Recently in Value Co-creation Category

Thumbnail image for Thumbnail image for vijay_govindarajan.jpg

Meet Vijay Govindrajan, VG to the world.      


Widely regarded as a leading expert and thinker on strategy and innovation, he is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business (Dartmouth).  More relevant from a personal perspective, he was my Professor at IIM Ahmedabad, first year, first trimester, Managerial Accounting, summer of 1974.  


While his accomplishments and awards are too numerous to list in a blog, two deserve a special round of applause.


First, Thinkers 50 recently awarded him the 2011 Breakthrough Idea Award for sparking a global conversation and challenge to build a $300 house (I was part of the effort), and ranked him number three in the definitive listing of the world's top 50 thinkers


Second, a 2-year stint as Professor in Residence and Chief Innovation Consultant at GE, led to a celebrated HBR article on reverse innovation, co-authored with Jeff Immelt and Chris Trimble, which recently culminated into a book - Reverse Innovation: Create Far From Home, Win Everywhere.


The book was launched globally on April 10, and it is where we pick up the action.  He very kindly agreed to visit with the readers of this blog to share his thoughts on Reverse Innovation and the key themes of his book.


VG, hearty congratulations on the Thinkers 50 award, the HBR article with GE's CEO, Jeff Immelt, and the book on Reverse Innovation, must be very heady times?


Thanks Gaurav.  Yes, heady and humbling times.  The book is the culmination of decades of research, but the reverse innovation journey is just beginning, gaining global momentum, as we speak. All that I can say is I am truly excited about the road ahead and the potential impact of reverse innovation thinking on the growth of multinationals in emerging countries.


Reverse Innovation - in a nutshell?


Historically, large multinationals, residing in rich, developed countries, innovated in their home countries, and then exported that innovation to the not so rich, developing countries.  Reverse innovation is exactly the opposite. Innovations are developed and adopted in poorer, emerging economies, and are subsequently adopted by customers and companies in richer, more developed economies.


A few examples please, to illustrate reverse innovation?


GE Ultrasound Machines - we discuss this example in the article and the book.  In markets like India, where more than 60% of the population lives in rural areas, without reliable sources of power, you can't have effective health care service models that rely on the patient coming to the hospital, you have to take the hospital to the patient.  Large ultrasound machines that are the size of appliances and cost between $100k to $500k are impractical and cost-prohibitive.  A light, portable, PC-compatible ultrasound machine, costing as little as $15k, was developed in India to help the local market meet its needs.  This equipment is now finding its way to developed markets - an example of reverse innovation.


Gatorade - is another fine example of reverse innovation; it's also the first case study in the book.  Quintessentially American, Gatorade actually has its roots in the treatment of cholera patients in Bangladesh and other South Asian countries.  To treat severe diarrhea caused by Cholera, patients were kept hydrated by giving them carbohydrate rich concoctions comprising of coconut water, carrot juice, and carob flour.  A centuries old tradition on that side of the world, it was a total shock to doctors trained in western medicine, who believed that putting carbohydrates in the stomachs of cholera patients would worsen their condition.  But as they say, results speak for themselves.  So, it was only a matter of time before the British Journal Lancet covered the story, and a doctor in Florida reasoned that if it is good enough to rehydrate unhealthy cholera patients, surely it must be good enough to rehydrate healthy Football players.   


In your book you state that Reverse Innovation requires a clean slate approach - interesting juxtaposition of words, slate and innovation - but that aside, please explain what constitutes a clean slate approach?


(Laughs) Yes, it is interesting, the juxtaposition of slate and innovation, now that you bring it to my attention.  By clean slate I mean that winning in emerging markets requires much more than geographic expansion, meaning it requires more than simply ramping up sales, distribution, and production.  I recommend looking at these markets with an entirely fresh set of eyes, with an intense amount of curiosity, supported by an abiding admission that the needs of these markets are different than those at home.  It will require rewriting the script, away from exporting innovations to emerging markets, to innovating in emerging markets.


You are not a big fan of the word - glocalization?


No, I am not, because at heart glocalization is still about exporting products.  Glocalization does not take into account the fact that the structure of markets and customer needs are fundamentally different in emerging markets, and hence require a set of "clean slate solutions." (Smiles, I smile too).


What do you see as the single biggest opportunity in the coming years for multinationals?


Emerging markets becoming more than nominal contributors to the sales and growth of multinational companies.  In the next 25 years, the single biggest opportunity I see for multinationals is customers moving from rich countries to emerging/poor countries - reverse innovation should make that possible.


Reverse Innovation is where you live, and Co-Creation is where I live - do the two intersect?


(Smiles) Is that a trick question?


Not at all! (I protest - though asking VG trick questions would be quite cathartic, given all the trick questions he asked us when he taught us Managerial Accounting).


Most definitely they do.  The $300 House initiative - you were part of that movement - it also received the Thinkers 50 Breakthrough Idea 2011 award - is an excellent example where Reverse Innovation and Co-Creation intersect.  In fact I would go one step further, they don't just intersect, they positively reinforce each other.  If the structure of markets and consumer needs are different, then so must be the architecture of solutions and customer experiences, a perfect set up for Reverse Innovation and Co-Creation to work with each other, and for end users and customers to collaborate in co-creating innovative solutions and experiences.


Could you share three key themes from your book for the benefit of busy executives who may not have had a chance to read it yet?  


Just three?


Yup, just three.


(Groans) Boy, you sure make it tough, Gaurav. (It's my turn to smile now).


I would say the three key themes are:


  1. You must innovate, not simply export, if you want to capture the mammoth growth opportunities in the developing world. 
  2. The stakes in emerging economies are global not local. Passing up an opportunity in the developing world today may invite formidable new competition in your home markets tomorrow. 
  3. Legacy multinationals must rethink their dominant organizational logic if they are to win in an era of reverse innovation.
Thanks VG - most gracious of you to have shared your time and thoughts.  Hope we can get together again soon for another round.


Absolutely, this was a lot of fun.  You know where to find me.


Have you been to an Innovation conference lately?  


Then you must have noticed a peculiar variant of the 20-80 rule at play!  


A handful of companies - Apple, Nike, P&G, GE, Google, Walmart - provide virtually all the fodder for industry examples and case studies.  Not just at one conference, but several.  Net result - we get to hear the same stories, with different spices and seasonings of course (depending on who's presenting), over and over again.  


Begs the question, do we really benefit by listening to stories and case studies of just the giants - majority of them from the US? Especially problematic in a global world, wouldn't you say?  Is nothing of consequence happening in other parts of the world?  


And then why do we only hear wildly successful case studies?  Is no one out there failing? Surely there have to be.  Just look at the plethora of articles in magazines like Harvard Business Review, Sloan Management Review, Fast Company, and Wired urging companies not be afraid of failure, and to learn from failure. 


I am ready, here - the guy with his hand raised - I am ready to learn from failure.  But how can I, if case studies dealing with failure and learning from failure are never presented?  


And what about the non-hall-of-famers?  "Unusual Suspects" (taking liberties with the famous line from Casablanca) tucked away in different parts of the world also have a lot to teach us. Korean companies, Turkish companies, Brazilian, Australian, and Malaysian companies; Indian and Chinese companies too, and not just Tata Nano and Baidu! Its time we heard their stories as well, and celebrated them, the way we celebrate Steve Jobs and Apple, and Jeff Bezos and Amazon.


In that spirit let's celebrate Hyundai, not unknown, but definitely short on conference exposure and attendee applause/recognition.


Cars carrying the Hyundai badge have made impressive sales and market share progress in the US, and have achieved market share leadership in growth markets like India.  In the eyes of an everyday auto buyer, the Hyundai line-up may lack the cache of a BMW, Cadillac, or Mercedes, but not when it comes to auto experts. They have been rewarding and recognizing Hyundai models for several years.


  • Earlier this year, the Hyundai Elantra was chosen as the 2012 North American Car of the Year, an award designed to recognize the most outstanding new vehicle of the year.  What made the award unique was that instead of being given by a single media outlet it was awarded by a coalition of automotive journalists from the United States and Canada who represent magazines, television, radio, newspapers and web sites.  This was not Hyundai's first trip to the podium - in 2009 the Genesis won, and the Sonata was one of three finalists last year.

If this is not enough, visit Hyundai's website, and click on Awards and Reviews.  The website provides a variety of awards not just for its car models, but also for its engines, emissions, green characteristics, and customer loyalty, in a variety of market segments.  Surely none of this would have been possible without healthy investments in innovation, and a few (or several) false starts. So, let's hear from Hyundai. 


Even in the area of collaboration and co-creation Hyundai has a lot to share.  


  • In Feb. 2009, Hyundai partnered with Passenger, the technology leader in on-demand Customer Collaboration, to create the "Hyundai Think Tank," a private online community for Hyundai owners, to help shape and co-create the future of the brand.  Several interesting initiatives have been co-created with the help of this community, notably the Hyundai Assurance Program.


  • More recently, to usher in its new "breaking-the-mold" compact car, the 2012 Veloster, Hyundai launched an ultra-creative co-creation project.  Called Re:Generation, 5 DJs - Premier, Mark Ronson, Skrillex, Pretty Lights and The Crystal Method - turn the tables on the history of music as they collaborate, co-create and reimagine five traditional styles of music, from the classical perfection of the Symphony Orchestra to the bayou jams of New Orleans jazz.

Thumbnail image for Regeneration.jpg

Simultaneously, Hyundai has also launched a global co-creation challenge on eYeka, a co-creation challenge platform, to echo the spirit of the Veloster- a groundbreaking car that challenges all preconceived notions of what a coupe should be. Hyundai is inviting participants to demonstrate how new thinking can challenge conventions for the better and how new possibilities can be created in life, through 30-60 seconds video/animation or illustration. 

This is rich material that would stimulate and inspire virtually any professional engaged in innovation and co-creation.  I am sure there are others out there, equally brilliant and creative as Hyundai.  Can we hear and learn from them?

Hope you are listening dear conference organizers and presenters.  Please give us more than just the "usual suspects."  In turn, we promise to turn off our smart phones, our i-everything, and stay glued to our seats!

Merci beaucoup!






CEO successions at large companies, like Unilever and IBM are not spur of the moment decisions.  They are carefully orchestrated and managed - with the bulk of the action often taking place back stage.  


GR.jpg

So are their interviews with the media and analysts - well rehearsed and predictably patterned.  Which is what makes Ginni Rometty's interview with Fortune, shortly after her appointment as the new CEO of IBM - no palace coup, Sam Palmisano is retiring - so terribly refreshing.


There was none of the usual pabulum about vision, and globalization, and the new normal; just solid insights. 


Allow me to share a few that resonated most with me.


Reinvention: When asked what was the most important thing she had learned from Sam, Ginni replied - "the biggest thing Sam taught me, and not just me but the whole company was: Don't accept inevitable." Meaning, you've got to keep reinventing, constantly making new markets, like Smarter Planet, Analytics, and the Cloud.  


Personally, I really like this emphasis on creating new markets.  One of the least discussed tenets of customer-centricity is leading the customer, creating new markets, as Swatch, Starbucks, and Tata Nano have done. 


Implementation: It helps if you are the author, or co-author, of the company's strategy.  Ginni Rometty was an integral part of building IBM's current strategy, the 2015 roadmap.  Not surprisingly therefore, her dominant focus will be on implementation and execution.  That said, it was still refreshing to hear that reaffirmed - too many companies spend too much time rearranging the furniture, and not enough time following through on their commitments and convictions.


Value Proposition: "What do you stand for" is an easy question to ask.  It's a very difficult question to answer, especially for companies as large as IBM.  It was very well answered in the interview - IBM stands for client value, R&D, and Innovation.


Several of my blogs have discussed two of these issues in depth - customer value and innovation.  Its one thing to know what the right things are - it's another to be committed to them.  Given the near death experience IBM had in the 1990s, it's unlikely that they will take either customer value or innovation for granted.  Or get smug about their achievements.  Both hallmarks of companies primed for long term success.


Learning Mindset-Longer Horizon: In his book "How the Mighty Fall" Jim Collins speaks of the dangers of hubris, the enemy of long-term success.  Of all the elements that comprise hubris, thinking that a company knows all that it needs to know to manage both its current and future operations is the most toxic.  In short, not having a learning mindset.  So one has to take note when Ginni Rometti says rather candidly - there are a lot of things we don't know yet.


Additionally, both academicians and consultants have railed against short-term thinking, favoring quarterly gains, sometimes at the expense of long-term performance.  This is especially true for activities that form the spine of the business, such as R&D.  Even more pleasing to hear IBM's newly appointed CEO talk of the longer-term horizon for IBM's R&D efforts, and to continue historically aggressive levels of R&D spending.


Business-driven Technology Agenda:  This blog has carried several features on customer-driven innovation, on customer-led marketing, and customer centricity.  It has even quoted Ted Levitt on a few occasions, especially his classic - customers don't buy ¼" drills, they buy ¼" holes.  IBM is a Technology company.  But Technology is at best a ¼" drill.  The sad part is that several companies still love their products and factories more than they love their customers (courtesy Regis McKenna - Real Time).  Based on her interview, it appears that IBM is unlikely to make that mistake any time soon - not just technology for technology's sake, but for the effect it can and will have on the world.  Ginny Rometti offered the example of Watson, and its potential to reshape healthcare around the world in our lifetime.


A very dear friend and business associate, Gary Kirby (who used to work for Glaxo/Glaxo Wellcome/Glaxo Smith-Kline, and who is sadly no more), and I used to enjoy asking questions like:


Who reads the HBR?

Who follows the advice of leading management thinkers?

What types of companies are most turned on by implementing next-generation management practices?


Regardless of how we cut it, we came to the same, painful realization that smaller companies were often the hungrier, more eager, and took more risks, perhaps because their survival depended on it.  


It's heartening to note - at least based on the interview - that behemoths, like IBM, are hell bent on showing that they too are hungry, keen, and eager.  That they can be the fountainheads of next-generation management practices.  We applaud them!


Consumer-generated ads may have started off as a curiosity, as light-hearted fun.  But they have crossed the chasm and user-generated content (UGC), an umbrella term for all consumer-generated material, including ads, is serious business at a large number of companies today.  Its not just Frito Lay, and Pepsi; companies like Coke, HP, and Best Buy have also bought into their uncommon appeal and engagement potential. Across the board this buy-in is being supported by managerial commitment and dedicated resources; exactly how companies would support core business practices, like IT and Purchasing.

Two key factors lend credence to this point of view.

  • First, the amount of effort - structure, rigor, and resources - to create, select, and air ads has increased significantly, at some of the more established players like Frito Lay.
  • Second, intermediaries like MOFILM have grown in recent years, to enable implementation at companies that would like to leverage the power of consumer-created ads, but without making significant investments of their own.

Consider first the effort factor.  A brief description of the platforms and processes deployed by Doritos and Pepsi Max to create the commercials that were aired during Super Bowl XLV follows:

  • A dedicated website invited ad submissions from Doritos and Pepsi Max fans in the second half of 2010.
  • Details regarding the prize money and the airing of the commercials were explained and presented on the landing page itself.  Both Frito Lay and Pepsi recognized the power of prize money, and correctly so.  The 2011 edition promised $25,000 to the five finalists for each brand, and airing of the commercial for the top 3 for each brand (a total of six).
  • In addition, they also promised monetary incentives for winning the USA Today Ad Meter contest; $1 million to the winner, $600,000 for second place, $400,000 for third place, and an additional $1million to all three winners if the two sponsors swept the top 3 spots.
  • All contest rules were clearly explained, including the format of the submissions, the number of submissions per person, and the submission deadline.
  • Finally, judging criteria, selection of finalists, and voting procedures to determine which ads get aired were also painstakingly explained.

superbowlchallenge.gif


In short, the two sponsors approached the contest exactly as they would any other formal business process.  Small-scale experiments, or novel indulgences, don't get this kind of management attention and/or support.

But, what if a company lacks, or is unwilling to invest in, a formal structure, resources, and/or knowledge to implement programs or contests for developing consumer-created ads?  That's where organizations like MOFILM come in; co-creation intermediaries.

MOFILM offers a platform for the co-creation of video content.  It helps large brands and social causes recruit the services of creative and passionate people from around the globe to create video and film content for a variety of applications and devices, including mobile devices.  The company usually stages its global competitions to coincide with world-renowned international film festivals, like New York, Cannes Lions, and London Film Festival.  The company carries the support of several marquee names from the world of cinema; heavyweights like Robert Redford and Spike Lee.

mofilm.gif
   

Even a cursory look at their clients - Axe, Lego, Hindustan Times, Persil, OMO, Haagen-Dazs, Nokia, Surf - reinforces the principal thesis of this blog.  UGC has crossed the chasm and is not just the preserve of a few companies tinkering at the fringes.  Consumer-created ads are core business practice at a large number of companies.  And their numbers are growing every day.

A modicum of cynicism is healthy. So, it doesn't surprise me one bit when marketing and innovation executives ask whether collaborative innovation is here to stay, or whether it is a mere fad; here today, gone tomorrow. Personally, I don't like to read tealeaves, but being a betting man, I am putting my money on collaboration and co-creation having a healthy and prosperous decade ahead.

Why? Because whenever a management practice finds applications in non-traditional arenas, it augurs well for its future growth. We are all very familiar with traditional corporate examples of collaboration and co-creation:

  • Unilever co-creating Marmite XO with the brand's fanatical lovers
  • IBM co-creating action agendas through its Jams technology - like the recently held Service Jam
  • P&G's engagement of teen girls through beinggirl.com
  • Electrolux's annual appliance design innovation challenges conducted through Electrolux Design Labs, etc.

However, how often do we come across case studies demonstrating collaboration and co-creation in the government and non-profit sectors? Not too often. Fortunately there are. Two interesting examples follow, one just taking off and the other already generating interesting success stories.

Collaboration and India's 12th Five-year Plan

Bureaucracies are not known for experimenting with cutting edge thinking. But the Planning Commission of India seems serious about changing that, at least in its sphere of operation. Before the Planning Commission actually starts developing the Plan, it needs to develop what is called an Approach paper, which sets out plan priorities and targets, which subsequently guide resource allocation and later serve as performance measurement benchmarks; an activity typically performed by technocrats, bureaucrats, and politicians.

For the first time however, the Planning Commission is using the platforms of collaboration and co-creation; it is reaching out to the citizens of India to help shape the Plan's priorities and targets. Indian citizens will get to voice their opinions and ideas before the Planning Commission, concerning the contents of the Approach Paper. The Planning Commission is inviting ideas, comments, and suggestions on important themes and topics that are relevant and cut across several sectors, such as:

  • Innovation and Enterprise - Are we creating enough innovations and enterprise for inclusive and sustainable growth? If not, how can we do so?
  • Governance and Institutions - How do Government or Public Institutions affect us in different sectors? How can we make them work better?
  • Financing the Plan - What are the financial requirements, both public
    and private of achieving our targets? Can we meet them?
Commenting on this collaborative and inclusive process, Deputy Chairman of Planning Commission, Montek Singh Ahluwalia, said a special portal will be available on the Planning Commission's website where people can drop in their suggestions. "We plan to make the process more inclusive. We invite people to comment and post their approaches on the portal. People's suggestions will be discussed while finalizing the 12th plan."

This program is just taking off, so its too early to tell how the citizens, collaborators in this case, will respond. In my book on Collaboration and Co-Creation, I refer to this type of commitment as a Light-level implementation.

I call it Light for several reasons:

  1. The motivation and onus for collaborating lies with the ordinary citizen. Why should they, especially if they have no confidence or trust in the Planning Commission or its intent?
  2. There is no opportunity for the citizens to debate and discuss different points of view. The opportunity for brainstorming can significantly improve the quality of submissions.
  3. Most importantly, there is no transparency once the ideas have been submitted. To a person submitting an idea or ideas, it is not clear who will read what has been submitted, how the idea(s) will be evaluated, and whether or not they will be accepted or rejected. This will undoubtedly affect the motivation to participate.
  4. There are no rewards for participation monetary or psychological. Imagine the missed opportunity here. Even a small newspaper article or mention of winning ideas on TV, with the person's photo, would cause a huge amount of excitement and commitment.
So, yes, the Planning Commission and the Deputy Chairman need to be applauded for their enlightened thinking. However, much more can be done to transform the inclusiveness into a major creative and innovation force.

The UK Spending Review

Across the Arabian Sea and a continent away, earlier this summer, UK Prime Minister David Cameron kicked off a collaboration and consultation program, Spending Review, focused on ways to reduce government spending. The Prime Minister recognized openly that the biggest challenge UK faces is dealing with huge debts, which means reducing public spending. He also acknowledged that reducing public spending will require innovative and challenging ideas, best developed by those working on the frontline of public services, and not just by his army of economists and policy makers.

Together with Nick Clegg, the Deputy Prime Minister, his office broadcast an appeal to Britain's public service workers asking them to share their ideas on where to make spending cuts.


A Spending Challenge website was launched to solicit suggestions from Britain's 6 million public sector workers. The challenge states that "Every single idea will be considered and the best ones taken forward by departments, the Treasury and the Cabinet Office."  The invitation also described, in detail, the process by which ideas would be evaluated and analyzed. By all accounts the Spending Review was the most collaborative ever with an extended period of engagement over the summer between Government, experts, the public sector and the general public.

Response to the Spending Challenge was, as the Brits would say, bloody damn good! Over 100,000 ideas, including 63,000 from the Public Sector were submitted to shape the way Government works, cut the deficit, and eliminate waste. In addition to inviting suggestions, Ministers traveled the country to hear people's ideas and opinions first hand. Finally, The Treasury received several thousand pieces of direct correspondence on specific areas of Government policy - such as health, housing and education - that led to several rounds of
productive meetings with experts in these fields.

Ideas dealing with low hanging fruit dealt with issues such as reducing dependence on paper and migrating to digital media for routine communications, resulting in savings of several million British Pounds. Other ideas dug deeper. A few examples follow:

  • reforming the Educational Maintenance Allowance (EMA) grant and child benefit
  • spending money more effectively by introducing a more preventative focus across public services, especially in public health services
  • building closer links across health and social care
  • minimising tax fraud, evasion and avoidance; a potential spending of £900 million to combat tax fraud, avoidance and evasion, could raise an estimated £7billion of extra tax revenue by 2014 (no need to compute an ROI on that).

Various government departments will continue to review ideas to identify and implement those that could help deliver further efficiencies. In the interests of transparency and openness, the UK Govt. intends to publish all of the original suggestions that met their moderation policy as a data set on data.gov.uk.

Nothing light about this implementation, very impressive indeed! In fact, to use another British expression, it is as close as you can get to a Full Monty; it meets all the criteria of the Listen-Engage-Respond framework discussed in my new book.  I am betting that applications are likely to grow around the world, and in the coming decade we should expect to see some of the most engaging and productive applications of collaboration and co-creation in the government, public, and nonprofit sectors.


UPDATE: I've posted an entry on the $300 House on the Harvard Business Review site: The $300 House: The Co-creation Challenge >>

One of my professors, the late C.K. [Prahalad], used to say that "managers are so preoccupied with operating efficiently that they don't even think about value in terms of the consumer's experience."

Sadly, despite all the brouhaha about customer-centricity, most companies still operate in a highly product-centric manner.   The difference between the two approaches, using C.K.'s words follows:

The traditional company-centric view says: (1) the consumer is outside the domain of the value chain; (2) the enterprise controls where, when, and how value is added in the value chain; (3) value is created in a series of activities controlled by the enterprise before the point of purchase; (4) there is a single point of exchange where value is extracted from the customer for the enterprise.

The consumer-centric view says: (1) the consumer is an integral part of the system for value creation; (2) the consumer can influence where, when, and how value is generated; (3) the consumer need not respect industry boundaries in the search for value; (4) the consumer can compete with companies for value extraction; (5) there are multiple points of exchange where the consumer and the company can co-create value.


All is not dark and bleak of course.  Several countries, cities, companies, and nonprofit oranizations are beginning to take the initiative to collaborate with their customers to co-create value in fields as diverse as healthcare innovations (Norway), improving the quality of life of 50+ year olds (Scotland), Swasthaya Chetna; Hindi for creating health awareness (Hindustan Lever), and Crashing the Super Bowl (Frito-Lay).   

In my new book, I devote an entire chapter to co-creation beyond the business world.  I share case studies of how the new platforms of customer collaboration and co-creation can be applied equally effectively beyond the business world, to drive collaborative innovation efforts in fields such as education, health care, energy, alleviation of poverty, and sustainability. The consumer-centric view is gaining momentum in non-business environments as countries, regions, and cities experiment with collaboration to co-create more promising futures for their people and the environments in which they live.

One example of a project which will be using co-creation at the bottom of the pyramid is the $300 House (disclosure: I'm an advisor).

$300 House for the Poor


The project, which came to life based on the remarkable response to a blog entry in Harvard Business Review, will take into account customer needs in various countries - from Haiti to India and the Philippines.  I don't expect to see a single house design emerge, but rather a variety of local designs - each designed to meet local needs.

How do you engage the customer at the bottom of the pyramid?  By spending time with them, and understanding their experiences, challenges, and frustrations as they tackle everyday tasks and chores that so many of us take for granted. Or like A.G. Lafley was fond of saying - by doing your laundry in 25 countries! 

Let's just pause for a moment to acknowledge that your company's customer of the future may well be at the bottom of the pyramid.  You would be well advised to adopt a customer-centric mindset and develop a system of initiatives to engage her.
Liam Cleaver.jpg

Collaborating with customers and other key stakeholders to co-create value is a surging trend and a hot topic at most companies.  It is also the theme of my forthcoming book - Collaboration and Co-Creation: New Platforms for Marketing and Innovation.  


Most readers may be familiar with the well-publicized of examples of co-creation, such as Frito Lay's creation of Super Bowl commercials, Dell's involvement with  its customer community, IdeaStorm, to shape product development and customer service strategy, and how Threadless collaborates with customers to create and produce its line of T-shirts.


But what about the non-business world - are these platforms just as relevant in co-creating value in fields like education, promoting green behaviors, and healthcare, as they are in co-creating advertisements and new products?  The answer is yes.  My recent HBR blog discusses how The Clinic of Innovation, at Oslo University Hospital, uses these platforms to nurture and treat innovative ideas.


IBM and its Innovation Jams technology has an extensive track record collaborating with not-for-profit organizations like World Urban Forum, NATO, and USAID on co-creation challenges involving urban poverty, international security, and promoting cooperation with the Muslim world through entrepreneurship and education.  The blog features an interview with Liam Cleaver, one of the principal architects of the Jams platform and its many applications.


Greetings Liam, do you want to kick off the interview by providing a brief primer on the Jams platform; how Jams are conceived and implemented.


Glad to.  An IBM Jam is an on-line collaborative event, often also referred to as crowdsourcing, involving the discussion and exchange of ideas around a specific topic or a set of topics.  The audience is invited to participate in a meaningful and constructive exchange of ideas, thoughts, and opinions.  This exchange takes place over a finite time period, usually a few days.  


We took the name "Jam" from the notion of a jam session. Jazz musicians who are passionate about their music and can sit and create something amazing even if they have never met before. This is the experience we look to create in an IBM Jam, the ability to connect people who might otherwise never meet, and have them share their passion for a topic, and build on each other's thoughts to create something remarkable. Like all events there is a backstage team helping to make connections and facilitating the exchange of ideas - trained facilitators, Jam Hosts, and experts in semantic data analytics technology from our IBM Research division, called COBRA.


What has been your overall experience with Jams? Positive, very positive, negative? Share a few key case studies to help us understand your answer.


Very positive, indeed!  We have run Jam events with participants from every walk of life. What has always impressed me is the ability of Jams to tap into people's natural desire to want to make a difference - make a meaningful contribution or have a positive impact on their place of work or where they live. A few examples:


  • The World Urban Forum (WUF) was established by the United Nations to examine rapid urbanization and its impact on cities, economies and policies. Habitat Jam run in 2005 for the World Urban Forum was the largest brainstorming ever on urban sustainability, bringing together NGOs, politicians and academia, and slum dwellers whose lives were directly impacted by this body. Over 8,000 ideas were distilled to 70 core ideas - this core set were all presented at the WUF3 conference and adopted as its official platform.
  • Eli Lilly's CEO, through VisionJam, engaged over half of their global population to identify practical ideas for how to realise their new strategy and vision resulting in a new framework for the company.
  • More recently, the NATO supported SecurityJam to address 21st Century security threats and CovJam for the City of Coventry in the UK, were truly impressive in terms of the range of ideas generated and quality of interaction.


Liam, in your opinion, what are some key misconceptions and misgivings people have about Jams?


There are a few misgivings.


  • First, I frequently hear that, 'this approach doesn't result in tangible outcomes, and it is simply a chat session and no different from how or why people use Facebook or Twitter.' 
  • The other prevalent view is 'people will only share their ideas in an anonymous environment.' Jams are not anonymous by design. A sense of trust is created in the Jam seeing a person's name associated with their comments, and certainly adds to the level of constructive (if at times critical) debate. 
A typical Jam lasts 72-hours, with people signing on around their busy daily schedules for perhaps 30 minutes, or an hour at a time. They are encouraged to return by the quality of the discussion and by their own desire to push emerging ideas forward.  The audience knows, in advance, that the Jam sponsor is committed to act on the results and outcomes of the discussion, so they are willing to roll-up their sleeves and contribute.  Jams do have the potential to be very fulfilling, as they do lead to follow-up action.  But there is a risk as well, raising the audience's expectations with no plan for follow-though.


The biggest misconception people have is that Jams are automatic, spontaneous, and require little or no planning.  Nothing could be farther from the truth.  There is nothing spontaneous and automatic about a Jam event.  Without all the investment of time and effort up-front, during, and after, a Jam would be a non-starter and have zero value.  The best Jams are those that have unwavering focus, and unquestioned commitment to follow-through and act on the recommendations.



What would be the best example of such a Jam, one that had unwavering focus and intent from the start, and which resulted in concrete, long-lasting outcomes?


Without a doubt, that would be IBM's InnovationJam in 2006. Before the Jam launched our Chairman, Sam Palmisano, committed $100 million in funding to ideas that utilized emerging technologies to solve existing business and societal challenges. Over 150,000 people from 104 countries participated during the 72-hour Jam generating over 40k posts that were narrowed down to 30 core ideas. The executive team selected 10 big ideas that represented first-of-a-kind new businesses within IBM; of which, over half represent IBM's corporate-wide Smarter Planet initiative launched in 2008.  So, it can safely be said, that a significant portion of IBM, namely the Smarter Planet initiatives, came into being as a result of the Jam. 


A change in Culture and Mindset is critical for collaborative innovation to take root and become reality in any company. Does IBM Jam regularly with employees to shape its own culture and mindset? 


IBM has been 'jamming' with it employees since 2001. In 2003, we used the Jam solution to reexamine the company's core values since their inception nearly 100 hundred years earlier. Through ValuesJam, IBMers came together to define the essence of the company. The result was a new set of core values - defined by IBMers for IBMers - that now shape everything we do and every choice we make on behalf of the company and our clients. Over 220,000 employees downloaded the "values manifesto" created as a result of the ValuesJam.


Thank you Liam for your time and views. I know you are bullish on Jams. What issues will challenge Jam experts like you over the next 3-5 years?


Yes, I expect to stay bullish on Jams, and yes, I expect to continue to be challenged.  Several things.


  • First, I expect more companies to use Jams to engage their employees, customers, and other key stakeholders; in my opinion "jamming" with employees is still underutilized.
  • Second, given the volume of data Jams generate, we need continued improvements in data and visual analytics to help make sense of the data in real-time and identify underlying themes, values, and sentiments.
  • Third, why just English, why not jams in other languages as well?
  • Lastly, everyday the connection between the PC and the Internet is weakening, with smart phones and other mobile devices capturing more users and accounting for more usage.  These devices will also need to be part of Jam events in the future

I can relate to Liam's responses. Thanks to him, I was able to get a firsthand understanding of the nature, power, and limitations of Jams, by participating in the USAID Jam event held earlier this year.  It was truly a valuable learning experience, one that greatly enhanced my appreciation for the Jams innovation platform.

book_medium.gifCome October, Springer will launch my new book, Collaboration and Co-Creation: New Platforms for Marketing and Innovation.  In this blog post, I'd like to briefly introduce the book - what motivated it, its structure, and essence.  I'd also like to take this opportunity to recognize and celebrate my collaborators.


It's a rare day when some media personality or academic guru doesn't proclaim - this is not your father/grandfather's economy!  It isn't. The reason it isn't is because the ethos (defining characteristics) of today's world is different.  Several C's and a T; connectivity, creativity, collaboration, community, and technology, especially the Internet, best capture the ethos of the world we live, play, and work in.  At the center of this maelstrom lies a new and empowered customer that best exemplifies this ethos in motion.


Companies today are dealing with a new type of customer; one that is more educated, better connected, and infinitely more creative and resourceful than at any time in the past. Today's customers expect to be heard; they are unwilling to be mere consumers, passive and invisible at the end of a long value chain - instead they want to be collaborators and co-producers of the products and services they consume.  They don't want to merely watch TV reports on Haiti's earthquake, they also want to report on it and use their social media skills to mobilize aid.  They don't want to merely watch the Super Bowl game, they also want to win Frito Lay's "Crash the Super Bowl Ad Contest" by creating ads for Doritos.  They don't want to merely moan and groan about Dell's lousy customer service - been there, done that - they also want to shape Dell's customer service and product innovation priorities by participating in its IdeaStorm community.   


Consequently, customer collaboration and co-creation is a hot item on the strategic agenda of most companies.  They have been fired up by books like Wikinomics, Here Comes Everybody, Crowdsourcing, We-Think, etc., that applaud and celebrate the rise of the empowered customer.  They hear pundits urging them to rethink the way in which traditional firm-centric activities like marketing and innovation should be implemented to win the empowered customer's business.


But for most companies the key question is how?  There is little out there to help them migrate from applause to implementation.  What does a company do after it gets all excited and motivated about collaborating with customers?  How does it engage them in re-shaping its marketing and innovation efforts? A few market leaders, like Unilever, IBM, Hallmark, and Audi have figured it out.  But the majority of companies are still huddled at the starting line debating how best to implement collaborative innovation programs.


About the Book


Collaboration and Co-Creation helps bridge this gap.  Using a simple and easy-to-understand framework, Listen-Engage-Respond, and numerous case studies from around the world, the book helps readers shake hands with a core set of thinking and action tools for implementing collaborative innovation programs in their own companies.  It nudges readers to view collaborative innovation as a business process that can be systematically designed and implemented, not as some spontaneous, self-organizing outburst of periodic customer benevolence.  The book was written with a show, don't tell mindset.   Hence the emphasis on sharing, discussing, and guiding using a variety of business and non-business cases, examples, and stories, so as to make the content eminently readable and interesting.   


Collaboration and Co-creation is a compact eight-chapter book.    


  • Chapters 1 and 2 set the stage.  Using case studies like the creation of the Oxford English Dictionary, birth of mountain biking, open source software, and Hallmark, chapter 1 discusses the evolution and dissemination of collaborative innovation in contemporary businesses.  Chapter 2 presents the Listen-Engage-Respond framework and illustrates it with case studies involving the Phoenix Suns and Unilever's Marmite.
  • Chapters 3 through 6 provide an elaboration of the Listen-Engage-Respond framework.  They discuss each of the legs of the framework, once again liberally supported with a large number of short (a few paragraphs) and regular (a few pages) case studies.  A few examples being - Barak Obama's election campaign, International Flavors and Fragrances, Nike, Audi, Blizzard Entertainment, Nokia, P&G, Frito Lay, NASA, Ellen Degeneres, and the Susan G. Komen Race for the Cure.
  • Chapters 7 and 8 aim to end the book on an emotional high.  Chapter 7 discusses the implications of becoming more open and collaborative on traditional firm-centric activities like marketing and innovation.  Supporting examples and case studies drawing on the experience of Unilever, Crayola, IBM, Sun, and Ubuntu are provided to help support the discussion.  Chapter 8 takes the reader on an eclectic journey beyond the business world.  Using examples ranging from the country of Denmark, to a clinic of innovation in Norway, to IBM's innovation jams, the chapter discusses how the Listen-Engage-Respond framework is just as effective and relevant in co-creating value in the fields of education, healthcare, economic growth, and global welfare, as in co-creating advertising based on UGC (user-generated content).


The book's Foreword is by Mr. Paul Polman, CEO of Unilever.  Leading business executives and thought leaders from the academic and consulting worlds, like Vijay Govindrajan, Nicolas Mirzayantz, Jacob Buur, Vince Barabba, John Hagel III, and Steve Howe, who had a chance to review the content before it went to print, have provided their insights and frank assessment of the book's framework and ability to foster customer-centric transformation.  We hope you will find it just as useful in leading customer-centric transformations in your own companies.


Collaborators


deanna web.jpg

Writing a book is seldom a solo endeavor; it is always a team event.  Collaboration and Co-creation is no exception.  I would like to acknowledge and celebrate Deanna Lawrence and Gabriela Head's valuable contributions to researching the myriads of cases and examples that breathe life into the book's content and their participation in triggering and writing various chapter drafts.  



Thumbnail image for Gabriela 2009.jpg

This collaboration has a very compelling underlying story that deserves to be shared.  Deanna lives in Michigan, Gabriela in Arizona, and I in Virginia.  I have known and worked with Deanna for several years, so working remotely with her was not a big deal.  But till today, one book and hundreds of calls later, I have yet to meet Gabriela.  And barring a two-hour meeting over a cup of coffee while in Arizona to attend a wedding, well after approximately 70% of the book was written, neither does Deanna have any previous history of working with Gabriela.  Needless to add, we are working hard to synchronize intent and calendars so we can all be in one place and toast the launch of the book in October.     


As the famous line in the classic short story - Face on the Wall - states, truth is not only stranger than fiction, but also greatly more interesting.  Yes, it is true, honest and productive work relationships can flourish, despite time and distance barriers.  They merely need a steady and constant infusion of trust and commitment.  Make no mistake, though, it is difficult, but infinitely rewarding.  I was not surprised at all therefore to learn that the latest "Richard Beckhard Memorial Prize" for the best article published in 2008-2009 was awarded by the editors of Sloan Management Review to the article  - How to Manage Virtual Teams.  Folks, if anyone is looking to do more research on this subject and needs first hand experiential data, please talk to us.  We will be happy to tell all!


In the coming weeks, I intend to feature interviews with companies and individuals who shared their stories with us and also provide more details on selected aspects of the book.  Stay tuned!

In Rethinking Marketing: From Marketing Products to Cultivating Customers my co-authors and I wrote about how companies must make products and brands subservient to long-term customer relationships.  We also made the point that for ongoing customer value innovation to become a part of the DNA of the organization, it is important that the company move from an internally focused concept of customer value creation, to a more open, collaborative model of co-creating value with customers and other key stakeholders.

In much the same way, I'm more convinced than ever that we must rethink the purpose of modern businesses.  As the global financial crisis has so bluntly shown us, "maximizing shareholder value" is no longer a sustainable purpose for business.  We doubt it ever was.  But back then, Jack Welch was preaching the gospel and companies were lapping it up.  Interestingly, even Jack Welch is no longer singing the "maximize shareholder value" song. 

This is the age of consumer capitalism and the triple bottom line.  The new gospel is people, planet, and then profits.  Near term thinking that just does good for the company without consideration for the environment, or the social social systems that a company operates in, is not a responsible option!    

So where should we look for new role models? 

Across the border to the north, and across the Atlantic to the sub-continent.

rtata.jpg 

Recently I read an article describing Ratan Tata's visit to Canada to deliver the first Thomas Bata Lecture on Responsible Capitalism.

The late Thomas Bata and Ratan Tata, and their corporations have a lot in common.  They epitomize socially-conscious leadership

The Tata story has been well covered in this article, which sums up the vision as follows:

Since its founding in 1868, Tata has operated on the premise that a company thrives on social capital (the value created from investing in good community and human relationships) in the same way that it relies on hard assets for sustainable growth. With every generation, Tata's executives and managers say, they have nurtured and improved their capability for "stakeholder management": basing investments and operating decisions on the needs and interests of all who will be affected. For Tata, this means shareholders, employees, customers, and the people of the countries where Tata operates -- historically India, but potentially anywhere.
These are not platitudes. Tata has won the goodwill of the people not by talk, but through action. Key decisions are based on the impact on society.  The company's humanitarian actions, for both employees and non-employees, following the dastardly November 2008 terrorist attacks on the Taj hotel are well documented, and have won raging applause from even the most anodized critics of business. 

People first, business second.  Both Bata and Tata teach us that it is possible to be a global powerhouse without sacrificing one's soul.  It is not necessary to separate social good from business well being, as so many companies do.

Dartmouth's Professor Vijay Govindarajan explains the Tata Nano as a social innovation:

Through his actions in the Tata Nano project, Ratan Tata has demonstrated that capitalism can have a soul--the profit mission and the social mission do not conflict and can, in fact, be pursued simultaneously. 
Increasingly, we are going to see businesses doing well by doing good, a philosophy that guides thinking and decision making at Unilever. In a recent discussion, Harish Manwani - President Asia, Africa, Eastern and Central European Regions at Unilever - shared that for Unilever value co-creation was not just collaborating with customers, it is collaborating with the interlinked ecosystems that the company operates in.  According to him, this passion and commitment to doing well by doing good, is the reason why the Dow Jones Sustainability Index has rated Unilever as the best company in its category for ten years running. I intend featuring more of the Unilever social responsibility story in my forthcoming blogs.

Social good and company well being can co-exist, as the examples of Bata, Tata, and Unilever demonstrate.  They should not be divorced from each other any longer. The people and the social systems they live in are both customers of the company.  The paramount purpose of modern businesses should be more than just "Do No Harm."  Rather it must be "Do Long Term Good for All."

India's economy and its companies have been getting a lot of attention in the past decade.  A trend map of India at the annual Davos conference will attest to this.  A decade ago, India was invisible at Davos.  Today, to the uninformed observer, Davos may well be a Bollywood party.    


indiaway.gif

The Tata Group, Mittal, Reliance, Infosys, Hindustan Computers Limited, Ranbaxy, ICICI, Hero-Honda, and Bharati Airtel are a few Indian companies that regularly garner media headlines.  The world knows a lot about these companies, and their products.  But what does the world know about the leadership of these companies?  The answer is very little.  Beyond a few names, like Naryan Murthy, Ratan Tata, Mukesh Ambani, and Laxmi Mittal, the West knows little about how Indian companies are managed.  The India Way, authored by Peter Capelli, Harbir Singh, Jitendra V. Singh, and Michael Useem intends to rectify that.  



Do Indian companies have their own way of managing and running their companies?  The answer is a most emphatic YES!  Instead of using management ideas and practices that dominate Western businesses, Indian companies are applying fresh practices of their own, to shape their strategy, leadership, talent, and organizational culture.


Here is a sampling:


  • The best Indian companies drive their performance by investing in people; motivating them, empowering them, and investing in their training
  • For them, the CEO's office and function is not as critical as in the West.  Many of these companies don't even have that title, and practice group decision-making at the top
  • Envisioning a path to the future, strategic thinking, and guiding change is very critical to the leadership of these companies
  • As is being inspirational, accountable, and entrepreneurial

 

Corporate Social Responsibility (CSR), is not an occasional, negotiable activity for most Indian companies.  Partly because most organizations in India tend to be surrounded by mass poverty, and partly because CSR is a reputational asset that helps negotiate deals with the government, companies are very serious about their obligations to the ecosystem they operate in.  40% of all Indian companies routinely monitor their progress on CSR goals, compared to just 17% in the U.S.  


Are these practices transferable to the West?  That all depends on the priorities of Western companies.  Consider the top priorities of Indian companies:


  • Looking beyond stockholders' interests to public mission and national purpose
  • Drawing on improvisation, adaptation, and resilience to overcome endless hurdles
  • Identifying products and services of compelling value to customers
  • Investing in talent and building a stirring culture. 


Perhaps the experience of dealing with obstructionist bureaucracies, crumbling and antiquated infrastructure, and growing up in hardship and scarcity can't be replicated.  But inspiration to do well by one's employees, and build lasting legacies, around entrepreneurship and long-term success, can certainly be imported, and emulated.   


There's always been an India Way.  Its just that its more palpable today.  Hunger can be a beautiful thing - especially the hunger of challenger companies not to be perceived as mere Xerox copies of front line Fortune 500 companies.  Let's hope, for their own sake, Indian companies don't forget this.  


The old adage - Fat Dogs Don't Fetch - applies to all companies in all countries!


Book

    book

About this Archive

This page is an archive of recent entries in the Value Co-creation category.

Social Innovation is the previous category.

Value Creation is the next category.

Find recent content on the main index or look in the archives to find all content.