You Can’t Collaborate Unless You Agree on the Problem

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To design and develop new products, it’s not uncommon today to get your research and engineering folks to collaborate with customers and other external stakeholders. In effect, you give these people the right to participate in your innovation process and influence its final outcome.

This sort of collaboration has been well-documented in the B2C context (where it’s often called “crowdsourcing” or “co-creation”), but we see it in B2B companies as well. In B2B customer collaboration, however, the customer tends to be driven by specific business goals rather than passion for your brand or product category.

In this context, agreement on the problem you’re going to work together on is the critical element. For companies to get real value from working together, the problem has to be aligned with the interests of all parties. This is not always the case in attempts to collaborate. Let me share a sanitized story of one such initiative at a company I will call WhiteCo, a parts supplier for the white goods industry (the durable consumer appliances that tend to have a white finish – air conditioners, refrigerators, and so on).

It had taken a long time to organize the workshop. WhiteCo had put huge efforts in convincing a key customer to participate and had done its best to set up the event well. They had picked a location designed to spark people’s imagination, and both parties had sent representatives from multiple functions that included experts and key executives from both companies. A top-flight facilitator had been invited to lead the discussion. Commitment and expectations were high.

But the workshop flopped. The issue, it turned out, was that the problem they were trying to solve through the exercise was relevant only to WhiteCo and not its customer, so the customer’s people soon disengaged. In an attempt to salvage things, WhiteCo switched to a problem that was important to its customer, but it soon became apparent that this didn’t work either, because it really wasn’t relevant to the WhiteCo people. Both sides ended up disappointed and will be unlikely to want to repeat the experiment.

This happens more often than you might think. In B2B, managers all too often treat such “co-creation” as an event rather than a process and therefore focus almost exclusively on the workshop. But the workshop is only a point in a process that starts with the careful, collaborative design of a problem statement. Here are some tips on how to write a winning problem statement:

Brainstorm and iterate: Analyze the customer’s business and priorities to identify problems that could be relevant for both sides; approach the customer, propose your options but make it clear that it is not necessary to choose immediately. Ask your partner to prepare a counter-proposal with additional problems. Rank-order the list: Agree with your customer on shared criteria and then score each of the listed problems accordingly. Do it separately at each company; you should not influence each other. Select several problem statements: Don’t go into the workshop with just one problem statement. If turns out to be unfeasible, then the entire initiative will grind to a halt. In our experience, two or three is the right number.

As an illustration of how to do this well, the experience of BASF is worth looking at. Recently, the German chemicals giant collaborated with another chemicals company. Through a process similar to the one just described, they selected engine downsizing as the problem statement, the goal being to develop a lighter weight engine that consumes less gas and emits less exhaust. They further narrowed the scope by explicitly ruling out development of a number of technologies including gas/fuel cell hybrid engines. The resulting workshop was a great success and the two have begun to collaborate on a number of projects within the agreed parameters.

Such B2B collaboration can be difficult, but focusing your initial effort on jointly defining a clear problem will make it more likely that you will achieve real, sustainable value in the long term.

Harvard Business Review

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Posted on September 26, 2014, in Sri Lanka. Bookmark the permalink. Comments Off on You Can’t Collaborate Unless You Agree on the Problem.

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