Co-Creation with the ICCL

Co-Creation with the ICCL November 2009

What is the ICCL?
Innovation Co-Creation Lab, f ounded in 2007
Joint-venture between two top business schools
Headquartered in Rotterdam and London
Executive Director: Professor Harry Barkema, LSE and RSM
A number of top-class senior researchers as well as very dedicated assistant professors and PhD students
Management research
Bachelor/ Master/ PhD programs
Corporate Strategy Programmes

Who is Harry Barkema?
Executive Director of the ICCL since 2007
PhD in BA (1988), MA in Social Geography (1981)
50+ publications in the areas of Strategic Management, Organisational Learning and Leadership
Member of Editorial Boards at Academy of Management Journal, Strategic Management Journal, Strategic Organization, European Management Review

Who is Gabi Helfert?
Project Manager at the ICCL since 2008
Responsible for managing research and education projects with companies
PhD in Management (1998), MA in Psychology (1994)
10+ years experience in the Marketing Service industry and the Automotive Industry (Project and Process Management)

ICCL: Work streams
Innovative Teams
Small Worlds
Online Innovation/ Crowdsourcing
Business Model Innovation

Innovative teams
What contributes to the innovativeness of teams? What supports their output, what impedes it? How to maximise innovative output?
Communication
Cooperation
Group processes
Leadership (including non-verbal behavior)
Research Projects at DSM and Unilever:
Interviews and surveys
Team observations
Document analysis
Small-scale experiments

Small Worlds
What makes Small Worlds (e.g. Science Parks, Corporate Campuses) co-operate better and innovate more?
What role does co-location play for collaborative innovation?
Can it be replaced or even outmatched by the use of next-generation Internet applications?
Research Projects with e.g. Cambridge Science Park, Philips Corporate Campus, Shanghai Science Park etc.
Partner in EU research consortium on highly innovative networks of SMEs (FONTUS)

Crowdsourcing: Definition
“ Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call .” (Jeff Howe, 2006)

Three levels of interest
Participant level – Why do individuals participate and what determines performance?
Intermediary level – How to organise for optimal results?
Organisation level – How to organise for optimal use of crowdsourced contributions?

State of the art in research
Concept is very recent for researchers (since 2006).
Some management books, cases describing crowdsourcing as a concept or giving examples of crowdsourcing
Beginning of papers on participants’ motivations (Brabham, 2008;2009).

State of the art in research (2)
No published research on implications of using crowdsourcing for companies.
No published research on how to make money from a crowdsourcing business model.

Questions
What are the experiences your company has made with online innovation/ crowdsourcing?
How do these compare with your competitors?
What are the organisational conditions you have created to explore and develop this area of innovation?
What are the main challenges in your area of work for crowdsourcing?

Crowdsourcing Field Research (I)
Open Innovation Masters’ Class @ Unilever
Working on three concrete challenges for Unilever
Interviews with key persons
Development of new approaches
Master Thesis projects
Crowdsourcing @ Philips Research and Unilever (Organisational changes: structures, incentives etc.)
Battle of Concepts/ RedesignMe/ Innovation Factory/ Creative Crowds Platforms (all major Dutch parties on Crowdsourcing)
TNO (independent Dutch research organisation): Developing a model how companies can use crowdsourcing
Cap Gemini/ TNO: What is the value of crowdsourcing? Up to now only anecdotal evidence, but no real research

Crowdsourcing Field Research (II)
Value of crowdsourcing (Capgemini, TNO, Syntens)
Crowdsourcing as a business model (Battle of Concepts, CreativeCrowds, RedesignMe)
Social identity in crowdsourcing
Role of social identity at Battle of Concepts
Questionnaires
Interviews
Development of social identity at Innomediary
Experimental crowdsourcing platform
Questionnaires
Interviews
Communication data

Innomediary.com
Started in early October 2009
Experimental crowdsourcing platform
Used for our own research to identify success factors of crowdsourcing and online innovation
Partners: City of Rotterdam, CapGemini, com.wonen and GreenEUR

The challenges

The ideas

Business Model Innovation – Well-known examples
In the beginning of the 20th century Gillette decided to produce and sell interchangeable metal blades instead of razor knives, while practically giving away the razors for free. The ease of use, low-maintenance product and the lock-in effect created ensured him a stable base of returning customers and market leadership over decades.
Low-cost airlines with radically new business models achieved a US market share from zero to 50%+ within little more than a decade.
Apple entirely revolutionised the music industry with their introduction of the iPod and iTunes. Today they sell 171 high-margin iPods per minute, while giving away the music almost for free.

Business Model Innovation – Facts and Figures
11 of 27 companies born in the last 25 years who entered the Fortune 500 in the past 10 years did so through new business models.
Over 50% of executives believe business model innovation to become even more important than product or service innovation.
Yet: No more than 10% of innovation investment in global companies is focused on developing new business models.

What is a Business Model?
A business model describes the value an organisation offers to various customers and portrays the resources, activities and partners as well as a cost structure required for creating , marketing , and delivering this value with the goal of generating profitable and sustainable revenue streams .

Business Model Innovation Research – State of the art
Sparsely researched yet
Existing research varies greatly in opinion
Importance of a good business model has been demonstrated
A superior business model trumps a better idea or technology

The seven-step approach to Business Model Design

1. Customer value proposition
The sum of benefits which a vendor promises that a customer will receive in return for the customer's associated payment
What, when, how much, where, at which price?
E.g. Ryanair:
Low cost, no frills, self-booked, no-delay, air transportation from A to B

2. Revenue model
What do we get our money for?
E.g. Ryanair:
Little earnings from the flights
High earnings from the extras (checked luggage, food and drinks, on-ground transportation etc.)

3. Requirements
What is required to make the business happen in terms of:
Resources
Capabilities
Assets
Organisational structures
Sales channels
Business processes

4. Network partners
What do we make ourselves, what do we outsource to partners?
Which partners do we choose?

5. Strengthening the network position over time?
How do we optimally organise our network?
Which share of the revenue stream goes to us, which to the partners?

6. Renewing the value proposition over time
How do we use the outside world best to continuously refresh our value propositions?
Reduced failure rates
Lower costs
Faster time-to-market
…

7. Implications for stakeholders
Customers
Shareholders
Employees
Suppliers
Partners
Society

Questions
What is the core of your current business model?
What was the last new value proposition in your area of business?
What are your key strengths in terms of capabilities, roles and responsibilities, business processes, culture / incentives in delivering this value proposition to your clients?
At which point in the life cycle of this business model are you now?
What new business models do you see come up?
What are the challenges?

Business Model Innovation
Selected ICCL projects with companies:
Case study mjunction
Strategy development Kjaer Group A/S
Open workshops

mjunction: Facts and figures
World's largest eMarketplace for steel
50:50 venture promoted by SAIL (steel authority of India) and TATA Steel
Founded in February 2001
Transaction value: Rs 94.35 crores (€ 13m) in FY'02 => Rs 14,393 crores (€ 2.05 bn) in FY'09
Employees: 2001: 6 => 2009: 375

Our assignment
Analyze the mjunction business model and identify what makes it so successful
Give recommendations on how to transfer the success of the business model to other Tata ventures.

Case Study approach

Timeline

Kjaer Group: Facts and Figures
Leading provider of vehicles and automotive solutions to the international aid and development sector
Founded in 1962
2008 Turnover DKK 954M (€ 128M)
Ca. 1,000 employees (including dealer and service network in Africa and Asia)

The challenge
Market is becoming more and more competitive
High dependency on OEM
Goal: Transform business from ‘shoving metal’ to a more service-oriented business

Our assignment
3-day strategy workshop with top management team in March 2009:
Teach knowledge and capabilities on how to do Business Model Innovation
Analysis of the current business model
Joint delopment of new value propositions in the service sector:
Fleet management
Driver safety training
Insurance
Leasing

Our assignment (2)
Two three-day workshops with 16 top potentials from Denmark, England, Uganda and Mozambique (July and September 2009)
Develop complete business plans for four new selected business models, including:
How to engage users and suppliers
Which resources are required
How to strengthen network
How to continuously use partners to renew the value propositions over time
Trajectories for implementation, including milestones
Prepare for the future: From providing services to providing solutions to becoming a mobility consultant

Results
Four complete business plans were developed
Four implementation trajectories were designed
All plans and trajectories were approved by the top management team for immediate implementation (September 2009)
The plans will be at the core of the transformation process for the entire company.

Business Model Innovation workshops
Typically 15-25 Participants, either from one company or from several networked companies (e.g. including suppliers, customers or other partners in the value chain)
Typically three* classroom blocks of 2.5 - 3 days each
Two months between the classroom blocks, with one day per week dedicated to working on the challenges
One assessment day four months after the last block (after implementation phase)
Pre-assignment: Issued four weeks before the first classroom module and results sent in a week before the first block starts
Coaching/ mentoring by a senior management team member between the classroom modules
* Single module workshops (1 x 3 days) also available

The Content
New trends in the environment and what they mean for your company’s business model
In-depth analysis of the new trends, opportunities and threats in your environment
Understand how the nature of competition is changing and what is needed to build a lasting competitive advantage under today’s tough economic conditions
Gain key insights, conceptual frameworks and tools for business model innovation, radical product innovation and open innovation
Learn strategies and organisational change approaches for open innovation
Analyze the current business model including core value proposition, competitive factors, blocking points for customers, and design new business models
Work out a plan for implementation and leadership of the new designs
Lead the initiation and implementation of the new designs
Between the modules: Develop a proof of concept, develop prototypes.

The Schedule

“ Very interactive. Excellent teacher.”
“ I was expecting a much more theoretical approach, but this module was very good.”
“ Innovative and very interactive way of teaching, without being pushy. Very much appreciated!”
“ Extremely useful.”
“ It is very practical and can be directly applied.”
“ Interesting, and fun to do.”
“ Strong practical concept.”
“ This was surprisingly very interactive. Other skills, more appropriate to an executive, were addressed. Very welcome module!”
“ Highly relevant to our business and current circumstances. During the work in class, we were able to build up very concrete plans which we are going to implement.”
Link to video:
Customer Feedback

Contact Information
Prof. Dr. Harry Barkema
Executive Director
Innovation Co-Creation Lab
hbarkema@rsm.nl
+31-10-4082911
Dr. Gabi Helfert
Project Manager
Innovation Co-Creation Lab
[email_address]
+31-10-4082369
www.icclab.com

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Co-Creation with the ICCL

by Rotterdam School of Management, Erasmus University on Nov 19, 2009

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