We innovate, under a service dominated thinking approach, for similar reasons as product dominated thinking (differentiate, cost leadership, value chains).
But also to enhance, entice and enrich our customers; to react to changes in ecosystem value generation; and to offer what customers are expecting from other markets/industries.
We live in an exciting world of "jobs to be done" and "blue ocean" thinking.
Perhaps better put as "All service systems, including the beneficiary" are resource integrators.
This premise highlights how every actor involved integrates resources and that there is a network of actors
Originally it hinted at why firms are formed - to integrate micro-specialisms into a more complex service. But it was quickly recognised that not just firms did this, so did individuals, households, social organisations and so on.
Hence, all economic and social actors are resource integrators.
The role of goods (both tangible products and intangible ones such as digital goods -eBooks, mp3s etc) needs to be seen differently different in our service-only world
No longer do we see a goods vs service divide; with the view that services are poor relatives.
Rather, we see goods enabling us to move service in time and space.
And this might seem strange, but let's consider that service can be frozen and unfrozen, and now we will see this begins to make sense
When our ways of thinking, acting and behaving are based mainly on goods, then we are following a goods-dominant logic
Such a logic leads us to see a world where
It is a logic that has been sufficient for nearly 300 years. But we will argue later that it is no longer sufficient, given that services are eating the world.
How can we increase the potential innovativeness of our organisation?
It turns out 3 orientations impact the potential innovativeness of our organisation. And in turn the business performance. Increasing these orientations impacts innovation performance. They are:
In a simplistic world, we exchange services directly. I do something for you as you do something for me. But our world is messier than that and this exchange may be hidden. For example it could be deferred, unequal, or not even a direct exchange at all.
We can think of "service credits" as a useful concept to bridge the "gaps" above.
However, and this is important, it still remains the case that these seemingly partial exchanges fulfilled all the foundational premises of service-dominant logic.
So we can say service is the fundamental basis of exchange, though indirect exchange sometimes masks this.
Where does Electrolux's recently launched robotic vacuum cleaner service sit on the goods-service continuum? What aspects of the ongoing shift to the service economy does this service address? What could Electrolux do next? And, will this be successful?
This mini case study looks at all these questions around the service recently launched on the Swedish market, built upon their successful product.
The music reproduction industry is a fascinating industry to observe. It shows the progression to a service economy but also starts as a service.
Along the way we see service development is dependent upon product developments and supporting innovations from other industries
It's useful to have some background on product-dominated innovation since service-dominated innovation is similar (yet with additional factors to address).
In this article we look at: