The co creative organization of the future


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A presentation about moving beyond NPD as the main focus of co-creation into more transformational ways of being that affect the whole organisation. We predict that the organization of the future will be co-creative (an adjective!). Presented at the World Mass Customisation Personalisation and Co-Creation conference (MCPC 2011) in San Francisco.

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  • Today we are going to be sharing with you our vision of the way the businesses will be acting in the future – we’ll explain the paradigm shift that we predict will take organizations from employing discrete co-creation practices (i.e: one-off, point in time co-creation projects) through to being co-creative at their very core (i.e: co-creative processes and practices ingrained into the building blocks of the organization). To help bring this to life, and as a proxy to frame our predictions, I’m going to start off by looking at the healthcare system. So, let’s go back to the beginning: to 1664 - and to the point in time when Descartes first developed his theory of pain.
  • Descartes conceptualized pain in a very straightforward way: >Hammer hits the knee> the knee feels the pain> knee sends a signal to the brain& the brain reacts. His approach suggests that pain results from injury or damage - and the larger the injury or damage, the more intense the pain. This is a pretty logical, sensible approach.
  • Well, it is so sensible and logical that our modern medical healthcare system has been based upon it. And the goals of the formal healthcare system are quite straightforward too: a)extend quantity of life and b)reduce the state of pain. And these straightforward, logical assumptions suggest that the process of getting sick works a little like this:
  • >You realize you are sick > So, you go to the Doctor who can quite clearly see what’s wrong. He gives you the relevant medicine, you take it. >The medicine either works or fails. And you either live or die.
  • This approach is the ‘medical model of health’ and it is an inside-out approach to healthcare and sickness. Inside-out problem solving means viewing the problem through the eyes of the experts who sit in the middle of the organization. ‘Inside out’ can be applied to any business that relies upon internal staff as the sole proprietors of innovation. In the example of healthcare, inside out means the Drs and specalists who treat the body as a biological organism –observing changes in a body, then dishing out treatment methods as deemed appropriate. But – you’re probably aware that as you sit in your seat you’re not just a biological organism. Rather you are a human with a social life, irrational fears, a sporadic approach to exercise. You can feel that social pressures affect how well you ‘feel’ right now [hands up of how many people feel well exercise]
  • And this means that when we get sick, something a little more like this happens: Show diagram. This diagram presents several challenges the logical, inside-out model: 1> Knowing you’re sick in the first place: it’s not always simple to know if you are sick or not - take phantom leg syndrome as an example! Cancer is another good illustration of how hard it is to know if you are actually sick: most people don’t experiences any signs of the disease in the first few months. 2> Once you realize you’re sick you go to the Dr: the logical assumption is that once you’ve decided something’s not quite right you go straight to the doctor. BUT social and psychological factors come into play … you have a big presentation at work, you don’t want to seem like a wimp… in the USA Taylor (1995) estimated that 60% of people who think they are sick do NOT seek professional intervention. 3>Once you’ve seen your Dr and decided what’s wrong, you’ll listen to what they say: The inside-out common sense approach would suggest that you follow your health management program to the letter. But, remember we’re not all that logical - and sometimes eating that cream cake seems even more important than lowering your cholesterol… So, you can see there is quite a difference between the inside-out, logical approach to medicine and what actually happens. What’s the fundamental problem with the inside out approach?
  • Well, the inside-out approach fails to take into account the irrational human element. A concrete example of how this inside-out approach is having an adverse effect on the patients: a study of 450 people suffering from osetoartritis: one group of patients was given information at home, one in an outpatient clinic. Those who received the at home treatment improved on physical health and pain measures, those in the clinic group actually reported poorer health than expected.
  • The business world has developed in a similar ‘inside-out’ way to the medical system: In the past the predominant industry was manufacturing and the Fordist philosophy was the paradigm of the day: the customer was ignored and experts who sat in the center of organizations decided what was best for them. As we have moved into service lead industries , we’ve got a little better at listening to the consumer. As Ogilvy famously said: ignoring research is dangerous… and he was moving in the right direction But you’ll note that the Ogilvy also referred to consumers as ‘enemies.’ And I think that highlights quite nicely what was wrong with his approach! So what about now, what about business 2.0?
  • Well, a 2010 survey of CEOs lead IBM to conclude that we shouldn’t just listen to what consumers had to say, rather “the most successful organizations co-create product and services with customers” And we tend to agree.
  • the ‘inside-out’ approach to problem solving is short-sighted, and leads to down-right silly innovations, like these carrots: available in a grocery store near you, a beautiful selection of multi-colored carrots…but what consumer will ever buy them? Afterall, what need does it fulfill in their daily lives?! And there are hundreds of examples of innovations that have been developed by very clever people, who sit in siloes within organizations – with no understanding with what is actually meaningful to the end customer.
  • With this in mind - our prediction for the future is that the inside-out approach will be replaced by the ‘outside-in paradigm’ of co-creation and organizations of the future WILL be co-creative.
  • More specifically, we see 3 stages to the evolution of the co-creative paradigm: co-creation in the short, the medium and the long-term – from discrete co-creation projects in the short term through to co-creation as a way of being and overall approach to business in the longer-term. And we will now take you through our prediction of the evolution of co-creation with the help of a few case-studies from projects that we (Nick and Anna/ Promise) have worked on.
  • Co-creation in the short-term: noun. Discrete projects that sit within the NPD and innovation realm. And companies are doing this already – Starbucks, Mio, and Activia. Activia is actually a project that we worked on at Promise and we’ll take you through the key stats from this project so you can see how co-creation can be used for effective NPD and innovation practices.
  • Going back to the healthcare analogy – what might a co-creation for NPD project look like? Well, it would probably be one specific problem, such as designing a better bed. And the better bed would be designed by involving all manner of shareholders in the process.
  • In the mid-term we see an opportunity for co-creation to become engrained in organisations at a different level: we see co-creation evolving from a noun to a verb and impacting organsations at change management level. And some companies, such as IBM and Kraft are doing this already.
  • Back to healthcare – what our prediction of mid-term ‘co-create’ look like in practice? Well, it might be the development of a new admissions process for patients who are admitted to emergency care. This new admissions process may be one which considers that a large proportion of ‘illness’ is actually experienced by the family members who aren’t actually lying unconscious on the hospital bed.
  • Co-creation in the long-term moves from verb to adjective and upgrades to an overall organizational approach: where consumer thinking sits at the very core of every business decision that is made. As an ADJECTIVE it puts the emphasis on the whole organisational approach to customers / users . It’s the most strategic and transformative version of the co-creation philosophy and tallies with new kinds of business models. It’s a way of approaching and involving the customer rather than a specific process or technique. And we struggled to think of many companies that are doing this in an absolute form – but there are a few that are making significant efforts to be co-creative: the Wing Luke Museum and threadless.
  • What practically do we predict organizations of the future will be doing?   1/ customer inside 2/conversational learning 3/networked partners 4/co-creation platforms 5/flexible roles and structures 6/Shared success
  • In short, we don’t just predict that organisations of the future will just employ co-creation techniques, rather we predict that organsisations will adopt co-creation as a way of being .
  • And I hope that this prediction is right – because the healthcare system of the future that follows the ‘inside-out’ principles isn’t all too appealing: The focus on quantity of life, the removal of pain, and the eradication of sickness tests the limits of physical survival with disregard for what it actually means to be human.
  • Whereas the co-creative system could be one that accepts pain as part of being human and this is a healthcare system of the future that follows ‘outside-in’ principles: And perhaps this approach is one that would be governed by goals of quality of life, wellbeing and joy. I know which one I’d prefer….
  • With that in mind here’s a re-cap to the 6 ways the healthcare business, and perhaps your own business, can prepare for the co-creative future…..
  • The co creative organization of the future

    1. 1. The co-creative organization of the future Dr Nick Coates, Research Director, Promise Corporation @nickcoates Anna Peters, Senior Consultant, Promise North America @stand_in_line
    2. 2. Descartes Theory of Pain, 1664:
    3. 3. The modern health-care system Goals : extend quantity of life, reduce pain
    4. 4. sick medical intervention life death
    5. 5. An inside-out approach to the problem
    6. 6. sick ongoing health management medical intervention (if you’ve paid your insurance) psychological factors social factors psychological factors social factors After Lindsay St Clare, 2003
    7. 7. The inside-out approach fails to take into account the irrational human element
    8. 8. Business has evolved with the same ‘inside-out’ mindset Past Present service manufacturing “ if I had asked people what they wanted they would have said a faster horse” Future business 2.0 ? - FORD - OGILVY “ Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals”
    9. 9. Business has evolved with the same ‘inside-out’ mindset Past Present service manufacturing “ if I had asked people what they wanted they would have said a faster horse” Future business 2.0 - FORD - OGILVY “ Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals” “ Successful organizations co-create products & services with customers” - IBM
    10. 10. The inside-out approach to problem solving is no longer relevant
    11. 11. <ul><li>Organizations of the future will be co-creative. </li></ul>Our Prediction:
    12. 12. Our Prediction: from co-creation to co-creative “ Co- creative” “ Co- create” “ Co- creation”
    13. 13. Co-creation in the short term: emphasis on the ‘what’ Focus: Outcomes and completion Discipline: NPD and innovation Success: A function of what’s produced & an ‘objective’ assessment of value. “ Co- creation” NOUN Product focus
    14. 14. Co-creation as NPD: the case of Danone Challenge: Fill the NPD pipeline with innovation concepts in a market where all the long-hanging fruit had been taken. <ul><li>Solution: </li></ul><ul><li>The Activia Advisory Board: </li></ul><ul><li>400 women </li></ul><ul><li>3 months </li></ul><ul><li>1,300 hours online </li></ul>Outcome: 82% more effective insights 9% uplift in base sales 10 new product propositions
    15. 15. Healthcare & co-creation as NPD Goal: a new bed designed by patients, porters, surgeons, nurses & cleaners
    16. 16. Co-creation in the mid-term: facilitating change Focus: Process Discipline: Internal change management Success: The impetus and action caused as a result of the process “ Co- create” VERB Process focus “ Co- creation” NOUN Product focus
    17. 17. Co-creation as change: the case of Kraft Challenge: Following major acquisitions & changes, there was a need to create the “new Kraft foods” Solution: 1) Big Talk: 2) Big Talk Online: Outcome: Co-created mission, vision & values in under four months This project is a landmark. Using Co-creation was one of the of the single most important decisions we made . Perry Yeatman SVP Corporate Affairs Kraft Foods
    18. 18. Healthcare & co-creation as change Goal: work with sick people, well people, care-givers, doctors, nurses & administration teams to create a new customer-care charter
    19. 19. Co-creation in the long-term: a way of being “ Co- creative” ADJECTIVE Cultural focus “ Co- create” VERB Process focus “ Co- creation” NOUN Product focus Focus: Organizational approach Discipline: Strategic and transformative Success: A belief system and approach to the customer
    20. 20. 1. Customer Inside 3. Networked partners 2. Conversational Learning 4. Co-creation Platforms 6. Shared Success 5. Flexible Structures & Roles A way of being: the ‘outside-in’ approach Have customers on the board Host continuous customer conversations Facilitate the adaptation of your product & services Get rid of verticals in favour of an eco-system approach Have customer-volunteers sit with you in your office Give your consumers shares in your business
    21. 21. <ul><li>Co-creation will become a way of being. </li></ul>Our Prediction:
    22. 22. The inside-out healthcare system of the future Goals: quantity of life, reduction of pain, no sickness
    23. 23. The co- creative healthcare system of the future Goals: overall quality of life, wellbeing and joy
    24. 24. <ul><li>The co- creative 0rganization of the future: your ‘out-side in’ checklist </li></ul><ul><li>Customers Inside </li></ul>2. Networked Partners 3. Conversational Learning 4. Co-Creation Platforms 5. Flexible Structures & Roles 6. Shared Success
    25. 25. Thank you!