CO-STAR – An Innovation Tool for Creating Compelling Customer Value:
“In our first year of rolling out the innovation programme, we generated more than 1300 CO-STARs. Over 90% of our employees participated in the programme”
Sid Cox, Director of B2B, EDF Energy
Following on from my previous blog, The “Innovation Master Plan”, readers have asked me to describe the CO-STAR tool for innovation. Here it is – please call me for more details!
Professor Gary Hamel once memorably commented that, despite the fact that most CEOs acknowledge the need for innovation to survive and thrive, their organisations still have no systematised process for doing innovation. Since then, no doubt prompted by such a challenge, many different versions of a process have been developed, often to meet specific needs at a given time. Some use a fairly linear process, focusing on technology, with everything measured, counted and quantified. Others use a more instinctive approach, drawing out the creativity of individuals. Some celebrate the idea that creativity is the generation of new ideas; others demonstrate that innovation is exploitation of ideas. Some happy few use both creativity and innovation practice. CO-STAR, our preferred innovation tool, belongs to one of the latter.
So what is CO-STAR? The acronym refers to an iterative systematised innovation tool that is customer-centred and supports organisations engaging in the process of creating continuous customer value. Everyone acknowledges and takes responsibility for the success of the company. Innovation becomes part of everyone’s job description and figures in everyone’s appraisal. It’s not rocket science – but it works!
The success of the process depends on working through six aspects of value creation, identified by the acronym: in brief, these aspects are:
C is for Customer – who is the customer? What is the unmet need?
– This is often the first light bulb moment for clients. The identification of the real customer – who is paying for the service or product? What do we know about them? Is there more than one? What need of theirs are you addressing? How do you know about it? What techniques have you used to get close to the customer to really understand the issue?Are you sure the need is not currently being met by any other organisation?
O is for Opportunity – what extra opportunities exist outside the nominated customer group?
– What is the wider potential of your idea? Is there a way of extending the impact of your idea into other areas? Could you increase your return on investment (however you measure that return) by expanding or rolling out your innovation later on? What are the characteristics of the market you are looking at? Do you know the trends, the values, the social and technological changes that will affect the market? This is where you should demonstrate your deep knowledge of the particular market place you are aiming at – responses here should always show the numbers.
S is for Solution – what is your idea for creating value for your customer?
– This is the articulation of the idea. This is where you move from a general idea into a more detailed description of the idea, of whom it will benefit, how it will be developed, how it will be disseminated? Use creative techniques to stimulate new ideas, remembering that creativity can be stimulated by anything and everything around us. Take it stage by stage – make sure it is coherent and designed to enhance customer experience. Describe your business model – demonstrate knowledge of current pricing in this field and estimate your costs. Always undertake proof of concept – develop fast prototyping even if it is for a service: nothing works faster to show you the efficacy of an idea. Identify the risks – walk them through and determine if and how you can manage or mitigate them.
T is for Team – what knowledge, skills and contacts do you need to deliver your idea?
– Think in terms of the attributes above rather than the individuals: do you have access to all the necessary attributes in the team that you are working with? If not, where else might you gain access to them? Be bold – think outside the obvious contacts, and look beyond your own networks and ecosystem. Be wary of focusing so hard on your own role in execution that you lose sight of whether other organisations may need to cooperate: is the successful roll-out of your idea dependent on another partner collaborating in your innovation by introducing their own innovation first to clear the way for yours to be implemented? Or do you need a partner to adopt your innovation before the end customer can fully benefit from your value proposition?
A is for Advantage –
– What is your competitive advantage? What do you offer that no one else is offering ? To answer this, you need to know who or what is the competition and what are they offering? What do they do brilliantly and how can you learn from and enhance that? Try reframing the problem to see if you can identify an unconsidered advantage – NASA spent millions of dollars designing a pen that would work in space, whereas the Russians simply asked ‘how do we write in space’ and came up with the solution: a pencil!
R is for Results
– Again, numbers are really important here – quantifiable results are always demanded, even in the most mission-led projects. Identify the specific return on investment. Give a timeline showing projected out turn, with milestones, for example, looking at time to profitability and growth. Despite the need for numbers, don’t disregard the qualitative results – demonstrate long term impact if possible. Show benefits to the end user e.g. measure changes in customer delight arising from significant improvements in performance, design etc
It’s worth remembering that it is not essential to follow the CO-STAR process in this order: some clients start with the C, with the need to respond to an unmet customer need; others come up with S, i.e. a brilliant idea and then have to find and test the market for that idea. Either way, CO-STAR will help you look at your solution from 3600, as it were –
Iteration – again and again:
When you have developed your idea following CO-STAR principles, you then present to a group of colleagues and other stakeholders, often including customers. You won’t take long to do it and they will give you their feedback. You then use that feedback to hone your idea. Just as actors rehearse and rehearse with their Director until they all feel that they have really got to the core of their characters, so you rehearse and rehearse your idea, polishing it all the way to get it pitch-perfect. Then and only then are you ready to present to your funder or your investor. This iteration is critical to getting your value proposition tailored to delight your customer. Having the idea is only the first step.
Who can use CO-STAR?
The CO-STAR process works equally well with large organisations and with start up businesses: here’s a couple of CidaCo clients talking about it –
Gary Wells, Assistant Director of Strategic Housing at Doncaster Metropolitan Council, commented: “The Doncaster housing innovation project has been really successful as it has helped us to tackle some key weaknesses in our existing services, specifically bringing empty properties back into use and rethinking our approach to addressing the housing issues affecting an ageing population. The Innovation Coaches at CidaCo have worked with council teams to challenge our current approaches to not only enable the teams themselves to identify new ways to develop and deliver better services but also to deliver significant cost savings too. The project also achieved sustainability by giving those involved the skills to cascade the approach to other teams and to apply the techniques to other problems or weaknesses. Going forward, we will be required to demonstrate a robust approach to achieving value for money if we are to meet the government’s efficiency targets. The project developed with CidaCo will give us a model framework to develop new ways to reduce costs whilst maintaining quality and performance.”
Steve Goddard, entrepreneur and founder of Families in Touch, was formerly a very successful director of a well known multinational company based In Singapore. Within six months of his retirement in the UK, his father died and it became necessary to find a care home for his mother. In the course of viewing many different care homes, he spotted an unmet customer need – the need for old people (75years+) to stay in touch with their families despite being unable to use a computer. He set up in partnership with a former supplier/colleague, a computer programmer, and a young product designer. They played with their idea not very seriously for six months, and got to the point of making a rough prototype. Then they met CIDA and undertook the CO-STAR process.
Steve now comments: “The use of the CO-STAR methodology was a godsend for us. Until we met CIDA, we had been playing at the edges, not making the commitment needed to turn a bright idea into a business. Making us go through the CO-STAR process made us look at everything, question everything, evaluate everything. It made us realise both the potential of the idea and the seriousness required if we were to bring the idea to market. 18 months later, we have product and interested customers; we have a marketing strategy in place; and we are three months away from the launch. We know we would never have gone on this journey without the work we did through CO-STAR.”
Where CO-STAR comes from:
CO-STAR was first developed by Dr Herman Gyr and Laszlo Gyorffy, innovation specialists, when they were working for SRI International, a world-leading innovation institute in Silicon Valley. SRI International developed everything from the mouse to robotic surgery. Herman and Laszlo were brought in to help systematise the process and to develop a five day workshop for clients to give them the know-how. This process was so remarkable that Will Hutton, acclaimed CEO of The Work Foundation, as part of his campaign to encourage innovation practice in the UK, took leading British company CEOs to SRI to experience it. Amongst those companies was the BBC who sent six teams of senior executives over 18 months to experience what they called the Disciplines of Innovation workshop. This had an immediate impact on the BBC and on Radio One in particular – Andy Parfitt, then the Controller of Radio One, credits the process with helping him to turn Radio One from being a station with declining listenership to winning within 12 months the SONY award for the most popular European station for young people. (The story is told more fully in the book ‘The 5 Disciplines of Innovation’ by Curtis Carlson and William Wilmot).
Herman and Laszlo then developed and refined that initial process and came up with CO-STAR. Once again, through the good offices of The Work Foundation, I met with Herman and Laszlo and persuaded them to come to the UK to work with my team. They ran a five day, residential workshop for us which turned out to be a profound and illuminating experience, and became the start of a partnership which still exists today. It influenced CidaCo’s work and enabled us to maximise and exploit our own expertise in creativity and business in serving our clients. It figured strongly in our move in 2008 to take our creativity and innovation into organisations across all sectors. Just like the BBC’s experience, CidaCo client companies, who are as varied as UK Broadband, ADAD, Doncaster Council, Engage Mutual and HMA Digital, have all used it to good effect – and we’ve trained in-house innovation champions in countries ranging from Germany, Holland and France to Nigeria, Kenya, Tanzania and Southern Africa. In every context, CO-STAR has proved invaluable.
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