MKSE and the Intangibles:puzzling over the ‘service’ economy
JC SpenderLUSEM & ESADE
MKSE 2011
agenda
• are ‘services’ different ?• knowledge versus agency• researching service firms• future of work
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MKSE 2011
what makes services different ?
• tertiary sector, electricity as ‘service’
• intangibles, the ‘knowledge-economy’, Penrose’s point
• timing, no inventory, consume as produced
• transaction not pre-determined - responding to the particular
• trends - rising consumer power, changing consumption
• subjective goods, tourism
• Veblen goods, Giffen goods, persuasive advertising
• ‘service economy’ does not follow economists’ rules
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MKSE 2011
so what ?
• from imposing planning and efficiency-seeking towards a responsive relationship with consumer
• from imposing stability towards embracing instability
• exploiting unique non-forecastable needs/opportunities
• anti-economic theory of the firm - imagination constrained, not resource constrained
• service challenge - create manageable order from chaos
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MKSE 2011
production - service
planning - imposing consumption pattern
on the consumer
servicing the uniquenessof the consumer’s needs
and desires
it’s NOT about fitting ‘service goods’ into a planning model
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MKSE 2011
analysis breaks down - engage agency
• analysis - universals under which the unique is categorized (e.g. medical patient - or person ?)
• how to respond to the unique and construct a customized solution ?
• service as ‘business art’ - imagination supported by, not subordinated to, ‘knowledge’
• bricolage - making novel use of what is available
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MKSE 2011
service as business’s art-form
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imaginatively combining what’s
available
MKSE 2011
service firm
• NOT about categorizing customers
• managing the imagination of the service-provider
• expanding knowledge available - but what knowledge ?
• K-categories as components of service business model
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MKSE 2011
simple (but useful) business modelswhich suggest K-categories NOT solutions
• SWOT
• BCG matrix
• Balanced Scorecard
• Porter’s 5-forces
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Step 1 - select K-categories that seem to matter in the particular situation
MKSE 2011
general ideathere is NO certain or necessary definition of the service firm - management choose K-categories based on their experience, competitors’ actions, R&D forecasts, economic history, academic theories, market surveys, etc.
A
B
C
DE
Step 2 - find a way to enter and operate within the ‘strategic opportunity space’ - constructed picture of the firm’s world
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MKSE 2011
K-dimensioned value-add
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our business model
or ‘vision’
A
what we knowabout using A that the
market does not
what we knowabout using B that the
market does not
B
what we know about coordinating A with B that the
market does not
it’s all about K-basedmicro-monopoly
MKSE 2011
from concept to value-adding
• division of labor, resource contracts, etc.
• persuade others into ‘the vision’
• actualize value-adding process
A
B
C
D
E
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drawing on and combining the palette of categorizing and
process knowledge
MKSE 2011
service K-categories
• intangibility, inseparability, variability, perishability, rent-ability (Shostack)
• setting, quality, relationship/brand, demand management (Swartz & Iocobucci)
• diagnose needs/desires, value-add process, delivery, Veblen/Giffen pricing, acquire/maintain reputation (Spender)
there are NO universal K-categories - so why not ask the managers/entrepreneurs ??
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MKSE 2011
service as the future (and past) of work
• growth of services, outsourcing
• managing service provider’s imagination, franchising
• expanding K-categories available, IT impact
• from planning and stability towards the precariat
• networking and other dynamic modes of organizing
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