engaging customers and other stakeholders: becoming a co-creative enterprise

November 9, 2010

Email: [email protected] blog: francisgouillart.com book web site: powerofcocreation.com

Francis J. Gouillart The Experience Co-Creation Partnership 27 Main Street, Suite 8 Concord, MA 01742 Concord, MA 01742 Phone: +1 978 369 6040

The enclosed material is proprietary to the ECC Partnership and is for the internal use of the addressee only.

Engaging Customers and Other Stakeholders:

Becoming a Co-Creative Enterprise

HSM Sao Paulo 2010-11-09 – FJG

© 2010 Francis GouillartAll rights reserved.

What We Will Cover Today

1. Zombies No More (Nike, Camiseteria)

2. The Heart of Strategy (ITC e-choupal)

3. The Emerging Country Advantage (24/7 Customer, CNI)

4. From Dead Processes to Live Interactions (Crushpad)

5. The Method Behind the Madness (La Poste)

6. The Platforms of Co-Creation (Starbucks, Dell, IBM)

7. Set My People Free (Santander Brazil)

8. The New Humanity of Business (Caja Navarra)

1



Classic Marketing Makes Customers into Zombies

2

Needs-based … … segmentation … … and targeting

Company marketing and sales Individuals passively receive value from enterprise

Customers

ZOMBIES NO MORE



Nike+ Creates New Interactions with CustomersZOMBIES NO MORE



You Can Track Your Runs

4

ZOMBIES NO MORE



You Can Map and Share Your Runs

5

ZOMBIES NO MORE



RunTracking

ChallengeOthers

Mapping andSharing Runs

RunningResolutions

Listening to Music& PublishingPlaylists for Running

Training witha RunningCoach,Interactingwith a Running Star

Nike RunningClubs andNike-SponsoredEvents

Running blogand discussionboards

Nike+ Platform Engages Runners and Communities Through Eight New Interactions

ZOMBIES NO MORE



Nike+ Results Have Been Spectacular

• Nike captured 57% of the $3.6 billion U. S. running shoe market in 2007 compared with 47% in 2006 More than 600,000 runners signed on the first year.

• Nike has reduced its marketing expenses by 57%.

• More than 160 countries in the first year.

• Over 40 million miles uploaded the first year.

• Visit 3-4 times a week.

• Nike has a goal of having 15% of the world’s estimated 100m+ runners using the system.

7

ZOMBIES NO MORE



New experiences

of value to individuals

Nike +Platform

Lower risks and costs for

individuals

Lower risks and costs for the company

Increased strategic capital and return to the company

Lesser cost of joining club57% reduction in marketing

cost

Nike Runners

Learn how people use the products in the field

Nike + Engages Runners and Changes its Own Economics in the Process

Lesser risk of falling off the wagon

Feed that learning into design and customer management

Motivation to run

Ease of tracking my performance

Fun of having peers

Four Powers Model

8

ZOMBIES NO MORE



A Brazilian Example of Customer Co-Creation: Camiseteria

www.camiseteria.com.br

9

ZOMBIES NO MORE



80 thousand registered users

More than 15.000 unique designs

150 T-shirt models

No professional fashionista hired

Buzz, word of mouth communication lowers marketing costs

Low risk, high fit to the market demand

ZOMBIES NO MORECamiseteria Is Successful



Strategy Has Long Been About War

11

THE HEART OF STRATEGY



The New View of Strategy: Connect New Experiences Through New Interactions

12

Co-Creative EnterpriseIndividuals participate in value

creation through personal engagement

CustomersSuppliersPartners

Employees

Co Creation




ITC e-Choupal Built an Entire Eco-System to Change the Experience of the Indian Farmer

1. Build kiosks in villages, with a

sanchalak providing coaching with help of computer (choupal)

2. Provide grain market in neighboring towns

(“hub facilities’), competing with “mandi”

Better pricesFairer transactions

Better information on global crop prices and

weather

3, Develop distribution centers providing agricultural inputs (Choupal Saagar)

Affordable inputs for farming

4. Expand retail space to provide all kinds of goods and services to the farmer, including

insurance and healthcare

Affordable goods and services tailored to the

farmer

FARMEREXPERIENCE

ITC E-CHOUPALPLATFORM

13




The Conventional Strategy Model Relies on Owning a Piece of the Value Chain

FarmersWholesale markets

Trading Food manufacturing

Farming in India

Consumers

Food retailing

Fragmented industry: average farm in India is 3.3 acres, producing:• Diseconomies of scale• Low crop yields

Structured industry: average farm in US is

420 acres

ITC’s business at the outset

Farming in US

In the US, food companies have forced a consolidation of the farm industry through:

• Acquisitions (creation of corporate farms)

• Farming contracts that require a professionalization of farm practices


15HSM Sao Paulo 2010-11-09 – FJG


1. Paint a picture of the vision best you can

Vision

Experiment 1

Co-Creation Strategy Builds a Stairway to Heaven …

Experiment 2

Experiment 3

Interaction 1

Interaction 2

Interaction 3

Interaction 4

Interaction 5

3. Design a small number of co-creation experiments within each interaction-based theme

2. Define some high-level interaction-based themes on the way there




… And Launches Interaction-Based Experiments THE HEART OF STRATEGY

FarmersWholesale markets (mandis)

Trading Food manufacturing

Consumers

Food retailing

ITC’s business at the outset

Individual farmer

Saagar wholesale manager

Choupal Saagars wholesale, challenging government

mandis

Individual farmer Sanchalak

E‐choupal kiosk

New businesses for ITC

Saagar retail manager

Choupal Saagars retail

Individual farmer

Dramatically improved

experience for farmers, sanchalaks

and other stakeholders

Lesser cost and risk for ITC

Reduced cost and risk for farmers,

sanchalaks and other stakeholders

New sources of revenue from the new businesses

for ITC

Benefits of ITC co‐creation platforms



Why Emerging Countries Are Good at Co-Creation

The thinking is fresher.• Less to unlearn.• Excitement about new experiences is worth a lot.

There is innovation power in large markets and low-cost requirements.• Bottom of the pyramid innovation

The future is about building infrastructure-based eco-systems.• The West’s focus on single firm strategy carries the genes of its own

economic limitation.

There is greater social consciousness in emergingcountries.• Greater collective sense of economic development

and social responsibility.• Sustainability.

THE EMERGING COUNTRY ADVANTAGE

http://us.123rf.com/400wm/400/400/maridav/maridav0910/maridav091000020/5660783-thumbs-up-very-excited-young-mixed-caucasian--asian-woman-giving-thumbs-up-shallow-depth-of-field-fo.jpg



24/7 Customer in India: From Call Centerto Remote Reengineering




1.RECRUITING NEW

SERVICE REPS AS A GROUP

Reduced cost of attracting candidates

Less intimidating recruiting

experience

RECRUIT

24/7 CUSTOMER

2.SELF- SCHEDULINGOF SERVICE REPS

Less absenteeism

SaferFun to work with

friendsI manage my

own schedule

EMPLOYEE

24/7 CUSTOMER

3.SOLVING

PROBLEMS WITH CUSTOMERS

Less time on the phone per

call

Better issue resolution

CUSTOMER

24/7 CUSTOMER

More fun in job

EMPLOYEE

4.DEVELOPING

NEWSERVICES

New sources of revenue for the

firmBetter strategic

positioning

Receiving more strategic answers

CUSTOMER

24/7 CUSTOMER

Advancing my career

EMPLOYEE

Solving my strategic issues

CLIENT OF 24/7 CUSTOMER

IMPROVED EXPERIENCE

FOR THE INDIVIDUAL

IMPROVED ECONOMICS

FOR THE COMPANY

ENGAGEMENT PLATFORMS

24/7 Customer Co-Creation Strategy: From Internal to External Co-Creation




CNI in Brazil: Co-creation Applied to the Design of a Social Network Platform

• How to increase the mobilization of industry actors around national issues? • How to promote more interaction among stakeholders?• How to build stronger positions to the government?




“Rede social da indústria” is a Platform Designed to Engage Multiple Stakeholders




Understanding Stakeholders Dreams and Concerns




Three InteractionsWithin the Social Network

“Rede Social da Indústria” Design

Mobilizing and engaging entrepreneurs and engaging for

national causes.

MOBILIZATIONENVIRONMENT

Articulate and build together political

positioning.

FORUMENVIRONMENT

Increase the competitiveness

of industry through best practice sharing

TRENDSENVIRONMENT




I See Dead ProcessesFROM DEAD PROCESSESTO LIVE INTERACTIONS



Yellow Tail Wine (Casella Wines) Creates a New Experience for Wine Lovers

High

Low

Qua

lity

of e

xper

ienc

e

Ease of drinking

Wine complexity

4

2

6

8

10

Mid-market wines

Price Heritage and prestige of vineyard

Experience curveBuyer’s perspective

ImageWine science,

connoisseur dimension

Aging quality

Key elements of the customer’s experience

Ease of selection

Fun and adventure

Range of products

1

3

9

7

5

Yellow Tail

FROM DEAD PROCESSESTO LIVE INTERACTIONS

http://images.google.com/imgres?imgurl=http://www.wjdeutsch.com/wineportfolio/yellowtail/img/YTPoster.jpg&imgrefurl=http://www.wjdeutsch.com/wineportfolio/yellowtail/index.asp&h=300&w=400&sz=14&tbnid=vsUMCBKEQpkJ:&tbnh=90&tbnw=120&hl=en&start=14&prev=/images%3Fq%3Dyellow%2Btail%26hl%3Den%26lr%3D%26sa%3DG

http://images.google.com/imgres?imgurl=http://www.theage.com.au/ffximage/2004/04/06/wine.jpg&imgrefurl=http://www.theage.com.au/articles/2004/04/06/1081222465831.html&h=221&w=200&sz=15&tbnid=AH9VeF1coQ8J:&tbnh=102&tbnw=92&hl=en&start=13&prev=/images%3Fq%3Dyellow%2Btail%26hl%3Den%26lr%3D%26sa%3DG



LOWER COST

Like Casella, You Can Try To Build a New Experience by Listening To The Customer ….

BETTER EXPERIENCE

Traditional EnterpriseCustomers

… But You Will End Up Guessing Wrong Most of the Time




LOWER COST

… or You Can Engage The Stakeholders in Co-Creating The New Experience With You

BETTER EXPERIENCE

Co CreationCo-Creative Enterprise

Individuals participate in value creation through personal

engagementCustomersSuppliersPartners

Employees

Build it With Them




Crushpad Brings Customers Into WinemakingFROM DEAD PROCESSESTO LIVE INTERACTIONS



Crushpad Has Opened Up The Winemaking ProcessFROM DEAD PROCESSESTO LIVE INTERACTIONS



1. Lay out steps in as is process

2. Evaluate process customer needs and establish

objectives for the process

3. Streamline steps and design to be process

4. Provides

A better experience for the customer

Lower cost for the companyReduced cycle time

Fewer steps, fewer hand‐offs

The broader experience of internal stakeholders is irrelevant, except for removal of pain points directly linked to operational dysfunctions in the process. It does not create a new source of revenue growth.

Traditional Process Design Delivers Cost-Efficiency, but Little Growth




Start With the Experiences of Specific Stakeholders, and Connect Them Through New Interactions

2. Map out how the stakeholders interact with each other today

4. Organize workshops where stakeholders make

their experience transparent to each other

3. Characterize the experience resulting

from these interactions for all stakeholders

(good or bad)

6. … that allows them to develop new interactions

Platform

5. Give stakeholders an engagement platform …

7. … that dramatically improve the

experience of all stakeholders …

1. Identify the stakeholders involved on the company and the customer side

8. … and produce new sources of

revenue from the new interactions

… and invite all stakeholders to imagine new interactions

between them

Internal company stakeholders

External stakeholders (e.g., customers)


http://annagustin.files.wordpress.com/2009/08/smiley.jpg

http://personal.riverusers.com/~s/sadsmile.gif










An Unlikely Role Model for Co-Creation: The French Post Office and its 17,000 Post Offices

THE METHOD BEHIND THE MADNESS



La Poste’s Management Established Five Interaction-Based Themes for its Strategy

Increase ticket

1. ACCESS TO POST OFFICE

Improve profitability

2. ORIENTATION

3. SERVICE DELIVERY

4.ADVICE

5. NEW SERVICES

Reduce network cost Increase sales

FINANCIAL

CUSTOMER

LEARNING AND GROWTH

PROCESS




The Transformation of La Poste Started With the Opening Up of the Employee Scheduling Process

1.CO-CREATED EMPLOYEE SCHEDULE

Post office (Active) post office employees

Engages post office employees in scheduling their own work

Creates post office employees schedule Passive post office employee

receives schedule

Employees schedule their own work (within constraints)

BEFORE

AFTER

34


http://www.laposte.fr/

http://www.laposte.fr/



Transforming La Poste Through Co-Creation Involved Opening Up More and More of the Firm’s Processes

New experiences of value to individuals

4.CO-CREATED POST

OFFICE PERFORMANCE

MODEL

3.CO-CREATED

SERVICES

2.CO-CREATED

OPENING HOURS FOR EACH LOCAL

POST OFFICE

1.CO-CREATED

EMPLOYEE SCHEDULE

• Customers

• Teller employees

• Post office manager

• “Hierarchy”



• “Hierarchy”

• Customers



• “Hierarchy”

• eBay

• Local elected officials

• Customers



• “Hierarchy”

35




Ten Steps Framework to Experience Co-Creation (Bottom-Up)

Fleshing out the CC hypothesesand making the case for them

(hypotheses teams, Strategy Fair)

10a. Business Case

Generating, developingand qualifying CC hypotheses

(External Co-Creation Workshops)

Understanding way things are done today(Executive and Focus Interviews, Internal Co-Creation Workshops)

9. Co-creation Stairway to Heaven

8. Win/Win (Four Powers)

4. Existing Experience

7. Glass House

5. Transparency (DART)1. Protagonists 3. Pain Points

2. Existing Interactions

6. Day in Life of Customer

10b. New Experience

36


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By and Large, The IT Community Is Still Missing the Point on Co-Creation

The focus is still on one-way process automation.ERPCRMData bases.

The people experience is still largely missing.

The IT community struggles to engage its business clients (B2B) …

… so it struggles even more to engage its business clients with its customers (B2C).

Slowly the IT community is awakening to the need to develop co-creation platforms.

37

THE PLATFORMS OF CO-CREATION



Some Companies are beginning to Build (Simple) Engagement Platforms

MyStarbucksIdea.com website launched in mid-March 2008.

38© 2010 ECC Partnership

Intro co-creation Waltham 2010-06-14 FJG




Dell’s customer ideas forum, Idea Storm, Follows a Similar Approach to Starbucks

39




IBM Jam Sessions Involve a More Sophisticated Process With a Large Number of Stakeholders

40




Co-Creation Involves a Personal Transformation

People know better than you what new experiences they aspire to.

People’s wings are often clipped by existing HR processes.

Let them define what their work experience ought to be.Set the context of the firm’s strategy and let them co-create the rest.

Let them engage with other people who are also trying to change their experience.

E.g., customers for customer-facing people, suppliers for supply chain people.

Start by opening up internal HR processes.

41

SET MY PEOPLE FREE



Santander Brazil Is Becoming a Co-Creative Enterprise

Santander Brazil has been applying

co-creation principles since 2007:

• in business areas such as insurance,

• in internal areas such as:

• Human Development

• Marketing & Communication.

SET MY PEOPLE FREE

42



Human Development Co-Creation Initiatives at Santander Brazil

Leadership Development Program: co-created with 3000 professionals

New performance management system: co-creation with employees of the 2011 “next practice” of performance management taking into account the individual experience, generating win-win relationships among stakeholders

“Caminhos e Escolhas” (Ways and Choices): collaborative training program engaging NGOs, universities, junior executives and former trainees.

SET MY PEOPLE FREE

43



“Juntos” (together) is the core message of Santander current marketing and brand positioning.

“Circulo Colaborativo” (Collaborative Circle) is a internal co-creation platform opened for new ideas and suggestions to various initiatives from all 30,000 employees

https://www.circulocolaborativo.com.br/

Moving From Inside to Outside: Marketing and Communication Initiatives at Santander Brazil

SET MY PEOPLE FREE

44



Humans Are at the Center of the Business Universe

Business is the art of building connection.

Connecting individuals to your business is key.EmployeesCustomers. SuppliersPartners.

Your business is itself connected to an eco-system you will have to co-create with other private and public entities.

They’re also full of humans longing to connect with your people.They have economic imperatives, as you do.

Ultimately, your role as manager is to make each individual feel at home in the universe.

The enterprise that is the most connected wins.

45



Caja Navarra Created Civic Banking

46

THE NEW HUMANITY OF BUSINESS



Customers choose to use the money they generate in CAN for needs and people rather than activities and things.

“You Choose: You Decide” overturned the bank’s allocation of profits to social work

Source: Caja Navarra investors presentation.47




Caja Navarra Creates Transparency of Earnings

Each Caja Navarra customer receives a statement showing exactly how much money goes to the social projects he or she has chosen.

48


Caja Navarra’s customers want the bank to make more money with them, so that they can give more to the charity of their choice.



What Have Covered Today

1. Zombies No More (Nike, Camiseteria)

2. The Heart of Strategy (ITC e-choupal)

3. The Emerging Country Advantage

4. From Dead Processes to Live Interactions (Yellow Tail, Crushpad)

5. The Method Behind the Madness (La Poste)

6. The Platforms of Co-Creation (Starbucks, Dell, IBM)

7. Set My People Free (Santander Brazil)

8. The New Humanity of Business (Caja Navarra)

49
