In my experience, clients large and small realize that customer alignment leads to a transformation that exceeds their expectations, in a good way. The more customers realize their vendor is committed to listening, embracing and delivering their precise requirements, the more they want to be involved in that organization.
The operative phrase is to “be involved in.” Increasingly, that is taking the form of customer co-creation. Prahalad and Ramaswamy defined co-creation as “the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context.” In my work, I define co-creation as the “purposeful action of partnering with strategic customers, partners or employees to ideate, problem solve, improve performance, or create a new product, service or business.”
The concept has been around since 2000 yet has taken over a decade to catch on. Co-creation is not a customer advisory board on steroids or a clever sales and marketing tactic. It’s about jointly creating value , for the vendor as well as customers. To most managers, the thought of openly and transparently engaging customers, sharing detailed data is downright scary. The rewards, however, should cause CEOs to pause and reconsider.
Let’s look at how two very different companies are using co-creation to drive value.
The first is DHL, the global market leader in logistics, part of the world’s largest mail and logistics services company, Deutsche Post (“DP”) DHL. You may know them by their yellow and red delivery trucks. Privatized 15 years ago, today the DP DHL Group employs some 490,000 employees around the world producing $57 billion in annual revenue. You might think a company this size would struggle being agile, let alone set standards in innovation and customer service.