Value co-creation

Nowadays, the principal transitions centre on the use of technology and in services for information searching, storing, processing, and disseminating information. The major driver for change has been an increased shift in focus to the user as the centre of attention from the library as a service and a system, especially to reflect the changing habits and needs of the digitally connected user. Really understanding library users and coming up with strategies to support greater user involvement will help in the reshaping of library services (Brindley, 2006). All these issues of involving and collaborating with user communities (especially in the early phases of creating ideas for new services) are fueling the coming of age of one research discipline, that is, value co-creation. In the business world, organizations are embracing consumers as co-creation partners in their approaches to innovation. Yet no work on value creation thus far has focused on academic libraries. The only work we have been able to find was a recent book chapter by Germano (2014). This looks at the role of leadership in value co-creation, and in the creation and execution of programmes and services that matter most to students and librarian educators alike, and in turning assessment of various library services into actionable data that produce meaningful changes for student library users.

42 Value creation is a process in service-oriented organizations, whereby services flow from the provider to the customer in a unidirectional, one-way manner (Prahalad and Ramaswamy, 2004a). Organizations have often used the traditional goods-dominant (G-D) logic (value in exchange) where value is created by the firm in the form of the products it manufactures (Vargo and Lusch, 2004; Vargo, Lusch & Morgan, 2006).

However, users today have more choice of services than before. Therefore, using an alternate service-dominant (S-D) logic (value in use), value is created jointly by the service providers and customers through the integration of resources and application of competencies (Vargo and Lusch, 2004; Vargo, Lusch & Morgan, 2006). Here, the customer is always the co-creator of value. This bi-directional interaction between the service provider and the customer in S-D logic forms the root concept of value co-creation (Vargo and Lusch, 2004) popularized by Prahalad and Ramaswamy (2000, 2004b). Value co-creation is defined as an interactive process involving at least two willing resource-integrating actors (Payne et al., 2008), focusing on three elements that lead to service innovation – the provider’s sphere, the customer’s sphere, and the joint sphere (Gronroos, 2008).

Figure 2.6 Elements of Value Co-creation

Figure 2.6 (based on Payne et al., 2008; Prahalad and Ramaswamy, 2004; Skarzˇauskait_

e, 2013) illustrates that both the customer and the service provider are important in creating value and in developing new/innovative services. The provider and the customer create value in their respective spheres (utilizing processes, resources, constraints etc.) and co-create value in a shared, joint sphere. The joint sphere is where the most innovative services take root. During the 2006 World Cup soccer tournament, Nike set up a social networking site that invited individuals to film their soccer skills, upload the video, and invited the network community to comment, rate, share the user generated content, and select a winner each month. Nike also sponsored street soccer competitions and created a Web site connecting professional players with fans. This enabled Nike to learn directly from its customers (Ramaswamy, 2008). Nike’s online

Joint sphere

(Value-in-use) Customer’s sphere Provider’s

sphere

43 service called NikeID allowed individuals to personalize and design their own clothing and shoes (Thomas and Wind, 2013). Coca-Cola’s Free-Style machine is an innovative soda fountain accessible by touch screen that offers over 125 unique flavors that customers can mix and create to their tastes (Thomas and Wind, 2013). Data gathering in the process allows Coca-Cola to learn about customer preferences, engages customers, and assists the design of future machines. Other often-cited examples of business applications of co-creation include Amazon, Alcatel-Lucent, Aloft, Apple, Cisco, Dell, Disney, eBay, Endemol, Heinken, IKEA, Mazda, Microsoft, Osram, Sony, Steelcase, Tata group, TiVo, and Toyota Scion.

2.14.1 Co-creation models

The shifts in the customer’s role in the value-creation process have stimulated many models and frameworks of value co-creation. Prahalad and Ramaswamy (2004b) see co-creation as an initiative of the customers dissatisfied with available choices and who want to co-create value. This is conceptualized in the dialogue; access, risk benefits, and transparency (DART) model (see Figure 2.7).

Dialogue (1) Access (2)

Risk-return (3) Transparency (4)

Figure 2.7 DART Model of Value Co-creation (Prahalad and Ramaswamy, 2004b)

Here, dialogue emphasizes that value is co-created in the interaction and engagement between the organization and the customer. Access implies providing facilities and tools for free and accessible information (which includes a mental state of accessibility in the mind of the customer). Risk return implies a careful assessment of the risks and benefits that the customer can get from co-creation. Transparency implies shared information between the organization and the customer.

Payne et al.’s (2008) co-creation framework consists of the following three main components (see figure 2.8). They have focused that co-creation is happening in a joint encounter process.

44 Figure 2.8 Framework of Value Co-creation (Payne, et. al., 2008)

Components of this co-creation are; (1) customer value–creating processes (the processes, resources, and practices that customers use to manage their activities), (2) provider value–creating processes (the processes, resources, and practices that the organization uses to manage its activities and relationships with customers and other stakeholders), and (3) encounter processes (the processes and practices of interaction and exchange between the customer and provider necessary for co-creation). Other models/frameworks of value co-creation include those by Rowley et al. (2007), Gro¨nroos (2008, 2011), Vargo et al. (2008), and Fuller et al. (2009). Most frameworks of value co-creation have focused on characterizing generic and domain-specific needs of co-creation and integrate elements such as encounters, service providers, and customers.

2.14.2 Value co-creation and innovation in academic library services

In the business world, organizations are embracing consumers as co-creation partners in their approaches to innovation. Most literature on value co-creation and service innovation relates to business firms and falls outside the library context. A few studies relate to libraries. Germano (2014) looks at the role of leadership in value co-creation, and in the creation and execution of programmes and services that matter most to students and librarian educators alike, and in turning assessment of various library services into actionable data that produce meaningful changes for student library users.

Akanda, Shirahada & Umemoto (2014) developed a theoretical model of reference services through co-creating value between reference librarians and users. They suggested that the proposed framework can be effectively used to analyze value co-creation activities in reference services. Siddike, Umemoto and Kohda (2014) design a value co-creation process model at Multipurpose Community Learning Centres what

Customer value-creating processes

Relationship experience (emotion, cognition, behavior)  customer learning

Provider value-creating processes

Co-creation and relationship experience design (co-creation opportunities, planning, implementation/metrics)  organizational learning

Encounter processes

45 they considered as the transformation of public library. They focus how economic as well as social values can be co-created in MCLC’s. Moorsel (2005) proposes a client–

value model to gauge how library users value library product/service offerings. Fattahi and Afshar (2006) indicate that value is generated through processes such as reproduction, exchange, transfer, refinement, analysis, interpretation, and regeneration in library and information professions. Oakleaf (2010) reviews the literature on the value and performance of academic libraries and posits that the value of an academic library is closely linked to the institutional outcomes of the university as a whole. The library can create value by defining, measuring, and aligning itself to the university-level outcomes in areas of student enrollment, student retention/graduation rates, student success, student achievement, student learning, student engagement, faculty research productivity, faculty teaching, service, and overarching institutional quality. Einasto (2013) concludes that renewing the marketing strategy is important in meeting user needs for value creation in libraries. Kingma and McClure (2014) measured the economic and environmental value of the academic library. Other studies on value in libraries focus on monetary value for the special library (ALIA, 2014; Keyes, 1995), value creation in the research library system (DEFF, 2009), valuing corporate libraries (Gauthier, 1999) and public libraries (Baron 2006; Jaeger et al., 2011), and people’s perceptions of the value provided by libraries (FESABID, 2014). While there have been limited studies on innovation in libraries (e.g. Jantz, 2012), value use in libraries (e.g.

Moorsel, 2005), write-ups on value co-creation from the British Library user perspective (Baron, 2006), and value creation in the research library system (DEFF, 2009), none have combined value co-creation and service innovation in the context of academic libraries.

While many of these have looked at the value in libraries, they have not investigated the core concept and dimensions of value, value co-creation, and service innovation adequately. There is no literature or template on how this process should be undertaken in an academic library setting. Value co-creation for service innovation in academic libraries can, for instance, be used to create user-centric services for library users, user-centred library interfaces/Web sites, new outreach/distribution methods, new applications technology for the service process, new ways to organize and manage services, new kinds of services that improve user experience and satisfaction, and continuously working to make the collections/facilities more useful to patrons.

Co-46 creation helps tap into the creative and intellectual potential of library users and increases the innovation capacity of the library. It can help the library with a consistent flow of ideas, service concept, and improved services. A strategic perspective on value co-creation in academic libraries would foster innovation. We hope for a fuller involvement of academic libraries in value co-creation for service innovation. A big hurdle in co-creation is a lack of clear knowledge as to how to apply co-creation activities to library services and the set of processes and phases involved. This is why we have set out to create a new framework for academic libraries that leads to offer innovative services in academic libraries.