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For many Fortune 500 brands today, finding the next billion-dollar idea is one of their most pressing issues. Once you've achieved a certain level of revenue or market share, innovation tends to become incremental. That's why some companies are starting to tap into the collective power of their customers to help drive innovation in their companies.

But why do some companies successfully collaborate with their customers while others fail miserably?

Co-creation - a process that involves customers in the development of new product and services - relies on a sound approach. For a co-creation project to succeed, brands need to keep the following ingredients in mind:

  1. The right balance

To understand what we mean by co-creation, it's useful to distinguish between three different ways of engaging consumers in ideation and product development, all of which often fall under the "co-creation" umbrella.

The first (and perhaps best-known) type is crowdsourcing: the practice of taking a business function and outsourcing it to an undefined (and generally large) network of people in the form of an open call. Crowdsourcing is based on the assumption that all consumers are equally creative. It opens a company's doors wide in their search for ideas. While crowdsourcing showers brands with lots of ideas, the free-for-all approach also delivers a lot of crowd noise and chaos. The result is lots of ideas - both good and bad - to sift through, requiring companies to allocate resources in managing and identifying workable ideas.

The second type of co-creation takes the opposite approach: it leaves the doors barely open for ideas from consumers such that only a select small group of specialists could add value. For most brands, this is a very restrictive approach that results in missing great ideas that often sit on the periphery.

When we talk about co-creation, however, we are talking about a form of consumer participation that combines and transcends both of these earlier approaches. This approach - which is the basis for IdeaHub - invites consumers to contribute their input, while putting mechanisms in place to ensure the quality of contributed ideas.

  1. The right people

Recruiting the right mix of respondent is important for every community but even more so for a co-creation project.

First, you need creative people who are good at generating ideas. These consumers can think conceptually within a short amount of time.

Secondly, you need people who are talented at identifying great ideas when they see them. During evaluation and refinement of ideas in your community, these people can help pinpoint and vote for creative and workable concepts.

Finally, consider recruiting people who are already familiar with your offerings or with the product category. This will help ensure that the ideas you get are not on the market yet.

  1. The right questions

Several steps in the co-creation process rely on brands asking the appropriate questions. Your questions need to strike the right tone, encouraging people to participate while not stifling creativity.

In the idea generation phase, for example, you need to provide enough background information while leaving some leeway for people to flex their creative muscles. Your requirements need to be spelled out: what people can include in the headline, what supporting media files they can submit, and what's out of scope for the project are just a few things that brands should include.

Another example is when you need to refine ideas in the latter stages of the co-creation process. To extract the right type of comments, brands need to ask thoughtful questions that will help improve existing ideas. This usually means asking open-ended questions and asking why people like or dislike the ideas.

  1. The right time

When is the proper time to engage customers in the innovation process? For the most part, the answer is "as soon as possible." From our conversations with clients, we know that bringing consumer feedback into the fold while developing product ideas and debating their commercial potential is a necessary ingredient in breakthrough innovations.

Co-creation projects usually won't work as well when there's a need for deep specialist knowledge or where project requirements aren't well defined yet. Your goal is to provide enough guidance to avoid chaos but no too much guidance that it stifles creativity and diversity of thinking.

  1. The right incentives

There's a misconception that people join co-creation communities just because of financial rewards. Sure, people appreciate coupons, samples, sweepstakes and cash for their ideas - but for most people, the intrinsic rewards are just as important as the extrinsic incentives.

People enjoy the creative and intellectual challenge. They also like the recognition they get from participating in a co-creation project. Others are passionate about contributing to the development of products or services they want to use themselves. Some even appreciate the fact that they get to build their personal networks through their participation. When running an innovation community, brands should offer a mix of intrinsic and tangible incentives that match people's goals and motivations.

How to get started with co-creation

As part of the team that helped launch IdeaHub, I'm a passionate advocate of co-creation and its potential to bring brands innovative ideas by tapping into people from outside their organizations. When done right, co-creating with customers or employees can generate innovative new ideas in a cost-effective and efficient manner. If you've thought about leveraging co-creation to help drive innovation in your company, I encourage you to learn more about IdeaHub


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