Mark McDonald

Value creation and innovation come from thinking in new ways about organizational offerings.  Over the last 50 years there has been a progression from offerings based on products (things that you use in your life), to those based on selling solutions (products that we use for you) to selling services (that you incorporate into your value chain).  That progression, shown in the figure below, begs the question – what will we have next?

That is the question business leaders are working their way through.  We already know a few things as we try to define a world ‘beyond service’.  Here are a few things that I believe we will need to incorporate.

• It will have a deeper connection to the individual, their goals and needs
• It will be delivered via a blend of communications and computing technologies
• It will have a social component
• It will support customer self expression
• It will incorporate location and condition into its value proposition
• It will evolve rapidly
• It will not fit into any readily available category
• It will require significantly more and different data then we have now, used in different ways
• Suppliers will not define it so much as by a consensus of consumers and interested parties.

So what do you call something that is personal, technological, social, customizable, unique, informational etc.  The name is something that goes beyond a product or service, or product/service, or even the notion of ‘prosumers’ advocated by Don Tapscott.  It’s more than a facility or a platform like Facebook or your bank.

One way to think about it is to call it a “SITUATION.”

Situation could be the term for a new set of offerings that create value in the world of digitized, social, networked, personal, peer influenced world.  The idea behind a situation is to capture something that is more than providing a ‘service in context’ that type of smarter approach may be a stepping-stone, but it still more about using information to slot customers into predetermined service scenarios than really addressing the situation.

Why do we need a designation of something beyond service?

Service replaced the idea of solutions as customers wanted to leverage our resources, assets, knowledge and products into extending their value propositions.  Services freed companies from having to replicate functions that were not essential to their value creation – think FedEx or UPS in logistics, Credit Cards in Accounts Receivable etc.  These services quickly came together and are now a standard of competitive strategy.

But what happens after you give people services?  You could sell them smaller services or integrate services into larger bundles or you could think of what is the next addressable frontier in terms of creating unique and sustainable value.  Addressable expressed in terms of the ability of business and technology infrastructure and substructure that makes it possible to do something new or at a price point or at a scale or at all three that was not feasible before.

Take the characterizations mentioned above and you can think of situation as the totality of them rather than simple combinations.  Some will say so what, are not the following forms of situation:

• Context or ‘smart’ situations = service + information analytics (data, Bi)
• Location situations = service + device location information (foursquare)
• Social situations = service + social media (web casts, move on, etc.)
• Event situations = service + social media + location (concert or flash mob)
• Etc.

Yes, but we need to push beyond that, because when we do we get a definition of something that is unique to the individual and therefore a source of unique value and competitive advantage.

A situation is about a broader definition of customer need.  Need in terms of a situation exists at a point, place, condition, emotion in time.  While that comes and goes and no one is ever the same, situations are commonly understood, think situation comedy or the phenomenon of schadenfreude and you get the idea.

People are already trying to integrate and support situations on their own

You can already see situations forming as people surround themselves with sets of disparate but related technologies to build support for their situations.  Recently I was out with my son, who is working on the east coast.  We were driving in his car, his GPS was plugged in, his cellphone one, and we were running errands based on recommendations he received from Yelp!

The idea of situation as something beyond service became apparent when we changed plans, the situation changed and the value of our prior plans and preparation dropped considerably.  I would up, reassembling the situation on the GPS (new location), the phone (Texting people) all based on new recommendations from Yelp! Accessed via the smart phone.

Thinking about the future of value creation beyond service opens the door to new competitors, value propositions and opportunity.  So as you put your strategies and plans to the test for this year and the next five years or so, ask yourself are we providing products, selling services, sure but what are we doing with the situation.

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Category: Innovation Social Media Social Organization Technology     Tags: customer experience, Design, product development, product innovation

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