B2B co-creation is a powerful way to co-create new business value with your most valued customers by closely iterating back and forth throughout the innovation process. Our approach is to combine methods from Design Thinking, Lean Startup and Business Model Innovation with specific customer facing formats to inspire participants whilst engaging with the key values of user, business and technical partner-buyer perspectives.
New revenue ventures will compliment strategic perspectives. HR will gain holistic cross-disciplinary thinkers and do-ers. Sales managers will gain higher and faster hit rates, all-the-while, fostering closer and stronger customer network relationships with the partner company.
The goal of this article article is to give you key insights into how we run B2B co-creation programs, whilst sharing some of our best practices and learnings along the way.
What is B2B co-creation?
Myth-buster: Co-creation is not just for B2C contexts. B2B co-creation, otherwise known as corporate partnerships, has a lot of opportunity for big impact when it comes to innovative business offerings between manufacturers and their most trusted customers. We’ve seen firsthand how successful it can be and wonder why more organizations aren’t doing co-creation programs. Where innovation is concerned, the interesting territory to cover between businesses often isn’t being covered. It’s a shame, really, as doing so would create new business impact and solve many needs and problems.
The domino effect of businesses working together in the innovation sphere increases speed to market, solves customers’ problems faster, and reduces all-round risk.
Over the course of the next two weeks, we’re going to share our most insightful insider’s knowledge of running corporate partnership programs to give you a short “how-to” guide and help you on your way to creating more value for your customers. Here’s the first…
#1 Organizational strategy
- Have a clear innovation strategy defined up front so that output innovations are strategically implementable and/or disruptive.
- In most cases, when running an innovation program or workshop, aim for radical and disruptive concepts and business models. They can always be made more safe afterward, for example, from radical to more adjacent innovation (optimizing existing products for existing markets) or incremental innovation (leveraging existing product to reach new markets).
- There are two opportunities to disrupt during the program: during the development of the concept, and when deciding on a business model. It is crucial to aim disruptive outcomes during both.
- In our experience, radical concepts and business models excite and motivate “dragons” (aka client-side problem owner) and customers the most because they open up new areas for business that might otherwise not be explored. Push the teams in this direction.
- Clearly brief customer round table participants and final dragons about the program design. Explain why each step of the co-creation process — 1. desirability 2. viability and 3. feasibility — is important to follow in that order. Many people skip straight to “technical feasibility” as they consider it the most important and realistic factor from prior experiences. Remember: alarm clocks kill dreams, and feasibility arguments kill ideas in incubation.
#2 Program design
- Ensure you host the modules at an inspiring startup co-creation space to reinforce the open mindset and way of working. Teams will derive and reinforce disruptive thinking from the meaning of their working environment.
- Run a start-up safari at the beginning of a co-creation innovation accelerator to hear startup insights and different ways of working first hand. This will set the scene nicely for the following duration of the program.
- Manage expectations all the time for all stakeholders. The main theme you want to get across is: This process is not the usual way of working. This is supposed to be about doing something else and you’re going to feel outside your comfort zone and this is ok. It’s about rewiring the ideation brain.
- Give teams the mandate to operate like a startup outside normal routines and processes to reinforce the idea that what is happening is an experiment and a safe place to try radical ideas and business models.
- When running multiple project teams, ensure each team has a different client problem area to conduct initial problem exploration interviews. This avoids overlap and ensures greater insights from which to ideate.
- B2B co-creation is not the same as B2B design thinking. B2B design thinking uses customer insights at the beginning and end stages. B2B co-creation is about involving the customer throughout the innovation cycle – before, during and after. We typically include the customer at six different co-creation moments throughout a program.
- Give teams their own budgets and/or resources to spend on experimentation and validation phases so that they can get things done faster whilst being empowered to do so.
- You should run round table consultation sessions (comprising a broad range of senior profiles) from the customer and from your organization during 1) ideation/concepting and 2) initial business model iterations.
- It is better to host accelerator modules with global teams in back-to-back 3-5 day sessions rather than spread out over fragmented days as this keeps focus and momentum.
- At Valmet, where we regularly run B2B co-creation twice yearly, usually sponsors wish to have business impact as the main outcome. Determine how much of a balance you want between learnings and mindsets vs. concrete project business outcomes. Typically, it is around 70% // 30%.
- Make teams accountable to an advisory council during key pitching moments for longer term projects. The innovation council should allocate additional people, time, and resources and remove road blocks if needed. Consider it like the Council of Elrond, minus the elves.
- Make sure you have senior strategic or C-level dragons on both customer and client investment panels to add positive pressure to perform within project teams at critical deliverable moments.
#3 Program set-up: scoping inputs
- Look at charging a nominal fee to partner customers to participate in your innovation accelerator. This changes the participation/motivation dynamic from something that you want from them, to being a privilege to participate in.
- Scoping client problem topics is a challenging process to nail. Make sure it is broad enough to allow teams to explore a range of key needs and problems through open-ended questioning. These problem areas should then be discussed in relation to the three horizons of innovation framework to ensure there is a strategic fit on potential outcomes possible.
- Train project teams up-front in how to effectively conduct problem exploration empathy interviews correctly by asking open-ended questions and diving into insights using techniques like the 5 why’s.
- One of the most challenging parts of B2B co-creation is translating problem interview insights into correctly scoped HMW (How Might We) statements to get ready for ideation rounds. A good amount of time is needed to get the scoping right. For example, if the HMW is too specific, then it might mess up the ideation process as there isn’t the space to design anything new or radical. This is an iterative process that needs expert facilitation to get right.
- Clearly define intellectual property ownership rights up front with the partner customer. Better to get the boring stuff out of the way first so the real sticky stuff can begin: Post-It note ideation.
- Involve the B2B partner right after initial concepts have been developed before moving into prototyping anything with designers. Make sure it solves their original problems. Do a reality check and save yourself a mental breakdown: validate the key problem solving solution features and critical assumptions first, before building anything.
- Run a pilot test program with a friendly customer first to learn and tweak your co-creation process. No two companies are the same, so being adaptable in program design is essential. We’ve seen situations where an unfriendly customer at a company shut down the whole process, yet another friendly customer at the same company gave it the green light.
- After starting your B2B co-creation with a friendly customer, move on to running further collaborations with a list of other top clients.
#4 Customer touch points: involvement
- Try to involve your B2B client in the modules/bootcamps to actually co-create with them on site. This is a big request, but is the ideal scenario in that you are doing true B2B co-creation together.
- Make sure your first generation minimum viable products (MVP) are tested with the same problem owner from your problem exploration phase to ensure you get validation from your original problem and budget owner.
- When showing MVPs to B2B customers, make sure the project teams know they are not trying to sell their solutions, but merely seeking to learn if it solves their problems through critical assumption (in)validation testing. As Steve Blank points out, you are expected to fail early, right away, and learn. Rarely, if ever, do initial concepts get it 100% right the first time, and that’s really ok. Learning fast is exactly what the co-creation innovation process is all about.
Stay tuned for the second set of tips and tricks of the trade next week, covering:
- Team formation
- Anticipated problems
- Career paths
- Program outputs
In the meantime, to help you on this journey, check out our newly updated B2B revenue model cards.