In 2008 McKinsey Quarterly published the article “The next step in open innovation,” mentioning distributed co-creation for the first time but concluded it was to early to predict what the outcome of this new business strategy would be.  Then last week McKinsey Quarterly published an article about ‘Ten tech-enabled business trends to watch’. The first business trend they described was ‘Distributed co-creation moves into the mainstream’.

This got me thinking how much has happened over the last couple of years. I first got interested in co-creation while writing my thesis for my MBA. My focus was how new technologies were changing the cost structure of innovation and thus enabling ‘the long tail of innovation’. The fundamental premise was how new technologies were enabling companies to collaborate with their customers in a completely new way: Co-creation.  At the time there were only very few successful examples of co-creation. LEGO’s Mindstorms,  the social T-shirt company Threadless where mentioned over again and again and creating value together with customers was certainly not on the agenda of most CEOs

Compare that to today where 70 percent of the executives McKinsey surveyed said that their companies regularly created value through Web communities. Yesterday I discussed social dynamics of online idea communities with a civil servant in the health care sector of a small Danish region – they were setting up an online platform where patients, personnel and companies could discuss and evaluate ideas together. So there is no doubt that co-creation is much more prevalent today.

However I would say we still have some way to go before we can call co-creation ‘mainstream’. First, we still face a host of challenges that have not been resolved – this includes IP management, reward systems and brand management. Second, for some areas of co-creation (e.g. support communities and viral branding campaigns) we are pretty good in calculating return on investment, but for the areas of co-creation where the pay-offs the largest potential (such as front-end idea generation), it is still difficult to estimate return on investment. Third, while examples such as Nike ID, P&G’s Vocalpoint and Microsoft’s MiBuSo are outstanding successes many co-creation initiatives fall short of expectations and in the current economic crisis many executives are going with what is tried and tested.

There is no doubt that a companies’ ability to engage their customers in value creation is going to be a key competitive parameter in the future, and it is great to see the movement. The next steps are to develop structured approaches and strategies to co-creation so it becomes a field at the same level of importance as ‘branding’ and ‘online presence’.

- David

I’ve been looking into what changes in technology, and society have come together to make dispersed, global co-creation a huge trend in business and market strategies. Dr Sudhanshu Rai has posted a great historical analysis of the history of collaborative ways of working internationally with Indian partners at http://barha.asiaportal.info/blogs/in-focus/2010/june/be-reminded-it-co-creation-we-should-understand. He outlines four phases:  ‘Y2K,’ ‘Bodyshopping,’ ‘Outsourcing,’ and ‘Co-creation’ as the final, and next stage. The first stage, Y2K, sent India into an international arena at a speed that had not been seen before, it must have been stunning from the front lines.

Along with many other Americans, I remember vividly the ‘Y2Y’ phase from another perspective – The news hype leading up to the date had suggested that pandemonium would break loose as everything from security systems to the phone system failed, and there had been a rush in the years leading up to 2000 that required the global pool of programmers. We sat at the edges of our couches at the stroke of midnight wondering which major government or utility services would go down because they had not been reprogrammed in time. At 12:10, there was a collective, national sigh of relief as the US toasted the world’s software engineers, our new friends.

That, as Dr. Rai points out, was a very simple method of collaborating internationally that resembles co-creation very little – it was just about assigning a pre-determined task as broadly as possible. It set us down a path however. Internationalization is just one aspect of co-creation. Democratization is another.

For the second aspect, democratization, it seems somehow fitting that Copenhagen is becoming a center for discussion about co-creation http://copenhagencocreation.com/), since the roots can be traced back to pre-international stage that started right here in Scandinavia. The notion that end users should collaborate to design products, systems and spaces has historical roots in the Participatory Design movement of the 70′s.  Back then, end user participation was enforced on organizations through the political machine of scandinavian trade unions. In the interest of protecting workers from the perceived threat that introducing computer systems to their workplace created, the trade unions demanded that workers have the right to co-design the systems which threatened at best to redefine their jobs, at worst to make them redundant. The motivation was democracy and end user empowerment.

Obviously, the approach did not spread to more private market-oriented environments such as the US. There, participation in the design process as an approach to development was taken up much later by private industry as a form of enhanced consumer research. This time it was outwardly focused, involving not employees but consumers. In this version, representative market segments or ‘lead’ users are paid to contribute to improving the design or contributing ideas within defined area or stage of design. This remains the predominant approach to user involvement.

Now participation as a deep engagement is back, and in a form that in some ways is reminiscent of the original Participatory Design movement. Once again people are participating for reasons that are in their own interests, and they have a real stake in the outcome. Except now the motivation for involvement is no longer fear, but opportunity. And now it is not (just) workers, but also consumers who have a choice about what they choose to get involved in. Micro-entrepreneurs are selling their designs on Threadless and Zazzle, self-organizing teams are collaborating to develop products on Quirky, LEGO fans are designing the kits they want to be produced, countless firms are creating infrastructure to encourage their employees to contribute ideas. In the new collaboration, the organizing company profits from faster product development. The contributing public and workforce reap rewards of social capital and empowerment that, while less measurable, are no less valuable. Some of them even go into business for themselves. Has the capitalist machine co-opted the people, or have the workers seized the factory?

-Gitte

January 20th at Copenhagen Business School Crossroad Innovation arranged an IP-workshop.

The objective of the workshop was to create a fact base and outline for IP framework we can develop into JOIN’s IP management system for the users of the platform.

The presenters were

• Johan Løje, Danske Designeres IP attorney: Industrial Property Law from the designer’s perspective
• Anders Sundelin, VP Business Operations CIP Professional Services: Management of Intellectual Assets and Property in collaborative business
• models
• David Dencker, Director Crossroad Innovation: How Elephant Design is addressing the IP challenge
• Mette Merete Andersen, LEGO Juris: How LEGO is addressing the IP Challenge in co-creation

The IP workshop focused on

1. Share knowledge and experience
2. Create a fact base
3. Outline a framework for an IP management system

Based on research it has become evident that IP is the elephant in the room. Designers are afraid to give away their designs and companies are afraid to open up their innovation process. However JOIN is operating in a field where there are no clear standards and no best practice.

The outcome of the workshop was a preliminary IP framework and an IP strategy for the JOIN platform.

Crossroad Innovation will lead a seminar about the future of distributed co-creation at Copenhagen Business School, June 18th. In cooperation with Alexandra Instituttet and Copenhagen Business School, Crossroad Innovation is hosting a workshop about how companies can add value propositions to their services and products and improve their new product development by engaging online communities. The workshop consists looks into:

1. Best practice experiences
2. Recent research
3. Future opportunities and challenges within the area of NPD and online communities

The presenters are
- Jacob Winther, Microsoft User Experience Designer
- Helle Borup Friberg, Director LEGO New Business Development
- Christoph Hienerth, Professor CBS
- David Dencker, CEO Crossroad Innovation

Crossroad Innovation’s Japanese partner, Elephant Design, is featured in an article on the ministry of commerce’s website. The article is written by Jørgen Rasmussen – Design Director, Århus architect school. Jørgen Rasmussen discusses the business model in detail and the implications for future innovation.

For full article: http://www.ebst.dk/brugerdreveninnovation.dk/cuuscoo

Crossroad Innovation is featured in an article June 17th in the Danish Newspapers Ervhervsvbladet in relation to the development project JOIN

“Muji er navnet på Japans svar på Ikea. Koncernen har succes. Størst succes har den med produkter, der reelt er udviklet i et samarbejde med kunderne. Det er sket i et virtuelt samfund eller community, om man vil, hvor 130.000 brugere, 6.000 designere og 1.500 virksomheder udveksler ideer på nettet. Cuusoo hedder det ti år gamle japanske initiativ, og nu er en dansk pendant på vej.

Ifølge direktør Betina Simonsen, UMT, mangler man endnu at få den endelige finansiering af projektet på plads, men hun finder det realistisk, at systemet vil kunne være køreklart om et år, hvorefter det skal afprøves i et lukket system, inden det om to år kan slippes løs på internettet til glæde for alle relevante brancher. Tilmed lyder vurderingen, at Danmark er som skabt til et sådant initiativ, fordi vi danskere i forvejen er nogle af verdens flittigste brugere af sociale netværk på nettet som Facebook og Linkedin. Japanerne er, ifølge direktøren, klar til at øse af deres erfaringer og systemer, men konceptet skal fordanskes, mener hun.

JOIN er blot et ud af flere hjemlige initiativer for at sparke gang i det, man under ét kalder brugerdreven innovation, men det er, ifølge Betina Simonsen, set det mest perspektivrige. Udtrykket kan lyde lidt langhåret for en typisk dansk smv’er, men der er ikke noget specielt mystisk ved fænomenet. Kunderne kan efterspørge specielle produkter med ideer, som designere, produktudviklere og producenter og andre brugere kan tænde på med forslag til forbedringer. Designeren kan for eksempel reagere på efterspørgslen ved at prøve at efterkomme kundens ønsker. Er kundereaktionerne meget positive, kan designeren så gå til en producent og i samme nu dokumentere forbrugerinteressen. Det kan også være, designeren selv kommer med en idé, som kunderne tænder på og, som nu igen kan blive præsenteret for en producent. Sidstnævnte kan også selv hente en masse tilbagemeldinger på sine produkter og forslag til forbedringer. Inspirationen går alle veje. Oven i købet er det ved teknologiens hjælp muligt at lægge forpligtende købsaftaler ind i systemet, så kunderne kort og godt bestiller en given vare, der endnu ikke er produceret.Så ved producenten, at der er en reel efterspørgsel.

Brugerinddragelse i forbindelse med innovation er ikke noget nyt begreb. Store koncerner som blandt andre Lego bruger også udviklingsmodellen, men ifølge Betina Simonsen er det vigtigt også at få små-og mellemstore virksomheder inddraget, fordi metoden er lige så velegnet for små som store. Med i arbejdet på at skabe web-projektet er Alexandra Instituttet, Crossroad Innovation, Cuusoo, Karup Partners, Danske Designere, Lego og Copenhagen Business School.”

Crossroad Innovation is a partner in JOIN. The project will develop a new web based innovation platform that integrates users into the innovation process.

JOIN – an acronym for Joint Online Innovation Network – aims to develop an online community innovation platform where companies, user-designers and consumers together can develop products, which better meet the needs of the consumers.

The innovation platform will drive companies revenue and increase their competitiveness by facilitating a business model that makes user driven innovation easier, cheaper, and less risky for companies. Furthermore it will make it easier for designer to become entrepreneurs by empowering them.

The project focuses on products within lifestyle, furniture and apparels and is based on Cuusoo, a Japanese innovation platform where 130.000 users, 6000 designers and 1500 companies during the last 10 years, together have developed new innovative products (www.cusoo.com).

Experiences show that an online community innovation platform has a huge potential to help Danish SMEs integrate the users in their NPD processes. However the innovation platform has to be further developed for a Danish context.

Join integrates a business model, a software platform and a network of users. In order to develop the platform the three user groups – companies, user-designers and consumers – are involved in the process. User driven innovation thus become both the means and the end of JOIN.