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Co-Creation from A to Z

October 28, 2009

AtoZ

Here’s a starter list of company-centric buzzwords and their co-creation alternatives.  Read on and let me know if you have other terms to add to the list.  I’ve started at the top of the alphabet, and I’ll look forward to sharing the latter letters with you in the coming weeks.

Advertising campaign: hammering customers with one-way messages aimed at numbing them into passive acceptance of an intellectualized view of the company’s value developed by top executives, and then creatively interpreted by an advertising agency guided by its desire to win a prize at the Advertising Awards ceremony.

The co-created alternative: in the development of an ad campaign, replace some of the agency’s pony-tailed types with some imaginative, equally pony-tailed customers, who’ll work with you to develop material based on their actual experience of your product and will do it in the hope of becoming half-famous.

Alignment: cracking employee heads until they agree with the top-down message and accept that they’ll be assigned metrics they don’t in any way influence. Use “metric” rather than the now passé “measure.” Definitely stay away from “KPI” (key performance indicator), reserved for veterans of failed quality campaigns of the ’70s and reengineering drives of the ’80s.

The co-created alternative: let the experience of rank-and-file employees co-shape the strategy map and its measures, on the silly argument that since they’re the ones doing the work, they’re more likely to align themselves effectively if they’ve participated in the strategy-making (with some top-down guidance by the chiefs).

Branding: apply a burning-hot iron on customers’ foreheads to encourage their identification with the company’s products and image. Tattoos on intimate body parts are second-best. T-shirts are for wusses.

The co-created alternative: allow the brand to “bubble up” as the collective experience of all customers, employees, and stakeholders, on the Woodstock-like belief that if they rock with each other in the mud for a while, some good music will ensue and you’ll sell lots of records, particularly to people who wish they’d been there.

CRM (customer relationship management): guessing at what customers like by bombarding them with mailings, calls and visits until they buy something, therefore revealing a “profile” that entitles the company to send them more stuff they don’t want at increased frequency and at lower cost.

The co-created alternative: let customers co-design the relationship they want to build with you, i.e., move away from using hackneyed pick-up lines in the singles bar, sign-up on eHarmony, and find the type of love your potential partners are looking for.

Cross-selling: getting customers to drink more from the fire hose, on the argument that since the hose is already there, it costs the company less to market that way than if the company had to find you in the first place.

The co-created alternative: everybody hates being sold. It makes people cross (this is the little-known etymology of the term cross-selling). But people will buy experiences. The best experiences are co-created. Customers don’t mind a hose if they get to design the hose experience (or the hose itself).

Data-mining: the art of gathering FBI-like data on you and reducing your bubbly personality to the sum of transactions the system can identify about you. Blame data-mining if your last unpaid credit card bill at Wal-Mart and your back-stage-at-Led Zeppelin possession conviction disqualify you for a discount at Jiffy Lube.

The co-created alternative: news flash! Customers know more about themselves than you do. Rather than poking at the ceiling to try to figure out what the woman in the apartment upstairs is about, get up there, knock at the door, and see if she’s willing to share some part of her life with you. This can be the beginning of a beautiful friendship.

New American visionaries at IBM and Cisco

October 26, 2009

IBM Cisco 3

It’s become customary to bash American business. Global analysts talk about a secular decline. And yes, US business has become a bit sad and dreary if you’ve spent any time around Detroit lately. But new US business leadership is emerging. Not from small start-ups this time, but from large corporations.

Take IBM. Yes, IBM. Lou Gerstner famously ridiculed the quest for a corporate “vision” in the early ’90s. His vision was only to serve customers and buy back the stock. I still get goose bumps just thinking about it. But Sam Palmisano and his team have crafted a true vision for the company. These guys believe in global collaboration. You can say it’s self-serving, since IBM sells hardware, software, and consulting services that rely on collaboration. But all good visions are self-serving. After all, IBM is a business. The vision of Palmisano’s team also goes beyond business. Their view of the future is centered on humans living on the earth, and how the interaction between both can generate new opportunities for IBM and for its clients.

I like the human centricity and breadth of ambition it conveys. It’s vintage American brassiness on a planetary scale, with a new 21st-century sensitivity. The basic belief is that if you engage a large number of people in a firm – say, 50,000 people in a large corporation — with a large number of its customers – say, another 50,000 – you’ll see new opportunities pop up from this massive co-creation of ideas. IBM has a process and technology called Innovation Jam that makes this Web-based dialogue happen over a period of 72 hours. It’s a messy process – structuring meaningful initiatives out of it is no picnic, and IBM understates the importance of live interactions — but it’s the first approach I’ve seen that approximates global democracy in business.

Taking a (good) page from the Gerstner book, IBM has first transformed itself using this mass co-creation approach internally. They shaped their new values and strategy by connecting the software technician in his Armonk cubicle all the way to the management team. The company’s omnipresent sales force is now running around the world telling customers that IBM has done well using this approach, so now it’s their turn. It’s a bit early to know how successful the approach will be. Because of Innovation Jam’s massive mobilization power, companies tend to use the approach for big issues, such as social responsibility or sustainable development, giving America an opportunity to provide new thought leadership in areas where the US has arguably been lagging (remember Kyoto?).

John Chambers and his team are largely doing the same at Cisco, where the company vision is about the “human network.” Again, Cisco has a vested interest in selling routers and other equipment that equip this human network with hardware, software, and consulting services, but there is a rich, humanistic backdrop to the business which captures the imagination of many. Cisco has even jumped ahead of IBM in thinking through the organizational implications of this new view of innovation. Their experiments provide the freshest ideas in organizational design I have seen in years.

You out there betting on the death of American thought leadership in business do so at your own risk…

Top Ten list of excuses not to engage in co-creation

October 17, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

1. We’ve always done focus groups. We’ve done user-testing, customer-centricity, collaboration, customization, and personalization. Somewhere in there, I’m sure we ‘ve also done co-creation.

I’m sorry you suffer from methodology fatigue. But have you ever invited your customers to insert themselves into your value chain and do some of the work for you? I’m not talking about YOU adding endless variations to your product line, guessing at what they will buy from you. Put THEM to work. Give THEM tools that allow them to do some of the work instead of you. Get THEM to hold the pen. This is what defines co-creation. Maybe you’ll feel less tired after that.

2. We’re in a boring industry. We ain’t exactly Nike or Apple, you see.

You will find successful co-creators in industries such as post office systems, local community banks, manufacturers of coated film, pulp and paper, chemical companies, utilities, technology services companies and hospitals. Can your industry really be more boring than these?

3. Customers want simple, affordable products and services that are ready to use. Co-creation makes things uselessly complicated.

I see. You don’t want to engage, do you? Well, a nice thing about co-creation is that you can turn it off. If you want a standard, off-the-shelf product offering no co-creative interaction, don’t use any of the interactive capabilities. Feel free to use your iPod as a boon box.

4. If customers come up with the innovative ideas, what’s our role? Don’t customers pay us for our expertise? I don’t see what we’re here for in co-creation.

You do ask deeply existential questions, my son. Søren Kierkegaard and Friedrich Nietzsche would be proud of you. But not to worry. There is corporate life after co-creation. You role just needs to move from “doing yourself” to enabling interaction with others. You’re now a double-barreled expert. Still an expert in whatever content you were good at before, plus now you’re learned to engage others in connecting with you. Congratulations. You’re now a content platform, rather than a content vessel. Are you now reassured about your purpose in life?

5.  We’re a science-driven industry. What could possibly be the role of co-creation there?

I understand, Herr Doktor Professor. Now we want you to not only be brilliant in your lab, but we want you to start teaching the customers what you know. Of course, they’ll never discover new molecules or create new composites for your fuselage.  But draw them into your kitchen, show them all the cool ingredients you’ve got, and get them to bake a casserole with you. You’ll both have a lot of fun, and the casserole will be cheaper.

6. It would cost too much money to co-create our products with customers. We’d lose our shirt.

Darn right, you are. As long as you’re geared for production of standard products, any co-creation attempt will represent an engineering “special” and be prohibitively expensive. But dear Henry Ford, please let go of mass production and think in terms of mass interaction. If your design and production system is geared toward allowing personalized interactions on a large-scale, you’ll create another type of economies of scale. Think eBay. Interactions between buyer and seller are both co-created and extraordinarily cost-effective because of the volume handled.

7. There’s no wisdom of crowds. Blogs and chat rooms generate only junk.

Crowds, like people, are both wise and stupid. Co-creation is a bit like advertising. You know one half is wasted, but never know which half. Accept a certain messiness, tolerate some mediocrity. The valuable stuff will emerge from the swamp. And then, you’ll not only have valuable content. You’ll have the people who develop and carry that content for you. Then, it won’t matter that this valuable stuff emerged from a lot of garbage.

8. If you open to co-creation, you’ll lose control of your brand.

Yes, this has happened. For example, GM offered for people to co-create some ads and contributors made fun of the Hummer – now in Chinese hands – as a huge gas-guzzler that destroys the environment. But these things occur anyway, whether you sanction them though an official platform, or whether these ads are placed on YouTube. Most large companies are skewered in a largecompanysucks.com site. Whether you recognize it or not, your brand is already co-created. It’s like when your spouse cheats on you. You’re often the only one not to know it. You might as well socialize the nasty input on your site. In the end, your fans will weed out the bad on your behalf, if your brand is worth its salt.

9. Many of your co-creation examples are about technology. It’s an IT thing, isn’t it? IT has other priorities at the present time.

Technology is often required in co-creation, but there are other ways to implement co-creation. Stores can be co-creative. People can be co-creative. There’s a wall on a chart at the French post office where employees co-create their schedule. But in many cases, the sheer volume of interactions requires some electronic intermediation, and IT is needed. If your IT is busy implementing infrastructure programs, tell them this is a good thing to do to catch up. But if they don’t learn to engage customers and other parties rapidly, they’ll soon be looking for a job.

10. You can’t defend your intellectual property if you do co-creation.

O yes, the “co-creation breeds socialism” argument. If I co-create with someone, does this someone de facto own a part of the idea, and have I diluted my intellectual property from the start, such that I cannot make money off the idea? The trick is to define a priori the terms of the IP that will be created. Some co-creation sites like Innocentive or Procter and Gamble’s Connect and Develop state what they’re willing to pay for solving a given problem. Other organizations get their lawyers to co-create the arrangement as part of the process – that’s a novel idea, isn’t it? Believe or now, even lawyers can learn to co-create.

The importance of cake visualization

October 16, 2009

NYT Cake

The New York Times had a wonderful  article on Tuesday about cake wrecks. As you might expect, it describes disastrous cake designs resulting from misunderstood specifications left by customers to their bakeries. The photograph above is representative of such a miscue, with its beautifully glazed inscription “Congratulations as small as possible”. There is apparently an entire book dedicated to the important topic of cake wrecks, not to mention a highly popular web site attracting 100,000 visitors a day.

At the risk of appearing the nerd trying to analyze humor, many of the cake wrecks struck me as failures at co-creation. There is a big difference between asking for cake specifications and allowing visualization of the cake. The former is classic company-centric design (give me in text form what you need, for example in an e-mail). The latter, by providing a visualization tool, allows true co-creation. In this second scenario, the customers can now insert themselves into the baker’s value chain, i.e., they become bakers themselves. If I can visualize my cake, I will not only make sure “as small as possible” is not part of my cake’s congratulatory inscription, but I may also decide to change other things, such as the color of the inscription, or the shape of the cake. Emotionally, I’m now officially a baker.

Few designers understand the experiential power on customers of this small step that goes from specifications to visualization. Companies who deal with physical products naturally find it easier to provide visualization platforms, but the visualization trend is also reaching industries with such abstract products as software development, advertising and chemical design.

We’re all in the cake business.

Animating the Disney experience

October 15, 2009

Disney is a bit like root beer or green jello. You have to be born on American soil to like it.

The most annoying thing about Disney people is how revered they are for the “experience” they provide in their theme parks.  But the Disney experience is entirely staged by them. Not an ounce of customer co-creation there. If I’m a customer puppet whose strings are drawn by Disney designers, am I much more than Pinocchio longing to become human?

If you ever attend a class from the Disney Institute – yes, they have an Institute – they’ll teach you all about their view of experience. I’ve now been there three times, invited by companies who think the Disney Institute will teach the basics of experience in the morning and I’ll show them the future of experience as co-creation in the afternoon.  And then my agony starts. A Hollywood executive once described the role of the producer on a movie project as watching a director make love to the girl of your dreams and having to pretend you like it. This is the way I feel listening to Disney teach about experience.

The class itself is offered by a teacher who only asks questions with ‘right” or wrong” answers. When you answer “right”, he gives you a small Disney character to take home. The last time in Orlando, my neighbor collected four of them. He reminded me of the dolphin being fed after every trick I had seen the day before at Seaworld. You’ll learn everything at Disney has been studied for you. The sidewalks of the theme park are red because they look good on pictures. The alley veering to the right is one or two feet larger than the one veering to the left because more people naturally go right than go left. Responding to a question during a tour of the underground premises, our guide volunteered that the characters don’t talk because “Disney would lose the ability to control the quality of the customer experience in an improvised dialogue”. Imagine the risk of it all, if Mickey could respond to the little girl in pink with her balloon (by the way, Mickey is a teamster, and his union contract may not include talking).

The intensity with which Disney focuses on experience – the manufactured kind – creates the very obstacle that prevents the company from moving to co-creation of that experience. Having been anointed as experience experts by pundits, why would Disney exhibit the humility to let customers design their own experience? By and large, this phenomenon extends to the entire fast-moving consumer goods industry, where companies such as Procter & Gamble and L’Oreal have blazed the experience trail, but have become laggards on the co-creation of the consumer experience.

Well, before I write Disney’s co-creative abilities off completely, let me point to two developments that show Disney may be coming off the experience ice age after all. Last Wednesday, the Epcot Center at Walt Disney’s Disney World opened a new attraction called Sum of All Thrills which lets kids design on a computer their own roller-coaster, bobsled track or plane ride, then actually experience that ride through virtual reality. Two other attractions in other theme parks – Toy Story Mania and Cyberspace Mountain – also exhibit personalization features of the same type.

Even more importantly, Disney is revamping its stores, coached by Steve Jobs who now sits on the Disney board through the Pixar relationship. The main idea behind the renovation is not particularly co-creative in that it involves making the stores into mini-theme parks providing kids with “an experience”, as opposed to the dolls warehouse that they are today. The co-creation comes in the process of developing the new store concept. As Apple did it in the development of its own store format, Jobs has talked the management of Disney Stores into opening a pilot store in a warehouse to figure out the right interactivity between customers, store personnel and the physical merchandise and store. He’s also coached them to consider community activities in the store, rather than focus on one-on-one sale.

The European cynic in me will probably never convince himself that going on a ride of It’s a Small World After All provides an authentic global experience, but Disney’s willingness to let customers participate in its value chain is encouraging. Slowly, Sleeping Beauty may be awakening after all.

An accidental entrepreneur

October 11, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 “All human beings are entrepreneurs” Muhammad Yunus, recipient of the 2006 Nobel Peace Prize,  likes to say. One of his campaigns involves trying to convince beggars to become door-to-door salesmen by lending them between 10 and 15 US dollars to buy their initial inventory of fruit, vegetables or toys for kids. As he puts it, he tries to get them to phase out their “begging division” and grow their “sales division”.

We should teach entrepreneurship somewhere between writing, reading and arithmetic. Just like the Three Musketeers were in fact four, entrepreneurship could be the fourth of the 3 Rs.

I discovered entrepreneurship much too late in life. I just didn’t know there was such a thing. There were no business people in my family, let alone entrepreneurs. All were teachers or government employees. None of them, as far as I know, had ever thought of starting a company. Growing up, I would‘ve been unable to list the major employers in my home town, nor did I understand that the wealth of my neighbors had anything to do with private companies creating employment opportunities for them.

I did have two small window on the real world, though. My father was a curious man. While grading school papers in front of a window overlooking the street, he analyzed trucks climbing with difficulty the steep hill in front of our house, noticing which companies they belonged to and trying to identify their points of origin and destination. With no frame of reference – there was no Internet then – the speculation was limited to enigmatic questions such as: “I wonder who needs a truckload of steel tubes from Wuppertal, Germany”.

I was also tipped to the relevance of business on prosperity by geography. Growing up as a French baby boomer living close to the German border, I became aware of the fact that the Vosges region where I lived was poorer than the Black Forest region on the other side of the Rhine. Black Forest houses were freshly painted and had flowers at their windows, while most French homes were in blatant need of renovation. I progressively discovered that the midsized companies of the mechanical industry in the Black Forest were growing, while the textile and paper mills of my French region were progressively shutting down.

After the randomness of the French educational system directed me to business studies, I moved to the United States and spent many years working for others, perpetually trying to reassure family members back in France that the financial risk wasn’t too great, the amount of work not excessive and the rewards worth the journey. The further jump into entrepreneurship came in the form of a couple of mentors dragging me into my future by my rear-end. I was operating as a faculty-in-residence inside a midsized consulting firm, when my two mentors kicked me out of the nest and gave me some capital to go out and recruit some people of my own. This marked the beginning of my entrepreneurial career.

I am not exactly Bill Gates or Steve Jobs, but I have been able to provide opportunities for many young (or older) people over the years, a fact I find as gratifying as the economic rewards most people associate with entrepreneurship. I often reflect on how lucky I was that my two mentors not only pushed me into it, but also gave me the initial capital to get started.  

My only regret is that I started too late. I wish my middle school had told me about entrepreneurship as a natural human state. I wish I had know about Mohammad Yunus then. We’re all entrepreneurs, indeed.

Structuring the healthcare ectoplasms

October 2, 2009

The art of co-creation lies in structuring the right exchange platforms at the outset of the debate. For having forgotten this simple fact, the Obama administration is now in the unenviable position of having to extract  common themes across five different bills generated by five different committees, and trying to cajole enough senators and house representatives into rallying around some kind of consensus bill still to be developed. The administration’s challenge is now to hang five ectoplasms on a common skeleton it still has to anatomically define, and get the ectoplasms not to slime in the process.

Imagine if eBay had had the great insight that there are lots of people with stuff in their attic they want to sell, and buyers who want to buy it, but had somehow forgotten to structure the market in categories such as cars, computers, or– my personal favorite  — “dolls and bears”. Imagine also what would have happened if eBay had forgotten to establish rules for its bidding system, including how long an item is put up for auction, how buyers and sellers establish or judge each other’s credibility through a rating system, how buyers and sellers can communicate and how the commissions get levied by eBay on both buyer and seller. If eBay had just said: “go out and co-create”, we’d have a real mess. That’s the healthcare debate so far.

Co-creation is not a free-for-all. It is an organized way of engaging different parties in a different kind of dialogue by structuring new platforms that create transparency between the various points of view. As a result, the process enables a better optimization than would have been possible under the old, non-transparent system. Absent this structuring, the healthcare debate has naturally reverted back to frozen, partisan characterizations of the other camp,  as either bleeding heart liberals or insensitive capitalists, not to mention absurd slogans such as “not letting anyone come between you and your doctors” – as if insurance companies were not already there!

As Business Week pointed out in its August 6 issue, health insurers have stepped into the breach and structured the debate on behalf of the administration. Not only have they framed the platforms, but they have used their considerable lobbying firepower to present actuarial evidence in favor of their proposed solutions. In a debate between free-form, idealistic regulators wishing for a better world and business legionnaires armed with scores of data, who do we think is going to prevail in the end?

Out of this mess, perhaps a new policy-setting process will arise in Washington, where regulators view themselves not as partisan advocates of a point of view they try to impose on others, but as architects and implementers of a new democratic process where issues are framed along citizen-centric lines. When regulators learn to design debate platforms rather than a priori outcomes, a new form of democracy will emerge.

In the meantime, it’s back to chasing ectoplasms. Whom you gonna call? Ghost busters.