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 HBR.ORG

ARTWORK Jacob Hashimoto, Infinite Expanse

of Sky, 2008-2009, acrylic, paper, thread,
bamboo. Studio La Città, Verona, Italy

Community
Powered
Problem
Solving
A health care initiatiwe
'hows how brick-and-mortar
businesses can co-create
solutions with their partners
and change the rules of the
game, by Francis Gouiilart and
Douglas Billings

ALL COMPANIES-EVEN THOSE in entirely B2B, brick-and-mortar in-

dustries—are now in a Facebook-like business. Their leaders have
to be community organizers who strive to engage the customers,
suppliers, employees, partners, citizens, and regulators that make
up their ecosystems. A good way to do that is to provide those
stakeholders with the means to connect with the company—and
with one another—and encourage them to constantly invent new
ways to create value for their organizations and themselves.
This approach is a radical departure from the old way of man-
aging constituencies through specific processes: marketing and
selling to customers, procuring from vendors, developing human
resources policies for employees, and so on. The problem with tra-
ditional processes is that they don't naturally evolve, since their
April 2013 Harvard Business Review 71
SPOTLIGHT ON MANAGING THE CROWD

objective is repeatability and comphance, not con- get them to start exploring new ways to connect and
tinual adaptation. generate new experiences, and let the system grow
Inviting constituencies to collectively solve prob- organically.
lems and exploit opportunities is a better strategy. You cannot map out the full structure of a co-
We call this approach co-creation. It's a new form of creation system from the beginning. Building one
competing, one we described in "Building the Co- is like putting together a jigsaw puzzle: You need
Creative Enterprise" (HBR October 2010). As consul- to construct it gradually by assembling pieces in
tants, we have helped more than 30 organizations— various corners of the puzzle and then identifying
in financial services, agricultural products, sports emerging patterns. (See the sidebar "The Four Steps
equipment, health care, and other industries—go of Co-Creation.")
down this path. In addition, we have studied some Using thefivequestions, a company should de-
200 other co-creation efforts. (See the exhibit "Who velop a handful of hypotheses about which segments
Is Co-Creating?" for a sample.) In this article we'll of the community to mobilize and how. The next
show you how to begin this journey, by telling the step is to conduct experiments by giving each seg-
story of a work in progress: the co-creation program ment an engagement platform and seeing whether
that the Medical Surgical Systems unit of Becton, it generates valuable interactions and insights. The
Dickinson and Company (BD) has been working on first experiment should always focus on an internal
for nearly two years. system. (You won't have any credibility with outside
partners if you haven't learned to co-create inside.)
The Building Blocks Later experiments wül add more and more external
The first step in building a co-creation system is partners. You can begin with the people your com-
identifying a large problem that you need the help pany already has relationships with and then enlist
of many people from different organizations to solve. their help in persuading more people to join your co-
Then, to kick off the design stage, a company's lead- creation community.
ers should ask thesefivequestions: Live meetings of participants make good ini-
1. What community of individuals from inside the tial platforms, but they're difficult to scale up cost-
company and across external stakeholders do we effectively. To handle broad participation, you'll
need to connect to solve this problem? need to move onto digital platforms. These don't
2. What p/af/orm (physical or digital forum) does demand huge investments; you can tap into exist-
this community need to start connecting in new ing digital connections with your external partners
ways? or use inexpensive cloud technology. After a few
3. What new interactions will community mem- months of experimentation, strive to increase the
bers want to engage in on the platform to design a number of members and segments rapidly and
solution? tackle problems of increasing scope. The larger and
4. What valuable professional experiences wül the richer the community is, the more everyone in-
members get out of these interactions? volved wül get out of it.
5. What value will this new set of experiences
generate for ourfirmand for the other organizations BD's Big Challenge
involved, creating a win for all parties? To see how this process works, let's look at a major
The answers to those questions form the build- initiative of the medical technology company BD. A
ing blocks of a co-creation system. The idea is to global leader in supplying syringes to hospitals and
attract people onto platforms that you've provided. their affiliated doctors' offices, BD's Medical Surgi-

You cannot map out the full structure of a

co-creation system at the start. You must piece
it together gradually, like a jigsaw puzzle.
72 Harvard Business Review April 2013
 COMMUNITY-POWERED PROBLEM SOLVING HBR.ORG

Large problems often present big opportu- The first step in building such a A model for this is a work in progress
nities. The challenge Is that their solutions "co-creation" system is to identify a large that Becton, Dickinson and Company is
often require the collaborative efforts of problem that everyone has an interest in. orchestrating. A global leader in supplying
hundreds, perhaps thousands, of people Then you should devise and test hypoth- syringes, BD is using co-creation to deepen
from different organizations. The best way eses about the segments of the community its ties with hospital chains by helping
to make this happen is to provide plat- that need to be engaged, the platforms them reduce the incidence of infections
forms on which these people can engage that will allow their members to connect in caused by unsafe injection and syringe-
with one another and invent new ways to new ways, the interactions that will result, disposal practices.
create value for their organizations and the experiences that members will get
themselves. out of the interactions, and the value that
could be generated to create a win
for all.

cal Systems unit set out, in August 2011, to deepen Launching Experiments
its ties with customers by helping them reduce the At BD, Banerjee and Ferrara assembled a co-creation
incidence of health-care-associated infections, like team of about 10 managers from divisional manage-
hepatitis, caused by unsafe injection and syringe- ment, marketing, sales, R&D, clinical and regulatory
disposal practices. affairs, and IT to develop detailed theories about
Over the previous 15 years, the company had which communities to engage and what platforms
successfully helped develop new industrywide to give them. In a one-day workshop, the team came
injection-safety standards and persuaded hospital up withfivesuch hypotheses.
workers to adopt them. But the degree of adoption Then the team began to launch experiments to
varied widely, even within hospitals, and was espe- test them. Thefirstone lay the groundwork by build-
cially low among doctors and nurses who were af- ing an internal community of BD functions dedi-
filiated with hospitals but worked at other locations. cated to solving the injection-delivery and syringe-
(Hospital systems have been acquiring large num- disposal challenges of each hospital. The strategic
bers of physician practices in recent years.) account managers (salespeople assigned to the hos-
BD's vision of a "safe injection environment" pitals) played the lead role and were supported by
presented a natural opportunity for co-creation. In a project team drawn from the same groups repre-
the United States alone, there are thousands of hos- sented on the co-creation team, plus an IT supplier
pitals and outpatient facilities, with hundreds of that specialized in social software services delivered
thousands of doctors, nurses, and waste-handling through the cloud. (Previously, the division had no
employees. Ranjeet Banerjee, vice president and formal cross-functional process for engaging each
general manager of Medical Surgical Systems, and hospital beyond the sales call.) The initial platform
Michael Ferrara, his director of strategy, realized was a working group that interacted through regular
early on that if they took a process approach and meetings, e-mail, and the company's collaboration,
relied solely on the unit's sales force to get all these or social media, tools. The group started by drawing
players to change their practices, it would take years maps of how various BD people interfaced—or could
and consume huge amounts of resources. interface—with the hospital staff beyond the pro-
With our assistance as consultants, they came up curement and supply chain managers they typically
with a more cost-eflfective, faster alternative: install dealt with. These maps were later shared with hospi-
numerous platforms (initially live workshops and tal staffers, who helped identify weak or missing in-
then eventually web-based systems) that would teractions and devise new ways of connecting both
bring together communities of people who shared organizations. The maps revealed, for example, that
an interest in improving injection and syringe- infection-prevention leaders had no way of measur-
disposal practices. These included supply chain and ing the safety performance of doctors and nurses in
purchasing managers, infection-prevention and oc- individual locations and no knowledge of how much
cupational health leaders, sustainability managers training in safety procedures such personnel had.
and staff, and chieffinancialofficers. At the outset, The resulting new interactions in the internal
BD had relationships with only some of those people. community generated insights into how to improve
But by the end of the co-creation process, that would each hospital's safe-injection and syringe-disposal
change. record. For example, BD was able to cross-pollinate
April 2013 Harvard Business Review 73
SPOTLIGHT ON MANAGING THE CROWD

the medical staff's and sustainability department's

knowledge about leading practices for injection Who Is Co-Creating?
and disposal with the R&D staff's ideas for product
design. Companies around the world are tackling big problems
The hope was that the new approach would im- through communal innovation, or co-creation, efforts.
prove the professional experiences of all players in
the system. It would make the job of the compzmy's COMPANY & PROBLEM STAKEHOLDERS
strategic account managers easier by giving them Communities of Indian Educational sessions,
a new way to work with a hospital and gain access BASF and ITC farmers seeking to im- programs, and tools
Indian soybean farmers, who
to its senior medical staff. And it would make the prove their economic and that promote sustain-
purchased supplies from BASF
social lives and protect the able and more produc-
jobs of the division's marketing, medical affairs, and and sold their products to
land; BASF and ITC field- tive farming
IT people more fulfilling by including them on the ITC, needed a new model of
based advisers
agriculture to become globa
sales team. The hospital chains would lower their in- ¡competitive
cidence of infections, which would reduce their risks
and costs. And BD would deepen its relationships Crédit Agricole " Civic-minded investors, ' Community-based
downtown merchants, financial products that
with hospital networks, increase sales, and reduce A leading bank operating in a
bank advisers from link local saving and lo-
its need to compete on price. declining downtown market had
downtown branches, city cal borrowing and help
to find new sources of growth
The second experiment focused on how mem- officials fund urban renovations
and improvements
bers of the internal community would engage the
hospitals, beginning with the people with whom Surgery scheduling staff, A sophisticated
'FedE>
BD already had relationships: the procurement and , Transport of live tissues for surgeons, patients, package technology,
medical device suppliers, SenseAware, that tracks
supply chain managers. To recruit thefirsthospital organ donation needed to take
FedEx operations temperature, pressure,
chains, Banerjee and Ferrara enlisted Barry Brian, place with zero defect and at humidity, and location
precise arrival times
BD's vice president of strategic sales. He immedi-
ately saw this effort as a way to turn his strategic
Private industrial compa- Development of filtering
account managers into trusted advisers of senior General Electric nies, the government of systems that reduce
Lower-cost, environmentally
hospital executives. Several account managers were friendlier ways were needed to Alberta, research center water consumption, by
staff GE and customers who
excited and volunteered to ask the procurement extract the abundant heavy oil
worked side by side
and supply chain managers whether BD could assist of Alberta at a shared innovation
them in developing a safe-injection environment. center
Within three months, six U.S. chains had agreed to
Nurses, doctors, insurers, Turnaround of a major
give the program a try. As of January 2013, that num- Hospital Moinhos patients and their families, hospital in Porto Alegre,
ber had grown to 16. de Vento visiting nurses, local and creation of a
construction workers low-cost community
The account managers asked for the procurement The citizens of southern Brazil
(particularly the poor) lacked hospital
and supply managers' help in building relationships access to quality health'c
with two groups: the infection-prevention and oc-
cupational health leaders responsible for controlling La Poste Customers, teller em- Redesigned, locally
infections and protecting employees of the hospital ployees, local post office customized post office
French postal service needed managers, local citizens' layout and schedule;
network. Their incentive for joining the program was to reverse the steep decline associations dramatically reduced
caused by the internet and to
access to information on leading practices and to improve service
waiting times
data about their networks, which would make them
more effective—for instance, in providing custom- Freelance car and parts Online tools for design-
I Local Motors
ized training in infection prevention to their organi- l' Passionate car lovers were designers, customers will- ing region-specific cars
ing to pay for a unique car (such as muscle cars
zations' nurses and doctors. 1 dissatisfied with standard cars experience. Local Motors for the Southwest); new
The co-creation team devised a well-oiled produced by the automotive staff car models
system for collecting data and developing improve- Lindusti
ment programs tailored to each hospital chain. It Customers who needed A more humanized
employs proprietary tools that identify practices Microsoft support, call center agents customer experience.
Customers were frustrated with Answer Desk, which al-
that cause variability in the incidence of infections anonymous call-center ser ervicäH lows callers to select a
within a given hospital network. (For example, the personal support agent
model demonstrates how certain variations in
74 Harvard Business Review April 2013
 COMMUNITY-POWERED PROBLEM SOLVING HBR.ORG

product-usage patterns often are a lead indicator of of the injection devices used had no safety features.
future problems.) Correcting this problem involved simple education
A small SWAT team initially assesses the prac- and training of the staff at each location.
tices at each chain and then, with BD experts who BD is using the data gleaned from the diagnoses
work remotely and the chain's infection-prevention to devise rules on the practices that work and those
and occupational health leaders, develops a preven- that do not, which it shares in the aggregate with its
tion plan. After each diagnostic phase, BD offers to community. (Individual hospitals' data remain pro-
configure an IT system that uses iPads to deliver in- prietary.) The data continuously generated by the
formation directly to meetings where improvement- IT platforms allow the company and the six chains
related decisions are made at the hospital network. to track the effectiveness of practices and to begin
Atfirstthe system is used mostly to provide informa- building predictive models that correlate variations
tion on BD's products and the leading clinical prac- in safety performance with specific factors. They in-
tices on how to prevent infections. But after a trial clude types of products (some have a better record
period of three to six months, the hospital network than others), the safety procedures up and down the
can choose to enter its own (anonymous) patient organization, the level of training, and the clinical
data and benchmark itself against various hospitals staff's turnover and experience.
that the company works with.
To gauge its progress, BD tracks two types of Increasing the Size and
measurements: some related to content and others Richness of the Community
related to engagement. The former include what The third experiment was aimed at connecting BD's
practice areas were investigated during the diagnos- product designers with hospital nurses and doctors.
tic phase, what improvements were identified, and Nurses, in particular, have lots of ideas about how to
how many recommendations were implemented. improve syringes, since they handle them daily, but
The latter include the number of live diagnostics until the advent of the co-creation program, product
conducted, how many people were involved, how developers tended to interact with users only when
frequently users got on the platform, how long they testing designs in the late stages of product develop-
stayed on it, what data they found most helpful, how ment. The hope is that the users' early involvement
much of their data they contributed, and what im- in product design will open up new ways of thinking
provements they achieved in their own operations. about the syringe experience, leading to innovative
The second experiment has generated a great ideas that further reduce the incidence of infections
deal of engagement, information, insights, and re- and deepen hospitals' loyalty to the company's
sults. As of January, BD had conducted diagnoses products.
at 16 hospital networks in the United States, and its This experiment is off to a slow start. Product de-
divisions in India and China were beginning to adopt velopers had been successful with the traditional ap-
the co-creation approach. Six U.S. networks, which proach, and many were skeptical about having users
collectively have hundreds of locations, had agreed participate in medical-equipment design, so it took
to test out the IT system. a while for them to warm up to the co-creation ap-
At one network, infection-prevention leaders proach. (The original hope was that they would be
were amazed to discover that 26 of their acute-care involved in the SWAT teams that conducted the as-
departments still occasionally used conventional in- sessments at hospitals, but they started participating
jection devices that lacked safety features (to protect only in late 2012.) But attracted by the opportunity to
against accidental needle sticks). The situation was pitch theii ideas for new products directly to end us-
even worse in nonacute-care facilities, where 70% ers, the developers are now joining the community

With data generated by BD's platform, the

community can track the effectiveness of safety
practices and build predictive models.
April 2013 Harvard Business Review 75
SPOTLIGHT ON MANAGING THE CROWD

The Four Steps of Co-Creation

STEP ONE STEP TWO The first should focus on an internal com-
Identify a large problem that the firm Develop hypotheses about the internal munity, so you can prove your ability to
cannot solve alone. and external stakeholders that could co-create within your company to potential
Choose one that requires the help of many help tackle the problem. (4-6 WEEKS) partners. The second should include exter-
people from different enterprises in the Begin by asking which members of your nal people that your enterprise already has
company's ecosystem. community would have an interest in the relationships with and people you need on
problem, what platforms (or tools and your side as you reach deeper into outside
forums) could connect them, what new organizations. You can use the results
interactions they could have on those plat- produced by early hypotheses to persuade
forms, what experiences those interactions outsiders—particularly those at high levels—
might generate, and what kind of value to join your later experiments.
everyone involved would ultimately realize. You'll always need to start with the
These five things are the building blocks of members of the community, but as long as
co-creation. you have a coherent logic linking the blocks,
With the building blocks, craft hypoth- the sequence in which you design them
eses about four to six community segments. doesn't matter.

in increasing numbers. Still, given the slow progress Getting chieffinancialofficers of the hospitals to
and long lead time for development and obtaining join the community was the object of the fifth and
regulatory approval, it may take two or three years final experiment. Because it depended on the other
for hard results (in the form of new products) to experiments' bearing fruit, it was launched about
materialize. a year and a half into the co-creation program. BD
The fourth experiment added the chief sustain- and two large hospital networks are beginning to test
abiUty officers and staffs of both BD and the hospitals the hypothesis that the co-creation system can help
to the community. The company (with the help of a CFOs negotiate lower insurance rates by proving that
waste management partner) already collected used the probability of infections due to injection and
syringes from many hospitals and recycled them (in syringe-disposal practices has dropped. Toward that
the manufacture of plastic hospital-waste contain- end, BD and the hospitals are developing a health-
ers). It also had green programs for reducing waste economics and risk-modeling tool. BD ultimately
and using renewable energies. Now BD is challeng- hopes the community members will build a compre-
ing the internal and external sustainability managers hensive model that helps dramatically reduce the
to come up with new ideas for further reducing both infection-related costs of the whole ecosystem.
the environmental impact and the likelihood of in-
fections from the siringe-disposal process. Expanding the Network
Making sustainability experts part of the larger About six months into the experimentation phase,
infection-prevention team is expanding their jobs BD realized that the proprietary communities within
beyond their traditional role of enforcing environ- each hospital chain were established enough for it
mental regulations and company policies. And help- to start building cross-hospital communities—for
ing hospitals reduce the costs and risks associated example, one for infection-prevention and occupa-
with syringe disposal further helps BD become the tional health leaders, and another for the leaders of
supplier of choice. Sustainability people at the hos- sustainability departments. These new communi-
pital chains have proved eager to engage. ties are growing rapidly and are reinforcing the com-
pany's standing as a global thought leader on hospi-
tal safety issues.
The new communities BD believes that its co-creation program enables
it to forge a special relationship with hospitals. In
reinforce the company's many industrywide meetings, such as conferences
where hospitals try to develop new standards for
standing as a global thought injection practices, BD is the only medical-device
manufacturer present. It says the co-creation pro-

leader in safety issues. gram has helped it win several new accounts, made
it less reliant on price in competing, and allowed it to
76 Harvard Business Review April 2013
 COMMUNITY-POWERED PROBLEM SOLVING HBR.ORG

STEP THREE already have with external partners. If STEP FOUR

Conduct experiments to test the none exist, inexpensive cloud software will Continuously generate new insights
hypotheses. (6-18 MONTHS) suit most needs. from the data.
When approaching external partners, After a few months of experiments, in- It's critical for the community to establish
don't pitch your experiments as a pilot; crease the number of community members rules about who owns the data and what
instead, invite people to be the first mem- and segments rapidly and tackle problems information can be shared. You'll also
bers of the community you're building. of increasing scope. The size and richness need to organize the data for use, setting
Make it clear that you want their ideas. (It of your community will attract more and up structures, tools, and protocols with
wouldn't be co-creation if you were simply more members to your co-creation system. your IT department.
pushing your views on them!) Start measuring results to gauge whether As more organizations adopt your plat-
Initial platforms typically consist of live you're reaching your goals for engagement, form and data accumulate, you can begin
workshops. Since these don't scale up well, the quality of experiences, value created, to build models of what practices drive
you'll need to progressively replace (or and so on. outcomes.
supplement) them with digital platforms.
Online platforms need not be complicated
or costly. Tap any digital connections you

become a leader in providing sustainabOity services ing it possible to tackle problems of increasing scope.
to hospitals. The number of individuals and organizations that
Some questions remain. For example, who owns can be connected is infinite. In the end, firms that
the data being produced? And how will the value build the most vibrant web of human interactions
generated be shared among BD, hospitals, and in- wiU win the competitive game, n
surance companies? Few hospitals have historically HBR Reprint R1304D
used data to define cHnical practices. Many of them
have to leam to operate differently to take advantage j Francis Gouillart is the president of Experience
of the power of the new BD approach. I Co-Creation Partnership, a management education
and consulting firm in Concord, Massachusetts. Douglas
Billings is a principal and the head of the co-creation
CO-CREATION IS NOT for the fainthearted. It involves practice at PwC.
a fundamental transformation of the firm's operat-
ing model and needs to start with top management's
commitment. (At BD the entire senior management
team, from CEO Vince Forlenza and COO Bill Kozy on
down, encouraged thefirm'sdivisions to experiment
with co-creation.) Because of its systemic nature,
co-creation cannot be undertaken as an isolated
skunkworks.
Co-creation requires a mix of hard and soft skills.
The ultimate goal is to trigger a chain reaction of win-
wins for people and organizations throughout an
ecosystem by generating and acting on data-driven
insights that benefit multiple stakeholders. But few
people are natural leaders who have both strong
analytical skills (which are needed to construct the
data models) and natural empathy (which inspires
the trust required to share intimate experiences and
data). The answer is to assemble a co-creation team
that includes people with different skills, some pre-
dominantly analytical, others stronger on the en-
gagement side.
Co-creation is an evergreen process that even-
tually affects all members of afirmand constantly
"It was at this point that we agreed to sell our souls."
draws in more and more external stakeholders, mak-
April 2013 Harvard Business Review 77
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