Co creation beyond the hype global survey

Co-creation beyond the hypeResults of the Global Co-creation Survey 2010

business, assess the following Co-creation beyond three basic questions: the hype  Who contributes, who gets When a word is used too many the benefits and who takes times a year and the context in the risks? which the word is used  Where & when in the broadens in every article, it is process is co-creation very likely that theCo-creation is the result of applied? management communitya broad and irreversible develops a sort of immunity.  What is the result of co-shift in the society and There are multiple examples of creation?corporate culture. management terminology being coined as fast as falling out of favor. Co-creation Co-creation, as a phenomenon, assessment was destined to have a similar lifecycle. The question that To improve the success of your arises in such matters, is current co-creation business, it whether the term was a hype is very important to have the introduced by some right knowledge to be able to management gurus, or an assess the initiatives according emerging domain just to objective criteria. Those struggling with its maturity. As assessment criteria can also be we see the world now, co- used in advance, as a checklist creation is here to stay. No for the design of a co-creation matter what you would like to initiative. fit in the definition, co-creation is the result of a broad and Who contributes, who irreversible shift in the society benefits and who takes the and corporate culture. During risks? the growth to maturity we To answer this question you wonder what is left beyond the map who has a share in a hype. What is the essence of certain part of the value co-creation? Which forms of creation process. There are co-creation proved to be most three important events that are beneficial for the initiators and distinguishing: value creation, participants? Which processes selection and consumption. are most suitable for Who creates and delivers the ‘outsourcing to the crowd’? actual value, who is allowed to make selections or set priorities This report will give you within the content that has insights into the current status been provided, and finally, who of co-creation, as perceived by does benefit from the co- top managers out of the created value? FEM500 business list. If you would like to verify yourHype cycle (Gartner, 1995) current experiences or if you are curious about what co- creation could do for your2

• Who contributes to a certain part of the co-creation process? • Who took the initiative? • Who is the director? • Who pays the facilitation? Who • Who shares the risk? contributes, benefits and risks?• What is the ‘richness’ of the created value? • Which corporate process is• Does the outcome match the open for co-creation? basic principles of co-creation? • Frequency of the interaction• What is the impact of the co- Co-creation • Deployment of channels creation? Where & What is the when in the result of process is co-creation? co-creation applied?Content creation theme, to be able to keep aYou could ask yourself whether company-owned communityyou can still call it co-creation, alive. The director of the co-when the content is purely creation process is the partycreated by the company. It that is allowed (or accepted) toactually can be co-creation, for set the rules of the game,instance when the selection is determine the duration ordone by the consumer. This is a moderate other contributions.typical customization setup, Again, it is not obvious that thewhere the building blocks are firm itself has to control allstill predefined and internally those elements. The rightcreated. The opposite can work degree of ‘self guidance’ isalso: content creation by the always an important factor forconsumer or business network, success. The director of the co-but selection by the organizing Costs & risks creation process is thecompany. This is a typical Finally, there are the cost and party that is allowed to set‘contest setup’. In the last risk elements, which are in fact the rules of the game,phase of value consumption, it closely related. Who bears theis impossible to call it co- determine the duration or costs of setting up a co-creation when the benefits are moderate other creation environment andnot shared between the contributions. therefore also runs the risk ofinitiator and the participants. there being no significantThe benefits can be split into outcome? You can think of thehard benefits, for instance the online environment, but forfirm’s business case and the instance when co-creatingextraction of economic value during use-phase, it could alsoby the consumer, and soft mean significant FTE costs forbenefits, like corporate supporting internal processes.reputation and social drivers of The legal implications of thethe consumer. creation process presentInitiator or director? another risk. Who isAnother important responsible for the co-createddiscriminator is the distribution product or service when it failsof roles like the initiator and physically or economically?director of the process. Those Equally applicable to co-two can be different. A creation is the fact that:company could consider joining Sharing benefits also means thea current community instead of willingness to share risks.creating one itself. We learnedthat you have to have a strongbrand or have to claim a clear Co-Creation Beyond the Hype 3

Where & when in the common nowadays. During the process is co-creation use and recycle or replacement applied? phase many opportunities are The second key question zooms lost. If you have the right in on the practical elements in approach towards your brand the design of a co-creation ambassadors or lead users, initiative. Map the most using ‘permission based important processes, using a marketing’, you can direct the standard value creation chain, realization of additional value like: strategy, NPD phases (idea by the user community. This generation to product launch), also provides the opportunity marketing, logistics, use phase, to personalize your product or recycling. For every step in this service according to the exactMost of the time context the customer is in afterco-creation is connected chain you can think of processes within that step that the moment of selling. Theto one of the NPD stages original targeted needs often could be open for outsideor during marketing participation. Most of the time change and an intensifiedphase. co-creation is connected to one number of interactions enable of the NPD stages or during the company to make the marketing (campaigning) necessary adjustments or to phase. This is not wrong, provide additional extensions. because co-creation has mainly This brings us to the next proved its value in those areas, question: what is the intended but do not forget to consider frequency of the interactions customer or b2b cooperation in and which channels do you the other steps. plan to use for that? The range The impact of the introduction of possibilities extends from of co-creation is different for twice, like in an idea each step. Co-creating on competition, to almost strategy formulation for continuously in an innovation instance, could have significant development community. This impact on the organization if last type of co-creation results you are fully transparent and in strong ‘learning willing to change course relationships’, leading to because of external ideas. On products or services that have the other hand there are a lot an optimal market fit while of examples of companies that creating strong loyalty both neglected the collective ways. opinion and had to deal with When thinking about proper even more organizational co-creation channels, impact. In logistics there can companies should not forget to also be a nice tradeoff between define the right balance consumer participation and the between on- and offline or price the consumer is willing to even online in virtual worlds. pay for the product, including Joining an existing platform or transportation. This often social medium is a fast way to resulted in new business reach potential co-creation models like IKEA and participants and saves all the McDonalds which were effort of building a platform introduced in the past, but which have become quite4

and keeping it vivid. Another crucial for the final success. Thepossibility is to share a platform most advanced form of co-with multiple organizations, creation, in which customerwhich are all interested in a experiences are co-created, cancertain topic. Sharing a only be achieved byplatform can enable one to performance in personalizationattain the larger scale that is and collaboration. When anecessary to start the co- company does not take care ofcreation process. one of them, there will be a barrier that hinders fullWhat is the result of co- deployment.creation?The third and final question is Furthermore it is important toall about the outcome of the verify whether the outcome ofco-creation process. It is an initiative meets the basicrecommended that you try to guidelines of co-creation, like:visualize the results in advance.  Does the collaboration offerWhat about the ‘richness’ of more value than thethe value created? Is the goal individual contributorsto reach a certain level of could have deliveredcustomization? This is a form of themselves?extreme segmentation,allowing the personalization of  Can the final result bethe offering based on limited characterized as ‘win-win’combinations of modules. Not or ‘pie-growing’? (None ofevery product or service is the collaboration partnerssuitable for splitting into should win by damagingseveral modules. In that case others.)the modules can also apply to  Is the result a matter offor instance, the logistics or value creation instead ofprocesses around the offering. value distribution?The unbundling trend amongthe low cost carriers is an The last, but not the leastexample of that. important topic relating to theAnother goal, when defining outcome of the co-creation isthe desired end-result, is to about the impact on thereach a certain level of organization as a whole. Even acollaboration. The proportion co-creation pilot does havebetween in-house and impact on back officeexternally co-created value, is processes. When an organization chooses to Co-Creation Beyond the Hype 5

continue with co-creation as a Although the respondents have central, strategic theme, it is high expectations from co- inevitable that there will be creation, only 25% indicate that significant changes in the they proactively and corporate culture and several continuously involve customers processes in the operating in the design and development model. Co-creation is even a of new products or services. If main driver in the transition to most respondents expect new business models. increased revenues due to co- creation, why have only 25%Although there is a high Understanding started implementing it?level of willingness to co- Although there is a high level ofcreate, organizations have needs as the main willingness to co-create,to deal with barriers driver organizations have to deal withwhich place constraints on barriers which place constraints How far beyond the hype are on their ability to achieve theirtheir ability to achieve we with Co-Creation? To co-creation goals.their co-creation goals. answer this question, we have launched the Global Co- The main constraints that Creation Survey 2010, asking respondents identify are the top managers from the FEM500 urgency of pressing day to day business list to what extent co- business demands (36%) and creation is currently applied in lack of formal processes for co- their business, what results co- creation (28%). This indicates creation brings and what are that co-creation is not yet at their expectations of the the top of the management future. agenda, although the respondents do recognize the The survey shows that 70% of opportunities co-creation has the respondents expect to offer. To align co-creation revenues from co-creation to and make it part of the day to rise in the coming years, day business successfully, indicating the opportunities organizations have to make and high expectations the dedicated choices and deploy a respondents have of co- clear and focused co-creation creation initiatives within their strategy. organization. What most constraints your companys ability to achieve customer interaction? (Top 5 responses) Urgency of pressing day to day business demands 36% Lack of formal processes 28% Lack of skills within the organization 26% We are a commodity product, difficult to show unique value to the customer 23% We are too far in the value chain to be interacting with the end consumer 19% 0% 20% 40% 60% 80% 100% Percentage Respondents6

Drivers & results The primary drivers for involving customers in value creationThe respondents indicatedthree main drivers for involving Understand new needs 75%customers in their value Competitive advantage 73%creation: understanding new Improve customer loyalty 67%needs, increasing their Gain market share 40%competitive advantage andimproving their customer Attract new customers 40%loyalty. Although co-creation is Higher brand awareness 29%currently often used as a Other 10%marketing tool, these driversshow that co-creation is much 0% 20% 40% 60% 80% 100% Pecentage respondentsmore to the respondent thanjust a marketing tool. Its aim isto understand customersbetter and to develop servicesand products that fit theirneeds.According to our respondents, What results did involving customers bring to your organization ?involving customers really doesresult in meeting their needs; New products or services 60%new products and services arefor them the key result of Competitive advantage 57%customer involvement. It is New customers 42%however interesting thatattracting new customers is Higher market share 36%only the fifth driver for co-creation, whereas it is the third Higher brand awareness 34%highest result. We have seen Less retention of customers 21%this unexpected result before inour previous research ‘Co- Other 8%Creation & Firm Performance’ 0% 20% 40% 60% 80% 100%(Arjan Tijmes, 2010). This Percentage of respondentsresearch showed that whereasmost organizations engage inco-creation to serve currentcustomers better, it alsoresulted in new customers,even if this was not a goal initself. This indicates that co-creation can have a snowballeffect. Co-Creation Beyond the Hype 7

Collaboration on the front-end Managing the always calls for a complexity of transformation of the back- office. The firm has to provide co-creation full transparency and has to In literature co-creation is often share risks as well as profits. associated with collaborative But does this matter? Research & Development Why should we have a activities. This can extend from theoretical discussion about crowd-sourced idea generation what is ‘genuine’ co-creation? to long term development Is a superficial co-creation form communities. Also, endorsed with mass customization of the final communication, like an idea product by selecting a set of competition, worth less than a predefined modules or designs, small-but-deep open sourceYou can compare it with can still be considered part of development community? For‘green’ environmental the development phase. In a large company an ideaactivities, at first used to practice, and endorsed by our competition or for instancemanipulate the common survey, we see most examples customization, can help tocorporate image, but coming from companies that experiment with customernowadays integrated in pilot co-creation merely owing collaboration and clientcore processes and part of to reputational motives. The centricity. You can compare itthe corporate strategy. launch of a rather superficial with ‘green’ environmental form of collaboration, activities, at first used to meticulously controlled by the manipulate the common firm and supported by corporate image, but nowadays traditional mass integrated in core processes communication, can result in and part of the corporate the desired open brand image. strategy. One could wonder whether this can be considered as genuine At the moment there are just a co-creation. If you look at the few examples of companies three most important steps in that adopted co-creation in the co-creation process - who multiple processes along the creates, who selects and who development and usage value benefits?- the effort-benefit chain. We expect this is not balance of this kind of co- because of a clear strategy, but creation initiative, tends to be due to the lack of focus on most beneficial for the firm. co-creation and internal Therefore you could argue competition with other whether this is contributing to priorities. client loyalty, which is strongly connected to a ‘win-win’ outcome. Most of the time companies are not willing to change processes, because this also means a decrease of control.8

Superficial with mass vs. Our competencies in changeprofound with a selection of management and provenpeople implementation skills augmentCapgemini research has our co-creation and industryrevealed new insights in the expertise: we do not onlybuilding of a strong co-creation develop the right solution - westrategy, by managing the also implement it effectivelycomplexity of co-creation, in and sustainably in theorder to ensure its success. organization.Managers should make We help you to deliverdedicated choices on the level maximized personal value forof co-creation and the number your clients, based on theirof organizational functions specific context. Throughoutinvolved. the whole chain you will find new possibilities to involveCo-creation has the most your clients in value creation,impact on product and service which will result in faster andinnovation when the better innovations.organization focuses on anorganization-wide low level ofco-creation (co-creation onmany business levels but understrict control and with strictconditions), or whenorganizations engage in highlevel of co-creation and involvea small number of Contactorganizational functions(completely customizing onesmall part of their offering on Jaco van Zijll Langhoutwhich customers can co-create Client Centric Innovationtheir experience). What both +31 6 5121 6490strategies have in common is jaco.van.zijlllanghout@capgemini.comthat they both enable Remy Brinkhorstorganizations to maintain Client Centric Innovationcontrol over their co-creation +31 6 5108 5757activities. remy.brinkhorst@capgemini.com Isabel ThijssenCapgemini Consulting and Client Centric InnovationCo-creation +31 6 1503 0403Capgemini Consulting has isabel.thijssen@capgemini.comsupported numerous nationaland international companiesand institutions in the analysis,design and implementation ofco-creation. Drawing on ourglobal network of innovationexperts, we have access toestablished tools as well as bestpractices. Co-Creation Beyond the Hype 9

About Capgemini Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs 90,000 people worldwide. More information is available at www.capgemini.com Rightshore® is a trademark belonging to Capgemini. About Capgemini Consulting Capgemini Consulting is the Global Strategy and Transformation Consulting brand of the Capgemini Group, specializing in advising and supporting organizations in transforming their business, from the development of innovative strategy through to execution, with a consistent focus on sustainable results. Capgemini Consulting proposes to leading companies and governments a fresh approach which uses innovative methods, technology and the talents of over 4,000 consultants world-wide. For more information: http://www.capgemini.com/services-and-solutions/consulting/ Capgemini Nederland B.V. Papendorpseweg 100 Postbus 2575 – 3500 GN Utrecht Phone: +31 30 689 00 00 – Fax: +31 30 689 99 99 www.nl.capgemini.com/consulting10 Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group

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Co creation beyond the hype global survey

by Koen Klokgieters on Jan 23, 2011

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Co creation beyond the hype global survey — Document Transcript