Welcome to the Journey: Making SD-Logic Approachable

Harnessing service-dominant logic in our innovation thinking opens up numerous opportunities. Compared to being constrained by the goods-dominant logic we typically use today.

Instead of the whole business focussing on one moment of value exchange (point of sale), we look beyond and build relationships. Suddenly jobs-to-be-done, blue ocean, experiences, agile etc all hang together and make sense.

However. The definitions of service-dominant logic can be unapproachable. Which leads to it being more of an academic study rather than practical real-world application it deserves to be.

This journey looks at how we can demystify the definitions.

If you agree with me that service-dominant logic is the way forwards for innovation, then what does this mean pratically?

Well, it requires shifts in our thinking, behaviours and actions.

The fundamental shift, from which the others really follow, is the thinking shift from making something to assisting beneficiaries make progress.

As we are “assisting” then that drives value to be co-created in a relational rather then transactional ways. And we should treat beneficiaries as resources rather than targets. As well as realise that firms' resources are primarily operant (ie can do things, which usually means people) and not operand (goods). And not least, efficiency is found through effectiveness.

Reading time <7 mins

A service-dominant logic approach requires us to stop seeing a goods vs service world where service is a poor relative to goods. And instead, embrace a service-only world where goods help us transport a service.

At first glance, this might seem that we are challenging the over 300-year old goods-dominant view of our world. But it is an evolution in thinking, acting and behaving rather than a revolution. One that requires us to stop seeing a goods vs service world and instead embrace a service-first world where goods help us transport a service.

However, they are unlikely to light up the management world. Or get the attention they need. Given the often confusing words choices, like phenomenological, or using words that have a different meaning than usual, as in the case of institutional.

Let's make service-dominant logic more approachable by doing two things:

  • Group premises together into the clear "what", "who" and "how"
  • Explore what the definitions really mean

Reading time <11 mins

Let's make service-dominant logic more approachable.

Here we look at the first foundational premise - that service is the fundamental basis of exchange. Which is two words different to goods-logics "value is the fundamental unit of exchange".

But those two words open up a world view where many deficiencies are solved. a world where design-thinking, lean, agile, job-to-be-done, market orientation, relationship marketing are natural.

And where we look past the point of exchange to see additional value creation opportunities

Reading time <7 mins

Instead of viewing economies by their predominant output, as we classically do, we view them by the predominant skills applied and improved.

Since the application of skills for benefit is the definition of a service, we find that all economies are service economies.

Shifts in economic eras are therefore shifts in the skills that beneficiaries see as beneficial. We shift not from agricultural to goods economies, rather the skills seen as beneficial shift from farming skills to those of mass production. And the "shift to service economy" talked about today is really a shift to see resource integration skills as most beneficial.

Reading time <6 mins

Our economies are based on the exchange of service. That is to say, in exchange for you benefiting from my service, I benefit from your service.

However, we rarely see such a direct exchange happening nowadays. Indirect exchange masks the fundamental basis. Think of this as you give me a service credit each time I provide my service to you. I can benefit from your service in the future by using those credits. Now think that I can use those service credits to benefit from someone else's service. This is an indirect exchange. And usually we would consider those service credits to be cash.

This premise, to me at least, helps us understand why the fundamental exchange of economy is service, yet we think of it more in terms of value and cash.

Reading time <2 mins

The role of goods (both tangible products and intangible ones such as digital goods -eBooks, mp3s etc) is different in our needed service-dominant logic

No longer are goods the main focus, with the blinkers of value-in-exchange etc. Instead goods are distribution mechanisms for services.

We can simpler see goods as taking one of two roles. They are either:

  • encapsulating knowledge and skills, allowing the beneficiary to later perform a self service. A hammer allows you to bang your own nails.
  • freezing a service to be later unfrozen by the beneficiary. A CD/vinyl/tape freezes a bands performance which is unfrozen when you press play

This is an important shift in thinking. Helping us minimise marketing myopia and to focus on job-to-be-done theory (increasing opportunities for innovation and growth)

Reading time <7 mins

We’re not going to get anyone to embrace service dominant logic thinking if we insist on using words like phenomenological.

Let's look into what axiom #4 of service-dominant logic means

"Value is uniquely and phenomenologically determined by the beneficiary"

And it's a tour that takes us through the experience economy, servicescapes, blue ocean strategy, and building brands people love

Reading time <8 mins