Engaging Customers and Other Stakeholders: Becoming a Co-Creative Enterprise

November 9, 2010
Email: fgouillart@eccpartnership.com blog: francisgouillart.com book web site: powerofcocreation.com
Francis J. Gouillart The Experience Co-Creation Partnership 27 Main Street, Suite 8 Concord, MA 01742 Concord, MA 01742 Phone: +1 978 369 6040
The enclosed material is proprietary to the ECC Partnership and is for the internal use of the addressee only.
Engaging Customers and Other Stakeholders:
Becoming a Co-Creative Enterprise

HSM Sao Paulo 2010-11-09 – FJG
© 2010 Francis Gouillart
All rights reserved.
What We Will Cover Today
1. Zombies No More (Nike, Camiseteria)
2. The Heart of Strategy (ITC e-choupal)
3. The Emerging Country Advantage (24/7 Customer, CNI)
4. From Dead Processes to Live Interactions (Crushpad)
5. The Method Behind the Madness (La Poste)
6. The Platforms of Co-Creation (Starbucks, Dell, IBM)
7. Set My People Free (Santander Brazil)
8. The New Humanity of Business (Caja Navarra)
1

Classic Marketing Makes Customers into Zombies
2
Needs-based … … segmentation … … and targeting
Company marketing and sales Individuals passively receive
value from enterprise
Customers
ZOMBIES NO MORE

Nike+ Creates New Interactions with Customers
ZOMBIES NO MORE

You Can Track Your Runs
4
ZOMBIES NO MORE

You Can Map and Share Your Runs
5
ZOMBIES NO MORE

Run
Tracking
Challenge
Others
Mapping and
Sharing Runs
Running
Resolutions
Listening to Music
& Publishing
Playlists for
Running
Training with
a Running
Coach,
Interacting
with a
Running Star
Nike Running
Clubs and
Nike-Sponsored
Events
Running blog
and discussion
boards
Nike+ Platform Engages Runners and
Communities Through Eight New Interactions
ZOMBIES NO MORE

Nike+ Results Have Been Spectacular
• Nike captured 57% of the $3.6 billion U. S. running shoe market in 2007
compared with 47% in 2006 More than 600,000 runners signed on the
first year.
• Nike has reduced its marketing expenses by 57%.
• More than 160 countries in the first year.
• Over 40 million miles uploaded the first year.
• Visit 3-4 times a week.
• Nike has a goal of having 15% of the world’s estimated 100m+ runners
using the system.
7
ZOMBIES NO MORE

New
experiences
of value
to individuals
Nike +
Platform
Lower risks
and costs for
individuals
Lower risks
and costs for
the company
Increased
strategic
capital and
return to
the company
Lesser cost of joining club
57% reduction in marketing
cost
Nike Runners
Learn how people use the
products in the field
Nike + Engages Runners and Changes its Own
Economics in the Process
Lesser risk of falling off the
wagon
Feed that learning into design
and customer management
Motivation to run
Ease of tracking my
performance
Fun of having peers
Four Powers Model
8
ZOMBIES NO MORE

A Brazilian Example of Customer Co-Creation:
Camiseteria
www.camiseteria.com.br
9
ZOMBIES NO MORE

80 thousand registered users
More than 15.000 unique designs
150 T-shirt models
No professional fashionista hired
Buzz, word of mouth communication
lowers marketing costs
Low risk, high fit to the market demand
ZOMBIES NO MORE
Camiseteria Is Successful

Strategy Has Long Been About War
11
THE HEART OF STRATEGY

The New View of Strategy: Connect New
Experiences Through New Interactions
12
Co-Creative Enterprise
Individuals participate in value
creation through personal
engagement
Customers
Suppliers
Partners
Employees
Co Creation

ITC e-Choupal Built an Entire Eco-System to
Change the Experience of the Indian Farmer
1. Build kiosks in
villages, with a
sanchalak providing
coaching with help of
computer (choupal)
2. Provide grain market
in neighboring towns
(“hub facilities’),
competing with “mandi”
Better prices
Fairer transactions
Better information on
global crop prices and
weather
3, Develop distribution
centers providing
agricultural inputs
(Choupal Saagar)
Affordable inputs for
farming
4. Expand retail space
to provide all kinds of
goods and services to
the farmer, including
insurance and
healthcare
Affordable goods and
services tailored to the
farmer
FARMER
EXPERIENCE
ITC E-CHOUPAL
PLATFORM
13

The Conventional Strategy Model Relies on
Owning a Piece of the Value Chain
Farmers
Wholesale
markets
Trading
Food
manufacturing
Farming in India
Consumers
Food
retailing
Fragmented industry:
average farm in India is 3.3
acres, producing:
• Diseconomies of scale
• Low crop yields
Structured industry:
average farm in US is
420 acres
ITC’s business at the outset
Farming in US
In the US, food companies
have forced a consolidation
of the farm industry
through:
• Acquisitions (creation of
corporate farms)
• Farming contracts that
require a
professionalization of farm
practices

15HSM Sao Paulo 2010-11-09 – FJG
1. Paint a picture of the vision best you can
Vision
Experiment 1
Co-Creation Strategy Builds a Stairway to
Heaven …
Experiment 2
Experiment 3
Interaction
1
Interaction
2
Interaction
3
Interaction
4
Interaction
5
3. Design a small number of co-creation experiments
within each interaction-based theme
2. Define some high-level interaction-based themes on the way there

… And Launches Interaction-Based Experiments
Farmers
Wholesale
markets
(mandis)
Trading
Food
manufacturing
Consumers
Food
retailing
ITC’s business at the outset
Individual
farmer
Saagar
wholesale
manager
Choupal Saagars wholesale,
challenging government
mandis
Individual
farmer
Sanchalak
E‐choupal kiosk
New businesses for ITC
Saagar retail
manager
Choupal Saagars
retail
Individual
farmer
Dramatically
improved
experience for
farmers, sanchalaks
and other
stakeholders
Lesser cost and
risk for ITC
Reduced cost and risk
for farmers,
sanchalaks  and other
stakeholders
New sources of
revenue from the
new businesses
for ITC
Benefits of ITC co‐
creation platforms

Why Emerging Countries Are Good at Co-
Creation
The thinking is fresher.
• Less to unlearn.
• Excitement about new experiences is worth a lot.
There is innovation power in large markets and low-cost requirements.
• Bottom of the pyramid innovation
The future is about building infrastructure-based eco-systems.
• The West’s focus on single firm strategy carries the genes of its own
economic limitation.
There is greater social consciousness in emerging
countries.
• Greater collective sense of economic development
and social responsibility.
• Sustainability.
THE EMERGING COUNTRY ADVANTAGE

24/7 Customer in India: From Call Center
to Remote Reengineering

1.
RECRUITING NEW
SERVICE REPS AS A
GROUP
Reduced cost
of attracting
candidates
Less
intimidating
recruiting
experience
RECRUIT
24/7
CUSTOMER
2.
SELF- SCHEDULING
OF SERVICE REPS
Less
absenteeism
Safer
Fun to work with
friends
I manage my
own schedule
EMPLOYEE
24/7
CUSTOMER
3.
SOLVING
PROBLEMS WITH
CUSTOMERS
Less time on
the phone per
call
Better issue
resolution
CUSTOMER
24/7
CUSTOMER
More fun in job
EMPLOYEE
4.
DEVELOPING
NEW
SERVICES
New sources of
revenue for the
firm
Better strategic
positioning
Receiving more
strategic
answers
CUSTOMER
24/7
CUSTOMER
Advancing my
career
EMPLOYEE
Solving my
strategic issues
CLIENT OF 24/7
CUSTOMER
IMPROVED
EXPERIENCE
FOR THE
INDIVIDUAL
IMPROVED
ECONOMICS
FOR THE
COMPANY
ENGAGEMENT
PLATFORMS
24/7 Customer Co-Creation Strategy: From
Internal to External Co-Creation

CNI in Brazil: Co-creation Applied to the
Design of a Social Network Platform
• How to increase the
mobilization of industry actors
around national issues?
• How to promote more
interaction among
stakeholders?
• How to build stronger positions
to the government?

“Rede social da indústria” is a Platform
Designed to Engage Multiple Stakeholders

Understanding Stakeholders Dreams and
Concerns

Three Interactions
Within the Social Network
“Rede Social da
Indústria” Design
Mobilizing and engaging
entrepreneurs and engaging for
national causes.
MOBILIZATION
ENVIRONMENT
Articulate and build
together political
positioning.
FORUM
ENVIRONMENT
Increase the
competitiveness
of industry through
best practice sharing
TRENDS
ENVIRONMENT

I See Dead Processes
FROM DEAD PROCESSES
TO LIVE INTERACTIONS

Yellow Tail Wine (Casella Wines) Creates a New
Experience for Wine Lovers
High
Low
Qualityofexperience
Ease of
drinking
Wine
complexity
4
2
6
8
10
Mid-market wines
Price Heritage and
prestige of
vineyard
Experience curve
Buyer’s perspective
ImageWine
science,
connoisseur
dimension
Aging quality
Key elements of the customer’s experience
Ease of
selection
Fun and
adventure
Range of
products
1
3
9
7
5
Yellow Tail
FROM DEAD PROCESSES

LOWER
COST
Like Casella, You Can Try To Build a New
Experience by Listening To The Customer ….
BETTER
EXPERIENCE
Traditional Enterprise
Customers
… But You Will End Up Guessing
Wrong Most of the Time
FROM DEAD PROCESSES

LOWER
COST
… or You Can Engage The Stakeholders in
Co-Creating The New Experience With You
BETTER
EXPERIENCE
Co Creation
Co-Creative Enterprise
Individuals participate in value
creation through personal
engagement
Customers
Suppliers
Partners
Employees
Build it With Them
FROM DEAD PROCESSES

Crushpad Brings Customers Into Winemaking
FROM DEAD PROCESSES

Crushpad Has Opened Up The Winemaking Process
FROM DEAD PROCESSES

1. Lay out steps in as is
process
2. Evaluate process customer
needs and establish
objectives for the process
3. Streamline steps and design to be
process
4. Provides
A better experience
for the customer
Lower cost for the
companyReduced cycle time
Fewer steps, fewer hand‐offs
The broader experience of internal stakeholders is irrelevant, except for removal of pain points directly
linked to operational dysfunctions in the process. It does not create a new source of revenue growth.
Traditional Process Design Delivers Cost-
Efficiency, but Little Growth
FROM DEAD PROCESSES

Start With the Experiences of Specific Stakeholders,
and Connect Them Through New Interactions
2. Map out how the
stakeholders interact
with each other today
4. Organize workshops
where stakeholders make
their experience
transparent to each other
3. Characterize the
experience resulting
from these interactions
for all stakeholders
(good or bad)
6. … that allows them to
develop new interactions
Platform
5. Give stakeholders an
engagement platform …
7. … that
dramatically
improve the
experience of all
stakeholders …
1. Identify the stakeholders involved on
the company and the customer side
8. … and produce
new sources of
revenue from the
new interactions
… and invite all stakeholders to
imagine new interactions
between them
Internal company
stakeholders
External stakeholders (e.g.,
customers)
FROM DEAD PROCESSES

An Unlikely Role Model for Co-Creation:
The French Post Office and its 17,000 Post Offices
THE METHOD BEHIND THE MADNESS

La Poste’s Management Established Five
Interaction-Based Themes for its Strategy
Increase ticket
1. ACCESS TO POST
OFFICE
Improve profitability
2.
ORIENTATION
3. SERVICE
DELIVERY
4.
ADVICE
5. NEW
SERVICES
Reduce network cost Increase sales
FINANCIAL
CUSTOMER
LEARNING
AND GROWTH
PROCESS

The Transformation of La Poste Started With the
Opening Up of the Employee Scheduling Process
1.
CO-CREATED
EMPLOYEE
SCHEDULE
Post office (Active) post office employees
Engages post office employees
in scheduling their own work
Creates post office
employees schedule Passive post office employee
receives schedule
Employees schedule their own
work (within constraints)
BEFORE
AFTER
34

Transforming La Poste Through Co-Creation Involved
Opening Up More and More of the Firm’s Processes
New
experiences
of value to
individuals
4.
CO-CREATED POST
OFFICE
PERFORMANCE
MODEL
3.
CO-CREATED
SERVICES
2.
CO-CREATED
OPENING HOURS
FOR EACH LOCAL
POST OFFICE
1.
CO-CREATED
EMPLOYEE SCHEDULE
• Customers
• Teller
employees
• Post office
manager
• “Hierarchy”
• Teller
employees
• Post office
manager
• “Hierarchy”
• Customers
• Teller
employees
• Post office
manager
• “Hierarchy”
• eBay
• Local elected
officials
• Customers
• Teller
employees
• Post office
manager
• “Hierarchy”
35

Ten Steps Framework to Experience Co-Creation (Bottom-Up)
Fleshing out the CC hypotheses
and making the case for them
(hypotheses teams, Strategy Fair)
10a. Business
Case
Generating, developing
and qualifying CC hypotheses
(External Co-Creation Workshops)
Understanding way things are done today
(Executive and Focus Interviews,
Internal Co-Creation Workshops)
9. Co-creation
Stairway to Heaven
8. Win/Win
(Four Powers)
4. Existing
Experience
7. Glass
House
5. Transparency (DART)1. Protagonists 3. Pain
Points
2. Existing
Interactions
6. Day in Life
of Customer
10b. New
Experience
36

By and Large, The IT Community Is Still
Missing the Point on Co-Creation
The focus is still on one-way process automation.
ERP
CRM
Data bases.
The people experience is still largely missing.
The IT community struggles to
engage its business clients (B2B) …
… so it struggles even more to engage its business clients with its
customers (B2C).
Slowly the IT community is awakening to the need to develop co-
creation platforms.
37
THE PLATFORMS OF CO-CREATION

Some Companies are beginning to Build (Simple)
Engagement Platforms
MyStarbucksIdea.com website launched in mid-March 2008.
38
© 2010 ECC Partnership
Intro co-creation Waltham 2010-06-14 FJG

Dell’s customer ideas forum, Idea Storm,
Follows a Similar Approach to Starbucks
39

IBM Jam Sessions Involve a More Sophisticated
Process With a Large Number of Stakeholders
40

Co-Creation Involves a Personal Transformation
People know better than you what new experiences they aspire to.
People’s wings are often clipped by existing HR processes.
Let them define what their work experience ought to be.
Set the context of the firm’s strategy and let them co-create the rest.
Let them engage with other people who are also trying to change their
experience.
E.g., customers for customer-facing people, suppliers for supply chain
people.
Start by opening up internal HR processes.
41
SET MY PEOPLE FREE

Santander Brazil Is Becoming a Co-Creative
Enterprise
Santander Brazil has been applying
co-creation principles since 2007:
• in business areas such as insurance,
• in internal areas such as:
• Human Development
• Marketing & Communication.
SET MY PEOPLE FREE
42

Human Development Co-Creation Initiatives
at Santander Brazil
Leadership Development Program: co-
created with 3000 professionals
New performance management system: co-
creation with employees of the 2011 “next
practice” of performance management taking
into account the individual experience,
generating win-win relationships among
stakeholders
“Caminhos e Escolhas” (Ways and Choices):
collaborative training program engaging NGOs,
universities, junior executives and former
trainees.
SET MY PEOPLE FREE
43

“Juntos” (together) is
the core message of
Santander current
marketing and brand
positioning.
“Circulo Colaborativo” (Collaborative
Circle) is a internal co-creation
platform opened for new ideas and
suggestions to various initiatives from
all 30,000 employees
https://www.circulocolaborativo.com.br/
Moving From Inside to Outside: Marketing and
Communication Initiatives at Santander Brazil
SET MY PEOPLE FREE
44

Humans Are at the Center of the Business Universe
Business is the art of building connection.
Connecting individuals to your business is key.
Employees
Customers. Suppliers
Partners.
Your business is itself connected to an eco-system you will have to co-
create with other private and public entities.
They’re also full of humans longing to connect with your people.
They have economic imperatives, as you do.
Ultimately, your role as manager is to make each individual feel at
home in the universe.
The enterprise that is the most connected wins.
45

Caja Navarra Created Civic Banking
46
THE NEW HUMANITY OF BUSINESS

Customers choose to use the money they
generate in CAN for needs and people rather
than activities and things.
“You Choose: You Decide” overturned the
bank’s allocation of profits to social work
Source: Caja Navarra investors presentation.
47

Caja Navarra Creates Transparency of Earnings
Each Caja Navarra customer receives a statement showing exactly
how much money goes to the social projects he or she has chosen.
48
Caja Navarra’s customers want the bank to make more money with them, so that
they can give more to the charity of their choice.

What Have Covered Today
1. Zombies No More (Nike, Camiseteria)
2. The Heart of Strategy (ITC e-choupal)
3. The Emerging Country Advantage
4. From Dead Processes to Live Interactions (Yellow Tail, Crushpad)
5. The Method Behind the Madness (La Poste)
6. The Platforms of Co-Creation (Starbucks, Dell, IBM)
7. Set My People Free (Santander Brazil)
8. The New Humanity of Business (Caja Navarra)
49

Engaging Customers and Other Stakeholders: Becoming a Co-Creative Enterprise

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