Hack:
Co-creative Innovation: How Unlikely Partnerships can Create Unthinkable Products
The central idea of co-creation is democratization of value creation process. Prof C K Prahalad, who was an exponent of the co-creation concept envisaged "an economy for, of and by people". Then, co-creative innovation can be defined as a method of making value creation process open for external participation to innovate a shared value: value for all.
The traditional approach to innovation aims at helping customers do a job faster, cheaper, and better, though each form of innovation may have its focus on any one of the time, cost, quality criteria. The low-cost innovation, as its name implies, aims at making a product more cost effective, and disruptive innovation aims at bettering a solution with technology. However, none of them are oriented to helping companies address the need to create multi-sided business value - that is value, not only for market constituents (namely customers) but also the stakeholders of society and environment.
Today, companies of all sizes realize that forging multi-stakeholder partnerships is a business imperative. They engage academia, government, customers, public, students, NGOs and so on, in various facets and phases of doing business. Another emerging need is that companies do have to care about creating multi-sided business value - value not just for markets, in terms of making a product or service faster, cheaper and better, but create value also for society and environment at large. For the first time, companies are thinking seriously about making wealth creation process more socially inclusive and environmentally sustainable.
In this background, adopting the basic tenets of co-creative innovation holds immense potential for them to win on both fronts: new partnership propositions, and new product propositions.
We can argue that creating new partnership propositions is important because only a wider participation can help companies come up with a collective brief - a brief that represents a shared value.
Few examples: Can you think of a retail chain partnering with inmates of prison? In India, Reliance Fresh, one of the major retail chains, is partnering with inmates of Dihar Jail, Delhi. The inmates produce bakery products and Reliance sells them, and this partnership represents social inclusiveness in its own way.
An there is a consumer goods conglomerate, Godrej, selling its low-cost fridge - chotuKool- through India's government post offices. ChotuKool, co-created with villagers in Maharashtra, India, is perhaps the world's cheapest and also the most environment friendly cooling system, as it requires a fraction of electric power, when compared with traditional refridgerators. Instead of selling the product, meant mainly for rural markets, through conventional channels, Godrej sells them through government post offices that have over a lakh and a half branches across the nook and corner of the country.
One of India's largest business houses, ITC, is marketing incense sticks (agarbatis) that are made by self-help groups run by rural women. It partners with the forest departments of a few state governments to source bamboo sticks, used for producing incense sticks. It engages NGOs to train more women in making incense sticks from 17 distributed locations. ITC sells about 500 million sticks in a month - comes second in market share - and has created livelihood opportunities for over 20,000 women in the process.
Even, the multi-stakeholder partnership forged by one of US's innovative business models in waste-to-wealth sector, TerraCycle serves as an inspiration for co-creative innovation. TerraCycle partners with product companies and consumers. Consumers pack waste products - including wrappers, containers, etc, and send them to TerraCycle, while the cost of shipping is being borne by manufacturers whose packaging materials and containers the customers send. The recycled and upcycled products of TerraCycle are sold by big time retailers including Walmart, and Home Depot.
Co-creative innovation, to re-emphasize, can help companies forge multi-stakeholder partnerships and create multi-sided business value: a value that comes from making a solution faster, cheaper, and better, while representing social inclusiveness and environmental sustainability.
Companies that want to try co-creative innovation can begin with asking two simple questions: 1) who is not my stakeholder?, and 2) what is not a business value?
Broadly, the four major categories of the stakeholder space are: business (from suppliers to competitors), regulator (government and NGOs), society, and market (consumers). Companies have to be inclusive in listing who its stakeholders can be - as inclusive as they want their end product to be wholesome.
They should try to engage them in all stages of value creation process- in the case of product development, for instance, the external stakeholders should be involved right at the stage of conceiving a product design/creating a design brief.
As for multi-sided business value goes, it is worth reading what Nike’s CEO, Mark Parker, had to say, in his 2010 CEO letter, “In the early days, our “systems” consisted of only those things that helped us build better shoes and shirts, and ads and events. We are, after all, a consumer products company. It took us a while, but we finally figured out that we could apply these two core competencies — design and innovation — to bring about environmental, labor and social change. We opened the aperture of our lens and discovered our potential to have a positive influence on waste reduction, climate change, managing natural resources, renewable energy and factory conditions."
I am a big fan of Prof CK Prahalad, and was sad to hear of his passing. I am also a big fan of his co-creation of value ideas. I would be very interested in your business perspective of my ideas on value (see my entry: Focus more on value and less on profit).
I would be very interested how you would define value, and whether you have thought about the process of value. This is what my work is about and I would be interested in your perspective.
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Hi Richard. Good to know you. I too can claim to be one of his fans. In fact, I can proudly claim that an organization I founded - Forum for Co-creation Excellence (FORCE), is the first one in the world to promulgate Prof Prahalad's birthday as World Co-creation Day. You can find the details at www.worldcocreationday.com.
I am keen to know your views on value - kindly give me a day or two for me to pass on my comments. As for my take on what is value, I think traditionally people in business focused on making things "faster, cheaper, and better". This is a market perspective. However, there is a need introduce social value (making a product/service/business socially inclusive) and environmental value (making it more environmentally sustainable) in the whole business value equation. Any innovation, thus, should pursue a five point agenda: time, cost, quality, as well as inclusiveness, and sustainability.
Please feel free to mail me at sankar@younomy.com - there is no mail alert or mail notification option in this forum, I suppose.
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Very happy to continue the conversation. Value is after all a continuous conversation to explore and explain our changing wants and needs. I also believe this conversation is a critical test that any innovation must face and overcome. Does it make our customers' lives better?
I did wonder this morning, is there something particularly Indian about a "co-creation perspective"? Though I do not know much about the Indian culture, except Taj Mahal, astrology, Bhagavad Gita, dharma and karma. And reflecting on this ("co-creation') some more, makes me think of the Thai people, and the Thai student I have taught. The Thai people have a great culture of service, perhaps related to their Buddhist tradition. They think of others before themselves. Perhaps Prof. Prahalad was also thinking along these lines. And maybe this is a challenge for an American culture which in many ways is a "me first, success, success, success" culture. Perhaps in the Asian Century, the West has much to learn from the culture of the East. If the West could learn some humility and listening skills and a tradition of service, putting the customer and their needs first, we might all be a little better off.
Let's continue the conversation. I had a look at your website. You look very busy. Check out mine at http://www.valman.blogspot.com (Value Management: Innovation 2.0).
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Hi Richard
Your question is a big one, and an important one too. I think there should be some connection between a person's spiritual understanding and his/her views on management. There is a belief that Buddhists are generally care about conservation, and they try to reuse everything. To what extent we could attribute the house keeping discipline of Japanese (and therefore of Toyota!) to their spiritual, cultural belief system. So, yes, there could be something embedded in Indian culture that someone who belongs to it, could think of co-creation first in a profound way. But, I am not for a moment suggest that India's spiritual ideas are inferior, as many would make out, for the Indian spirituality itself says that there is only one source that everyone radiates, irrespective of where they are born or live.
BTW, I have been to your interesting blog. Excepting the dark background, which makes reading a little difficult, I like everything you have posted there.
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