Innovation in Experiential Services

A report from London Business School

"Service innovation has proved an elusive area for many reasons, including the intangibility of services, the heterogeneity of services, much innovation being of processes rather than products and the lack of an identifiable R&D function. Much research has focused on services where products can clearly be defined (for example financial services), and where technology is being used to change the nature of the service or the business. However, as Salter and Tether (2006) have pointed out, there is an emerging research stream which addresses the particular nature of services such as intangibility, dependence on people and high levels of interaction rather than technologies.

This report examines innovation in experiential services. These are services where the focus is on the experience of the customer when interacting with the organisation, rather than just the functional benefits following from the products and services delivered.

The report is based on a continuing research programme on experiential services at London Business School. In particular it draws on a recent case-based study of eight design agencies and consultancies and nine successful experiential service providers. The report addresses the question of how do experiential service providers innovate, in particular the content of innovation and the process of innovation including organisation for innovation. Studying innovation in experiential services facilitates wider reflection on the subject of service innovation."

Download the report here.....

(via Design For Service)

Fundamental Changes

A 'must read' report from Swinburne University of Technology on user-led innovation.

"User-led innovation is transforming the way many organisations develop new products, services and knowledge. Service-based organisations in particular can benefit from leveraging the participation of their audiences, customers and citizens. Today’s consumers have much greater input into the creation and dissemination of the products and services they consume."

Download it here...

Service Design Changes The Rules

I've been taught some valuable lessons at school. Most of them I've forgotten from the moment I walked out of the school building for the last time. But, oddly enough, some ideas got stuck in my head.

For example, I learned the difference between branding and marketing. And I actually cherished that rule. For years I've been a pain in the ass of many marketing, brand and product manager telling them time and time again they should never confuse these two disciplines. Never!

But I feel it might be time to start questioning some rudimental principles. There is a service revolution going on after all. And what's a revolution without changing a couple of rules.

Let's assume for a second we live in a perfect world and service organisations are bold enough to go were no man.... etc. And they are actually going to embrace all the 'service design' principles. Than service organisations are going to be all about engagement, empowerment, co-ownership, meaningful relationships and building an organisation around the costumer needs and wants.

What could follow is this:

Identity = Image
A direct result of customer (and employee) empowerment, co-ownership and co-production. If you're customers can truly shape your organisation than your identity equals your image.

Branding = Marketing
This one scares the heck out of most organisations I know. The rule is: Marketing begins with the customer and branding begins within the company. But this is thinking in commodities not services. Co-ownership will hand over the brand to the customer.

Marketing communications = Internal communications
To deliver a great service everyone involved in the delivery should embrace the same set of values. And this means a customer-centered organisation can't differentiate between the people who work for the organisation and customers. They must be treated the same and given the same information. The only differences is that employees get paid.

This is just a thought that's been rattling around in my head for a while. And at DesignThinkers we use it as an inspiring starting-point to think up some innovative business-models. But my old marketing teacher is going to think I'm a raving idiot, so no change there.

Watch Out! Here Comes The Service Revolution!

You may not have noticed, but In the 'West" we are living in a so called service economy. This means we don't make a lot of stuff anymore. We just buy it.

We are able to do so in ever increasing quantities with the money we earn sitting in office buildings looking at computer screens. Producing spreadsheets. And if we are not looking at our screens we are sitting around a big table with lots of comfy chairs. Talking about our spreadsheets.

Sounds all right. But there is a problem. We don't make a lot of stuff anymore, but we don't provide a real viable alternative for it. My gut feeling says that If we don't use our hands, we should be using our head. And we are not using it. You don't have to be a economist to figure this out. If we don't change we will be in trouble. We won't be able to compete on any level with the big and slowly awakening giants like India, Brazil and China.

We, in the west, are living a service economy, that's a big change from a industrialized economy. But our way of thinking, our processes, the way we structure our companies, sell and market our products is still based on ideas developed in the industrial revolution. So it's about time for a new revolution. A service revolution.

In fact it is taking place right now and it's official name is the "third Industrial Revolution". Basically this is what's happening: Economists divide goods and services into tradable and non-tradable. And service has often been considered non-tradeble (and still is by many). But the boundaries are fading away. This means that more and more services will become tradable. This is were our greatest and possibly only opportunities for the future lie.

It's going to take some effort. Because, just like the other two industrial revolutions, it is going to change the way we work, live, and educate our children. So it's a big deal. But it's still early days and we don't really know what to do with it. Or we're just to bloody comfortable, rich and lazy and we don't want to see the necessity for change. So we just keep pushing the snooze button one more time. But it's time to wake up. Because it's never a good idea to sleep through a revolution. You'll miss all the fun.