Posts Tagged ‘strategy’

Top-ten list of sponsors for co-creation efforts

Thursday, March 22nd, 2012

Periodically, I ask myself: “who are the most effective change agents when it comes to implementing co-creation inside a corporation?” Here is my list, in descending order of effectiveness:

1. Chief Financial Officer (CFO)

  • Good news: The CFO’s source of power comes from controlling financial resources, often including IT money required for the development of co-creation platforms. They are often frustrated line managers who see co-creation as a means to gain influence over the operational side of the business.
  • Bad news: their analytical bias can overpower the human side of co-creation.
  • Good first step: issue cost reduction challenge to one of the businesses; suggest co-creation may be the way to reach that goal (get external people to do work for free that was previously done inside).

2. Chief Information Officer (CIO)

  • Good news: CIOs get to co-creation through the funding of engagement platforms. The role of CIO in co-creation is legitimized by the app store phenomenon (co-creation with third-party developers).
  • Bad news: CIOs often struggle with developing the human community part of co-creation (they can be too tool-focused).
  • Good first step: find a few APIs and open up some aspect of your customer-facing sites to third-party developers. Start connecting customers and developers.

3. Chief Purchasing Officer (CPO), Directors of Supply Chain

  • Good news: There is a new breath of fresh air with procurement departments; they increasingly recognize that they should be developing supplier networks rather than consolidating them. Supply chain people are often pushed to co-creation through the need to create transparency in their emerging country plants (often due to labor and sustainability issues).
  • Bad news: Supply chain people can get confused on the difference between collaborative supply chain tools that have been around for several years, and the actual development of co-creative supply chain communities that allows the constant reinvention of those supply chains.
  • Good first step: pick a particularly risky part of your supply chain (e.g., Chinese plant with labor issues), and demonstrate that you can remove some operational and reputational risk through co-creation.

4. Research and Development (R&D) Managers, Heads of Product Development

  • Good news: Many product development people know that co-creation is coming to product development and product design (also often referred to as open innovation, or crowd-sourcing).
  • Bad news: They often do not yet know how to involve their own people in co-creation and avoid the NIH syndrome. They often jump too fast to third-party platforms to generate product ideas, but fail to engage their own people in the dialogue.
  • Good first step: start inside.  Assemble your R&D people and see where they would welcome the engagement of external people. Only when you have their views will it become meaningful to engage external contributors.

5. Chief Experience Officer

  • Good news: more and more companies have experience officers.  Experience officers are natural sponsors for co-creation.
  • Bad news: many of them focus on measuring “as is” experience rather than trying to change it.
  • Good first step: pick a narrow segment (a single customer in B2B), engage the mini ecosystem involved in serving this narrow segment/single customer and see what co-creation can bring.

6. Chief Marketing Officer (CMO), Head of Market Research

  • Good news: CMO and market research people understand experience.
  • Bad news: they think of themselves as experience experts, and therefore see no reason to co-create any of that experience with anyone (since they know better).
  • Good first step: open up one of the brand management processes to customers and employees, e.g., advertising, and see what you get.

7. Chief Sustainability Officer (CSO)

  • Good news: sustainability is one of the best fields of application for co-creation because of the multi-stakeholder nature of the problem.
  • Bad news: CSOs don’t typically have access to senior people and may not know how to engage them.
  • Good first step: team up with the sales force to embed sustainability in the sales message.

8. Performance Management, Quality, Reengineering, 6 Sigma, Lean, Transformation Officers.

  • Good news: Performance management people naturally gravitate toward co-creation as “the new tool kit.”
  • Bad news: The concept of process can be so engrained that moving to platforms and self-configured interactions can represent a mental challenge. Many struggle with the notion that the transformation path can/should itself be co-created, rather than established by experts.
  • Good first step: pick a customer-facing process, e.g., sales or customer service, and show how moving from process thinking to co-creation changes the outcome.

9. Strategy Officers

  • Good news: A few strategy officers understand the power of human experience in generating insights.
  • Bad news: most prefer an information-gathering and analytical approach.
  • Good first step: pick a self-contained strategy issue, and ask customer-facing people and a few customers how they would frame and solve the issue. Compare to the answer an analytical approach would have provided.

10. Human Resources Officers, Diversity Head

  • Good news: Of course, senior HR development people should be major players in co-creation.
  • Bad news: In practice, they rarely have access to the proverbial strategic table.
  • Good first step: co-create HR processes (e.g., training, hiring, career development) rather than tackling line processes.


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.

The heart of strategy

Sunday, October 3rd, 2010

I have become increasingly aware of the fact that women are better at co-creation than men. My friend and co-author Venkat Ramaswamy has been saying it for a while, as we debrief working sessions or speaking engagements we occasionally do together, but I’d never thought about it much beyond those moments. It’s a terrible conclusion to reach, particularly for a guy. I wonder if this makes me a gender racist, and whether I will ostracize one-half of the populations I will address from here on. But I increasingly believe it is statistically true.

When guys think of business strategies, they talk about domination, advantage, rivalry, barriers, forces and power. This is the language of war. Witness for example how Michael Porter, arguably the most prominent business strategist to date, describes strategy in a Harvard Business Publishing video. His language evokes tanks and barbed wire, exploding shells and smell of napalm in the morning. Military strategy is the model for business strategy. One visualizes Patton looking at maps, shouting orders and admonishing troops with quotes such as: “Your job is not to die for your country. Your job is to make the SOB on the other side die for his country.” Soldiers are resources that need to be concentrated to conquer and hold territory.

Women by and large think of business as building relationships. Listen for example for how Anne Mulcahy, recently retired CEO of Xerox, describes the company’s strategy over the last ten years.  Women are interested in engaging customers, not destroying competitors. They believe employees are more than resources needing to be marshaled toward dominance; they matter as individuals. Some female managers even think suppliers are people too, and do not have to be beaten to a pulp. Many women believe that businesses need to define their place in the larger environment in which they operate, leading them to a view of strategy as the development of an ecosystem in which their company participates. I recently spoke to a group of Chief Sustainability Officers of large global corporations and close to one-half of them were women, allowing a very different type of dialogue than with a male-dominated audience.

The male conceptualization of strategy of course comes with an automatic disqualification of the softer, gentler view of strategy as unrealistic, even utopian. There is a “gotta love women” condescension that usually accompanies the female characterization of strategy as building relationships. The CEO of a large European bank, also a brilliant economist, once warned me that business and emotions do not mix and that he did not particularly care about the experience of his retail customers because “retail banking is about access to capital and the number of branches you have.” A year ago, his board pushed him into retirement because the bank had been steadily losing market share. Apparently, customers did not like their experience of the bank. I wonder whether he still feels customer experience is irrelevant.

My dream is that I will wake up one morning and find that a woman has displaced Michael Porter, Sun Tzu and Machiavelli on the Olympic strategy podium. Of course, for this to happen, it will require that the top management of large businesses and/or the strategy department at major business schools around the world no longer be dominated by men. I hope it happens before I die.

In defense of PowerPoint

Wednesday, April 28th, 2010

An article in yesterday’s New York Times showed a widely ridiculed map attempting to describe the strategy of the US-led coalition in Afghanistan. Using the spaghetti bowl nature of the PowerPoint page, the article, supported by comments from several senior officers in the US military, argues that attempting to describe causes and effects on such a scale creates such complexity that the human mind cannot conceivably wrap itself around it. Furthermore, the article suggests that conceptual representations of this type create the illusion that the game plan described by the map is the essence of the war, implicitly minimizing the importance of flesh-and-blood troops conducting field operations that involve both risk and courage.

Although PowerPoint is an easy target since we all love to hate Microsoft’s ubiquitous software, the real argument is whether the US military should attempt to create some kind of cause-and-effect representation of what senior officers think might (or should) happen as a result of some actions the coalition takes, or whether any action produces an outcome that is by definition unpredictable, solely driven by the talent of local troops in the specific context of each operation, rendering futile any attempt at anticipating any large-scale outcome from headquarters.

am hardly a specialist in military strategy, but using business strategy as an analog, it seems to me that the answer lies in the co-creation of the war agenda between field operators and headquarters. There is merit in starting with some kind of top-down representation by headquarters of how things might play out if everything were to fall in place perfectly – which it won’t, of course, but at least the military will have a straw model to build from as it learns more from actual operations. As long as this representation is understood to depict an intent and a hypothesis, and not imply any kind of deterministic pattern at the detailed level, it serves a useful purpose. Many businesses have dramatically improved their operations by building strategy maps for their operations, as a way of sharing priorities and mobilizing large numbers of people around the common goal.

The key is to accept that conceptual representations have a limited life. The co-creation point of view on strategy is that it involves short bursts of action, followed by brief moments of reflection. In this rapid cycle of actions and reflections, conceptual representations of strategy are helpful to co-create the insights generated by action reviews between all levels, from the Humvee driver’s observations to the views of the generals at headquarters. What outstanding managers do is develop terrain-anchored patterns of causes and effects that can be used to frame the next course of action, not only at the local level but also in a progressively larger theater of operations, resulting in an increasingly crisper view of how the entire war can be won. Organizing such a discussion requires putting in place an engagement platform that allows parties at all levels to shape a common point of view on what causes what at any given time, looking at the problem at various levels of granularity. In this view, the conceptual representation of the war is continuously co-created.

In the end, the issue is not so much the map as the process that leads to the development of the map, and its life cycle. There may be hope for PowerPoint after all.

Of lizards and hairy men

Wednesday, July 22nd, 2009

If reincarnation exists, I want to come back as a Communications Manager. Enough of this intellectualization about strategy, marketing and innovation! Advertising is where it’s at. On all continents, executives light up when it comes to designing a TV spot. They bring early concepts to their spouses and children, and all agree that Mom has a really cool job. The best fate for my PowerPoint presentations on customer experience and co-creation has been to act as drawing paper for two-year olds. It seems people want lizards (er, geckos) and hairy cavemen (infamous thanks to the American insurance company Geico), not interaction maps and experience curves.

Perhaps as a rationalization for joining the cool dudes, I increasingly believe it’s O.K. for advertising to come before strategy. I know I’ll probably rot in marketing hell for saying so, but having to come up with a 30 second TV spot is a wonderful forcing function. Who needs strategy?

Many moons ago, the Rockport shoe company was looking for its positioning (the legendary Ted Levitt of Marketing Myopia fame roped me into this one). Rockport’s distinctive features were to offer the comfortable sole of a sneaker in the look of a casual shoe you could wear to work. “Let’s make it a walking shoe”, some barely post-puberty kid in the creative department of a Boston ad agency suggested. This became the strategy, complete with walking manifestoes and walking competitions. Twenty-five years ago, they’re still the walking shoe. In an instant, gone were the subtle segmentation schemes of the marketing department: the old vs. the women, the young vs. the restless, and Madonna vs. my mother-in-law. Suddenly, they were all walking.

I’ve heard similar stories about Danone and its health positioning (I wasn’t there, but hold it from good sources). “Heck, we sell mineral water and yoghurt: we’re about health,” an advertising type is rumored to have said, confronted with the need to launch a new corporate campaign. The only problem is they also made beer and cookies (which sounds like a wonderful snack right there?). The story has it that the CEO then decided that if they were a health company, they should sell the beer and cookies divisions, and lo and behold, he did just that. Once again, the campaign became the strategy.

I’m currently working on helping a large European bank define its positioning. We’ve made good progress, but it’s hard to get the highly de-centralized management team to agree on anything. Maybe it’s time to bring in the lizards and hairy cavemen.