AS JEAN-FRANCOIS ZOBRIST ARGUES, ‘MORE AND more people understand: this is not a crisis, but the end of a cycle’. In the past ten years we’ve seen an increase in brands and organisations using crowdsourcing and co-creation to power their online communities and connect with the people invested in their success. Co-creation can be a powerful engine for innovation.

‘Crowdsourcing’ is a term first coined in 2006 by Jeff Howe. He defines it as:

… the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.

Crowdsourcing can enable a brand to gain a true competitive advantage by innovating faster and making more informed business decisions. Often used interchangeably with co-creation, crowdsourcing is, as crowd intelligence platform Chaordix argues, an ‘invitation to submit, discuss, refine and rank ideas or other contributions via the web to arrive at what have been proven economically as the most-likely-to-succeed solutions’.

Co-creation takes things further. According to Francis Gouillart (co-author of The Power of Co-Creation and cofounder of the Experience Co-Creation Partnership), co-creation is

a theory of interactions. It involves changing the way the organization interacts with individuals, including employees, customers or any stakeholder. More specifically, co-creation involves setting up new modes of engagement for these individuals — platforms, in the jargon — that allow these individuals to insert themselves in the value chain of the organization. The idea of co-creation is to unleash the creative energy of people, such that it transforms both their individual experience and the economics of the organization that enabled it.

In ‘Crowdsourcing and co-creation are complementary’, Yannig Roth also explores these ideas, arguing, ‘In terms of accessing a broad spectrum of people and ideas, crowdsourcing represents reach but co-creation represents reach, richness and depth.’

A powerful engine for innovation

Co-creation is increasingly synonymous with corporate innovation and stakeholder empowerment, not merely as a reaction to increased demands for values alignment, but rather as a viable strategy for economic growth and impact. According to John Seely Brown and John Hage in their McKinsey Quarterly article ‘From push to pull: The next frontier of innovation’,

Co-creation can be a powerful engine for innovation: instead of limiting it to what companies can devise within their own borders, pull systems throw the process open to many diverse participants, whose input can take product and service offerings in unexpected directions that serve a much broader range of needs.

The discipline of leveraging crowdsourcing mechanisms to transform engagement, growth and impact is no longer relegated to grassroots outliers and activists. Companies must evolve. As Paul Noble-Campbell notes in ‘Throw out your PRD!’ (a PRD is a Product Requirements Document), the process of bringing to light underlying user needs

... demands the use of contextual and generative design research techniques optimized for discovering the valuable insights that drive innovation and create brand experiences that delight customers. Such techniques as empathetic immersion, user observation, and participatory design provide a deeper understanding of what is truly important to customers.

In a world where radical humanisation and customisation challenge the traditional company-manufactures-consumer-buys paradigm, co-designing with customers and stakeholders has become a vital prerequisite in an organisation’s quest for sustainability. It creates a level of assurance and relevance that is not otherwise possible using traditional innovation processes, and is a radical departure from institutionalised ‘managerialism’. As Jeremy Heimans and Henry Timms outline in ‘Understanding “new power” (Harvard Business Review), co-creation embraces ‘informal, opt-in decision making; self-organization and networked governance’ in its design.

To understand the importance of co-creation in today’s world, you need to examine how the role of customers has evolved. Table 8.1 (overleaf) shows the four levels of changing customer roles, from the 1970s to today. (This table was outlined by Muriati Mukhtar, Mohamed Nazul Ismail and Yazrina Yahya in their article ‘A hierarchical classification of co-creation models and techniques to aid in product or service design’.)

As evidenced in table 8.1, customer roles have evolved from a one-size-fits-all engagement approach that is lacklustre and prescriptive in nature, to a highly networked and interdependent ecosystem model that continuously adapts, innovates and thrives through collective contribution. It is important to reiterate that innovation isn’t a guaranteed outcome of collaboration. Neither is it a magic wand to fix your culture woes (despite what some managers believe).

Innovation culture emerges when customers and stakeholders are fully invested in a co-creation process. With this in mind, organisations must abandon the idea of long-term affiliation and loyalty and embody co-creation in their cultural DNA. They also must ensure stakeholders (employees, customers, partners and community) have ready access to all essential information about products, purpose and so on, and be completely transparent in their relations with them. Co-creation also involves celebrating failure as an essential element of progress (see later in the chapter for more on this).

A business imperative

Co-creation presents us with questions and opportunity — for example, in an ecosystem where everybody participates, everybody contributes and everyone belongs:

• How can organisations orchestrate the right set of people and circumstances for innovation to flourish?
• What is its design?
• Is co-creation finite, or a continuum or both?
• What technological and human skills are required to co-create and sustain continuous engagement, innovation, and growth?

The challenges are far-reaching and not restricted to any one industry. However, in spite of these challenges, and with government and industry now recognising the importance of including customers and community in the design and innovation of products and services, co-creation is imperative for the following reasons. Co-creation:

• fuels fresh thinking and helps to inform and extend core product expertise from an external perspective (outside-in innovation).
• unleashes potential and results in levels of community intelligence, cohesion, participation and contribution that are otherwise not possible in traditional stakeholder engagement models.
• mitigates the risk of falling into the ‘innovation focus group’ rut and other old-school customer research models.
• is fun and empowers continuous learning while enabling an organisation to accomplish its aspirations and goals.

Embracing co-creation

Open-source collaboration and crowd wisdom continuously challenge the transparency of organisations. To this end, finding effective ways to turn the institutional ship around while maintaining focus on day-to-day service delivery demands new skills and a new approach. The invitation for heavily regulated and conformist industries (and all industries, for that matter) is to abandon a ‘protectionist’ worldview of value creation and empower stakeholders with a ‘collectivist’ toolset and techniques that ignite the innate innovation potential that exists wherever human beings coalesce. This is a culture of innovation by design — where individual purpose and organisational direction align to generate every form of value imaginable.

Consequently, in both society and enterprise involving customers and stakeholders in the design and growth of products, services, culture and community is becoming the new normal. As Anja Orcik, Zeljko Tekic and Zoran Anisic point out in their article ‘Customer co-creation throughout the product life cycle’, this behaviour spans from innovating ‘existing products and exploitation of existing technology with low levels of uncertainty’, to ‘radical innovations that result in completely new products, exploitation of new technology, high levels of uncertainty, and usually exclude customers’ involvement’. In ‘A critical look at technological innovation typology and innovativeness terminology’ authors Rosanna Garcia and Roger Calantonea argue further that, in many instances, innovations ‘do not address a recognized demand but instead create a demand previously unrecognized by the customer’.

Martijn Pater, partner at Fronteer Strategy in Amsterdam, developed these ideas further in ‘Co-creation’s 5 guiding principles’. In this white paper, Pater defines four basic approaches to co-creation (see figure 8.1, overleaf). Businesses can use a club of experts, a coalition of parties, a crowd of people or a community of kindred spirits, with each approach determined by varying degrees of openness and ownership. In order to leverage co-creation as a catalyst for innovation, understanding these basic differences is essential.

The following outlines the attributes of each approach:

• Club of experts: Participation in the co-creation process is based on an initiator-only selection process involving lead users and experts who meet specific participation criteria. This kind of approach is most common in corporate innovation contexts where bespoke teams are assembled to experiment with a specific outcome in mind. The biggest challenge with this mode of co-creation is having a pre-determined agenda, which fuels activity but also inhibits the potential for naturally occurring innovation (which is often more relevant and powerful).
• Coalition of parties: Here co-creation occurs through collaboration between organisations where initiators and contributors share expertise, knowledge and skills to create a common competitive advantage. This mode of co-creation is symbiotic in nature and requires high levels of consensus, which can lead to extraordinary innovation or inertia (when consensus is impossible or takes a long time to attain). Due to its alliance-like nature, this mode of co-creation can be very effective; however, all parties need to abandon protectionist behaviour in order for it to flourish.
• Crowd of people: Here, anyone can join the co-creation process and participation is not limited, resulting in a critical mass aspiration to a shared goal or outcome. Grassroots in nature and resembling a social movement, this mode of co-creation is arguably that with the most power and impact. And yet, given the seemingly orderless nature of ‘crowds’ mobilising alliance can be challenging. Innovation in this context requires clear communication and leadership as well as cohesion to an enduring higher-order purpose. Many high-profile movements in society, including the Women’s March that ignited after the Trump election, are evidence of this type of co-creation at its best.
• Community of kindred spirits: This approach involves a highly interdependent and autonomous ‘collective’ of people with shared purpose and interest, who come together to co-create value. Enterprise communities are a good example of this type of co-creation, enabling people in the developed world with skills and agency to control their own work, as well as small companies with specialised skills the chance to compete.

Co-creation increases when organisations are transparent with stakeholders about the risks associated with products and services they produce.

One of my favourite quotes from inventor Buckminster Fuller is ‘You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.’

A test/fail/learn/adapt sequence of small strategies that involves more tests, more risks and real accountability is key to the co-creation process. The following contribution from Mark Truelson explores this idea of failure in more detail, and I return to the topic later in this chapter.