Community-Powered Problem Solving

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Spotlight on Managing the crowd

Community-Powered Problem Solving A health care initiative shows how brick-andmortar businesses can co-create solutions with their partners and change the rules of the game. by Francis Gouillart and Douglas Billings

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Spotlight on Managing the Crowd

Spotlight

This article is made available to you with compliments of Harvard Business Publishing for your personal use. Further posting, copying or distribution is not permitted.

For article reprints call 800-988-0886 or 617-783-7500, or visit hbr.org Artwork Jacob Hashimoto, Infinite Expanse of Sky, 2008–2009, acrylic, paper, thread, bamboo, Studio La Città, Verona, Italy

CommunityPowered Problem Solving

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Photography: Michele Sereni

A health care initiative shows how brick-and-mortar businesses can co-create solutions with their partners and change the rules of the game. by Francis Gouillart and Douglas Billings

All companies—even those in entirely B2B, brick-and-mortar industries—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 managing constituencies through specific processes: marketing and selling to customers, procuring from vendors, developing human resources policies for employees, and so on. The problem with traditional processes is that they don’t naturally evolve, since their

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Spotlight on Managing the Crowd

objective is repeatability and compliance, not continual adaptation. Inviting constituencies to collectively solve problems and exploit opportunities is a better strategy. We call this approach co-creation. It’s a new form of competing, one we described in “Building the CoCreative Enterprise” (HBR October 2010). As consultants, we have helped more than 30 organizations— in financial services, agricultural products, sports equipment, health care, and other industries—go down this path. In addition, we have studied some 200 other co-creation efforts. (See the exhibit “Who Is Co-Creating?” for a sample.) In this article we’ll show you how to begin this journey, by telling the story of a work in progress: the co-creation program that the Medical Surgical Systems unit of Becton, Dickinson and Company (BD) has been working on for nearly two years.

The Building Blocks

The first step in building a co-creation system is identifying a large problem that you need the help of many people from different organizations to solve. Then, to kick off the design stage, a company’s leaders should ask these five questions: 1. What community of individuals from inside the company and across external stakeholders do we need to connect to solve this problem? 2. What platform (physical or digital forum) does this community need to start connecting in new ways? 3. What new interactions will community members want to engage in on the platform to design a solution? 4. What valuable professional experiences will the members get out of these interactions? 5. What value will this new set of experiences generate for our firm and for the other organizations involved, creating a win for all parties? The answers to those questions form the building blocks of a co-creation system. The idea is to attract people onto platforms that you’ve provided,

get them to start exploring new ways to connect and generate new experiences, and let the system grow organically. You cannot map out the full structure of a cocreation system from the beginning. Building one is like putting together a jigsaw puzzle: You need to construct it gradually by assembling pieces in various corners of the puzzle and then identifying emerging patterns. (See the sidebar “The Four Steps of Co-Creation.”) Using the five questions, a company should develop a handful of hypotheses about which segments of the community to mobilize and how. The next step is to conduct experiments by giving each segment an engagement platform and seeing whether it generates valuable interactions and insights. The first experiment should always focus on an internal system. (You won’t have any credibility with outside partners if you haven’t learned to co-create inside.) Later experiments will add more and more external partners. You can begin with the people your company already has relationships with and then enlist their help in persuading more people to join your cocreation community. Live meetings of participants make good initial platforms, but they’re difficult to scale up costeffectively. To handle broad participation, you’ll need to move onto digital platforms. These don’t demand huge investments; you can tap into existing digital connections with your external partners or use inexpensive cloud technology. After a few months of experimentation, strive to increase the number of members and segments rapidly and tackle problems of increasing scope. The larger and richer the community is, the more everyone involved will get out of it.

BD’s Big Challenge

To see how this process works, let’s look at a major initiative of the medical technology company BD. A global leader in supplying syringes to hospitals and 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. 4 Harvard Business Review April 2013

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Idea in Brief Large problems often present big opportunities. The challenge is that their solutions often require the collaborative efforts of hundreds, perhaps thousands, of people from different organizations. The best way to make this happen is to provide platforms on which these people can engage with one another and invent new ways to create value for their organizations and themselves.

The first step in building such a “co-creation” system is to identify a large problem that everyone has an interest in. Then you should devise and test hypotheses about the segments of the community that need to be engaged, the platforms that will allow their members to connect in new ways, the interactions that will result, the experiences that members will get 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 its ties with customers by helping them reduce the incidence of health-care-associated infections, like hepatitis, caused by unsafe injection and syringedisposal practices. Over the previous 15 years, the company had successfully helped develop new industrywide injection-safety standards and persuaded hospital workers to adopt them. But the degree of adoption varied widely, even within hospitals, and was especially low among doctors and nurses who were affiliated with hospitals but worked at other locations. (Hospital systems have been acquiring large numbers of physician practices in recent years.) BD’s vision of a “safe injection environment” presented a natural opportunity for co-creation. In the United States alone, there are thousands of hospitals and outpatient facilities, with hundreds of thousands of doctors, nurses, and waste-handling employees. Ranjeet Banerjee, vice president and general manager of Medical Surgical Systems, and Michael Ferrara, his director of strategy, realized early on that if they took a process approach and relied solely on the unit’s sales force to get all these players to change their practices, it would take years and consume huge amounts of resources. With our assistance as consultants, they came up with a more cost-effective, faster alternative: install numerous platforms (initially live workshops and then eventually web-based systems) that would bring together communities of people who shared an interest in improving injection and syringedisposal practices. These included supply chain and purchasing managers, infection-prevention and occupational health leaders, sustainability managers and staff, and chief financial officers. At the outset, BD had relationships with only some of those people. But by the end of the co-creation process, that would change.

A model for this is a work in progress that Becton, Dickinson and Company is orchestrating. A global leader in supplying syringes, BD is using co-creation to deepen its ties with hospital chains by helping them reduce the incidence of infections caused by unsafe injection and syringedisposal practices.

Launching Experiments

At BD, Banerjee and Ferrara assembled a co-creation team of about 10 managers from divisional management, marketing, sales, R&D, clinical and regulatory affairs, and IT to develop detailed theories about which communities to engage and what platforms to give them. In a one-day workshop, the team came up with five such hypotheses. Then the team began to launch experiments to test them. The first one lay the groundwork by building an internal community of BD functions dedicated to solving the injection-delivery and syringedisposal challenges of each hospital. The strategic account managers (salespeople assigned to the hospitals) played the lead role and were supported by a project team drawn from the same groups represented on the co-creation team, plus an IT supplier that specialized in social software services delivered through the cloud. (Previously, the division had no formal cross-functional process for engaging each hospital beyond the sales call.) The initial platform was a working group that interacted through regular meetings, e‑mail, and the company’s collaboration, or social media, tools. The group started by drawing maps of how various BD people interfaced—or could interface—with the hospital staff beyond the procurement and supply chain managers they typically dealt with. These maps were later shared with hospital staffers, who helped identify weak or missing interactions and devise new ways of connecting both organizations. The maps revealed, for example, that infection-prevention leaders had no way of measuring the safety performance of doctors and nurses in individual locations and no knowledge of how much training in safety procedures such personnel had. The resulting new interactions in the internal community generated insights into how to improve each hospital’s safe-injection and syringe-disposal record. For example, BD was able to cross-pollinate April 2013 Harvard Business Review 5

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Spotlight on Managing the Crowd

the medical staff’s and sustainability department’s knowledge about leading practices for injection and disposal with the R&D staff’s ideas for product design. The hope was that the new approach would improve the professional experiences of all players in the system. It would make the job of the company’s strategic account managers easier by giving them a new way to work with a hospital and gain access to its senior medical staff. And it would make the jobs of the division’s marketing, medical affairs, and IT people more fulfilling by including them on the sales team. The hospital chains would lower their incidence of infections, which would reduce their risks and costs. And BD would deepen its relationships with hospital networks, increase sales, and reduce its need to compete on price. The second experiment focused on how members of the internal community would engage the hospitals, beginning with the people with whom BD already had relationships: the procurement and supply chain managers. To recruit the first hospital chains, Banerjee and Ferrara enlisted Barry Brian, BD’s vice president of strategic sales. He immediately saw this effort as a way to turn his strategic account managers into trusted advisers of senior hospital executives. Several account managers were excited and volunteered to ask the procurement and supply chain managers whether BD could assist them in developing a safe-injection environment. Within three months, six U.S. chains had agreed to give the program a try. As of January 2013, that number had grown to 16. The account managers asked for the procurement and supply managers’ help in building relationships with two groups: the infection-prevention and occupational health leaders responsible for controlling infections and protecting employees of the hospital network. Their incentive for joining the program was access to information on leading practices and to data about their networks, which would make them more effective—for instance, in providing customized training in infection prevention to their organizations’ nurses and doctors. The co-creation team devised a well-oiled system for collecting data and developing improvement programs tailored to each hospital chain. It employs proprietary tools that identify practices that cause variability in the incidence of infections within a given hospital network. (For example, the model demonstrates how certain variations in 6 Harvard Business Review April 2013

Who Is Co-Creating? Companies around the world are tackling big problems through communal innovation, or co-creation, efforts. Company & Problem

Stakeholders

Outcome

BASF and ITC

Communities of Indian farmers seeking to improve their economic and social lives and protect the land; BASF and ITC fieldbased advisers

Educational sessions, programs, and tools that promote sustainable and more productive farming

Crédit Agricole

Civic-minded investors, downtown merchants, bank advisers from downtown branches, city officials

Community-based financial products that link local saving and local borrowing and help fund urban renovations and improvements

FedEx

Surgery scheduling staff, surgeons, patients, medical device suppliers, FedEx operations

A sophisticated package technology, SenseAware, that tracks temperature, pressure, humidity, and location

General Electric

Private industrial companies, the government of Alberta, research center staff

Development of filtering systems that reduce water consumption, by GE and customers who worked side by side at a shared innovation center

Hospital Moinhos de Vento

Nurses, doctors, insurers, patients and their families, visiting nurses, local construction workers

Turnaround of a major hospital in Porto Alegre, and creation of a low-cost community hospital

La Poste

Customers, teller employees, local post office managers, local citizens’ associations

Redesigned, locally customized post office layout and schedule; dramatically reduced waiting times

Local Motors

Freelance car and parts designers, customers willing to pay for a unique car experience, Local Motors staff

Online tools for designing region-specific cars (such as muscle cars for the Southwest); new car models

Microsoft

Customers who needed support, call center agents

A more humanized customer experience, Answer Desk, which allows callers to select a personal support agent

Indian soybean farmers, who purchased supplies from BASF and sold their products to ITC, needed a new model of agriculture to become globally competitive

A leading bank operating in a declining downtown market had to find new sources of growth

Transport of live tissues for organ donation needed to take place with zero defect and at precise arrival times

Lower-cost, environmentally friendlier ways were needed to extract the abundant heavy oil of Alberta

The citizens of southern Brazil (particularly the poor) lacked access to quality health care

French postal service needed to reverse the steep decline caused by the internet and to improve service

Passionate car lovers were dissatisfied with standard cars produced by the automotive industry

Customers were frustrated with anonymous call-center service

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product-usage patterns often are a lead indicator of future problems.) A small SWAT team initially assesses the practices at each chain and then, with BD experts who work remotely and the chain’s infection-prevention and occupational health leaders, develops a prevention plan. After each diagnostic phase, BD offers to configure an IT system that uses iPads to deliver information directly to meetings where improvementrelated decisions are made at the hospital network. At first the system is used mostly to provide information on BD’s products and the leading clinical practices on how to prevent infections. But after a trial period of three to six months, the hospital network can choose to enter its own (anonymous) patient data and benchmark itself against various hospitals that the company works with. To gauge its progress, BD tracks two types of measurements: some related to content and others related to engagement. The former include what practice areas were investigated during the diagnostic phase, what improvements were identified, and how many recommendations were implemented. The latter include the number of live diagnostics conducted, how many people were involved, how frequently users got on the platform, how long they stayed on it, what data they found most helpful, how much of their data they contributed, and what improvements they achieved in their own operations. The second experiment has generated a great deal of engagement, information, insights, and results. As of January, BD had conducted diagnoses at 16 hospital networks in the United States, and its divisions in India and China were beginning to adopt the co-creation approach. Six U.S. networks, which collectively have hundreds of locations, had agreed to test out the IT system. At one network, infection-prevention leaders were amazed to discover that 26 of their acute-care departments still occasionally used conventional injection devices that lacked safety features (to protect against accidental needle sticks). The situation was even worse in nonacute-care facilities, where 70%

of the injection devices used had no safety features. Correcting this problem involved simple education and training of the staff at each location. BD is using the data gleaned from the diagnoses to devise rules on the practices that work and those that do not, which it shares in the aggregate with its community. (Individual hospitals’ data remain proprietary.) The data continuously generated by the IT platforms allow the company and the six chains to track the effectiveness of practices and to begin building predictive models that correlate variations in safety performance with specific factors. They include types of products (some have a better record than others), the safety procedures up and down the organization, the level of training, and the clinical staff’s turnover and experience.

Increasing the Size and Richness of the Community

The third experiment was aimed at connecting BD’s product designers with hospital nurses and doctors. Nurses, in particular, have lots of ideas about how to improve syringes, since they handle them daily, but until the advent of the co-creation program, product developers tended to interact with users only when testing designs in the late stages of product development. The hope is that the users’ early involvement in product design will open up new ways of thinking about the syringe experience, leading to innovative ideas that further reduce the incidence of infections and deepen hospitals’ loyalty to the company’s products. This experiment is off to a slow start. Product developers had been successful with the traditional approach, and many were skeptical about having users participate in medical-equipment design, so it took a while for them to warm up to the co-creation approach. (The original hope was that they would be involved in the SWAT teams that conducted the assessments at hospitals, but they started participating only in late 2012.) But attracted by the opportunity to pitch their ideas for new products directly to end users, 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 7

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Spotlight on Managing the Crowd

The Four Steps of Co-Creation

STEP ONE

Identify a large problem that the firm cannot solve alone. Choose one that requires the help of many people from different enterprises in the company’s ecosystem.

STEP TWO

Develop hypotheses about the internal and external stakeholders that could help tackle the problem. (4–6 weeks) Begin by asking which members of your community would have an interest in the problem, what platforms (or tools and forums) could connect them, what new interactions they could have on those platforms, what experiences those interactions might generate, and what kind of value everyone involved would ultimately realize. These five things are the building blocks of co-creation. With the building blocks, craft hypotheses about four to six community segments.

in increasing numbers. Still, given the slow progress and long lead time for development and obtaining regulatory approval, it may take two or three years for hard results (in the form of new products) to materialize. The fourth experiment added the chief sustain­ ability officers and staffs of both BD and the hospitals to the community. The company (with the help of a waste management partner) already collected used syringes from many hospitals and recycled them (in the manufacture of plastic hospital-waste containers). It also had green programs for reducing waste and using renewable energies. Now BD is challenging the internal and external sustainability managers to come up with new ideas for further reducing both the environmental impact and the likelihood of infections from the syringe-disposal process. Making sustainability experts part of the larger infection-prevention team is expanding their jobs beyond their traditional role of enforcing environmental regulations and company policies. And helping hospitals reduce the costs and risks associated with syringe disposal further helps BD become the supplier of choice. Sustainability people at the hospital chains have proved eager to engage.

The new communities reinforce the company’s standing as a global thought leader in safety issues. 8 Harvard Business Review April 2013

The first should focus on an internal community, so you can prove your ability to co-create within your company to potential partners. The second should include external people that your enterprise already has relationships with and people you need on your side as you reach deeper into outside organizations. You can use the results produced by early hypotheses to persuade outsiders—particularly those at high levels— to join your later experiments. You’ll always need to start with the members of the community, but as long as you have a coherent logic linking the blocks, the sequence in which you design them doesn’t matter.

Getting chief financial officers of the hospitals to join the community was the object of the fifth and final experiment. Because it depended on the other experiments’ bearing fruit, it was launched about a year and a half into the co-creation program. BD and two large hospital networks are beginning to test the hypothesis that the co-creation system can help CFOs negotiate lower insurance rates by proving that the probability of infections due to injection and syringe-disposal practices has dropped. Toward that end, BD and the hospitals are developing a healtheconomics and risk-modeling tool. BD ultimately hopes the community members will build a comprehensive model that helps dramatically reduce the infection-related costs of the whole ecosystem.

Expanding the Network

About six months into the experimentation phase, BD realized that the proprietary communities within each hospital chain were established enough for it to start building cross-hospital communities—for example, one for infection-prevention and occupational health leaders, and another for the leaders of sustainability departments. These new communities are growing rapidly and are reinforcing the company’s standing as a global thought leader on hospital safety issues. BD believes that its co-creation program enables it to forge a special relationship with hospitals. In many industrywide meetings, such as conferences where hospitals try to develop new standards for injection practices, BD is the only medical-device manufacturer present. It says the co-creation program has helped it win several new accounts, made it less reliant on price in competing, and allowed it to

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STEP THREE

Conduct experiments to test the hypotheses. (6–18 months) When approaching external partners, don’t pitch your experiments as a pilot; instead, invite people to be the first members of the community you’re building. Make it clear that you want their ideas. (It wouldn’t be co-creation if you were simply pushing your views on them!) Initial platforms typically consist of live workshops. Since these don’t scale up well, you’ll need to progressively replace (or supplement) them with digital platforms. Online platforms need not be complicated or costly. Tap any digital connections you

already have with external partners. If none exist, inexpensive cloud software will suit most needs. After a few months of experiments, increase the number of community members and segments rapidly and tackle problems of increasing scope. The size and richness of your community will attract more and more members to your co-creation system. Start measuring results to gauge whether you’re reaching your goals for engagement, the quality of experiences, value created, and so on.

Cartoon: Joe di Chiarro

become a leader in providing sustainability services to hospitals. Some questions remain. For example, who owns the data being produced? And how will the value generated be shared among BD, hospitals, and insurance companies? Few hospitals have historically used data to define clinical practices. Many of them have to learn to operate differently to take advantage of the power of the new BD approach. Co-creation is not for the fainthearted. It involves a fundamental transformation of the firm’s operating 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 the firm’s divisions 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 winwins 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 predominantly analytical, others stronger on the engagement side. Co-creation is an evergreen process that eventually affects all members of a firm and constantly draws in more and more external stakeholders, mak-

STEP FOUR

Continuously generate new insights from the data. It’s critical for the community to establish rules about who owns the data and what information can be shared. You’ll also need to organize the data for use, setting up structures, tools, and protocols with your IT department. As more organizations adopt your platform and data accumulate, you can begin to build models of what practices drive outcomes.

ing it possible to tackle problems of increasing scope. The number of individuals and organizations that can be connected is infinite. In the end, firms that build the most vibrant web of human interactions will win the competitive game.  HBR Reprint R1304D Francis Gouillart is the president of Experience Co-Creation Partnership, a management education and consulting firm in Concord, Massachusetts. Douglas Billings is a principal and the head of the co-creation practice at PwC.

“It was at this point that we agreed to sell our souls.” April 2013 Harvard Business Review 9

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