Guides to Innovation at Scale: Co-Creating with Customers

Customers are the lifeblood of any business. An organization that prioritizes too many moving parts ahead of those it sells to is likely to fall short of growth targets or, in some extreme scenarios, fold completely.

Given this reality, it’s surprising that the practice of using customers as part of an innovation process isn’t more commonplace than it currently is. In 1996, Ajit Kambil, Ari Ginsberg, and Michael Bloch of NYU’s Stern School of Business published a paper suggesting that it be used as a key strategy for transforming value propositions, working with customers, or complementary resources.

The world of business may have moved on a lot in the quarter-century since, but the use of co-creation for this purpose, as well as its effectiveness in innovating in other areas, remains potent.

In this guide, we’re going to discuss exactly what is meant by the term co-creation and how to contextualize it within a Challenge-Driven Innovation framework. We’ll also look at the reasons why a business should co-create with its customers and share some tips on how to do this successfully.

Co-Creation: A Definition

At its most basic, Co-Creation is defined as: “the collaborative development of new forms of value, from concepts to fully-formed solutions.” Through our work at Wazoku, the Challenge-Driven Methodology that underpins our innovation program is well-suited to support co-creation of all forms: particularly that between business and customer.

The use of the term “co-creation” predates Kambil et al.’s work by some seventeen years. In 1979, Christopher H. Lovelock and Robert F. Young coined the term as part of their analysis of the benefits of looking to consumers for productivity.

For generations, businesses have found success in turning to the people that spend money with them – or that don’t, in some cases – for ideas on where it can improve.

Co-Creation is one of several handy innovation tools to have in any company’s back pocket. Now that it’s understood what is meant by the term, let’s take a look at why businesses should be co-creating with the customers it has.

Why Should Businesses Co-Create?

Having run Challenges that use co-creation with customers as a great resource for new ideas, we’ve narrowed down the reasons why an organization would use it as a tactic. These reasons are as follows:

  • Shorter time-to-market: the continuous user feedback loop that co-creation with your customers provides means that it is easier to get new products or services to market in a quicker time.
  • Enhancing knowledge and creativity: adding a crowd to any innovation program is going to result in greater insights being available to resolve an issue. The added benefit of this enhanced knowledge and creativity from a customer crowd is that this feedback is coming directly from those to who an organization is hoping to sell.
  • Improved customer relations: involving customers in an innovation process contributes greatly to improved customer relations and loyalty. Enhancing this aspect of the customer relationship can help shore up any plans an organization has, as it has done the work to create a significant base of customers that are likely to return and spend with it again.
  • The competition is also doing it: from a more business-minded perspective, this is the main reason why any company should consider co-creating with its customer base. If the competition is doing it, then there must be some value to it.

Tips for Challenge-Driven Co-Creation Programs

It’s great to be in a position of knowing what co-creation is and why it should be utilized. But there is still potential, especially if a business is running co-creation Challenges for the first time, that mistakes could be made.

Below are some handy tips for things that any organization looking to get started on co-creation Challenges should either do or not do.

  • DO – Keep an open mind: having a specific idea about who from the customer base to talk to may not be the best way to proceed with co-creation. Often, businesses believe that speaking to the most enthusiastic or engaged customers will deliver the best results. Engaging with the naysayers in the customer community can provide greater insight into current issues and how to address them.
  • DO – Get internal minds involved: co-creating with your customers isn’t something that has to be done in isolation. Bringing in people from a variety of departments within the organization ensures that the entire process involves a more rounded perspective on any issue or new product, or service being discussed.
  • DON’T – Go too big, too soon: involving a variety of people is great, but it’s key not to get side-tracked by trying to build the biggest community possible. If the process of co-creation turns into a numbers game, the returns delivered will likely not be as effective as those delivered by a smaller and still diverse, but more engaged community
  • DON’T – Repeat desired outcomes: returning to this co-creation community once it’s been established but posing the same types of questions repeatedly leads to a gradually less-enthusiastic audience. Be sure to keep the problems that are brought to this community varied, to ensure that people’s interest doesn’t wain.

These are general pieces of advice that any company, regardless of industry or size, can attribute to its co-creation program. They are also elements, as with so much of Wazoku’s Challenge-Driven Methodology, that can be customized to better fit any specific business needs.

Conclusion

In this guide, we’ve looked at co-creation Challenges. We’ve defined what they are and looked at where the term comes from. We’ve also broken down the different reasons why any business could look to start using them as part of a scalable innovation program. Finally, we’ve shared advice from our first-hand experience of running these Challenges on things to encourage and things to avoid. Managing ideas from any crowd can be a daunting task, especially if it’s the first time a business is doing it. This is made even more difficult if it looks to bring the very people it relies on to stay afloat into the mix. Having said all that, it is surprising how on-board customers can be to such a process, and unlocking the potential found within that hive mind could well be the difference between achieving and outperforming targets and falling short of them.