Online consumer communities, collaborative learning and innovation

ONLINE CONSUMER COMMUNITIES, COLLABORATIVE LEARNING AND INNOVATION Carla Rossi University of Basilicata Final draft Final version published as: ROSSI, C. (2011), "Online consumer communities, collaborative learning and innovation". Measuring Business Excellence, Vol. 15 Issue: 3, pp.46 - 62 DOI: 10.1108/13683041111161157 This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here (www.ssrn.com). Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.' Abstract The paper aims to outline the managerial challenges faced by the organizations interested in leveraging knowledge and creative talent embedded in online customers’ communities to sustain innovation in b-2-c industries. Through a detailed case-study analysis of a leading food producer who launched an online open collaborative platform to gather users’ idea for new products – the paper aims to highlight the transformational effort that firms have to make in order to leverage knowledge absorption from customers in the context of innovation. The paper suggests potential strategies for conventional companies to engage consumers in knowledge (co-creation) and collaborative innovation processes, formulating some hypothesis that could support an interpretative model of the capabilities needed to develop, maintain and increase customer’s engagement in the exchange. On the basis of the case analyzed, the paper suggests some managerial actions that could be adopted to facilitate customers’ engagement in processes of collaborative learning and innovation, outlining the potential barriers (in primis the managerial reluctance) that could prevent a successful result. The case contributes to the literature on co-creation, demonstrating how it can be progressively achieved and improved, trough a combination of management and marketing strategies, addressed not only to accrue users’ motivation but also managerial commitment. Keywords – Online consumer communities, collaborative innovation, Customer Knowledge Management, customer engagement, web 2.0, Barilla, Mulinochevorrei Conceptual background In a discontinuous business environment, facing a fiercer competition and the growing expectations of the consumers, companies are compelled to manage innovation on a continuous basis. Since internal R&D activities are too slow to keep up with innovation in the market, companies need to open up their innovation processes to new ideas and creative 1 contributions, caught outside their walls (Micelli & Prandelli, 2000; Chesbrough, 2003). As innovation occurs through combining different knowledge bases, firms need to nurture their ability to create, integrate, recombine knowledge, coming from different contributors, inside and outside their boundaries (Cohen & Levinthal, 1990; Kogut & Zander, 1992; Drucker, 1993; Grant, 1996; Teece et al., 1997). Literature on strategic alliances largely recognised the role of inter-firm collaboration in creating unique learning opportunities for the firms (Teece, 1998; Badaracco; 1991; Inkpen, 1996). The role of the final customer has been, instead, long neglected. Only more recently the “customer as a source of competences” idea appeared in literature (Prahalad & Ramaswamy, 2000; Sawhney & Prandelli, 2000; Busacca & Prandelli, 2001; Tapscott & Williams, 2006). This shift was largely enabled by the advent of the digital technologies, especially the so called web 2.0 applications, which opened the way to a deeper customer involvement in the processes of knowledge co-creation and collaborative innovation (Nambisan & Nambisan, 2002¸ Sawhney et al. 2005; Verona & Prandelli, 2006). In the last years many studies confirmed the strategic role that customer, considered either individually or in community contexts, can play in enhancing innovation and business performance (Bagozzi & Dholakia, 2002; Gibbert et al. 2002; Kozinets, 2002; Franke & Shah, 2003; Fuller et al., 2007). In particular, online consumer communities proved to be a powerful instrument to shape customer relationship with companies, as well as with products or brands, and to support firms’ innovation processes (Muniz & O’ Guinn, 2001; McWilliams, 2000; Sawhney & Prandelli, 2000; Busacca & Prandelli, 2001). Such online aggregations, or electronic tribes (Kozinets, 1999) are based upon shared enthusiasm for an issue or an activity; they possess and exchange knowledge related to specific product domains and are often virtual meeting places where users discuss opportunities for new products and ideas for product improvements. They represent, in other words, a large pool of product know-how (Fuller, 2006), that companies can leverage, if they have the right abilities to listen, enliven and nurture the horizontal flow of conversation revolving around their products and brands. The extent literature (McWilliams, 2000; Nambisan & Nambisan, 2002, Bauer & Grether, 2002; Verona & Prandelli, 2006; Bagozzi & Dholakia, 2002; Gibbert et al. 2002; Kozinets, 2002; Franke & Shah, 2003; Fuller et al., 2007; Wiertz & de Ruyter, 2007) shows that customers can potentially play different active roles, as they are involved in virtual aggregations related to a product or a brand they are attached to: 2 1. product marketers, contributing to the diffusion of information about the product, shaping other customers’ purchase behaviour (Vianello & Mandelli, 2009) and preferences (viral marketing), or delivering support services to peer customers (Nambisan & Nambisan, 2002); 2. innovation (co)developers (Jeppesen & Frederiksen, 2006; Fuller et al. 2006; Ogawa & Piller, 2006; Chesbrough, 2003; Reichwald et al. 2004; Magnusson & Kristensson, 2010). With regard to the first point, horizontal conversation accrue consumers’ independence from the firm: organized in communities of likeminded others, an increasing number of consumers engage in dialogue with their peers, bearing their ideas, experiences, feelings, capabilities. Interacting online in a peer-to-peer logic, customers aggregate themselves and collectively coproduce and consume content about a commercial activity, that is central to their interest, by exchanging intangible resources, that can take the form of information, knowledge, socioemotional support, etc (Wiertz & de Ruyter, 2007). These “swarms of customers” can wield tremendous influence “for” or “against” causes, ideas, beliefs or even brands. They can act as brand supporters or evangelizers, justifying the devotion toward the brand and inspiring others to use it, they can enrich others’ brand experience, constructing their personal narratives around it (Schau et al., 2009), but they can also hijack the brand (Wipperfurth, 2005) or develop a dangerous form of consumer resistance (Cova & Dalli, 2008), refusing market ideology, market resources (goods and services) or developing potentially dangerous opposition to the companies, as it happens in the so called alter and counter brands communities (Cova & White, 2010). This situation is particularly acute for larger companies, where consumer influence is disproportionately strong. Brand owners are losing some control over their brands' identities. This is perhaps the reason why some companies, especially the ones operating in traditional businesses, still feel uncomfortable with C-2-C conversation. They are still seeking a satisfactory compromise between the fear of losing control and the desire to gain a spontaneous relevance (which no brand could actually purchase), encouraging online conversations that:  amplify the message that the brand as already put out,  reinforce the credibility of the message, appearing much more “neutral” than the claim coming from the company;  “enrich” and greatly increase the relevance of a brand, thanking to the customers’ narratives revolving around it. 3 As innovation (co)developers, customers can give a contribution to new product testing or ideation. In the first case, they can give their input on product prototypes, as for example, do users that take part in software beta-testing. They can gain a growing “freedom of expression”: when they are not simply asked to provide a feedback on a selected group of options that the company developed (giving an input that is widely structured and channelled by the company) but to freely tell what they expect, what they feel and think about a brand. In this way, their voice may rise more spontaneously, even in the earliest phase of the new product development process, giving a richer input that could be useful for the exploration of new product concepts as well as for the cooperative design of the product and its functional or symbolic identity. With this respect, online conversations (with and among consumers) can become sources of customer insights, making available to the company a fresh and not-yet obvious understanding of customer beliefs, values, habits, desires, motives, emotions or needs. As Sawhney et al. (2005) and Verona & Prandelli (2006) highlight, virtual environment greatly enhance the firm’s ability to engage customers in collaborative innovation in several ways (table 1). It allows companies to transform episodic and one-way customer interactions into a persistent dialogue with customers. In addition to this, managing an ongoing dialogue (Sawhney & Prandelli, 2000; Kozinets, 1999; McWilliams, 2000; Micelli & Prandelli, 2000) and favouring C-2-C interactions, companies can tap into the social and the tacit dimensions of customer knowledge, shared among groups of customers with shared interests, having access to knowledge profoundly rooted in social relationships and exploring the universe of experiences, feelings, insights, capabilities, ideas, coming from their consumers. Table 1– Key differences between customer engagement in physical and virtual environments Innovation perspective In Physical environments Firm centric In virtual environments Customer centric Role of the customer Passive - customer voice as an input to create and test products Active - customer as a partner in the innovation process Direction of interaction One way Intensity of interaction On contingent basis Two way Continuous, back and forth dialogue Richness of interaction Focus on individual knowledge Focus on knowledge as social and collective sense making Size and scope of audiences Current customers Source (Sawhney et al., 2005: 4 – with some adaptations) Current as well as prospects and potential customers 4 In other words, the ubiquitous interconnectivity and the participative architecture of virtual environments open the way of cooperative innovation to the “ordinary” consumer, not limiting the involvement to the lead users (Von Hippel, 1986) in industrial goods sector. Many studies have confirmed the strategic role that customer can play in enhancing innovation and business performance (Bagozzi & Dholakia, 2002; Gibbert et al., 2002; Kozinets, 2002; Franke & Shah, 2003; Fuller et al., 2007; Magnusson & Kristensson, 2010). In particular, the benefits companies can extract from launching (or entering in relationship with existing) consumer communities have been highlighted in literature (Kozinets, 1999; McWilliams, 2000; Nambisan & Nambisan, 2002): positive word of mouth, stronger brands, increase in brand loyalty, more rapid and effective market research and, above all, the opportunity to leverage the “tacit” dimension of the customer knowledge, obtaining precious insights that can inform product innovation and contribute to build differentiation. A minor degree of attention received the transformational effort that firms have to make in order to leverage knowledge absorption from customers in the context of innovation; the hurdles that companies have to surmount to successfully establish and maintain over time a dialogue with their customers, involving them in their processes; the “meta-structuring” intervention required to fully exploit the potential of web-based technologies and applications within the specific organization. The aim of this paper is to highlight the managerial challenges faced by the organizations interested in leveraging customers creative talent to sustain innovation. Despite the rhetoric of customer involvement, wikinomics, power of the masses, crowd-sourcing etc., companies benefiting from this new business paradigm are still far from being a myriad. With the exception of the software industry (and the open source movement, which received a great deal of attention in the studies), in the academic literature there is a relative paucity on the experiences of firms that successfully exploited the potential of the web to foster collaborative innovation in b-2-c industries. Hence, the paper adopts an exploratory approach to derive patterns and implications: through a detailed case-study analysis of a leading Italian food producer (who launched an online open collaborative platform to gather users’ idea for new products), the paper seeks to provide deeper insights into the creation and management of an online customer community, to generate new ideas that can inform product innovation. The paper suggests potential strategies for conventional firms to engage this phenomenon, formulating some hypothesis that could support an interpretative model of the capabilities they need to master in order to develop, maintain and increase customer’s involvement in the 5 exchange, as well as of the factors that could facilitate or inhibit customers’ participation into the innovation process. The remainder of the paper is structured as follows: the next section shortly provides theoretical background on co-creation and Customer Knowledge Management, focusing on the main benefits of the customer-company collaborative learning relationship. Following this, is a presentation of the Mulino Bianco Barilla case history (related to the project www.nelmulinochevorrei.it), focused on the governance mechanisms and the community management activities adopted by the firm. A particular attention is deserved to the managerial problems faced by the company during the initial phases of implementation of the project and the solution progressively adopted. Finally, main findings are discussed and possible managerial implications outlined. Learning with the consumers: co-creation and Customer Knowledge Management Literature on strategy, marketing and product development, all emphasize the role of customer in knowledge discovery and creation. Echoing the seminal work of Normann & Ramirez (1993) and translating the “value constellation” notion into the digital era, Prahalad & Ramaswamy (2000, 2004) provide a useful framework to describe the changing role of the customer, from passive recipient of information flows (and products) created by companies, to competent partner that firms have to involve in value co-creation processes, where he can bear his experiences, feelings and capabilities. Implicit in this view, is the idea that companies must escape the firm-centric image of the past: they can no longer be autonomous in designing products, crafting marketing messages and controlling sales channels; they have to adopt an “obsessive focus” on the joint co-creation of unique interaction experiences (and innovative products) with consumers. Sawhney and Prandelli (2000), describing the practice of distributed innovation within communities of creation, emphasize the contribution of the new technologies, which enable a shift from “a perspective of exploiting customer knowledge by the firm to a perspective of knowledge co-creation with the customers”. This shift towards the collaborative learning approach (Busacca & Prandelli, 2001) is even better underlined, from the semantic point of view, by Gibbert et al. (2002) who explicitly propose the distinction between Customer Relationship Management and Customer Knowledge Management (table 2), defining the latter as “the strategic process by which cutting-edge companies try to gain, share and expand the knowledge residing in customers, to both customers and corporate benefit” (p. 461). 6 Their research outlines the benefits companies can obtain by managing the knowledge of their customers, mainly related to the opportunity of sensing emerging market opportunities before the competitors, constructively challenging the established wisdom of “doing things around here” and creating more economic value for corporation, its shareholders and its customers. Sawhney & Prandelli (2000) highlight similar and other benefits, as they remark that the most significant output of a knowledge creation process that transcends the firm’s boundaries and moves toward the customers can result from a “higher innovation potential, better fine tuning in respect of market needs, increased customer satisfaction, major switching costs, shorter loop of learning errors and reduced information ambiguity”. Table 2 - From Customer Relationship Management to Customer Knowledge Co-creation CRM CKM Knowledge sought in Customer data-base Customer experience, creativity and (dis)satisfaction with products/services Rationale Mining knowledge about the customer in company's database Customer base nurturing; customer retention Gaining knowledge directly from the customers, as well as sharing and expanding this knowledge Collaboration with customers for joint value creation; organizational learning and innovation Role of customer Mainly captive, tied to product by loyalty schemes Active; he is a partner in value and knowledge co-creation processes Corporate role Build lasting relationship with Involve the customer; remove the customers barriers that impede customer enactment Objectives Source: Gibbert et al. (2002: 461) (with some adaptations) Though this idea of managing and exploiting customer knowledge may sound appealing to firms, there is so far little empirical research available about the strategic use of customer competences for innovation processes. Trying to extract, incorporate and leverage customers’ knowledge is not an easy and costless process: there are no instant solutions, no shortcuts that can be followed, no general recipes that can be used without incurring in a failure. A remarkable effort on behalf of firms is, therefore, required to embrace and tap into the full power of social applications. To succeed, companies can not simply intensify their strategies; they have to re-think the way they compete in order to embrace a new art of dialogue and collaboration. They have to reconfigure their own role, assuming the seemingly humble task 7 of providing technological, cultural, strategic, emotional resources in the hope of fostering the creation of specific innovative and profitable forms of customer participation. To really become customer-centric, companies need to become more adept with a new way of doing business: this transformation requires a radical mind-shift and an organizational effort that can not be taken for granted. In the next sections, trying to provide deeper insights into the “dark side” of the online b-2-c collaborative relationships (the hidden but essential work which is required to fully exploit the potential of customer communities in order to support processes of knowledge co-creation and collaborative innovation) we will focus on the reconstruction of an Italian case-history. Customer involvement in new products idea-generation: an Italian case-study In order to provide a deeper insight in the mechanism and processes trough which organizations can engage online customer aggregations and leverage their creative contribution to foster innovations, the “Mulino Bianco Barilla” idea-generation internet project (www.nelmulinochevorrei.it) was selected as a case-study. An italian food leader company was chosen as the basis for the case analysis for the following reasons: - Barilla is a traditional firm which has long based its marketing activities on broadcast, oneto-many forms of communication. In 2009 the company decided to adopt a new practice within its industry, starting a project that is explicitly aimed at “listening, instead of talking”. The case appears to be, therefore, particularly promising to observe the transformational process carried out by an established firm; - the project launched by Barilla is not conceived as an episodic and short-termed activity: on its website, the company declares that no deadline has been foreseen. This long term orientation of the initiative offers the opportunity to follow its future evolution, realizing an over time study of the phenomenon object of analysis; The case study was informed by in-depth interview with company managers, non participant observation of the investigated website and a detailed search of publicly available information from financial statements, internal documents and industry publications. The approach to questioning was open ended and based on individual semi-structured interviews. 8 Sharing of ideas and cooperative innovation: the experience of Mulino Bianco Barilla1 “Nel Mulino che vorrei” (literally: In the windmill I would like) is an open, online ideassharing platform, where Barilla - as a pioneer in the Italian food market - experiments with a new way to relate itself with consumers. With the creation of this online platform, inaugurated on march 2009, Barilla aims to reduce the distance from itself and its customers, declaring itself ready to listen rather than talk. The explicit objective of the initiative is to «allow the public to spontaneously communicate with the brand in order to contribute to its improvement and growth». Customers are left free to express themselves, without any filters or risk of distortion, disclosing their rational, emotional, creative proposal, as a decisive contribution to the generation of new product ideas, as well as to the brand identity construction and enrichment. Table 3- The themes and sub-categories where ideas are catalogued Themes Products Promotions Packaging Corporate Social Responsibility Sub-categories Cookies, Snacks, Bread & co., Other products, New ingredients Prizes, Sales points, Collect Point Program, Contests, Events, Other Forms and formats, Materials, Information, Other Social commitment, Environment, Other The www.nelmulinochevorrei.it site is structured to gather ideas according to pre-defined themes (table 3) and processes. It is a laboratory for ideation, imagination and cooperation, a space where one can interact, share and compare one’s ideas and perception of Mulino Bianco. Here, users can present requests and offer suggestions, ideas or simple “food for though”. They can give their comments to others’ idea, discuss and develop them, together with the company and other users. Ongoing dialog, comparison with others, and the exchange of information allow to let free both cognitive and imaginative consumers’ potential, creating a wealth of ideas, daily enriched with new contributions. The launch of the project marks the beginning of a turnaround of the consolidated logics of communication but also of the traditional New Product Development processes which tend to be oriented, in a stronger way, toward an open innovation approach. The customer is not listened only during the testing phase of the new product ideas; his voice may rise spontaneously to give a richer input that will be useful for the exploration of new product concepts as well as for cooperative design of the product, the brand and their identity. 1 This paragraph was co-authored with Pepe Moder, Head of Digital, Barilla. 9 In the “Mulino I would like” project, customers’ involvement in the generation of ideas is based on an equitable relation and on a reciprocal promise: the consumers commit to elaborate their own view of Mulino, generating new points of reflection for the company, which, on the other hand, assumes the responsibility to evaluate, study, delve into, and verify them in their various aspects to understand if, from these ideas, new projects can arise that are concrete, compatible with the values, the vision and mission that Barilla undertakes. At the same time, the company commits to guarantee maximum transparency in the handling of information, keeping up to date the community on the evaluation process of the given contributions and to respond in a clear and public manner on the feasibility of the evaluated ideas, giving its motivations on the final decision (reject the idea or realization of it). It does not promise any form of monetary reward to the participants. As it is clearly explained in the online presentation of the initiative, “who participates has the sole interest of a desire, a need, an idea that would like to be seen realized…We want to improve in the directions that the consumers indicate and do our best to make their best proposals come true”. In the company management’s perception, who participates in the project “Nel mulino che vorrei” does it only for the pleasure of feeling like a protagonist, or because he is proud to make public his own idea (hoping to see it realized), but also for the “adherence” to a brand, Mulino Bianco, which is a love-mark, an emotional part of many consumers’ experience. For this reason, the company does not compensate with money or with objects but it commits to give visibility to the authors of the “winning” ideas (who will be involved in the idea launch and will be invited to relate online their participation experience). Consumers can give their contributions in three forms: suggesting their ideas, giving a vote to others’ contribution or commenting them by joining the discussions in progress (Fig. 1). To pass on to the next phase of evaluation, ideas gathered must obtain an adequate support (through votes and discussions) from the community. By succeeding interactions and sharing of ideas and experiences, the community contributes to feed the process of social construction of meaning, generating new collective ideas that are superior to those received by individual indications, since they are created through an ongoing, recursive and progressively emerging relationship. The company guarantees maximum liberty in expressing ideas. Therefore, it commits to make available all the ideas received, even the ones not relevant with business brought forth by Mulino Bianco, without applying any form of discrimination. It commits to not make remarks on the idea, reserving itself the possibility to reject contributions not corresponding to the rules of netiquette. 10 Realization Phase Raccolta delle idee Valutazione 1 In the pipeline Launch 2 … Moderation 10 Online diary and progressive scrolling up of ideas Suggest idea, comment, vote and refine others’idea REGISTERED USERS Figure 1 – The structure of the process The publication of the contribution online is not, however, immediate because it is subject to an intervention of “moderation” finalized to avert the risk of uploading “cloned” ideas or contributions extremely similar to other ones already presented (this is a problem that occurred during the first weeks after the launch of the initiative). To reach the realization phase (the final one), the ideas go through two steps of evaluation: in the initial one, that can last from 4 to 6 weeks, the ideas have to obtain a positive evaluation on behalf of a steering committee (composed of Marketing Director of the product, General Manager and CEO), who evaluates the degree of strategic coherence compared to the mission, vision and values of Mulino Bianco. At the second step of evaluation, costs and benefits of the solution proposed are taken into account: technical-productive, financial-economic and market feasibility are assessed. If the idea obtains a positive evaluation, then it goes to the next phase of realization. Every idea under evaluation is correlated with an online "diary" (published on the blog that supports the project) reporting its evolution. The online diary can be progressively enriched with comments by users or company personnel. The project does not have a final point: when an idea under evaluation is archived, because considered not feasible or because it goes to the realization phase, one of the ten places in the ranking is freed up and a mechanism of scrolling is activated. 11 For contributions that do not pass the evaluation process, the company commits to supply a detailed motivation, delivering on the promise made to the users (“ensuring transparency of information”) on which the project is based. As of May 26, 2011, the platform had gathered 4565 ideas, 74216 votes and a total of 7536 comments, generating a buzz of even wider proportions within the sites of social networking as Facebook, Twitter, Wordpress, etc. where the authors (or the supporters) of an idea research the consensus and “social” support in order to reach a noticeable number of votes, sufficient to make it advance in the next phase of evaluation. The users of the platform are mainly women (at 72%), with an average age of 35 years old (Table 4): An average of 15 new ideas are proposed daily, and the site has reached 10.200 indexed pages (while the generic site www.mulinobianco.it has only 930). Table 4 – Users’ Profile Female registered users Average age Average time on site per user Average new visits 72% 35 3 minutes 72% The company realized four ideas, one is under realization, while 19 ideas have been archived on the basis of different motivations that were clearly explained by the company to the users. In the presentation pages of the initiative, the company makes clear that the phase of realization could be very long, due to the complexity of the procedures and the tests to be carried out before marketing of the new product (for example, the preparatory work needed to put into production a new cookie can even take up to 24 months). The company is aware of the risks that derive from their slow response time, or better yet, from the asymmetry of the behavioural speed: consumers are very fast, their action time is very reduced and they expect the same speed of action and reaction from the company. The company, on the other hand, cannot compress beyond certain limits the time it takes to carry out its processes. Such asymmetry can represent a potential weak point of the project: as it will be discussed later in, waiting time can reduce the level of commitment and can attenuate consumers’ motivation to participate. The project is advancing towards the second level: if in the first phase the company “listened” to the consumers, gathering spontaneous contributions, in the second phase it will ask them to “activate” themselves on focused themes, in order to contribute to systematize the initiatives that are to be realized (for example, if the project is implementing a new cookie, it could ask 12 the community to suggest a name for it). Cooperation, therefore, will become strongly finalized to satisfy company’s specific needs and questions ("what about...", "chose between...", "send us a..."). Even in this phase, the users-authors will maintain a privileged role: according to the level of complexity of the project, they will, for example, be called to interact directly with the company designers, or become part of the panel of consumers involved in the test of first tasting or be included in the mailing list of clients that receive a samples of the product so they can express their impressions. Discussion When a company of large dimensions, operating in a traditional business, commits to a cooperating project, finalized to feed the co-evolution between its offering system and the increasingly magmatic consumption system, must undertake a non-trivial process of metamorphosis in order to try to overcome the multiple inertial factors that would tend to refrain it in its traditional modus operandi. The success or failure in the implementation of similar projects is, therefore, strongly influenced by the quality of the managerial action and by the ability to face the inevitable critical situations (table 5) arising while the project is in progress, that can refrain or slow down the initial thrust toward the realization. In the case of Barilla, an essential propelling factor to start the initiative was the high level of commitment showed by top management: the need to start in a direct way the experimentation on the digital “field” was perceived by the top management and shared by the property. Up to that moment, the online relational marketing activities were managed by external companies, on non-proprietary technological platforms, and were addressed, in a pure CRM databasedriven logic, to obtain, through small incentives and rewarding systems (ex.: free offer of phone logos and ring-tones), all data useful to customer profiling. A clear signal of the desired change (and of the top management’s will to attribute more weight to the online communication activities) was launched during the middle of 2008, through the creation of an internal Digital Team (initially composed of 2 people, the team has been expanded to 5 members). Since the company wanted to harness the potential of the new communication environment in a strategic way and not invest to accommodate a passing fad, they adopted an experimental approach. Some pilot projects were created and launched with the final aim to test the ground and progressively correct the “draft”, taking in account useful indications to implement broader projects. For example, before launching the Nelmulinochevorrei.it platform, other 13 type of initiatives that involved the consumers were led with success. Reference is made to the project "A cookie in search of an author”: in May of 2008, Barilla asked the consumers to suggest a name adequate for the new cookies that would have been launched in autumn of the same year. The online contest gathered 20.660 proposals for a total of 8253 users-voters that chose to baptize the new product with the name “Girotondi”. At the end of the project, 8 consumers were involved in another initiative: the diaries of the Girotondi. They were asked to try the new product and publicly share their sensations, committing to tell, on a weekly basis, in an online diary their impressions of the product and describe their personal consumption habits. In this manner, the company obtained important insight and saw needs that were not yet articulated, through the story of the experiences lived by the consumers. The success of the pilot initiative, besides confirming the existence of groups of consumers, emotionally involved with the brand and potentially very prone to being integrated in projects of collaboration and sharing of ideas, contributed to help the entire company organization to see and perceive the potential of similar projects. This alleviated the level of “skepticism” in regards to the novelty. Under this profile, one of the critical points that Barilla faced was the distrust manifested (or latent) on behalf of some managers, endowed with professional competences, but used to working with different logics and in environments of traditional communication. It took them a long time to accept the idea that on the web one cannot unilaterally “control”, condition or censor the flow of communication. It is quite obvious the “effort” made necessary to convince the entire organization of the idea of working with new tools that determine a downstream shifting of the information control, accruing the potential risk of seeing the company exposed to criticism. In more general terms, a prominent critical point of the project is trying to get the right level of involvement on behalf of the entire organization. Under this aspect, a problem that still need to be (partially) managed is helping the entire structure to “metabolize” one’s role within the collaborative sharing project: in the early company experience, even those who, in theory, declare themselves interested in listening to the customer, don’t realize in practical terms, the finalized participation to translate into reality the objective to which they theoretically claim to aspire. The problem arises because some functional product managers see the project as an “extra” compared to their daily activities; they see it as an additional activity for which it is hard to find time, if already absorbed by routine management. For this reason, more work is needed to convince the entire organization to metabolize the new way of working and understand the sense of it: the ideal point of arrival of the project can be reached when its management is no 14 Table 5 – Key managerial actions adopted to face critical points Critical problem Key Managerial Action Slow organizational response: risk of deceiving participants. Problem: maintaining the right level of credibility in company's ability to keep promises Launching of "Quick win" initiatives to realize major immediate progress revamping the level of (external and internal) commitment toward the broader and long-termed objectives of the project (the "big" victory) Maintaining high the motivation to participate and come back on behalf of the users. Problem: enlivening and encouraging the dialogue - Need to guarantee the right level of openess of the platform. Problem: simplify the participation and the access to contents, reducing the time and cost of specific learning undertaken by the consumers - Maintaining a direct "line of communication" trough the online diary and the creation of a blog supporting the platform. Investing on time consuming activities: reading all the ideas, rejecting the duplicate ones (indicating the idea already presented), responding to the participants' questions, reading the comments, re-launching the topics of conversation, warming up again the interest towards the discussion, conceiving and presenting parallel initiatives (online context, gathering, etc.) - Interventions aimed at increasing the level of usability of the site - Dynamic adaptation of the company's vocabulary to the one used by the consumer world. Changing the "tone" of the communication: using a simple language and a “human” tone of voice, to explain all the technical details of a complex project, making the consumers participate to the mechanisms and company processes - Facebook direct connect in order to cut down the distance between itself and the consumers, having matured its awareness that the brand “lives” all over in the digital eco-system and not only within its site Need to "retrieve" good ideas not supported by the community. Problem: try to maintain a right balance between the declared intention to realize the contributions mainly voted by the community and the opportunity to promote potential innovations related to "socially" weak ideas that appear to have sense in terms of business Need to expand the company's peripheral vision beyond its own customers. Problem: to involve customers who, not being biased from the “functional fixedness” (Von Hippel, 1986) and the core competences matured by the firm - In addition to the 10 most voted ideas, the digital team choose and bring in the assessment phase other ones, selected among those who have impressed and inspired more or among those that are more consistent with company's development strategies. Online conversation as a source of consumer insight Managerial reluctancy to work with new tools implying a downstream shifting of the information. Problem: managing the managerial skepticism in regards to the "novelty" - Adoption of an experimental approach: launching of some pilot projects to test the ground and progressively correct the draft Press on obtaining involvement of the entire organization, extending responsibility for the project beyond the Digital Team. Problem: helping the organization to "metabolize" one's role within the collaborative sharing project; overcoming the "not invented here" syndrome and the general distrust showed (or simply felt) by many managers towards new ideas coming from the consumers - Progressive involvement of functional manager in the blog communication activity: they become, at the eye of the community users, the main point of reference (managing the relationship with the community) for the projects that fall within their sphere of competence - Expanding the “range of listening” beyond the community hosted on company's websites, moving toward the social virtual spaces where the brand is discussed (on behalf of customers and non-customers). - Creation of a sort of monthly internal newsletter that summarizes and highlights the most significant insights emerged from the discussion/ideas published in recent weeks on the platform - All marketers are asked to find in the folds of the portal, potentially viable ideas (which received little support from the community) to assess their feasibility and try to implement them. The achievements of this "mission", headed across all marketers, is considered in terms of individual incentive and annual evaluation. 15 longer contracted to the Digital Team but distributed among the different functional areas, transversally permeating the entire organization and its processes. This is the reason why, within the blog that supports the community discussion of the “Nel Mulino che vorrei” site, the role of interface between the company and its customers is no longer carried out (as in the initial phases) by the sole members of the digital team but gradually taken on even by the different managerial roles that, in turn, are called to present themselves in first person and to present to the community the state of implementation of the ideas that fall within their tasks. In this same perspective (obtaining the involvement of the entire organization, extending responsibility for the project beyond the Digital Team) was created a sort of monthly internal newsletter that summarizes and highlights the most significant insights emerged from the discussion/ideas published in recent weeks on the platform; a further step forward was made when, in the first months of 2010 all marketers were asked to find, in the folds of the portal, potentially viable ideas (which received little support from the community) to assess, on a monthly basis, their feasibility and try to implement them (the achievements of this "mission", headed across all marketers, is considered in terms of individual incentive and annual evaluation). The organizational structure is progressively changing even if such a transformation is slow, compared to the one initially assumed. This strengthens the structural asymmetry in the behavioural speed of the company compared to the user’s. As earlier noted, another critical point derives from the impossibility to compress beyond certain limits the company response time. Even if the company has completed the analysis of 24 projects, the major risk is to not meet consumer expectations, even though a lot of energy and effort is lavished in the initiative, being perceived as not trustable. To avoid such a risk, the company, besides carrying out long term projects (that respond to the “desiderata” expressed by the community), has realized some parallel initiatives (online and offline) of minor complexity to demonstrate to the consumers, in the short term, its ability to maintain promises. In April 2009, for example, an online campaign, based on the use of banners, was launched. The content was generated by the users who participated in a contest of ideas. They proposed 2300 slogans and, based on the community liking, a company panel selected 6 winners. Even in this case a “social” reward was given: the chosen slogans were displayed on the main web sites with the signature of the respective authors. Some of the parallel initiatives have been inspired by the customer insights seized by the company during interaction with customers. For example, the elevated and fond number of 16 requests for the re-edition of Mulino Bianco products (cookies and snacks) that have gone off the production line induced the company to launch an online survey to be supported by the community to choose, among the numerous recommendations, the product to propose on the market again. At the same way, the unexpected interest that many users have demonstrated for the “little surprises” of the past (the small promotional objects that were inserted in the packages of the products) and the “discovery” of the existence of a vast group of nostalgic and collectors of such gadgets, determined the opening of a communication channel (a blog, which is autonomous from the one created to support the community discussion) dedicated specifically to these gadgets and gave the company the rise to start a re-evaluation of the Mulino Bianco surprises of some time ago (trough different initiatives such as, for example, the creation of a catalogue of the surprises, the organization of a “gathering”, in the form of a barcamp, of all the collectors and people fond of the surprises who had the opportunity to meet each other, etc.). Particularly critical for the initiative’s success is also the ability to keep an high motivation to participate (along with a high return rate) on behalf of the users. Under this profile, the company has created a blog to support the collaborative platform. The blog allows a better coordination of the initiatives and the adoption of those interventions that support and direct the contributions, given by the community: the posts are published by the digital team as well as by company management and used to launch new initiatives (ex.: the online contest for products of the past), to recall the attention on themes of major interest, to explain the state of advancement of the ideas being evaluated. The company strongly realized that the interventions aimed at encouraging and enlivening the dialogue were critical for the success of the initiative and that they have to be constantly realized in order to keep a high interest in participation on behalf of the users. Under this profile, shunning the logic of “Build it and they will come” the company commits to activities that are time consuming (even more than originally planned): reading all the ideas, rejecting the duplicate ones (indicating the idea already presented and inviting people to examine them and eventually give them a vote), responding to the participants questions, reading the comments, re-launching the topics of conversation, warming up again the interest towards the discussion, conceiving and presenting parallel initiatives. All of the above to keep live the motivation to participate and express one’s idea. In this perspective, an element that contributes to the success of the initiative is the experimental approach adopted by the company that got close to the opportunity of using web 2.0 according to a progressive logic, but also endless and dynamic: the experience progressively matured was the starting point to modify the site or create new 17 initiatives, always conceived in order to obtain the maximum of customer involvement in the generation of the brand and its meaning (functional and symbolic construction). The company has realized different integrations/changes to the project while in progress (creation of the blog to support the platform, opening to comments of the published posts, control mechanisms to check the novelty of ideas, etc.). Among these, is the adoption of Facebook Direct Connect (that let the Facebook users directly access, without having to register, the platform “Nel Mulino che vorrei”), made in order to expand the “range of listening” beyond the community hosted on company's websites, moving toward the social virtual spaces where the brand is discussed. This is another step forward that the company realized in order to simplify participation and cut down the distance between itself and the consumers, having matured its awareness that the brand “lives” all over in the digital ecosystem and not only within its site. Therefore, it is necessary to “attend”, directly or indirectly, the digital places where the fans of the brand meet (one of the Mulino Bianco sub-brands, Pan di Stelle, counts today more than 1.200.000 fans on Facebook but no one was previously taking care about them), bearing in mind that, from the customer’s point of view, the company site is just a peripheral element of the individual digital eco-system. With this innovation and with other interventions carried out to make it easier to use the site, the company demonstrates to have clearly understood the need to simplify the access to the contents (figure 2) and to the new forms of relations, reducing the time and cost of specific technologic learning undertaken by the customers (potential barriers to the installation and maintenance of an involving relation). Figure 2 – Some features of the “Nel Mulino che vorrei” website Simple graphics; Pages fast to load; Intuitive surfing structure: ideas divided in 4 categories and 18 sub-categories to make research easier, internal research engine (with multiple search criteria) 18 Under this profile, another critical element for the success of the initiative is the ability to adapt the company language to the one used by the counterparts: the relation is based and is consolidated on the construction of shared languages, on the ability to dynamically adapt its own “vocabulary” to make it coherent with the one used by the consumer world. Also this can be seen as an effort on behalf of Mulino Bianco, above all when it commits to explain, with a simple language and a “human” tone of voice, all the technical details of a complex project, making the consumers participate to the mechanisms and company processes. A potential risk element that Barilla, as all companies that undertake projects of online crowdsourcing faces, is to try to maintain a right balance between the declared intention to realize the contributions mainly voted by the community and the opportunity to promote potential innovations related to ideas that, even without reaching the necessary level of “social consensus”, appear to have sense in terms of business. Under this profile, one of the main risks embedded in all customer involvement projects derives from the incapacity of the consumers to imagine radically new solutions. In Barilla’s case, as stated before, a natural tendency to “nostalgia” was encountered, a strong need to have back of products of the past but, among the thousands of nostalgic proposals or the requests of incremental improvements, the company also surprisingly seized innovative ideas that, in many cases, were not supported through the mechanism of voting by the community. For this reason the company introduced a “strategic” change in the project (publicly announced on the blog in march 2010): in addition to the 10 most voted ideas, the digital team can choose and bring in the assessment phase other ones, selected among those who have impressed and inspired more or among those that are more consistent with company's development strategies. Even though being aware of the critical factors that remain to be managed, Barilla took on the challenge of renewal of its communication models and its brand-identity. Without losing its values, strong of its traditions, the company has started an exploration of new territories and communication models that will allow the young generation - decisively not very sensitive to the traditional communication methods - to get closer to the Mulino Bianco brand. One of the objectives of the “Nelmulinochevorrei” project was to improve the relationship with the younger generation to whom Mulino Bianco brand appeared as “outdated and dusty”. Since the launch of the project, the perceived value of the brand by young people increased by 4 percent. 19 Table 6 - Summary of the essential characteristics of the collaborative platform “Nel Mulino che vorrei” Topics Deadline Incentives Type of Governance Mechanisms of coordination and control Parallel support initiatives Type of participation 4 guide-themes (macro-categories) None Non monetary but “social” Informal. Decentralization of the idea generation processes combined with the coordination of the knowledge socialization processes The blog sets the rhythm of community development. “Moderation” assures respect of the rules of netiquette and compatibility among the solutions proposed Both, online (creation of 2 blogs, survey launches, etc.) and offline (ex. organization of events and gatherings) Spontaneous adherence in the first phase of the project, solicited and finalized in the second phase Conclusions and managerial implications The paper presented the first results of an ongoing research that need to be deepened (even following the future evolution of the project analyzed) and widened, to cover other kinds of organizations and business sectors. Despite these limitations, some conclusions and managerial implications can be derived at this stage. Community members are capable and willing to bring their creative contribution even without any explicit form of compensation. In projects of product virtual co-development, intrinsic and emotive stimuli (mainly related to the sense of “attachment” toward the brand) proved to be more important than monetary incentives in motivating potential participants to give their contribution. Consumer communities show a great potential to foster product innovation but the “organizational metamorphosis” and the mind-set shift needed to fully exploit this potential can not be under-evaluated. Learning to leverage and “absorb” customers’ competences requires a nontrivial, cultural and organizational transformation whose accomplishment postulates a great level of managerial commitment. In the case-history analyzed, new specific organizational roles have been created to activate, support and facilitate customer integration processes. Nevertheless, the organizational transformation is requiring much more effort (and time) than planned because of the inherent risk of a divergence between espoused theory and theory in action. For a long standing, traditional company, renouncing (even partially) to control the communication flows with the market and the meaning associated to the brand can be a “trauma”, difficult to absorb and manage. In the case analyzed, the company has taken a number of actions to manage internal and external critical points. The first ones were related to the need of overcoming the managerial scepticism, and obtaining the right level of involvement on behalf of the entire organization, 20 extending responsibility for the project beyond the Digital Team. The second ones were related to the need of facilitating the customer integration, simplifying the participation and the access to contents and reducing the time and costs of specific learning undertaken by the consumers: a great effort was lavished in trying to lower the barriers to an effective dialogue with customers, from the technological ones (ex. establishing a direct access to/from social network) to linguistic ones (the communication style adopted online is not anymore selfreferential, and the tone of voice is strongly different from the one used in traditional marketing activities, tending to sound much more “human” and personal). The company’s main effort was related to the need of maintaining the right level of credibility (in its ability to keep promises), trust and motivation on behalf of its customers, even knowing that results can not certainly be obtained in the short term. This problem was managed through the launch of a series of “quick win” initiatives, so as to realize major immediate progress, revamping the level of interest and commitment toward the broader (and longtermed) objectives of the project. Even parallel initiatives, launched online and offline, moved toward this same direction. Under this point of view, the early simplistic thinking about the “inexpensive nature” of online conversations with consumers is a myth, a fad, more than a reality. As observed in the case analyzed, companies have to invest on time consuming activities, related to listening, talking, energizing, supporting, nurturing, enlivening the community (the group, not the product), trying to dynamically adopt, even on the basis of progressive learning and customer feed-back, initiatives that are conceived with the aim of letting the process evolve, by increasing value provided to customers. Other critical managerial aspects stemming from the case-analysis are related to the inherent risks of customer involvement in new product ideas generation, especially in the communitarian forms of as the one experimented by Mulino Bianco: 1) obtaining mainly ideas and suggestions related to incremental innovations, that is mere incremental improvements over the current offerings and not really new products; 2) obtaining ideas and insight that do not really represent the preferences of the broader market; 3) obtaining good contributions from users who do not receive the needed social support to let their idea go further in the evaluation-realization process. To avert these risks, the company has to creatively conceive solutions aimed at engaging customers in multiple ways in product development process and for different purposes: various web-based collaboration mechanisms (idea generation competition, online survey, 21 customer involvement in the new product development team) have to be creatively conceived and employed in a synergistic way to foster customer dialogue and integration in the different stages of New Product Development process, adopting different forms of interaction (with the communitarian one not excluding the individual involvement). For instance, Mulino Bianco relied on a specific online poll to verify the community strong request for re-edition of products of the past. Besides, the company has to expand its peripheral vision beyond its own customers, making an effort to gather ideas (and feed-back) from an audience as broad as possible. In this way, the company has more chance to involve customers who, not being biased from the “functional fixedness” (Von Hippel, 1986) and the core competences matured by the firm, have a greater potential to suggest disruptive ideas. In other words, companies have to ensure that customers involved are large enough in number and sufficiently mixed in their background and views to produce a representative outcome. For instance, Mulino Bianco has expanded its “range of listening” beyond the community hosted on its website, moving toward the social virtual spaces where the brand is discussed (on behalf of customers and noncustomers). 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