MKSE and the Intangibles: puzzling over the ‘service’ economy

1. MKSE and the Intangibles:puzzling over the ‘service’ economy JC Spender LUSEM & ESADE

2. agenda • are ‘services’ different ? • knowledge versus agency • researching service firms • future of work MKSE 2011

3. 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, Giffengoods, persuasive advertising • ‘service economy’ does not follow economists’ rules MKSE 2011

4. so what ? • fromimposing planning and efficiency-seeking towardsa responsive relationship with consumer • fromimposing stability towardsembracing 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 MKSE 2011

5. production - service planning - imposing consumptionpattern on the consumer servicing the uniqueness of the consumer’s needs and desires it’s NOT about fitting ‘service goods’ into a planning model MKSE 2011

6. 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 MKSE 2011

7. service as business’s art-form imaginatively combining what’s available MKSE 2011

8. 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 MKSE 2011

9. simple (but useful) business modelswhichsuggest K-categories NOT solutions • SWOT • BCG matrix • Balanced Scorecard • Porter’s 5-forces Step 1 - select K-categories that seem to matter in the particular situation MKSE 2011

10. general idea there 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. B A C E D Step 2 - find a way to enter and operate within the ‘strategic opportunity space’ - constructed picture of the firm’s world MKSE 2011

11. K-dimensioned value-add it’s all about K-based micro-monopoly what we know about coordinating A with Bthat the market does not B A our business model or ‘vision’ what we know about using A that the market does not what we know about using B that the market does not MKSE 2011

12. from concept to value-adding • division of labor, resource contracts, etc. • persuade others into ‘the vision’ • actualize value-adding process B drawing on and combining the palette of categorizing and process knowledge A C E D MKSE 2011

13. 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 ?? MKSE 2011

14. service as the future (and past) of work • growth of services, outsourcing • managing service provider’s imagination, franchising • expanding K-categories available, IT impact • fromplanning and stability towardsthe precariat • networking and other dynamic modes of organizing MKSE 2011