the very term “interface” connotes a fairly passive process rather than an interaction – nor is there any view of what the architecture of the integrated experience ought to be.