Archive for the ‘co-creation’ Category

Porto Alegre, Brazil: the co-creation capital of the world

Saturday, July 16th, 2011

Being an economic junkie, nothing excites me more than the view of building cranes, ready-mix concrete trucks clogging major arteries, gleaming steel plants, and hurried business people packing airport food joints and flights. So when I get tired of the American and European debate on why neither continent is growing, I head to Brazil for a fix, which is what I did last week. I came back with a cold (it’s winter time in Brazil) and a treasure trove of new insights on the role of business in generating economic growth.

I was particularly amazed by my stay in Porto Alegre, the largest city in the most Southern Brazilian state, Rio Grande do Sul.  Porto Alegre is best known for its beautiful women (Gisele Bündchen was born there), but its economic vibrancy is deserving of at least equal attention. I wish I could take low-energy managers of US corporations and members of our dysfunctional US Congress to see how the various parties of Brazilian society build their growth agenda together.  Porto Alegre is arguably the co-creation capital of the world, because it brings together enlightened corporate management of individual businesses, a visionary business confederation of industries, and city, state and federal management.

Corporations are the heart of the Brazilian economic system.  I participated in a session with the management team of Hospital Moinhos de Vento (literally the Windmills Hospital, also the name of one of Porto Alegre’s neighborhoods). One of the greatest joys of business educators is to see companies achieve great results and tell their stories, improbably giving us credit for having provided some conceptual structure for their tremendous accomplishments. The two leaders of the hospital told stories of doctors in the neonatal ward developing a new awareness of the mother’s emotional experience, or of nurses catering to the patient’s family needs when major diseases such as cancer strike. They described unemployed poor people receiving an education provided by the staff, so that they could become the construction crew for the new hospital, or develop into nurses that vaccinate rural populations, traveling through the pampas on shiny new motorcycles. Beyond the human aspect, the leaders of the hospital were also able to describe how they had doubled occupancy and revenues for the hospital, with profits to boot. I could not help but notice how easily they moved back and forth between the inspiring experiential nature of what they had created, and the economic wealth they had generated for the business.

The leaders of Hospital Moinhos de Vento are not that different from health care executives I meet in the US or Europe (most are equally attentive to the human experience), but they differ on one essential dimension: they believe their business can make a difference at the societal level and therefore refuse to think of themselves as mere corporate care-takers. They’re not solely focused on reimbursement schemes and regulatory negotiations. They role-model what a corporate hospital can do and proactively teach government leaders what can be achieved through private-public partnerships. They want to be actors in a larger societal play, and they view their business as the backbone of an economic ecosystem that helps them personally fulfill their higher, quasi-spiritual aspiration. While many American and European business people have given up on the societal role of business, they firmly believe this is their mission.

Challenged by this corporate vibrancy, the government is responding in kind, reaching for new modes of interaction with business and citizens. In Porto Alegre, citizens are able to propose projects at the grassroots level and debate why these projects are selected or rejected. For the projects that have been selected, they can track and influence progress. The state itself has devised an elaborate multi-stakeholder planning system that engages all constituencies in a live co-creation process. The federal government of Brazil is also experimenting with new co-creative approaches involving industry and the various states.

Of course, Brazil is far from perfect on many dimensions, facing multiple issues such as public corruption, street crime, and some resurgence of inflation. But when it comes to developing the future model of business-government relationship to foster economic growth, my money is on Brazil. Maybe we should all spend a few days a year in Porto Alegre, even if Gisele Bündchen no longer lives there.

The soul of Argentina

Friday, July 1st, 2011

It is winter time in Argentina. In the course of my three-day visit for an HSM conference, I will discover this is physically and figuratively true. The young woman charged by the conference organizer to shepherd me through the event has the sadness of Argentina in her eyes. She’s sharp as a tack, is curious about everything she can learn from me, and knows her job prospects are bleak. She wants to know all about the US and whether she would still be living at home if she were going to a US college. She dreams of green campuses and independence.

Argentina is like its soccer teams, brilliant and ultimately self-destructive. At every international soccer event, Argentina is one of the favorites, expected to combine creative play and game toughness to challenge the best. Year after year, they disappoint. This week, the news is dominated by the relegation of River Plate, one of the two leading club teams of Buenos Aires, who will have to play in a second-division league for the first time in its 110-year history, creating talks of bankruptcy for the club. For good measure, giant riots erupted after their last match around the Monumental stadium where they play, and more than 70 people were hurt.

I am coached not to mention River Plate’s fate on any of my speeches. Emotions are still raw. On the way to the airport last night, I catch from the road a glimpse of the Argentine national team starting its training for the Copa America tournament. Maybe this time…

At the conference itself, as well as during journalist interviews and company visits, there is strong interest in co-creation. Argentines love the notion that business is about people – there is an instinctive humanity you can feel anywhere in Argentina – and they know for not being very good at it that business is about building ecosystems. For a fleeting moment, it feels like hope.

In the evening, though, gloominess returns during a dinner I am attending with some business executives of Buenos Aires. The conversation starts with agriculture, where exorbitant export duties and the vagary of the government’s granting of export licenses are challenging a highly competitive intrinsic global position. In the oil sector, YPF, a very competent exploration and production and refining company, has been a political football for many years, moving from independence to being acquired by the Spanish company Repsol, to being sold again in a complex government scheme. There seems to be little love between the business community and the current government. Inflation has returned with a vengeance, with economists estimating it at 25-30% (the number is highly contested), but this does not seem to worry the government of Cristina Kirchner, widow of the previous President. Everywhere you turn, there is little hope for growth.

The remarkable thing about Argentines is that while few of their institutions work, they remain a nation of remarkable talent, giving their society a soulful dimension which touches your heart. Leonard Cohen’s Beautiful Losers novel comes to mind. “Don’t worry about us, we’ll be all right,” one of the executives tells me, probably reacting to my empathetic look. “We’re used to this. We’ve learned to cope.” A minute later, though, he starts dreaming of Argentina adopting the Brazilian growth model.

“It would be fun to start growing like them,” he says. “But beating them in the final of the Copa America in a few weeks would be even better.”

The dark side of co-creation: Lance Armstrong, Dominique Strauss-Kahn, and their country’s press corps

Sunday, May 29th, 2011

 

 

 

 

 

 

 

Lance Armstrong and Dominique Strauss-Kahn have long shared a common ability: both have parlayed their extraordinary talent into a relationship with the national press corps that has protected them from seeing their dubious ethical behavior exposed (at the minimum) or from being held accountable for their alleged crimes (at worst). It took many years and a recent CBS “60 Minutes” interview of one of Lance Armstrong’s team members on the Tour de France for the American press to finally realize what had been a fairly obvious reality to many observers of professional bicycling, namely that most professional cyclists, including Armstrong, have used performance-enhancing drugs for years. Similarly, Dominique Strauss-Kahn, the former head of the International Monetary Fund and ex-future President of France, was known to have behaved inappropriately with women for many years, with a suspicion of at least one outright rape attempt. Yet the French press corps had created a kind of omerta around him until he was recently arrested in a New York hotel for attempted rape. Why this journalistic conspiracy of silence for the two men in their respective countries?

As a humble student of communities of all types, I believe there is merit in studying even destructive communities. Journalists are an essential ingredient in a democracy. By exposing the secrets of rich and powerful people, they are supposed to “keep them honest,” as CNN advertises the late-night program of one of its journalists, Anderson Cooper. In the cases of Lance Armstrong and Dominique Strauss-Kahn, though, journalists became co-dependent with the subject they were supposed to cover. Instead of investigating the objectionable activities or crimes of their global sports or political star, they moved into a pattern of silence. This is the dark side of co-creation, and it behooves us to find out how such a negative form of co-creation develops.

For Lance Armstrong, American journalists seem to have wanted to believe the fairy tale: the inspiring story of Lance overcoming cancer, Lance becoming a global star in a sport traditionally dominated by Europeans, Lance mobilizing huge resources for a great cause with his cancer foundation. As a result, they deliberately ignored the growing evidence pointing to Lance’s doping, including some high-quality investigative journalism done by the French sports daily L’Equipe. Somehow, the US sports journalism community seems to have coalesced around a collective belief that accusations of Lance’s doping in the French press were the result of sour grapes because Lance had stolen the limelight from French cyclists in a major French sport. Instead of collectively rallying around this orthodoxy, wouldn’t their job have been to investigate these claims? Why didn’t they? Where were the Woodward and Bernstein of American sports journalism? Why weren’t they running around asking Lance’s team members, nurses, team managers, doctors, mechanics, hotel keepers, anti-doping authorities, and law enforcement officials about what they had observed? How could they miss a story with so many protagonists and involving so many daily interactions with prohibited products?

The Dominique Strauss-Kahn (DSK) story is equally troubling. Like many other people who occasionally travel in French power circles, I had heard stories of DSK’s womanizing behavior for years, including some rumors of outright predatory behavior. French people profess to be amused by the peccadilloes of their political and corporate leaders (but hopefully not their crimes!). They often blame the American investigation of inappropriate sexual behavior by powerful people on American puritanical tendencies, conveniently ignoring that these investigations often point to human weaknesses that degrade leaders’ ability to lead, or make them vulnerable to corrupt behavior to protect their shameful secrets. When US politicians are suspected of inappropriate behavior, a pack of journalistic hounds gets unleashed in quest of a scoop, and editors rejoice over the possibility of a page one exclusive on the topic. By and large, France does not have a tradition of investigative journalism, which represents a gaping hole for a democratic country of its size and importance on the international scene.

Even more worrisome is the lack of willingness on the part of French journalists to take on the country’s political and corporate leaders. The co-dependency that exists between journalists and French leaders is palpable. French power circles frequently interfere with journalistic independence and utilize access as a blunt instrument, and there have been numerous stories of phone calls being placed in strategic places to de-fang ambitious journalists who tried to practice American-style journalism. The sad thing is that intimidation of this kind has largely neutered the French press, producing more and more daring behavior by some of its leaders. I fear that DSK’s behavior at the New York Sofitel will turn out to be but the ugly head of a larger beast.

The greatest perversion arising from this lack of transparency about the reprehensible behavior of French leaders is that women who have been victims of these behaviors have understandably refrained from speaking out, thereby allowing these horrendous behaviors to continue unchecked, and exposing more women to these predators. Why haven’t Le Monde, Le Figaro, or the major French TV and radio channels interviewed the women who have described DSK’s inappropriate behavior? Why haven’t they spoken to IMF employees, hotel front desk employees, members of DSK’s Socialist Party, or staff members at Socialist Party conventions? Why did news editors not encourage their journalists to follow up on the rumors?

There is no co-creation without transparency. Both the Lance Armstrong and DSK stories are illustrations of the fact that co-dependency can develop in the dark alleys of power. Journalists operate in a difficult economic world, with advertising revenues, circulations of major newspapers, and television audiences at major news networks all down. Finding the courage to take on the Lance Armstrongs and DSKs of this world and reinvigorating the old-fashioned investigative journalism tradition may be the profession’s best hope.

 

A business SOS

Saturday, May 7th, 2011

Everywhere I look, corporate people are stressed. It’s true at the top, the middle, and the bottom of the pyramid. Being hired by a successful business used to contribute to personal well-being. I can still remember how giddy I was when a large US multinational hired me out of school and how much it contributed to my early enthusiasm about life. This, in all evidence, is no longer the case. Everywhere I go, I collect stories of rising managerial expectations and reduced access to resources, resulting in a productivity squeeze that destroys the fun of business life and in some cases increases suicide rates. France, for example, is beginning to raise the issue of “work health.” In inimitable fashion, the French want to legislate on the topic, which creates a new class of stressed people: managers afraid of being accused of having induced suicides among their direct reports.

Has business lost its way? How did we get to the point where companies destroy the lives of their people instead of making them better? Like anybody else, I can point to the forces that drive the endless quest for productivity in business: the rise of shareholder expectations, the development of global competition, and the do-or-die nature of the modern labor market. But where in this equation are the ethical braces that prevent humans from oppressing other humans? Have we become collectively insensitive to the point where we’re lost the ability to remember why we’re engaging in business in the first place? And if corporations have become the new gulag, why hasn’t there been a management revolution?

Our conceptualization of business as a company-centric science rather than a human-centric creative network may have something to do with it. Conceptually, we have it all wrong. We should start from the viewpoint that employees and managers have an experience of business, and this experience is as important as the experience that customers have of the business. The latter is much talked about, analyzed, and continuously worked on. There is a rising caste called Chief Experience Officers whose job it is to worry about customer experience. Yet there is no equivalent for employee or manager experience. As long as their frustration stays below suicide range, we are content to take their temperature once or twice a year in the form of an employee survey. The employee survey is usually managed by HR people whose role is to delineate for business managers how far the corporation can push in the name of productivity. This is a frustration containment strategy, a far cry from the experience co-creation strategy it should be. When HR people venture to advocate for the employee experience, they rapidly become accused of being a part of the problem, an obstacle on the road to productivity. Understandably, few of them choose this path.

We should view business as the coming together of a set of individuals, from employees to customers and other stakeholders, in order to invent worthwhile personal experiences through the development of a common economic model. Employees should matter as much as customers. The role of business managers should be to help employees figure out the work experience they want to have for themselves, allow customers and other stakeholders to do the same, and give all of them the tools that will allow them to interact as efficiently as possible. The self-interested pursuit of greater well-being by employees and customers is what will produce the most efficient corporation and create the highest shareholder return. The obnoxious expert opinion of a few top managers on what processes those employees and managers should follow will at best represent a mediocre approximation of what humans with passion and an intimate knowledge of what needs to be done would have devised for themselves. At worst, it will become an oppressive machine with a mediocre economic engine.

Engaging employees in the co-creation of their work experience is job 1 for business. But it’s getting dangerously late. Business, it is time to save your soul.

 

Guest blogging for Harvard Business Review and Front End of Innovation

Tuesday, April 19th, 2011

I’m pleased to be a contributor to two blogs, HBR.org and FrontEndofInnovation.blogspot.com.

As part of HBR.org’s new series on “Creating a Customer-Centered Organization,” I wrote about the need for companies to design new and better customer interactions.

Experience Co-Creation

Many companies now have senior officers in charge of customer experience. The executives’ role is to define the attributes of the customer experience in partnership with their operational colleagues, organize the customer-satisfaction-measurement process against those attributes, and encourage remedial action wherever warranted. What they hardly ever have, though, is an approach to evolve the design of the customer experience, let alone create a new experience.

To develop a new customer experience, companies need a real-time engagement process that encourages customers and employees to devise new interactions between them and facilitates the emergence of innovative customer experiences.

Yes, this co-creation takes time, but there is no alternative. Each customer designs her own experience in the unique context of each interaction she has with the company. So when companies rely solely on market research to design the customer experience, the result is a manager-biased lowest common denominator of customers’ expectations.     More

 

On the Front End of Innovation Blog, linked to the FEI 2011 Conference, where I will be a keynote speaker on May 17, I listed seven words I’d like to see banned from the lingo of product development (with apologies to George Carlin).

Seven Words We Should Ban From the Product Development Language

The American stand-up comedian George Carlin had a routine entitled “Seven Dirty Words You Can’t Say on TV.”

Here are seven dirty words I’d like to ban from the product development language:

1. process,
2. customer,
3. needs,
4. market research,
5. engineering,
6. product specifications and
7. idea management.

1. Process: the appearance of rigor conveyed by a flow chart representing product development on a wall, disguising a cesspool of messy interactions as a neatly flowing river.

In the classic company-centric view of business, product development people follow a process. In reality, there is no such thing as a product development process. Product development is a series of interactions. To state the obvious, the difference between a process and an interaction is that the latter flows in (at least) two directions. One should therefore not design product development processes, but product development engagement platforms inviting multiple constituencies to participate in the design, with the product development people acting as facilitators of those interactions.

More

Which came first: the process or the experience?

Sunday, April 17th, 2011

This week, I visited a manufacturer of electronics components that believes that process design and key performance indicators (KPI) are the key to its business success. In parallel, Harvard Business Review just asked me to write a blog entry for its website on the role of co-creation in customer experience. This led me to reflect on what comes first in business design: the process or the experience?

Most companies have been trained to think that processes are what matters most for corporate success, and that good processes generate good customer experience. In this view, process clearly comes first, and a good customer experience is the result. By contrast, co-creation starts with the broad experience of two of more people (customers and employees) and invites them to develop new processes or interactions between them that will result in new experiences for both. In co-creation, the human experience comes before the process (or the interaction).

Back to my visit of the semiconductor manufacturer: I first thought the large wall displays were integrated circuit designs with red and green coloring, but I was told they were actually “trees of KPIs.” I think I saw a KPI tree in their bathroom urging me to do my business effectively. I asked one of the executives whether KPIs were always defined by management in top-down fashion, or an operator on a particular line or in an office could instead define her own “bottom-up” KPI. His answer: “Oh yes, we discuss those things all the time.” Upon pressing, he conceded that what could be discussed was the way to meet the top-down target, not the definition of the KPI itself from the vantage point of the operator.

In a subsequent private discussion with another executive at the same company, he started exhibiting some impatience. “What do you propose?” he asked. “That we ask every employee whether they like the goal we give them? This is not a popularity contest. We have to hit cost and volume targets.” I pointed out that my goal was the same as his, but the way to get there might be different. “I believe the best way to uncover new, innovative ways of lowering the cost of your operation or increasing throughput might be to tap into the individual experience of your operators and let them define new interactions between them – maybe between equipment manufacturers, suppliers, or your management team. You need a combination of a top-down and bottom-up process.” He clearly thought this was the most absurd thing he’d ever heard.

The notion that the personal quest of a fabrication line operator for a self-interested, better experience of work might provide the most direct line to a productivity improvement for the plant was so foreign to him that he could not even conceive of the connection. He could only think of my suggestion as a gratuitous expedition into an experiential la-la land and a demagogical bridge to nowhere.  I pointed out to him that it is a sad place where business goals and aspirations to experiential well-being are structurally incompatible. “The business world is not a happy place,” he told me, as we parted.

At the risk of veering toward “angelism,” as French people call it, I believe there is something inherently good about placing the human experience at the center of business design. Human experience is rich, varied, and unbounded, while processes are made of blue steel. Who wants to live in a business world of cold rationality? Experience before process, please.

 

A great day

Saturday, March 26th, 2011

Yesterday, I went home chirping like a bird. As I started scanning the events of the day, though, I could not find what had made me so happy. I thought it might have to do with the fact that after many months, the snow is finally vanishing from the Boston suburb where I live and work, but this seemed like an insufficient explanation, particularly given that yesterday had its share of bad news. A major automotive manufacturer had to delay the start of a large project because of the disruption caused by the Japanese situation on the company’s supply chain. There is a translation problem with one of the foreign editions of the book I co-wrote with Venkat Ramaswamy. We had a review of the firm’s economics, and it had its usual cohort of cash-flow and performance management challenges. So what is it that made me so chipper?

It finally dawned on me that the smile on my face had to do with one of the day’s meetings. The meeting was about what software or “engagement platform” we should use to encourage co-creation on a global project for a major manufacturer of medical and scientific equipment. Our gathering had the usual attributes of a business meeting: PowerPoint report prepared by a team, projection on the wall, discussion of the issues involved. As you can see, this is intensely emotional stuff. You’re probably already imagining the treatment afforded such a dramatic event by John Grisham, or the movie Martin Scorsese would make from such rich material.

What made the meeting so engaging was the lead presenter, a young man recently hired by our partner firm. He’d been working hard to put the material together over the last few days and conveyed it with the enthusiasm of his youth. He was genuinely excited about what he’d found, and one could not help but share in the excitement. He was curious about everything, eager to get directions, and I found myself dragged out of my morning torpor and animated by an irresistible desire to share whatever wisdom I could conjure up. All of a sudden, my brain was in overdrive, examples and stories were colliding in my head, and new avenues for research were emerging. We could all feel the energy in the room and at that moment, we were all individually smarter, and collectively co-creative.

I also found the excitement caused by the morning’s meeting to linger in the afternoon. I started thinking of other applications of the research the young man had done, for example in approaching a large European high-tech company that develops software for engagement platforms and which had earlier expressed its interest in our co-creation work, but which we’d never gone back to. When I conveyed this idea to the young man at the end of the day – I am desperately trying to resist the urge to call him “the kid” – he told me he’d discovered new avenues of research for the project and couldn’t wait to show me what he’d got. I found myself trying to find wiggle room in my overbooked schedule, plotting late-night calls next week from Europe that my jet-lagged body will undoubtedly resent when they occur.

I’m not sure I even know how to describe the process through which energy gets generated in such exchanges. Very little is written about how human connections happen in business. All I know is that it feels unbounded and transformative when they occur. A great day indeed. Co-creation works in mysterious ways.

Would I have worked for Gadhafi if he’d asked me? (Fortunately, he didn’t.)

Thursday, March 10th, 2011

Since I work at the intersection of academia and consulting, I found myself pondering the recently released information that both the London School of Economics (LSE) and the Monitor Group consulting firm had received large payments from the Libyan government of Moammar El-Gadhafi. More specifically, I found myself wondering what I would have done, had Moammar called me for some friendly co-creation advice a few years ago.

First, let’s go back to some of the facts. LSE accepted £3.7 million for a research center and for educating some of the Libyan government’s civil servants. Separately (or maybe not), it also granted a PhD degree to Saif El-Gadhafi, Moammar’s son. Moammar himself appeared on video at a major LSE event. The Monitor Group received $3 million a year “to enhance the profile of Libya and Muammar Qadhafi.” As part of this package, some Monitor consultants also contributed field work to Saif’s dissertation.

With the benefit of hindsight, it is easy to point to the “error of judgment” by LSE and Monitor in working with the Libyan government (that is the phrase LSE Director Howard Davies used in his resignation speech). We now know from recent events that Moammar El-Gadhafi has not changed and is still a deranged dictator with no respect for human life. With Saif El-Gadhafi’s “river of blood” speech on February 21, we also learned that his claim to be the change agent who would usher Libya into a new relationship with the global community of nations was a lie. But let us remember that until those recent events, Libya had been universally commended for voluntarily dismantling its nuclear arsenal and had been invited to sit on the Human Rights Council of the United Nations. Let us remember that Saif was portrayed by many, inside and outside the LSE, as the person who would bring modern values to Libya.

Many governments have unappetizing sides, particularly in emerging countries (although not exclusively). Should we expect our academics and consultants to respect some boundaries of acceptable and not-acceptable governments? And who is to draw those boundaries? There are documentable human rights violations in Russia or China, for example. Should academics and consultants be expected to disqualify themselves from work in those countries? Or should we on the contrary encourage our teachers and consultants to become pioneering change agents of those countries’ transformation to Western democratic and management values? I personally spend a lot of time teaching and consulting in emerging countries. While corruption and nepotism are present, these countries are also fantastically exciting because of the opportunities they offer to help entire populations lift themselves out of poverty. Why would Libya have been different? LSE was not asked to train Libyan civil servants to repress street demonstrations, but to prepare them for modern practices of government.

If one accepts that the true tyrannical nature of the Libyan regime may have been concealed at the time, the only ethical violation on the part of LSE was to commingle a source of financing with the granting of the degree to Saif and the public video appearance by Moammar. There is indeed something unsavory about what appears to be a quid pro quo, which compromised the academic integrity of the school by suggesting its degrees can be bought. In the larger scheme of things, though, this is not as major a violation as helping a known dictator terrorize a country’s population. It is comparable to asking whether, say, George W. Bush’s academic record is truly what earned him his admission to Yale College or Harvard Business School, or whether these two Ivy League schools granted him admission because they saw some value in having the son of a prominent family (and it turns out, a future President) among its students.

The ethics of Monitor are a bit more questionable. First, a strategy consulting firm has no particular public relations skills, thereby raising the question of why it accepted a scope of effort entirely built on enhancing the image of Libya and its leader. The answer to that question probably lies in the magnitude of the money involved, and this is a disturbing conclusion. If Monitor was in effect using its elite academic reputation to whitewash the dirty laundry of the Libyan government, there is indeed something rotten in the kingdom of Cambridge.  Having Monitor consultants do interview work for the PhD dissertation of the Libyan leader’s son is also reprehensible, because an academically based consulting firm like Monitor – with Michael Porter of Harvard Business School as one of its co-founders – should have known better (they did acknowledge that it was “ill-considered”).

As to what I would have done had I been approached by the Libyan government to provide teaching or consulting services, we will of course never know because nobody asked me. In my moments of honesty, though, I imagine I would have done it. I have had pangs of doubt before accepting work elsewhere in the Middle East, before taking on some of Singapore’s government-sponsored growth initiatives, and before a project in Russia. In all cases, I convinced myself in the end to do it. So, yes, I probably would have said yes to working with the Libyan government. And of course, I would have been eternally sorry after that.

 

If I ran the business

Sunday, February 20th, 2011

If I ran the business,

I’d put engineers on the lot,

Invite them to discuss

Each customer’s thought.

Engineers would not mind

This input from mankind.

On the TV remote,

I’d take out most buttons,

And add one little note

Of simplification.

Engineers would love that,

This little bit of chat.

And when my car sputters,

I’d call the company,

Talk to designers

Out there in Germany.

“There’s a noise on the right,

Fix the darn thing in flight.”

They might protest a dab,

And do it in the lab.

I would have a big screen

Through which I’d call them all,

Engineers could be seen

Through my designer wall.

“Change this and that,” I’d say,

And they would all obey.

They would welcome my art,

For engineers are smart.

From my suburb nearby

To the farthest nation,

They would all amplify

Our co-creation.

And engineers would bring

Some new composition,

That customers would sing

In a grand jam session.

They would get a new pride,

And might well smile inside.

For engineers get healed

Once their hearts are revealed.

Michael and me

Monday, January 31st, 2011

Michael Porter, arguably the best-known scholar in the corporate strategy field, recently wrote about “creating shared value” in the Harvard Business Review. This marks an important development in the history of strategic thinking because Porter had not until then acknowledged that building new interactions with entities outside the firm can in itself be a source of competitive advantage. His focus had always been on the firm mastering something unique in its value chain and defending it ferociously against potential attackers, such as competitors, new entrants – or customers.

I first got a little annoyed when I saw the article, because my colleague Venkat Ramaswamy and I (and C.K. Prahalad before us) have long argued that co-creation with other stakeholders outside the traditional definition of the firm is increasingly the source of competitive advantage in the 21st century. In other words, yes, it is about creating shared value, and co-creation is the process that gets you there. We put out a book (The Power of Co-Creation) and a Harvard Business Review article of our own (“Building the Co-Creative Enterprise”), and while both are generating good attention, the buzz we are creating is a fraction of what Michael Porter’s article caused. It felt like the Rolling Stones had stolen a tune from the punk rockers that we are.

This was before I came to my senses and realized that Michael Porter is more than a guru; he’s a brand. Although barely a month old, his article has done more for the co-creation point of view than anything else until then. Now that Michael says it’s OK to seek to create shared value, the number of objections to co-creation has diminished exponentially. “Have you heard the latest tune by the Rolling Stones?” I ask people. “It’s about shared value and co-creation.” Some have already heard it. Others go and buy the CD. Even those who do neither know we’re now cool.

I wrote a brief (and admittedly) snide entry in the HBR blog below the Porter article. Because I was (gently) questioning his legitimacy in the shared value/co-creation field after close to 30 years of saying “strategy is about controlling and defending your value chain,” he patiently explained how the concept of shared value had emerged in his thinking. In the process, he also explains that the new thinking on shared value and co-creation does not replace what he has written in the past, but is additive to it. In doing so, he minimizes the role of shared value and co-creation, limiting it to the icing on the cake (with a narrow sustainability flavor, it seems). The punk rocker in me thinks that he has electrified his guitar a bit but still does not understand the essence of the new music. But it’s OK. Michael and me, we’re now buddies.