Smart companies connect with their ecosystems to co-create solutions

Companies are confronted with big problems every day. An agrarian society looking for new business models to compete more effectively, a bank needing new growth sources to combat the effects of a declining market, a courier firm pressured to transport with zero defect to protect sensitive cargo, a technology company looking to be first to market –- these are by no means outlandish dilemmas.

But solving them, even when the correct strategy is apparent (as in these examples), often requires enormous effort and resources, notes a recent Harvard Business Review article.

Traditionally, companies devote classic corporate processes and associated resources to such problems –- marketing and selling, procurement, HR, customer service and so forth. But in using only their own resources and capabilities or those of outside consulting companies, they battle for years and burn massive resources to solve challenges this big.

Facebook businesses

The HBR article observes that all companies –- even those in brick-and-mortar industries –- are ‘Facebook businesses’. “Their leaders have to be community organisers who strive to engage the customers, suppliers, employees, partners, citizens and regulators that make up their ecosystems.”

A platform that truly connects companies with their stakeholders in Facebook fashion allows them to solicit solutions to problems that are too big for them to solve alone. Done in ad hoc fashion, this is called crowd-sourcing. If a company routinely encourages its constituencies to collectively solve problems and exploit opportunities, thus creating value for itself and its stakeholders, this is called co-creation.

Global co-creation

HBR uses the example of Becton, Dickinson and Co (BD), a global supplier of syringes to hospitals, as a case study of successful co-creation. BD wanted to deepen ties with its customers by helping them reduce the incidence of healthcare-associated infections (like hepatitis) caused by unsafe injection and syringe disposal practices.

BD’s vision of a safer injection environment presented a natural opportunity for co-creation. The company realised early on that if it relied solely on its sales force to get all players to change their practices, it would take years and consume huge amounts of resources. By installing web-based platforms it brought together communities of people who shared an interest in improving injection and syringe disposal practices. This deepened ties beyond the traditional supply relationships, and created solutions that were informed by all communities’ realities and input.

Local co-creation

Social business software (SBS) platforms offer an excellent means to engage communities to collectively solve problems. South African retail franchise operation Cash Crusaders tackled the problem of lacklustre ideation and corporate teamwork by implementing an SBS platform that got franchisees talking.

The chain, which has 150 outlets countrywide, embraced the structured brainstorming of SBS, which combines the compelling engagement of social software with collaborative principles. With the promise of rewards, participation became intense, and franchisees, for the first time, shared their innovative ideas. These included a method to prevent credit card fraud and a novel means of obtaining individual tax rebates by combining franchisee companies into a single entity.

Radical

The SBS approach is a radical departure from the old way of managing constituencies through specific processes. Not only is it more effective at tackling big problems, it also exploits collective wisdom better. By its very nature SBS encourages innovation, because its objective is adaptation, and not repeatability and compliance, so prized by corporate processes.

Image: Impact Hub via Flickr.