Fronteer Strategy - Co-creation's 5 Guiding Principles

FRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT.

CO-CREATION’S

5 GUIDINGPRINCIPLES

A White Paper by Martijn Pater, Fronteer Strategy

Amsterdam, May 2009


Co-creation’s 5 Guiding Principles

OR .... WHAT IS SUCCESSFUL CO-CREATION MADE OF?

In this white paper, we identify different types of co-creation

(suitable for different types of challenges), present 5 guiding

principles for success, discuss the value of co-creation and

present a number of inspiring cases from around the world.

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Co-creation - what is it?

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We define co-creation as the practice of collaborative product or service development: developers and stake-holders working together.

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Co-creation - where does it come from?

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Co-creation is part of the

Open Innovation trends

going on since the 50‘s

Traditional business processes have changed

Customers want more involvement with their products

An enormous amount of

knowledge has become

accessible



Because of these trends, companies face

challenging questions

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How to get - or stay - connected with customers?

Where can I find future growth?

How to innovate from the core?

How should I deal with the risk of commoditisation?



But markets change and new rules apply...

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99,995% of the people don’t work at your

company...

They might have some good ideas...

Why not capture them?

But opening up can be scary

- most companies hesitate to

share ideas and strategies


Co-creation - how does it work?

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There is always 1 initiator

- either company or just a

single person - that decides

to start the initiative

Contributors will be joining

along the process, but the

initiator determines who can

join and under what conditions


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100% Consumers

Only 1% of people in any

community generates the

majority of the creative output

1% Creators

10% Synthesisers

If you open up, keep in

mind the ‘1% rule’


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Co-creation is more than a tool, it’s a program of change

It can be used to...

... tackle your toughest strategic challenges

... get a fresh perspective on your business

... develop breakthrough new ideas

... unlock the world outside and bring it inside

... connect with partners, customers, consumers

... bring excitement to the floor

... work with the 1% most creative peopleFRONTEERSTRATEGYINNOVATION.CO-CREATION.BRAND DEVELOPMENT.


4 Types of Co-creation

There are many ways to go about Co-creation, and which to choose depends

on the challenge and objectives at hand.

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The 4 types of co-creation are based on 2 dimensions:

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Ownership who owns the challenge &

the outcome?

Openness who can join the challenge?


The 4 types of co-creation

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Anyone can join

Selection process

Initiator Initiator + Contributors

Club of Experts

Community of Kindred Spirits

Coalition of Parties

Ownership

Open-ness

Crowd of people

Crowd of People

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Crowd of people

For any give challenge there might be a person ‘out there’

with a brilliant idea

Threadless enables contributors to send in and

rate t-shirt designs. Profits on sold items are

shared with the designer. Not bad: a full 30%

profit margin selling t-shirts with no R&D cost,

low investments and hardly any employees.

http://www.threadless.com/

http://www.threadless.com/

Community of kindred spirits

People or groups with a similar goal develop something for the

‘greater good’

The Linux open source operating system

software was developed by users and for

users. The software code is free to use and

owned by nobody. It started with one

simple e-mail with a request for help.

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Nokia organises ‘lead user’ and

‘expert’ co-creation sessions to

develop visionary new products

and services.

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Club of experts

For specific, time-pressured challenges when expertise and breakthrough ideas are needed

http://fronteerstrategy.blogspot.com/2009/01/warm-welcome-in-helsinki.html

http://fronteerstrategy.blogspot.com/2009/01/warm-welcome-in-helsinki.html

Coalition of parties

In certain complex situations parties with specific skills team up to share knowledge, ideas

and investments

Heineken has successfully developed

the ‘Beertender’ in co-operation with

Krups. A development period of 10 years

resulted in the first true packaging

innovation in beer in a long time.

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5 Guiding Principles of Co-creation

Successful co-creation initiatives tend to have a number of characteristics in common.

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Inspire participation


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Select the very best



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Connect creative minds


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Share results


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Share results

Continue development


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Trigger people to join your challenge

Alessi has been inspiring designers

for many years to contribute to the

Alessi brand, in return for exposure

and shared gains.

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Innocentive is a platform where scientists and

other experts are gathered to solve tough

scientific challenges. Their track record is

impressive: 30% of all problems posed are solved

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Find the best ideas and the best people


http://www.innocentive.com/

http://www.innocentive.com/


Enable people to work together and find that

‘spark’

Lego developed new generation Mindstorms

products together with lead users of the

Mindstorms Developer Program. They have

helped Lego improving their product ranges far

beyond Lego’s wildest dreams.

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http://mindstorms.lego.com/eng/Cpoenhagen_Dest/Default.aspx

http://mindstorms.lego.com/eng/Cpoenhagen_Dest/Default.aspx

Share results

‘Giving back’ is crucial*

Co-creation was part of many of Apples

successes and also drives the Apple iPhone

App store success. The profits are shared,

70% is for the developer, 30% for Apple.

28 *Compensation doesn’t have to be monetary, sharing IP is a next step


Continue development

Co-creation only delivers when it is a longer-term

engagement

Procter & Gamble set high co-creation

standards: 50% of new products should come

from outside the company. P&G’s Connect &

Develop platform invites external people &

companies to innovate with them.

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4 Areas of Value

Return on investments in co-creation can be found in several areas.

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4 Areas of Value in Co-creation

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Direct S

pinoffs

Future

Spinoffs

Direct ResultsFuture Results

Gen

era

ted

Va

lue

Time

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Direct results correspond with the

project goals that have been set: often

new products and services, which

generate economic value

Direct spinoffs cannot be measured in

terms of profit, but create enormous value.

Unexpected effects can occur like new

contacts, collaborations and brand

ambassadors.

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A successful new product introduction

can generate a snowball effect within a

category, creating future results

Future spin-off effects are

unpredictable. Side-effects of certain

actions are hard to oversee, but what

we can say is that action taken now will

have an effect sometime in the future.


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Fronteer Strategy - Co-creation's 5 Guiding Principles