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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?
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
33
It’s about basic truths how oureconomy is really working
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
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
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
Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg
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
Service is the fundamental basis of exchange
A1FP01
Service is the fundamental basis of exchange
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
Value is cocreated by multiple actors, always including the beneficiary
Value?
Worth?
“Intangible Goods”
“Our Services”
‘Common’
Sen
se says
A1FP01
Service is the fundamental basis of exchange
“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
Service is the fundamental basis of exchange
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
Service is the fundamental basis of exchange
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
Service is the fundamental basis of exchange
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).
„“
Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg
A1FP01
Service is the fundamental basis of exchange
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
FP7 The enterprise can (not deliver value,but) only make value propositions
FP8 A service-centered view is inherentlycustomer oriented and relational
Value is cocreated by multiple actors, always including the beneficiary
A2FP06
The customer is alwaysa co-creator of value
‘Common’
Sen
se says
Value is cocreated by multiple actors, always including the beneficiary
S-D Logic
says
A2FP06
The customer is alwaysa co-creator of value
Value is cocreated by multiple actors, always including the beneficiary
S-D Logic
says
A2FP06
The customer is alwaysa co-creator of value
Value is cocreated by multiple actors, always including the beneficiary
S-D Logic
says
A2FP06
The customer is alwaysa co-creator of value
Value is cocreated by multiple actors, always including the beneficiary
A2FP06
The customer is alwaysa co-creator of value
Why th
at
Matter
s
Value is cocreated by multiple actors, always including the beneficiary
People will ignore your value proposition!
A2FP06
The customer is alwaysa co-creator of value
Why th
at
Matter
s
Image Source: http://www.bldgblog.com/2010/12/ventilating-mines-with-repurposed-airplane-engines/
Value is cocreated by multiple actors, always including the beneficiary
Look!
It’s a hack!
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
A3FP09
All social and economic actorsare resource integrators
‘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
All social and economic actorsare resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MICRO level
"$
.
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)
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# ( %
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♂
+
♂
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♂
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♂♂
♂
♂
"
"
"
"
"
"
InstitutionsResource IntegratorsMarket
S-D Logic
says
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MESO level
♂"$
A3FP09
All social and economic actorsare resource integrators
InstitutionsResource IntegratorsMarket
♂
♂
♂
♂ "
♂
+
♂
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"
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InstitutionsResource IntegratorsMarket
S-D Logic
says
A3FP09
All social and economic actorsare resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MACRO level
2
♂"$
0
1
/
S-D Logic
says
A3FP09
All social and economic actorsare resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
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
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
A4FP10
Value is always uniquely and phenomenologicallydetermined by the beneficiary
‘Common’
Sen
se says
Italian Miracle?
S-D Logic
says
A4FP10
Value is always uniquely and phenomenologicallydetermined by the beneficiary
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
Value is always uniquely and phenomenologicallydetermined by the beneficiary
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
Thank you!servicedesignberlin.de
@SD_Berlin
@Jan_Schmiedgen
fb.com/servicedesignberlin
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