2 cents // Ville Kilkku

The time is right for service-dominant logic

A change in marketing logic is underway. The perception that markets are a place where goods are exchanged for money is being replaced with a more nuanced view of service as the fundamental basis of exchange and value as subjective, consisting of multiple dimensions, and realized only through use.

Why is this shift taking place? Has the world changed? Or has our understanding of the world improved? Why didn’t we think of this before?

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Value-based pricing and the four dimensions of value

For many companies, the traditional way to set prices has been some form of cost-plus pricing. In other words, they calculate their costs, slap on a margin, and there they have a price. However, this pricing scheme has come under increasing pressure as of late, and exploration is underway into other pricing schemes.

The most prized goal at the moment is often value-based pricing: determining the value the customer is able to create with the service and adjusting the price accordingly.

In this post, I will look into what value-based pricing is and how a more sophisticated understanding of what value is can help companies on their journey towards value-based pricing.

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Seek out those who want to join your journey, not just the job

One good guideline in recruitment is to hire the person who wants the job, not the title. Even if they are less skilled initially, motivation to push through and learn easily outperforms learned skills that are sloppily applied.

But is this all there is to it? I don’t think so.

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Can all support functions become strategic business partners?

Companies are constantly looking for ways to be more effective and more focused. This places a major strain on the support functions, as they need to prove their worth in creating value for the business or face more and more cost-cutting measures and outsourcing. This has led practically all support functions to seek a deeper partnership status with the core business units. However, therein lies a problem: how many partners can the core business units have? Is it viable for all support functions to become business partners? If it isn’t, which ones of them can reach this level?

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Fostering innovation by developing and hiring generalists

Where do innovations come from? The Soviet scientist Genrich Altshuller scoured through tens of thousands of patents in the mid-20^th century to find an answer, and his findings suggest that generalists may have an important role to play in fostering innovation.

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Developing balanced leaders through Lean

Lean is a comprehensive management philosophy, and one important aspect of Lean is leadership. In this post, I will examine how adherence to Lean principles develops well-rounded leaders as measured through the lens of the 8 DISC leadership styles.

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Managing inherent uncertainty with Lean Startup and social business

We live in a world full of uncertainty. If there was no uncertainty, waterfall would be an infallible project management method and a well-written business plan would be the key to success for any startup.

So, given that uncertainty exists, we face the question what to do about it. The traditional answer has been to reduce uncertainty and thus make things manageable, and there are still many advances that can be achieved in that field.

However, the more uncomfortable question is what do we do about things that remain uncertain? What if some of this uncertainty is inherent, something we are never able to remove? In such cases, we need to build systems to manage this uncertainty, even harness it, instead of merely attempting to reduce it.

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Leaders grow their own replacements, managers don’t

In recent weeks, Raph Koster has been writing interesting post-mortem articles about Star Wars Galaxies. One point in particular caught my attention from a leadership point of view: the state in which the team was left in after Koster’s departure and his regret over his failure to train a replacement before he left.

Koster’s story is not a rare one. I have been through similar experiences myself. It is the difference between managing a team and leading a team, and it is a difficult lessons to learn. In this post, I want to dig a little deeper into management and leadership, and how it affects the growth of the team members.

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WoW level 90 boost and the limits of level-based game design

Character levels have been an essential part of the game design toolkit for a long time. In many cases, they work quite well, such as in single-player games and in tabletop environments with a set group of players. However, when it comes to massively multiplayer games, there are also quite a few problems with this design paradigm, especially if the game manages to persist for an extended period of time.

The prominent example that illustrates this is World of Warcraft that recently celebrated its 10^th anniversary and, in a highly controversial move, introduced an opportunity for players to purchase a boost for their character to near-max level.

In this post, I will examine this design element, the upcoming Timewalking design element that is about to be introduced to the game to alleviate other issues with level-based design, and some alternative designs as featured in Ultima Online, EVE, and Guild Wars 2.

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Guarding against complacency in the enterprise

Complacency is a natural, almost inevitable feature of human behavior. It really is very difficult to recognize the need for change, especially as companies that experience hard times have almost always had a very successful past.

Motorola experienced sliding market share for five years before they recognized that maybe they should do something about it. Harley-Davidson almost went bankrupt and saw their domestic market share fall from over 80% to below 5% before their turnaround began. A similar story could be told of many other companies. Complacency is not rare, it is, in fact, systemic. So is there something we can do about it?

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