How Co-Creation Boosts Your Culture and Business

In our new book, The Third Paradigm: A Radical Shift to Greater Success, Dr. Heidi Scott Giusto, Dawa Tarchin Phillips and I outline the concept of “co-creation” in business. Co-creation is a big step further than mere cooperation. As we write in the book: “It is about bringing different parties together to actually produce, improve, or customize a product or service, based on a mutually desired outcome.”

In the following excerpt, we break down the five types of co-creation, and what each of them brings to the table for like-minded entrepreneurs and business owners.

Five Types of Co-Creation

Co-creation is unlike earlier business models, the latter of which business professors C.K. Prahalad and Venkatram Ramaswamy compared to traditional theater in a 2000 Harvard Business Review article:

Business competition used to be a lot like traditional theater: Onstage, the actors had clearly defined roles, and the customers paid for their tickets, sat back, and watched passively. In business, companies, distributors, and suppliers understood and adhered to their well-defined roles in a corporate relationship. Now the scene has changed, and business seems more like the experimental theater…; everyone and anyone can be part of the action.

This is part of what makes co-creation so attractive: It is always a joint process. The group of people working together on a solution and the involvement of other stakeholders determines the form of co-creation you can or want to engage in.

And like all frameworks, co-creation comes with its own set of limitations and challenges you should be aware of. The drawbacks mentioned most often in our survey are personality conflicts and dealing with egos— not unusual problems when there are multiple cooks in the kitchen.

The Board of Innovation, a global innovation firm, also points to six barriers that arise, particularly in B2B contexts: cost, time, resources, capacity, creativity, and fear of change. Co-creation has immense potential but also risks. Choosing the right type of co-creation for your business is a crucial step to mitigate challenges.

Here we highlight five types, or frameworks, of co-creation. They can be likened to five different paths, which can all lead you to your destination. Which road you choose depends on which path you consider the most suitable for your journey.

Some types of co-creation are more popular and thus more familiar to the average person than others. Many types of co-creation happen in plain sight, but unless you are trained to perceive co-creation in action, it might look very similar to a traditional business model. In fact, it is radically different.

Buy The Third Paradigm: A Radical Shift to Greater Success | Entrepreneur Bookstore | Amazon | Barnes & Noble

Here are the five types:

1. Think tank/brainstorm: A group or company brings together a consortium of people, experts, suppliers, and/or partners to develop a new solution, product, or service. In some instances, this even results in customers handling part of the “production” (e.g., flat pack furniture that customers transport and assemble themselves, self-scanning systems in supermarkets, and self-serve ticket counters at airports).
2. Crowdsource: A large group of people (often volunteers) co-create (often for free) a product or service by using web-based creative tools. (e.g., Wikipedia, Kickstarter). This type of co-creation can lead to an increased quality of creativity, which was also one of the benefits mentioned in our survey.
3. Open source: A group or company invites a large group of internal and external experts to tackle its innovation challenge or contribute to its data pool (e.g., Center for Open Science and ResearchGate). This can lead to what many participants in our survey described as a shared sense of ownership and shared resources.
4. Mass customization: A group or company mass-produces products that have been individually tailored to the customer’s wishes. (e.g., a T-shirt printed with your own photo, personalized Vans shoes, or customized luggage). Many participants in our survey of several thousand entrepreneurs mentioned the diversity of ideas as a major benefit of co-creation.
5. User-generated content: A group or company uses knowledge and content that is made public by people (e.g., posted online). There are all kinds of web tools to help you find very quickly information that others have posted online (e.g., customer feedback on blogs and forums, YouTube videos, and social media platforms). This is another great example of gaining access to shared resources, which many in our survey listed as one of the advantages of co-creation.

You can also group these five types of co-creation into just two different buckets:

1. According to what role the group or company plays in the process: This is about who steers the process. Is it the individual consumer, or the company?
2. According to the kind of value created: This is about whether your value is a standardized value that all customers can enjoy (co-creating a better product or service), or a personalized value individually tailored to each customer (co-creating a personalized product or service).

Co-creation, following the five types above, is about making something better or making something unique. If unique is the value proposition, even average products can find market success because they tap into the value of co-creation. If it is making something better, even average products can still find market success by being improved with the help of customers and consumers.

That is why co-creation is continuing to rise in popularity among new and established businesses alike. What type of co-creation would work for you and your company?

Related: Best Business Books for Entrepreneurs

As you can see, co-creation can unlock additional value in your value creation chain and make that value available for your and others’ success. Wouldn’t it be great if you could optimize the value you provide because you trust and engage with others, rather than keeping your value generation tied to an outdated model? Wouldn’t it be meaningful to elevate your relationships and engage the talents, knowledge, and skills of those who care the most about what you do—your customers and the consumers and stakeholders of your products and services?

There is no aspect of your business that cannot be touched and improved upon with the help of co-creation. Every part of every business can benefit from unlocking and harnessing the power of co-creation to identify the value yet to be discovered, unleashed, and scaled. Every business could achieve greater success by embracing the co-creation process and expanding the trust and investment it can generate among customers, consumers, and stakeholders alike.

Buy The Third Paradigm: A Radical Shift to Greater Success | Entrepreneur Bookstore | Amazon | Barnes & Noble