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Co-Creation:A DigitalTransformationAdoption Tool#GoodTechIBM

Co-Creation: A Digital Transformation Adoption Tool2HighlightsThis white paper describes how organizations can use co-creation internallyas a tool to achieve a successful digital transformation.Content overviewCo-creation: The Present4Using Co-creation for InternalTransformation5Personalize the EmployeeExperience5Activate Employees duringTransformation6Produce Great Ideas7Conclusion10

3IBM Corporate Social ResponsibilityExecutive abstractOrganizations no longer question if they need to undertakea digital transformation journey, but how they can do sosuccessfully. While the payoff of digital transformationremains high, the success rate is relatively low. Out ofthe 1,000 companies surveyed on digital readiness, only5% reported they achieved or exceeded expectations duringdigital transformation efforts. Where does this disconnectstem from? Developing a strategy is only the beginningof digital transformation. Implementing this strategyto effectively take hold within an organization presentsthe real challenge.1IBM uses co-creation as a tool to implement digitaltransformation initiatives. This well-regarded tool hasbeen widely used to invite customer collaboration intoproduct design. However, co-creation can also be used duringtransformation efforts to connect leadership with employeesand shape change decisions together. This paper outlinestwo case studies to demonstrate the value of co-creating:1) Starbucks co-creating with customers via theMy Ideas platform2) IBM co-creating with employees via a web-baseddiscussion forumUsing co-creation as a tool to facilitate digital transformationresults in:— A personalized employee experience and abilityto activate the employee population— Great ideas and key insights to stay competitivein a volatile environment— Employee buy-in during a period of accelerated change—1 Baculard, Laurent-Pierre, and Colombani, Laurent, and Flam, Virginie, and Lancry,Ouriel, and Spaulding, Elizabeth. (November 22, 2017). Orchestrating a SuccessfulDigital Transformation. Bain&Company.

Co-Creation: A Digital Transformation Adoption ToolCo-creation:The Present4Case Study:My StarbucksCo-creation has been successfully used many timesto collaborate with customers to design new products,however can this framework accomplish more? Co-creation’ssuccess can be attributed to its triumph over traditionalresearch techniques. Traditional methods rely on staticsurvey tools, while co-creation engages people in a robustand dynamic discussion. A shared discussion betweencustomers and companies at scale produces valuable insights.This experience is far more immersive for participants andprovides a space for creativity to prosper, ideas to grow,and alignment or adoption to be achieved. A successfulco-creation exercise is structured by three tenets: 1) Selection participation – Co-creation exercises beginby targeting and identifying the audience most relevantto the discussion 2) Early transparency – Participants are informed of theexercise’s intentions. Throughout the exercise, outcomesare communicated to participants on how they are beingused to shape design decisions. 3) Differentiated involvement – While reviewing outcomes,ensure a diverse pool of expertise from a variety ofsources. This creates comprehensive and unbiasedperspectives.2Through co-creation exercises, organizations are ableto reach out to individuals at scale in a structured mannerto collect and synthesize feedback on specific topics andco-create a solution. Starbucks demonstrated the benefitsto co-creation in their exercise “My Starbucks”.“My Starbucks” launched in 2008 and engaged customersthrough a web-based platform. Customers simply createda profile and submitted their ideas for others to comment.What made this exercise more than a suggestion boxwas the voting, commenting, and collaboration over ideas.Starbucks actively managed this platform and communicatedwith customers, resulting in increased customer loyaltyand greater product diversity. In the first five years theplatform operated, customers submitted over 150,000 ideas.277 ideas were brought to life including Starbucks productstaples such as pumpkin spice lattes, cake pops, happy hours,and free birthday treats. The greatest benefit this co-creationexercise brought Starbucks was access to new and potentiallyvaluable ideas. In addition, Starbucks received mediaattention, free advertising, and a market research tool intotheir customer demographic. Customers, on the other hand,were able to voice their ideas and influence the directionof their favorite establishment.3——2 CEB. (2016). Cocreate Change Strategy.3 Fournier, Alexis. (March 20, 2019). My Starbucks Idea: An Open Innovation Case-Study.

5IBM Corporate Social ResponsibilityUsing Co-creation for Internal TransformationPersonalize the Employee ExperienceThe strong benefits of co-creation have been demonstratedthrough customer engagements and can also be adaptedand used with employees during internal transformations.While soliciting employee input is a widely agreed upontransformation technique, co-creation moves beyond simpleengagement and allows leadership to mutually design, shape,and share ownership of the final product, helping employeesto feel part of the dialogue. While the concept of solicitingemployee feedback in principle is quite simple, the executioncan be difficult, particularly at global scale. Management oftenasks for input too late and underestimates the effort requiredto conduct feedback sessions to truly influence decisionmaking. Management may try to shortcut this process throughtown halls and annual surveys. While these techniquesproduce some results, they ultimately have limited impacton employees embracing change. On the other end of thespectrum, too many participants providing feedback causesopinion overload leading to slow decision-making.4Co-creation exercises identify how to cultivate a positiveemployee experience through which organizations are ableto better understand their people and achieve strongerbusiness results. By shifting traditional thinking beyondjust employee engagement to employee experience,companies will be able to more effectively manage theirpeople and enable them for success. Gartner defines theemployee experience as “employees’ perceptions andrelated feelings caused by the one-off and cumulative effectof interactions with their employer’s customers, leaders,teams, processes, policies, tools, and work environment.” 5This holistic approach to workplace culture and employeeexperience helps companies better understand their people.Through achieving a greater understanding, enterprises willalso produce stronger business results. According to MITresearch:Striking the balance of including the right people, at theright time, and in the right way is challenging. Throughthe methodology of co-creation, organizations can gatherinput from across their teams to design, test, and launchinnovative programs. Using co-creation to facilitate internaltransformation allows organizations to 1) Personalize the Employee Experience 2) Activate Employees during Transformation3) Produce great ideas “Enterprises with a top-quartileemployee experience achieve twicethe innovation, double the customersatisfaction, and 25 percent higherprofits than organizations witha bottom-quartile employeeexperience.” 6Iterating directly with employees produces stronger businessresults, a network of change agents, and unparalleledinnovation. These three benefits increase transformationstrategy adoption within an organization. This user-centricapproach produces a diverse set of insights and allowsleadership to connect with employees, accomplishingmore together than either one is able to alone.——5 Gartner. (2019). Employee Experience.4 CEB. (2016). Cocreate Change Strategy.6 Deloitte. (2019). From Employee Experience to Human Experience. 2019 Deloitte HumanCapital Trends.

Co-Creation: A Digital Transformation Adoption ToolWhile these business results are impressive, they are alsodifficult to achieve. Only 9% of Deloitte’s 2019 HumanCapital Survey respondents believed they were ready toaddress the challenge of improving employee experience.7How can organizations tackle employee experience in astrategic manner? The IBM Talent and Change team addressedthis question by conducting a thorough interview exercisewith Human Resources thought leaders. Through theirresearch, IBM Talent and Change identified personalizationas a key practice to improve employee experience.Personalizing the employee experience creates a fitbetween the needs of the employee and the needs of theorganization.8 This agrees to neither putting the employeenor the organization before the other. Ultimately, productivitywill flourish by joining together to achieve goals in tandem.Conducting co-creation exercises uncovers how to personalizethe employee experience. A structured exercise betweenmanagement and employees at scale allows the employeeto speak from their perspective and management toincorporate these workforce differences into transformationefforts. One size does not fit all. Once companies haveexpanded their definition of engagement to include thewhole employee experience, they need to identify how toreach employees and create a network of change agents.6ActivateEmployees duringTransformationFacilitating a co-creation exercise identifies the mostactive employees within an organization. A large barrierto implementing strategy within organizations, particularlylarge ones, is reaching the employees. Employee activationplays an important role in combating the natural formationof change resistant silos to foster an open and transparentculture. Activation refers to the way organizations encourageand communicate with their employees. The first step toemployee activation is identifying how to communicate withemployees. Once communication channels are established,employers should consistently seek to improve thesemethods, ensure they are effective, and strive to reachnew audiences. The initial goal of activation is to captureemployee interest and empower employees to take actionin areas outside their direct job function. The ultimate goalenlists employees as organization champions to encourageparticipation amongst their peers. When employeesare active, they become more engaged, more productive, andhelp establish the business as a trustworthy, authentic brand.9Identifying these individuals can be particularly difficult.The first step in a co-creation exercise is selecting participants.After the exercise completes, management can analyzeparticipation to identify the most active employees andcontinue utilizing these individuals. These active employeesare imperative to the betterment of an organization,as they often also voice the greatest ideas.—7 Ibedem.8 IBM Institute for Business Value.(2016). Designing the Employee Experience. Capital Trends.—9 Brenner, Michael. (June 18, 2018). What Is Employee Activation? Marketing Insider Group.