Prof. Ramaswamy answers eYeka’s questions (part 1/4): How does co-creation relate to crowdsourcing?

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We recently had the opportunity to interview Prof.  Venkat Ramaswamy, Hallman Fellow of Electronic Business and professor of marketing at the Ross School of Business, University of Michigan. He coauthored The Future of Competition and The Power of Co-Creation (which we advise you to read!) and also consults for The Palladium Group, speaking in conferences about strategy and co-creation. During the next month, we’ll publish parts of the interview every week, and this week we have the pleasure to present Prof. Ramaswamy’s first answer to our question: How do you relate co-creation to crowdsourcing?

eYeka: How do you define co-creation in relationship to the more well-known crowdsourcing category?

Prof. Ramaswamy: This is a question I get asked a lot, or more generally, how does co-creation relate to open innovation, of which crowdsourcing is a part. For starters, co-creation implies just that: creating together. Haven’t we always created together? Yes, of course. So, the question arises as to what’s new here? Interestingly, Googling the word “co-creation” today yields over 30 million hits, up from barely a million hits, just about four years ago. So, this means there is something that people are connecting with out there that is signified by the word co-creation. It is perhaps a meme of sorts. But I think there are four fundamental things going on, in the increasing fascination with the idea of co-creation.

The first is the notion of inclusivity. Let us start with open innovation and crowdsourcing, which are means of tapping into expertise and creativity from anywhere in the world. This ability to “access resources outside the firm” has been made possible because of advances in communication and information technologies. But viewed from the perspective of people around the world who are able to participate in it, firms are being more inclusive than they have been before. In other words, we have expanded the scope of “togetherness” in crowdsourcing and open innovation at large.

The second is the notion of meaningful engagement. This refers to how meaningful the act of creating together is, which depends on the design of the environment in which the act of creating together takes place. So, a poorly designed crowdsourcing environment can generate not so meaningful engagement experiences. Building on my work with the late C. K. Prahalad, there are four principles of meaningful engagement: Transparency, access, dialogue, and reflexivity, in increasing order if you will. The first three may be relatively more obvious than the fourth, which I will focus on. Reflexivity is about enhancing “sense-making” and “learning”, while “evolving” the design of the environment to make participants’ engagement experiences more meaningful. Further, this ought to be done in inclusive fashion with the participants themselves.

Nike+ (Apple & Nike) is a pioneering example of value co-creation. Back in 2008, Prahalad & Ramaswamy talked about "Risk-Return"; today, "Raflexivity" (source: emeraldinsight.com)

The third is the notion of value expansion. If we think of co-creation as not just « creating together”, but “mutually expanding value together”, then this takes us way beyond crowdsourcing and open innovation to any value-chain activity anywhere in the business-civic-social ecosystem, which can be opened up to more inclusive and meaningful engagement together with stakeholders to mutually expand value. In my new book, The Power of Co-Creation (with Francis Gouillart), we describe over 40 examples from over 20 sectors that span a wide range of value creation inside and outside enterprises, together with stakeholders.

The fourth is the notion of human experiences. Traditionally, we have thought of creating value through the lens of goods and services. As enterprises and stakeholders around the globe move toward mutually expanding value together, the basis of the creation process shifts to the larger space of human experiences. This is not just about creating better experiences, but imagining new types of purposefully designed environments of experiences that generate sources of value to people.

Which brings me finally to my definition of co-creation as follows: Co-creation is about inclusive and meaningful engagement of stakeholders (customers, employees, suppliers, investors, partners, regulators, citizens, and others) to mutually expand value, through the mindset of human experiences.

Acknowledgements:

eYeka would like to thank The Palladium Group Asia-Pacific for making this interview happen. Prof. Ramaswamy is a Fellow of The Palladium Group Asia-Pacific and will be key note speaker on two international conferences this year: The 2011 Strategy Execution Forum in Sydney (May 17th) and in Auckland (May 20th).

About Yannig

Yannig was Marketing Manager at eYeka, responsible for PR, communication and research. Interested in marketing, innovation and design-related topics, he also loves to free his head by cycling, running, reading or drawing. Yannig, who holds an MSc from ESSCA School of Management and a PhD from University Paris 1 Panthéon-Sorbonne, tweets under @YannigRoth and blogs at www.yannigroth.com
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3 Responses to Prof. Ramaswamy answers eYeka’s questions (part 1/4): How does co-creation relate to crowdsourcing?

  1. Pingback: The Power of the People: Crowdsourcing Versus Co-creation | eYeka Co-creation Blog

  2. Pingback: Prof. Ramaswamy answers eYeka’s questions (part 4/4): Apple uses “selective co-creation” | eYeka Co-creation Blog

  3. Pingback: Francis Gouillart’s universal view of co-creation | eYeka Co-creation Blog

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