Recently, I had the pleasure of being introduced to ICFAI University, one of India’s leading educational institutions, recognized for its skills in developing innovative educational programs and writing insightful case studies. It is also a leading publisher, 18 magazines and 46 journals, in areas such as marketing, finance, environment, and health care.
Effective Executive is the flagship magazine of the University. Started in 2000 and published monthly, it features articles on topics like marketing, strategy, sustainability, and innovation. Every issue also features interviews on these topics with experts. In the recent past, the magazine has interviewed globally renowned experts and intellectuals, like Philip Kotler, Michael Tracy, Pankaj Ghemawat, Vijay Govindarajan, and Dr.A.P.J.Abdul Kalam, a renowned nuclear scientist, and former President of India.
I would like to share two key topics covered by the interview. The first deals with the nature of co-creation, and the second with the difference between customization and co-creation.
Often, the more people use an expression, the less certain we are what they really mean by it. It’s as if usage guarantees understanding, and more frequent usage guarantees deeper understanding. But that’s not true. Take expressions like Web 2.0, the new normal, or sustainability. People don’t often explain or use these terms the same way.
In the interview, I explained co-creation not by defining it, but by decomposing it, to better explain its features and characteristics.
Co-creation, as currently used in the business and marketing world, has a very specific meaning. Rather than present a definition, my preference would be to explain co-creation by decomposing it, so we can better understand its characteristics. First, co-creation, represents interaction, and takes place between one or more firms, and one or more actual or potential customers. Second, this interaction is willing, purposive, and intentional. Third, this interaction is managed, either by the firm, or jointly by the firm and its customers. Fourth, the output of this interaction results in value for both the firm and for its customers. Lastly, the value created for customers may or may not be unique, and is derived through a variety of experiences, such as suggesting ideas, refining current value, designing new products, improving current designs, fixing defects, and consuming new products and services.
Customization and Co-Creation
I’ve blogged on this topic before when I interviewed Page Moreau. But its worth revisiting, since the two words are often used interchangeably, giving the impression that the two concepts are the same.
There is no doubt that in specific cases there is a blurring of boundaries, but customization and co-creation are not the same.
Let me answer the last part of the question first – do boundaries between customization and co-creation get blurred? Yes, they do. Part of the reason is that researchers and authors who introduce these terms are not always diligent in defining them, and differentiating them from other similar terms. Let me illustrate this for you with an example. Take a men’s clothing company like Paul Fredrick, that sells its offerings through a catalog. If you want to order dress shirts, you have two options. You can either buy the color and pattern you prefer, in your size, based on all the shirts displayed in the catalog, or you can order a custom shirt. Customization allows you to mix and match the fabric, collar and cuff styles, fit, pleat style, pocket, among other things! But wait, there’s more. You can also have the shirt personalized, by having your initials monogrammed in several different styles, in different colors, on either the cuff, or the pocket. Customization, personalization, or both! But is it co-creation?
What is important to realize is that customization and personalization are possible only within the boundaries of choices offered by the company. To go back to the shirt example, the only way I can order a shirt with kurta sleeves (an Indian style shirt with tubular sleeves) is if the company offers that option. If the company does not offer that option, then all that I can do is pick from the sleeve styles offered. This is in sharp contrast to co-creation. If the shirt were being co-created, then all options would be on the table, including kurta sleeves, because the starting point would be a blank canvas, not a menu of predetermined options and styles.
I am sure I’ll blog again on the similarities and differences between customization and co-creation. We owe it to ourselves to keep our thinking fresh and focused.