Plugging into co-creation's potentialby
Customer co-creation is still a pipedream for most firms, despite its acknowledged potential. But Electrolux is stealing a march on the competition with its tentative steps into this field.
By Neil Davey, editor
You could make a good argument that bringing customers into the organisation as part of a product co-creation initiative is the pinnacle of customer relationship management. Not only does it involve highly-developed customer interaction, but it also delivers enormous benefits as well, in the form of innovation and differentiation.
Nevertheless, it’s something that few firms are doing - and fewer still are doing successfully. Procter & Gamble remains the clear leader in the field, having launched hundreds of products over the past two years in which aspects have been developed outside of the company. Its dominance is such that it even sells its co-creation expertise to others.
Other firms are skirting the field with some success, however, and one of the most notable of these is home appliance manufacturer Electrolux. Its annual Design Lab contest, which invites design students from around the globe to submit ideas based on a specific theme, has garnered significant praise for rewarding emerging talent and nurturing innovation.
Now in its fifth year, Design Lab 2007 sees students tasked with designing eco-friendly, sustainable solutions. Previous themes have included designs to encourage healthy eating habits and have attracted entries from thousands of students from around the world.
For those with genuinely innovative ideas, there is a lot at stake. “Several of the winners have told us that Design Lab has changed their lives,” says Ulrich Gartner, vice president of communications for Europe at Electrolux, and a key figure in the invention and development of the Design Lab concept.
“It provides them with once-in-a-lifetime opportunities to work with world-class designers and it provides them with publicity that has opened a lot of doors. Last year’s winner, Metin Kaplan from Turkey, says he almost became a celebrity in his home country and gained great opportunities for additional education. He is currently serving his internship, which is part of the winner’s prize, at our Design Centre in Stockholm.”
Indeed, this is no mere competition. As well as integrating this design talent into the organisation, Electrolux also integrates the ideas themselves – it has already protected intellectual property rights for a number of ideas stemming from Design Lab with some already in the company’s innovation process.
Nevertheless, Gartner admits that the project was originally conceived as an initiative to drum up media coverage of the company’s 2002 brand strategy makeover. This saw Electrolux strategically reposition the firm as a “thoughtful design innovator”, adopting an outside-in approach distinct from its previous processes.
“Traditionally there was a tendency to have engineers come up with technology which we would put in a product and then look out to see if there was anybody that needed it – sometimes yes, sometimes no,” Gartner says. “The new process involves an outside-in process, so we look outside to see what problems consumers have via consumer insight and research observation, and once we have identified a problem we’ll start developing a solution.”
“My team was looking for a way to create publicity around these elements,” he continues. “We thought we could engage with young design talent and have them work along the Electrolux innovation process, based on consumer insight, to detect a specific consumer need and then develop a solution to this need.
“It was also clear that this approach would provide us with large opportunities in terms of PR exposure, and that it would have multiple extensions in terms of employer branding, access to new talent and not least in terms of real future innovation. We worked with four design schools in European markets, asking them to come up with a solution to a specific consumer need. And that was the starting point. From there it grew and grew and become more ambitious.”
In line with the company’s outside-in strategy, the Design Lab initiative has also proven to be a unique opportunity to leverage untapped consumer expertise. Ideas from earlier Design Lab competitions are in the early stages of Electrolux’s innovation process and the company also gains creativity from the project through the employment of Design Lab participants – the 2004 winner is employed at the firm’s design centre in Sydney, whilst another finalist is working in its Brazilian design facility. In addition, the initiative provides what Gartner calls “general food for thought” through the variety of ideas delivered.
To improve the quality of entrants and make them more focused and relevant, the Design Lab briefings have become increasingly narrow on specific themes. Aiming for quality over quantity, the renewed focus has proved a hit.
“The more specific approach means that the number of entries isn’t that huge but the quality tends to be higher,” explains Gartner. “In the really good entries you find that they student has spent a lot of time to understand our processes and detecting specific problems. And that is at the heart of Design Lab, and what differentiates us from a lot of other design competitions. Companies may ask students to come up with a design or product but we’re asking them to come up with a solution to a problem. They need to be able to tell us why this solution is important and what problem it solves.”
Next year’s Design Lab event is already being planned, although the theme is yet to be decided on – Gartner insists that it will be the first thing Electrolux discusses after this year’s final in Paris. In the meantime, hopes are high that the 2007 Design Lab will produce another bumper crop of innovations and talent that will be a worthy addition to the company’s processes.
“Innovation is the key driver for success – in terms of differentiation, in terms of escaping the commodity trap and in terms of driving growth and profit,” concludes Gartner. “Design Lab has grown from something that was created to deliver PR value into much more of an incubator for our own innovation processes and design population – as well as positioning us as an interesting employer for design people.”
Read more features, practical case studies and white papers about customer strategies.