Table Of ContentPraise for Collaboration and Co-creation
In today’s customer-empowered world, collaboration and co-creation competen-
cies are critical to the future growth of a company. Execution skills will be at a
premium. Gaurav Bhalla offers a concrete framework and specific examples that
managers can use to implement value co-creation programs with their customers.
A must-read for companies not wishing to get left behind!
Vijay Govindarajan, Earl C. Daum 1924 Professor of International Business,
Tuck School of Business, Dartmouth College
Collaboration and co-creation are the sweet spots for rethinking how companies
should practice marketing and innovation. I personally am very passionate about
co-creation; it creates real competitive advantage. It is the foundation of IFF’s
customer-centric thinking, and guides every aspect of our new product development
creative process. Gaurav Bhalla’s book is very timely, and offers readers an effec-
tive way for building businesses around customers.
Nicolas Mirzayantz, Group President, Fragrances, International Flavors and
Fragrances
Companies can’t afford to fake it. Customer-driven innovation has moved from the
edge to become a core business practice. Gaurav Bhalla helps you understand what
it takes to make this shift, and not a moment too soon.
John Hagel III, Co-Chairman, Deloitte Center for the Edge, and co-author, The
Power of Pull
If running your business seems more difficult lately, reading this book will help you
understand why. It will also provide insights into how collaboration and co-creation
can improve your company’s performance.
Vince Barabba, Author, Meeting of the Minds, and Founder and Chairman,
Market Insight Corporation
Gaurav Bhalla is after big game: how the world’s leading institutions are connect-
ing and collaborating with their most important asset — their customers — in novel
and important ways. Understanding this space as few do, he shows how this new
form of customer interaction leads to game changing business decisions. This book
is an important one to read for any marketing, market research, or product innova-
tion professional.
Steve Howe, CEO, Passenger
Based on my research, it is clear that user co-creation is a strong driver for trans-
forming the marketing and innovation programs of those companies that dare to
listen and respond. Gaurav Bhalla provides a solid framework to guide this process
and a rich set of case stories to explain why and how. In particular, I must credit
him for taking the challenge of implementing user-driven innovation inside the
company seriously — it’s no easy task, but highly rewarding!
Jacob Buur, Professor of Participatory Innovation, Research Director of SPIRE,
University of Southern Denmark
Gaurav Bhalla
Collaboration
and Co-creation
New Platforms for Marketing and Innovation
Gaurav Bhalla
Knowledge Kinetics, Inc.
Reston, VA
USA
[email protected]
ISBN 978-1-4419-7081-7 e-ISBN 978-1-4419-7082-4
DOI 10.1007/978-1-4419-7082-4
Springer New York Dordrecht Heidelberg London
© Springer Science+Business Media, LLC 2011
All rights reserved. This work may not be translated or copied in whole or in part without the written
permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, NY
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to proprietary rights.
Printed on acid-free paper
Springer is part of Springer Science+Business Media (www.springer.com)
To Mothers
consummate practitioners of collaboration
and co-creation
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Foreword
Business can sometimes be accused of promoting new techniques and practices that
have more to do with jargon and theory than with action. Fortunately, this is not the
case with Collaboration and Co-creation.
In today’s networked world, power has irrevocably shifted to the consumer. This
has significantly altered the nature of interactions between companies and consum-
ers, especially in the areas of marketing and innovation. Traditional methods of
fueling growth through thirty-second commercials and products developed exclu-
sively by in-house R&D departments have run out of steam. They are increasingly
being replaced by a collaborative, co-created view of value that emphasizes the
individual’s needs rather than the “one-size-fits-all” model of mass marketing.
Gaurav Bhalla’s book is about this new customer-centric model of value-
creation. It is a book about transformation: the need to rethink customer value —
what it is and how it should be created. The book recommends that readers think of
value not as “what companies do to their brands in their factories,” but as “what
consumers do with brands to make their lives better and more fulfilling.”
Consequently, value lies not in building more features into products and services,
but in providing more and varied opportunities to consumers for co-creating per-
sonalized experiences, much like the Ponds Institute does in helping a diverse set
of consumers co-create individualized beauty and skin care experiences.
Implementing new business practices is not always obvious. A common quan-
dary that most companies find themselves in is where to begin. How does a com-
pany make collaboration and co-creation a core capability? How does it sequence
this capability-building process? Fortunately, the book is up to this challenge. It
lives up to its promise of taking the reader beyond theory to implementation. By
presenting a simple, easy-to-understand framework, it takes the intimidation factor
out of adopting these new value-creation platforms. The book stresses that new
mindsets and new cultures are prerequisites to broadening one’s horizons and pro-
moting creativity.
The “Listen-Engage-Respond” framework for implementation should appeal to
both sides of the reader’s brain. It is simultaneously intuitive and rational. It is an
obvious reality that to get consumers to pay attention, you have to first listen to them.
Listening is even more important when dealing with consumers at lower levels of the
pyramid, where engagement cycles tend to last months, and sometimes years, before
vii
viii Foreword
positive business outcomes are experienced. Additionally, engaging and responding
to the whole consumer and not just her wallet is the best way to ensure that a com-
pany’s current offerings and future innovations will be crowd favorites.
The book makes a compelling case for rethinking marketing, not as a department
or as a function, but as an ingrained pattern of behavior that leads to an obsession
about creating and nurturing consumer value. The author also urges the reader to
rethink innovation, not as something that a company does on its own with its pro-
prietary R&D resources, but as an activity it undertakes in collaboration with other
stakeholders operating in its ecosystem.
Both these themes merit serious attention. The world is far too complex and
multifaceted for any company, no matter how large, to ignore the interests and well-
being of other stakeholders — consumers, customers, suppliers, NGOs, and regula-
tors. Also, since our businesses and brands have impacts at every stage of their
lifecycle — in sourcing raw materials, packaging, manufacture, distribution, con-
sumer use — shared value-creation must involve the full spectrum of stakeholders.
Unilever’s own experience with the sustainable sourcing of palm oil bears this out.
We partner with Greenpeace, Oxfam, WWF, and an industry coalition comprising
over 20 global retailers and manufacturers. Without this level and range of collabo-
ration, it would be impossible for us to meet our public commitments — to draw
all our palm oil from certified sustainable sources by 2015.
The book offers a timely reminder that collaboration does not happen automatically
and spontaneously; it requires an investment in effort and resources. Collaborating across
the entire value chain is complex and time-consuming. It challenges everyone. But it can
be very — rewarding, resulting as it does in faster and more relevant innovations.
Very few business books venture beyond the business world, even though a lot
of good ideas and projects are implemented by nonprofit organizations. This book
does and deserves credit for it. The discussion on how Denmark, Norway, Scotland,
Ireland, Sweden, and Chicago are collaborating with their citizens to co-create
value in the areas of health, education, clean air, and reducing urban congestion is
very instructive.
The book uses a rich array of examples to illustrate the key concepts of collabo-
ration and co-creation. The diversity of companies, organizations, and individuals
featured in the book — Hallmark, Nike, President Obama, Robert Redford, Phoenix
Suns, IBM, GE, P&G, Coca-Cola, Mini Cooper, Dell, Audi, Nokia, Marico — is
impressive. There is much to reflect on and learn from these case studies.
Let me turn you over now to the pages of this book. We are all beneficiaries of
Gaurav Bhalla’s decision to tackle this difficult subject. Marketing and innovation
have and will continue to be two of the strongest drivers of margin and revenue
growth. The concept of customer value is central to both of them. How that value
is created will determine which companies will win in the future. If companies want
to get enduring competitive advantage, they will need to master the skills of col-
laboration. Embracing and implementing the new models of value co-creation,
discussed in the book, will help companies make that transition.
Paul Polman
Chief Executive Officer, Unilever
Prologue
Businesses and organizations today face a complex and rapidly changing land-
scape. Three aspects stand out. First is the emergence of a new, empowered cus-
tomer, very skilled at using the new digital information commons for a variety of
vocational, recreational, and creative purposes. Second is the inevitability of a
linked, interconnected global economy. Third, “people, planet, and profits” is the
new performance imperative; companies can’t ignore the interests of people – especially
those living at the bottom of the pyramid – and of the planet in setting their own
growth agendas. It is the first aspect that focuses our energies and attention.
In the last five to ten years, several books have been written applauding the
emergence of the empowered customer. Books like The Cluetrain Manifesto
(Levine, Locke, Searls, and Weinberger), The Future of Competition (Prahalad and
Ramaswamy), Groundswell (Li and Bernoff), Crowdsourcing (Howe), Here Comes
Everybody (Shirky), Wikinomics (Tapscott and Williams), and We-Think (Leadbeater)
have very successfully and skillfully established how empowered customers —
meaning better-educated, better-informed, and more creative customers — armed
with ubiquitous and Internet-enabled information and communication technolo-
gies, are not just consumers of value, but also its co-producers. This new hand-
shake, depicting a radically different way in which customers interact with
companies and organizations is not just trendy fashion, here today, gone tomorrow.
Rather, the new handshake represents a fundamental and irrevocable shift in the
way traditional, firm-centric, customer value-creating activities, like marketing and
innovation, are implemented.
The wall of intimidation has been breached. With every passing day, businesses
and executives get increasingly more comfortable with the world and ideas realized
by collaborative innovation. Consequently, it is not surprising that collaborating
with customers to co-create new customer value is a hot item on the strategic agen-
das of most companies. But as with most things that require a change in behavior,
migrating from recognizing the importance of something to actually doing some-
thing about it is not trivial.
To borrow a phrase from Eric Berne, author of What Do You Say After You Say
Hello?, What do companies do after they get all excited and motivated about col-
laborating with customers? How do they engage their customers in collaborative
innovation efforts? How do they rethink and reshape their marketing and innovation
ix
x Prologue
efforts? A few companies have figured it out through a mix of experimentation and
trial and error; some are muddling through, but the majority of the companies have
questions. They would like to know how companies like Unilever, IBM, Nike,
P&G, and Hallmark do it. More importantly, they are keen to learn how they can
implement co-creation programs in their own companies.
It is this need that our book fills. Our goal is to take the reader beyond applause
and appreciation to implementation. In a manner of speaking, we start where the
books mentioned earlier leave the reader. We assume that the reader is convinced
that collaboration and co-creation is a game-changing business practice. We also
assume that the reader is convinced that debating on whether or not to adopt this
emerging business practice may not be a wise option, as today’s new, empowered
customers may not offer them that choice. Accordingly, we focus our energies on
helping the reader reach a deeper understanding of implementation. We do so with
the help of a simple framework, which as Mr. Paul Polman, CEO of Unilever, says
in his Foreword, should appeal to both sides of the reader’s brain. We agree. The
Listen-Engage-Respond framework has both emotional and rational appeal. Its
emotional appeal stems from its simplicity. It is at once intuitive and obvious. Its
rational appeal derives from its structural integrity. It is a system for transforming
a transactional approach to relating with customers to achieving ongoing and
sustainable relationships with them.
All companies today want to have conversations with customers; there is nothing
wrong with that. However, it is impossible to have a conversation with anybody,
let alone customers, without first listening to them. Wives, husbands, children,
parents can all attest to that. In families across the world, the objection — you are
not listening to a word of what I am saying — is screamed out thousands of times
a day. However, listening is not enough. Conversations, in order to be sustained,
need fuel; they need the fuel of attention and engagement. They also need an
agenda and an investment in resources. Finally, for conversations to be transformed
into ongoing relationships, people need a response, a commitment to action.
Companies that are not committed to following through, that are unwilling to
respond with concrete, tangible actions that create mutual value for the customer
and the company, are unlikely to find customers who would want to maintain a
relationship with them. It is the sum of all these aspects and the interrelationships
between them that make the Listen-Engage-Respond framework an effective sys-
tem for designing and implementing collaboration and co-creation programs.
Poets never tire of admonishing — Show, Don’t Tell — meaning demonstrate,
illustrate, don’t simply narrate. As authors, we have taken this admonition to heart.
We have used numerous case studies from a number of different companies, repre-
senting a number of different sectors, including nonprofit organizations, to illustrate
the various implementation concepts discussed in the book. Each decision, every
aspect of the framework is amplified, not through definitions and explanations, but
through examples and case studies. In selecting case studies and examples, we were
careful not to just go after well-publicized examples. We have tried our best to
research and showcase examples of companies and organizations that have a lot to
