The emerging disciplines of customer-driven innovation and
value co-creation don’t enjoy a natural fit with existing mental maps of
managers.
Most marketing
executives equate involving customers in the innovation process as ceding
control. They perceive customers’
demands for co-creation as a threat, wrongly believing that it weakens and
undermines a company’s need for controlling transactions with consumers. Other authors like Charlene Li and Josh
Bernoff in Groundswell and C.K. Prahlad and V. Ramaswamy in The Future of
Competition have also recognized this reluctance and anxiety on the part of
companies.
Consequently, developing and
implementing a customer collaboration capability is not merely a matter of
implementing a recipe; it also requires a shift in mindset. The three
prerequisites for a new mindset that encourage managers to look beyond
traditional models of markets, where markets are disjointed from the value
creation process to newer models, where markets are isomorphic with the value
creation process, are:
- Authenticity
- Flexibility
- Conviction
Authenticity
Companies have agendas and
consumers have agendas. The
difference is that consumer agendas are for the most part transparent. For example, consumers want safe toys,
easy to use plug-and-play products, and hassle free customer service. Company agendas, on the other
hand, are not always unambiguous or easy to understand.
Authenticity, as I conceptualize
it, is part ethics, part transparency, and part trust. It is an orientation, or intent,
that a company brings to its collaboration and value creation efforts with
consumers. Over time, if
reinforced by right action, it gets transformed into being perceived as a
company trait. It is a heart
response on the part of the consumer towards a company, not a head
response.
Few companies wear the badge of authenticity as well as
Johnson & Johnson. Ask the
millions of moms who visit its award winning global community BabyCenter. Somehow, they are convinced that J&J will not
compromise their interests.
Today’s consumers have a definite
point-of-view on a number of issues, ranging from t-shirt designs (Threadless),
nutritional value of various foods (Acai fruit berry), appropriateness of diets
(South Beach Diet), to issues related to child labor and living conditions of
workers in Nike and Levi’s factories in Asia.
Flexibility speaks to a greater willingness on the part of
the company to accommodate opposing points of view. There is no rule that says that companies and customers have
to agree all the time. What
is absolutely essential is clear communication about what the company has paid
attention to and how it has adjusted its own stand as a result of the
customer’s opposing point-of-view.
knees, drawing attention to child labor in its Asian shoe producing factories.
Nike admitted its blunder acknowledging that it blew it. The company did not close down its Asian factories, but
instituted significantly more stringent age monitoring and hiring controls,
which it broadcast widely in its corporate responsibility reports. The activists have yet to give
Nike a passing grade, though consumers seem to have accepted Nike’s
accommodation and self-policing.
Nike boasts of some of the most successful customer-driven innovation
programs; just ask the world’s football (soccer) fanatics – customer-driven
innovation programs have been implemented for shoes, t-shirts, and other
team/country related merchandise.
Conviction
Companies have a choice. They can either treat emerging
customer-driven innovation initiatives as a substantively new way of shaking
hands with the market, or as a way of keeping up with the powerhouses – Apple,
Samsung, P&G, Nike, and Nokia.
Symbolism is likely to be penalized.
Wal-Mart‘s
attempt at engaging teens in their community The Hub lasted only ten weeks. The problem was not with Wal-Mart’s intentions; they
probably meant well and wanted to build a safe environment for teens to
interact. However, whether
Wal-Mart was convinced that this was the way of the future is seriously
debatable.
Contrast
this case with the example of WePC.com,
the first community-designed laptop. A joint venture between ASUS and Intel – it
demonstrates that positive outcomes occur when companies approach the new model
of customer-driven innovation and value co-creation with conviction. Even when companies operate outside
their zone of comfort! Intel is a
chip company, not a builder of laptops.
Companies
need to recognize that in the absence of a shift in mindset, efforts at
implementing customer-driven innovation programs are likely to stall. It would be far too easy to shoot the
messenger, or fault the recommended solution.
However,
as the good bard reminds us – the fault dear Brutus lies in us, not in our
stars.
It is not just a simple
matter of adopting newer models of open innovation. Adoption and implementation of these newer models must also
be accompanied by a new and different way of thinking of the relative roles of
companies and customers in creating future value.

