Wednesday, 18 February 2009

Service Innovation Part 4: Safe-fail experiments

Although not exclusively applicable to services, experimentation plays a vital role in the development of new services. 

Traditionally however, experiments were associated with Labs, where people - often nerdy white-coated chaps (and few girls) - built heaps of new knowledge doing interesting things with stuff. These days are not completely gone, but for the sake of the argument, lets says that the golden days of this approach are behind us now.

Contemporary services literature in general and the services marketing and services design literature in particular approach services either as an extention of product (and can thus be designed in advance) or as innovation that somewhat magically emerges from customer interaction. I believe that both perspectives are fundamentally flawed for two reasons:
  1. Although a lot of effort is put into "user-interaction design" when developing a product, still most users must spend considerable effort before they feel "at home" when using the product. Towards the services-end of the spectrum it becomes less and less possible to design the user interaction as the output of the service becomes more and more determined by the customer/client/user. Any up-front design activities will limit both the services-recipient and services-provider in their flexibility to co-create value.
  2. In daily services operations, unexpected customer requests, or other non-plannable circumstances are a fertile source of ad-hoc experimentation. Quite often best efforts of all involved lead to good (and regularly co-created) solutions that satisfy the urgent needs. This way real-time, ad-hoc and to a lesser extend on-demand novel practices emerge on a daily basis in the front-stage. But also on a less heroic level projects that deliver customer-specific systems (products, services, hardware, software, etc.) are in fact often producing novelty on a regular basis by going from one customer to the other and fror one context to the other.
The lattter form of "creation" in my view is one of the most fertile source of innovations. Things that work for customer #1 are varied upon for customer #2, #3, #4 and maybe than #1 again, thereby creating a group of costomers that each have a somewhat similar/somewhat unique incarnation of a system for which no marketing material exists.  This way of creating an installed base in fact "innovates" a group of customers one by one, learning-better while doing. 

From a developers perspective each project in the series can also be seen as an experiment to develop a better version of "the solution". But since the customer pays, it is also quite safe to do, because one failed project only harms one customer, not all. This is one of the principles behind the Safe-Fail approach: multiple tries where one failure doesn't disrupt the whole while variation between the experiments increases the chances to achieve/find/stumble upon real breakthroughs. This is how a large part of the creative/implementative part of services industries works.

(to be continued)

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