Tag Archive | service-dominant logic

Service Design Capabilities

Oct29

Does possessing service design tools make you automatically a service designer? Or does a person need to have special capabilities in order to be a service designer? This question was examined by Nicola Morelli, Professor of university of Aalborg, Denmark, and co-writer of a recently published book called “Service Design capabilities” in a workshop that was organized 15 October 2021 by the Swedish Experio Lab. According to Professor Morelli, the ethos has been that proper tools made a service designer a designer. However, if you have all recipes, ingredients and kitchen utensils, does it make you a cook?

Image: https://freedesignfile.com/657243-female-chef-cartoon-vector/

The answer is obviously a no. In order to be a cook you also need technique, skills, and understanding of how different ingredients mix together. In short, you need special capabilities.

The same applies to service designers.

Who designs?

Perspective is important. The famous scientist and Nobel laureate Herbert Simon argued back in 1969: “Everyone designs who devises courses of action aimed at changing existing situations into preferred ones”. Meaning that each time a person finds new solution to an everyday problem on the basis of her/his own knowledge and competences it is about design. But, if everyone is a designer, what is then the role of designer training, professional designers and design agencies?

There has been a significant change in how services are perceived. Some decades ago, services were something that products were not, and the value was seen to be in the good itself. Whereas now the value is seen to be defined by the beneficiary, and it is based on the interaction with users. A bank is nothing but an office space before a customer starts using the banking services. Or, a bus is just a box with wheels, unless a customer uses it to move from place A to B. Physical artefacts and products are only tools for value creation, and value is produced when the beneficiary of a certain service interacts with the service. Producers and service providers don`t offer value itself, but only a value proposition which must be made concrete by the beneficiary by aggregating resources and hence being a co-producer of value.

In comparison with the Goods Dominant Logic, in the Service Dominant Logic the value is perceived and determined by the customer, not by the producer.

A service designer is hence the link that facilitates value co-production by providing a logical infrastructure in which the customer then aggregates resources to create value. If the designer personally participates in the value production process, the interaction is direct, but it can also be indirect. In that case the designer designs products or services that engage the beneficiary.

Image: https://www.revechat.com/blog/customer-interactions/

Professor Morelli linked the GDL with a project-based approach, in which the circle is closed: the process has a beginning and an end. While SDL can be seen as infrastructuring approach and the duration of the process depends on how the customer aggregates the resources that are made available. In the infrastructuring approach also the results are controlled by the customer.

A Map

If service is seen as an interaction and the value of it comes from the co-production, then what is the roadmap for designing better services and better problem solving? Professor Morelli saw three logical levels in seeing service as a systemic institution:

  • Value in use: Solving the problem by one`s own devices and based on own knowledge, or asking a friend for help. The key is interaction and exchange. But does service design have any role on this level?  
  • Infrastructure: Interaction with experts, expert design, organization.
  • Institutional systems: for example access to health care system, rules, legislation etc. System design implies that replication and scalability are embedded in it.

The first level can affect the second and third levels, albeit not directly, but by changing patterns and practices step by step.

Navigation tools = service design capabilities

What capabilities should a service designer then be able to sell to the potential client? According to Nicola Morelli, the needed capabilities depend on the level we operate on. On the first level, Interaction, the designer needs to be able to address the context, build vision, engage stakeholders, model possible solutions and control experimental aspects.

On the Expert Design level, in addition to the requirements of the first level, the designer must be capable of building logical service architectures and engaging in open problem solving. Working on the System Design level requires working across different logical levels ja modelling in a bigger scale to make solutions scalable and replicable.

One example of a System Design level could be the 15-Minute City concept. This concept, created by Carlos Moreno and popularized by Paris mayor Anne Hidalgo, is designed to ensure that urban residents can fulfill six essential functions within a 15-minute walk or bike from their home: living, working, commerce, healthcare, education and entertainment. With its four components, the 15-Minute City would improve the urban experience and quality of life of its inhabitants, as well as boost community participation in the planning.

Image:  Every Street In Paris To Be Cycle-Friendly By 2024, Promises Mayor. http://www.forbes.com

Service design is always also political. The aim of design is to create something better. The question that inherently comes along is: can we provoke change with the design? And can we imagine the effects that this change would lead to? The core task of a service designer is to visualize something that is not yet there.

And that brings the focus on capabilities rather than tools. After all, it`s not the kitchen utensils that make a chef, but his/her capabilities.

– Laura Ekholm

For more information:

Morelli, N., de Götzen, A. & Simeone, L. 2020. “Service Design Capabilities”

Simon, H. 1969. “The Sciences of the Artificial”

15-Minute City. https://www.15minutecity.com/about

Traditional media is merging with social

Mar29

I recently attended a doctoral thesis defense of Anna Viljakainen, who has been studying the shift from goods dominant logic (GDL) to service dominant logic (SDL) in the Nordic media industry.

Anna Viljakainen

Anna Viljakainen

According to Asle Rolland (Viljakainen, 2015) the value of journalism in the world of mass communication has based on the assumption that access to exclusive information is what creates value for the customer and to media themselves, and the most valuable kind of information has been the first release.

The tradional media industry has been mainly focused on selling goods, such as copies of print magazines, advertisements and recorded media, and measuring them by reach of audiences and number of transactions.

However, because of the proliferation of social media, the consumers have more alternatives for finding and experiencing the information, the corner stone of media industrys GDL strategy has started eroding. In response, the industry has started to servitize their offering by including reader generated content as well as offering additional services for magazine subscribers, such as discussion boards on their web properties.

Many magazines, such as Cosmopolitan and Olivia in Finland have gone as far as having virtually no editorial content at all. Almost all the material in these brands are either created by readers or by advertisers both online and in print. The role of editorial staff has been reduced into curators of said content.

At the same time, social media giants, such as the Facebook have started to diversify themselves from single destinations into variety of brands. The Facebook for example owns WhatsApp and Instagram properties.

To me, it seems like the field of media is converging into a brand driven, curated social media, where the both the content and the consumption experience is co-produced with the brands and the readers. The attention of readers (or users) has started to revolve around interesting topics or articles, rather than within a media or a medium.

Thus, probably within a decade the distinction between the traditional media industry and social media has vanished because of the shift from GDL to SDL in the media industry and platformization of the social media from the other end.

To keep the traditional media industry in the game, Viljakainen identifies that a new method a new method of measurement, a currency, where reach and effectiveness of each media can be scaled against each other is needed. Here the work is only starting, but Viljakainen might be onto something big.

(Viljakainen, 2005): https://aaltodoc.aalto.fi/handle/123456789/15384

Master Thesis: Empowering Child Sponsorship with Service-Dominant Logic

Mar11

Child Sponsorship

Child Sponsorship is highly motivational form of regular giving. Largest child sponsorship organizations in Finland are currently Plan, World Vision and Fida. Picture taken from Fida’s project in Tanzania by Erkki Salo.

In this blog post, I Introduce my master thesis and share some of my personal experiences from the MBA studies. As part of my master thesis (which can be downloaded from here: Salo Erkki Master Thesis) I developed a Service-Dominant Logic based business model canvas application for child sponsorship organizations. With the help of the canvas, value propositions for the child sponsorship of the case organization Fida International were developed.

Turmoil in fundraising

Child sponsorship is a highly popular and high impact form of giving that affects to the lives of 90 million people. In child sponsorship, a donor, called a child sponsor, supports a child in a developing country through regular donations. With the support, a sponsored child receives improved chances in life. The case organization Fida International is one of these organizations with its 5200 child sponsors helping 10 000 children in poor countries.

Child sponsorship organizations, like any other charities, are facing the changing world as donor generations are aging without the younger generations filling in the gap. In order to adapt to the change, donor customers cannot be treated as passive receptors of marketing messages, but instead as co-creators of value. By co-designing services together with customers and with other stakeholders, doors can be opened for innovations.

New Business Model Canvas application for child sponsorship

The starting point of the thesis was that the Business Model Canvas (see my previous blog post) introduced by Osterwalder and Pigneur (2010) can help organizations to visualize and innovate successful business models. Despite of its strengths, it is said to represent an old paradigm of service marketing called goods-dominant logic.

The new paradigm of service marketing introduced by Professors Vargo and Lusch (2004), called the Service-Dominant Logic, challenges the Goods-Dominant Logic. In the Service-Dominant Logic, value is always co-created with customers and is solely determined by the customer.

Therefore, I decided to apply the Business Model Canvas with Service-Dominant Logic and to add also insights found from the fundraising literature and from other available business model canvas applications, such as the Lean Canvas and the Nonprofit Business Model 1.0. After the analysis, I used the original business model building blocks by Osterwalder and Pigneur, but altered the original key questions.

The developed business model canvas application was used as part of the service design process to develop value propositions of the case organization’s child sponsorship. Multiple different stakeholders were involved, and the focus was on the big picture. The chosen service-design process was the Double Diamond. As outcomes of the thesis, the case organization gained a deeper understanding of their donor customer needs and how the developed value propositions were linked to the donor customer’s public and private desired outcomes.

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Service-dominant logic in business models – a workshop with Professor Vargo

Apr30

Written by Katri Ojasalo

The two trending phrases in academic and business conversations are “service-dominant logic” (SDL) and “business model canvas” (BMC). Is there a connection between them? Or are they just two extremes: the first one an academic theory and the latter one a business tool?

In fact, they are quite far from each other. We can see that the BMC is clearly based on goods-dominant logic. This comes up for example in the use of terms, such as customer segments, channels etc. So, does this tool guide businesses to focus on more irrelevant issues and neglect the guiding principles of SDL: customer value and value co-creation? This was the notion that brought a group of Finnish service researchers together.

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

In fall 2012, service researchers from various Finnish universities were gathered to discuss the future of service research and service competences. During the discussion, we realized a common interest in further developing the BMC, which we all had been using in different contexts in teaching, research, consulting, etc. We saw that the BMC needs adjustments to be in line with SDL. Applying SDL in practice and truly understanding value co-creation can offer a very important competitive advantage for any organization. The BMC seems to be missing this understanding of the relevance of SDL.

To discuss and further develop this issue, we first formed an informal group that was soon changed into a Special Interest Group of the Finnish Service Alliance (FSA – an association of more than 100 Finnish service researchers and companies interested in service research). The Special Interest Groups (SIGs) are forums for discussing and developing specific service-related themes and they are founded by the members of FSA.

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The Evolution of Service Science

Nov25

by Jenni Aranko and Ainokaisa Kostamo

This blog post examines the evolution of Service Science which aims to be a new, interdisciplinary approach to study and innovate in service. First we’ll examine what is actually meant when discussed about service and provide a definition of service as a framework for further reading. We’ll continue with arguing why there is a need for generally approved Service Science.

Then we’ll introduce the foundations of Service Science through a selection of chapters from articles and books that were published in the late 1970s. The writers have brought the key elements from their previous studies and reflected those to today’s world.

Lastly we’ll take a look at the modern Service Science which has its foundation in the Service-Dominant logic (introduced by Vargo & Lusch in 2004) and present the most essential concepts related to it. The distinction between services and goods as one of the key questions and sources of misinterpretations in the field of Service Science is also discussed.

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