“value is defined by and co-created with the consumer rather than embedded in output [ 14].” The “make-and-sell” strategy of linear value chains gives way to the “sense-and-respond” strategy of self-reinforcing “value cycles.” Lusch described traditional goods-centered dominant logic as focused on “operand resources,” tangible assets with inherent value. He contrasted that logic with emerging service-centered dominant logic focused on “operant resources”—intangible assets that create value in their use, such as skills, technologies, and knowledge. He also pointed out that service logic is not only compatible with the idea of a learning organization, but it may actually require one.
sometimes service varies from one experience to the next.
Product as Object
Possesses
Visceral
Immediate
Rapidly judged
Physical
Node
About components
More static
Service System
Delivers
Connected (via (APIs)
Takes longer to develop
Takes more effort to unseat
Supporting
Links
About relationships
More dynamic
[ 13] Dubberly, Hugh, and Paul Pangaro. “Cybernetics and service-craft: language for behavior-focused design.” Kybernetes 36, no. 9/10 (April 2007).
Traditional Goods-dominant logic Goods
Primary unit
of exchange
Role of goods Operand resources
Emerging Service-dominant logic Service(s)
[ 14] Lusch, Robert F., and Stephen L. Vargo, eds. The Service Dominant Logic of Marketing: Dialog, Debate, and Directions. Ne w York: M. E. Sharpe, 2006.
Role of Customer
Meaning defined by
Customer interaction
Source of growth
Transmitters of operant resources
Tangible Intangible (e.g.,
knowledge)
Operand resource Operant resource Recipient Co-producer Asymmetric information Symmetric information Propaganda Conversation
Value added Value in use before use Value proposition Price
Transaction On-going relationship
Profit maximization
Financial feedback
Adapted from Robert Lusch by Shelley Evenson
Nicholas Negroponte has famously contrasted “atoms and bits.” The physical, tangible, here-and-now aspect of products as objects makes them relatively easier to evaluate than services. This characteristic is one of the things that makes products easier to manage than services. A CEO can pick up a product appearance model and immediately evaluate it, compare it to another, and decide how to proceed. Even a complex product like a car can be evaluated relatively quickly. But services are much harder to evaluate. Services cannot be apprehended all at once; they must be experienced over time. And
The mechanical-object/organic-system dichotomy also appears vividly in discussions about ecology. Much of our economy still depends on “consumers” buying products, which we eventually throw “away.” William McDonough and Michael Braungart have pointed out that there is no “away,” that in nature, “waste is food.” They urged us to think in terms of “cradle to cradle” cycles of materials use, and they suggested manufacturers lease products and reclaim them for reuse [ 15]. Theirs is another important perspective on the idea of product as service.
Architects, too, have begun to design for disassembly and reconfiguration. Herman-Miller recently published a manifesto on programmable environments, talking about the need for “ pliancy” in the built environment and echoing the language of The Cathedral and the Bazaar while discussing building design [ 16].
Sustainable design is emerging as an issue of intense concern for designers, manufacturers, and the public. The same sort of systems thinking required for software and service design is also required for sustainable design. This provides further impetus for changing our approach to design education.
Stuart Walker, professor of environmental design at the University of Calgary, has written, “Only by fundamentally changing our approaches to deal with the new circumstances can we hope to develop new models for design and production that are more compatible with sustainable ways of living. Wrestling with existing models and trying to modify them is not an effective strategy.”
[ 15] McDonough, William, and Michael Braungart. Cradle to Cradle: Remaking the Way We Make Things. Ne w York: North Point Press, 2002.
[ 16] Long, Jim, Magnolfi, Jennifer, and Lois Maasen. Always Building: The Programmable Environment. Zeeland, Mich: Herman Miller Creative Office, 2008.
September + October 2008
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