I have written about many themes that touch the corporations of today in this blog over the years. Themes such as Lean, social business, dynamic capabilities, Lean Startup, intrinsic motivation, and service-dominant logic each have had their time in the spotlight.
With all these themes and theories, what is the big picture? I believe there is, in fact, quite a coherent picture that can be painted from all these themes, and that picture provides some much-needed answers on what a dynamic organization looks like and how to build one.
Platforms are all the hype nowadays. It seems as if the silver bullet to success for any enterprise is to become a platform following a trend set by the iPhone with which Apple disintegrated Nokia as a smartphone giant.
However, I argue that this belief in the power of the platform is ultimately misplaced and only manages to capture the superficial instead of the core underlying principle. In order to understand why, we need to turn to service-dominant logic.
Companies are increasingly striving to become more focused on customer needs and better serve their customers. After all, what is a company without customers? Yet, what exactly is the relationship between the company and the customer, and what should companies do in practice in order to truly provide service for their customers?
In his new book, FinancialServiceLogic: In the Revolution of Exchange in Banking and Insurance, Pekka Puustinen serves us as a guide on a path to a deeper understanding of the nature of exchange, the multiple dimensions of value created for all parties through interaction, and what it means to see your customers as human beings.
While the book focuses on the finance sector, the core tenets of the book are in no way limited to finance alone. The lessons from the book apply to any business, and the discussion is not so specific to finance that managers from other fields could not see how to apply it.
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?
In their influential paper, Evolving to a New Dominant Logic for Marketing, Stephen Vargo and Robert Lusch (2004) argued for a shift from goods-dominant logic to a new, service-dominant logic, according to which service provision is the basis of all economic exchange.
In their subsequent papers, Vargo and Lusch have repeatedly written about the importance of information technology. Although Vargo and Lusch do not spell it out directly, it seems that social media in particular is required both as a technology and as a methodology in order to effectively utilize service-dominant logic. In this post, I will elaborate on why social media is so important for any enterprise that strives to become service-dominant. Continue reading