In their book, The Future of Competition: Co-creating Unique Value with Customers, authors C. K. Prahalad and Venkat Ramaswamy suggest that “Informed, networked, empowered, and active consumers are increasingly co-creating value with the firm. The interaction between the firm and the consumer is becoming the locus of value creation and value extraction.”
That was in 2004. Twelve years later, how much progress have we made? How much progress has your firm made is re-thinking how value is created, not for customers, but with customers? When was the last time you attended a meeting where customers were invited to critique a new product launch or even better, help your service delivery team think through the ideal way to implement self-service tactics to improve the customer experience and reduce cost to serve? If you honestly can’t remember seeing the invitation, let alone attending such a meeting, you’re not alone.
Why? Why has the concept of customer co-creation been so difficult to institutionalize in the organizations we all work for and patronize? I mean, you don’t get much bigger than the late C. K. Prahalad in terms of business thought leaders to give something undeniable credibility. I think the problem comes down to three things:
- Customer co-creation is much easier to talk about than to actually do. Fully embracing the paradigm shift that is inherent in “crossing the chasm” to customer co-creation is not for the faint of heart. Yet, in a world where customers are no longer just the extractors of value, but in many cases, the creators of additional value – the risk of holding onto a firm-based, product-out mindset is risky.
- The elephant in the room: If you get past “1”, then you actually have to act on what customers have told you, which often interferes with lots of internal, sometimes political agendas (“what, kill that product, I’ll have you know that product helped make this company what it is today!”). But this isn’t the deeper issue. When you pull this string what you find is a natural resistance to letting go of control. Prof. Venkat Ramaswamy has said, “It is essentially a positive sum ‘disequilibrium’ in which jointly growing the value pie takes precedence over concerns about its divisions.” A hard case to make when you are submitting your second-half forecast.
- The heart of the matter: This really gets to the root of the problem. I actually heard a very senior executive from a company celebrated for its “open innovation” capability say: “What can customers really teach us?” He went on to describe how most of their new products came from studying adjacencies from other industries or from open innovation contests promoted globally.
Hey, I get it. We can’t expect customers to tell us how our technology could create new products or services. As someone once said, “If Henry Ford had asked customers what they wanted; they would have said ‘faster horses.’” But let’s hold those horses for just one minute. Certainly it’s our job to understand how our technologies can engineer solutions that customers could not describe, but isn’t it also our job to shape those solutions through the lens of how a customer sees them? Experiences them? Evolves them? And perhaps, if we let them, co-create those solutions with us?
Now there’s an idea. And it’s the reason why we MUST go beyond basic customer journey mapping to facilitate true customer co-creation. Customer Journey Maps are a powerful tool to visualize the customer experience, but they usually fall short in providing rich, real-time insight about what customers are truly experiencing. CX Workout removes the friction that makes customer co-creation challenging and turns customer journey mapping into a platform for true customer engagement.
And when something is possible, nothing is impossible. Perhaps even customer co-creation.
 Leavy, Brian, Interview: Venkat Ramaswamy – how value co-creation with stakeholders if transformative for producers, consumers and society, Strategy & Leadership Vol 42 No 1 2013, page 13