Enterprise Co-Creation: The Ultimate Growth Strategy

I think it is fair to say, the Internet is all about the customer. Think about the rapid advance of web personalization for the consumer. Google’s ad targeting based on your recent web activity. Amazon’s recommendation engine that offers products based on what you have bought, and what Amazon thinks you will buy. There have even been companies founded on the principle of outstanding customer service, like Zappos, whose mission statement is, “To provide the best customer service possible.”

And it seems like Zappos was on to something, evidenced by their $928M exit. Today, the customer is king, and all strategy needs to contribute to an optimal customer experience. Drop the ball with your customers, and they can now let you know via social media immediately. And while they are at it, they will let their friends know as well.

With this in mind, companies are especially mindful to create an exceptional value chain for their customers – every step of the way. From new product development, through marketing, sales, and service, organizations look to be unified, connected, and exceptional across the company. But as business units get larger and initiatives get more complex, communication begins to break down. Value creation starts to live within the silos of business units, with the hope that all activities align with the overall customer experience strategy.

This is where enterprise co-creation comes into play. Defined as a “management initiative that brings different parties together (company stakeholders, business partners, customers, etc.) in order to jointly produce a mutually valued outcome,” co-creation is an innovative way to create powerful strategic alignment.

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What is Enterprise Co-Creation?

According to a report released by PWC, authored by Doug Billings and Keith Katz, there are five principles of enterprise co-creation:

  1. The Power of Crowds: Engaging the collective mind of the organization to develop and execute strategy produces better results than any one individual ever could. Drawing on the expertise of all stakeholders allows you to create a rounded, value-packed solution or offering.
  2. The Currency of Passion: In a study of outstandingly engaged business units conducted by Susan David, founder of the Harvard/McLean Institute of Coaching, only 4% of respondents mentioned pay as motivation for their engagement. When people are working on projects they truly care about, and results far exceed that of a dis-engaged employee who is simply working for a paycheck (pardon the harsh assessment).
  3. Value from Experience: Experience here doesn’t reference career experience, but rather the experience of co-creation. Working collaboratively with other types of individuals expands the ways of thinking amongst all members of the group. And don’t underestimate the collective impact on team drive when a successful breakthrough is reached.
  4. Serendipity of Networks: As mentioned in the power of crowds, many minds are better than one. Especially when it comes to innovation. Innovative thinking becomes much easier when individuals can bounce ideas off of people that think differently about issues than they do themselves.
  5. Agility of a viral/social cloud: Technology, and specifically social media, has empowered companies with real-time market insight. From engaging with customers in real-time, to seeing market shifts unfold over time via social commentary, organizations now have a real-time feedback loop to help inform strategy. This makes co-creation, especially with customers and potential customers, easier than ever before.
Enterprise Co-Creation at BMW

Co-creation, by design, is a collaborative endeavor. A real-world example of enterprise co-creation would be the rise of automobile customization online. In early 2010, BMW piloted an initiative to increase customized orders of their vehicles based on feedback from their US customers. Their “made-to-order” online purchase experience offered over 28,000 customization options to customers. Yes, this level of customization required significant changes to their manufacturing plants and processes, marketing, and sales efforts. But it’s what their customers wanted. And in the spirit of co-creation, BMW’s business units worked together to make it happen.

In 2010, BMW set an aggressive goal of having 40% of vehicle purchases be customized by the customer by 2015. Today, in 2015, 80% of the vehicles that BMW delivers are customized for the individual customer. They doubled their five year goal, and more than tripled their stock price over the same period.

As previously mentioned, enterprise co-creation is designed to create a mutually beneficial outcome for all involved parties. BMW did just that. When launching the co-creation endeavor in 2010, James O’Donnell, a senior executive of BMW’s US division, said, “I’m convinced it will give us a competitive advantage against Audi and Mercedes.”

Good thinking, and good execution, BMW. The results speak for themselves.

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Meagan M. Flores
Meagan M. Flores
Meagan M. Flores is the Vice President of Marketing for AchieveIt. A genuine 'problem-solver', when Meagan isn't nose-down in the Sunday Times crossword puzzle, you can find her leveraging her expertise spanning early stage startups to mature growth enterprises to comment trends and best practices related to strategy development and execution, leadership and revenue marketing.