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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.  


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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!


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I received an email from Amazon a few days ago informing me that they were refunding me $2.50 on an item that I had preordered.  The reason offered for the refund was "pre-order price protection." 


Two things about the email got my attention.  


First, the company had reached out to me of its own accord.  If someone had walked up to me minutes before I read the email and quizzed me on Amazon's "pre-order price protection" feature, I would have got an F, because I would have replied - "what's that?"


Second, and even more interesting was the claim at the bottom of the email - We are building the world's most customer-centric company


Since customer-centricity is a hot topic and a priority for several business professionals and companies I decided to dig deeper and discover what makes Amazon so customer centric.  Amazon's own explanation - a place where you can find and buy anything online - doesn't quite cut it from me.  It may serve well as an advertisement for the world's largest online bazaar, or as a vision statement, but not as an explanation.  


So, I went digging to understand how Amazon - the entire company - organizes itself around the customer.   I decided to use Jay Galbraith's 5-point framework of Strategy, Structure, People, Processes, and Rewards to guide my inquiry.


Strategy and Culture: The true character of a company is revealed by the choices it makes and not by the slogans on the T-shirts it wears.  Every company wants to get closer to its customers.  Few succeed.  Because despite the rhetoric, most companies still love their brands, technologies, and factories more than they love their customers.  Not Amazon.  It has very successfully crossed this chasm - its strategic choices are directed by a simple dictum, what's good for the customer in the long run is good for us.  It is strategically obsessed with continually creating and innovating customer value; it doesn't waste its energy and/or resources obsessing about itself or its competitors. 


Structure: Agility and Flexibility are greatly valued traits in organizations.  However, without the spinal strength of conviction, agility and flexibility is merely blowing in the wind.  As the great poet Kipling advises us:


If you can keep your head when all about you

Are losing theirs and blaming it on you;

If you can trust yourself when all men doubt you,

But make allowance for their doubting too;


Translated, in an organizational setting, it is the balance between the exuberance of the shorts with the pragmatism of the suits that holds the key to future performance.  Amazon has done well in striking a balance between when to throw the organization chart out of the window and when to dig in and let experience rule.


Processes: The fundamental goal of most processes should be to provide the customer with a hassle-free experience.  Too many companies are so preoccupied with knocking the socks off their customers that they forget the leaky pipes and flooded basements.  Companies first need to get the basics right - customer delight will follow.  Amazon's processes are transparent and motivated by a single dominant concern - how to help customers buy more intelligently.  Its One-click check out, Golden Box, Bottom of the page deals, Look Inside, warning messages if a customer is placing an order for something they have already bought before, its willingness to feature negative customer review on its own site - all point to one very simple motivation - if it makes sense from the customers' point-of-view, give it to them.  Simple.


Rewards: So much has been written about the dangers of the next quarter mentality, yet so many companies continue to pursue it zealously.  A long-term view is not for the faint of heart.  Amazon has very successfully demonstrated the benefits of shunning lollypops and candy for more enduring sustenance and nutrition.  By actively deciding against chasing quick bucks Amazon has successfully invested in ongoing customer relationships and built long-term customer equity.


People: I have blogged about and spoken at conferences about the importance of employees to the innovation and customer value creation process on a number of occasions. I am not the only one.  Vineet Nayar's book Employees First: Customers Second (a much misunderstood title) is a candidate for the best book award in the Thinkers 50 competition. Without the right people, customer-centricity will remain a slogan; the employees will hear the sirens, no one will move.  Amazon is on the move, it is excessively persnickety about who it hires, and rightly so!


The purpose of this blog is not put Amazon on a pedestal.  There is too much of that going on in today's business world, too much chest thumping - look at me, look at me, see how great I am. The purpose of this blog is to simply give the reader a behind the scenes understanding of the key factors contributing to Amazon's ongoing drive to becoming the world's most customer-centric company.  That's it.  


Does this mean that Amazon is forever blessed, destined to succeed for all times to come?  Far from it! Building the world's most customer-centric company is a journey, not a destination.  Besides, future success is never guaranteed, least of all to today's most successful.

 


Zeynep güncel foto.jpgAnalogies are a powerful way of stimulating creativity.  What better reservoir to draw it from than nature? I met Zeynep Arhon in October last year at the Future Trends 2010 conference in Miami.  Zeynep is a biomimicry specialist from Turkey.  It was our mutual interest in innovation and collaboration that helped us connect.  Since sustainability is such a hot topic, and since biomimicry's key goal is to promote sustainability, I thought a conversation with Zeynep would benefit our readers.  So here we are.  


Zeynep, can you give us a brief introduction to Biomimicry?

Sure.  The term "Biomimicry" is a combination of two words. "Bios" means life and "mimicry" means to imitate. Biomimicry is therefore the conscious emulation of life's genius. 


And your belief is that innovation can benefit from this conscious emulation of life's genius?


Absolutely. Understanding how nature and its many organisms solve their specific challenges can greatly help us solve life's challenges in our own world.  What we don't realize on a day-to-day basis is that we live in an R&D lab 3.8 billion years young! In this marvellous lab millions of species have already solved and continue to solve many of the problems that we grapple with - energy, food production, temperature control, transportation, packaging, business management and more. So, it makes much sense to look at nature for innovation. Mimicking these time-tested solutions can help us leapfrog to more effective futures, with significantly less failure.


Let's dig a little deeper.  When I hear "innovation inspired by nature" Leonardo da Vinci comes to mind. Several hundred years ago he studied nature to come up with breakthrough designs.  Is Biomimicry really new?


You are spot on.  Leonardo was a genius, and yes his observation of birds in flight led him to think of planes. It is well known that polar bear digging and hibernating habits significantly influenced igloo designs. More recently, Swiss engineer George de Maestral studied burr seeds to invent Velcro. Learning from nature is not new.  What is new is the going beyond a few brilliant minds, what is new is the birth of a systematic discipline of learning and application that involves hundreds of designers, engineers, educators, biologists, entrepreneurs, chemists and architects from around the world. One indicator will help set the global interest and relevance of biomimicry in perspective.  The number of global patents containing the term "biomimetic" or "bio-inspired" in their title has increased by a factor of 93, from 1985 to 2005, compared to a factor 2.7 increase for non-biomimetic patents.

 

Let's get specific - please share a few examples of innovative solutions inspired by nature? 


Since you are from India, you may like this.  HOK Architects and Biomimicry Guild, the consulting firm that incorporates nature's designs into a variety of applications, are building a new city in India, 8,000 acres large.  The source of inspiration for this revolutionary city is moist, deciduous forests. 

BioPower Systems, an Australian company, creates technologies to convert ocean power into a renewable source of energy.  BioPower's wave power system, bioWAVE™, is based on the swaying motion of kelp in the presence of ocean waves. Another new development is The VIVACE hydro energy device that mimics the swimming strategies of schools of fish. VIVACE can harness power from slow moving ocean and river currents to provide new, reliable, and affordable alternative energy sources

Another application that comes to mind which is sure to appeal to urban commuters is Volvo's accident avoidance project; a goal they hope to achieve by the year 2020.  Volvo's "Locust Collision Avoidance Detector" project led to the development of a sophisticated, yet affordable, collision avoidance sensor based on the study of locust behavior.  


There is an interesting saying this side of the Atlantic - there is no such thing as a free lunch.  What are some key roadblocks in developing and implementing biomimicry inspired innovations?


All the big roadblocks have to do with us - human beings; how we think and what we value.  As I see it, the biggest challenge is our ability to be humble and learn from even the smallest organisms on this planet.  We human beings live with a built-in mindset that we are superior to all other life forms.  With that kind of attitude there is slim or little chance for us to learn from other organisms, especially those that we label "insignificant."


Another has to do with our willingness to true risk takers.  Most business leaders hanker after breakthrough ideas, but without breakthrough risks.  Biomimicry can't guarantee success, what it does have to offer is an abundance of opportunities, waiting to reward those that are willing to be frontier thinkers and doers.


Now you personally operate at the intersection of biomimicry and business innovation.  Share a little of your passion and working philosophy with us?  


Happy to, but you have to forgive me if I come across as evangelical.  I am a biased protagonist!  You are very right.  I do operate at the intersection of bomimicry and business innovation.  


  • First, I do believe that business has the power to shape the future. 
  • Second, I also believe that biomimicry has the power to change business into a more human, and graceful activity, which it is not at the moment. 
  • Third, I believe in collaboration and co-creation, which is how I got interested in your work.  In my opinion, we overvalue competition, but undervalue collaboration.  

It is these ingredients that I combine to help my clients develop effective survival and growth strategies.  


One for the road - what if someone is looking for good reference sources, what would you recommend?   


"Biomimicry: Innovation Inspired by Nature" by Janine Benyus is the iconic book, for those interested in reading more on the subject. The Biomimicry Group provides consulting and educational services. Its sister organizations, Biomimicry Institute and Biomimicry Guild bring together scientists, engineers, architects and innovators for creating sustainable technologies. Finally, the website www.asknature.org is an excellent and free resource developed by The Biomimicry Institute in collaboration with the well-known biologist E.O. Wilson.  


Thanks Zeynep, for sharing your ideas and passion; enjoyed the conversation.    


Thank you!  Enjoyed it.  Look forward to continuing our conversation.



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


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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.  



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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.

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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.    


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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!


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.

effectiveexecutive.gifEffective 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.

The magazine's latest issue is dedicated to the theme Co-Creation: the New Frontiers of Competitive Advantage.  The issue features an interview conducted with me on my HBR article and on co-creation

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.

Understanding 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. 

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