Building strong relations through innovation & co-creation in China

innovation & co-creation

Design thinking can help SMEs to improve their attractiveness to Chinese business partners. And innovation and co-creation can save companies up to €200,000 and ten weeks of product development work. How? Heidi Larsen reveals all in this blog.

Product development and innovation activities should not be restricted to Europe. By developing projects alone before presenting them to Chinese business partners, many European companies are missing out on a lot of time-saving and money-saving potential. If you are among them, you could benefit from European-Chinese co-creation and innovative design thinking to gear up your business for the future. In addition to resulting in better and faster business cases, it will also help to make you an attractive SME partner in the Chinese market.

I have seen a lot of time and money lost in so-called ‘partnerships’ between European and Chinese businesses – not only in product development, but also in projects to set up Chinese entities, distribution networks or regular flows of goods. It seems to me as if, for some reason, the majority of European companies still conduct their innovation processes behind closed doors, and certainly in European time zones. In my eyes, this is the root cause of wasted time and money – and of a lack of appeal in the eyes of Chinese business partners. I mean, where’s the fun for them? After all, you’ve done all the interesting and innovative work yourself already, right?

The reasons I hear for this, when I am solving complex challenges in my clients’ supply chains or holding workshops, training sessions or keynotes, are along the lines of “We know better, we are better designers, and we own the IP rights after all”. Well, let me ask you this: do you really know better? What would happen if you invited your Chinese business partner to be a part of your innovation process long before you even knew which product or project to develop? What kind of valuable insights would your company gain if you’d do something ‘crazy’, like inviting your Chinese partner to come and study the users of your product in their local environment? How would that change the process? Would it add value for you? I promise you it would.

The Design Thinking Innovation Model

A model like the Design Thinking Innovation Model can help you to start using innovation and co-creation as a way to save time and money – and to make yourself attractive to a Chinese business partner at the same time. By adding your business partner’s technological expertise and extensive know-how to the ‘Empathize’ and ‘Define’ parts of the process, you will gain a lot of valuable feedback and comments at a much earlier stage of the innovation process. In turn, this will improve the likelihood of your product or project becoming a future success. If the product cannot come out of tooling, it simply does not make sense to produce it – no matter how pretty or smart it is. The better and stronger business case you are able to build, the more impressive your bottom line will be. And getting these insights to the table before you spend countless hours designing your product, negotiating the price, scouting the location or setting up distribution will absolutely be a game-changer for you.

Only when your business partner truly understands your status quo and local environment can they actually suggest the innovative solutions that I have seen demanded from the partner in so many contracts. The funny thing is that the second bullet point of most contracts states that “the European company owns the IP rights”. If that is the case, first of all you must explain the background stories – the ‘whys’ – much better. And secondly, what incentive will any partner have to suggest anything under such terms? In my book, the strongest relations are built from a foundation of shared wins and losses. But all success stories begin with insights. And to gain insights, you have to work closely with your esteemed and chosen strategic partners based on your ‘whys’. Be vulnerable and share the challenges that you seek to solve through co-creation. Be open, not naive. Sharing your challenges and listening to the feedback from your chosen experts will put you at the very top of the class in the battle for the best global business partners. But you have to be willing to open up and accept that Europe does not hold a monopoly on know-how, answers and design expertise.

I do not own a magic wand or a crystal ball, but by using the Design Thinking Innovation Model as a tool for thinking differently and including the Chinese business partner in the innovation process, I saved a client of mine more than €200,000 and ten weeks of work on an annual basis. And that was just in their product development activities. Imagine what this model and way of thinking could do for you!

Heidi Larsen, the Supply Chain Princess of Plus 7