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DESIGN YOUR INNOVATION

co-creation framework+casesFlavio Fabiani http://about.me/f.flavio

June 29th - NMBS Loods - Magdalenastraat 48 - 8500 Kortrijk

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I am member of the Innovation Core Team at Toshiba Europe where I work since 10 years At Toshiba I am responsible for

working with senior business leaders to drive innovative solutionsadvising & coaching to business units on innovation methods, processes, and approachesconsulting on the approach to innovation engagements

R&D, product innovation and communication strategies are the areas I am mainly dealing with

FLAVIO FABIANI / Toshiba Europe

www.leading-innovation.com

www.welovestories.net

www.youtube.com/watch?v=k6PSbUl_68k

us.toshiba.com/computers/research-center/technology-guides/toshiba-bulletin-board-software/

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Myths about innovation

Leading neurologists for many years have been telling us that meaningful interactions among individuals enable people to both learn faster and remember more of what they learn, and that as a result engaged minds in collaboration generate creative solutions even the smartest minds alone may not find

In spite of that, there are two prevalent myths about creativity and innovation

1. creativity is the preserve of the individual creative genius2. innovation are generated by eureka moments often by people in scientific labs

These myths exist because they are more interesting to narrate, but looking beneath the surface we find out that innovations are developed by groups of people and that they usually take long time to become fully formed.

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An idea is networked

In 1805 Heinrich von Kleist in his essay ‘On The Gradual Production Of Thoughts While Speaking’ wrote that we can sit alone in our room trying to solve a seemingly intractable problem and then when we talk to others suddenly the answer is there Recently, Steve Johnson in his book “Where Good Ideas Come From: The Natural History of Innovation” - concludes that less than 10% of innovation during the Renaissance was networked but that already two centuries later a majority of breakthrough ideas emerged in collaborative environment. This trend continued in the following centuries.

Christians will probably refer to the Bible’s passage “For where two or three are gathered in my name, there am I among them” (Matthew 18:20)

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Managing innovation

If these are the assumptions, managing innovation in order to create more value lies not in finding a way to create the best fully-featuredproducts or services, but in providing more and varied opportunities to individuals involved in our value chain to come together and co-create personalized experiences

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my definition of co-creation

“Co-creation is an organization’s strategic guidance giving strong significance to the working and consumption experience of people.Co-creation strategies are always human-centric as the notion of experience is by definition referring to individuals who sometimes act for themselves (customers), sometimes on behalf of organizations (employees, suppliers, policy makers, etc.)Talking and working on human experience is setting the ground for the intuitions collision and for the mutual enrichment but should not be the final aim”

Ultimately co-creation is about learning how to create meaningful and rewarding experiences, is about managing for creativity instead of managing creativity itself

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Benefits of co-creationIt increases efficiency by cutting costs in many ways like

reduce marketing budget necessary to launch products / services avoiding launch of products / services not valued by the customers

It reduces business risks by sharing them with partnersby increasing insights generationby pre-testing investments

It lower employees turnoverIt expands market opportunities and returns thanks to outside-in and inside-out strategies

outside-in, by involving customer in matching processes on the enterprise side. This approach start with the human experiences and mix them with the enterprise processes (e.g. Nike+)Inside-out, by making enterprise processes transparent to stakeholders in order to allow them to interact with those processes and generate new experience for themselves. This approach start with the enterprise processes and mix them with the human thinking (e.g. mass customization)

It enhance enterprises strategic capital, i.e. the capacity to plan and successfully execute their business strategiesIt allow individuals to gain new experience of valueIt decrease risks and cost for individuals

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Scope of co-creation

Co-creation can be applied to almost any type of innovation from operational and product-service innovation to business strategy and management innovation.Indeed the more technical a product is, the greater the difficulty in involving consumers in the development process. Yet it is not impossible to involve others.People who have professional careers in associated disciplines such as design, architecture, ergonomics, can bring specific knowledge to a problem; consumers can provide insights into the way a product or service connects to their lives, and employees from different domains can make previously unseen connections: new mental structures, new constellations, come into being when knowledge, experiences, ideas from widely differing and distinct domains, meet.

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The universe of opportunities of co-creation strategies

The core principle underlying enterprises transformation towards a co-creation strategy aiming at generating a CO-CREATIVE MUTUAL VALUE is:

engaging people to create valuable experiences together while enhancing network economics

This core principle can be pursued thanks to 4 different levers:

network relationships with the other stakeholders organizations in the ecosystemindividual interactions in the different ecosystem contexts experience of both stakeholders organizations and individualsengagement platformssource: V. Ramaswamy and F. Gouillart 2010

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#1: network relationships with the other stakeholders organizations in the ecosystem

The objective is expanding the stakeholders relationships in the ecosystem by increasing networks economics of both stakeholder organizations and of the people working for them In the early stages of co-creation, an organization might experiment by connecting with the existing experiences of adjacent stakeholders Over time, the organization gains confidence to venture into new relationships with distant stakeholders and supporting or proposing new experience typologies The benefits for stakeholder organizations are: growth of strategic capital, increase of efficiency and returns Individuals acting on behalf of a stakeholder organizations (employees, suppliers, policy makers, etc.) benefit from this activities by getting a deeper and more personalized working experience

QUESTIONS- Who are the different types of stakeholders in our business network?- How does our enterprise currently connect with these stakeholders?- Can we engage with our external stakeholders in different / new ways in order to expand the mutual value generation? Where and how is this possible?- Which stakeholders should we address initially?- Are there opinion leaders among the stakeholders? If there are, how can we improve the network economics of both these organizations and the people working for them?

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#2: individual interactions in the different ecosystem contexts

The objective is expanding the scale and the scope of the interactions among the individuals involved in the different ecosystem contexts (profit.com, public.gov, social.org)As stated above co-creation strategies are always human-centric as the notion of experience is by definition referring to individuals who sometimes act for themselves (customers), sometimes on behalf of a stakeholder organizations (employees, suppliers, policy makers, etc.)To add value to individual working / consumption experiences we can differentiate an early stage approach and a more mature approach, like we did when we approaching stakeholders' relationships.Initially the organization experiments by intensifying and reinforcing those interactions among individuals already existing Over time, the organization gains confidence to propose / support new interactions and by engaging more individuals, even those traditionally distant from the organization Individuals in the ecosystem benefit by getting a deeper and more personalized working / consumption experience but also by decreasing their risks and costs

QUESTIONS- What links the organization have already in place with its customers, its employees, and the employees of the other stakeholder organizations?- Can the organization engage in a more co-creative ways in these interactions? If it can, where and how can these interactions be more co-creative

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#3: experience of both stakeholders organizations and individuals

The objective is to expand the space of the experience of both stakeholder organizations and individuals acting in the ecosystem The experience of value chain participants can concern the organization production, its operative processes or its platformsOften enterprises opening up their processes (design, development, R&D, marketing, etc.) to exploit outside-in and inside-out opportunities forget collecting the experiences of participants and truly include them into their operative processes Another common mistake for some enterprises is to open up their processes to the outside world before paying attention to the working experience of their employeesThe benefits for organizations are: growth of strategic capital, increase of efficiency and returns and at the same time decrease risks and employees turnoverIndividuals in the ecosystem benefit by getting a deeper and more personalized working / consumption experience but also by decreasing their risks and costs

QUESTIONS- What experiences currently live people involved in our value chain when they get in touch with our products / services, to our processes or our platforms?- Is it possible to build more meaningful experiences together with the people involved in our value chain?

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#4: engagement platformsThe objective is to driving organization costs down and reducing its risk through co-creative engagementThe engagement platforms represent an industrialization of the interactions among individuals who are part of the ecosystem, i.e. thanks to these platforms both the scope and the scale of these interactions can be easily and cost-effectively increasedEngagement platforms are the cornerstone of co-creation which support the other 3 engagement componentsThe simplest form of engagement platform is the meeting, where people congregate with a specific purpose and a structured process through which they will co-create, thereby playing a central role in defining products and services experience. Stores, products, call centers are other examplesTransforming corporate websites into engagement platforms constitute a huge opportunity in just about any industry . With the plethora of social interaction technologies available nowadays, conversation online has boomed, nevertheless few companies managed this opportunity to engage their customers in a productive and creative ways. (Dell)The best engagement platforms are always multifaceted, they include therefore different dimensions (e.g. online and offline)

QUESTIONS- If we already have engagement platforms up and running, how can we keep them alive through the generation of co-creative value? - What are existing assets and resources which can be used as engagement platforms?- How can we involve our innovation partners in the building of new engagement platform together?

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Core principles of Co-Creation - RecapCo-creative enterprises, innovate new types of experiences shaped by the context of people’s interactions, creating mutual value. To make the process effective and affordable, they design engagement platforms that “industrialize” the scale and scope of interactions, driving their costs down and reducing risk through co-creative engagement. Doing so requires building an expanded, reconfigurable network of relationship that goes beyond the traditional boundaries of the organization to expand stakeholder relationships (private-public-social), and generating radically new economics for participants in the different ecosystem’s contexts of interactions

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Ask yourself the right questions

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Designing a super cheap incubator ($300/$30.000)

a team of students at Stanford University accepted the challenge and went to Bangladesh, in an area with a high incidence of infant mortality and there they visited many hospitalshospitals found of way to finance the purchasing of the incubators via donationsincubators were emptystudents visited the villages and there they realize that mothers didn't brig the premature babies to the hospitals because they were busy with the other children or with domestic activities or again because they didn't know about this opportunity

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when they came back to university, students knew the context of interactions and understood that the initial problem was incorrectly formulatedthe real challenge was not to design a super cheap incubator at a cost of 300$ but a cheap port-enfant which that could be used directly by mothers at home and therefore without electric energythe initial question was therefore reformulated by the students FROM how to design a super cheap incubator TO how to save premature babies from death

Designing a super cheap incubator ($300/$30.000)

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Designing a super cheap incubator ($300/$30.000)

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A correct approach to innovation is working on both sides of the equation through many fruitful iterations

mistaking today = mistaking tomorrow

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DESIGN YOUR INNOVATION

PREDICA designing co-creative business processes

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Context

Crédit Agricole Europe’s second-largest banking network which comprises of 39 regional banks in FrancePredica is a CA division designing life insurance products and managing sales through CA network.Big business, in 2007 around €20 billionHocher (CEO) tasked Steinmann (Head of Marketing) with the development of a new low-end unit-linked life insurance product (i.e. linked on a series of mutual funds)The product, dubbed Cap Découverte, targets young customers who never saved a penny before

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Challenges

Getting the mass of young unskilled customers to understand the relative complex functionality of the productCompetitive offering from ING which had no fees and was rapidly getting market shareIndirect selling model of Predica through regional banks which trained their branch advisors on the insurance productsComplex product management function with many actors involved, setting Predica far back from final customerPainful launch experiences in the past with many of the actors always having good reasons not to like the product design

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How do individuals view their engagement experiences in their interaction contexts and how can those views be leveraged by my organization?

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Kick off of co-creative initiative

Co-creation starts with people not with analytical phases in a process, so the first step was to figure out who should be involvedSteinmann was leading the product development and marketing function so she started looking at all parties involved in the development and launch of Predica products with the intent to allow them to engage with one another in different ways and as a consequence to improve their experienceTo achieve this objective, engagement would be expanded to a new level by asking the retail branch advisor to design the selling-buying experience and to some extent the life insurance product itself

INSURANCE SPECIALISTS retail branches

SALES AND SUPPORT TEAM predica

CUSTOMER COMMUNICATION PEOPLE predica

PRODUCT MANAGERS predica

ACTUARIAL, FINANCIAL, COMPLIANCE STAFFpredica

TOP MANAGEMENT predica

BRANCH MANAGESretail branches

RETAIL BRANCH ADVISORSretail branches

FINAL CUSTOMERS

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Predica Product Manager’s Interaction Map

PRODUCT MANAGERS predica

INSURANCE SPECIALISTS retail branches

SALES AND SUPPORT TEAM predica

CUSTOMER COMMUNICATION PEOPLE predica

ACTUARIAL, FINANCIAL, COMPLIANCE STAFFpredica

TOP MANAGEMENT predica

Develop market background

Develop productconcept

DiscussProduct Concept

FinalizeDesign & Review

Develop CommPlan

FinalizeCommPlan

DevelopSales AidTools

Finalize & Build Sales Aid Tools

DeliverSalesKit

act as product manager within the branches orchestrate

training and support

Institutional sales force conveying +/- enthusiasm to

retail branches

Staff in charge for cucomactivities boost -/+ by deciding where promo funds are going

product lifecycle

stakeholders sequence

Staff evaluate new products’ ROI and checking regulatory

requirements

Proof checks new products’ design and their contribution

to the overall strategy

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Analysis of product managers interactions

Steinmann and her team tried to identify the limitations and opportunities of their own interactions with the actors in their value chain

1. PMs had the largest number of interactions with other parties and this will justify their role of orchestrator of the co-creative effort2. PMs interactions touched only one or at best two players at a time and this sequential way of acting reduced his role to a ‘traffic cop’ who encouraged better coordination between the warring factions 3. PMs work little with the customer-facing people at the local branches (retail branch advisors) as their interaction stopped at the point of sales tool delivery to the insurance specialists

Outcome: there was an unaccomplished need of involving all parties in the design and marketing of new products in an integrated way and as a solution a product design and launch platform was launched and is still used at Predica

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Retail Branch Advisor’s Interaction Map

INSURANCE SPECIALISTS retail branches

CUSTOMERS

RETAIL BRANCH ADVISORretail branches

BRANCH MANAGERretail branches

SALES AND SUPPORT TEAM predica

Undergoestraining onnew products

Receivessalesmaterials

Receivessales targetsfor new product

Markets to customers

Meet with customers

Introduces and sells new product

Tracks progress of customers assets

Undergoes yearly evaluation

Key players at the end of the chain since they interact with the customers. They are 40k with over 60% in junior

position

Set the goals for retail branch advisors can set +/- priority on

the different products

product lifecycle

stakeholders sequence

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Analysis of retail branch advisors interactionsThe PM team then decided to turn the table and see the world from the vantage of the retail branch advisor, and they found out:

the advisors were frustrated because they could not talk to the developers of the sales toolsjunior advisors worked isolated in one-on-one discussion with customers on a complex insurance productsquality of interaction with customers was low because there was no more interactions after purchasing

Outcome: co-creation workshops were launched in the field with the aim of linking activities of PMs and retail branch advisors In the workshops retail branch advisors fleshed out the nature of interactions with customers and with the other bank employeesWorkshop were videotaped hoping to uncover emotional responses of participantIt became clear the aspiration of junior advisors to grow professionally through a permanent process of co-creation engagement with insurance specialists, other advisors and even customersAdvisors Engagement Platform and Customer Engagement Platform were devised and launched

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business process are not sequential

Traditional representations of a business process is a left-to-right arrow where successive process owners optimize their process steps in order to deliver the best value to the next operator in the value chain

The traditional approach to business process design start with the definition of the process customer needs/specs and attempt to deliver efficiently and predictably.Continuous improvements methodologies (e.g. lean, six sigma) are important is this scenario and parameters like cycle time reduction, cost reduction, minimization of output variations are important

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From designing processes to designing platforms for stakeholders’ interaction

If we start looking at operations with a co-creation approach in mind, soon we realize that the difference of process owner and process customer is irrelevantBusiness processes are not only driven by the process owner (left-to-right) but also by the process customers (right-to-left)

Process customers (individuals) don’t want their needs to be frozen at the beginning of the process design investigation, they want a real time adaptation of their process needs.Customers empowered by technology want to engage in the process on their terms and require that the organization adapt the contexts every time they interact The process design focus is therefore not only the desired outcome, but more and more the platform of interaction that will allow process owners and process customers to come together in an optimized way in each new interaction context

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Trans-disciplinary co-creation

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