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Co-creation is the future By Mark Wiggins

As business becomes more global and the needs of customers more diverse, the way in which companies obtain actionable insights, by mining internal and external data, is changing. Traditionally, companies performed analytics tasks in-house or outsourced them completely to a third party. Things have changed. Many companies that believe in being a “knowledge enterprise” are opting for what is called co-creation, a concept that first originated in an Harvard Business Review article by CK Prahalad and Venkat Ramaswamy. I believe that co-creation is the next “big thing” for excellence. So what is co-creation? Co-creation is sharing research, innovation and product development initiatives with engaged stakeholders outside the corporate boundary - customers, suppliers or contractors. This approach, often called open innovation or crowd sourcing, draws upon subject matter experts both inside and outside the company to jointly develop strategies, products and markets. Here are three reasons why co-creation is important. 1. Customers opinions matter: No company in today’s cutthroat business environment can afford to ignore the voice of the customer since the Internet has changed the dynamics between business and its customers. Moreover, the steady advance of social media and blogging means people can post opinions-either negative or positive-that companies must pay attention to. Companies such as Amazon have learned this the hard way. 2. Reducing redundancies: If something is not broke, then there is no need to fix it. Therefore, by building on what exists, costs associated with product development and time-to-market can be substantially reduced. Co-creation actually reduces bottlenecks. With approximately 80 3. New forms of advantage: As products and services become increasingly commoditized, co-creation is one way in which a company can differentiate itself from its competitors. When you learn faster from your customers and suppliers, a company’s ability to innovate for first-mover advantage gains momentum. In addition, there are key associated benefits such as the promotion of customer loyalty and brand advocacy. The saying that two heads are better than one aptly captures the essence of co-creation. In fact, in co-creation, two hundred heads are considered better than the traditional intuition of the CMO. However, the caveat is that it is critical to bring the right heads together, which is the real challenge. In my next blog, I will discuss a few strategies that companies must embrace in order to ensure that co-creation is a success.

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