If Service Innovation has an anatomy, is it then alive?

The headline question might seem far fetched, but the language used to describe Service Innovation is full with innovative analogies. Reading the paper "Exploring value propositions and service innovation: a service-dominant logic study" by Skålén, P., Gummerus, J., von Koskull, C., & Magnusson, P. (2015), we are imperceptibly served with words like anatomy, creation, resources and adaptation. They all also are used in describing the concept of life. This is of course a play with words - which by the way is a creative way of making associative innovations. So lets play along for a bit.

In what way is Service and Service Innovation alive?

I'll just restrict myself to Services B-B and B-C, to make the associations clearer. So, lets pretend Services are alive. They thrive when delivered, so in a way they consume resources like manpower and electricity, and they deliver experiences, satisfaction or physical attributes. Obviously a Service can be copied, like Dolly the cloned sheep, but Service Innovation is how they reproduce. Everybody has heard the saying "Necessity is the mother of invention". In the living Service context it would mean that problems or needs is what the reproductive process (Service Innovation) is aiming for, while consuming its resources and producing the Service babies.

Linking back to the Skålén - Gummerus - von Koskull paper, a value proposition would be a service on display. The three aggregates of practices that constitute and fulfill value propositions, provision, representational and management and organizational practices, would be the living service in action, its genes and feeding practices respectively.

Types of innovation and is corresponding life analogy

Anders Gustafsson, professor at the Service Research Center at Karlstad university, presents a model related to Doblin’s ten types of innovation (see picture below).

In the above model, and listening to Anders Gustafsson presenting it, you can figure out that streamlining a Service is like holding it on a leash; brand innovation is to brush up the service and make it more attractive; experience innovation is to alter what and how the Service consume resources; and finally social innovation actually has many similarities with a pet dog: it's a nice companion and you meet lots of people when you are out walking the dog.

Is this meaningful?

OK, I must confess it has been a nice time trying to find useful analogies - but I at the same time have learned some more about these concepts. However I think there really is a deeper meaning, taking concepts like evolution, genes, reproduction (mixing of genes) etc. into account. It should be used carefully, for explaining. But possible life can give something back. Perhaps this analogy can provide some deeper understanding and new discoveries?

The customer is not always right

I will now plunge myself into the infected debate on whether the customer is always right or not. This might seam far fetched from the actual purpose - to write about Service Innovation - but that is what I actually will do. In the process I will come to the conclusion that the customer is not always right, only to rephrase the sentence and seemingly contradict myself. I have the coffee cup at the ready!

How to Innovate Customers, not Products

I will refer to findings and conclusions made by Michel, Brown and Gallan in their paper “Service-Logic Innovations: How to Innovate Customers, not Products” (2008). To me, some of their statements seams to be less trustworthy, or at least less apparent.

I do however fully support them argue that service-logic innovation is customer-oriented. To me, service innovation is a process, and the outcome is the specification of a new service. Nothing could be more natural than involving the potential customers to that (coming) new service, in the process of specifying it. But I would also like to point out that there is nothing saying you can't perform service innovation without the involvement of customers. Of course you can, and you might get initially very successful - but hardly for any longer period of time (without customer involvement).

They also state for example that “Altering value as it is defined and used by the customer, not value in production and exchange, defines innovation”. This to me is in the eyes of the observes, that is the system boundaries you have set up. There clearly can be innovation in for example production, and setting the proper system boundaries you will find there is an internal "customer" - and if you will (using the service-logic innovation terminology) there also might be some service innovation made. I would prefer another definition to innovation, I just can't formulate it now. Note that the customer is not included in their definition, so by (their) definition customer involvement is not an unavoidable part of Service Innovation.

So, as they put it: “How can we anticipate and assess alterations in customer roles, such that we can innovate our offerings? And finally, how can innovating customer roles alter the ways our firm needs to configure its value network?”. To customer involve, or not to customer involve, that is the question.

Confusion

There is some confusion at play here. One very important issue is about the concept Service Innovation, and that comes from the fact that it is actually two terms. First, Service Innovation (verb) is a process, and as such a service itself. Then a Service Innovation (noun) is a result from a value creating process (Service Innovation), and that result is the specification of a new service. So when discussing Service Innovation you always have to be crisp clear whether it is the process or the result you mean.

Does it matter? Very much: As we know from Michel, Brown and Gallan, the process of Service Innovation benefits from involving the customers, but the service innovation itself (the resulting service) might well be one not involving the customer in its delivery or execution. Take for example the service home delivery of groceries connected to a fix weekly menu. The whole point is not involving the customer (in the making). But the very same service might well be the result of heavily involvement of customers in the service innovation process.

Did that help? Here's another one: a (normal) service is a value creating process ordered by a customer. But a service innovation is a value creating process ordered (indirectly) by the customers. In the first case we clearly have customer in singular, or at least a group that acts as a single customer. In the second case, we have customer in the plural: customers. It is customers as a collective that can accept or reject a new service - not any single customer. Well they can, but unless they are very influential and convinces the whole customer collective to follow suit, any single customer can't change the success of a service on the market. So when we talk about "customer involvement" in general, we should clarify if we mean involvement of customers in the service innovation process, or involvement of the customer in the execution or delivery of the new service. It might be booth or one of them.

With their exploratory, rather than confirmatory, research orientation, Michel, Brown and Gallan finds that service-logic innovations are triggered by the following forces:

1. Embedding know-how into objects
2. Changing the integrators of resources
3. Reconfiguring the value constellation, or combining any of these forces.

They also found that “each service-logic innovation changes at least one of customers’ roles as users, payers, and buyers”.

This is all well, these are the triggers and these are the impacted roles, but what about service innovation in the making? How is actually the service innovation process working? To get the grips of this, we still need a strong definition of Service Innovation. Having this, it would be much easier to move on in the process of understanding.

Conclusion

So, in conclusion, the customers are always right. Nota bene: customers in plural. Why? The customers, as a collective, can always use their right not to use your services. If they choose to, there's nothing you can do. You are out of business. They are always right.

But there's an important measure for preventing this: to involve the customers in the process of Service Innovation. This way, the customers have actually specified the outcome (the new service) and are by definition co-owners of that specification. So if they want to oppose the suppliers right, they will at the same time be opposing themselves. This is a contradiction, and hence to involve the customers is the road to success. By definition. You can however, like Henry Ford with model T, have a visionary insight in customers future behavior and initially win a market without any customer involvement in the innovation process - but eventually customers are right. Do you know of anyone driving a T-Ford today? (This was of course a product example, not a service, but you can always refer to the service the car delivers in moving you swiftly around).

Is the customer always right? No. Definitely not always. If you yourself haven't experienced the rejection of a seemingly righteous claim with reference to written terms, you probably have heard stories of others claiming such and getting both denied and humiliated in the process. So the sentence is negated by example, and hence the customer is not always right. But customers are always right. Crisp clear.

References

Michel, Stefan, Stephen W. Brown, and Andrew S. Gallan. “Service-Logic Innovations: How to Innovate Customers, not Products” California Management Review 50.3 (2008): 54-66.