Strategising with Service as Business Logic / Service Design Drinks

Service Design Berlin

F A C T O R Y B E R L I N / F E B R U A R Y 2 4 , 2 0 1 6

Strategising with service as business logic

Katrin PhD Candidate, University of Potsdam

Who is inviting?

Olga Business Consultant, Fuxblau

Manuel Service Designer, Fuxblau

Mauro CEO & Designer, Boana

Martin Experience Designer, HERE

Formats of Service Design Berlin

Service Design Drinks

Service Experience Camp

Service Design Dinner

How does it work?

Input Exercise Mingling

Broadcasting globally

What’s the big picture?

level 3

Techniquesmethods and tools supportingpractices and the developmentof mindsets

level 2

MindsetsPractices influence

support

attitudes, ways of thinking,linked to principles

ways of working,linked to principles

support

level 1

Principles

embodiedenacted

A Conceptual Model of Design Thinking (Carlgren, Rauth and Elmquist, n.d.)

Who is tonight’s speaker?

Jan Schmiedgen Innovation Facilitator & Design Strategist

A Brief Glimpse Into‘Service-Dominant Logic’A useful rationale for more ‘strategic thinking’ in service design practice?Service Design Drinks Berlin, February 2016, Factory Berlin

32

Service?

Service as an activity

Service as a perspectiveon business and marketing

e.g. restaurant service, repair, maintenance, transportation, call center etc.

regardless of whether your core business is a physical product (good) or a service activity

Table: adapted from Grönroos, 2008

32

Service?





Table: adapted from Grönroos, 2008

33

It’s about basic truths how oureconomy is really working





Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg

34






Axioms and foundational premises

35

Our »S-D logic examples« for tonight

Dinner

With

Friends

A5FP11

Value cocreation is coordinated through actor-generated institutions and institutional arrangements

A4FP10

Value is always uniquely and phenomenologicallydetermined by the beneficiary

A1FP01

Service is the fundamental basis of exchange

A2FP06

The customer is alwaysa co-creator of value

A3FP09

All social and economic actorsare resource integrators

The Four Axioms

of S-D Logic

Value is cocreated by multiple actors, always including the beneficiary

A1FP01


A1FP01


A4FP10


A1FP01


A2FP06


A3FP09



Value?

Worth?

“Intangible Goods”

“Our Services”

‘Common’

Sen

se says

A1FP01


“Service Packages” “Service units”

Def.: The service product is a service that

can be sold and that is performed within

customer service (for example, inspection

of your car).

“Service Product”

Biased notions of ‘service’ in G-D logic

S-D Logic

says

A1FP01


Image courtesy: Hipster-Barber-Flicker-by-Thierry-Bignamini.jpg

The service nature of exchange is not always apparent

»Power by the Hour«

Image courtesy: Wiki Commons, Julian Herzog (http://upload.wikimedia.org/wikipedia/commons/8/86/Rolls-Royce_Trent_900_AEDC-d0404084_USAF.jpg)

A1FP01


Why th

at

Matter

s

G-D logic // Exchange Units: S-D logic // The Jobs-to-be-done:“What we can sell you.” “Where we can enable / facilitate your JTBD.”

❖ Engine❖ Spares❖ Information (e.g.

monitoring reports)❖ Time (man-hours of skills,

information and competencies)

❖ Through-life and obsolescence forecasting and planning recommendations

❖ Equipment configuration advice for operational and contextual capability

❖ Capability forecasting andplanning recommendations

❖ Equipment operating advice❖ Equipment repair service❖ Equipment maintenance service❖ Component forecasting & provisioning❖ Equipment performance❖ Technical query resolution speed❖ Recovery concessions

42Image courtesy: Wiki Commons, Julian Herzog;Table adapted from Ng et al. (2012)

Why th

at

Matter

s

A1FP01


Goods become less decisive for company success

43

‘Service’ is the applicationof resources for the benefit

of others or oneself.Lusch, R. F., & Vargo, S. L. (2014).

„“


A1FP01


A4FP10


A1FP01


A2FP06


A3FP09


FP7 The enterprise can (not deliver value,but) only make value propositions

FP8 A service-centered view is inherentlycustomer oriented and relational


A2FP06


‘Common’

Sen

se says


S-D Logic

says

A2FP06



S-D Logic

says

A2FP06



S-D Logic

says

A2FP06



A2FP06


Why th

at

Matter

s


People will ignore your value proposition!

A2FP06


Why th

at

Matter

s

Image Source: http://www.bldgblog.com/2010/12/ventilating-mines-with-repurposed-airplane-engines/


Look!

It’s a hack!

A4FP10


A1FP01


A2FP06


A3FP09


A3FP09


‘Common’

Sen

se says

Firmeninfrastruktur(z. B. Finanzwesen, Planung, Investor Relations)

Personalmanagement(z. B. Einstellung, Training, Vergütungssystem)

Technologieentwicklung(z. B. Produktdesign, Test, Prozessdesign, Materialforschung, Marktforschung)

Einkauf/Beschaffung(z. B. von Komponenten, Maschinen, Werbung, Dienstleistungen)

InterneLogistik

(z. B. Material-eingang, Lage-

rung, Daten-gewinnung,

Services,Kundenverkehr)

Innerbetrieb-liche Abläufe(z. B. Montage,Komponenten-

herstellung,Produktion,

Nieder-lassungen)

Marketing &Vertrieb

(z. B. Vertrieb,Verkaufsförde-rung, Werbung,

Angeboteschreiben,Pflege derWebsite)

ExterneLogistik

(z. B. Auftrags-abwicklung,Lagerung,

Vorbereitenvon Kunden-

berichten)

Kunden-dienst

(z. B. Installation,Kundensupport,

Beschwerde-management,

Reparatur-dienst)

UnterstützendeProzesse

Kernprozesse

€ € € €

+ + + + + + -------

♂+

S-D Logic

says

A3FP09


Structuration of service ecosystems (Vargo & Lusch, 2014 )

MICRO level

"$

.

-

'

*

)

♀♂♂

# ( %

♂

♂

♂

♂ "

♂

+

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂♂

♂

♂

"

"

"

"

"

"

InstitutionsResource IntegratorsMarket

S-D Logic

says


MESO level

♂"$

A3FP09



♂

♂

♂

♂ "

♂

+

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂

♂♂

♂

♂

"

"

"

"

"

"


S-D Logic

says

A3FP09



MACRO level

2

♂"$

0

1

/

S-D Logic

says

A3FP09



MICRO

MESO

MACRO

Market-facing, Public, and Private Resources

Market-facing, Public, and Private Resources

VALUE CO-CREATION SPACE

Value Co-creation Space

Nested networks

Value Co-creation Space Value Co-creation Space

Resource Integrator / Beneficiary / (Actor)

Resource Integrator/ Beneficiary / (Actor)

A4FP10


A1FP01


A2FP06


A3FP09


A4FP10


‘Common’

Sen

se says

Italian Miracle?

S-D Logic

says

A4FP10


Image courtesy: Messy-Kitchen-by-Flickr-user-Mark-Knobil

Noodles Fast & Cheap!

Why th

at

Matter

s

Image Source: NASA-Desert-Landing-Public-Domain.jpg, Air-Malta-Pre-Flight-Inspection-Airbus-A320-Wikipedia-User-Kristoferb

A4FP10


60

ConclusionWhat does that mean for you as an organization?

Image courtesy: Wiki Commons, Julian Herzog

Do you really think and talk ‘service’?

61

G-D logic S-D logic

Service = services understood as packaged activities, i.e. ‘intangible goods’ and ‘units of output’

Value = value-in-exchange; ‘worth’

Service = a universalperspective on economics;a strategic lens to (re)define one’s organizational purpose, as well as market and industry boundaries

Value = value-in-use;value-in-context

62

Take-aways

Your customer creates value; not you.You can only humbly propose to participate in their value co-creation!

Value emerges differently depending on context.You better know 1) how your offering gets integrated as one of yourusers’ resources, and 2) make sure to collaborate in their value co-creation spaces and integrate yourself proactively!

Your customers are your most precious resource.Why aren’t they on your balance sheet?And industry, why don’t you even know them … ?

References

Bettencourt, L. A., Lusch, R. F., & Vargo, S. L. (2014).A Service Lens on Value Creation. CaliforniaManagement Review, 57(1), 44–66.

Irene Ng, Glenn Parry, Laura Smith, Roger Maull, & Gerard Briscoe. (2012). Transitioning from a goods‐dominant to a service‐dominant logic: Visualising the value proposition of Rolls‐Royce. Journal of Service Management, 23(3), 416–439.

Lusch, R. F., & Vargo, S. L. (2014). Service-Dominant Logic: Premises, Perspectives, Possibilities (1st ed.).New York: Cambridge University Press.

Ojasalo, K., & Ojasalo, J. (2015). Adapting BusinessModel Thinking to Service Logic: An Empirical Studyon Developing a Service Design Tool. In THE NORDIC SCHOOL - Service Marketing and Management for the Future (pp. 309–332). Helsinki, Finland: Hanken Schoolof Economics

www.sdlogic.net

“Steve Vargo and Robert Lusch” via Twitter: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg

“Desert scene” via Wikimedia Commons by Mlsra (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)],

“Rolls Royce engine” via Wikimedia Commons by Julian Herzog, Julian Herzog [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 4.0 (http://creativecommons.org/licenses/by/4.0)],

“Man getting a shave at barber” - Flickr by Thierry Bignamini, https://www.flickr.com/photos/ioleoso/19674583490

“Cotton wad and whisk” by Unknown http://ak-hdl.buzzfed.com/static/enhanced/webdr02/2013/8/5/12/enhanced-buzz-16580-1375721473-20.jpg

“Whisk, spoon and whisk fly” by Spoon Art @ Pinterest, https://de.pinterest.com/explore/spoon-art/

“Whisk, bowl and drill machine” by Unknown source

“Whisk lamps” by Anja Baumgärtel (Findelkind.biz), http://findelkind.biz/chef_de_cuisine.html

“Preparing a thanksgiving meal”, Courtesy of James Jaeger, http://www.loyolaphoenix.com/2013/11/friendsgiving-meal-family/

“Jeffrey ‘AERODYNE’ Mine Fan”, Image courtesy of Kentucky Coal Heritage, http://www.coaleducation.org/coalhistory/tech2/e40a.htm, More info on ventilating mines @ http://www.bldgblog.com/2010/12/ventilating-mines-with-repurposed-airplane-engines

“Messy Kitchen” by Messy-Kitchen-by-Flickr-user-Mark-Knobil.jpg

“Engine Inspection” by Kristoferb, Air-Malta-Pre-Flight-Inspection-Airbus-A320-Wikipedia-User-Kristoferb.jpg

Sources of remaining images and icons:Martin Jordan, Jan Schmiedgen, Depositphoto, Wikimedia Commons Public Domain, NounProject, FontAwesome

Image Credits (in their order of appearance)

Exercise

Think & note

What does it take for people to create value in daily contexts? What resources need to be integrated?

Example: Dinner with friends

Collect integrated resources in value creation processes

Own operant resources(mental & physical skills)

Others operant resources(mental & physical skills)

Operand resources(Tools and goods)

What resources has the host to integrate to create valuewith the service ‘AirBnB’ for himself and his guest?

Resource:

Benefit:

R:

B:

R:

B:

R:

B:

R:

B:

Resource:

Benefit:

R:

B:

R:

B:

R:

B:

R:

B:

Resource:

Benefit:

R:

B:

R:

B:

R:

B:

R:

B:

Value creation with dynamic resources integration in daily contexts

DoodleCoordinate best time

Cleaning serviceGetting flat clean before dinner

Neighbour Providing olive oil as you run out

PayPalSplitting bill for grocery shopping

KochhausProviding exotic ingredients

Cooking experienceEnsuring dish qualities

Sense for timingReady when guests arrive

Pans & potsMeans for cooking

CookbookTips & tricks and inspiration

Gas supplyEnabling oven to work

Potato peelerSaving time in preparation

Decent lighting in living roomCreating right atmosphere

Entertainer qualities as hostCheering everyone up

Interior tasteCheering everyone up

Knowledge for open bottle by handProviding wine w/o bottle opener

Example: Dinner with friends

Evening impressions

Evening impressions

Evening impressions

Evening impressions

Who wants to dive deeper into service-dominant logic with us?

Take the survey: http://bit.ly/21pWRIC

http://bit.ly/21pWRIC

Thank you!servicedesignberlin.de

@SD_Berlin

@Jan_Schmiedgen

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