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Co-creation in the era of social business
Article Type: The strategist’s bookshelf From: Strategy & Leadership, Volume 42, Issue 4
The Co-Creation Paradigm
(Stanford Business Books, 2014) by Venkat Ramaswamy and Kerimcan Ozcan, 333 pp.
It has been 10 years since C.K. Prahalad and Venkat Ramaswamy introduced the “co-creation of value with stakeholders” paradigm with the publication of their landmark book The Future of Competition (Harvard Business School Publishing, 2004). In the ensuing years, Professor Ramaswamy and Francis Gouillart detailed over 40 examples of co-creation of value with customers, employees, suppliers, partners and other stakeholders in The Power of Co-Creation, (Free Press, 2010). So what does Professor Ramaswamy’s third book, The Co-creation Paradigm, written with Kerimcan Ozcan, have to offer strategists that has not already been discussed in his previous two? The short answer: an abundance of fresh insights and cases that are especially useful in the emerging era of social business!
Chapter 1 introduces the co-creation paradigm by offering a comprehensive conceptual and organizing framework for identifying its constituent elements, defined as, “the joint creation and evolution of value with stakeholding individuals, intensified and enacted through platforms of engagements, virtualized and emergent from ecosystems of capabilities, and actualized and embodied in domains of experiences, expanding wealth-welfare-wellbeing.”
This dauntingly dense co-creation paradigm definition is richly illustrated with detailed case studies in the subsequent chapters of the volume, beginning with the discussion in Chapter 2 of how co-creative enterprises serve as a nexus for engagement platforms, which are defined as assemblages of artifacts, persons, processes and interfaces (APPI), designed to amplify and intensify human initiative in creating value together. In their opening chapter, the authors utilize rich case studies from Nike, Apple and Local Motors to identify different types of platforms simultaneously employed by different functions and co-creation process managers for product design, (product) wearing- testing, employee training and supply chain engagement. An essential insight in this discussion is that managers need to integrate the engagement processes employed with different stakeholding groups for different organizational functions and value creating processes so that they are synergistic and mutually reinforcing.
Domains of experience
The second key concept unpacked in Chapter 3 is that of creating domains of experiences via platform-enabled interactions with stakeholders. Four objectives for such experience-domain designs are dialog, transparency, access, and reflexivity (the reflection on outcomes which helps generate and regenerate more positive practices and associated results). Numerous examples of designing such domains of experience are provided, beginning with General Motors’ On Star platform for remote vehicle monitoring and communications between car owner/driver and external sources of assistance. A second case study focuses on Starbucks’ store designs and associated training platforms for shaping the experiences and interactions between customers and the baristas who serve them. In particular the Starbucks case illustrates how all phases of the customer journey – from search for customizable drink options, to selection, to purchase and post-purchase services – are all integrated within an array of Starbucks platforms and the associated experience domains that foster positive interactions. Again, the focus is on adding value in all phases of the customers’ and other stakeholders’ interactions with Starbucks to mutually co-create positive experiences and business opportunities.
Ecosystems of capabilities
The third key concept is examined in Chapter 4 and devoted to ecosystems of capabilities – the collaborative engagement of multiple types of stakeholder innovation co-creation among private, public and social sector enterprises. This concept expansion brings into play various organizational and institutional actors, whose resources and skills are vital to supporting a co-creation initiative. The design and operation of co-creation ecosystems are illustrated in detail in case studies such as Starbucks’ extensive coffee supply ecosystem and the agro-business ecosystem of Indian conglomerate ITC. Each case illustrates key operational capabilities: including all stakeholders, generating value to participants, linking network capacities across the multiple interaction environments of engagement platforms and co-creation enterprises and enabling the evolution of future modifications and extensions as opportunities and circumstances warrant.
Chapter 5 shows how to build co-creation management systems, illustrated by ten case studies drawn from a variety of industries – telecoms, health care, manufacturing, apparel, consumer electronics, financial services, and insurance – and international regions. This chapter illustrates specific co-creation management challenges throughout the various functions and value chain activities of an enterprise, including customer experiences, service and relationship management, customer communities, brand management and new product development, distribution channels and retail experiences, business to business sales and strategic account management, talent and project management. These operationally specific co-creation challenges are supplemented by a detailed discussion of more strategic co-creation challenges, such as how to design and implement co-creation perspective into strategy management, and how to engage financial stakeholders and manage risk-return in an enterprise’s strategic choices and resource allocations.
Chapter 6 explains how to craft co-creative enterprise architectures. It addresses how using the the Internet of Things (IOT), platforms for engagement and value co-creation can transform the development and marketing of everyday objects such as shirts and glasses as well as exotic devices such as pacemakers.
Mahindra & Mahindra case
One of India’s largest vehicle manufacturers, Mahindra & Mahindra Limited, enacted transformational change and the evolution of their co- creative capabilities and practices. How this company and its leadership built a culture of co-creation thinking, broke down organizational silos, and fostered a sense of co-ownership by the company’s employees and other stakeholders is described. (For a brief version of this change process see, “Case: Building a culture of co-creation at Mahindra” by Professor Ramaswamy and Mahindra executive Naveen Chopra in Strategy & Leadership Vol. 42, No.2, 2014).
Implications for society
Chapter 8 utilizes several examples to illustrate how economies and societies may evolve through co-creation. The case of Caja Navarra (CAN) a savings bank in Pamplona, northern Spain illustrates how it has developed and promoted a nexus of engagement platforms to benefit its customers and the local economy. For example CAN has created EureCan, a community engagement platform of mentors, networks and training for entrepreneurs to promote economic entrepreneurship and economic growth. A second example is the Ashoka enterprise, an Indian not-for-profit organization that fosters growth in the social sector (NGO) of India by supporting the work of social entrepreneurs.
Chapter 9 examines how wealth, welfare and well-being can be promoted by private, public social-sector co-creation. This form of cross-sector co-creation is first examined in the case of Mondragon in the Basque region of Spain where a large-scale, cooperative-employee-ownership-network model has operated for some time. The Mondragon is examined as an ecosystem and its impact on economic and social growth and the co-creation mechanisms that foster such growth. The Dublin city collaboration with various stakeholders is also examined as an example of a co-creation ecosystem that generates positive economic, welfare (reduction of poverty and income inequality) and well-being (quality of life) initiatives. Other examples in this chapter further illustrate how co-creation can be a vehicle for social development and well-being for its stakeholders.
The book concludes with a set of general principles for embracing the co-creation paradigm and identifies a number of questions that strategists must ask before embarking on the co-creation journey.
(email@example.com) is Professor of Strategy and International Business at Suffolk University, Boston.