Dissecting Product Co-Creation – Part 2

4 04 2007

In our last post we began to examine the current phenomenon that is “product co-creation” by reviewing a possible workflow for how it can work for associations seeking to become more nimble, volunteer resource rich, and better delivering what the market wants. We examined the stages of proven practices of product development and left off after stage 1 “ideation” (a process to scope and evaluate a product or service concept).

Who does what

Once the community has vetted through head to head competition of member and nonmember-generated ideas and a winner(s) trickles up from this “idea market,” the second stage is developing a business case for the product or service concept that survives. At this point, the process begins to resemble a virtual project team rather than a competition but still taps your community of member and nonmembers to help you break down tasks and complete the business case phase.

As we discussed in the last post, having your community of volunteers register with you (sharing information they volunteer about their experience and expertise) gives you the opportunity to assess who can be matched with specific tasks. You will need a project leader who could be the winning idea generator since it was their passion or zeal that created the excitement in the first place. These project leaders can have product support from both your volunteer leadership as well as professional staff. It would be a good idea to pre-define “job roles” so that participant workers understand and agree to these responsibilities before accepting a task. This should be done for any kind of work that might be anticipated not only in this stage but later ones as well.

Other community member and nonmember project team participants can be tasked to work on different parts of the business case. Depending on your own internal processes you might consider something as follows:

  • Executive Summary – perhaps one page in length describing the opportunity, solution, business model, and the initial prototype design and means of production
  • Market Opportunity – a concise explanation from the “users” point of view of the opportunity in the market defined from the “ideation” phase, likely target audience, and any supporting data to help validate
  • Solution – how will this product or service respond directly to this opportunity by articulating a clear value proposition that will provide essential value to the target audience
  • Business Model – how will you make money, who pays, show how you intend to distribute this product or service for consumption, and what is the expected net revenue after expenses (if this is not a revenue generating product or service demonstrate how it would add value in a measurable way)
  • Design & Production Plan – what does it look like, how will you deliver it, and a project plan for implementation
  • Marketing – an initial marketing plan for the launch and ongoing buzz
  • Competitive Analysis – an assessment of direct competitors strengths, weaknesses, opportunity (to counter), and threats (potential for disrupting you)
  • Management Team – assignments and backgrounds of those involved in all phases of development including volunteer leaders, professional staff AND community volunteers
  • Financial Projections & Success Metrics – a forecast of some duration including metrics that will define success (e.g. number of nonmembers converted)
  • Accomplishments – what you have accomplished so far and a timeline into the future

Business cases (plans) do not need to be lengthy tomes. Many venture capitalists prefer plans no longer than 20 pages in length.

Once again, it is important to stress how wider participation from your community can help to develop this documentation. However, the final arbiter should be you and your leadership since you are most likely providing the financial backing or committing other resources. This is the next “decision gate” for moving ahead or not with a given product or service concept.

Everyone has their favorite source for developing business plans. My recommendation is to use Guy Kawasaki’s excellent book “The Art of the Start” because it is designed with lots of experience from the venture capital arena. It is concise, easy to read, and a great ongoing resource through his blog.

Need for Virtual Project Spaces

This is not an effort that can be managed via listserv nor a simple discussion board. You should invest in technology tools that permit you to create “rooms” for projects with applications to facilitate collaboration: file sharing, discussion boards, private messaging, calendaring, and website link sharing. The ability to self-generate and manage these rooms with such functionality would be key. Document sharing would also be nice.

Stage 3 Design and 4 Production would be managed according to the same process where your “design team” and later “production team” are assigned roles and responsibilities to complete. Prior to leaving the design stage, the production stage or later the promotion/launch phase, another “decision gate” must be passed using decision criteria you create for each.

If you read the Cambrian House post earlier, you may recall they seek participants from their community to play the following roles in their co-creation process:

  • Creatives – concepts, campaigns, media
  • Developers – production of product design, test prototypes
  • Entrepreneurs – suggest plan strategy, evangelize to get people to help or buy/sell, champion a product team
  • Investors – offer feedback on a business plan, counsel entrepreneurs on funding pitches, buy into a product
  • Marketers – provide pitch feedback, create good copy and creative input to campaign, direct creative for product site, blog, media,etc.

This will give you some idea for how to frame the project support required before issuing a call for volunteers for a product or service idea that wins your community competition.

Tying the Community Volunteers to Your Internal Processes

Reexamining how you create new or improve existing products and services will need to be considered to make a co-creation process work. At the root of this is the opportunity to “open” yourselves to larger numbers of your members and quite possibly nonmember consumers of content. It will require rethinking the process(es) you use presently which may be different depending on the business unit in your organization. It will require the design of a “system” that frames the means of engagement so that it empowers community volunteers while giving you the means to guide the process and results. It will require new competencies for staff “product managers” who may see themselves more operational-centered than customer-centered in their approach to product or service management as well as require team building and facilitation skills from them.

But the payoff could be huge. Companies like Proctor and Gamble have redefined their strategy around “connect and develop” which integrates product co-creation into their internal processes (as the story about InnoCentive in an earlier post shows).

According to P&G they state,

“Today, more than 35 percent of our new products in market have elements that originated from outside P&G, up from about 15 percent in 2000. And 45 percent of the initiatives in our product development portfolio have key elements that were discovered externally. Through connect and develop—along with improvements in other aspects of innovation related to product cost, design, and marketing—our R&D productivity has increased by nearly 60 percent. Our innovation success rate has more than doubled, while the cost of innovation has fallen. R&D investment as a percentage of sales is down from 4.8 percent in 2000 to 3.4 percent today. And, in the last two years, we’ve launched more than 100 new products for which some aspect of execution came from outside the company. Five years after the company’s stock collapse in 2000, we have doubled our share price and have a portfolio of twenty-two billion-dollar brands.”

That’s quite a success statement for a company that was already a market leader.

Do you want to be a market leader? Do you want to retain your franchise with your members or grow new audiences? Do you provide essential value in the products and services you deliver to your users today?

Being “open” is less risky than remaining “closed.” Don’t close yourself out from talent, new ideas, and a leadership position among your constituents.

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