2. business, assess the following
Co-creation beyond three basic questions:
the hype Who contributes, who gets
When a word is used too many the benefits and who takes
times a year and the context in the risks?
which the word is used Where & when in the
broadens in every article, it is process is co-creation
very likely that the
Co-creation is the result of applied?
management community
a broad and irreversible develops a sort of immunity. What is the result of co-
shift in the society and There are multiple examples of creation?
corporate culture. management terminology
being coined as fast as falling
out of favor. Co-creation
Co-creation, as a phenomenon, assessment
was destined to have a similar
lifecycle. The question that To improve the success of your
arises in such matters, is current co-creation business, it
whether the term was a hype is very important to have the
introduced by some right knowledge to be able to
management gurus, or an assess the initiatives according
emerging domain just to objective criteria. Those
struggling with its maturity. As assessment criteria can also be
we see the world now, co- used in advance, as a checklist
creation is here to stay. No for the design of a co-creation
matter what you would like to initiative.
fit in the definition, co-creation
is the result of a broad and Who contributes, who
irreversible shift in the society benefits and who takes the
and corporate culture. During risks?
the growth to maturity we To answer this question you
wonder what is left beyond the map who has a share in a
hype. What is the essence of certain part of the value
co-creation? Which forms of creation process. There are
co-creation proved to be most three important events that are
beneficial for the initiators and distinguishing: value creation,
participants? Which processes selection and consumption.
are most suitable for Who creates and delivers the
‘outsourcing to the crowd’? actual value, who is allowed to
make selections or set priorities
This report will give you within the content that has
insights into the current status been provided, and finally, who
of co-creation, as perceived by does benefit from the co-
top managers out of the created value?
FEM500 business list. If you
would like to verify your
Hype cycle (Gartner, 1995)
current experiences or if you
are curious about what co-
creation could do for your
2
3. • Who contributes to a certain
part of the co-creation process?
• Who took the initiative?
• Who is the director?
• Who pays the facilitation?
Who
• Who shares the risk?
contributes,
benefits and
risks?
• What is the ‘richness’ of the
created value? • Which corporate process is
• Does the outcome match the open for co-creation?
basic principles of co-creation? • Frequency of the interaction
• What is the impact of the co- Co-creation • Deployment of channels
creation?
Where &
What is the when in the
result of process is
co-creation? co-creation
applied?
Content creation theme, to be able to keep a
You could ask yourself whether company-owned community
you can still call it co-creation, alive. The director of the co-
when the content is purely creation process is the party
created by the company. It that is allowed (or accepted) to
actually can be co-creation, for set the rules of the game,
instance when the selection is determine the duration or
done by the consumer. This is a moderate other contributions.
typical customization setup, Again, it is not obvious that the
where the building blocks are firm itself has to control all
still predefined and internally those elements. The right
created. The opposite can work degree of ‘self guidance’ is
also: content creation by the always an important factor for
consumer or business network, success.
The director of the co-
but selection by the organizing
Costs & risks creation process is the
company. This is a typical
Finally, there are the cost and party that is allowed to set
‘contest setup’. In the last
risk elements, which are in fact the rules of the game,
phase of value consumption, it
closely related. Who bears the
is impossible to call it co- determine the duration or
costs of setting up a co-
creation when the benefits are moderate other
creation environment and
not shared between the contributions.
therefore also runs the risk of
initiator and the participants.
there being no significant
The benefits can be split into
outcome? You can think of the
hard benefits, for instance the
online environment, but for
firm’s business case and the
instance when co-creating
extraction of economic value
during use-phase, it could also
by the consumer, and soft
mean significant FTE costs for
benefits, like corporate
supporting internal processes.
reputation and social drivers of
The legal implications of the
the consumer.
creation process present
Initiator or director? another risk. Who is
Another important responsible for the co-created
discriminator is the distribution product or service when it fails
of roles like the initiator and physically or economically?
director of the process. Those Equally applicable to co-
two can be different. A creation is the fact that:
company could consider joining Sharing benefits also means the
a current community instead of willingness to share risks.
creating one itself. We learned
that you have to have a strong
brand or have to claim a clear
Co-Creation Beyond the Hype 3
4. Where & when in the common nowadays. During the
process is co-creation use and recycle or replacement
applied? phase many opportunities are
The second key question zooms lost. If you have the right
in on the practical elements in approach towards your brand
the design of a co-creation ambassadors or lead users,
initiative. Map the most using ‘permission based
important processes, using a marketing’, you can direct the
standard value creation chain, realization of additional value
like: strategy, NPD phases (idea by the user community. This
generation to product launch), also provides the opportunity
marketing, logistics, use phase, to personalize your product or
recycling. For every step in this service according to the exact
Most of the time context the customer is in after
co-creation is connected chain you can think of
processes within that step that the moment of selling. The
to one of the NPD stages original targeted needs often
could be open for outside
or during marketing participation. Most of the time change and an intensified
phase. co-creation is connected to one number of interactions enable
of the NPD stages or during the company to make the
marketing (campaigning) necessary adjustments or to
phase. This is not wrong, provide additional extensions.
because co-creation has mainly This brings us to the next
proved its value in those areas, question: what is the intended
but do not forget to consider frequency of the interactions
customer or b2b cooperation in and which channels do you
the other steps. plan to use for that? The range
The impact of the introduction of possibilities extends from
of co-creation is different for twice, like in an idea
each step. Co-creating on competition, to almost
strategy formulation for continuously in an innovation
instance, could have significant development community. This
impact on the organization if last type of co-creation results
you are fully transparent and in strong ‘learning
willing to change course relationships’, leading to
because of external ideas. On products or services that have
the other hand there are a lot an optimal market fit while
of examples of companies that creating strong loyalty both
neglected the collective ways.
opinion and had to deal with When thinking about proper
even more organizational co-creation channels,
impact. In logistics there can companies should not forget to
also be a nice tradeoff between define the right balance
consumer participation and the between on- and offline or
price the consumer is willing to even online in virtual worlds.
pay for the product, including Joining an existing platform or
transportation. This often social medium is a fast way to
resulted in new business reach potential co-creation
models like IKEA and participants and saves all the
McDonalds which were effort of building a platform
introduced in the past, but
which have become quite
4
5. and keeping it vivid. Another crucial for the final success. The
possibility is to share a platform most advanced form of co-
with multiple organizations, creation, in which customer
which are all interested in a experiences are co-created, can
certain topic. Sharing a only be achieved by
platform can enable one to performance in personalization
attain the larger scale that is and collaboration. When a
necessary to start the co- company does not take care of
creation process. one of them, there will be a
barrier that hinders full
What is the result of co- deployment.
creation?
The third and final question is Furthermore it is important to
all about the outcome of the verify whether the outcome of
co-creation process. It is an initiative meets the basic
recommended that you try to guidelines of co-creation, like:
visualize the results in advance. Does the collaboration offer
What about the ‘richness’ of more value than the
the value created? Is the goal individual contributors
to reach a certain level of could have delivered
customization? This is a form of themselves?
extreme segmentation,
allowing the personalization of Can the final result be
the offering based on limited characterized as ‘win-win’
combinations of modules. Not or ‘pie-growing’? (None of
every product or service is the collaboration partners
suitable for splitting into should win by damaging
several modules. In that case others.)
the modules can also apply to
Is the result a matter of
for instance, the logistics or value creation instead of
processes around the offering. value distribution?
The unbundling trend among
the low cost carriers is an The last, but not the least
example of that. important topic relating to the
Another goal, when defining outcome of the co-creation is
the desired end-result, is to about the impact on the
reach a certain level of organization as a whole. Even a
collaboration. The proportion co-creation pilot does have
between in-house and impact on back office
externally co-created value, is processes. When an
organization chooses to
Co-Creation Beyond the Hype 5
6. continue with co-creation as a Although the respondents have
central, strategic theme, it is high expectations from co-
inevitable that there will be creation, only 25% indicate that
significant changes in the they proactively and
corporate culture and several continuously involve customers
processes in the operating in the design and development
model. Co-creation is even a of new products or services. If
main driver in the transition to most respondents expect
new business models. increased revenues due to co-
creation, why have only 25%
Although there is a high Understanding started implementing it?
level of willingness to co- Although there is a high level of
create, organizations have
needs as the main willingness to co-create,
to deal with barriers driver organizations have to deal with
which place constraints on barriers which place constraints
How far beyond the hype are on their ability to achieve their
their ability to achieve we with Co-Creation? To co-creation goals.
their co-creation goals. answer this question, we have
launched the Global Co- The main constraints that
Creation Survey 2010, asking respondents identify are the
top managers from the FEM500 urgency of pressing day to day
business list to what extent co- business demands (36%) and
creation is currently applied in lack of formal processes for co-
their business, what results co- creation (28%). This indicates
creation brings and what are that co-creation is not yet at
their expectations of the the top of the management
future. agenda, although the
respondents do recognize the
The survey shows that 70% of opportunities co-creation has
the respondents expect to offer. To align co-creation
revenues from co-creation to and make it part of the day to
rise in the coming years, day business successfully,
indicating the opportunities organizations have to make
and high expectations the dedicated choices and deploy a
respondents have of co- clear and focused co-creation
creation initiatives within their strategy.
organization.
What most constraints your company's ability to achieve customer interaction?
(Top 5 responses)
Urgency of pressing day to day business demands 36%
Lack of formal processes 28%
Lack of skills within the organization 26%
We are a commodity product, difficult to show unique value to the customer 23%
We are too far in the value chain to be interacting with the end consumer 19%
0% 20% 40% 60% 80% 100%
Percentage Respondents
6
7. Drivers & results The primary drivers for involving customers in value creation
The respondents indicated
three main drivers for involving Understand new needs 75%
customers in their value Competitive advantage 73%
creation: understanding new Improve customer loyalty 67%
needs, increasing their
Gain market share 40%
competitive advantage and
improving their customer Attract new customers 40%
loyalty. Although co-creation is Higher brand awareness 29%
currently often used as a
Other 10%
marketing tool, these drivers
show that co-creation is much 0% 20% 40% 60% 80% 100%
Pecentage respondents
more to the respondent than
just a marketing tool. Its aim is
to understand customers
better and to develop services
and products that fit their
needs.
According to our respondents, What results did involving customers bring to your organization ?
involving customers really does
result in meeting their needs;
New products or services 60%
new products and services are
for them the key result of Competitive advantage 57%
customer involvement. It is
New customers 42%
however interesting that
attracting new customers is Higher market share 36%
only the fifth driver for co-
creation, whereas it is the third Higher brand awareness 34%
highest result. We have seen Less retention of customers 21%
this unexpected result before in
our previous research ‘Co- Other 8%
Creation & Firm Performance’
0% 20% 40% 60% 80% 100%
(Arjan Tijmes, 2010). This
Percentage of respondents
research showed that whereas
most organizations engage in
co-creation to serve current
customers better, it also
resulted in new customers,
even if this was not a goal in
itself. This indicates that co-
creation can have a snowball
effect.
Co-Creation Beyond the Hype 7
8. Collaboration on the front-end
Managing the always calls for a
complexity of transformation of the back-
office. The firm has to provide
co-creation full transparency and has to
In literature co-creation is often share risks as well as profits.
associated with collaborative But does this matter?
Research & Development Why should we have a
activities. This can extend from theoretical discussion about
crowd-sourced idea generation what is ‘genuine’ co-creation?
to long term development Is a superficial co-creation form
communities. Also, endorsed with mass
customization of the final communication, like an idea
product by selecting a set of competition, worth less than a
predefined modules or designs, small-but-deep open source
You can compare it with
can still be considered part of development community? For
‘green’ environmental the development phase. In a large company an idea
activities, at first used to practice, and endorsed by our competition or for instance
manipulate the common survey, we see most examples customization, can help to
corporate image, but coming from companies that experiment with customer
nowadays integrated in pilot co-creation merely owing collaboration and client
core processes and part of to reputational motives. The centricity. You can compare it
the corporate strategy. launch of a rather superficial with ‘green’ environmental
form of collaboration, activities, at first used to
meticulously controlled by the manipulate the common
firm and supported by corporate image, but nowadays
traditional mass integrated in core processes
communication, can result in and part of the corporate
the desired open brand image. strategy.
One could wonder whether this
can be considered as genuine At the moment there are just a
co-creation. If you look at the few examples of companies
three most important steps in that adopted co-creation in
the co-creation process - who multiple processes along the
creates, who selects and who development and usage value
benefits?- the effort-benefit chain. We expect this is not
balance of this kind of co- because of a clear strategy, but
creation initiative, tends to be due to the lack of focus on
most beneficial for the firm. co-creation and internal
Therefore you could argue competition with other
whether this is contributing to priorities.
client loyalty, which is strongly
connected to a ‘win-win’
outcome. Most of the time
companies are not willing to
change processes, because this
also means a decrease of
control.
8
9. Superficial with mass vs. Our competencies in change
profound with a selection of management and proven
people implementation skills augment
Capgemini research has our co-creation and industry
revealed new insights in the expertise: we do not only
building of a strong co-creation develop the right solution - we
strategy, by managing the also implement it effectively
complexity of co-creation, in and sustainably in the
order to ensure its success. organization.
Managers should make We help you to deliver
dedicated choices on the level maximized personal value for
of co-creation and the number your clients, based on their
of organizational functions specific context. Throughout
involved. the whole chain you will find
new possibilities to involve
Co-creation has the most your clients in value creation,
impact on product and service which will result in faster and
innovation when the better innovations.
organization focuses on an
organization-wide low level of
co-creation (co-creation on
many business levels but under
strict control and with strict
conditions), or when
organizations engage in high
level of co-creation and involve
a small number of Contact
organizational functions
(completely customizing one
small part of their offering on Jaco van Zijll Langhout
which customers can co-create Client Centric Innovation
their experience). What both +31 6 5121 6490
strategies have in common is jaco.van.zijlllanghout@capgemini.com
that they both enable
Remy Brinkhorst
organizations to maintain
Client Centric Innovation
control over their co-creation
+31 6 5108 5757
activities.
remy.brinkhorst@capgemini.com
Isabel Thijssen
Capgemini Consulting and Client Centric Innovation
Co-creation +31 6 1503 0403
Capgemini Consulting has isabel.thijssen@capgemini.com
supported numerous national
and international companies
and institutions in the analysis,
design and implementation of
co-creation. Drawing on our
global network of innovation
experts, we have access to
established tools as well as best
practices.
Co-Creation Beyond the Hype 9
10. About Capgemini
Capgemini, one of the world’s foremost providers of consulting, technology and
outsourcing services, enables its clients to transform and perform through
technologies. Capgemini provides its clients with insights and capabilities that boost
their freedom to achieve superior results through a unique way of working, the
Collaborative Business ExperienceTM. The Group relies on its global delivery model
called Rightshore®, which aims to get the right balance of the best talent from
multiple locations, working as one team to create and deliver the optimum solution for
clients. Present in more than 30 countries, Capgemini reported 2009 global revenues
of EUR 8.4 billion and employs 90,000 people worldwide. More information is available
at www.capgemini.com
Rightshore® is a trademark belonging to Capgemini.
About Capgemini Consulting
Capgemini Consulting is the Global Strategy and Transformation Consulting brand of
the Capgemini Group, specializing in advising and supporting organizations in
transforming their business, from the development of innovative strategy through to
execution, with a consistent focus on sustainable results. Capgemini Consulting
proposes to leading companies and governments a fresh approach which uses
innovative methods, technology and the talents of over 4,000 consultants world-wide.
For more information: http://www.capgemini.com/services-and-solutions/consulting/
Capgemini Nederland B.V.
Papendorpseweg 100
Postbus 2575 – 3500 GN Utrecht
Phone: +31 30 689 00 00 – Fax: +31 30 689 99 99
www.nl.capgemini.com/consulting
10
Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group