Fronteer Strategy - Co-creation's 5 Guiding Principles


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Fronteer Strategy - Co-creation's 5 Guiding Principles

  2. A White Paper by Martijn Pater, Fronteer Strategy Amsterdam, May 2009FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT.
  3. Co-creation’s 5 Guiding PrinciplesOR .... WHAT IS SUCCESSFUL CO-CREATION MADE OF?In this white paper, we identify different types of co-creation (suitable for different types of challenges), present 5 guiding principles for success, discuss the value of co-creation and present a number of inspiring cases from around the world. 3
  5. We define co-creation as the practice of collaborative productor service development: developersand stake-holders working together. 5
  7. Customers want more involvement with their products Traditional businessprocesses have changed An enormous amount of knowledge has become accessible Co-creation is part of the Open Innovation trends going on since the 50‘s FRONTEER STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 7
  8. Because of these trends, companies face challenging questionsFRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 8
  9. How to innovate from the core? How to get - or stay - connected with customers?How should I deal with the risk ofcommoditisation? Where can I find future growth? FRONTEER STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 9
  10. But markets change and new rules apply...FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 10
  11. 99,995% of the people don’t work at your company... They might have some good ideas... Why not capture them?But opening up can be scary- most companies hesitate to share ideas and strategies 11
  13. There is always 1 initiator - either company or just asingle person - that decides to start the initiative Contributors will be joining along the process, but the initiator determines who can join and under what conditions FRONTEER STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 13
  14. 1% Creators 10% Synthesisers If you open up, keep in mind the ‘1% rule’ 100% Consumers Only 1% of people in any community generates the majority of the creative outputFRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 14
  15. Co-creation is more than atool, it’s a program of change It can be used to... ... tackle your toughest strategic challenges ... get a fresh perspective on your business ... develop breakthrough new ideas ... unlock the world outside and bring it inside ... connect with partners, customers, consumers ... bring excitement to the floor FRONTEER ... work with the 1% most creative people STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 15
  16. 4 Types of Co-creation There are many ways to go about Co-creation, and which to choose depends on the challenge and objectives at hand.FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 16
  17. The 4 types of co-creationare based on 2 dimensions: Ownership who owns the challenge & the outcome? Openness who can join the challenge? FRONTEER STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 17
  18. The 4 types of co-creation Anyone Crowd of Community of can join People Kindred SpiritsOpen- Crowd of peopleness Selection Club of Coalition of process Experts Parties Initiator Initiator + Contributors Ownership 18
  19. Crowd of peopleFor any give challenge theremight be a person ‘out there’ with a brilliant idea Threadless enables contributors to send in and rate t-shirt designs. Profits on sold items are shared with the designer. Not bad: a full 30% profit margin selling t-shirts with no R&D cost, low investments and hardly any employees. 19
  20. Community of kindred spirits People or groups with a similar goal develop something for the ‘greater good’The Linux open source operating system software was developed by users and forusers. The software code is free to use and owned by nobody. It started with one simple e-mail with a request for help. 20
  21. Nokia organises ‘lead user’ and ‘expert’ co-creation sessions to develop visionary new products and services. Club of experts For specific, time-pressuredchallenges when expertise andbreakthrough ideas are needed 21
  22. Heineken has successfully developed the ‘Beertender’ in co-operation withKrups. A development period of 10 years resulted in the first true packaging innovation in beer in a long time. Coalition of parties In certain complex situations parties with specific skills team up to share knowledge, ideas and investments 22
  23. 5 Guiding Principles of Co-creation Successful co-creation initiatives tend to have a number of characteristics in common.FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 23
  24. 5 Guiding Principles of Co-creation 24
  25. 5 Guiding Principles of Co-creation Inspire participation 24
  26. 5 Guiding Principles of Co-creation Select the very best Inspire participation 24
  27. 5 Guiding Principles of Co-creation Connect creative minds Select the very best Inspire participation 24
  28. 5 Guiding Principles of Co-creation Share results Connect creative minds Select the very best Inspire participation 24
  29. 5 Guiding Principles of Co-creation Continue development Share results Connect creative minds Select the very best Inspire participation 24
  30. Inspire participationTrigger people to join your challenge Alessi has been inspiring designers for many years to contribute to the Alessi brand, in return for exposure and shared gains.FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 25
  31. Select the very bestFind the best ideas and the best people Innocentive is a platform where scientists and other experts are gathered to solve tough scientific challenges. Their track record is impressive: 30% of all problems posed are solved FRONTEER STRATEGY INNOVATION. CO-CREATION. BRAND DEVELOPMENT. 26
  32. Connect creative minds Enable people to work together and find that ‘spark’ Lego developed new generation Mindstorms products together with lead users of the Mindstorms Developer Program. They have helped Lego improving their product ranges far beyond Lego’s wildest dreams. 27
  33. Share results ‘Giving back’ is crucial* Co-creation was part of many of Apples successes and also drives the Apple iPhone App store success. The profits are shared, 70% is for the developer, 30% for Apple.FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 28 *Compensation doesn’t have to be monetary, sharing IP is a next step
  34. Continue developmentCo-creation only deliverswhen it is a longer-term engagement Procter & Gamble set high co-creation standards: 50% of new products should come from outside the company. P&G’s Connect & Develop platform invites external people & companies to innovate with them. 29
  35. 4 Areas of Value Return on investments in co-creation can be found in several areas.FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT. 30
  36. 4 Areas of Value in Co-creation Generated Value s n off pi r eS u F ut s n off pi tS Resul ts r ec ture Di Fu R esults D irect Time 31
  37. Direct results correspond with the project goals that have been set: often new products and services, which generate economic value Direct spinoffs cannot be measured interms of profit, but create enormous value. Unexpected effects can occur like new contacts, collaborations and brand ambassadors. 32
  38. A successful new product introduction can generate a snowball effect within a category, creating future results Future spin-off effects are unpredictable. Side-effects of certain actions are hard to oversee, but  whatwe can say is that action taken now will have an effect sometime in the future. 33
  39. FRONTEER martijn@fronteerstrategy.comSTRATEGYI N N OVAT I O N.C O - C R E AT I O N.B R A N D D E V E L O P M E N T.