We are great believers that collaboration and co-creation among businesses and between companies and customers hold much promise for future growth. There is an opportunity for collaboration and co-creation all along a companies’ value chain, whether it be customers, other businesses or suppliers.
The notion of a lone genius has always been a myth. As W. Brian Arthur observed in The Nature of Technology, innovations are combinations, so it is unlikely that anyone ever has all the pieces to the puzzle. Even Steve Jobs depended on a small circle of loyalists. Today, however, the ability to collaborate is becoming a key competitive advantage.
Let’s examine some examples along the value
chain.
Customers
There’s plenty of research showing that under
the right circumstances and conditions customers and users can develop
innovations which are both novel and have greater value for the users that what
the company’s own developers come up with. Still, there hasn’t been
overwhelming agreement on how best to get it done.
A recent study by Anders
Gustafsson at BI Norwegian Business School and Karlstad University in Sweden
demonstrates that profitable co-creation with customers centers on the nature
of the communication and interaction between the company and its customers. The researchers were after answers to two questions: How should
companies communicate with their customers? When is it profitable to listen to
what they say?
They tested four hypotheses:
First, customer co-creation characterized by high-frequency communication will lead to increased product and market success.
Second, because companies often take an overly dominating role, a more evenly distributed dialogue will lead to more beneficial outcomes of an innovation process.
Third, that collaborative process of face-to-face communication and openness in critical aspects of a project will facilitate the successful development of future services and products.
Finally, new offerings will be more successful if they account for needs that have been identified from user experiences.
The researchers
conducted a survey among 334 managers who all had experience with innovation to
create new products and services. They selected 284 real development projects
that they divided into two main groups:
207 of the projects dealt with minor improvements of products or services, while the remaining 77 projects dealt with the development of radically new products or services not previously known to the market.
The study confirms that companies can achieve better results in
new product development if customers are given the right pre-requisites for
participating actively in the company’s development processes. Better results
were defined as enhanced creativity, improved user value, and a more successful
launch.
Listening
No big surprise here. For minor improvements to products and services, it is advantageous to talk frequently with the customers and have two-way communication between the company and customers.
Listening carefully.
The researchers also saw that it’s wise to listen carefully to what the customers actually said. Users will often know better what is needed to make them even more satisfied with products and services. Customers will also be able to tell you what types of improvements they are willing to pay for.
When not to listen
When a company aims to develop a product or service entirely new
to the market, on the other hand, you should not listen too much to the
customers’ specific proposals. The researchers saw that companies that listened
too much to what customers said were less successful with radical innovations
than those which placed less emphasis on the contents of conversations.
“The customers base themselves to a great extent on previous
experiences. The really radical solutions are difficult to imagine in advance
based on experiences with current products,”Gustafsson points out.
Sounds a bit like Henry Ford’s famous century-old quote:
“If I had asked people what they wanted, they would have said a faster horse.”
And no survey was needed on that thought, was there?
Other Businesses
Here is a great business to business collaboration and co-creation example that was derived from a common objective of sustainability of product containers. In 2009, The Coca-Cola Company created the Plant- bottle, a plastic bottle partially manufactured (30%) with plant-derived materials (like sugar cane and molasses) and byproducts of sugar production in Brazil.
These plants were chosen based on environmental criteria to ensure that they do not interfere with local crops. The remaining 70% of each bottle is made with materials derived from fossil fuels, such as petroleum.
The Coca-Cola Company is now striving to manufacture a bottle made of 100% plant-derived materials and plant residues. In fact, they have already developed a prototype, and are now collaborating with Heinz to use their bottling factory. The Coca- Cola Company has planned to invest $150 million in Plant BottleTM, to develop the next generation of technology for extracting sugar from plant residues such as plant stems, tree bark, and fruit peel.
It is also working to make the new container water and carbon neutral. Heinz has made a major investment in the project, although the company has not revealed any details. It is hoping to take a step further towards its own goal of reducing emissions, waste and energy consumption by 20% by 2015.
Heinz had already used 120 million PlantBottlesTM in the USA in 2011. The material in these new containers shares many properties with that of the original plastic (PET): it is amenable to carbonation of the liquid contained; recyclable; weighs the same; has the same life-time; shares the same appearance and chemical composition; and is suitable for water, juice and carbonated beverages.
The bottle is 100% recyclable: the resulting byproducts can be re-used to manufacture more bottles or to make other products, such as furniture or clothing. More opportunities for collaboration and co-creation. For example, The Coca-Cola Company and furniture maker Emeco have established a smart collaboration to manufacture the Emeco 111 Navy Chair, a chair made of 111 recycled bottles.
Where there are a need and a will of partner collaboration, companies will find a way.
Suppliers
Is growing the pie via supplier collaboration an impossible task? No, quite the opposite. But you have to collaborate more upfront on strategies. And finding an equally willing partner.
Consider one example. Over the last five years, Jimmy Dean’s has expanded its frame of reference beyond just breakfast sausage into convenient breakfast meals that provide longer-lasting energy. A great collaboration with its food manufacturer.
This niche partnership delivers a breakfast like what you’d get at a fast-food restaurant with sausage at its center. In that time, Jimmy Dean’s tripled its frozen breakfast sales with triple-digit millions in growth. But the business category overall grew from $1.2 billion to $1.5 billion, with Jimmy Dean’s driving nearly two-thirds of all the growth.
It’s a great example of what can happen when companies
and their supplier bases stop fighting over splitting the pie and instead find
a way to increase the share. In this case, the growth was stealing sales that
might otherwise have gone to fast food establishments.
We offer these additional collaboration or
co-creation recommendations that are independent of the partner type you are
collaborating with (from the Art of Innovation by Tom Kelly):
Shoot
the bad ideas first
Study the
things you know won’t work. They will help you understand why they don’t work
and give you more alternative options.
Have
a bias for action
Move to implement experimentation with your best ideas as soon as possible. The mere process of actualizing will create more ideas and thoughts on solutions.
Use
lots of media
Try as
many types of media as possible to explore your prototype options. Examples
include drawings, graphics, foam … any means to learn quickly.
Iterate often
Create
short feedback loops. Don’t go long without experimenting and testing your
ideas.
Expect
your design to change
Rarely does your first prototype become your final design.
Remember
this, if you are as impatient as I am, look to your colleagues, your friends,
your customers, other businesses, and to suppliers to challenge you to reach
new heights. Tap into the parts of your brain you may not use every day.
The parts of your brain you may not even realize you can tap into.
Most of all, reach out to others to collaborate. The sum of group collaboration is always greater than the work of each individual.
The bottom line
So in the future, we will all need to learn how to collaborate with machines much as pilots do. In effect, rather than depend solely on our personal databases of experience, we will apply the sum total of human knowledge to our everyday and professional tasks.
Do
you have any comments, questions, or experiences on collaboration to share with
this community?
Are you devoting enough energy continually
improving your continuous learning?
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Mike Schoultz is a digital marketing and customer service expert. With 48 years of business experience, he consults on and writes about topics to help improve the performance of small business. Find him on Facebook, Twitter, Quora, Digital Spark Marketing, and LinkedIn.
