Growing through innovation is the dream of all business leaders. The idea of having a predictable and stable portfolio of product, service and administrative innovations, with high margins and with the long-awaited goal of being the first in the market, is what virtually all those in charge of defining a strategy in a company seek. Why, despite the fact that everyone wants it, is innovation still so scarce and complicated?
The reality of many companies is that the top managers have too many incentives to focus on results in the short term. Organizational incentives encourage incremental change, but do not favor experimentation or risk taking. In general, managers do not know how to develop products and disruptive technologies, have little tolerance toward risk and do not know how to measure the performance of creative groups and innovations.
On the other hand, the main obstacles to innovation are the long periods for development, the lack of coordination between the areas of the company, a risk-averse culture, scarce knowledge of the customer, poor selection of ideas and lack of understanding of the adequate measurement tools.
One way to counteract these drawbacks is to co-create. Co-creation is defined as a business or marketing strategy that results in the generation of joint ideas between the company and its clients.
Markets participate in debate and discussion forums for both the most active companies and consumers. Thanks to this, there is a change in the traditional model of passive consumption, and criticism, combinations and new possibilities are generated.
Through co-creation everyone is expected to win: the organization is better aware of the perception of its product or service through the voice of its own users and these individualize the offer.
Thus, co-creation creates close experiences with groups of clients or potential clients, whose cooperation with the company makes both achieve synergies.
Many organizations have implemented co-creation by asking people around the world what ideas they have. What makes co-creation work for some companies and others not?
Co-creation is not recent. At the beginning of the 19th century, Napoleon found the solution to the problem of providing nutritious food to his troops on the march through co-creation. Without a doubt, the internet has extended the use of this tool and we increasingly find more examples of successful cases. For example, Tchibo, a cafeteria and department store of German origin and with stores throughout most of Europe, launched its platform “Tchibo ideas” in 2008, to know the daily problems of its customers and to ask them to propose solutions. Netflix has also used this system. It received more than 44,000 contributions and improved its recommendations system by 10%. Starbucks launched MyStarbucksidea.com to gather ideas from its customers and has received more than 100,000 proposals from around the world.
NASA asked how it could reduce exposure to cosmic rays on the International Space Station. More than 1,000 people proposed solutions and four received an economic compensation for the creativity of their ideas.
One of the main objectives of co-creation is to develop new products, for which you have to have more ideas of products that people need or solves a problem for them. But one must not forget that it is also a way for customers to feel accepted and appreciated.
According to Dahlander and Piezunka (2017), successful organizations in co-creation undertake two types of actions.
Proactive attention: give to get
Instead of waiting for ideas to be presented to them, organizations should propose ideas and invite people to discuss them. Thus, people will know what ideas the organization expects, in addition to gaining the confidence of feeling they are part of the innovation process. This will empower the participants, as they can evaluate the ideas of the organization. A reciprocal communication is established and the exchange of knowledge is encouraged and there is motivation to continue proposing ideas.
This is even more important when a company takes the first step of these initiatives. Nobody wants to be the first to suggest something, so the organization should be the first.
Reactive attention: showing that is matters
Organizations that respond publicly to suggestions receive quite a few more outside suggestions. With this, the proponents of ideas are validated and they are encouraged to follow up on their proposals. At the same time, it sends a signal about what kind of suggestions the organization values most.
New proponents also learn what interests the organization and feel cared for and recognized.
In sum, co-creation also has advantages and disadvantages. It makes customers feel accepted and helps the company introduce new products that are more innovative and creative. It can also serve to approach marketing niches that the organization has not yet explored. Another advantage is that it reduces costs of market research, because the company can find out trends and offer improved products. At the same time, the company draws the attention of the media and increases and narrows the relationship with is customers, which currently is a crucial asset.
Among the disadvantages of co-creation is the problem of how to make customers feel needed, without giving much importance to the concrete development of the products. Do not forget that you will not materialize all your ideas. It is possible that a good part of the products that are proposed are “good wishes,” but they are not profitable. When organizations serve different types of customers, the evaluation and selection of ideas is a complex and multi-factored process that can generate great skepticism between customers and designers.
The value of co-creation occurs in the psychological, economic and organizational planes. On the psychological side, customers feel better because they are taken into account not only to externalize their problems, needs or trends, but also to propose solutions. Economically, companies detect business opportunities and increase profits. And on the organizational, the costs of innovation and generation of ideas are reduced, in addition to reducing the uncertainty about whether a new product or service will be successful, which increases the productivity of the company.
In order for co-creation to generate value, the company must focus on the experience of all the participants: customers, employees, suppliers and others. It should seek a direct interaction in order to have the appropriate and efficient tools, such as a well designed, functional and easy-to-use platform.
References
Dahlander, L., Piezumka, H. (2017) Why Some Crowdsourcing Efforts Work and Others Don’t. Harvard Business Review.
The Co-Creation Process: A Good Option for Innovation?
Growing through innovation is the dream of all business leaders. The idea of having a predictable and stable portfolio of product, service and administrative innovations, with high margins and with the long-awaited goal of being the first in the market, is what virtually all those in charge of defining a strategy in a company seek. Why, despite the fact that everyone wants it, is innovation still so scarce and complicated?
The reality of many companies is that the top managers have too many incentives to focus on results in the short term. Organizational incentives encourage incremental change, but do not favor experimentation or risk taking. In general, managers do not know how to develop products and disruptive technologies, have little tolerance toward risk and do not know how to measure the performance of creative groups and innovations.
On the other hand, the main obstacles to innovation are the long periods for development, the lack of coordination between the areas of the company, a risk-averse culture, scarce knowledge of the customer, poor selection of ideas and lack of understanding of the adequate measurement tools.
One way to counteract these drawbacks is to co-create. Co-creation is defined as a business or marketing strategy that results in the generation of joint ideas between the company and its clients.
Markets participate in debate and discussion forums for both the most active companies and consumers. Thanks to this, there is a change in the traditional model of passive consumption, and criticism, combinations and new possibilities are generated.
Through co-creation everyone is expected to win: the organization is better aware of the perception of its product or service through the voice of its own users and these individualize the offer.
Thus, co-creation creates close experiences with groups of clients or potential clients, whose cooperation with the company makes both achieve synergies.
Many organizations have implemented co-creation by asking people around the world what ideas they have. What makes co-creation work for some companies and others not?
Co-creation is not recent. At the beginning of the 19th century, Napoleon found the solution to the problem of providing nutritious food to his troops on the march through co-creation. Without a doubt, the internet has extended the use of this tool and we increasingly find more examples of successful cases. For example, Tchibo, a cafeteria and department store of German origin and with stores throughout most of Europe, launched its platform “Tchibo ideas” in 2008, to know the daily problems of its customers and to ask them to propose solutions. Netflix has also used this system. It received more than 44,000 contributions and improved its recommendations system by 10%. Starbucks launched MyStarbucksidea.com to gather ideas from its customers and has received more than 100,000 proposals from around the world.
NASA asked how it could reduce exposure to cosmic rays on the International Space Station. More than 1,000 people proposed solutions and four received an economic compensation for the creativity of their ideas.
One of the main objectives of co-creation is to develop new products, for which you have to have more ideas of products that people need or solves a problem for them. But one must not forget that it is also a way for customers to feel accepted and appreciated.
According to Dahlander and Piezunka (2017), successful organizations in co-creation undertake two types of actions.
Proactive attention: give to get
Instead of waiting for ideas to be presented to them, organizations should propose ideas and invite people to discuss them. Thus, people will know what ideas the organization expects, in addition to gaining the confidence of feeling they are part of the innovation process. This will empower the participants, as they can evaluate the ideas of the organization. A reciprocal communication is established and the exchange of knowledge is encouraged and there is motivation to continue proposing ideas.
This is even more important when a company takes the first step of these initiatives. Nobody wants to be the first to suggest something, so the organization should be the first.
Reactive attention: showing that is matters
Organizations that respond publicly to suggestions receive quite a few more outside suggestions. With this, the proponents of ideas are validated and they are encouraged to follow up on their proposals. At the same time, it sends a signal about what kind of suggestions the organization values most.
New proponents also learn what interests the organization and feel cared for and recognized.
In sum, co-creation also has advantages and disadvantages. It makes customers feel accepted and helps the company introduce new products that are more innovative and creative. It can also serve to approach marketing niches that the organization has not yet explored. Another advantage is that it reduces costs of market research, because the company can find out trends and offer improved products. At the same time, the company draws the attention of the media and increases and narrows the relationship with is customers, which currently is a crucial asset.
Among the disadvantages of co-creation is the problem of how to make customers feel needed, without giving much importance to the concrete development of the products. Do not forget that you will not materialize all your ideas. It is possible that a good part of the products that are proposed are “good wishes,” but they are not profitable. When organizations serve different types of customers, the evaluation and selection of ideas is a complex and multi-factored process that can generate great skepticism between customers and designers.
The value of co-creation occurs in the psychological, economic and organizational planes. On the psychological side, customers feel better because they are taken into account not only to externalize their problems, needs or trends, but also to propose solutions. Economically, companies detect business opportunities and increase profits. And on the organizational, the costs of innovation and generation of ideas are reduced, in addition to reducing the uncertainty about whether a new product or service will be successful, which increases the productivity of the company.
In order for co-creation to generate value, the company must focus on the experience of all the participants: customers, employees, suppliers and others. It should seek a direct interaction in order to have the appropriate and efficient tools, such as a well designed, functional and easy-to-use platform.
References