Posts Tagged ‘supply chain’

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.


Andy Grove for President!

Saturday, July 3rd, 2010

Andy Grove, former CEO of Intel and now its senior adviser, suggests in this week’s edition of Bloomberg BusinessWeek that giving up on large-scale manufacturing eventually amounts to economic suicide for the United States.

His argument is that if the US continues to focus solely on the “knowledge component” of its economy, it will develop a society comprising a few wealthy people playing at the edge of technology development, along with a large number of unemployed folks wondering why their government let their manufacturing jobs go to China. I love seeing Grove make this ostensibly left-leaning argument because his leadership in the development of the highly successful, eminently capitalistic Intel protects him from the bipolarity of debates about free-market vs. protectionism, Republican vs. Democrat, and no industrial policy vs. industrial policy.

The most convincing part of Grove’s argument to me is that, beyond the social fracture this laissez-faire attitude may create, it will eventually produce an erosion of the technological edge for the US, because large-scale manufacturing is the foundation of future technology developments.

The shop floor and the design lab do indeed participate in the same process of technology co-creation. Product engineers design for manufacturing, but the experience of manufacturing – and the experience of customers with the manufactured products — fuels the next design. If you disconnect one from the other on the argument that the brain can function without the muscle, think again. The brain is in the muscle and the muscle is in the brain. Yes, there are a few cases of pure lab-induced disruptions in technology – e.g., new molecules in drug industry, new generation of materials and components in electronic parts. But most innovation comes from the creative confrontation of science- and engineering-induced ideas in the lab, machine and operations design considerations on the shop floor, and customers pushing both shop floor and lab to come up with the next generation of products.

I spend a lot of time these days trying to reconnect faraway suppliers in India, Brazil, or China with their business-to-business customers in the US. Some of these conversations do take place in person with interpreters, but the sheer logistics forces many of these conversations to take place in broken English on bad-quality Skype connections, with the noise of Bangalore, Sao Paulo, or Shenzhen traffic in the background. The stress of these conversations is high, and the generative content of the conversation nearly non-existent. Most of these calls end up with the OEM manufacturer imparting its specifications and a one-way determination of how the supplier’s performance will be assessed, followed by a few grunts generously interpreted as assent by the OEM. Twenty or thirty years ago, the meeting would have taken place live, lasted a whole day, included a plant tour and discussions with shop floor operators, quality, engineering, and plant management, and ended up with a recap in a local restaurant about the ten things we’re excited about doing together over the next six months.

Nostalgia won’t help us here, because the location of suppliers and the state of supplier-customer relationship are what they are. I am also not sure that an industrial policy driven by the US government to encourage more manufacturing jobs in the US is a good idea. While I love the US where I live and it grieves me to see many people suffer as a result of this failure to maintain the crucial link between design and manufacturing, I have an equal passion for the awakening of emerging nations that these expatriated jobs allow.

The solution, I believe, lies in a better analytical understanding of the high strategic value of connecting design and manufacturing in a rich, co-creative dialogue. Standard accounting does not recognize the value of this interaction, leading companies to overstate the benefits of cheaper labor. Standard accounting shows the cost of individual activities; and in fact, one of the modern approaches to accounting is aptly called activity-based costing. What we need is an accounting that computes the cost of interactions between activities, or more precisely the cost of missing interactions, such as the huge value companies routinely destroy by disconnecting manufacturing from design. At this stage, the solution lies in both helping China and other emerging nations build new links to design in the US and encouraging American companies to keep some manufacturing jobs in the US.

As for Andy Grove for President, I’m told this can’t happen because he was born in Hungary and escaped it in the dark of night in 1956 at age 20. Now, that’s one protectionist feature of the US political system I’d like to change.