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Idea generation ********** Idea diffusion >>> Idea development CO-CREATION IN SERVICE-BASED ORGANIZATIONS embedding collaboration in new product development processes Master thesis Joost de Boer BSc. Student number 1517597 Master Business Administration, Strategy & Organization Supervisor: Prof. Dr. T. Elfring Supervisor II: Dr. M.M. Rietdijk April 2011
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Idea<br />
generation<br />
**********<br />
Idea<br />
diffusion<br />
>>><br />
Idea<br />
development<br />
CO-CREATION IN SERVICE-BASED ORGANIZATIONS<br />
embedding collaboration in new product development processes<br />
Master thesis Joost de Boer BSc.<br />
Student number 1517597<br />
Master Business Administration, Strategy & Organization<br />
Supervisor: Prof. Dr. T. Elfring<br />
Supervisor II: Dr. M.M. Rietdijk<br />
April 2011
Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Voor degene met z’n mateloze trots <br />
In z’n risicoloze hoge toren <br />
Op z’n risicoloze hoge rots <br />
Moet nu weten, zo zijn we niet geboren <br />
Voor degene met de slapeloze nacht <br />
Voor degene die ’t geluk niet kan beamen <br />
Voor degene die niets doet, die alleen maar wacht <br />
Moet nu weten, we zijn allemaal samen <br />
Zing, vecht, huil, bid, lach, werk en bewonder <br />
Vrij naar Ramses Shaffy (1971) <br />
The photo on the front page of this thesis is used under Common Ground licence. It is called ‘The smile of a man with a wild fan base’ and <br />
was taken by Ibrahim Iujaz and shared via Flickr (2011) <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Joost de Boer <br />
Supervisor:<br />
EXECUTIVE<br />
Prof. Dr. T. Elfring <br />
SUMMARY<br />
Student number 1517597 <br />
Motivation: One of the concepts in innovation and marketing literature that has received an increasing amount <br />
of attention in the past few years is co-‐creation. Co-‐creation can basically be described as something that <br />
connects organizations and its stakeholders in a continuous dialogue about its products, services and <br />
potentially everything it does, with the aim of creating a shared value. <br />
Research design: Departing mainly from the open innovation and service-‐dominant logic paradigms that <br />
emphasize the involvement of external parties in innovation and marketing processes, this research focuses on <br />
the use of co-‐creation in new product development processes of service-‐based organizations. By doing a <br />
thorough research among five service-‐based organizations in The Netherlands, a total number of fourteen <br />
participants were interviewed, having a special interest in the purposes for the use of co-‐creation, the internal <br />
and external parties that are involved, and the types of co-‐creation that are used during the three main phases <br />
of the NPD-‐process: idea generation, idea development and idea diffusion. <br />
Findings: The combined findings of the literature review and the empirical research demonstrate that <br />
organizations mainly use co-‐creation for the purposes of innovation and marketing of new products and <br />
services. During the NPD-‐process, organizations mainly involve lead-‐users, experts and thought leaders in the <br />
phase of idea generation, and more mainstream customers later on in the process for testing and evaluation <br />
purposes. The external parties that are involved can best be described as the collective group of ‘stakeholders’, <br />
rather than solely ‘customers’ as mostly described in co-‐creation literature. <br />
Further, one new type of co-‐creation was identified: internal co-‐creation. Large organizations appeared to be <br />
able to involve their own employees through the use of co-‐creation for the purpose of innovation and process <br />
improvement. Finally, a number of difficulties were found that organizations are likely to deal with when they <br />
adopt co-‐creation in their NPD-‐processes: commitment (as a result of available time, budget and perceived <br />
priority), the organizations’ culture and structure, environmental influences and communication. <br />
Implications: This research provides managers with an overview of the types of co-‐creation and for what <br />
purpose and at what phase in the NPD-‐process they may be used. In addition, it provides them with an <br />
overview of the difficulties they may expect, and with the knowledge and caution that co-‐creation may require <br />
to be fully embedded in the organization in order to deliver the best results. Finally, it highlights the use of <br />
internal co-‐creation as a way to enhance cooperation inside the organization itself. <br />
<strong>Future</strong> research: Two findings may be recommended to receive increased attention in the future. Firstly, <br />
internal co-‐creation and its use as a new way of co-‐creation that allows organizations to increase collaboration <br />
between employees. Secondly, open innovation and especially co-‐creation faces the challenge to deal with <br />
shared intellectual property in a digital age: when organizations and stakeholders are cooperating, new forms <br />
of intellectual ownership are likely to be required. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor:<br />
TABLE<br />
Prof. Dr. T. Elfring <br />
OF CONTENTS<br />
Joost de Boer <br />
Student number 1517597 <br />
PREFACE <br />
EXECUTIVE SUMMARY <br />
TABLE OF CONTENTS <br />
1. INTRODUCTION 6 <br />
OBJECTIVE AND RESEARCH QUESTION <br />
7 <br />
THEORETICAL AND PRACTICAL RELEVANCE <br />
8 <br />
RESEARCH DESIGN <br />
10 <br />
2. CASE ANALYSIS 11 <br />
2.1 CO-‐CREATION OF VALUE: A GENERAL INTRODUCTION 11 <br />
§ 2.1.1 | Co-‐creation: a definition 12 <br />
2.2 THE PURPOSE AND USE OF CO-‐CREATION 14 <br />
§ 2.2.1 | Co-‐creation in marketing: the service-‐dominant logic 14 <br />
§ 2.2.2 | Co-‐creation in innovation: the open innovation paradigm 16 <br />
2.3 CO-‐CREATION IN MARKETING AND INNOVATION PROCESSES 18 <br />
§ 2.3.1 | (Open) Stage-‐gate model and the Innovation Value Chain 18 <br />
§ 2.3.2 | Involved parties in co-‐creation 21 <br />
§ 2.3.3 | Types of co-‐creation 23 <br />
2.4 TOWARDS EMPERICAL RESEARCH 26 <br />
3. METHODOLOGY 27 <br />
3.1 RESEARCH DESIGN 27 <br />
3.2 DATA COLLECTION 28 <br />
§ 3.2.1 | Sample selection 28 <br />
§ 3.2.2 | Selection criteria 29 <br />
§ 3.2.3 | Selected cases and sample characteristics 29 <br />
§ 3.2.4 | Data collection through semi-‐structured interviews 31 <br />
3.3 OPERATIONAL DEFINITIONS 31 <br />
3.4 CREDIBILITY OF THE RESEARCH 32 <br />
3.5 DATA ANALYSIS 32 <br />
4. CASE ANALYSIS 33 <br />
4.1 CASE ANALYSIS 34 <br />
4.5 CROSS-‐CASE ANALYSIS 54 <br />
5. DISCUSSION 64 <br />
5.1 PURPOSE OF CO-‐CREATION 65 <br />
5.2 INVOLVEMENT OF INTERNAL AND EXTERNAL PARTIES 65 <br />
5.3 USED TYPES OF CO-‐CREATION 67 <br />
5.4 CO-‐CREATION IN THE NPD-‐PROCESS 68 <br />
5.5 RESULTS AND MEASUREMENT 70 <br />
5.6 ENCOUNTERED DIFFICULTIES USING CO-‐CREATION 71 <br />
6. CONCLUSION 72 <br />
6.1 CONCLUSION 72 <br />
6.2 THEORETICAL AND PRACTICAL IMPLICATIONS 73 <br />
6.3 LIMITATIONS 75 <br />
6.4 RECOMMENDATIONS FOR FUTURE RESEARCH 75 <br />
REFERENCES <br />
APPENDIXES <br />
APPENDIX A: OPERATIONAL DEFINITIONS* <br />
Appendix B: Definition of co-‐creation by interviewees <br />
3 <br />
4 <br />
5 <br />
77 <br />
80 <br />
80 <br />
82 <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
01<br />
Supervisor:<br />
INTRODUCTION<br />
Prof. Dr. T. Elfring <br />
Introduction <br />
§ 1.1 | Objective and research question <br />
§ 1.2 | Theoretical and practical relevance <br />
§ 1.3 | Research design <br />
Joost de Boer <br />
Student number 1517597 <br />
“In the past few years, the ability to organize communities of Web participants to develop, market and support <br />
products and services has moved from the margins of business practice to the mainstream” (Bughin, Chui et al. <br />
2010). In August 2010, McKinsey Quarterly published an article called ‘Ten tech-‐enabled business trends to <br />
watch’ which describes recent technical developments and their impact on traditional business models. <br />
Collaborative creation, in short co-‐creation, is one of those developments that have received increased <br />
attention during the past decade. It roughly describes the involvement of customers by organizations in the <br />
process of developing, marketing and support of products and services. <br />
The increasing popularity of co-‐creation is -‐ next to technological developments -‐ largely the result of <br />
‘dissatisfied consumers that want to interact with firms and thereby co-‐create value’ (Prahalad and <br />
Ramaswamy 2004b). In addition, an increasing number of articles in marketing and innovation literature have <br />
been published that elaborate on the increasing use of customer involvement in value creating processes of <br />
organizations. Within marketing and innovation fields, two important paradigms have risen that stimulate <br />
organizations to source beyond their direct organizational boundaries: the service-‐dominant logic and open <br />
innovation <br />
Both paradigms promote the involvement of customers in organizations, and co-‐creation appears to have the <br />
potential to function as a linking pin between the two worlds. It enables organizations to gather insights and <br />
ideas from experienced users and experts, while at the same time creating leverage for new ideas in the <br />
internal organization and shaping opportunities to develop those ideas together. However, Kristensson et al. <br />
(2008) state that ‘co-‐creation in terms of user involvement forces a rethink of much of the traditionally <br />
accepted strategies when a company attempts to collect knowledge about customer value’. So apart from its <br />
apparent benefits, co-‐creation tends to affect the organizations’ strategy, questioning the traditionally <br />
accepted strategies of product development and collecting customer insights. <br />
Although the number of contributions to co-‐creation literature has increased in line with its popularity, few <br />
combined research has been done about where and when co-‐creation can be used in the process of new <br />
product development, and who should be involved in it. Adopting co-‐creation may, along with a large list of <br />
new value creating opportunities, also have a large impact on the way organizations shape their innovation and <br />
marketing processes. Hence, this research aims to identify how co-‐creation can be used in both marketing and <br />
innovation processes to create value. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
§ 1.1 OBJECTIVE AND RESEARCH QUESTION<br />
Given the novelty of the concept, recent co-‐creation research has primarily focused on explorative research <br />
and theory building. The first conceptual models on co-‐creating value that were built, presented potential <br />
strategies for successful user involvement and exploring the benefits of co-‐creation for both customers and <br />
organizations (Kristensson, Johansson et al. 2008; Payne, Storbacka et al. 2008). Several types of customer <br />
collaboration were identified (Pisano and Verganti 2008) as well as researches that focused on the question <br />
whether co-‐creation should be considered a ‘limited subset of digital media’, or as ‘something that extends <br />
more generally and inclusively across the entire economy and culture’ (Potts, Hartley et al. 2008). <br />
However, little research has been combining marketing and innovation processes, neither has there been made <br />
consequent use of paradigms in both fields of interest such as the Service Dominant Logic and open innovation. <br />
As a result, there is a gap in co-‐creation literature in describing how co-‐creation can best be used in the <br />
different phases of value creation processes. Bendapudi & Leone (2003) made attempts to show that the <br />
timing of customer involvement is important, and Nambisan & Nambisan (2009) elaborate that different types <br />
of co-‐creation have different levels of impact. However, this does not include the question of what types of co-creation<br />
can best be used during the specific phases of the value creation process. <br />
In addition, there is lack of research describing which parties -‐ inside and outside the organization -‐ are <br />
involved in the different phases of the (co-‐created) value creation process. Thereby, co-‐creation requires <br />
cooperation with outside as well as with inside parties. Few is known about how this cooperation works, and <br />
what possible problems occur when for instance marketing and innovation departments start cooperating <br />
intensively with each other. Considering these gaps in co-‐creation literature, this research departs from the <br />
following research question: <br />
“How is co-‐creation used in the innovation and marketing New Product Development-‐processes of <br />
service-‐based organizations?” <br />
In addition, several sub questions have been formulated to underpin the research question: <br />
1. What is considered as the ‘co-‐creation of value’? <br />
2. How are different types of co-‐creation used for different purposes in the process? <br />
a) For what purposes is co-‐creation used in organizational processes? <br />
b) What types of co-‐creation are there? <br />
3. Which parties are involved in co-‐creation? <br />
a) Who are involved from the inside of the organization? <br />
b) Who are involved from outside the organization? <br />
4. What are the encountered problems for co-‐creation in these processes? <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
This research starts with a review of the available co-‐creation literature, and is subsequently extended with <br />
empirical research on co-‐creation. Both theoretical and empirical results will be combined to provide an <br />
answer to the research question, as shown by the proposed conceptual model in figure 1.1. <br />
Figure 1.1 | Proposed conceptual model<br />
Co-creation<br />
Marketing<br />
and<br />
innovation<br />
processes<br />
New Product Development Process<br />
Successful<br />
products<br />
and<br />
services<br />
§ 1.2 THEORETICAL AND PRACTICAL RELEVANCE<br />
This research has the objective to make contributions to both theory and practice. This section therefore <br />
discusses the theoretical and practical relevance of this research. <br />
§ 1.2.1 | Theoretical relevance <br />
Co-‐creation is a concept that can be used by both product-‐based as by service-‐based organizations. But over <br />
the past few decades, marketing theory and practice have evolved from a ‘goods’ dominant-‐logic towards a <br />
more ‘service’ dominant-‐logic. Vargo & Lusch (Lusch, Vargo et al. 2007) mark that from the 1980’s ‘a dominant <br />
logic begins to unify disparate literature streams in major areas such as customer and marketing orientation, <br />
services marketing, relationship marketing, quality management, value and supply chain management, <br />
resource management and network analysis’ (Vargo and Lusch 2004). <br />
Similarly, in innovation theory has quite recently had contributions on the field of lead-‐user innovation (von <br />
Hippel 1986; von Hippel 2005), open innovation (Chesbrough 2003; Chesbrough 2006) and new product <br />
development (Phillips, Neailey et al. 1999; Grönlund, Sjödin et al. 2010). These concepts have one thing in <br />
common: they open up innovation processes and emphasize the importance of cooperation and sharing, <br />
thereby deviating from traditional ‘closed’ innovation theories who prescribe that innovation is something that <br />
is done from within. <br />
Although these innovation and marketing theories have much in common, there have been done no attempts <br />
yet to challenge the strategies that traditional innovation and marketing departments use. This research zooms <br />
in on the process of new product development, thereby aiming to identify the moments that organizations <br />
involve their customers by using co-‐creation. Although previous research has identified several types of co-creation<br />
and opportunities for the use of co-‐creation in general, no combined research has been done yet <br />
describing what type of co-‐creation is used in what type of the new product development process. In addition, <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
few is known about which internal and external parties are exactly involved during these particular phases in <br />
the process. Considering the external parties that are involved, it might be that these are not just customers, <br />
but also a more varied group of stakeholders. In addition, considering the involvement of internal parties, there <br />
might be problems when cooperation between departments is intensified as the result of co-‐creation. Finally, <br />
when deploying co-‐creation in the new product development process, problems may occur that were <br />
previously unaccounted for. This research aims to map the problems that occur when using co-‐creation in this <br />
process. <br />
§ 1.2.2 | Practical relevance <br />
The practical relevance of this research lies in the direct extent of its theoretical relevance, and contributes in <br />
four ways First, in June 2008, an article in McKinsey Quarterly’s noted that “…smart companies are now <br />
beginning to encourage their customers to help them develop the products and services consumers really <br />
want” (Bughin, Chui et al. 2008). Recognizing that organizations share a common struggle in using co-‐creation <br />
of value in their marketing and innovation processes, there appears to be a growing need for solutions on this <br />
level. Although this research cannot provide an answer to all known matters and questions that are related to <br />
co-‐creation, it can make a start by indicating what type of co-‐creation organizations may use in different phases <br />
of their product or service development process. <br />
Second, it is highly relevant to know exactly who to involve during these different phases. As Enkel et al. (2005) <br />
noted, organizations should ‘involve customers as early as necessary, but as late as possible’. They also <br />
conclude that by involving customers, organizations may at the same time put their intellectual property at <br />
risk, and expose information that is sensitive to competitors. By indicating which customers are to be involved <br />
in the different phases that co-‐creation is used, organizations may limit the risk of unnecessary involvement of <br />
customers at crucial stages of the process. <br />
Third, the intensified cooperation between an organizations’ marketing and innovation departments as a result <br />
of the use of co-‐creation challenges the ways how organizations are structured. Referring to Goold & <br />
Campbell’s specialist cultures (Goold and Campbell 2002), departments are sometimes consciously separated <br />
from each other in order to reach greater performance. In the case of co-‐creation, this might complicate the <br />
cooperation between those departments and their interactions with externally involved parties. Problems that <br />
were indicated during this research might be prevented by changing organizations’ structural design. <br />
Finally, Kristensson et al. (2008) conclude their article by stating that managers in general face the challenge of <br />
“discovering innovation opportunities which are not related to findings made in the R&D laboratory, but at <br />
places far away from the company where, and when, ordinary people use certain services”. It will not be easy <br />
for organizations that have previously operated using rather closed innovation departments to open up and to <br />
involve customers. At the end of this research, several practical implications and recommendations will be <br />
made, as well as the limitations and possible follow-‐ups of this research. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
§ 1.3 RESEARCH DESIGN<br />
Serving the purpose of this research to provide an answer to the proposed research question, this research <br />
largely consists out of four parts. The first part provides an overview of recent co-‐creation literature and <br />
related theories in Chapter 2, partially and temporally answering the sub questions by completing the <br />
proposed conceptual model that was introduced in paragraph 1.1. Next, Chapter 3 functions as a link between <br />
theory and practice, by discussing the research methodology that was used to collect empirical data. <br />
The second part is the actual empirical section of this research: fourteen employees working at a total number <br />
of five service-‐based organizations were interviewed and asked for their experiences with co-‐creation. This <br />
way, an overview is created that shows how different organizations involve co-‐creation in their product/service <br />
development processes, and what problems they have encountered. By not only discussing each case on its <br />
own, but also providing a cross-‐case analysis of the results, the research also compares results among <br />
organizations. <br />
In the third part of this research, theory and practice meet as their results are compared. It will discuss the <br />
implications that the empirical data of Chapter 4 appear to have on the theories that were identified earlier in <br />
Chapter 2. Finally, Chapter 6 concludes the discussion of Chapter 5 with the results generated in Chapter 2 and <br />
4, providing an answer to the research question and the sub questions that were stated in Chapter 1, and <br />
additionally explains the theoretical and managerial implications of this research along with its limitations. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
02<br />
Supervisor:<br />
CASE<br />
Prof. Dr. T. Elfring <br />
ANALYSIS<br />
Introduction <br />
§ 2.1 | Co-‐creation of value: a general introduction <br />
§ 2.2 | The purpose and use of co-‐creation <br />
§ 2.3 | Co-‐creation in marketing and innovation processes <br />
§ 2.4 | Towards empirical research <br />
Joost de Boer <br />
Student number 1517597 <br />
This chapter is the first step towards providing an answer on the question how co-‐creation is used in innovation <br />
and marketing processes of service-‐based organizations, and is therefore divided into four paragraphs. It <br />
therefore starts with a general introduction of the concept ‘co-‐creation of value’, and a discussion about what <br />
is considered to be co-‐creation and what not. Next, the different purposes and use of co-‐creation are explored <br />
by discussing the relevant marketing and innovation theories that the concept relates to: open innovation and <br />
the service dominant logic. <br />
The third paragraph first discusses the different approaches to the shared marketing and innovation process of <br />
new product development, while working towards an integrated process overview. The involved parties in co-creation,<br />
as well as the different types of co-‐creation are treated subsequently with respect to their use in <br />
different stages of new product development. It is argued that co-‐creation can be used in multiple stages of the <br />
joined marketing and innovation process, but that the way how co-‐creation is used and the parties that are <br />
involved may differ per stage. <br />
Finally, an overview is made of the reviewed literature in this chapter, while visually underpinning these results <br />
in the conceptual model. From here, empirical data will be gathered and analyzed to assess whether how co-creation<br />
can contribute to existing marketing and innovation processes. <br />
§ 2.1 CO-CREATION OF VALUE: A GENERAL INTRODUCTION<br />
An example: Wikipedia <br />
§ 2.1.1 | Co-‐creation: a definition <br />
An example: Wikipedia <br />
There is no better way to start a paragraph about the co-‐creation of value, then by defining the concept by <br />
using a co-‐creation medium ‘avant la lettre’: Wikipedia. The Dutch Wikipedia page on ‘co-‐creation’, defines it <br />
as follows: “Co-‐creation is a situation where an organization achieves value creation by cooperating with <br />
consumers, end-‐users or other stakeholders”. However, one of the well known problems with Wikipedia is that <br />
it lacks accordance with relevant pages in other languages. <br />
Hence, the <strong>English</strong> page of Wikipedia defines co-‐creation as “a form of market or business strategy that <br />
emphasizes the generation and ongoing realization of mutual firm-‐customer value. It views markets as forums <br />
for firms and active customers to share, combine and renew each other's resources and capabilities to create <br />
value through new forms of interaction, service and learning mechanisms. It differs from the traditional active <br />
firm -‐ passive consumer market construct of the past.” <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Although the <strong>English</strong> definition is somewhat more extended than the Dutch definition, both definitions are in <br />
accordance with each other. However, a little further on the Dutch Wikipedia site, there is a section called <br />
‘Difference with related concepts’, that claims: “Co-‐creation is often confused with co-‐design. Co-‐design is a <br />
process where customers or end-‐users are involved to develop new products or services in a customer oriented <br />
way. The input of customers/end-‐users in this process aims at value creation within an organization”. <br />
The three subsections above allow us to draw a few conclusions already: (1) there is a variety of definitions on <br />
co-‐creation, but (2) co-‐creation may largely be explained as the creation of value by stakeholders and <br />
organizations in a cooperative process. In addition, these definitions show that (3) some co-‐creation initiatives, <br />
like Wikipedia, have important limits regarding the reliability of their input, and as a result (4) organizations <br />
may expect that co-‐creation will not be implemented easily, and that its results will not always be directly <br />
profitable. For this research, the definitions Wikipedia provides are not very useful; however, they do offer <br />
some clues where to start. This paragraph is about co-‐creation: it discusses what it is, how it works and what <br />
the current state of mind in co-‐creation literature is. <br />
§ 2.1.1 | Co-‐creation: a definition <br />
The ‘co’ in co-‐creation stands for ‘collaborative’ -‐ collaborative creation, that is. It is no coincidence that <br />
Wikipedia in the previous example uses different definitions of co-‐creation. Concepts like co-‐production, co-design,<br />
customer innovation, lead user innovation and customizing are used interchangeably; the theoretical <br />
landscape that describes co-‐creation is fragmented as a result of the semantic discussions about what co-creation<br />
exactly is. This research makes no attempt to enter or to end this discussion; as the number of <br />
concepts that relate to co-‐creation seems to be endless and most concepts are not entirely mutually exclusive, <br />
there is no use in trying to identify each of these concepts and to compare their differences. However, it is <br />
useful to identify a number of criteria that can be used to embrace concepts that operate within the same area <br />
of co-‐creation, preventing this research from ending up in semantic discussions. To do this properly, a point of <br />
departure is needed to identify such criteria. <br />
A definition provided by Kristensson, Matthing and Johansson (2008) appears to be suitable. They define co-creation<br />
as “The involvement of the customer as an active collaborator right from the beginning of the <br />
innovation process. In the process of co-‐creation value, the customer may suggest innovative ideas for the <br />
company’s forthcoming products or, alternatively, he or she might share consumption experience”. This <br />
definition hands a number of leads that can be transformed into criteria: co-‐creation is used from the <br />
beginning of the innovation process (i.e. place in the process), by involving customers as an active collaborator <br />
(i.e. whom are involved) to suggest ideas or share their consumption experiences (i.e. for what reason are the <br />
whom involved). <br />
C.K. Prahalad and V. Ramaswamy, two business scholars who popularized the term ‘co-‐creation’ with their <br />
book ‘The <strong>Future</strong> of Competition’ in 2004, define the concept of co-‐creation as “a new approach to value <br />
creation, based on an individual-‐centered co-‐creation of value between consumers and companies” (Prahalad & <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Ramaswamy, 2004b). In addition to Kristensson et al., they add the section ‘(new) approach to value creation’: <br />
this appears to be the target of co-‐creation (i.e. why is it done). They managed to make a comparison between <br />
what, in their view, can be considered as co-‐creation and what cannot; the result is plotted in table 2.1. <br />
What co-creation is not<br />
Customer focus <br />
Customer is king or customer is always right <br />
Delivering good customer service or pampering <br />
the customer with lavish customer service <br />
Mass customization of offerings that suit the <br />
industry’s supply chain <br />
Transfer of activities from the firm to the <br />
customer as in self-‐service <br />
Customer as product manager or co-‐designing <br />
products and services <br />
Product variety <br />
Segment of one <br />
Meticulous Market research <br />
Staging experiences <br />
Demand-‐side innovation for new products and <br />
services <br />
Table 2.1 | The concept of co-creation<br />
(Prahalad & Ramaswamy, 2004c).<br />
What co-creation is<br />
Co-‐creation is about joint creation of value by the company and the <br />
customer. It is not the firm trying to please the customer <br />
Allowing the customer to co-‐construct the service experience to suit <br />
her context <br />
Joint problem definition and problem solving <br />
Creating an experience environment in which consumers can have <br />
active dialogue and co-‐construct personalized experiences; product <br />
may be the same (e.g., Lego Mindstorms) but customers can <br />
construct different experiences <br />
Experience variety <br />
Experience of one <br />
Experiencing the business as consumers do in real time <br />
Continuous dialogue <br />
Co-‐constructing personalized experiences <br />
Innovating experience environments for new co-‐creation <br />
experiences <br />
According to Prahalad & Ramaswamy, co-‐creation is the result of dissatisfied consumers that want to interact <br />
with firms and thereby co-‐create value. Potts et al. (2008) add to this that co-‐creation is not exactly a new <br />
thing, but rather an “evolution of economic and cultural order to ‘account for consumers’ greater access to the <br />
‘means of production’ through information and communication technologies”. They link it to situated creativity, <br />
defining it as a feedback dynamic of creativity between production and consumption. The evolutionary <br />
approach and the dissatisfaction argument mentioned above, are supported by other writers such as Malcom <br />
Gladwell (The Tipping Point, (2000)) and Matt Mason (The Pirate’s Dilemma, (2008)) who recently published <br />
about the way how youth culture and increase of technological developments result in increasingly critical <br />
consumers that do not want to remain on the sideline: they want to participate. <br />
As for organizations, the first reason to involve customers in their processes is that customers, being the users <br />
of a product or service, have user experience. Therefore, they can have valuable insights and experiences that <br />
might improve existing products, or lead to the development of new ones (Prahalad and Ramaswamy 2004b). <br />
Second, as Payne et al. (2008) recall: ‘the suppliers’ motivation should be to improve these customer practices <br />
in order to build value for the customer and a more valuable role for itself in the customer’s activities’. More <br />
customer value would automatically lead to more satisfied consumers, which leads to more sales. <br />
After this defining section of the concept co-‐creation of value, it is useful to consider the purposes that co-creation<br />
is used for in organizations. This involves theories that are dominant in the fields where co-‐creation <br />
operates: mostly marketing and innovation. Therefore, the next paragraph provides an overview of the <br />
emerging paradigms in marketing and innovation and how they relate to co-‐creation. It appears that although <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
used by both marketing and innovation departments in organizations, there is still little known about the way <br />
that co-‐creation is used in a joined effort between the two. <br />
§ 2.2 THE PURPOSE AND USE OF CO-CREATION<br />
§ 2.2.1 | Co-‐creation in marketing: the service-‐dominant logic <br />
§ 2.2.2 | Co-‐creation in innovation: the open innovation paradigm <br />
After the previous introductory paragraph, this section discusses the different purposes that co-‐creation is <br />
known to be used for. Nambisan & Nambisan (2009) argue that co-‐creation generally can result in two <br />
outcome categories. The first category relates to marketing and customer relationship management, where <br />
they mostly emphasize that ‘consumer involvement in innovation and value creation can lead to enhanced <br />
customer loyalty, customer satisfaction and customer quality perceptions’. Second, the outcomes of co-creation<br />
relate to the process of innovation: they provide examples of ‘enhancing innovativeness, appeal of <br />
products and services and reduce time to market by partnering with customers in product development or <br />
enhancement’. <br />
This paragraph therefore provides a discussion focusing on two fields of attention: marketing and innovation <br />
literature. An important paradigm in marketing literature is the service-‐dominant logic (S-‐D logic): one that <br />
breaks with the product-‐dominant focus of organizations and emphasizes the importance of involving <br />
customers in development and marketing processes (Vargo and Lusch 2004). The application of co-‐creation for <br />
innovation purposes is also subject to the attention of many scholars. One of the emerging paradigms in the <br />
field of innovation literature is that of open innovation, arguing that organizations should not only source for <br />
new ideas inside, but also outside the boundaries of their organizations (Chesbrough 2003). <br />
§ 2.2.1 | Co-‐creation in marketing: the service-‐dominant logic <br />
Vargo & Lusch (2004) explore the possibilities for the S-‐D logic in their article ‘Evolving to a new dominant logic <br />
for marketing’. In their study on the evolvement of marketing literature during the past two centuries, they <br />
discover a growing importance for marketing, which has its glory days in a traditional sense during the 1950’s – <br />
1980’s. After this, marketing emerges more and more towards a more holistic paradigm that unifies “disparate <br />
literature streams in major areas such as customer and market orientation, services marketing, relationship <br />
marketing, quality management, value and supply chain management, resource management and network <br />
analysis.” <br />
Originating from marketing literature, the service-‐dominant logic largely describes the transition from the <br />
traditional goods-‐dominant logic’s focus on ‘value in exchange’ towards a focus on ‘value in use’. This ‘value in <br />
use’ paradigm is not only modern in its view of customers (i.e. as an operant, intangible resource), but also <br />
stretches the idea of customer value creation by actually involving the customer in the process of creating <br />
value. (Enkel, Kausch et al. 2005) <br />
This kind of marketing asks for a different mind-‐set. Instead of looking at a product or service and considering it <br />
as ‘output’, the S-‐D logic tends to look at a product or service as a step in a process towards customer value. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Hence, the product or service is not any more the product or service that it used to be in terms of ‘end <br />
product’, but the purpose of a product or service is here seen as something that functions in order to achieve a <br />
certain amount of satisfaction. <br />
Changing the paradigm of customer value creation starts with the understanding that according to the S-‐D <br />
logic, value creation is a continuous process rather than a production process that ends at the phase of ‘value <br />
exchange’. Yet, Vargo & Lusch (2006) explicate, the S-‐D logic does not neglect the importance of value in <br />
exchange; however, they claim that ‘value in exchange’ exists only if ‘value in use’ occurs for the customer as <br />
well. Further, the relationship between customer and organization is considered to be continuous, inviting both <br />
to collaborate. Table 2.2 on the next page provides an overview of the fundamental differences between the <br />
goods-‐dominant and the service-‐dominant logic (Vargo and Lusch 2004), which was adjusted to the concepts <br />
used in this section. <br />
Table 2.2 | Adjusted G-D and S-D logic conceptual transitions<br />
Lusch & Vargo (2006) <br />
Goods-‐dominant logic <br />
Service-‐dominant logic <br />
Focus Goods (operand) Service (operant) <br />
Mode of exchange Products, Services Experiences <br />
Satisfaction Feature/attribute Solution <br />
Creating customer value Value-‐added Co-‐creation of value <br />
Financial Profit maximization Financial feedback/learning <br />
Remuneration Price Value proposition <br />
Determining supply and demand Equilibrium systems Complex adaptive systems <br />
Activities Supply chain Value creation network/constellation <br />
Marketing Promotion Dialogue <br />
Launch To market Market with <br />
Orientation Product orientation Service orientation <br />
From an S-‐D logic point of view, co-‐creation can also be seen as an important addition to customer relationship <br />
management (CRM). In their article in the Harvard Business Review, Rust, Moorman and Bhalla (2010) propose <br />
a shift in marketing departments from a focus on driving transactions towards the maximization of customer <br />
lifetime value. They argue that organizations should consider ‘reinventing the marketing department as a <br />
customer department’: replacing the Chief Marketing Officer for a Chief Customer Officer, placing customer <br />
managers instead of traditional brand managers, integrating customer-‐focused functions as ‘Customer <br />
Relationship Management’, Market Research and Research and Development into a customer department, and <br />
emphasizing the importance of customer services (Rust 2010). Their point of departure is that it is increasingly <br />
important to focus on the retention of customers by offering them a maximized customer lifetime value (CLV) <br />
instead of focusing on acquiring new customers. <br />
Bendapudi and Leone (2003) suggest that organizations ‘may want to encourage participation in production by <br />
customers who have a strong relationship with the firm’. In addition, Gummesson (2004) suggests the use of <br />
Return on Relationship (RoR) as a measure instead of Return on Investment (RoI), defining RoR as ‘the long-term<br />
net financial outcome caused by the establishment and maintenance of individual customer <br />
relationships’. Comparing these suggestions on the field of Customer Relationship Management and the <br />
paradigm switches that are proposed by the Service-‐Dominant Logic, they have one general thing in common: a <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
shift towards the involvement and retention of customers. As support for these developments is created by the <br />
increase of technological ability to reach customers, CRM and S-‐D Logic describe a potential new direction for <br />
marketing processes and the departments that drive them, by involving the customer. <br />
Co-‐creation and the service-‐dominant logic <br />
One of the fundaments of the S-‐D logic is the co-‐creation of shared value. This assumes that value should be <br />
created together with the customer in a collaborative process, and not created by the producer for the <br />
customer. Cova and Salle (2008) based their model for involving customer network actors on the S-‐D Logic; <br />
Payne et al. (2008) cite Vargo & Lusch (2004a) while creating a conceptual framework for value co-‐creation: <br />
“The customer is always a co-‐creator of value: there is no value until an offering is used -‐ experience and <br />
perception are essential to value determination”. However, when reaching toward a new, collaborative logic of <br />
value creation and goal-‐based satisfaction, the customer will have to get involved in the process. This does not <br />
only imply involvement at the end of the line, but also from the very start of the value creation process: the <br />
phase of innovation. <br />
Consequent to this increasing customer involvement, scholars have linked S-‐D logic with innovation processes <br />
in organizations. Michel et al. (2008) elaborate on the fact that the traditional goods-‐dominant logic falls short <br />
to explain and understand many recent discontinuous innovations. Discontinuous innovations, or revolutionary <br />
innovations, are innovations that have changed traditional markets and created new ones, supported by new <br />
techniques like Web 2.0 and the rise of online social media (Albors, Ramos et al. 2008). This new type of <br />
connection does not only connect customers with customers and organizations with other organizations, but <br />
also provides opportunities for cross-‐link communication. <br />
But how do organizations that have always used a G-‐D logic approach in their innovation processes adapt to <br />
these changing circumstances? This cannot singularly be explained by the service-‐dominant logic, which mostly <br />
has a marketing focus – therefore, the use of co-‐creation for (open) innovation purposes is discussed in the <br />
next section. <br />
§ 2.2.2 | Co-‐creation in innovation: the open innovation paradigm <br />
One of the current leading innovation paradigms is open innovation. Before clearly defining this paradigm, it is <br />
useful to define what exactly is considered as ‘closed’ innovation. Closed innovation, or traditional innovation, <br />
refers to a closed-‐circuit model where internal research and development activities lead to internally <br />
developed products that are then distributed by the same firm (Chesbrough 2006). Or as Grönlund et al. (2010) <br />
define closed innovation: it is the development and marketing of new products that takes place within the <br />
boundaries of the same firm. Resources are fed into a development funnel for inventions to appear in the end, <br />
mostly without seriously considering alternative ideas from outside the organization. <br />
Open innovation, however, intends to use a different perspective on innovation. The term ‘open innovation’ <br />
was coined by Henry Chesbrough (2003; 2006), defining it as a paradigm that “assumes that firms can and <br />
should use external ideas as well as internal ideas, and internal and external paths to market, as they look to <br />
advance technology”. Open innovation attempts to open up the traditional, closed circuit of research and <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
development (R&D) departments by suggesting that valuable ideas can be generated and used both inside and <br />
outside a specific organization. In practice this means that not all good ideas come from inside the firm, and <br />
neither should all good ideas that emerge from inside that firm be commercialized by that same firm <br />
(Grönlund, Sjödin et al. 2010). <br />
Further, open innovation assumes that internally developed ideas can be taken to the market and then be <br />
applied in other organizations, enabling ideas that are of no direct value to the organization to generate value <br />
either way (i.e. outbound open innovation). Accordingly, another characteristic is that it expects traditional <br />
R&D departments also to identify, connect and leverage external knowledge as an important part of the <br />
process of open innovation (i.e., inbound open innovation). External knowledge herein focuses on reconciling <br />
“the individual inventor or high-‐tech start-‐up in Silicon Valley, to the research facilities of academic institutions, <br />
to spin-‐offs from large, established firms” (Chesbrough 2006). <br />
Open innovation incorporates the business model as the source of both value creation and value capture. This <br />
means that open innovation does not only considers the creation of value, but it also elaborates on capturing <br />
value, making it worthwhile a serious consideration for organizations. The focus on both value creation and <br />
value capturing originates partially from its emphasis on changing the traditional business model. Traditional <br />
business models create value by “defining a series of activities from raw materials through to the final <br />
customer that will yield a new product or service with value being added throughout the various activities”, <br />
and capture value by “establishing a unique resource, asset or position within that series of activities, where <br />
the firm enjoys a competitive advantage”(Chesbrough 2006b). <br />
The open business model, as promoted by the open innovation paradigm, uses the division of innovation labor <br />
to create value by leveraging many more ideas (internal as well as external ideas), and also attempts to capture <br />
greater value by using a key asset, resource or position not only in the company’s own business, but also in <br />
other companies’ businesses. In doing so, it advocates organizations to harness external parties in the process <br />
of value creation (Chesbrough 2006b), as also displayed in figure 2.1. <br />
Figure 2.1 | The Open Innovation Paradigm for Managing Industrial R&D (Chesbrough, 2006)<br />
Research<br />
Development<br />
Boundary<br />
of the firm<br />
New<br />
market<br />
Research<br />
projects<br />
Current<br />
market<br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Open innovation thus provides us with a viewpoint that is little different from the service-‐dominant logic. The <br />
S-‐D logic derives on the idea that an organization should use its customers in building certain customer value, <br />
with the purpose of creating more loyal customers by offering better value propositions than its competitors <br />
(Vargo and Lusch 2004). However, the open innovation paradigm also emphasizes the capturing of value by the <br />
organization itself. So, instead of only implementing a logic wherein organizations involve the customer to <br />
leverage many more ideas, open innovation also amplifies the capturing of value by using key assets, resources <br />
or positions both inside and outside the company. This way, a paradigm arises where there is not only a focus <br />
on generating ideas, but also on using generated ideas in a proper way both internally and externally. <br />
§ 2.3 CO-CREATION IN MARKETING AND INNOVATION PROCESSES<br />
§ 2.3.1 | Stage-‐gate model and the new product development process <br />
§ 2.3.2 | Involved parties in co-‐creation <br />
§ 2.3.3 | Types of co-‐creation <br />
Considering that co-‐creation is mostly used for innovation and marketing purposes, it is necessary to identify <br />
how co-‐creation is exactly involved in its processes. Although the previous section mentioned that co-‐creation <br />
for example also can be used solely for the purpose of customer relationship management, the emphasis of <br />
this research will be on the use of co-‐creation in the process of new product development. New product <br />
development (which may also concern the development of services) is mostly a joined process between <br />
marketing and innovation, where at one point of the process there might be an emphasis on marketing and <br />
vice versa (Grönlund, Sjödin et al. 2010). This section attempts to consider the process of new product <br />
development (NPD) and to identify opportunities for the use of co-‐creation within it. <br />
§ 2.3.1 | (Open) Stage-‐gate model and the Innovation Value Chain <br />
Taking the service-‐dominant logic and open innovation paradigms into account, marketing and innovation <br />
literature appear to provide support for the use of co-‐creation. However, they do not yet explain how it is used <br />
during the process of new product development; the stage-‐gate model does. This originally four-‐staged <br />
framework enables organizations to move from the stage of idea development to the launch of a product or <br />
service, separating for 1) preliminary concept development, (2) design and development, (3) validation and (4) <br />
In-‐service product support. Each of these stages are separated by a gate, that is used as a review point of the <br />
previous stage (Phillips, Neailey et al. 1999). Both marketing and innovation departments have their moments <br />
of influence on the different phases of the development process. <br />
However, the traditional Stage-‐Gate presumes that a product or service is developed inside the organization <br />
according to the insights of the R&D-‐employees of the organization. Therefore, Grönlund et al. (2010) <br />
introduced the open Stage-‐Gate model that is more suitable for working in an open innovation environment. <br />
The open Stage-‐Gate model breaks with its closed predecessor by adopting inbound and outbound open <br />
innovation activities into the traditional Stage-‐Gate model. This has two important consequences: first, it <br />
encourages managers during each stage to source both inside and outside the organization for opportunities <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
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Joost de Boer <br />
Student number 1517597 <br />
when sourcing for new ideas by providing a framework that not only accepts, but also explicitly promotes the <br />
use of these opportunities in order to eventually generate higher revenues. Second, it has implications for the <br />
gate processes: it provides an additional evaluation dimension within the traditional gate criteria for the review <br />
and assessment of ideas generated in each stage. <br />
This way, organizations are better able to use NPD as a tool for developing ideas that do not directly match the <br />
core capabilities or business models of organizations, lowering the rate of failure and improving the chance of <br />
finding a solution for expensive development paths. It therefore contributes to an organization’s NPD and open <br />
innovating strategy, as explained in table 2.3. <br />
Table 2.3 | Comparison between the Traditional and Open Stage-Gate Model<br />
(Grönlund, Sjödin et al. 2010) <br />
Dimension Traditional Stage-‐Gate Model Open Stage-‐Gate Model <br />
Evaluation criteria Closed evaluation criteria Closed and open innovation evaluation criteria <br />
Import of know-‐how <br />
and technology <br />
Export of know-‐how <br />
and technology <br />
Business model <br />
considerations <br />
Core capability <br />
considerations <br />
If at all, external know-‐how and <br />
technology are opportunistically <br />
reviewed and accessed <br />
Only internal paths to market are <br />
assessed <br />
Alignment between the NPD project <br />
and the business model is considered <br />
Fit between the NPD project and <br />
current core capabilities is considered <br />
External know-‐how and technology are systematically <br />
reviewed and assessed <br />
Internal and external paths to market are thoroughly <br />
assessed <br />
Continuous assessment and evaluation of the business <br />
model <br />
Continuous assessment and evaluation of core <br />
capabilities <br />
However, in their article ‘The innovation value chain’, Hansen and Birkinshaw (2007) plead that there is no ‘one <br />
size fits all’ solution for organizations to become more innovative. They argue that organizations who say to fail <br />
to be innovative, should not try to adopt solutions that have worked for other organizations. Instead, they offer <br />
a framework that helps organizations to consider and analyze their entire processes of innovation: the <br />
innovation value chain. The innovation value chain distinguishes three phases during the innovation process: <br />
idea generation, idea conversion and idea diffusion. Across these three phases, six tasks must be performed <br />
that are of influence on the entire innovation value chain. A brief overview is provided in table 2.4: notice that <br />
there are three phases, and the six distinct events during these phases, all have influence the innovating <br />
capabilities of the firm. <br />
Phase <br />
Idea Generation <br />
Idea Conversion <br />
Idea diffusion <br />
Table 2.4 | Schematic overview of the innovation value chain<br />
(Hansen and Birkinshaw 2007) <br />
Process <br />
In-‐house idea generation: creation within a unit <br />
Cross-‐pollination: collaboration across units <br />
External sourcing: collaboration with parties from the outside <br />
Selection: screening and initial funding <br />
Development: movement from idea to first result <br />
Spread of the idea: dissemination across the organization <br />
Having weaknesses in each one of these phases or processes implicate a threat to the entire innovation <br />
process. When a weak link is identified, organizations should focus on strengthening these weak links instead <br />
of improving the innovation capabilities they already possess. Using the innovation value chain, organizations <br />
can thus target their shortcomings and specifically concentrate on improving them. From a service-‐dominant <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
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Joost de Boer <br />
Student number 1517597 <br />
logic, customer participation and co-‐creation of value should be integrated in the innovation value chain, which <br />
is done by the external sourcing. <br />
Co-‐creation and the processes of marketing and innovation <br />
The open stage-‐gate model and innovation value chain do however not yet explain on the use of co-‐creation in <br />
new product development processes; it is likely that this may differ dependent on the moment that an <br />
organization chooses to involve the customer. As Bendapudi and Leone (2003) have already indicated, the <br />
strength of the relationship between the organization and the involved customer, as well as the timing of <br />
customer participation is of crucial influence to the co-‐creation success. <br />
Nambisan & Nambisan (2008) separate several customer roles in the process of innovation and value creation <br />
in virtual customer environments: these roles can either be product ideation, product design and development, <br />
product testing, product support, product marketing and the actual diffusion of new products and services <br />
(Nambisan and Nambisan 2008). Although these roles are linked to a virtual customer environment, it can also <br />
be argued that these roles may also be applied to non-‐virtual, ‘offline’ value creation processes; however, this <br />
lacks empirical evidence. <br />
In table 2.5, the first four columns provide an overview of the discussed theories and perspectives on <br />
innovation and marketing processes leading towards new product development. The fifth column merges these <br />
different theories and perspectives into one integrated process view: a total number of three stages are <br />
identified that integrate the shared agreements of the different models that were discussed above. These <br />
stages, idea generation, idea development and idea diffusion simplify the previous models, while still <br />
accounting for the different main events that occur during the process of new product development. Hence, <br />
the integrated view will be used in this research as a reference framework for the use of co-‐creation in <br />
marketing and innovation processes for new product development. <br />
Stage-‐Gate Model <br />
Philips et al. (1999) <br />
Preliminary concept <br />
development <br />
Design and <br />
development <br />
Table 2.5 | Schematic comparison of the value creation process<br />
Open Stage-‐Gate <br />
Model <br />
Grönlund et al. <br />
(2010) <br />
Innovation value <br />
chain <br />
Hansen & <br />
Birkinshaw (2007) <br />
Customer roles in <br />
virtual customer <br />
environments <br />
Nambisan & <br />
Nambisan (2008) <br />
Integrated process view <br />
Define Idea generation Product ideation Idea generation <br />
Design Idea conversion Product design <br />
Product <br />
development <br />
Validation Validate Product testing <br />
In-‐service product <br />
support <br />
Idea diffusion <br />
Product support <br />
Product marketing <br />
Product diffusion <br />
Idea development <br />
Idea diffusion <br />
Considering the Service-‐Dominant Logic that Vargo & Lusch (2004) introduced, the answer to the question <br />
where and how customers should be involved in these processes is simple and complicated at the same time: <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
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Joost de Boer <br />
Student number 1517597 <br />
as early and as often as possible. Prahalad and Ramaswamy (2004b) add to this that co-‐creation ‘demands that <br />
both managers and consumers make the necessary adjustments’. Necessary adjustments involve, according to <br />
them, investing in a continuous dialogue, that reach far more further than involvement at the point of <br />
exchange (i.e. when a product is bought). <br />
There are three important factors that are expected to determine the success of co-‐creation in the NPD-process:<br />
the specific moment(s) in the process that co-‐creation is used, the way it is used at that specific <br />
moment and the internal and external parties that are involved. Bearing the integrated process view in mind, <br />
this research aims at describing how co-‐creation can successfully be used along the track of new product <br />
development. The next two sections elaborate on the involvement of internal as well as external parties and <br />
the different types of co-‐creation that can be used during the process. <br />
§ 2.3.2 | Involved parties in co-‐creation <br />
During the co-‐creation process, there are two types of parties that are involved: parties from inside and from <br />
outside the organization. Parties from inside the organization may contain employees and management, while <br />
external parties refer to the involvement of customers and other stakeholders(Lusch and Vargo 2006). This <br />
paragraph discusses the involvement of both internal and external parties, and in addition attempts to identify <br />
what problems the involvement of these parties this might cause. <br />
Involvement of internal parties <br />
The previous paragraph shows that co-‐creation is mostly used for the purpose of innovation and marketing. <br />
These are often two separate departments inside organizations; marketing departments often tend to have a <br />
more outward focus on customers, while innovation departments tend to focus on the actual development and <br />
production of products and services. However, this sets two requirements that must be met, in order to make <br />
successful use of co-‐creation. First, it requires employees to have an outward focus in that they start <br />
interacting with customers again (Vargo and Lusch 2004). Second, they must not only be able to interact and <br />
cooperate with their customers, but also with the other employees and departments in their organization. <br />
With the rise of paradigms like the service-‐dominant logic and open innovation, organizations have increasingly <br />
been encouraged to develop a view that focuses inside as well as outside the organization. A number of <br />
scholars have written about the potential dangers of the not-‐invented-‐here syndrome, what causes <br />
departments to “be openly or secretly against cooperation with customers, resenting all external ideas” (Enkel, <br />
Kausch et al. 2005). <br />
However, it may also be expected that the second requirement for successful co-‐creation, the cooperation <br />
between employees and departments inside the organization, will cause problems. Considering the use of co-creation<br />
in the process of innovation and/or marketing, employees of both, but certainly not only those <br />
departments are assumed to be involved. Goold and Campbell (2002) discuss that as a result of specialist <br />
cultures, departments that operate within the same organization might have different targets and <br />
responsibilities. These different targets and responsibilities allow them to specialize and create a deep <br />
understanding of for instance certain customer segments or products. <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Given the fact that co-‐creation requires organizations to collaborate not only externally with parties from <br />
outside the organization, but also with parties from inside the organization, this might cause a problem. During <br />
this literature research, no articles were found that describe exactly which internal parties are involved, nor <br />
how the existence of specialist cultures influences the process of co-‐creation. As co-‐creation probably most <br />
benefits from a marketing and innovation process that in some way integrates knowledge of both marketeers <br />
and innovators, it is relevant to know whether possible problems in cooperation between those departments <br />
also influence the success of co-‐creation. <br />
Involvement of external parties <br />
Almost all the articles that are written about co-‐creation have a single focus on whom co-‐creation actually <br />
involves: the organization and the customer. Out of the thirteen articles describing co-‐creation that were used <br />
in this research, seven articles already referred directly to the customer or ‘customer value co-‐creation’ directly <br />
in the article’s title. The definitions that were introduced by Kristensson et al. (2008), Prahalad & Ramaswamy <br />
(2004b) and Potts et al. (2008) in the previous section also directly link the customer to the use of co-‐creation. <br />
Nevertheless, it can be expected that not all customers are involved in the co-‐creation of value. Obviously, the <br />
first reason not to do this is that involving all customers directly in the process of innovation and marketing, will <br />
cause these processes to become too large to manage properly. A form of selection is needed – but then, still: <br />
which customers are allowed to participate in the process of co-‐creation? It seems reasonable to expect that <br />
organizations demand their participants to have a certain level of expertise or sensitivity over other customers <br />
– criteria they can use to make a selection between their customers. <br />
Von Hippel (1986, 2005) is one of the scholars that hands a lead for the process of involving expert customers <br />
(so called ‘lead users’) in the processes of innovation. In his article on lead-‐users as a source of novel product <br />
concepts (1986), he defines lead users as users of a certain product or service that combine two characteristics: <br />
“(1) they expect attractive innovation-‐related benefits from a solution to their needs and so are motivated to <br />
innovate, and (2) they experience needs for a given innovation earlier than the majority of the target market”. <br />
From there, the use of -‐ and interest in -‐ lead-‐users in innovation and development of new products has only <br />
increased during the years (Herstatt and von Hippel 1992; Lilien, Morrison et al. 2002; Lüthje and Herstatt <br />
2004; von Hippel 2005). <br />
Obviously, there are certain conditions to lead-‐user involvement in the innovation process to be met. Von <br />
Hippel (1986) advises a four-‐staged process for incorporating lead users into marketing research. These steps <br />
are (1) identifying an important market or trend; (2) identify lead users who can lead that trend in terms of <br />
experience and intensity of need; (3) analyze lead user need data; and (4) project lead user data onto the <br />
general market of interest. <br />
Even though the focus here was on marketing research, the four steps of the lead-‐user method are also applied <br />
in more recent research on the field of innovation, applying the lead-‐user method as a NPD-‐method that <br />
enables organizations to directly involve customers in their innovation process (Herstatt and von Hippel 1992; <br />
Lilien, Morrison et al. 2002; Lüthje and Herstatt 2004). In extend, it also emphasizes the involvement of <br />
different groups of customers during the co-‐creation process. Where the involvement of lead-‐users appears to <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
be important in the early stages of trend identification and idea generation, the third and fourth steps require <br />
the need of projection onto other customers. Thus, it can be argued that during the co-‐creation process, <br />
several ‘types’ of consumers are used – lead users and ‘average’ users. This idea will be extended in the next <br />
section on the different types of co-‐creation. <br />
Although the involvement of users appears to be lucrative, scholars like Enkel et al. (2005) encourage <br />
organizations to ‘involve customers as early as necessary, but as late as possible’, pointing at the risks of <br />
customer integration. They wrote an article identifying the risks customer integration in organizational <br />
processes brings. Without discussing these risks in detail, it is worthy to mention them: loss of knowhow <br />
through disloyal customers, dependence on customer’s demands or personality, dependence on customers’ <br />
views, limitation to mere incremental innovation, serving a niche market only and misunderstandings between <br />
customers and employees (Enkel, Kausch et al. 2005). <br />
Before moving on to this paragraph, it is important to note that co-‐creation does not necessarily limits itself to <br />
involving just customers; it might be useful to involve other external parties as well. Payne, Storbacka and Frow <br />
(2008) are the first to involve stakeholders in the co-‐creation process. On their way to develop a conceptual <br />
framework for the co-‐creation of value, they distinguish three processes in their conceptual framework: <br />
customer value-‐creating processes, supplier value-‐creating processes and encounter processes. They refer to <br />
the supplier value-‐creating processes as “the processes, resources and practices which the supplier uses to <br />
manage its business and its relationships with customer and other relevant stakeholders”. <br />
Payne et al. (2008) also imply that certain stakeholders may have a relevant contribution to the process of co-creation;<br />
in addition, Cova and Salle (2008) provide a process model to involve business-‐to-‐business customers <br />
in supply networks to create value. Despite the fact that the gross of the available co-‐creation literature almost <br />
exclusively directs the role of ‘co-‐creator’ to the customer, it can very well be argued that the scope of co-creation<br />
should be broadened by considering all stakeholders as potential co-‐creators of value. This way, not <br />
only customers but also other stakeholders, such as employees, suppliers and government agencies can <br />
contribute in the co-‐creation of value. <br />
In short, during the co-‐creation process both internal as external parties may be involved. First, internal parties <br />
mostly consider employees from multiple departments (i.e. mostly innovation and marketing departments). It <br />
can thereby be argued that as a result of specialist culture, the cooperation between those departments will <br />
not come easy. Second, according to most recent literature, the involvement of external parties is mostly done <br />
by involving customers -‐ a collective term for lead-‐users and ‘average’ users -‐, but it is also argued that this <br />
should use a more broader scope, by sourcing for involvement in the entire group of stakeholders of the <br />
organization. The next section discusses the different types of co-‐creation that might be used in the NPD-process:<br />
the specific involvement of parties appears to be crucial here. <br />
§ 2.3.3 | Types of co-‐creation <br />
The sections above have described the purposes, use and involved parties in co-‐creation. However, they do not <br />
exactly explain how co-‐creation can be used to create value. This section first considers a number of conditions <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
that Prahalad and Ramaswamy (2004b) identified, which they found to be the fundamental requirements for <br />
each type of co-‐creation. Next, four types of co-‐creation are introduced, which are defined using a number of <br />
criteria. <br />
For organizations to make effective use co-‐creation, four ‘building blocks of co-‐creation’ must be incorporated <br />
in their organization. Prahalad and Ramaswamy identified these key concepts and integrated them into what <br />
they call the DART-‐Model. DART stands for Dialogue, Access, Risk-‐Benefits and Transparency, but can merely be <br />
considered to be building blocks than a model. The DART-‐blocks are largely congruent with the issues that are <br />
addressed in table 2.1 used in the previous section. <br />
Dialogue is the first and most obvious concept: however, it means more than just listening to customers. The <br />
word ‘dialogue’ presupposes a conversation between two equals: customer and organization therefore have to <br />
be on the same level, allowing for shared learning and communication. Next, there is access: whenever an <br />
organization wants to organize a dialogue, it has to provide the customer with information and tools, to allow a <br />
dialogue: this is one important condition in order to come to a dialogue between equals. <br />
There is also an ethical issue in co-‐creation: when a customer is creating value together with a consumer, can <br />
that customer also be held responsible for possible consequences of a certain product or service? Providing a <br />
customer with the presumed risks and benefits of the product is therefore key to a good customer-‐organization <br />
relationship, and in line with the idea that customers in general are increasingly better informed and have a <br />
more critical attitude towards organizations and their products. In line with risk-‐benefit assessment, <br />
transparency is also required. The traditional benefit of information asymmetry cannot longer be maintained, <br />
the authors presume; organizations should therefore be transparent about their prices, costs, margins and the <br />
previously mentioned things like information, risks and benefits (Prahalad and Ramaswamy 2004c). <br />
As already implied in the previous sections, there is no ‘one way’ of co-‐creation. It can be used in several ways, <br />
largely depending on the organization’s characteristics, the environment it operates in and the people it invites <br />
to participate. Pisano & Verganti (2008) managed to produce a framework that helps organizations to start <br />
collaborating with their customers, departing from two dimensions: the level of openness and the type of <br />
governance that should be used. They found that co-‐creation can either be done in an open or closed way, by <br />
enabling practically everyone to join the session, or by only inviting certain specific customers or experts. <br />
Parallels can here obviously be seen with the lead-‐user method (von Hippel 1986) that was discussed in the <br />
previous paragraph, as this also requires a strict selection of the participants in the co-‐creation process. Next, <br />
the type of governance explains who defines the problem and chooses the solution. This can either be done in <br />
a hierarchical or flat context, i.e. by the initiating organization or by every party that is participating in the <br />
process. <br />
In their White Paper ‘Co-‐creation's 5 guiding principles’, co-‐creation strategy consultant Fronteer Strategy <br />
(2009) has crafted these dimensions into a useful tool, displayed in figure 2.2. The tool uses the levels of <br />
openness of Pisano & Verganti and adds ownership of content instead of governance to define four types of co-creation:<br />
the crowd of people, club of experts, community of kindred spirits and the coalition of parties. <br />
Changing governance for ownership is the result of the fact that ‘ownership’ directly shows who is owner of the <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
generated outcomes, i.e. who owns intellectual property. Hence, an explanation of these four types of co-‐ <br />
creation is provided below, involving several of the characteristics of co-‐creation as discussed above. <br />
Figure 2.2 | Four types of co-creation<br />
(Fronteer Strategy, 2009)<br />
The names between parentheses are the names used in the article of Pisano & Verganti: <br />
-‐ Club of Experts (Elite Circle): uses a selection process to involve participants and lays the ownership by <br />
the initiator, which often is the organization itself. Pisano & Verganti refer to ‘Elite Circle’ instead of <br />
‘Club of Experts’, but their definition is largely the same: ‘one company selects the participants, <br />
defines the problem and chooses the solutions’. Clubs of Experts usually involve lead-‐users, expert or <br />
thought leaders as participants, in relatively small, offline groups. <br />
-‐ Crowd of People (Innovation mall): in this type of co-‐creation, practically anyone can join. However, <br />
the ownership is still assigned to the initiator. The initiator defines the problem, but in this case, <br />
practically anyone can propose solutions. This type of co-‐creation is often referred to as <br />
crowdsourcing, and benefits from the use of modern technologies like social media and online <br />
platforms. <br />
-‐ Coalition of Parties (Consortium): here, the problem definition as well as the generated content or <br />
solutions are shared between the initiators and the contributors (Pisano and Verganti 2008). However, <br />
the participants to contribute in this type are still selected. Additionally, the outcomes can result in <br />
cooperation between different organizations, leading for example to joint ventures or alliances. <br />
-‐ Community of Kindred Spirits (Innovation Community): enabling anyone to join in to work out and post <br />
solutions, while all the involved contributors share ownership, this is the most open and accessible <br />
type of co-‐creation. Anybody can purpose problems and offer solutions, and is free to choose the <br />
solutions that suits their party best (Pisano and Verganti 2008). <br />
Although this framework clearly defines four types of co-‐creation, it does not yet describe where in the process <br />
of innovation or marketing these types are used. Considering the dimension of ‘openness’, it can already be <br />
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Master thesis (in progress) Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
argued that during different moments in the process, different participants are involved. Hence, the <br />
‘ownership’ dimension might also be influenced during different stages in the marketing/innovation process. <br />
Therefore, one of the objectives of the empirical section of this research is to consider what types of co-creation<br />
appear to fit with what purpose/use in the marketing/innovation process. Before moving on to the <br />
empirical section of this research, paragraph 2.4 provides a short wrap-‐up of this chapter. <br />
§ 2.4 TOWARDS EMPERICAL RESEARCH<br />
The main objective of this chapter was to provide an overview of relevant theories in co-‐creation literature that <br />
explain for the use of co-‐creation by marketing and innovation in the process of new product development. It <br />
therefore started by identifying a number of criteria that separate co-‐creation from other similar concepts that <br />
also relate to the involvement of customers. It became clear that co-‐creation (1) can be used from the <br />
beginning of the innovation process by (2) involving customers as active collaborators to (3) suggest ideas or <br />
share their consumption experiences as (4) a new way of value creation. In addition, it appeared to be highly <br />
that both customer and organization benefit from the collaboration, not just one of those parties. <br />
Next, discussing the service-‐dominant logic and the open innovation paradigm, it appears that marketing and <br />
innovation are the two main fields of operation for co-‐creation. Hence, these two also largely influence and <br />
partially overlap the process of new product development, suggesting opportunities for the use of co-‐creation. <br />
Three main stages forming the NPD-‐process were identified: idea generation, idea development and idea <br />
diffusion. However, there are three factors that have yet not been discussed within co-‐creation literature <br />
relating to its use in NPD-‐processes: (1) the specific stages of the process where co-‐creation can best be used, <br />
(2) the parties that are involved in co-‐creation at that specific moment and (3) what type of co-‐creation is used. <br />
It might also be expected that at a certain stage in the process, specific combinations of these three factors <br />
may occur. For the purpose of the empirical section of this research in Chapter 4, the findings of this literature <br />
review are summarized and applied into the proposed conceptual model illustrated in figure 2.3. <br />
Figure 2.3 | Proposed conceptual model<br />
Co-creation<br />
Purpose/use<br />
Involved parties<br />
(internal/external)<br />
Types of cocreation<br />
(openness/<br />
ownership)<br />
Marketing<br />
and<br />
innovation<br />
processes<br />
New Product Development Process:<br />
idea generation | idea development | idea diffusion<br />
Successful<br />
products<br />
and<br />
services<br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
03<br />
Supervisor:<br />
METHODOLOGY<br />
Prof. Dr. T. Elfring <br />
Introduction <br />
§ 3.1 | Research design <br />
§ 3.2 | Data collection <br />
§ 3.3 | Operational definitions <br />
§ 3.4 | Credibility of the research <br />
§ 3.5 | Data analysis <br />
Joost de Boer <br />
Student number 1517597 <br />
This chapter explains the steps that were taken towards the empirical section of this research. First, an <br />
overview is provided of the research design: this is a short general section discussing the methodology that was <br />
used during the research. Next, the way of data collection is explained, together with the criteria that were <br />
used to select cases. In section three, definitions are operationalized to insure all measurements are <br />
comparable and valid. Finally, the process of data analysis is clarified. <br />
§ 3.1 RESEARCH DESIGN<br />
Explorative research, using an embedded multiple case study <br />
As already mentioned in the introductory chapter, this research aims to provide a clearer sense of how co-creation<br />
is used in marketing and innovation processes. Given the fact that co-‐creation is a relatively new <br />
concept in both marketing and innovation literature, this research has an exploratory nature: it aims to seek <br />
new insights on the field of future innovation and marketing strategies, and the effects on an organization’s <br />
strategy (Babbie 2004). The first part of this research has already passed the reader’s attention in the previous <br />
chapter: the search for and review of available literature on this subject. <br />
This chapter mostly explains the second part of the research, being the collection and processing of empirical <br />
data. The advantage of an exploratory research is that it is flexible and adaptable to change: new insights or <br />
viewpoints can quite easily be adopted in the research, without the risk of losing important information or <br />
focus of the research itself (Saunders, Lewis et al. 2009). By using a case study research strategy, multiple cases <br />
were selected to supply empirical data through semi-‐structured interviews. As Yin (2003 in: Saunders, Lewis et <br />
al. 2009) remarks, a multiple case study ‘allows a researcher to do research which involves an empirical <br />
investigation of a particular contemporary phenomenon within its real life context using multiple sources of <br />
evidence’. In addition, it is possible to compare findings between cases to allow one to make better <br />
generalization of the data. <br />
According to Yin, the researcher also has to consider the unit of analysis, i.e. as holistic or embedded. While a <br />
holistic approach considers the organization as a whole, the embedded approach allows involving more units of <br />
analysis. Taking in consideration that this research uses multiple cases, but also wants to differentiate for <br />
different units within the cases/organizations itself, we can here say that this research uses an embedded case <br />
study. This way, separate units inside the organization can be compared with each other; something that is <br />
necessary in order to compare, for instance, different policies between marketing and innovation departments. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
§ 3.2 DATA COLLECTION<br />
§ 3.2.1 | Sample selection <br />
§ 3.2.2 | Selection criteria <br />
§ 3.2.3 | Selected cases and sample characteristics <br />
§ 3.2.4 | Data collection through semi-‐structured interviews <br />
This section explains all steps and choices relevant to data collection. First, an impression is given on how the <br />
total sample population is generated, containing sampling techniques and total number of cases. Next, <br />
selection criteria are framed that will include or exclude cases in the research. After providing an overview of <br />
the selected cases and the characteristics of the sample population, the section ends with an explanation on <br />
the semi-‐structured interviews. <br />
§ 3.2.1 | Sample selection <br />
Given that this research is an embedded case study that uses multiple cases to acquire empirical data, two <br />
selections must be made before a definitive composition of the sample population is possible. First to be <br />
framed are the holistic selection criteria, which allow to select cases within a range of organizations. These <br />
criteria are discriminating for certain organizational characteristics, such as their industry, nature (products vs. <br />
services) and customers (business-‐to-‐business vs. business-‐to-‐customer). Next, criteria can be set to select <br />
between the embedded cases within the organizations themselves: discriminating for departments, functions, <br />
experience, and so on. Selections are thus made on two dimensions, while controlling for selection criteria <br />
within the dimensions themselves: all equal cases (organization vs. organization, individual vs. individual) are <br />
selected using the same selection criteria. <br />
Before discussing these criteria, it is first important to decide whether a probability or an non-‐probability <br />
sampling technique will be used. Given that the research question and objectives of this research do not <br />
require any statistical estimation of the population characteristics, non-‐probability sampling techniques will be <br />
used. This is in accordance with Eisenhardt’s (1989) theoretical sampling: cases are chosen to extend emergent <br />
theory, and are therefore non-‐randomly selected. There are two selection techniques that may be considered: <br />
purposive sampling and snowball sampling. Purposive sampling allows working with relatively small, special <br />
samples in interviews, while still allowing to keep a reasonable control over the sample contents. Snowball <br />
sampling, in addition, helps the researcher to reach cases that are difficult to identify by making contact with <br />
one or two cases and asking those cases to identify further cases (Saunders, Lewis et al. 2009). <br />
Purposive sampling will therefore mostly be used to collect sample cases for this research. However, it could be <br />
difficult to directly reach key persons within the embedded organizations themselves. Snowball sampling <br />
might, in addition, provide a good way to reach important cases within the organizations by using first contacts <br />
to penetrate deeper into the organization. The size of the total sample will mostly be determined on the <br />
moment that data saturation takes place: when new cases provide few new insights, generation of samples is <br />
stopped. According to Creswell (2007, in: Saunders, Lewis et al. 2009), the target within a relatively <br />
heterogeneous population should contain 25 to 30 cases. Considering both the holistic as the embedded <br />
nature of this research, the sample should include four to five organizations, with about four to five cases in <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
each organization itself. However, due to restrictions in both time and the availability of participants, some of <br />
these cases will come short in this number, as explained further in section § 3.2.3. <br />
§ 3.2.2 | Selection criteria <br />
To make a proper selection between organizations that are relevant for this research and organizations that are <br />
not, a fixed set of selection criteria has been determined. There are four conditions that an organization has to <br />
comply with in order to get adopted in the data set. First, only cases of service-‐based organizations are <br />
selected: these organizations are mainly reliable on their innovation departments (instead of research and <br />
development) in order to develop new services. Second, these service-‐based organizations must have an <br />
innovation and/or marketing department, and (1) have the ambition of adopting co-‐creation in their <br />
organization or (2) having already adopted co-‐creation in their marketing and/or innovation strategies. <br />
Third, there will be no discrimination based on the size of the organization: while small organizations might <br />
indicate a higher potential in creativity, larger organizations might include large marketing and innovation <br />
departments that both use co-‐creation. Considering the exploratory nature of this research and given the fact <br />
that all cases, small, middle and large firms, might provide interesting results, there is no discrimination on <br />
organizational size. Also, subsidiaries of larger organizations can be included in the sample (Almeida and Phene <br />
2004). <br />
Fourth, to make sure generalization of data is possible, the focus of this research will be on organizations that <br />
operate mostly in a business-‐to-‐consumer (B2C) context; however, organizations that do so in a business-‐to-business<br />
(B2B) contexts will not necessarily be excluded. Organizations that use co-‐creation as a bridge <br />
between their marketing and innovation department and a consumer, will probably find more obstacles on <br />
their way than organizations that interact with other businesses (Enkel, Kausch et al. 2005). <br />
Next, criteria for individual case selection must be set. These criteria are applied when organizational cases are <br />
identified, and individual samples must be picked. The focus of this research is to provide a clear picture of the <br />
marketing and innovation departments of the organization using co-‐creation; therefore, it will not only focus <br />
on managers of the departments, but mainly on employees in general that are involved in co-‐creation <br />
processes. Co-‐creation is something that is done by the entire department together with the consumer, so it is <br />
important to also include employees. <br />
§ 3.2.3 | Selected cases and sample characteristics <br />
In line with the selection criteria and methods of sampling, five service-‐based organizations were approached <br />
for the empirical section of this research. This section offers an overview of these organizations, along with the <br />
participants that were interviewed to gather empirical data. Due to corporate non-‐disclosure policies, the <br />
names of both the organizations and the interviewed employees are not to be mentioned in this research. <br />
Instead of company names, companies have got assigned a letter (A to E) and a symbol that refers to the <br />
industry they operate in. Next, the number of participants per organization is mentioned, as well as the context <br />
in which they primarily operate: business-‐to-‐business (B2B) or business-‐to-‐customer (B2C). Some organizations <br />
operate both in a B2B as in a B2C context: in this case, both are mentioned. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Company A: <br />
Industry: Insurance | Context: B2C/B2B |Participants: 2 | Total number of employees: app. 20.000 | <br />
Participants: Concept and Proposition Developer and Manager Innovations <br />
Company A is a large insurance company in The Netherlands, and is part of a larger holding company that <br />
employs over 20.000 persons in Europe. Focusing both on private and business customers, Company A offers a <br />
diverse number of insurances and has started using co-‐creation almost three years ago, increasing its use ever <br />
since. Co-‐creation is now standard procedure when new propositions or services are developed. <br />
Company B: <br />
Industry: Mobile Network operator | Context: B2C | Participants: 4 | Total number of employees: 35 | <br />
Participants: Brand Manager, Manager Development, Manager Acquisition, Manager Communications <br />
Company B is a daughter company of one of the largest telecommunications and ICT Service Providers in The <br />
Netherlands. The company’s philosophy is that they want to stand next to their customers, and not above <br />
them. They (co-‐)created their own ‘Society’, formed by the organization’s customers and its employees. <br />
Company C <br />
Industry: Information Technologies | Context: B2B | Participants: 4 | Total number of employees: 12.000 <br />
Participants: Global Practice Manager, Product Manager <strong>Future</strong> Ready Workspaces, Vertical Market <br />
Manager, Business Development Manager <br />
Since 2007, Company C is a subsidiary of the same holding company as Company B, operating solely in a B2B <br />
environment. It is the largest ICT-‐service provider in the Benelux, providing organizations with workspaces, <br />
connectivity solutions, datacenters and advisory. Despite that because of its B2B nature most products are <br />
custom designed, participants said the organization started making use of co-‐creation only two years ago. <br />
Company D <br />
Industry: Aviation | Context: B2C | Participants: 2 | Total number of employees: 32.000 | <br />
Participants: Director Product Strategy, Director Business Innovation <br />
Becoming one of the largest aviation companies in the world, Company D is a Dutch airline <br />
operator that recently merged with a French aviation company. Company D has experience with several co-creation<br />
projects with their clients, as well with employees. <br />
Company E <br />
Industry: Internet | Context: B2C/B2B | Participants: 2 | Total number of employees: 200-‐300 | <br />
Participants: Product Manager, Online Marketeer <br />
Being the third organization in this research that is a daughter corporation of the same <br />
Telecommunications and ICT Service Provider, it is one of the first internet providers in The Netherlands, and is <br />
still known for its premium quality and customer service. It offers both private and business customers <br />
internet, Voice over IP solutions, mobile internet, and hosting solutions, and attempts to involve their <br />
customers through co-‐creation. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Although one of the criteria at the start of the sample selection was that organizations should have separated <br />
marketing and innovation departments, it appeared during the research that this assumption turned out to be <br />
wrong. Multiple organizations had a clear overlap between functions and departments, and it appeared that <br />
some of them did not even have an actual – as what they would refer to as – ‘innovation’ department. <br />
Therefore, a selection was made mostly based on the availability of persons inside the organization that still <br />
are, or have been involved with co-‐creation projects in their organization. <br />
§ 3.2.4 | Data collection through semi-‐structured interviews <br />
Having selected a sample of cases, data was collected using semi-‐structured interviews: this technique <br />
combines the advantages of both structured interviews (predetermined questions) and unstructured <br />
interviews (ability to deviate between questions and to go in-‐depth. Interviews can therefore be prepared in <br />
advance, but the interviewer has the freedom to ask certain additional questions on certain topics. Given the <br />
exploratory nature of this research, it allows one to go more in-‐depth whenever something relevant comes up <br />
in an interview (Saunders, Lewis et al. 2009). <br />
Due to the fact that all the participants were Dutch of origin, all interviews were held, recorded and transcribed <br />
in Dutch instead of <strong>English</strong>. All the questions that were used for the interviews were open-‐ended; this way, <br />
interviewees had the freedom and ability to tell everything they knew relating to the questions that they were <br />
asked. To ensure that particular sections or answers would not go unnoticed, interviews were literally <br />
transcribed. A copy of each finalized transcript was send to the participant to double-‐check and for private <br />
archiving. However, no changes have been made to its content whatsoever. <br />
§ 3.3 OPERATIONAL DEFINITIONS<br />
In the process of linking theory with practice, operational definitions are crucial. The literature and concepts <br />
that were discussed in Chapter 2 first have to be operationalized in order to be measured in the field. <br />
Operationalization is the process of transforming theoretical concepts and variables into testable and workable <br />
indicators and questions, or “the translation of concepts into tangible indicators of their existence” (Saunders, <br />
Lewis et al. 2009). Appendix A provides an overview of the theoretical concepts and the related indicators and <br />
questions that were used in interviews. <br />
Although the final list of interview questions consisted out of a relatively large number of questions, not all <br />
questions were proposed to each participant. Dependent on both function and expertise of each participant, <br />
some subjects were discussed more in detail than others – using the freedom that semi-‐structured interviews <br />
offers to the interviewer (Eisenhardt 1989). In addition, a number of general questions were asked to every <br />
participant, relating not only to their background, but also to the type of co-‐creation and the organization’s <br />
openness to input from the outside. <br />
Here for, participants were presented with an illustration similar to the four types of co-‐creation of figure 2.2 in <br />
Chapter 2. After having explained the difference between the two dimensions ownership and openness, they <br />
were asked to indicate what kind of co-‐creation their organization was using. This visual presentation proved to <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
be a useful way of gathering information about the used types of co-‐creation. In addition, four questions <br />
referred to the DART-‐model’s building blocks of co-‐creation, asking participants how they found their <br />
organization scored on dialogue, access, risk-‐benefit and transparency. Unfortunately, many of the participants <br />
found it hard to answer these questions, which often resulted into misinterpretations. Therefore, the resulting <br />
scores on the DART-‐model will only be used for background purposes – no further analysis has been made <br />
relying on these data. <br />
§ 3.4 CREDIBILITY OF THE RESEARCH<br />
In order to be able to generalize and draw proper conclusions on the findings presented in this research, the <br />
validity and reliability of the research are crucial. Reliability concerns the “extent to which data collection <br />
techniques will yield consistent findings” (Saunders, Lewis et al. 2009). Because of the exploratory nature of <br />
this research, and the fact that semi-‐structured interviews were used to collect data by asking participants for <br />
their experiences and opinions, it is difficult to generalize the gathered data (Miller and Brewer 2003). At the <br />
same time, its exploratory nature may also be considered to be a unique strength, as it collects data at multiple <br />
organizations and leaves participants with much freedom to discuss their own views and experiences. <br />
Validity refers to whether or not “findings are really about what they appear to be about”. Taking this into <br />
account, the openness of the interviews allowed participants to emphasize what they found that was <br />
important. In addition, several employees of the same organization were interviewed – this way, appealing <br />
answers could be checked with other participants working in that same organization. <br />
§ 3.5 DATA ANALYSIS<br />
Once all data had been collected, recorded and transcribed, it had also to be analyzed. Rather than with <br />
quantitative research where data mostly can be analyzed using statistical analysis, the qualitative data of this <br />
research was analyzed using the Constant Comparative Method. The Constant Comparative Method (CCM) is <br />
derived from Grounded Theory (Glaser and Strauss 1967; Eisenhardt 1989), and helps researchers to systemize <br />
the analysis process and contributes in developing a theory that is grounded in the data. Boeije (2002) <br />
managed to make a conveniently arranged overview of the process of categorizing, coding, delineating <br />
categories and connecting them. <br />
He identified different steps that can be taken in order to analyze all the collected data. In this research, first an <br />
analysis is made of each single interview, summarizing it and making categories. Next, the interviews with <br />
participants working in the same organization are compared, searching not only for organizational patterns but <br />
also for possible differences between departments. Finally, the cases of the organizations themselves were <br />
compared with each other, aiming to point out on the shared agreements and differences between cases for <br />
the use of co-‐creation. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
04<br />
Supervisor:<br />
CASE<br />
Prof. Dr. T. Elfring <br />
ANALYSIS <br />
Introduction <br />
§ 4.1 | Case Analysis: Company A -‐ E <br />
§ 4.2 | Cross-‐case analysis <br />
Joost de Boer <br />
Student number 1517597 <br />
This chapter presents the findings of the empirical research that was done among five service-‐based <br />
organizations in The Netherlands. A total number of fourteen semi-‐structured, qualitative interviews were held <br />
with employees working at these organizations. Starting with a within-‐case analysis per organization, a <br />
description and interpretation is made of how each organization uses co-‐creation in their NPD-‐process. Next, <br />
all five organizations are compared with each other in a cross-‐case analysis, using the conceptual model that <br />
was proposed in Chapter 2 as a guiding line. <br />
Definition of co-‐creation <br />
The interviewees defined co-‐creation as follows: it is the “involvement of stakeholders at a certain moment in <br />
time by creating a dialogue about organizational processes or topics together with the organization, in order to <br />
create a shared added value”. Appendix B shows an overview of the different interviewees and how they <br />
define co-‐creation; this section shortly discusses their definitions and considerations when referring to co-creation.<br />
<br />
Some of the interviewees managed to give a definition of one or two sentences; others used a more <br />
comprehensive explanation. It appeared that there is still a lot of discussion on what co-‐creation exactly is, <br />
what it should be used for and how it should be used, immediately highlighting the relevance of this research. <br />
The first item of discussion was about the question of who to co-‐create with. Is an organization only co-‐creating <br />
with its customers, or can it also be done with employees and other stakeholders? And having concluded with <br />
who to co-‐create, what should co-‐creation be used for? Where one participant found its use to be in the <br />
innovation of new products and the development of existing ones, others found that it could also be used <br />
internally to start a dialogue between people inside the organization. <br />
Agreement was found in the description that co-‐creation stands for ‘doing something together’. However, the <br />
question ‘together with whom?’ resulted in different answers. The interviewees of Company B immediately <br />
and solely referred to ‘customers’ or ‘the target population’, as would Company E. Company A did the same, <br />
however it also referred to the possibility of co-‐creating internally by not involving customers, but employees. <br />
Company C, which operates solely in a B2B-‐environment, mostly referred to ‘external parties’, in a very broad <br />
sense. They emphasized not only the co-‐creation with direct customers, but also with the entire value chain of <br />
the industries they and their customers were operating in. Company D, finally, widened the scope of co-creation<br />
to a maximum, by bringing in specialists and experts, as well as ‘the public’. For the purpose of this <br />
analysis, it is sufficient to answer the who-‐question in general with ‘stakeholders’. <br />
In addition, a number of participants were asked whether they considered co-‐creation as something new or as <br />
something they or their organizations were already familiar with, such as focus groups. Most of them found <br />
that the concept of cooperation and creation with customers, together with the organization, was something <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
that had been done for years. However, they distinguished two characteristics: first, co-‐creation enabled them <br />
to involve customers at an earlier stage in the process. Second, the use of new technologies, such as social <br />
media and Web 2.0, provided organizations with a tool to start a dialogue with external parties in a total new <br />
way. <br />
Finally, when discussing what exactly could be co-‐created, most participants would not go further than <br />
speaking of ‘development of products and services’. From this perspective, there was no direct lead in how the <br />
involved parties (the who) and the moment and topic of co-‐creation (the what) should be translated into the <br />
process of innovation through co-‐creation. Participants referred differently to the moment in the development <br />
process (‘every stadium of the process’) or its purpose (‘idea generation’ or ‘mainly for testing purposes’). This <br />
will become clearer in the next paragraph, where the actual use of co-‐creation in the organization is discussed.. <br />
§ 4.1 CASE ANALYSIS<br />
§ 4.1.1 | Case analysis: Company A <br />
Purpose of co-‐creation <br />
One of the interviewees in Company A indicated that one main of the reasons to <br />
introduce co-‐creation was to involve customers in the creation of new products, hoping <br />
to create an internal basis of support for certain ideas. In addition, another interviewee <br />
explained that it was also used to get closer in the minds of customers and to reconsider what Company A’s <br />
added value is for its customers. For these reasons, customers were mostly involved in the organization’s <br />
innovation process to generate ideas for new service propositions and to discover (new) business opportunities <br />
for Company A. Here, co-‐creation was often preceded by context mapping, a technique to that helps to ‘map’ <br />
the product context by researching its user-‐context. <br />
The exact focus and scope tended to change over several projects. Sometimes, a participant told, there were <br />
greenfield-‐like sessions, characterized by a very broad scope and little focus, leaving participants with much <br />
freedom, but also few handles and direction on where to go to. Other sessions were led very specific by its <br />
content, providing clear directions about the kind of solution that Company A was looking for: “having clear <br />
directions brings the advantage of knowing what you will do and what you will not do during a session”. One <br />
important similarity among the projects, is that complicated technical and legal problems are not used as input <br />
for the co-‐creation sessions: “some of these things are highly complex, and are therefore not interesting for co-creational<br />
purposes”. <br />
After a period of trial and error, a participant remarks: “when it comes to clarity in the project, it is very <br />
important to set concrete goals and to be specific in what we ask of the participants in a co-‐creation session”. <br />
But besides setting concrete goals and making sure the scope of the project is narrowed down to a workable <br />
level, time pressure that comes with a co-‐creation session (a co-‐creation session normally only takes one day) <br />
was also believed to increases productivity. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Involvement of internal and external parties <br />
When it comes to co-‐creation, multiple departments in Company A are involved. “The departments that are <br />
normally assigned to co-‐creation projects are marketing, sales and a technical department that arranges <br />
portfolio’s and risk inspection”. As a result, information was distributed quite fragmented through the <br />
organization. In order to solve this problem, Company A launched its ‘Concept and Proposition Development’-‐<br />
department (CPD) in January 2010. This department was charged with the initiation of co-‐creation projects and <br />
context mapping: when it comes to the development of new products or service propositions with customers, <br />
the CPD-‐department is the linking pin between the marketing and sales departments and the ‘fabric’ – <br />
responsible for the actual development of new propositions. Co-‐creation itself did not appear to be the reason <br />
for the introduction of the new department in the organization: ‘co-‐creation is one of the things we do, but the <br />
introduction of this new department was a result of other departments that started to cooperate with each <br />
other. You should see that apart from co-‐creation’ an interviewee says. <br />
Considering the involvement of external parties, this was mostly done by involving stakeholders such as <br />
customers, potential customers and experts on the field of the involved topic. The results of concept mapping <br />
sessions that were often held before co-‐creation were thereby used as a starting point; co-‐creation was used to <br />
generate ideas, improvements and opportunities for the new product or service. The fact that mutual contact <br />
between customer and employees is stimulated by co-‐creation, appeared to be very important: ‘employees are <br />
now more aware of for whom they are doing the things they do, in the way they do. They now ask themselves: <br />
what do the numbers on my screen actually mean to the customer?” <br />
Used types of co-‐creation <br />
Over the years, Company A has used three types of co-‐creation: the Club of Experts, Coalition of Parties and <br />
Crowd of People. Two of these (Club of Experts and Coalition of Parties) were used by Company A itself; one of <br />
its sister organizations that is part of the same holding has involved stakeholders through the Crowd of People. <br />
For the purpose of this research, the focus will be on the types of co-‐creation used by Company A itself; <br />
however, it is interesting to know that multiple organizations in the same holding use different types of co-creation<br />
– something that will return further on in this research. Company A used the ‘Coalition of Parties’ only <br />
once, in a collaborative project with a Dutch consultancy firm. The aim of this project was to explore the <br />
possibilities for a partnership between the two, but since this is the only ‘Coalition’-‐project that has been used <br />
(and is still in progress), there was no sufficient information to make an in-‐depth analysis. <br />
However, Company A has mostly used the ‘Club of Experts’ co-‐creation type several times now to involve their <br />
stakeholders to generate new ideas and to think of improvements and opportunities for new propositions. To <br />
involve stakeholders and internal parties in this co-‐creation project, its openness was limited to a select <br />
number of people. In addition, Company A maintained the ownership of the content generated during the <br />
session, although stakeholders would later be able to benefit from the new propositions as a customer. Figure <br />
4.1 provides an overview of the purpose that co-‐creation was used for by Company A, along with its scope, the <br />
involved parties and used types of co-‐creation. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Figure 4.1 | Company A: purpose, scope, involved parties and types of co-creation<br />
Crowd of People:<br />
not used<br />
Community of kindred spirits<br />
not used<br />
Openness<br />
Club of Experts:<br />
Purpose: Idea generation<br />
Scope: varies dependent on project/session<br />
Internal parties: Concept and Proposition<br />
Development, marketing, sales, technical and legal<br />
departments<br />
External parties: customers, potential<br />
customers and experts<br />
Coalition of parties:<br />
Purpose: sourcing for potential collaborative<br />
Scope: explorative<br />
Internal parties: Concept and Proposition<br />
Development department<br />
External parties: consultancy agency<br />
Ownership<br />
Co-‐creation in the NPD-‐process <br />
Both interviewees indicated that Company A uses co-‐creation mostly during the phase of idea generation. The <br />
‘Club of Experts’ co-‐creation projects involved small numbers of stakeholders who each had their own level of <br />
expertise in relation to the product or service that was to be developed. This ‘tool-‐like’ deployment of co-creation<br />
allows Company A to do a thorough research about the potential product and its background using <br />
context mapping, before involving participants in a co-‐creation session. <br />
The selection of the generated ideas is mostly done by the management team, together with the concept and <br />
proposition development department. Using a decision model, they decide whether an idea will be developed <br />
or after the co-‐creation session. Subsequently, the idea is picked up by a product manager who then develops <br />
the product, and it is tested with customers again before releasing it. This meant, according to the developer, <br />
that “After we’ve looked where the needs of our customers are and what they think about the terms and <br />
conditions, we start to develop the project and test it with the target group”. <br />
The development phase is mostly coordinated by the Concept and Proposition Development department, and <br />
development is done inside the organization without the direct involvement of customers. This is a time <br />
consuming process, but it is most of all risky in the sense that it may alienate from the original idea. According <br />
to one of the interviewees, this is the result of what he refers to as the ‘waterfall method’: “People work in <br />
steps to reach their targets, which is low risk but also low profile. I think it is better to do so using a more <br />
‘designing’ method: by prototyping a number of the generated ideas, and continuously returning to the <br />
customer to ask what he or she thinks of the concept during the entire process of product development. That is <br />
the best way to involve stakeholders, by continuously asking them for their involvement and feedback”. <br />
Considering the diffusion phase, this is not directly done with the customer. The feedback that is given to <br />
stakeholders is still very little. “We know it is important to manage a good relationship with our customers by <br />
constantly involving them. However, it appeared to be difficult to communicate this throughout the <br />
organization. Most employees still say to a customer: “thank you for your trouble and your ideas, you can go <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
now.”– and that is their end of the story. But that is not how to manage a healthy relationship.” According to <br />
the innovation manager, customers appreciate it to get involved: “and we should cherish that”. Both <br />
participants also indicate that they want to keep contact with their stakeholders, but also find that something <br />
like that takes a lot of time. Therefore, the feedback process to customers should be designed internally in <br />
another way to improve this. Figure 4.2 shows an overview of the phases that co-‐creation was used in the NPD-process<br />
in relation to the type of co-‐creation. <br />
Figure 4.2 | Company A: types of co-creation and purpose in the NPD-process<br />
Idea Selection:<br />
mangement/CPDdepartment<br />
Context<br />
mapping<br />
Club of Experts:<br />
Idea Generation<br />
Internal development & diffusion phases<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
Results and measurement <br />
Considering the result of its co-‐creation projects, interviewees mentioned two tangible results: the first one <br />
was an online platform that functions as an interactive question bank for entrepreneurs, the second an <br />
information book for construction companies: here companies that were active in the construction business <br />
could find answers to their questions. In addition, an intangible result, as an innovation manager recalls, is the <br />
fact that the co-‐creation projects resulted in more internal awareness and insights among employees about <br />
who the customer is, and what its needs look like; something what he refers to as a benefit of co-‐creation. “We <br />
have shown that if you treat customers in another way by involving them, and show them you have put effort <br />
in it to get a better understanding of what drives them, this has a positive effect on the organizations returns. <br />
[…] But if you ask me: have you literally developed products or services that bring in more money, than I cannot <br />
answer your question”. <br />
Referring to the measurement of co-‐creation, the concept and proposition developer responds: “We cannot <br />
measure the results yet. The two tangible results prove that the concept had its returns; however, we do not <br />
have a representative sample yet, which makes it impossible to measure the real (financial) success. We do not <br />
build a business case around these co-‐creation projects; it is a direction we have chosen to take, and perhaps in <br />
a later stadium we can prove that that direction was the right one. In addition, we have multiple results from <br />
co-‐creation that are still being developed; it is important to have faith in the outcomes”. <br />
Encountered difficulties using co-‐creation <br />
One of the most difficult things to overcome in the use of co-‐creation was getting commitment and setting <br />
priority throughout the organization: “People tend to think they can drop by for an hour or so, and thus do not <br />
take the responsibility to be there the entire session in a dedicated way. Often, other employees say ‘You do it, <br />
it’s your thing!’” Another problem that adds to this is that senior management is often too busy to be involved <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
for an entire day as a result of their workload. Co-‐creation first had to prove its use in the organization before <br />
its value is recognized. <br />
Next to the problems of gaining commitment, it also appeared to be difficult to change the risk-‐averse culture <br />
an insurance company has that is needed to realize new concepts created together with customers: “There are <br />
too many people in the stage-‐gate decision process who all want to say something about the generated ideas <br />
and their development. You need empathy and a good feeling of why ideas were generated in the first place, <br />
and only the customer knows that.” <br />
§ 4.1.2 | Case Analysis: Company B <br />
Purpose of co-‐creation <br />
Co-‐creation is an important factor in the ‘Society’ Company B wants to build. The first <br />
participant, the company’s brand manager, almost immediately referred to co-‐creation <br />
as ‘a way of working’, and during the interviews it became more obvious why Company <br />
B deployed co-‐creation as a way of working rather than considering it as a tool. Company B has started using <br />
co-‐creation three years ago. Their key reasons to start using co-‐creation were to (1) get a more authentic <br />
brand, and (2) to offer propositions that directly satisfy their customers’ needs. Co-‐creation projects are often <br />
preceded by collecting marketing insights of the targeted population, resulting in setting the used scope for co-creation.<br />
<br />
Dependent on the phase of the NPD-‐process, the scope and focus of co-‐creation tends to be different. <br />
Sometimes sessions are initiated as a greenfield, providing no to very little direction to participants, as an <br />
acquisition manager explained: “I do believe that the more freedom we provide our participants with, the <br />
wilder and the more innovative ideas we get in return. […] However, we sometimes do have to explain our <br />
business model to the participants, which can take us half a day”. <br />
At the same time, other sessions provide more clear direction to its participants, a manager development <br />
recalls: “We often start by doing some desk research, collecting marketing insights of the target population. […] <br />
This focuses on interpreting figures and scanning for trends, so we can provide direction to the target audience. <br />
Imagine, for example, that we would ask our customers how their perfect contract would look like. We would <br />
be getting answers like ‘give me something as cheap as possible’. So by providing them with clear directions, <br />
we build useful sessions with our customers.” <br />
Involvement of internal and external parties <br />
Being organized as a matrix organization, Company B consists of four teams operating in three different <br />
products or services categories: prepaid, postpaid and data. Company B’s Brand Manager is responsible for <br />
coordinating the different projects, and functions as a linking pin between the different teams. Co-‐creation can <br />
be initiated by almost everyone in the organization who is responsible for product or service development. “It <br />
also happens that there are multiple co-‐creation sessions per week, initiated by different teams”, the <br />
development manager recalls. This, however, is not considered as a problem, because often different concepts <br />
for different products or services are being created. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Almost all employees of Company B are involved in co-‐creation whenever this appears to be relevant to his or <br />
her work. In addition, salespersons are also involved in the co-‐creation projects. They are believed to generate <br />
important input, because they operate in the frontline every day. Salespersons are the face of Company B and <br />
are constantly in contact with (potential) customer, knowing what customers want and perhaps equally <br />
important: they know what will sell and what not. Because of their day-‐to-‐day involvement and contact with <br />
customers, they are given the opportunity to translate customer input into ideas that are valuable to the <br />
organization <br />
However, co-‐creation also provides Company B with difficulties considering internal cooperation, as it is <br />
dependent on its larger holding organization for its technological resources. Therefore, it is also dependent on <br />
the holding’s current technological capabilities. As Company B aims to continuously develop new products and <br />
services that adapt to their ‘Society’s’ needs, it sometimes happens that the holding company cannot provide <br />
them with the right technological solutions. “So then, we are somewhat forced to turn to third parties to <br />
develop things for us. This however also has its disadvantages, as it can lead to proliferation in the systems we <br />
use. So we are continuously looking for the right balance here. At the moment that the holding’s IT department <br />
is able to deal in a more flexible way with our requirements, we can increase the development these specific <br />
things in-‐house”. <br />
Referring to the involvement of external parties, Company B involves different parties for different purposes. It <br />
aims at involving the ‘Society’ it has created as much as possible, at different phases of the NPD-‐process. In <br />
early phases often leading edge youngsters are asked for their contributions and ideas; later on in the process, <br />
a more mainstream audience is involved. Next to involvement in the NPD-‐process, this can for example also be <br />
done when testing existing products or services, to make sure they are still interesting for the target <br />
population. <br />
Used types of co-‐creation <br />
Company B has, since it started using co-‐creation three years ago, been using two types of co-‐creation: the <br />
Club of Experts and Crowd of People. As already indicated, it mostly involves leading edge youngsters, or lead <br />
users, in the early phases of the NPD-‐process. Leading edge youngsters are here used to generate new ideas on <br />
future or existing products and services of Company B. In addition, when aiming at involving a larger number <br />
and more mainstream kind of users for the purpose of testing new or existing ideas, products and services, a <br />
Crowd of People is used. <br />
When considering the openness of these types of co-‐creation, the Club of Experts obviously consists of a group <br />
of people that were selected on their ability to be in the lead of other, more mainstream users, anticipating on <br />
their future trends and needs. In the Crowd of People, any customer of Company B is free to join and to <br />
participate. Although these parties differ in the parties they involve, they both score the same on the axis of <br />
ownership. All the generated content is the direct intellectual property of Company B – only later on in the <br />
process, participants can use the outcome of co-‐creation. Figure 4.3 provides an overview of the previous <br />
section. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Figure 4.3 | Company B: purpose, scope, involved parties and types of co-creation<br />
Openness<br />
Crowd of People:<br />
Purpose: Testing, fine-tuning<br />
Scope: Focused scope<br />
Internal parties: Marketing, development,<br />
communication<br />
External parties: Mainstream youngsters,<br />
customers<br />
Club of Experts:<br />
Purpose: Idea generation<br />
Scope: Sometimes open, sometimes focussed<br />
Internal parties: Marketing, development,<br />
salespersons<br />
External parties: Leading edge youngsters<br />
Community of kindred spirits:<br />
not used<br />
Coalition of parties:<br />
not used<br />
Ownership<br />
Co-‐creation in the NPD-‐process <br />
The previous section already indicated that Company B uses co-‐creation at multiple phases of the NPD-‐process. <br />
In the idea generation phase, lead users are involved in a Club of Experts to think of new products, services and <br />
concepts. To make sure that ideas generated by lead-‐users also match the needs of non-‐lead users, its <br />
outcomes are combined with market research and also tested by the Crowd of People. Before continuing to the <br />
development phase, Company B selects generated ideas using two selection criteria. <br />
First, before co-‐creation sessions are initiated, a set of benchmarks is determined that the outcomes will have <br />
to meet, independent from the content of the idea itself. ”It starts with benchmarks, while at the same time <br />
providing enough freedom to develop new ideas”, the development manager says. Secondly, Company B every <br />
year states an OGSMT (Objectives, Goals, Strategy, Measurement and Tactics) that withholds the entire <br />
strategy for a year, on a single page. Each year, the OGSMT holds five strategies. When the outcome of a co-creation<br />
session provided completely new ideas which were not anticipated, the ideas are tested by Company <br />
B’s mission, positioning and brand values, along with its OGSMT; if there is no match, than an idea will simply <br />
not be realized. <br />
Next, Company B’s customers are involved at different moments in the development phase. For instance, <br />
concepts are tested during the stage of development by making prototypes of services available in an online <br />
test environment for customers: “It is a continuous process, where we have to make sure that everyone can <br />
think along, without losing an eye on the business case”. However, the actual development of the ideas is still <br />
done by Company B itself. The proposition manager explains: “We are inspired by the customer, but we also <br />
have ideas of our own. So we use the input of our customers, but at the same time we make sure that a new <br />
service or proposition has the flavor we want it to have”. <br />
Finally, in the idea diffusion phase, co-‐creation is also used to involve customers in the development of <br />
communication campaigns. This is mostly done with a ‘Crowd of People’ – be it that access and participation is <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
preserved to customers only. For one, this involves the organization of castings where customers can become <br />
‘the face of Company B’ in national ad campaigns. Further, customers are offered access to sneak previews of <br />
new advertisement campaigns and asked for their opinion. As the communications manager recalls: “At the <br />
moment that our audience really does not like a concept or commercial, it’s off the table and we design a new <br />
one. That has happened before’. <br />
Regarding the feedback that is provided to the participants of co-‐creation sessions, Company B’s employees <br />
indicate that they do not directly involve the participants in the entire process. “Most of the time we thank <br />
them, and go on. Sometimes they are rewarded by tickets for a launch party or something, but that is <br />
dependent on the content they provided us with.” However, participants are paid for their time if they <br />
participate in for example a ‘Club of Experts’. “But we do not pay people who provide us with feedback online – <br />
and we don’t have to. Most of our customers just think it is cool to provide us with their feedback, and do not <br />
directly expect something in return”. Table 4.4 illustrates how Company B involved their customers through <br />
co-‐creation during the phases of the NPD process. <br />
Figure 4.4 | Company B: types of co-creation and purpose in the NPD-process<br />
Idea Selection:<br />
Predefined benchmarks/<br />
OGSMT<br />
Crowd of People:<br />
Testing/evaluation<br />
Market<br />
research<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Crowd of People:<br />
Testing campaigns<br />
Idea generation Idea development Idea diffusion<br />
Results and measurement <br />
Dependent on the type and scope of co-‐creation that was used, participants contributed in introducing <br />
completely new ideas – some of the online services Company B offers its clients were the direct result of co-creation<br />
– but also in finding (critical) feedback and insights on both new and existing services and <br />
propositions. This is probably the result of having realistic expectations, and providing a clear focus and scope <br />
to the participants. However, the communications manager admits there is a need to be more consequent in <br />
the use of co-‐creation. “We have had co-‐creation sessions where we came up with good results, but then we <br />
failed to apply them in our business. Now, two years later, we see that these ideas have been lying around, <br />
without anyone picking them up. So we should be more consequent in using the results.” <br />
The measurement of results is not done by directly attempting to build a business case around ideas: “Co-creation<br />
is our way of working; we get targets and objectives, and we measure them by using KPI’s (Key <br />
Performance Indicators). Co-‐creation is our way to get there, and as long as it helps us in reaching our goal of <br />
becoming a more social brand, we will use it in our strategy” the brand manager explains. This especially <br />
counts for positioning of services or strategic plans, according to the manager acquisition, “But we of course <br />
also still have to earn money”. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Encountered difficulties using co-‐creation <br />
Not everything is always co-‐created in Company B. During the interviews done for this research, it appeared <br />
that in some situations, customers are more or less explicitly not involved in decision-‐making processes. For <br />
one, this is due to the fact that the mobile operator market is heavy competitive. Therefore, not everything can <br />
be shared with customers. Using non-‐disclosure agreements can sometimes solve this, but that is not always <br />
sufficient. The brand manager explains: “In the past year, we have been copied multiple times, within the <br />
period of a couple of weeks after the launch of a new product or service. The market is watching us, and <br />
competitors are jealous about the freedom we have within this brand. […] So that is why we cannot be <br />
completely open, yet”. <br />
Second, it appeared that when sales tend to decline and/or Company B has to respond quickly to <br />
environmental developments, there is few to no time to consult customers. When business is declining, tough <br />
decisions will have to be made in order to survive. Despite the fact that customers normally are involved in <br />
multiple processes, it is a time consuming process. This also does not hold on when Company A has to respond <br />
to actions of competitors. A manager explains: “I think you can say that the more time pressure there is, the <br />
less time there is to co-‐create”. She continues: “I think that we are doing co-‐creation 0.1. When considering the <br />
way we collect insights from our customers, what should be the basis of marketing, we are now at co-‐creation <br />
1.0 or perhaps co-‐creation 1.5. Beyond this marketing scope, we also still involve our customers in the things <br />
we do, but not on a day-‐to-‐day basis. That is why I say we are doing co-‐creation 0.1. It’s our challenge to <br />
become more proactive in order to reach co-‐creation the level of 1.0.” <br />
§ 4.1.2 | Case Analysis: Company C <br />
Purpose of co-‐creation <br />
As a result of its B2B nature, Company C has always been working closely together with <br />
its clients, offering customized ICT-‐solutions that meet the diverse criteria that differ <br />
per client. However, the interviewees indicated that Company C has explicitly started <br />
using co-‐creation about two years ago. Its reasons to start with co-‐creation were (1) increasing their innovation <br />
speed, (2) creating new ideas and getting a broader perspective by involving other people and (3) creating a <br />
more innovative image towards their customers. <br />
Company C has organized three co-‐creation projects, each spread out over a period of a few months. These <br />
projects started with an internal session, where employees that were descended from different departments of <br />
the organization were brought together to identify a number of themes. These themes were concretized, and – <br />
dependent on its context – experts from inside and outside the organization were involved to co-‐create the <br />
themes into useful concepts. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Involvement of internal and external parties <br />
The co-‐creation projects involved employees from different departments: IT, HR, controlling or marketing, and <br />
of almost every business line in the organization – although the latter is dependent on the content of the <br />
session. The interviewees do not see the need for changes in the way that different departments work together <br />
in order to make co-‐creation work, although one of the positive consequences of co-‐creation is that it brings <br />
together people from different departments. “But it should not be co-‐creation that brings people together and <br />
makes them talk. People should communicate more easily by themselves in the organization, but you do not <br />
need co-‐creation for that”, a manager says. <br />
Considering which employees are involved from those departments another manager adds, “The department <br />
itself appoints its delegates for the session. But more than often a department has people who I know are <br />
more innovating than the ones that are delegated. So I think we need another way of selecting those people. It <br />
has become some honorary thing to participate in co-‐creation, while it should be about whom is the most <br />
suited to participate.” Consensus among interviewees is found in that there should be clear criteria describing <br />
who exactly should be involved in the sessions. <br />
The externally involved parties consist mostly out of experts on specific fields. A business development <br />
manager explains: “We involve people who might be of a certain added value to the project, but we already <br />
determined what the concepts would look like before involving externals. We often involve clients or <br />
companies at a much later stadium, while we perhaps could have involved them earlier”. Although some of <br />
those experts might be working for a client of Company C, the interviewees feel that clients should be involved <br />
more explicitly . The manager future ready workplaces explains: “We have never really involved our clients in a <br />
co-‐creation session” -‐ it appeared that most of the time, experts and thought leaders are the ones that are <br />
involved. <br />
Used types of co-‐creation <br />
The interviewees indicated that Company C uses two types of co-‐creation: the ‘Club of Experts’ and the <br />
‘Coalition of Parties’. A global practice manager described this as follows: “We are somewhere at the boundary <br />
between ‘Club of Experts’ and ‘Coalition of Parties’. We have a strong initiator role, but we also involve parties <br />
from the outside to develop services together […] We are embedded in an eco-‐system where partner <br />
management gets increasingly important. It’s about interconnecting parties, and that also includes sharing <br />
some of your IP (Intellectual Property).” <br />
Where formally the most contact between Company C and its clients was based on offering solutions for a <br />
single client, the ‘Club of Experts’ allows Company C to involve multiple clients, and connect them with external <br />
experts and its own employees. This way, they are able to combine diverse customer experiences with the <br />
expertise of experts from inside and outside the company. An example of these subjects might be what is <br />
referred to as ‘the new working’ (Het Nieuwe Werken) – a concept that has increased in popularity in many <br />
large organizations in the past few years. This exceeds the level of a single client, and the combined <br />
perspectives that ‘Club of Experts’ tends to offer is an interesting solution to this. In addition, the Club of <br />
Experts an also be used to leverage these combined perspectives towards suppliers. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
In addition, the combination of the ‘Club of Experts’ and the ‘Coalition of Parties’ does not appear to be <br />
coincidental. Both types use a select group of participants, but differ on the ownership of the generated <br />
content. Company C has “changed its direction toward the role of aggregator”, a manager recalls, emphasizing <br />
the importance of cooperation with suppliers and other companies. Where the ownership of generated <br />
content with the ‘Club of Expert’ is assigned to Company C, the ‘Coalition of Parties’ presumes that the <br />
ownership is shared between parties. This allows building important partnerships, as a vertical market manager <br />
explains: “We have, for instance, previously worked together with banks, seeking for opportunities to reinforce <br />
one other”. Figure 4.5 illustrates how the involvement of internal and external parties contributed to different <br />
types of co-‐creation for different purposes. <br />
Figure 4.5 | Company C: purpose, scope, involved parties and types of co-creation<br />
Crowd of People:<br />
not used<br />
Community of Kindred Spirits:<br />
not used<br />
Openness<br />
Club of Experts:<br />
Purpose: Idea generation<br />
Scope: Focussed, internally prepared<br />
Internal: IT, HR, Controlling, Marketing, relevant<br />
departments<br />
External: Experts, thought leaders<br />
Coalition of Parties:<br />
Purpose: Seeking new partnerships/alliances<br />
Scope: Open, explorative<br />
Internal: Relevant departments (higher<br />
management)<br />
External: Other organizations<br />
Ownership<br />
Co-‐creation in the NPD-‐Process <br />
Before involving external parties in the idea generation phase, a group of employees of Company C were <br />
brought together to identify a set of themes that would function as the scope of the co-‐creation session. So, <br />
before involving any external participants at all, certain criteria for products or service to be generated were <br />
set already. In the case of the Club of Experts, the involved externals were invited to generate new ideas and <br />
concepts that would fit within these themes; the Coalition of Parties tended to be used somewhat more to <br />
explore possibilities of partnerships between organizations and are therefore less easily directed to a specific <br />
NPD-‐phase. <br />
A part of the selection of generated ideas is partially already done before the actual co-‐creation session has <br />
started, when employees of Company C determine a number of themes that will be used in the co-‐creation <br />
sessions itself: “And that way, we already send our stakeholders in a certain direction. That way, we will never <br />
generate ideas that are completely out of the box. Why send a party off with a solution, while there are <br />
multiple solutions?” Often co-‐creation sessions in Company C have often been framed in a way that the <br />
44
Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
selection criteria have already been used before the session has stated. This has the benefit that sessions are <br />
often designed around a certain business line in Company C. However, when an idea has no direct match with a <br />
business line, it is difficult to implement it somewhere else in the organization. Hence, according to multiple <br />
interviewees, that is at this moment the only way to develop an idea in Company C. <br />
This problem becomes more clear in the development phase: if an idea does not fit in a business line, no one <br />
takes responsibility for it; the same thing happens when there is no clear business case for the idea itself. As an <br />
interviewee explains: “Who are going to develop it? Everyone is busy! And what about our budgets? Because <br />
we will have to make investments, but who will invest in something new that is not considered their <br />
responsibility?” Secondly, the development process of co-‐creation generated ideas is no different than the <br />
development process of ideas that were not generated through co-‐creation. “Internally, organizations are often <br />
slow as a result of regulations; but why should this be different when using co-‐creation? It is not that we <br />
measure with two sizes, or that co-‐creation is that much better than other idea generation techniques.” <br />
The diffusion of generated ideas does neither directly involve external parties. This probably also the result of <br />
the shortcoming of feedback to externals provided by Company C: interviewees indicate it has a lot to improve. <br />
“Stakeholders are highly positive and enthusiastic when they are involved in co-‐creation sessions. However, <br />
they are not satisfied with the follow-‐up. For instance, we do not communicate which of the generated ideas <br />
are going to be developed. A number of the participants in the co-‐creation sessions are people from our own <br />
personal networks, and through this way I know that our follow-‐up is not sufficient”. The product manager <br />
FRW adds to this: “the follow-‐up of ideas itself is slow. Not only our communication, but it also lacks in <br />
realization. We have already told our customers that we have a new service or product coming, but then it can <br />
still take us one or two years to realize it, because of slow organizational processes”. The use of co-‐creation <br />
throughout Company C’s NPD-‐process is illustrated by figure 4.6. <br />
Figure 4.6 | Company C: types of co-creation and purpose in the NPD-process<br />
Idea Selection:<br />
Match with defined<br />
themes / business line<br />
Themes<br />
defined by<br />
employees<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
Results and measurement <br />
Although one of them mentioned that “We have not invented our Nespresso yet”, the interviewees do indicate <br />
that co-‐creation offered some results to the organization. First, the global practice manager mentioned that co-creation<br />
appeared to be a useful way to structure and leverage ideas. Most of the time, the ideas were not <br />
completely new, but co-‐creation functioned as a vehicle to conceptualize the ideas, and to bring them under <br />
the attention of the senior management. “No one really ever took the effort to write down what the concept <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
would look like, and to bring that concept to the management. And that is where co-‐creation has contributed <br />
in”. Next, participants also feel that co-‐creation contributed in boosting the innovative image of Company C. <br />
When looking how the results of co-‐creation were measured, participants indicated that Company C would <br />
build a business case around generated ideas. “We know what a certain idea will bring us: we simply indicate <br />
how much of the products or services we expect to sell, and calculate our revenues. This also includes looking <br />
at how much margin we have got, and within how much time we will regain our investments”. For Company C, <br />
it is obligatory to know what the turnover of a development of a product or service will be. “We do not take <br />
risks here; At Google, for instance, they don’t build business cases: they have an idea, develop it, and <br />
eventually see how it turns out. We can’t do that, we are operating in such a competitive environment. We just <br />
can’t generate a hundred ideas, of which ten will eventually be successful, like Google does”. <br />
Encountered difficulties using co-‐creation <br />
The participants think that external parties should be involved earlier in the process of co-‐creation: “We now <br />
tend to first think themes out for ourselves, and after that we involve other parties. Of course, this works well <br />
in order to set a certain direction, but perhaps we should consider involving those parties at the very start. We <br />
now start co-‐creating by shooting with a bullet, while we perhaps should be shooting with hail first, to generate <br />
new ideas”. In addition, although some of the involved experts might be working for a client of Company C, <br />
clients should be involved more explicitly. <br />
There also appears to be a need for a more structural internal co-‐creation project. “Knowledge is power. What <br />
we still see here, as in many other companies, is that people inside the organization tend to keep their ideas to <br />
their selves. We need to break with this idea”, the vertical market manager says. Internal co-‐creation might be <br />
a very suitable way to do this, also considering the size of the organization; but it needs to be embedded in the <br />
organizational structure and culture. She continues: “A field engineer can have a very good vision on how to <br />
solve certain problems, for instance. We have so much internal expertise; we just have to find a way to use it”. <br />
Finally, the development of generated ideas tends to get stuck between business lines. “You can only consider <br />
yourself to be innovative when you realize the ideas you have. But that is the problem: there is not enough <br />
speed to realize these ideas. When you throw a new idea back into an old organization, there is no match. The <br />
problem is that innovation simply is not in our DNA.” The delay in the development of generated ideas as a <br />
result of internal regulations and procedures, can according to the interviewees be overcome by developing it <br />
elsewhere, referring to the use of incubators. Once found feasible, ideas should be developed outside the <br />
organization. According to the participants, this can either be done in a corporate venture, or in an institute <br />
that looks more like an incubator. “If you particularize the process of idea generation/innovation, then you <br />
should also particularize the process of realization, one way or another”. <br />
46
Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
§ 4.1.1 | Case analysis: Company D <br />
Purpose of co-‐creation <br />
Company D initially started using co-‐creation for three reasons: (1) seeing things <br />
differently than from the operational perspective, (2) getting a more direct input from <br />
stakeholders and (3) exploring possible partnerships. The director product <br />
management explains: “We (Company D’s employees) all tend to think we know exactly what the customer <br />
wants, given the fact that all of us fly frequently; so that is normal, I think. But we translate our experiences all <br />
into paperwork, into business cases, and we tend to lose some of our sharpness along the way. […] Therefore, I <br />
think co-‐creation is a good way to get the direct input of customers”. In addition, they were sourcing for a way <br />
to include the input of (directly) involved stakeholders, enabling them to share their ideas and experiences. An <br />
example here can be found in the co-‐creation with own employees: “Sometimes, organizations take on such <br />
proportions that they can use co-‐creation inside their own organization”. Here, co-‐creation was used to involve <br />
employees from the Ground Services department to source for their input on how to improve processes. The <br />
Ground Services department consists of about five thousand employees, and it wanted to include their <br />
employee input in their operations. <br />
Company D also aimed at co-‐creating with other organizations with the purpose of in-‐depth exploration of <br />
opportunities for cooperation. The director business innovation gave the example of the sessions with a large <br />
Dutch chemical factory: “We found out, that when we looked at our supply chain, we indirectly dealt with this <br />
company considering multiple products we use: products that represented a large sum of money and had a <br />
large impact on our business. So then, we had some sessions to explore whether there were opportunities to <br />
cooperate in a more efficient way, possibly cutting out one or two chains that separated us throughout the <br />
value chain.” <br />
Involvement of internal and external parties <br />
Obviously, employees were involved in the internal co-‐creation project. However, this project also had to be <br />
initiated and led by people inside the organization. An interviewee explains: “First, we needed a project leader <br />
– someone who arranges the IT infrastructure. Then, we needed someone of the HR department to take care <br />
of all the employee related issues. And finally, you need all the business owners on whom the project might <br />
have impact. If you add all these people and departments together, it becomes a project within a company like <br />
other projects in a company; one where everyone has a certain function or role, and agreements are made.” <br />
Regarding to other co-‐creation projects in general, the director product strategy concludes that “it’s a role-‐play <br />
between different departments, and you have to be suitable as an organization to organize that. You have to <br />
have a certain internal modes wherein several parties are held together, to make sure that there is a certain <br />
basis of support”. The interviewees were both employed at different departments: innovation and marketing. <br />
As the direct product strategy indicates, although there is a certain overlap, they have different roles inside the <br />
organization: “It is not only marketing what we do here. We focus on different things, on different terms: you <br />
can roughly state that marketing focuses on the business within the period of a year, and we tend to look at <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
the long term. Each of us has their own competences and responsibilities. However, it is crucial that we start to <br />
correspond and cooperate at the right moment – and that moment is different per situation. <br />
This also included the projects that were used to involve a smaller number of external people, where the <br />
emphasis was more on customers’ experiences and ideas to improve existing services or develop new ones. <br />
Here, lead users were involved to not only share their experiences (almost every body has experience with <br />
flying), but also their ideas as a thought leader in near-‐by fields of industry. <br />
Used types of co-‐creation <br />
To organize these co-‐creation projects properly, Company D uses three types of co-‐creation: the ‘Crowd of <br />
People’, ‘Club of Experts’ and ‘Coalition of Parties’. These types are all used for different purposes and different <br />
kinds of processes. The ‘Crowd of People’ was used for two purposes: first of all for the internal co-‐creation <br />
project that was done together with the employees of Ground Services. Another way that Company D used the <br />
‘Crowd of People’ co-‐creation type was by involving their customers to an online platform. They built a <br />
community platform for heavy users – frequent flyers – where they could post their ideas and experiences, and <br />
discuss the ones of others. At the same time, this was administered by employees of Company D, who also <br />
participated in discussions and sourced for new ideas on the platform. The platform was also used to discuss <br />
new or existing business propositions. Finally, the Club of Experts was used to involve not only heavy users, but <br />
also experts and thought leaders in their NPD-‐process. <br />
Considering the openness of the projects, Company D both used types that required selection of participants as <br />
well as the Crowd of People that accounted for the use with large groups of customers. Although the internal <br />
co-‐creation session was accessible only for employees of Ground Services, it had this much participants that it <br />
can be seen as the Crowd of People. The ownership of the generated content mostly benefited Company D, <br />
although its cooperation’s with other organizations had the purpose of delivering shared results. Figure 4.7 <br />
shows an overview of the used types of co-‐creation, in combination with the involved parties and its purpose. <br />
Figure 4.7 | Company D: purpose, scope, involved parties and types of co-creation<br />
Openness<br />
Crowd of People:<br />
Purpose:(1) Idea generation / (2) process<br />
improvement<br />
Scope: (1) Open / (2) focused<br />
Internal: (1) Marketing and innovation<br />
(2) Ground Services staff, HR, innovation<br />
External: (1) Heavy users<br />
Club of Experts:<br />
Purpose: Idea generation<br />
Scope: Open<br />
Internal: Marketing, innovation<br />
External: Heavy users, experts, thought leaders<br />
Community of Kindred Spirits:<br />
not used<br />
Coalition of Parties:<br />
Purpose: Seeking new partnerships/alliances<br />
within value chain<br />
Scope: Open, explorative<br />
Internal: Innovation<br />
External: Other organizations in the value chain<br />
Ownership<br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Co-‐creation in the NPD-‐process <br />
The projects that the Club of Experts and Crowd of People were initiated to source for experiences and new <br />
ideas can mostly be redirected to the idea generation phase. In addition, also the Coalition of People was used <br />
to seek opportunities for possible cooperation between Company D and other organizations. For the selection <br />
of these generated ideas, several criteria were used. First, an idea was tested on its ‘fit’ with Company D: this <br />
was done to see whether it was close to Company D’s core business or not, as this gave a good indication on <br />
how easy the idea could be implemented in the existing organization. Also the content of the generated ideas <br />
appeared an important factor: “sometimes, it might be as easy as just turning a switch, and other ideas have <br />
more impact and therefore require more efforts.” <br />
Next, when the choice was to develop an idea inside the organization, the next question would be whether it <br />
would fit in one of the existing departments or that it needed a department on its own; this is of course <br />
dependent on the available competences and the expected impact an idea would have on the other <br />
businesses. When an idea was placed outside the organization, this involved a search for possible partner <br />
organizations. But, as the director business innovation explained: “These are of course beautiful models, who <br />
are theoretically valid, but in practice things just might go different than expected. It is dependent on many <br />
coincidences”. <br />
Considering the feedback that is provided to the stakeholders who participated in co-‐creation projects, the <br />
interviewees are kind of proud: “We have a tight connection between the sessions and the process afterwards. <br />
During the projects themselves, we already respond on ideas and indicate what we think of them by coding <br />
them with a certain color. After the projects, we often involve a group of people who were actively <br />
participating and bringing good ideas, by inviting them for an offline session, some sort of brainstorm. So we <br />
are quite involved in providing feedback and involving participants afterwards”, the director business <br />
innovation explains. <br />
Regarding the use of the Crowd of People for the purpose of internal co-‐creation, it is more difficult to redirect <br />
it to a certain phase in the NPD-‐process. Mostly because it had the purpose of process improvement, there was <br />
no obvious NPD-‐phase it could be placed in. Figure 4.8 illustrates the use of different types of co-‐creation, not <br />
directly placing the use of co-‐creation for internal sourcing in any of the phases. <br />
Figure 4.8 | Company D: types of co-creation and purpose in the NPD-process<br />
Crowd of People<br />
Idea Generation<br />
Idea Selection:<br />
Fit with business/<br />
departments<br />
Crowd of People<br />
Process improvement<br />
Topic<br />
defined by<br />
employees<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Results and measurement <br />
The director product strategy claimed that one of the most interesting results of co-‐creation appeared to be its <br />
function as an “eye opener that directly drew our attention to reconsider what we were doing”. In addition, <br />
one of the outcomes of the internal co-‐creation project was related to improving the departure gate: the <br />
employees from Ground Services generated a great deal of ideas on how the gate of the future should look <br />
like. Further, several process improvements were made, thanks to the ideas that were generated in co-‐creation <br />
sessions. Unfortunately, the director business innovation adds, “Considering the Ground Services project, I am <br />
referring to the past because we have stopped the project. Huge cuts had to be made across the entire <br />
organization, of which Ground Services was one. That is unfortunate, but no matter how good the generated <br />
ideas are, it is considered as ‘cash out’ at a certain moment”. <br />
There were two ways of measuring the results of co-‐creation. The first one was the degree of participation: <br />
“Reports were made on how many participants would sign up for the online platforms, and how many people <br />
actually contributed to the platform; the number of participants is an important indicator of customer loyalty”. <br />
The other way to measure the results of co-‐creation was by involving employees of the controlling department. <br />
They would then estimate what the actual revenues would be of certain generated ideas once they would have <br />
been developed and implemented. This was of course an estimation, but it also provided involved decision <br />
makers with a more substantial idea of the achieved results of co-‐creation would look like. <br />
Encountered difficulties using co-‐creation <br />
One of the difficulties while using co-‐creation was the nature of Company D’s existence. Being an airliner, <br />
margins are relatively low which results in a day-‐to-‐day focus. Because: flights and production will always <br />
continue, even when not all the seats in the plane are booked. Therefore, the operations perspective is highly <br />
important: “We are a highly operational company, so if we would only be looking at things that will matter in <br />
2020, we would have gone out of business already.” Why this results in a possible problem, is filled in by his <br />
colleague in charge with product strategy: “Co-‐creation tends to focus more on what we will be doing <br />
tomorrow, than what we are doing today. However, its strength is that if you do it right you immediately create <br />
commitment between the operations and commercial departments.” However, the director business <br />
innovation warns that in unstable times, innovation projects are always under pressure: “We have had times <br />
when we were losing money, about 1,5 billion. At that moment, you have to do something in order to survive; <br />
no matter what the results of co-‐creation or innovation projects are”. <br />
§ 4.1.1 | Case analysis: Company E <br />
Purpose of co-‐creation <br />
Company E uses co-‐creation for two purposes: the first is to reestablish the <br />
involvedness and contact with its customers, and second to generate new <br />
products/services and improve existing ones. As the online marketeer explains: “We <br />
started this out of interest in with our customers. When we started the company <br />
seventeen years ago, our clients were exactly the same as the people that were working at our company. But <br />
that tended to change over the years: we managed to keep in touch with a share of our customers, but not <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
with all of them. Therefore, we started using co-‐creation”. “It is also turned out to be a very good way to <br />
receive confirmation from customers about taking the right direction – or not. It allows us to fine-‐tune our <br />
services, which is highly valuable”, the product manager adds. <br />
Company E built an online platform that is open to any of its customers where they can post their own ideas <br />
and share their experiences with other participants and with the employees of Company E. In addition, <br />
Company E also posts questions relating to several themes on the platform, asking the opinion of their <br />
customers. . “However”, the online marketeer says, “we are going to change this for the coming year. We now <br />
have a relatively open platform, where we as employees are always active, and we noticed that we cannot <br />
handle all the input. It simply takes too much time to answer all the questions we are receiving now. We are <br />
therefore going to change this by setting a new theme each month or quarter with the start of the new year.” <br />
Involvement of internal and external parties <br />
“Introducing the platform was not all that troubling, from an organizational perspective”, the product manager <br />
tells. “But the follow up, the internal organization of the project, that is difficult. How do you keep everyone <br />
who participates motivated? How do we make sure that everybody keeps giving useful answers, how do we set <br />
the right themes and stories? That’s quite a challenge…” Company E now has about 30 to 35 employees from <br />
multiple departments that are involved in the co-‐creation project. The platform’s team consists of people that <br />
are descent from the marketing department, people from customer care, their helpdesk, public affairs and <br />
people from the technical staff. The product manager and the online marketeer who were interviewed for this <br />
research indicate that they are the two persons who are in the lead of the project. “We don’t do it on a fulltime <br />
basis, but we do notice that we are short on staff”. This shortage on staff came unexpected, according to both <br />
participants. <br />
A moderator on the platform decides what questions go to which department. No real changes had to be made <br />
as a result of co-‐creation between the departments. “Our internal communication was already above average, <br />
and it might have got even slightly better. But it’s too much to call that a direct result of co-‐creation. […] There <br />
were no rigorous changes as a result of co-‐creation. There has been a growing number of cooperation between <br />
departments, but I think that is simply our culture and the structure of our organization” the product manager <br />
explains. Company E holds a weekly meeting for the employees that are directly involved in the co-‐creation <br />
project to discuss its progress. Considering the parties that were involved externally, these are all Company E’s <br />
consumers – no selection was made here. <br />
Used types of co-‐creation <br />
The interviewees said to use only one of the four types of co-‐creation: ‘Crowd of People’. In a period of about <br />
two years, Company E prepared itself for co-‐creating with its customers by building an online platform. The <br />
platform is open to any of its customers, a product manager explains: “We started by sending 50.000 of our <br />
clients a postcard, asking them if they wanted to join us to think about our products and ways to improve our <br />
service -‐ about 2200 joined the platform, and each week we have about 40 new participants who join us.” <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Although the platform was open to every customer of Company E, the ownership of the results was directed <br />
immediately to the organization itself. Participants of the platform knew that they would not receive any direct <br />
reward for their efforts, but the interviewees felt that it was sometimes difficult to explain to customers that <br />
not every idea that was put on the platform, was also going to be realized: “They often think that when we’ve <br />
said to bring one of the ideas to life, it will be working within a week, or within a few months. That is not always <br />
possible, and that is sometimes hard to explain”. Figure 4.9 summarizes the results of this section. <br />
Figure 4.9 | Company E: purpose, scope, involved parties and types of co-creation<br />
Openness<br />
Crowd of People:<br />
Purpose: Testing new and existing services/<br />
generating new ideas<br />
Scope: Fixed/open<br />
Internal: Marketing, customer care, helpdesk,<br />
public affairs, technical staff<br />
External: All customers<br />
Community of Kindred Spirits:<br />
not used<br />
Club of Experts:<br />
not used<br />
Coalition of Parties:<br />
not used<br />
Ownership<br />
Co-‐creation in the NPD-‐process <br />
Company E introduced the platform they use for the purpose of reestablishing the involvedness and contact <br />
with their customers, to improve existing products/services and to generate new ones. Considering the NPD-process,<br />
two phases can be identified where co-‐creation contributes to Company E’s purposes. First, it can be <br />
used during the phase of idea generation: new ideas can easily be brought under the attention of Company E’s <br />
employees, and can at the same time be discussed by participants on the platform. Second, the platform can <br />
also be used during the development phase to test new and existing propositions. <br />
There are multiple criteria that are used to select ideas that are a result of co-‐creation. A selection of these <br />
criteria is provided by the online marketeer: the fit with Company E, the number of customers that will use it, <br />
the match with the company’s core values and what the expected returns will be. Next, an important criterion <br />
is the available capacity inside the organization, or in other words: are there people enough to realize the idea. <br />
”I think that if you are seriously setting up a co-‐creation platform, that you should sell ‘no’ to sixty to seventy <br />
percent of the ideas. Just because of the simple fact that customers are highly demanding, and also expect <br />
things to be customized to their needs”. Finally, as already mentioned at the measurement of results-‐section, <br />
ideas are discussed with the management team; that is the moment where the decision is made to continue <br />
with an idea or not. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Whenever Company E adopts an idea it is developed inside the organization. However, the online marketeer <br />
adds that this is also an important and distinct part of co-‐creation: “in the most ideal case, we start with an <br />
insight, and then we develop a concept around it. Then, we check with customers whether it is something they <br />
like, and if necessary, we improve the product or service until it is suitable for release”. Company E appeared to <br />
provide their stakeholders with extended feedback. “When co-‐creating with a customer, I also expect that we <br />
provide something in return to a customer. Not in the sense of giving presents or something like that, but by <br />
providing insights of Company E. […] What we give them in return, is that we provide them with an impression <br />
of how our organization works, and most of our customers find this already very valuable […] And we also let <br />
them know what happens to their ideas. So it is the fact that customers have a good relationship with our <br />
organization, what gives them a good feeling”. There are no financial compensations or whatsoever, and <br />
sometimes an answer to an idea might also just mean ‘no’, the online marketeer explains: “We just have to be <br />
honest, and I think that is one of the core concepts in co-‐creation: being transparent”. Explaining what ideas <br />
are useful and what ideas are less useful appears also to be important. Figure 4.10 illustrates how the platform <br />
that is used by Company E contributes in its NPD-‐process. <br />
Figure 4.10 | Company E: types of co-creation and purpose in the NPD-process<br />
Idea Selection:<br />
Management team/<br />
involved employees<br />
Themes<br />
Crowd of People:<br />
Idea Generation<br />
Developed<br />
internally<br />
Crowd of People:<br />
Testing/Feedback<br />
Idea generation Idea development Idea diffusion<br />
Results and measurement <br />
The participants honestly indicated that they had expected more concrete results, in terms of ideas they had <br />
not thought of themselves at the moment that the project started. This, however, was not the case: there were <br />
some new ideas that were the result of co-‐creation, but not as rigorous they would have expected in advance. <br />
An online helpdesk chat, adjusted invoices and ideas to reward loyal customers were among the results. On the <br />
other hand, they did manage to create a better relationship with the customer, as the product manager <br />
explains: “You don’t hear too many people about it, but co-‐creation proved to be a very good PR-‐tool. It <br />
improves customer loyalty. Starting by saying, “I want to improve my services”, companies suddenly found <br />
themselves improving the relationship with their customers”. The online marketeer also mentioned that <br />
although the generated ideas were not revolutionary, and often already discussed in the organization before <br />
the co-‐creation project started, co-‐creation helped in giving a higher priority to certain ideas. <br />
Looking at the measurement of the returns of co-‐creation, the product manager explained: “We have multiple <br />
themes, and customers can introduce their own ideas as well. Once a month, we have a meeting with the <br />
management team, where we discuss the best ideas customers provided us with. During that same meeting <br />
the decision is made to develop a number of those ideas – or not. So our MT knows every month what ideas <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
are being generated, and what the current situation is. And one thing that also helps is that we have positive <br />
results – but the most important thing is that we gain commitment in the MT to continue the project.” He <br />
added that it is also possible to build business cases around ideas, but that it takes time to measure these <br />
results. For example, the idea of an online helpdesk chat had to be developed, to be implemented, and only <br />
after a couple of months, results can be measured by looking at a decrease in traffic of the telephone-‐based <br />
helpdesk, the generated costs and accomplished savings. <br />
Encountered difficulties using co-‐creation <br />
The interviewees indicated three difficulties since Company E has started using co-‐creation. First, it appeared <br />
that customers sometimes expect their ideas to get realized right away – something that is not always possible <br />
when the people who are dedicated to the development of products and services also have other tasks and <br />
priorities. Second, Company E started the project mainly with the purpose of improving their services – but <br />
customers often interpret this as that Company E wants them to think of new services: “with this project, we <br />
aim at improving our services. Customers mostly want to talk about product development; they want to <br />
participate in designing new products, and develop new things. The problem is, that at this moment, we just <br />
are not ready to do this yet”, the online marketeer indicates. <br />
Although the problems that are stated above should be solvable by improving the communication towards <br />
customers, both interviewees also indicate that they simply not have enough people available to moderate all <br />
the answers. Available time and commitment are considered crucial for the success of co-‐creation. <br />
§ 4.2 CROSS-CASE ANALYSIS<br />
Using the same constructs as for the within-‐case analysis, a cross-‐case analysis is made involving all five <br />
organizations. This paragraph therefore analyzes, describes and interprets both the differences and the shared <br />
agreements between organizations in their use of co-‐creation. After a short discussion of the results across the <br />
organizations and the results that stand out <br />
Purpose and scope of co-‐creation <br />
During the within-‐case analysis, almost all organizations were found to have initiated more than one co-creation<br />
project; Company E was the only organization that focused on a single co-‐creation project. Two kinds <br />
of purposes could be distinguished: overall purposes -‐ such as reestablishing the connection with the consumer <br />
or increasing the speed of innovation -‐ and project-‐specific purposes that were of special interest to this <br />
research. One of the things that immediately stood out in the collected data is that all the organizations use co-creation<br />
– although not always for a primary purpose – for what they refer to as ‘idea generation’. In addition, <br />
two organizations used co-‐creation to test new concepts that had been developed inside the organization, <br />
and/or to test existing products or services with its target population. Further, co-‐creation is also quite often <br />
used by organizations to explore the possibilities for new strategic alliances or partnerships. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
One organization, Company D, used co-‐creation for a purpose that came quite unexpected at the beginning of <br />
this empirical research: internal co-‐creation. Where most organizations used co-‐creation for idea generation or <br />
testing purposes, Company D used it to consult its Ground Service employees by involving them in an online <br />
platform. Although one of the interviewees working at Company C mentioned the possibility to use co-‐creation <br />
as a way to stimulate innovation and process improvement from within the organization, Company D can be <br />
said to take in a quite unique position in the sample population. As one of its employees mentioned: <br />
“Sometimes, organizations take on such proportions that they can use crowd sourcing inside their own <br />
organization”. <br />
Considering the scope that was used in co-‐creation projects, this appears to be rather open at the stage of idea <br />
generation, and tends to become more focused once co-‐creation is used for testing purposes. This can be <br />
explained by marking that setting few boundaries might increase creativity among the participants, while at the <br />
same time providing little or more direction may also help not to wander from its original topic. Hence, when <br />
using co-‐creation for testing purposes, projects will automatically be provided with a more focused scope, as <br />
there already is some sort of developed concept or prototype. <br />
Involvement of internal and external parties <br />
All initiated projects – except the internal co-‐creation project of Company D – involved both internal and <br />
external parties. Considering the involvement of internal parties, the marketing department was a constant <br />
factor among all involved organizations: each organization involved its marketing department in at least one of <br />
its co-‐creation projects. The projects that did not involve the marketing department were often the ones that <br />
had the purpose of testing or seeking new strategic alliances/partnerships. In addition, next to marketing <br />
departments, innovation and development departments also turned out to be internal parties that were <br />
involved frequently in co-‐creation projects. Although an overlap in tasks between the marketing and innovation <br />
department was expected, they often appeared to have quite different tasks – and at the moments that an <br />
overlap between the two was indicated, this did not directly appear to be responsible for struggles between <br />
them. <br />
The involvement of other internal parties was often dependent on the context of the co-‐creation project. It <br />
appeared that not just every department/party inside an organization is involved in co-‐creation – there has to <br />
be a clear link between the content of the project and the tasks of the related department. Company A was the <br />
only organization that had a specific department that was specifically charged with the initiation and process <br />
management of co-‐creation projects – along with other innovation projects that were initiated in the <br />
organization. <br />
When comparing the involvement of external parties between the organizations, most of the organizations <br />
turned out to involve specific topic experts and/or thought leaders when co-‐creation projects had the purpose <br />
of idea generation. In addition, most of the organizations also involve lead-‐users in their projects when <br />
sourcing for new ideas – and often, these lead-‐users also turned out to be experts in a certain way. An example <br />
can be found at Company D: many of its involved topic experts were also people who happened to fly quite <br />
often -‐ attributing them with the role of heavy users at the same time. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Projects that were initiated for testing purposes often involved larger, more mainstream groups of users. No <br />
direct expertise on a certain topic or whatsoever was asked in a number of projects that had the purpose of <br />
testing new or existing products or services. The Internet and new forms of (digital) media appeared to play an <br />
important role here, making it rather easy for organizations to reach a large number of their customers. Finally, <br />
parties that were involved when seeking for new alliances or partnerships turned, both internally and <br />
externally, to be employed at higher management levels. Unfortunately, few information about these projects <br />
was available – most probably as a result of its potential strategic impact. <br />
Used types of co-‐creation <br />
When comparing the different types of co-‐creation that were used by the organizations, it immediately <br />
signifies that none of the participating organizations appeared to make use of the ‘Community of Kindred <br />
Spirits’, as illustrated in figure 4.11. Considering the fact that this type of co-‐creation is both open for anyone to <br />
join, and that its content is open for anyone to own, it may be that it is not directly suited for commercial <br />
activities. However, looking at the popularity of open source software -‐ one of the best examples of a <br />
successful ‘Community of Kindred Spirits’ -‐ there seems to be a clear potential for this kind of co-‐creation. <br />
Almost all involved organizations use more than one type of co-‐creation. Although different types of co-creation<br />
are often not used at the same time, they do appear to be used during the same project. <br />
Organizations mostly start co-‐creation projects by using the Club of Experts, moving towards the Crowd of <br />
People as the project develops into another stage. It is therein noticeable that although the level of openness <br />
tends to change – during the project, often more external parties get involved (or at least on a less selective <br />
basis) – the level of ownership remains the same. So, organizations do involve external parties in their NPD-processes,<br />
but at the same time protect their (newly gained) intellectual property by directly assigning its <br />
ownership to them selves. <br />
The ‘Club of Experts’ appears to be the most popular type of co-‐creation and is used by four organizations, all <br />
with the purpose of idea generation. Organizations appear to see a good combination in the generation of <br />
ideas with relatively small external parties consisting out of topic experts, thought leaders and lead-‐users. This <br />
may be combined with the ownership that remains preserved to the initiating party (i.e. the organization): <br />
every idea that results from the project, it will be the intellectual property of the organization, making the Club <br />
of Experts an interesting type of co-‐creation for the purpose of idea generation. <br />
Another popular type is the Crowd of People: three organizations indicated that they use or have used the <br />
project. While mostly used for testing purposes, the Crowd of People also seems to have the clear potential of <br />
functioning as a platform for internal co-‐creation projects. The Internet can be considered to be a highly <br />
important factor in its success, allowing organizations to connect with large groups of customers and/or <br />
employees. <br />
The Coalition of Parties was mostly used by relatively large organizations to seek for new alliances or <br />
partnerships. In two cases, Company C and Company D, it concerned projects that attempted to seek alliances <br />
or partnerships throughout their own value chain. Co-‐creation was here used to explore the possibilities for <br />
potential collaboration – either with direct suppliers (Company C) or with indirect suppliers (Company D). In <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
addition, it might also be used to seek for partnerships in fields where cooperation between two organizations <br />
might not be as obvious (Company A). <br />
Figure 4.11 | Types of co-creation among involved organizations<br />
Crowd of People<br />
Community of Kindred Spirits<br />
!<br />
!<br />
!<br />
Openness<br />
Club of Experts<br />
Coalition of Parties<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
Ownership<br />
Co-‐creation in the NPD-‐process <br />
Figure 4.12 on the next page shows a comparison of the different NPD-‐processes in the involved organizations. <br />
As already discussed in the previous sections, it immediately points out that all the organizations tend to use <br />
co-‐creation for the purpose of idea generation. However, this illustration also shows that all the involved <br />
organizations tend to do a form of research in the stage before involving external parties by using co-‐creation. <br />
This form of early research can be done in the way that Company A does, by using context mapping, or for <br />
example by letting a relatively small number of involved employees define a set of themes like in Company C. In <br />
either case, it may be clear that no organization uses co-‐creation with the scope of an entire greenfield by <br />
leaving the involved parties completely free in which direction they take. <br />
Next, all the involved organizations appeared to make a thorough selection of the generated ideas after the <br />
idea generation-‐phase. The exact way that these selections were made differs per organization: some use very <br />
tangible criteria such as predefined benchmarks, and others use a somewhat more ‘gut feeling’ approach. The <br />
importance of a clear scope for co-‐creation projects becomes more obvious when seeking for selection criteria <br />
and ways to communicate the follow-‐up of generated ideas towards participants of co-‐creation sessions. <br />
Considering the development phase, what immediately meets the eye is that most of the actual development <br />
of products and services is done internally – behind closed doors and without directly involving any external <br />
parties by using co-‐creation. There were no clear indications why the development of ‘openly’ generated ideas <br />
was done without direct involvement of the involved external participants. One of the possible reasons could <br />
be the lack of knowhow of externals or an organizations refusal to share information that is sensitive to <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
competition. Nevertheless, later on in the development phase of some organizations external parties were <br />
involved for testing purposes, using the Crowd of People in an online environment. <br />
Figure 4.12 | Overview of NPD-processes Company A-E<br />
Idea Selection:<br />
mangement/CPDdepartment<br />
!<br />
Context<br />
mapping<br />
Club of Experts:<br />
Idea Generation<br />
Internal development & diffusion phases<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
Idea Selection:<br />
Predefined benchmarks/<br />
OGSMT<br />
Crowd of People:<br />
Testing/evaluation<br />
!<br />
Market<br />
research<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Crowd of People:<br />
Testing campaigns<br />
Idea generation Idea development Idea diffusion<br />
Idea Selection:<br />
Match with defined<br />
themes / business line<br />
!<br />
Themes<br />
defined by<br />
employees<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
Crowd of People<br />
Idea Generation<br />
Idea Selection:<br />
Fit with business/<br />
departments<br />
Crowd of People<br />
Process improvement<br />
!<br />
Topic<br />
defined by<br />
employees<br />
Club of Experts:<br />
Idea Generation<br />
Internal development<br />
No co-creation used<br />
Idea generation Idea development Idea diffusion<br />
Idea Selection:<br />
Management team/<br />
involved employees<br />
!<br />
Themes<br />
Crowd of People:<br />
Idea Generation<br />
Developed<br />
internally<br />
Crowd of People:<br />
Testing/Feedback<br />
Idea generation Idea development Idea diffusion<br />
Noticeably, co-‐creation was only once used in the idea diffusion phase. Although it might be expected that <br />
marketing departments would find opportunities in using external parties for the diffusion of newly developed <br />
products and services, only Company B actively involved their customers when planning and designing their <br />
marketing campaign. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Regarding to the feedback that was provided to parties that were actively involved in a co-‐creation project, the <br />
results were dichotomous. One part of the organizations would ‘thank the participant for his or her <br />
contribution’ and would then move on in the process without further directly involving the customer. Another <br />
way of providing feedback was seen at Company D, where the involved interviewees were kind of proud about <br />
the way that participants received feedback and were involved afterwards. Considering the other interviewees, <br />
many of them saw plenty room of opportunity for (in their eyes necessary) improvements on the way their <br />
organization provided feedback to participants. As one of the interviewees of Company A mentioned: “We <br />
should cherish that our customers want to be involved in our organization”. <br />
Considering the entire NPD-‐process, some interviewees initiated the idea for installing something that might be <br />
referred to as ‘Co-‐creation Councils’, consisting of both internal and external parties of the organization. These <br />
councils should then be assigned with the budgets and time to constitute a core team of people to select and <br />
develop the co-‐created ideas outside the organization. This would then either be done by setting up incubator <br />
programs or by creating more traditional settings like corporate ventures. In addition, these would then also <br />
have to deal with the time-‐to-‐time evaluation of the development process, measuring and testing its progress <br />
and content. <br />
Results and measurement <br />
Discussing the results of co-‐creation, it quickly appeared that only few projects really delivered in terms of new <br />
products. Considering the fact that many of the co-‐creation projects were initiated for idea generation, the lack <br />
of results in terms of new products or services might imply that many of these co-‐creation projects failed. <br />
However, most interviewees explained that co-‐creation had contributed to the organization and their new <br />
product development processes in another way than simply by delivering complete products or services. <br />
Although new ideas were in fact generated during co-‐creation projects, these were often ideas that had earlier <br />
already been thought of by employees of the organization. Nevertheless, multiple interviewees indicated that <br />
because of the increased priority that was given to co-‐creation projects and their outcomes by higher <br />
management levels, co-‐creation functioned as a wheelbarrow for ideas, leveraging them towards a new level. <br />
In addition, customers were found to provide useful feedback on new ideas and on products or services that <br />
already existed. <br />
Next to these product-‐related results, co-‐creation also proved to be a new way of communicating between the <br />
organizations and its stakeholders. Several interviewees indicated that they felt co-‐creation ‘shook up’ the <br />
organization, directly involving employees with the people they really work for: their customers. In addition, <br />
co-‐creation appeared to be a strong PR-‐tool, enhancing the relationship between the organization and its <br />
customers. <br />
The actual measurement of the results of co-‐creation was more difficult than just telling what is results were. It <br />
is quite difficult to express the monetary value of new (unrealized) ideas, useful feedback and enhanced <br />
customer relations that were the result of co-‐creation. Organizations appeared to deal with this differently. <br />
Where some of them were actually still seeking for ways to measure results in terms of ‘return on investment’ <br />
by for example calculating what an ideas’ potential model would look like, other organizations made sure that <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
the results of the co-‐creation projects were distributed throughout the organization, automatically creating <br />
some form of supportive basis for its use. <br />
It can also be said that different types of co-‐creation also have a different type of measurability. Where the <br />
Club of Experts -‐mostly used for idea generation – has a quite difficult measurability of results, the Crowd of <br />
People can for example more easily be measured by looking at its degree of participation. In either way, <br />
interviewees also indicated that there were still ideas resulting of co-‐creation projects that yet remained <br />
undeveloped – highlighting its potential for the long term. <br />
Encountered difficulties using co-‐creation <br />
Before, during and after the NPD-‐process, there were several difficulties organizations encountered when using <br />
co-‐creation. Although not all of these difficulties could directly be found at every organization, it may be <br />
expected that they are applicable on multiple organizations. In total, seven difficulties were identified that <br />
organizations might face when using co-‐creation as illustrated by figure 4.13. <br />
• Commitment -‐ three factors can be distinguished that strongly affect the level of commitment co-creation<br />
projects can expect to receive: available budget, available time and the priority that is given <br />
to the project. <br />
First, the availability of time employees have for participation and dedication to co-‐creation projects <br />
can be separated in two types: the individual available time of each employee to be involved in the co-creation<br />
project, and the available time during the process to involve external parties. Co-‐creation <br />
cannot be done instantly or as something that is done in spare hours. <br />
Second, the available budget plays a crucial role. During the research, it appeared that when an <br />
organization suffers under financial stress, innovation projects – and among them co-‐creation – are <br />
under high pressure of cutting losses. <br />
Third, the level of priority that is given to the project by both employees and higher management <br />
levels, is relevant for its success. Especially when generated ideas do not directly fit in a certain <br />
business line, it still requires the responsibility and dedication of employees and management. As one <br />
of the interviewees remarked: “I think that co-‐creation should be implemented both top-‐down and <br />
bottom-‐up to become a real success”. <br />
• Organizational culture – even though the organizational culture will be one of the toughest things in <br />
the organization to change, it is crucial that it embraces co-‐creation. Although co-‐creation is largely <br />
influenced by other factors such as available time and available budget, co-‐creation must be <br />
embedded in -‐ as what some interviewees referred to as -‐ ‘the way of working’ – rather than <br />
considering it as another tool. <br />
• Organizational structure – co-‐creation requires flexibility and anticipation for the future. Most of the <br />
larger -‐and therefore often more hierarchical designed – organizations found it more difficult to <br />
translate co-‐created ideas into successful services. <br />
• External influences – the external environment of organizations appeared to be an important predictor <br />
for possible problems. Organizations that felt to be under high environmental pressure as a result of <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
intense competition, found themselves to be more defensive to everyone in the outside world, <br />
including external parties that are involved in co-‐creation. <br />
• Communication – although it may seem easy, the communication towards both employees and <br />
customers or other involved external parties is crucial. It can function as a glue in organizations to <br />
communicate successes of co-‐creation, to keep both employees and externals committed to the <br />
organization. <br />
Figure 4.13 | Encountered difficulties using co-creation<br />
Communication<br />
Commitment requires<br />
available...<br />
Organizational structure<br />
Time<br />
Budget<br />
Priority<br />
Organizational culture<br />
Environmental influences<br />
Table 4.1 on the next pages summarizes the results found in this cross-‐case analysis. After the analysis, <br />
description and interpretation of the collected empirical data in this chapter, Chapter 5 will be to compare <br />
these empirical results with the theoretical findings of the literature review in Chapter 2. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Table 4.1 <br />
Company <br />
A <br />
Company <br />
B <br />
Company <br />
C <br />
Purpose of co-creation<br />
<br />
Idea generation <br />
Searching for <br />
potential <br />
collaboration <br />
Idea Generation <br />
Testing/Fine-‐tuning <br />
products/services <br />
Project scope <br />
Varies <br />
dependent on <br />
project/session <br />
Explorative <br />
Sometimes <br />
open, <br />
sometimes <br />
focused <br />
Focused <br />
Involved internal <br />
parties <br />
Concept and <br />
Proposition <br />
Development, <br />
marketing, sales, <br />
technical and legal <br />
departments <br />
Concept and <br />
Proposition <br />
Development <br />
department <br />
Marketing, <br />
development, <br />
salespersons <br />
Marketing, <br />
development, <br />
communication <br />
Testing campaigns Focused Marketing, <br />
communication <br />
Idea Generation <br />
Seeking new <br />
partnerships/alliance<br />
s <br />
Focused, <br />
internally <br />
prepared <br />
Open, <br />
explorative <br />
IT, HR, Controlling, <br />
Marketing, relevant <br />
departments <br />
Relevant <br />
departments (higher <br />
management) <br />
Involved <br />
external parties <br />
Customers, <br />
potential <br />
customers and <br />
experts <br />
Consultancy <br />
agency <br />
Leading edge <br />
youngsters <br />
Mainstream <br />
youngsters, <br />
customers <br />
Mainstream <br />
youngsters, <br />
customers <br />
Experts, <br />
thought leaders <br />
Other <br />
organizations <br />
Used types of co-creation<br />
<br />
Club of Experts <br />
Coalition of Parties <br />
Club of Experts <br />
Crowd of People <br />
Crowd of People <br />
Club of Experts <br />
Coalition of Parties <br />
Co-‐creation <br />
in the NPD-process<br />
<br />
Idea <br />
generation <br />
phase <br />
Idea <br />
generation <br />
phase <br />
Idea <br />
Development <br />
phase <br />
Idea diffusion <br />
phase <br />
Idea <br />
generation <br />
phase <br />
Results and <br />
measurement <br />
Two concrete results + <br />
new customer insights. <br />
No financial <br />
measurement possible <br />
-‐ <br />
New ideas, some new <br />
products. Measurement <br />
through KPI’s <br />
Critical feedback <br />
Critical feedback <br />
Leverages ideas, more <br />
innovative image. <br />
Measurement: business <br />
models <br />
-‐ <br />
Encountered difficulties <br />
using co-‐creation <br />
Getting commitment, <br />
setting priority and dealing <br />
with company culture <br />
Budgets, timepressure, <br />
competition sensitive <br />
information, working <br />
towards constant <br />
involvement of customers <br />
Early involvement is <br />
difficult, culture (knowledge <br />
sharing not promoted) , <br />
problem with realization of <br />
ideas <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Table <br />
4.13 <br />
Company <br />
D <br />
Purpose of co-creation<br />
<br />
Project scope <br />
Involved internal <br />
parties <br />
Idea Generation Open Marketing, <br />
innovation <br />
Idea Generation Open Marketing, <br />
innovation <br />
Process <br />
improvement <br />
Focused <br />
Ground Services <br />
staff, innovation, HR <br />
Involved <br />
external parties <br />
Heavy users, <br />
experts, <br />
thought leaders <br />
Used types of co-creation<br />
<br />
Club of Experts <br />
Co-‐creation <br />
in the NPD-process<br />
<br />
Idea <br />
generation <br />
phase <br />
Heavy users Crowd of People Idea <br />
generation <br />
phase <br />
Results and <br />
measurement <br />
Eye opener. <br />
Measurement through <br />
degree of <br />
participation/controllers <br />
New ideas <br />
-‐ Crowd of People New ideas <br />
Encountered difficulties <br />
using co-‐creation <br />
Focus on operations, <br />
available budgets <br />
Company <br />
E <br />
Seeking new <br />
alliances within value <br />
chain <br />
Testing new and <br />
existing services/Idea <br />
generation (Crowd of <br />
People) <br />
Open, <br />
explorative <br />
Fixed <br />
(themes)/open <br />
Innovation <br />
Marketing, <br />
customer care, <br />
helpdesk, public <br />
affairs, technical <br />
staff <br />
Other <br />
organizations in <br />
the value chain <br />
Coalition of Parties <br />
All customers Crowd of People Idea <br />
generation <br />
phase/idea <br />
development <br />
phase <br />
Good PR tool, improved <br />
customer relationship. <br />
Measurement by MT <br />
and involved employees <br />
Communication through <br />
customers, available <br />
people, available time <br />
63
Master thesis Business Administration, Specialization: Strategy & Organization <br />
05<br />
Supervisor:<br />
DISCUSSION<br />
Prof. Dr. T. Elfring <br />
Introduction <br />
§ 5.1 | Purpose of co-‐creation <br />
§ 5.2 | Involvement of internal and external parties <br />
§ 5.3 | Used types of co-‐creation <br />
§ 5.4 | Co-‐creation in the NPD-‐process <br />
§ 5.5 | Results and measurement <br />
§ 5.6 | Encountered difficulties using co-‐creation <br />
Joost de Boer <br />
Student number 1517597 <br />
After discussing each individual case by analyzing the interviews with the involved participants and a cross-analysis<br />
between the involved organizations, this chapter discusses and interprets the empirical results of <br />
Chapter 4 together with the theoretical findings of the literature review in Chapter 2 by focusing on their main <br />
agreements and difficulties. Chapter 2 and Chapter 4 both started with a definition of co-‐creation – one <br />
drawing on theoretical data, the other on an empirical discussion. Hence, this chapter starts with a short <br />
discussion of these different definitions of co-‐creation, and how they complement each other. <br />
In Chapter 2, first a number of criteria were defined that differ co-‐creation from other concepts: (1) the place in <br />
the process, (2) the involved parties, (3) the reasons to involve those parties and (4) its purpose. It became <br />
clear that according to scholars, co-‐creation is used from the beginning of the innovation process by involving <br />
customers as an active collaborator to suggest ideas and or/share their consumption experiences. In addition, <br />
co-‐creation was mostly considered as a feedback dynamic of creativity between producers and customers. <br />
Next, in Chapter 4 the definitions provided by interviewees were discussed, resulting in the following <br />
description: co-‐creation is the “involvement of stakeholders at a certain moment in time by creating a dialogue <br />
about organizational processes or topics together with the organization, in order to create a shared added <br />
value”. <br />
When comparing both definitions, a number of differences are noticeable. First, regarding to the place in the <br />
process that co-‐creation is used, Kristensson et al. (2008) refer to the beginning of the innovation process, as <br />
interviewees talk about ‘a certain moment in time’ – allowing co-‐creation to be introduced at any given stage in <br />
the innovation process. Next, referring to the parties that are involved, the empirical data broadens the <br />
theoretical scope by not just involving customers, but stakeholders in co-‐creation-‐ along with people in the <br />
organization. Finally, the reasons for involvement are according to the interviewees ‘to create a shared added <br />
value, by creating a dialogue between different parties’ – here, Potts et al. (2008) refer to its use as a feedback <br />
dynamic of creativity between producers and customers. <br />
Although there appear to be differences in the views that interviewees and scholars embrace, they do not <br />
directly exclude one another. It is rather the level of interpretation and value that is imputed to co-‐creation <br />
that eventually explain for its use. The technological developments that increased over time allow <br />
organizations even more to do so. Integrating all these findings, a general concept called co-‐creation arises. <br />
Therefore, it is probably best not to let semantic discussions dominate the research on co-‐creation. The <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
equivalent, collaborative nature between organizations and their stakeholders, their pursuit for shared value, <br />
along with the multi-‐sided applicability in the innovation process are mostly distinctive factors when comparing <br />
it with other and earlier forms of collaboration and customer involvement. <br />
§ 5.1 PURPOSE OF CO-CREATION<br />
Key findings: two new purposes were identified that were not yet mentioned in co-‐creation literature: the <br />
sourcing for potential alliances inside and outside the value chain, and the internal use of co-‐creation among <br />
employees. <br />
Considering the purpose of co-‐creation and its use within organizations, the literature in Chapter 2 refers to <br />
two fields: marketing and innovation. Two emerging paradigms were found that elaborate for its use: <br />
marketing literature uses the service-‐dominant logic (Vargo & Lusch, 2004), while innovation literature <br />
emphasizes its use from the perspective of open innovation (Chesbrough, 2003). The empirical research found <br />
support for the use of co-‐creation by organizations for both these purposes; however, two additional purposes <br />
were found in the empirical research that had not been mentioned in literature on marketing, innovation or co-creation<br />
itself. <br />
Firstly, the three largest organizations in the research used the Coalition of Parties in to search for potential <br />
strategic alliances or partnerships with other organizations both inside and outside their direct value chain. <br />
Although the involved participants referred to this as co-‐creation, the sourcing for potential partnerships with <br />
other organizations shows many similarities with concepts such as joint venturing and strategic alliances that <br />
are broadly discussed in existing management literature. Further research should point out whether the use of <br />
this form of co-‐creation really is different from traditional joint venture and alliance literature, or that it is just <br />
another name for something that has been around for a long time. <br />
Secondly, co-‐creation was also used by one organization to improve its operational processes together with its <br />
employees. Interviewees argued that when organizations become larger, it becomes possible to use co-creation<br />
as a way of collaboration inside the organization. In addition, other organizations also mentioned this <br />
potential use, but had not been using it themselves. Although the available literature did not mention the use <br />
of co-‐creation for internal purposes such as process improvement, it can be argued that the sense of dialogue <br />
and the use of online tools makes co-‐creation a highly suitable way for collaborative creation in the <br />
organization itself. Here again, additional research is needed to explore the opportunities of using co-‐creation <br />
for this purpose. <br />
§ 5.2 INVOLVEMENT OF INTERNAL AND EXTERNAL PARTIES<br />
Key findings: although difficulties in cooperation between different departments inside the organization were <br />
expected, almost none were found. However, there did appear to be problems when responsibility had to be <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
taken in the further development of co-‐created concepts. Next, when considering the parties that are involved in <br />
co-‐creation, it became clear that it is better to speak of ‘stakeholders’ rather than just ‘customers’. <br />
Internal parties: difficulties in realization, not in collaboration <br />
Based on the results of the literature review: (1) the internally involved parties were expected to be mostly the <br />
marketing-‐ and innovation departments of organizations, and (2) the existence of specialist cultures (Goold & <br />
Campbell, 2002) among those departments was expected to provide difficulties, as each department in an <br />
organization has its own expertise, responsibilities and focus. <br />
When comparing the results of the literature review with the empirical findings, firstly, marketing and <br />
innovation departments indeed proved to be the parties that were internally most involved in co-‐creation <br />
processes. However, often other departments would be involved as well – mostly departments that had a clear <br />
affinity with the involved topic of the co-‐creation project. Although expected, there were no direct signals of <br />
problems in the cooperation between the departments. Often, marketing and innovation would have their own <br />
scope and responsibilities without directly experiencing difficulties. <br />
However, it was found that in several organizations problems rose after the use of co-‐creation: once co-‐created <br />
ideas or concepts had to be developed, it was often not clear who, or which department, would be responsible <br />
for the development of the generated content. Especially when generated ideas did not directly fit into one of <br />
the existing business lines of the organization, there would be no direct party taking the responsibility and the <br />
risks of developing one of the generated ideas – eventually leaving the idea for what it was. Although this <br />
problem was not directly accounted for in co-‐creation literature, the open innovation paradigm argues that <br />
organizations should consider to spin-‐off ideas whenever there is no direct fit or support from within the <br />
organizations and/or its core capabilities. Other solutions may be found in making the involved parties (both <br />
internal and external) in the co-‐creation project directly responsible for the development of the generated <br />
outcomes. <br />
External parties: stakeholders rather than customers <br />
Referring to the external involved parties, scholars mostly elaborated on the involvement of lead-‐users in co-creation<br />
processes, later complemented by ‘average’ users to evaluate and test the ideas that were generated <br />
by lead-‐users. Only few other scholars spoke about stakeholders instead of merely referring to customers. <br />
When analyzing the empirical data, it appeared that most organizations indeed involved lead-‐users in their co-creation<br />
projects – however, these lead-‐users were most of the time involved together with topic experts and <br />
thought leaders. The ‘average’ or ‘mainstream’ consumers that in literature were dictated the role of testing <br />
and evaluating, sometimes also appeared to be used to generate new ideas: it signals an overlap between lead-users<br />
and ‘mainstream’ customers and their role in the co-‐creation process. This is different from Von Hippel’s <br />
(1986) assumption that mainstream customers are singularly involved for analyzing and testing purposes, and <br />
can most probably be explained by the technological developments that allow initiators to process and select a <br />
larger number of generated ideas. <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Referring to the involvement of not just customers but mostly stakeholders in co-‐creation projects, it was <br />
already shortly discussed that some organizations mentioned the involvement of employees in co-‐creation <br />
projects instead of customers. In addition, co-‐creation was also used to source for potential collaborative <br />
opportunities with other organizations inside and outside the value chain, mostly involving higher management <br />
levels. Hence, where most of the theory only refers to the involvement of customers in co-‐creation projects, it <br />
can now be stated that it is better to refer to the involvement of ‘stakeholders’. Considering the importance of <br />
dialogue in the concept of co-‐creation and the multiple purposes it can be used for, co-‐creation allows <br />
organizations to involve far more parties than just customers. <br />
§ 5.3 USED TYPES OF CO-CREATION<br />
Key findings: no use was made of the Community of Kindred Spirits. In addition, one new type of co-‐creation <br />
was identified unexpectedly: internal co-‐creation. <br />
Co-‐creation literature roughly distinguishes two dimensions that can be used to differentiate between different <br />
types of co-‐creation: openness and ownership. While the ‘openness’ describes the level of accessibility of the <br />
project for participants (selection vs. no or few selection), the ‘ownership’ dimension refers to the ownership of <br />
the content and the intellectual property that was generated in the co-‐creation project. Four types of co-creation<br />
were identified: Club of Experts, Crowd of People, Coalition of Parties and the Community of Kindred <br />
Spirits. Combined with the empirical results, two interesting observations can be made. <br />
First, the empirical research showed that the ‘Community of Kindred Spirits’ was not used by any organization. <br />
It may be assumed that this type of co-‐creation is mostly suitable for non-‐profit purposes such as open source <br />
software. These communities are open to anyone, and its generated content is owned by anyone, making it <br />
less attractive for commercial activities. However, it might also prove to be an opportunity for organizations to <br />
engage in a dialogue or cooperation with other parties beyond their direct interests, discussing topics like <br />
sustainability. <br />
Second, although the four types proved to be able to distinguish different types out of several co-‐creation <br />
projects, there also appeared to be a shortcoming in the model: the use of co-‐creation for internal purposes <br />
was not explicitly mentioned at all. It might be that this kind of co-‐creation proves to be a good example of the <br />
Community of Kindred Spirits, as it is open to and owned by everyone in the same organization. However, <br />
several other types of co-‐creation might also be used for internal co-‐creation, such as the Club of Experts or the <br />
Crowd of People. <br />
Herein, two perspectives can be identified: one that accounts for a hybrid form of internal co-‐creation – <br />
allowing for the use of all four types while emphasizing that there is no difference between co-‐creation for <br />
internal or ‘external’ purposes. The second scenario then holds that internal co-‐creation is a new, unique type <br />
that should be used different from the other four types that organizations are already familiar with. Either way, <br />
it is a subject that should receive increased attention as multiple interviewees praised the connective and <br />
collaborative nature of co-‐creation. <br />
67
Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
§ 5.4 CO-CREATION IN THE NPD-PROCESS<br />
Comparing the results of the literature review and the empirical section of this research, it appeared that the <br />
use of co-‐creation affected the traditional new product development process. The main differences between <br />
theory and practice of each specific phase in the NPD-‐process are presented here, along with an overview of <br />
the potential influences the introduction of co-‐creation might have. <br />
Idea generation phase: choosing for an open or narrow scope <br />
Considering the use of co-‐creation in the idea generation process, organizations aimed to involve external <br />
parties, mostly in the form of topic experts and lead users. Enkel et al. (2005) mentioned however that <br />
considering the involvements of customers, organizations should “involve customers as early as necessary, but <br />
as late as possible”, pointing at the potential risks of customer involvement. Before involving any other external <br />
parties, organizations often did thorough market research, not only by using traditional market research <br />
methods, but also by using new methods such as context mapping in order to set a certain scope for co-creation<br />
projects. <br />
One important thing that was found during the stage of idea generation, was the scope that projects were <br />
initiated with. Some organizations aimed at using idea generation as a greenfield, providing none to few <br />
directions to the external involved parties; others made sure that initiated projects had a clear scope for the <br />
participants, pointing them in a certain direction. Hence, there is a trade-‐off to be made between ensuring <br />
creativity and the direct usability of generated ideas. No direct clues were found in the involved literature that <br />
explicitly discussed the decision for using an open or narrow scope in this phase. Therefore, one of the <br />
contributions of this research in the phase of idea generation is that it is not only important when external <br />
parties are involved, but also to consider the degree of freedom they are left with during their involvement. <br />
Selection of ideas: making inbound and outbound innovation decisions together with externals <br />
Deriving from the open innovation paradigm, organizations are encouraged to engage themselves in a <br />
continuous process of sourcing for both inbound and outbound opportunities (Chesbrough, 2003; Grönlund, <br />
2010); this also includes the selection of generated ideas. However, almost none of the involved organizations <br />
were found to make a deliberate consideration whether ideas should be developed internally or externally. It <br />
can here be said that the open innovation literature here is ahead of what is actually done in practice. <br />
In addition, organizations more or less internally evaluated and selected the input retrieved from the co-created<br />
idea generation phase, without the involvement of externals. Organizations here often chose ideas <br />
that had the highest potential to become a success on the market once introduced, as they are aware how well <br />
an idea matches the organizations capabilities, ignoring ideas that have great potential but are more complex <br />
to realize. Organizations might consider involving external parties in this selection process, but will then also <br />
face the challenge of providing these parties access to information in order to improve their quality of decision-making<br />
(Prahalad & Ramaswamy, 2004b). <br />
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Joost de Boer <br />
Student number 1517597 <br />
Idea development phase: development often largely remains a ‘black box’ <br />
The actual development of ideas that were co-‐created in the previous phase still remains something that is <br />
strictly done by people inside the organization – without the involvement of externals. Although this can be <br />
defended referring to the complexity of the product or service and the knowhow that is needed in order to <br />
develop an idea, this also carries the risk of alienating from the original co-‐created idea. According to the <br />
literature review, scholars mention the involvement of external parties in the development phase, but do not <br />
emphasize its importance. In contrary, scholars underwriting the service-‐dominant logic refer to a continuous <br />
process of customer involvement, including during the development phase. <br />
Further on in the development phase, co-‐creation was often used as a way to test or evaluate the developed <br />
idea. Hereby, often by using the Crowd of People, more ‘mainstream’ customers were involved in a more <br />
mature phase of the development process. Using the feedback of these externals, the concept could be <br />
adjusted and tweaked, until it met the expectations of its audience – which is largely in correspondence with <br />
co-‐creation and lead-‐user theory (Nambisan & Nambisan, 2008; Von Hippel, 1986). It should here, however, be <br />
noted that involving external parties earlier in the development phase might lead to fewer necessary <br />
adaptations in the tested product. <br />
Idea diffusion phase: lack of use of relationship with the customer <br />
In the theoretical section, it was argued by Rust et al. (2010) that organizations should shift their focus from <br />
being transaction driven towards customer lifetime value. In addition, customers who are involved with the <br />
organization and its products or services are expected to become more loyal to the organization. The service-dominant<br />
logic emphasizes the dialogue and ‘market with’ instead of promotion and ‘to market’ when <br />
launching a product (Vargo & Lusch, 2006). <br />
Although the involved organizations mentioned to use co-‐creation with the overall-‐purpose of getting a better <br />
relationship with their customers, only one organization involved its customers in the idea diffusion phase. All <br />
the organizations mentioned that their customers were pleased to co-‐create together with the organization, <br />
but also indicated that the feedback that was provided to their external participants at the end of the co-creation<br />
project left room for improvement. Considering this difference between theory and practice, it may be <br />
expected that the improved relationship between the organization and its customers result in a higher loyalty <br />
and involvement with products once they are ready for diffusion – emphasizing the potential benefit for <br />
organizations when involving external parties within their marketing process. <br />
The adoption of co-‐creation in the NPD-‐process requires a change in the status quo of traditional innovation <br />
and marketing processes. Involving external parties has an impact on the way things are done in the <br />
organizations, and on the way decisions are made. Figure 5.1 summarizes the findings of this paragraph, <br />
indicating the impact that co-‐creation has during the multiple phases of the NPD-‐process. <br />
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Joost de Boer <br />
Student number 1517597 <br />
Figure 5.1 | Potential impacts on traditional NPD-processes<br />
Preparing for customer<br />
involvement:<br />
- market research<br />
- context mapping<br />
- other techniques<br />
Choosing open/<br />
narrow scope in cocreation<br />
projects<br />
Selection of ideas:<br />
- inbound and outbound<br />
decisions<br />
- involving external<br />
parties in decision<br />
making<br />
Opening up the ‘black box’ of<br />
idea development<br />
Embracing marketing<br />
opportunities by<br />
involving customers in<br />
product launch/<br />
marketing<br />
Idea generation Idea development Idea diffusion<br />
§ 5.5 RESULTS AND MEASUREMENT<br />
Key findings: low measureability complicates the usability of co-‐creation <br />
Obviously, there were no theoretical foundations considering the exact results of co-‐creation. The <br />
organizations involved in the empirical section of this research indicated that co-‐creation resulted in a small <br />
number of new products or services. In addition, interviewees mostly mentioned the positive effects co-creation<br />
had on the relationship between the organization and its customers, and the increased awareness of <br />
employees in the organization by bringing them closer to the customer and their needs. <br />
Considering the measurement and measurability of co-‐creation, some organizations would attempt to measure <br />
its results by estimating how the business case of newly generated ideas would look like; others would use a <br />
more ‘soft’ approach of measuring ideas. In the theoretical section of this research, Gummesson (2004) plead <br />
for the use of ‘Return on Relationship’ (RoR) as a result for the measure ‘Return on Investment’ (RoI). No <br />
indications were found for its use yet – if organizations manage to craft this RoR into a tool that makes accurate <br />
predictions of the returns of co-‐creation, it might actually have a potential for marketing and innovation <br />
departments. <br />
However, until this far there are no known revolutionary products or services that were the direct result of co-creation.<br />
Although co-‐creation may have already resulted in an improved relationship with the customer, <br />
helped to raise new and usable insights in customers’ needs, and might also have actually brought new <br />
products or services, organizations are still commercial institutions. Taking the potential efforts and costs when <br />
seriously aiming to adopt co-‐creation in the organization’s processes as illustrated in the previous sections, <br />
critical notes should be placed at the costs that co-‐creation brings when compared with the benefits. <br />
On the contrary, co-‐creation will require certain changes in the organization to work properly. In order to have <br />
a useful discussion on the costs and benefits of co-‐creation, clear methods of measurement will have to be <br />
developed. In this case, it probably requires a special, adopted chicken to produce golden eggs. The next <br />
paragraph discusses the problems organizations encountered in their use of co-‐creation. <br />
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Joost de Boer <br />
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§ 5.6 ENCOUNTERED DIFFICULTIES USING CO-CREATION<br />
Although the previous paragraphs of this chapter have already indicated several difficulties that organizations <br />
encountered during their use of co-‐creation, there appeared to be certain difficulties that could not directly be <br />
directed to a particular phase in the process. No direct links were found between the difficulties that were <br />
encountered in practice and the ones used in the literature, but it can be expected that almost all organizations <br />
using co-‐creation will find these difficulties on their path. Chapter 4 already identified seven difficulties: <br />
availability of time, budget constraints, organizational culture, organizational structure, commitment, external <br />
influences and communication. <br />
One important problem that is discussed in the literature is the not-‐invented-‐here syndrome; this describes the <br />
risk of ideas from the outside being rejected by people inside the organization. Although none of the empirical <br />
research directly indicated problems relating to the NIH-‐syndrome, a connection here can be seen with the <br />
problem when co-‐created ideas do not directly fit into the business line. This shows that the culture in <br />
organizations may highly be related to the amount of commitment that is given to co-‐creation. Hence, future <br />
research should find out how these encountered difficulties exactly relate to co-‐creation, in what way they are <br />
specifically related to co-‐creation and how they can be overcome. <br />
Drawing from the main theoretical and empirical results of this research, this chapter discussed the most <br />
important empirical findings and how they relate to theory that was used in the literature review of Chapter 2. <br />
The next chapter, Chapter 6, concludes this research by providing an answer to the research question and the <br />
stated sub questions, and explaining for the implications, limitations and recommendations for future research. <br />
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06<br />
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CONCLUSION<br />
Prof. Dr. T. Elfring <br />
Introduction <br />
§ 6.1 | Conclusion <br />
§ 6.2 | Practical and theoretical implications <br />
§ 6.3 | Limitations <br />
§ 6.4 | Recommendations for future research <br />
Joost de Boer <br />
Student number 1517597 <br />
After the literature review, an empirical case study and a discussion where both theory and practice were <br />
compared, this chapter offers the concluding remarks of this research. After presenting the conclusions, the <br />
practical and theoretical implications of this research are discussed. Next, the limitations and <br />
recommendations for future research are presented. <br />
§ 6.1 CONCLUSION<br />
This research was initiated from the observation that co-‐creation has received an increased amount of <br />
attention in the past few years. However, it was found that although despite its increased popularity, still few <br />
was known about the possible implications co-‐creation would have on the way that organizations shape their <br />
innovation and marketing processes. Being especially interested in the use of co-‐creation in the process of new <br />
product development, this research aimed to find out at what moment and for what purpose different types of <br />
co-‐creation were used, and which parties would be involved in each phase of the NPD-‐process. <br />
Therefore, the following research question was formulated: <br />
“How is co-‐creation used in the innovation and marketing New Product Development-‐processes of <br />
service-‐based organizations?” <br />
First, it appeared that there is no single or ‘right’ definition of co-‐creation. Almost every person will describe <br />
the concept differently; something that has a direct effect on the way that co-‐creation is used. A number of <br />
indicators were identified that distinguish co-‐creation from other relating concepts in combination with the <br />
process of new product development: the purpose of the project, the parties that are involved, the type of co-creation<br />
that is used and finally also the place in the NPD-‐process. These indicators are on their turn strongly <br />
dependent on the way that organizations choose to use them. <br />
Considering the reasons that made organizations to adopt co-‐creation in their organizations, it appeared that <br />
this was mostly done for the purposes of idea generation (early in the NPD-‐process) and for testing/evaluation <br />
(further on in the NPD-‐process). In addition, the main reasons for organizations to start co-‐creating with their <br />
customers was to increase their relationship and to get better insights of customers actual needs. Another <br />
reason also appeared to become more innovative, or at least to create a more innovative image. <br />
Regarding to the involvement of parties in co-‐creation projects, a separation could be made between parties <br />
inside and outside the boundaries of the organization. The internally involved parties often consisted of <br />
employees from the marketing and innovation department, although other departments that had affinity with <br />
the topic of the project would often also be involved. Even though it was expected that the cooperation <br />
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Joost de Boer <br />
Student number 1517597 <br />
between different departments would experience difficulties as a result of the intense cooperation co-‐creation <br />
demands, none of the interviewees indicated real problems here. However, the transition from ideas to the <br />
development of concepts turned out to be a crucial point; newly generated ideas had to match certain <br />
business-‐line criteria in order to get adopted in a specific business line – otherwise, none of the involved <br />
departments would not feel responsible for its development. <br />
Considering the involvement of external parties, organizations often involved lead-‐users, topic experts and <br />
thought leaders in the idea generation process. In addition, the more ‘mainstream’ customer would be <br />
involved for testing and/or evaluation purposes. Organizations did not limit themselves by just involving <br />
customers: a large share of them focused on involving ‘stakeholders’ instead. Stakeholders could hereby mean <br />
anyone who has any relation with the organization, from employees to people from the government. <br />
Four types of co-‐creation can be distinguished: Club of Experts, Crowd of People, Coalition of Parties and the <br />
Community of Kindred Spirits. These four types were distinguished using two dimensions: openness and <br />
ownership. Openness refers to the accessibility of the co-‐creation projects (i.e. who are asked to participate), <br />
where ownership refers to the party that was assigned the ownership of the generated content (i.e. just the <br />
initiator or also the other participants). Next to the purposes of idea generation and testing/evaluation, co-creation<br />
appeared also to be used to source for new (strategic) alliances and partnerships inside and outside <br />
the value chain, and for internal co-‐creation, where employees rather than external parties were involved. <br />
Combining the purposes of co-‐creation with the types that were used, it became clear that when co-‐creation is <br />
used for idea generation, this is mostly done using the Club of Experts. In addition, when aiming to involve <br />
external parties mostly for the purpose of testing or evaluating new and/or existing products and/or services, <br />
organizations used the Crowd of People – the Coalition of Parties was used for exploring the possibilities for <br />
future alliances and partnerships. Hence, internal co-‐creation was found to use multiple types of co-‐creation, <br />
although it can also be argued that this is a new, fifth type not directly fitting the openness/ownership criteria. <br />
During the entire empirical research, several problems and difficulties were found that organizations <br />
encountered in their use of co-‐creation. These difficulties mainly considered gaining commitment form <br />
employees and management – mostly influenced by the available time, budget and priority for the use of co-creation.<br />
In addition, the organizations’ culture and structure were found to play an important role, mostly <br />
starting at the phase of idea development. External influences such as nature of the industry of the <br />
organization also may be an indicator for the difficulty of using co-‐creation. Finally, communication appeared to <br />
play a crucial role in the process: no matter what the outcomes of co-‐creation are, it is of the highest <br />
importance to communicate them – both inside and outside the company. <br />
§ 6.2 THEORETICAL AND PRACTICAL IMPLICATIONS<br />
Theoretical implications <br />
The findings presented in this research have several theoretical implications. First, it is one of the first to <br />
combine marketing and innovation theories by integrating them into the process of New Product <br />
Development. The two main paradigms that were addressed, open innovation and the service-‐dominant logic, <br />
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Joost de Boer <br />
Student number 1517597 <br />
were used to investigate the use of co-‐creation in organizations. It proved that these paradigms both provide <br />
powerful perspectives in the use of co-‐creation in the process of New Product Development. Considering the <br />
collaborative nature of co-‐creation, marketing and innovation departments in organizations appear to have <br />
both a unique role in the process and at the same time also multiple overlaps. <br />
Next, a combination has been made between the purposes of co-‐creation, the involved internal and external <br />
parties and the types of co-‐creation that are used by organizations. It became clearer that each type of co-creation<br />
suits different purposes, and in its turn involves different parties. Although these three factors are not <br />
new to co-‐creation literature, the combination of the three is. Apparently, there is not just one definition of co-creation<br />
that explains for its use in organizations: it is dependent on how these multiple factors are filled in by <br />
the organization during the process. One other important finding was that organizations also make use of co-creation<br />
internally, as a way to involve their employees in the processes of the organization itself. <br />
After identifying these three factors of importance, it became possible to make an outline of the NPD-‐process, <br />
using the (open) stage-‐gate model that has been of use by organizations for a long time now. By using three <br />
separate phases in the NPD-‐process, idea generation, idea development and idea diffusion, it became possible <br />
to illustrate the different ways that different types of co-‐creation are used. <br />
The strength of the integrated view of co-‐creation in the NPD-‐process is that it became apparent that using co-creation<br />
in a serious way does not come easy. Where organizations might already find difficulties when using <br />
open innovation as a new way of sourcing for new or improved capabilities, co-‐creation adds a few more <br />
difficulties by not just suggesting organizations to look outside, but also to bring the outside in. It appeared that <br />
organizations have a certain organizational comfort zone, suggesting the incremental nature of integrating co-creation<br />
in organizations. Finally, seven difficulties were identified that had not been directly related to the use <br />
of co-‐creation: available time, budget constrains, organizational culture, commitment, external influences and <br />
communication. <br />
Practical implications <br />
Next to the theoretical implications, this research also has a number of implications on a more practical level. <br />
First, it showed that there are numerous factors to account for and to deal with when organizations start using <br />
co-‐creation. This research may contribute to managers that are struggling with issues such as how to start co-creating,<br />
who to involve, and what type of co-‐creation to choose from. The results of both the theoretical and <br />
especially the empirical section of the research provide managers with an overview with the different options <br />
they will have to choose from. <br />
However, the list of offered options is not complete at all – as already indicated, there is a numerous amount of <br />
things that have to be taken into account when adopting co-‐creation. It basically starts with knowing what you <br />
want: setting a clear target and providing clear scope and focus to the co-‐creation project is probably the most <br />
important first step. When doing this in a realistic and well over thought way prevents organizations from <br />
having measurement problems and being disappointed in the results of co-‐creation. Having realistic <br />
expectations and not being afraid to engage a dialogue with whomever outside the organization are key for the <br />
success of co-‐creation. <br />
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Student number 1517597 <br />
Next, this research identified several difficulties other organizations found on their way when embedding co-creation<br />
in their NPD-‐processes. These difficulties should, however, not be considered as problems that cannot <br />
be overcome, but rather as opportunities. Knowing that these problems may arise, managers may actually be <br />
prepared when adopting co-‐creation, lowering the possibility of failure of co-‐creation. Finally, one of the <br />
interviewees might have said it in the most striking way possible: “just do it: you will only learn if you try”. <br />
§ 6.3 LIMITATIONS<br />
Although this research was designed in such a way that the research results would be both reliable and valid, <br />
there are a few limitations that should be mentioned. Firstly, the empirical research focused mainly on service-based<br />
organizations. Therefore, the results may not be generalized for all organizations; future research should <br />
point out what possible differences there are between service-‐based and product-‐based organizations <br />
considering the use of co-‐creation. <br />
Secondly, the research only involved employees of the involved organizations. None of their external <br />
participants were interviewed, although the experiences of external involved parties are even important as the <br />
experiences of internal involved parties. In addition, no data was available about what effect the use of co-creation<br />
actually had on the relationship between customers and the organizations. Such data may be collected <br />
by quantitatively analyzing customer satisfaction research and/or by involving methods such as the Net <br />
Promotor Score (NPS). <br />
Thirdly, it was mostly top management that appeared to be responsible for sourcing potential strategic <br />
alliances or partnerships using the Coalition of Parties. Although several managers of these organizations were <br />
interviewed, this type of co-‐creation should probably be investigated by adding interviews with top <br />
management. In addition, the other types of co-‐creation also implied to involve different departments, <br />
dependent on the topic of the project. No employees of other departments were interviewed in this research, <br />
leaving this an unexplored field of attention. <br />
§ 6.4 RECOMMENDATIONS FOR FUTURE RESEARCH<br />
Throughout this research, several fields in co-‐creation literature were found to be unexplored – mostly as a <br />
result of the fact that co-‐creation is a relatively new topic in marketing and innovation literature. Hence, <br />
several recommendations were identified that deserve more attention. Firstly, one of the findings was the use <br />
of internal co-‐creation. This field yet remains unexplored, and might future as an emerging method for <br />
communication, value creation and process improvement in especially large organizations. <br />
Next, the size of organizations may also have an effect on the use of co-‐creation. Not only when exploring the <br />
potential of internal co-‐creation, but also the different ways of using co-‐creation may be largely influenced by <br />
the number of employees and the number of counties an organization operates in. As small organizations <br />
might have shorter lines of communication, this might also imply the ability to act more dynamically to ideas <br />
that are generated inside and outside the organization. <br />
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In accordance with the size of organizations, one of the implications found was that co-‐creation needs to be <br />
embedded in organizations in order to function properly. One of the problems that emerged during the process <br />
was the ability of organizations to develop co-‐created ideas that do not directly match the core capabilities of <br />
the organization, and therefore tend to remain unused. The use of corporate venturing and incubators that <br />
stimulate organizational intrapreneurship and development of new ideas may prove to be a good solution in <br />
working around organizational cultures and risk-‐averse management. <br />
Finally, the issue of intellectual property in combination with open innovation and especially co-‐creation are a <br />
field that are in a high need of attention. During the research, organizations were found to be somewhat <br />
protective considering sharing information, and involving external parties in their innovation process. The <br />
question assigning the ownership of co-‐created ideas is one that will not be answered quickly. Yet, it is a crucial <br />
part of the co-‐creation process and touches the very fundaments of the organization and its innovation <br />
strategies. <br />
For now, these recommendations form the end of this research. New solutions will have to be found in order to <br />
stretch the organizational comfort zone towards a level that allows for better interaction between <br />
organizations and its stakeholders. Along the way of industrialization and mass production, organizations may <br />
have lost a little bit of their sense of dialogue with the customer. Co-‐creation may just provide the way to <br />
rediscover the importance of simple communication between people and organizations, assisted by <br />
technological possibilities that make it increasingly easier to create a dialogue to share experiences and ideas. A <br />
hint for the fundamental first step in this direction is provided by Gilberto Gil, a musician and former Minister <br />
of Culture of Brazil: “Sharing is the nature of creation”. <br />
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Lilien, G. L., P. D. Morrison, et al. (2002). "Performance Assessment of the Lead User Idea-‐Generation Process <br />
for New Product Development." Management Science 48(8): 1042-‐1059. <br />
Lüthje, C. and C. Herstatt (2004). "The Lead User method: an outline of empirical findings and issues for future <br />
research." R&D Management 34(5): 553-‐568. <br />
Lusch, R. F. and S. L. Vargo (2006). "Service-‐dominant logic: reactions, reflections and refinements." Marketing <br />
Theory 6(3): 281-‐288. <br />
Lusch, R. F., S. L. Vargo, et al. (2007). "Competing through service: Insights from service-‐dominant logic." <br />
Journal of Retailing 83(1): 5-‐18. <br />
Mason, M. (2008). The Pirate's Dilemma -‐ How Youth Culture is Reinventing Capitalism. New York, Free Press. <br />
Michel, S., S. Brown, et al. (2008). "An expanded and strategic view of discontinuous innovations: deploying a <br />
service-‐dominant logic." Journal of the Academy of Marketing Science 36(1): 54-‐66. <br />
Miller, R. L. and J. D. Brewer (2003). The A-‐Z of Social Research: A Dictionary of Key Social Science Research <br />
Concepts. London, Sage Publications. <br />
Nambisan, P. and S. Nambisan (2009). "Models of consumer value cocreation in health care." Health Care <br />
Management Review 34(4): 344-‐354. <br />
Nambisan, S. and P. Nambisan (2008). "How to profit from a better 'Virtual Customer Environment'." MIT Sloan <br />
Management Review 49(3): 53-‐61. <br />
Payne, A., K. Storbacka, et al. (2008). "Managing the co-‐creation of value." Journal of the Academy of <br />
Marketing Science 36(1): 83-‐96. <br />
Phillips, R., K. Neailey, et al. (1999). "A comparative study of six stage-‐gate approaches to product <br />
development." Integrated Manufacturing Systems 10(5): 289-‐297. <br />
Pisano, G. P. and R. Verganti (2008). "Which Kind of Collaboration Is Right for You?" Harvard Business Review <br />
86(12): 78-‐86. <br />
Potts, J., J. Hartley, et al. (2008). "Consumer Co-‐creation and Situated Creativity." Industry & Innovation 15(5): <br />
459 -‐ 474. <br />
Prahalad, C. K. and V. Ramaswamy (2004b). "Co-‐creation experiences: The next practice in value creation." <br />
Journal of Interactive Marketing 18(3): 5-‐14. <br />
Prahalad, C. K. and V. Ramaswamy (2004c). "Co-‐creating unique value with customers." Strategy & Leadership <br />
32(3): 4-‐9. <br />
Rust, R. T., Moorman, C. , Bhalla, G. (2010). "Rethinking Marketing." Harvard Business Review(January -‐ <br />
February 2010): 8. <br />
Saunders, M., P. Lewis, et al. (2009). Research Methods for Business Students. Essex, Pearson Education <br />
Limited. <br />
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Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Strategy, F. (2009). Co-‐creation's 5 guiding principles -‐ or what is successful co-‐creation made of. Amsterdam. <br />
Vargo, S. L. and R. F. Lusch (2004). "Evolving to a New Dominant Logic for Marketing." Journal of Marketing <br />
68(1): 1-‐17. <br />
von Hippel, E. (1986). "Lead users: A source of novel product concepts." Management Science 32(7): 791-‐805. <br />
von Hippel, E. (2005). "Democratizing innovation: The evolving phenomenon of user innovation." Journal für <br />
Betriebswirtschaft 55(1): 63-‐78. <br />
Additional references: <br />
Fronteer Strategy Whitepaper (2009): ‘Co-‐creation’s 5 guiding principles. Or… what is successful co-‐creation <br />
made of?’ www.fronteerstrategy.com <br />
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Supervisor:<br />
APPENDIXES<br />
Prof. Dr. T. Elfring <br />
Appendix A: Operational definitions <br />
Appendix B: Definition of co-‐creation by interviewees <br />
Joost de Boer <br />
Student number 1517597 <br />
APPENDIX A: OPERATIONAL DEFINITIONS*<br />
Concept <br />
General Background <br />
Co-‐creation in general <br />
Purpose/use of co-creation<br />
<br />
Involved interal parties <br />
Question <br />
Wat is uw functieomschrijving? <br />
Hoe lang werkt u al bij deze organisatie? Op welke afdelingen hebt u gewerkt? <br />
Vindt u dat de organisatie waarvoor u werkt dynamisch is? Waar blijkt dat uit? <br />
Hoe wordt er binnen de organisatie omgegaan met nieuwe initiatieven? <br />
Zijn er fondsen/budgetten beschikbaar voor het ontwikkelen van nieuwe ideeën? <br />
Zijn er bepaalde factoren binnen de organisatie die het gebruik of de implementatie van co-creatie<br />
op de een of andere manier beïnvloeden? <br />
Hoe wordt het initiëren van nieuwe ideeën binnen de organisatie gewaardeerd? <br />
Hoe worden nieuwe ideeën in de organisatie verspreid, en hoe wordt er draagvlak voor <br />
gezocht? <br />
Wat verstaat u onder co-‐creatie? <br />
Hoe kan co-‐creatie het beste binnen uw organisatie georganiseerd worden? <br />
Kunt u enkele voorbeelden geven van situaties waarin goede ideeën het resultaat waren van co-creatie,<br />
en wat is hiermee gedaan? <br />
Zijn de uiteindelijke resultaten van een co-‐creatieproces ook wel eens tegengevallen? <br />
Hoe worden de resultaten van co-‐creatie in de organisatie gemeten? Waarin worden deze <br />
uitgedrukt? <br />
Hoe bent u binnen de organisatie begonnen met co-‐creatie? Anders gezegd: bent u zelf met een <br />
co-‐creatie project begonnen, of hebt u daar hulp bij gehad? <br />
Wat waren de voornaamste redenen om te beginnen met co-‐creatie? Waarom waren deze <br />
redenen vooral geschikt om op te lossen door middel van co-‐creatie? <br />
Welke verwachtingen zijn/waren er binnen de organisatie over de resultaten van co-‐creatie? <br />
Waarin wordt de unieke kracht/waarde van co-‐creatie verwacht? <br />
Verwacht u dat co-‐creatie belangrijker wordt als manier van werken binnen een organisatie? <br />
Waarom wel/niet? <br />
Vanuit wie/waar binnen de organisatie kwam de vraag naar co-‐creatie? <br />
Welke afdelingen binnen de organisatie zijn vooral betrokken bij co-‐creatieprojecten? Waarom <br />
juist die afdelingen? <br />
Hoe zien die afdelingen eruit? Hierbij denkende aan het aantal personen dat werkzaam is per <br />
afdeling, waar die zich mee bezig houden en wat de unieke rol van de afdeling binnen de <br />
organisatie in zijn geheel is? <br />
Zijn er nog andere afdelingen die niet direct betrokken zijn bij co-‐creatie, maar hier wel invloed <br />
op uitoefenen? <br />
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Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Indien niet genoemd: wat zijn de rollen van de innovatie en marketingafdeling hierin? <br />
Hoe ziet u de betrokken afdelingen in de toekomst functioneren? Blijven die gescheiden, of <br />
gaan die meer samenwerken? Wat is hiervoor nodig? <br />
Involved external <br />
parties <br />
Types of co-‐creation <br />
Impediments, changes <br />
or problems in the <br />
organization <br />
Staat de organisatie open voor initiatieven van buitenaf, bijvoorbeeld die van haar klanten of <br />
experts? <br />
In hoeverre wordt de input van een stakeholder serieus genomen? <br />
Hoe staat u tegenover directe samenwerking met stakeholders? En tot op welke hoogte? <br />
Wat zijn de gevolgen geweest van het betrekken van stakeholders bij bepaalde processen in de <br />
organisatie? Zijn er dingen veranderd? <br />
Wat vinden stakeholders ervan om betrokken te worden? Draagt het bij aan meer waarde voor <br />
die klant, bijvoorbeeld in betere relatie? <br />
In hoeverre en hoe werkten verschillende afdelingen (die hierboven genoemd zijn) samen <br />
voordat co-‐creatie in de organisatie werd toegepast? Hoe verliep deze samenwerking? <br />
Is er een beleid in de organisatie om samenwerking tussen afdelingen te bevorderen? Waarom <br />
wel/niet? Hoe gaat dit in zijn werk? Hoe zou u dit het liefst zien? <br />
Is de samenwerking tussen deze afdelingen veranderd als gevolg van het toepassen van co-creatie?<br />
<br />
In hoeverre maakt uw organisatie op dit moment gebruik van co-‐creatie? In welke vorm doet de <br />
organisatie dit? <br />
Hoe vind u dat de organisatie scoort op de punten van het DART-‐Model: Dialogue, Access, Risk <br />
and benefit en Transparency? <br />
Zijn er problemen die u tegenkomt bij het samenwerken tussen de afdelingen? Zo ja, welke en <br />
waar ligt dat aan? Hoe worden deze problemen opgelost? <br />
Wat zou u in de organisatie willen veranderen om samenwerking tussen afdelingen te <br />
bevorderen en/of te verbeteren? Welke rol zou co-‐creatie hierin kunnen spelen? <br />
Hebben de diverse afdelingen een verschillende kijk op co-‐creatie? Zo ja: waardoor komt dat? <br />
Hebben ze een ander doel voor ogen? <br />
Zijn er sinds de implementatie van co-‐creatie dingen binnen de organisatie veranderd die vooraf <br />
niet verwacht waren te veranderen (neveneffecten)? <br />
Zijn er bepaalde wijzigingen in de organisatie doorgevoerd om co-‐creatie mogelijk te maken? <br />
* NOTE: the sequence of questions as shown in this table is not necessarly the same as the sequence of the questions <br />
that were asked during interviews. <br />
81
Master thesis Business Administration, Specialization: Strategy & Organization <br />
Supervisor: Prof. Dr. T. Elfring <br />
Joost de Boer <br />
Student number 1517597 <br />
Appendix B: Definition of co-creation by interviewees<br />
Participant Who to co-‐create with? Where should it be <br />
used for? <br />
A01. Customers or employees New products/Inside <br />
the organization <br />
A02. Customers, employees Getting closer to the <br />
customer <br />
C01. External parties Innovating new-‐ and <br />
improving existing <br />
products <br />
C02. Other people, in the broadest <br />
sense. <br />
C03. Companies, communities or <br />
people <br />
C04. Internally with employees, <br />
externally with customers. <br />
The entire value chain of an <br />
industry <br />
Creation <br />
something <br />
Products, services <br />
of <br />
Creating new ideas <br />
or concepts, thinking <br />
out of the box <br />
Essence <br />
Thinking about what the organization can improve, together with <br />
the customer. And as far as I see, if there has to change something <br />
inside the organization, it can also be done with employees. But <br />
until now, I mostly consider co-‐creation as what we do together <br />
with the customer. <br />
We have always done it, since 1900. But we’ve lost it along the way. <br />
People get a lot of money out of it by calling it a hype. The only <br />
hype are the technological developments; but the phenomena of <br />
developing something together is as old as the way to Rome. It’s <br />
just common sence. <br />
Co-‐creation is all innovation that is not done in a regular way. And <br />
the regular way is: innovation with supplying partners, innovations <br />
that are demanded by our customers, and our internal delivery <br />
processes. The rest of it is co-‐creation. <br />
It’s in our nature to find out things for ourselves; something that is <br />
found by another person is often not enough. What I understand by <br />
co-‐creation is that you create something new together. <br />
Developing something together. But not anymore from the internal <br />
organization; it’s not inside-‐out anymore, it’s outside-‐in. <br />
The beauty of internal co-‐creation is that it involves multiple <br />
departments or divisions, and allows them to think out of the box. <br />
But it can also be used to start a dialogue together with other <br />
companies, making a value chain analysis and create new concepts <br />
or ideas. <br />
B01. Customer Continuous dialogue Getting to something, together with your consumer. Step 1 is to <br />
start doing something together with your consumer, how you do it <br />
is step 2. <br />
B02. Target population Every stadium of the <br />
production process <br />
B03. Customers Developing products <br />
or services <br />
Determining a product for and together with its target population, <br />
and bringing that product to the market. <br />
Developing products or services together with customers. But also <br />
commercials and other things. <br />
B04. Target population Developing products Developing the product together with the brand and the target <br />
population <br />
D01. Customers or external parties Developing <br />
propositions <br />
D02. Customers, suppliers, <br />
employees, specialists and the <br />
public <br />
Developing <br />
something <br />
E01. Customers Developing products <br />
and services <br />
E02. Customers and people from <br />
within the organization <br />
Developing and <br />
testing services and <br />
products, seeking for <br />
possible <br />
improvements <br />
Development of certain product propositions, together with <br />
customers or externals <br />
It is a fashionably term for something we have been doing for years <br />
already. However, web 2.0 enables us to do new things. – We also <br />
have a public function, and co-‐creation improves our dialogue with <br />
potential customers. <br />
Customers provide us with useful information, but we also have to <br />
provide customers with our insights and information in return. <br />
An online platform that enables organizations to interact with their <br />
customers, and to have a discussion about the organization and its <br />
products or services. <br />
Appendix II: <br />
Definition of <br />
co-‐creation <br />
by <br />
interviewees <br />
82