The idea of business co-creation was first elaborated by C. K. Prahalad and V. Ramaswamy in a Harvard Business Review article, ‘Co-opting customer competence', published in 2000. They saw organisations co-creating products with their customers at different stages in the product cycle.

Threadless, founded by Jake Nickell and Jacob DeHart, manufactures T-shirts but it has never produced a flop, has minimal product returns and sells 100 per cent of its stock. How is that possible? The Threadless community, now 2.4 million strong, submits all the designs. Customers vote for their favourite designs and these are manufactured and sold with a 100 per cent success rate. You're literally designing and choosing what you want before it's even made.

By co-creating with its consumers, and bringing them into the value chain, Threadless exemplifies this new paradigm.

Co-creation ideas are also based not just on the needs of consumers and producers but on those of society. Co-creation can help us all play a bigger game. Creation means constructing something new, meaningful or purposeful, while the co- part means doing so with other people. Co-creation is a win for people, prosperity and the planet. It requires the participation of multiple stakeholders, each holding a key to the solution.

By 2050 it is estimated that 70 per cent of the world's population will live in cities. Efficient transport networks will become increasingly critical to the viability of urban centres, especially in relation to accessing health and education services and employment.

To address this challenge, the World Business Council for Sustainable Development (WBCSD) has launched the Sustainable Mobility Project. The city of Indore (the state capital of Madhya Pradesh in central India, population 2.1 million) has been selected as one of five ‘demonstrator cities' for sustainable mobility. Demonstrator cities such as Indore, it is hoped, will develop a sustainable mobility roadmap for governments around the world.

The WBCSD will work with Indore city officials to implement sustainable mobility solutions. BMW, BP, Bridgestone, Brisa, Daimler, Deutsche Bahn, Ford, Fujitsu, Honda, Michelin, Nissan, Pirelli, Shell, Toyota and Volkswagen are all members of the WBCSD.

Here a cross-section of governments, not-for-profits and private corporates (often competitors) are working together to find answers to global problems. Their co-created solutions will address the demands of public, private and commercial transport; and bike and pedestrian pathways that are interconnected, safe, reliable, efficient and affordable. Solutions are also expected to meet environmental goals of lower emissions, resource efficiency and enhanced quality of life.

The challenge reaches far beyond the transport ecosystem, Michael Fahy, director of the project, indicates. ‘By working with leading cities such as Indore, this project will help cities move towards improving sustainable mobility for all … By facilitating the movement of people and goods the project has the potential to have a real positive impact on people's lives, the environment and the economy.'

Does all this sound familiar? Have we seen co-creation in earlier guises? Is this just teamwork or collaboration dressed up for a new age?

Co-creation is a new execution of an idea that has existed in various forms as long as we've lived in communities. Hunter-gatherer societies may not have held team-building days, or staged workshops on how to collaborate, or written co-creation manifestos. But at a fundamental level that is what they did. Every day they worked towards surviving today and laying some sort of foundation for tomorrow, whether it was gathering and foraging for the tribe, or storing food or pelts for the future. It all involved an intricate web of interdependency.

If we think of co-creation as a further evolution of every organisational idea that came before it, then the following hierarchy will help us understand it better: team building is influence 1.0.1, collaboration is influence 2.0.1, co-creation is influence 3.0.1.

Remember teamwork exercises in the 1990s when you were whisked away to retreats and built rowboats and engaged in paint skirmishes? They were lots of fun, with some learning, but they didn't often translate into changed workplace behaviour.

Collaboration is the next level up from team building. You can collaborate on projects across silos within your organisation, or across organisations such as in public–private partnerships, or even across countries through international infrastructure projects such as building the Channel tunnel.

Both teamwork and collaboration define the process (how we work together) and a specific outcome (what result we want). Co-creation is of a higher order. It is the next stage in the evolution of you and us working together in ways that are meaningful and creating a shared future that is good for business and the planet.

Collaboration is the dominant model in most workplaces today, although coercion is still experienced by far too many. But the quantum shift is to co-creation with all its competitive advantages.

One of my favourite magazines, Wired,always features a three-part column that lists ideas or products that are ‘expired', ‘tired' or ‘wired'. This is how I would list the dominant work models:

• Expired: coercion
• Tired: collaboration
• Wired: co-creation.

If you or your organisation still talk team building, you need to catch up on missed opportunities. It's never too late to start. If you are talking collaboration, it may still be hard for people to relate to; many will feel they are already collaborative, are good at it or don't need it. When you adopt co-creation, you position yourself for competitive advantage.

Co-creation is fundamentally different because it:

• involves many levels of stakeholders
• gives up control to gain control
• is an infinite game, not a finite game
• is organic and long term, yet commercially smart
• can deliver true, sustainable and competitive advantage.

Through their online program Connect + Develop, Procter & Gamble (P&G) invite customers and entrepreneurs to submit innovation ideas. It could be a tweak or improvement to P&G's existing products or an entirely new product. When the current chairman and CEO, A. G. Lafley, first took the helm in 2000, the success rate for new products was about 15 to 20 per cent, which was standard across the industry. The success rate is now about 50 to 60 per cent, an ideal level that indicates they are not playing too safe by aiming for a higher success rate.

Design powerhouse Burberry encourages customers to suggest designs for their next trenchcoat. In a Harvard Business Reviewarticle, Francis Goillar describes human co-creation, as demonstrated by Burberry, as ‘the true revolution'.

What are the distinguishing features of co-creation?

Here, in a nutshell, are the main ones:

• Co-creation usually starts by defining a specific problem and asking an audacious question, such as how can we improve transportation and quality of life in our cities? The cutting-edge management thinker Mitchell Osak believes leaders will get the most out of co-creation strategies when they target big problems and opportunities that the firm cannot deal with on its own. 
• Co-creation embraces possibility. The core of co-creation is the embrace of greatness as just the beginning of possibility; it encapsulates the notion that the whole is bigger than the sum of its parts.
• Co-creation is the sweet spot between control and chaos. You give up control to gain control. This is hard, but as leaders and organisations shift from command and control to co-creation, they're exposed to new possibilities and opportunities.
• Co-creation draws on the wisdom of the crowd and embraces an infinite mindset.

Embrace an infinite mindset

In the early days of new technology, we attended a facilitated session on social media in a Q&A format. It was like drawing teeth, and despite the best efforts of two seasoned presenters the group discussion floundered.

The facilitators turned to the audience and asked, ‘How can we structure this to serve you?' Lots of ideas flowed in and then one person nailed it: ‘What we have here are some newbies to social media and some seasoned practitioners. Why don't we split the session in two with each of you leading one of these two different groups?'

Bingo! That is how the rest of the very successful evening progressed. The facilitators drew on the wisdom of the crowd to co-create a very different experience for everyone, resuscitating a dying workshop to serve the needs of all participants.

Co-creation does require a degree of skilful facilitation, as groups can tend to crave outcomes. Remember, co-creation thrives in that sweet spot between control and chaos, but it requires some skill to move a group forward. People need to feel momentum and progress, but not that they are hurtling towards a pre-fixed destination.

Move from a finite to an infinite mindset. Usually with team building and collaboration you have set start and finish points, and the process can feel, or be made to look, linear. For true co-creation, you have to embrace an infinite mindset.

Reverse engineer co-creation and start at the individual level. Most initiatives in organisations are top down, despite their best intentions to involve people at the coalface. Co-creation works best from the individual out. Think of it as a ripple in a pond from your thrown pebble. The first ripple creates all the other ripples, starting at individual level.

Companies such as Google and 3M have famously encouraged their engineers and researchers to take time off during their working day to work on personal projects. And some of these projects gave birth to remarkable and successful products, such as Gmail, Google Maps and Post-it notes.

Some considerations

Co-creation assumes some mutuality of interests, as illustrated by the sustainable mobility project. But let's not fall for the Pollyanna syndrome about co-creation. What if our interests are mutually exclusive? Co-creation is easiest when the two circles of desire (what is good for business and what is good for society) intersect.

Co-creation can only happen when we foster the production of mutual value with people who matter — your employees, customers, suppliers and stakeholders — people who conventional businesses usually exclude from their value chain. By not co-creating, and ignoring these powerful and rich allies, you are like Tolstoy's beggar, pleading for pennies while unwittingly sitting on a pot of gold.

What is the most powerful brand in the world? Is it Apple, Nike, Facebook or the new kid on the block, Twitter?

In fact, it is none of the above. Apple is number one in terms of brand value. But according to the 2015 Brand Finance report, the world's most powerful brand in terms of perception, replacing Ferrari, is Lego.

You may think Lego has it easy: what is there not to love about it? It has broad global, cross-generational and cross-gender appeal. The Lego movie, which was both a commercial and a critical success, also massively boosted the brand's popularity.

But there are co-creation lessons we can learn from Lego's success. Lego allows its customers to create as well, rather than thrusting designs and products onto its market. It uses a system of creating, voting and rewards via its IDEAS website to engage its customers in co-creation. Customers can submit product or project ideas, and any idea that receives more than 10 000 votes is evaluated internally by Lego employees. If the project goes ahead, 1 per cent of net sales of that product go to the creator. One of Lego's most successful products, ‘Lego Friends', came about through this process of co-creation. A customer insight that bright colours and emotional connectedness appeals to young girls was the springboard for the product.

How can you help your customers live your brand experience and co-create with you? Can they submit their videos, as Red Bull fans do, or publish recipes that use your ingredients? Co-creation harnesses your fans, your loyal customers who know and love your product, sometimes even more than you do! Co-creation builds communities of fans.

Co-creation is not for the faint-hearted and needs a ‘fly or die' and iterations mindset. To work, it must thumb its nose at a culture of perfectionism, put out a beta version, and refine the result through feedback and further co-creation. Wikipedia is a perfect example of this process.

In Slow School our successful series called ‘Talk on Purpose' (formerly ‘Is There a TED Talk in You?') was co-created by four members of the faculty, each with different areas of expertise.

The first launch saw a beta product released to the market at a low entry price. The four-week program was a phenomenal success, and based on feedback we ran a second public program at a healthy price point. We now also run the program within large organisations. But it took courage to put it out there and then co-create with our audience.

The quantum leap

Co-creation lifts our game beyond being just about us in our organisational teams (teamwork) and us working with one another across silos and organisations (collaboration). Gaurav Bhalla, author and co-creation expert believes co-creation solves three fundamental problems:

• People inside organisations want meaningful work.
• Consumers outside organisations are better informed and educated than ever before. (Co-creation caters to their intelligence by bringing demand and supply closer.)
• Anything you do must be right for the planet as well as profitable.

Of course, lots of people see themselves as wage slaves, just a cog in the machine. They meet their aspirations outside work, not within it. But many others (including you if you're reading this book) look for more from work. We see it as a form of self-expression, or even a path to self-actualisation. As Nicole Bradley, a partner with professional accounting services network Grant Thornton, puts it, ‘Personal life and work are increasingly merging, which creates an even greater need for our work roles to meet higher needs'. Co-creation is an avenue to meet these higher order needs.

What are the challenges for co-creators?

The authors of The Co-creation Roadmap: Six steps to tap the wisdom of crowd, G. Sankanarayanan and Gaurav Bhalla, believe co-creation as a movement can suffer because it requires you to broadcast problems, challenges or current developments you may not want to share. Here are some critical issues they highlight:

• Successful co-creation requires serious silo busting within organisations. Knowing the players and politics can make this difficult.
• People look to technology as the solution to co-creation, but while technology and social media are enablers, they aren't necessarily sufficient.
• Genuine co-creation demands incremental customer input, and ideally shared value creation for a better life for society as a whole.

Co-creation goes beyond immediate self-interest in business; it's where commerce puts society's interests first. This may seem altruistic when current reality tells you business and societal interests often diverge. Co-creation at its best finds their common interests, like two intersecting circles. Perfect co-creation finds matching circles and overlays them.

Consumer philanthropists

‘The purpose of business must be redefined as creating shared value, not just profit per se,' says Michael Porter, an international competition strategist at the Harvard Business School. Co-creation bridges the gap between profit and value, and can generate economic, social and environmental value as we've never seen before.

But what gets to be co-created? How do we decide? One way is through determining the common good. What represents value for all? Simon Griffiths, an Australian engineer and economist turned philanthropic entrepreneur, has also grappled with this question and has an ingenious solution.

Simon knew that the biggest challenge for not-for-profits and charities is fundraising. They must constantly run appeals for donations and, however well-meaning we are, we sometimes develop compassion fatigue, weary of the constant requests for money.

You may well already have a stable of causes you support, but you feel guilty or resentful or both when you turn away others who approach you. Shouldn't altruism make you feel better about yourself and the world?

Simon thought about this problem differently and came up with the concept of the consumer philanthropist. Instead of asking you for money, he looked at what you might already consume. In doing so he could co-create with you and consumers like you, helping you become philanthropists simply by doing what you already liked doing.

He set up Shebeen, a not-for-profit bar in Melbourne. It sells exotic beers and wines from the developing world. The profit from each drink sale supports a development project in the country of origin. A drink for Kenya? Go for it. Today, Shebeen supplies its beer to other venues too. It's a wonderful example of co-opting your customers for the greater good. Let's drink to that!

But then he hit a hurdle. Not everyone drinks, or drinks beer or wine, and not everyone likes African beer. What other consumer product could he tap into?

His next venture, called Who Gives A Crap, produces toilet paper manufactured entirely from recycled materials, and 50 per cent of the profits from sales go to building toilets in the developing world.

It's ingenious, and the wry humour in the name always makes audiences laugh. Simon's concept could revolutionise consumer behaviour, turning everyday consumers into philanthropists.

Business and societal goals do not have to be mutually exclusive.

Sitting in a coffee shop one day, Mark Henderson asked the barista what they did with the used coffee grounds. ‘We just put them in the bin,' was the reply.

Mark learned that this shop alone threw out about 10 kilograms of grounds a day. There must be a better way, he thought, and he started to research how coffee grounds could be used productively.

Anecdotally he knew that some people scattered coffee grounds on their gardens as a soil conditioner or added them to their compost, but no one had thought to take the next step.

So Mark and his friend Geoff Howell did. They quit their jobs as IT consultants and set up Espressogrow, which plans to pay coffee shops for their used grounds, and then turn them into organic fertiliser at a central manufacturing plant.

The mindset that drives co-creation is usually ‘There must be a better way' and ‘Together we can find the answer or create the solution'.

Sex: a final word

Another way of identifying areas in which to co-create is to list business priorities, then map critical stakeholder groups, engage with them to learn their priorities and identify mutual areas of interest.

Elizabeth Broderick did this really well. One of her first moves when she took up her role as Australia's Sex Discrimination Commissioner was to set out on listening tours around the country, talking to business leaders about their ideas for addressing gender issues.

Based on what she learned on these tours she formed the Male Champions of Change movement, identifying 12 male leaders, each of whom took on responsibility for setting and delivering on targets to forward the agenda of women in the workplace.

Broderick and these 12 male champions of change are successfully co-creating this new future together.

Co-creation is the new future. Are you ready to embrace it?

In the final chapter we look at how we can tap into people's heads and hearts to rally them around a call to action for a cause. This is the power of cause leadership.