service design for networked business models - presentation at service design network conference,...
DESCRIPTION
With increased connectivity, networks at both a global and local level are growing rapidly whilst new communities can develop and flourish through digital channels. These allow for resources to be shared, swapped, borrowed and traded; bearing a new economy that favours access over ownership. This is a dramatically different user experience context that demands a transformation of our approach to service design. In this session we will share findings from our global research that explored the experiences and opportunities involved in moving from an ownership economy to one built on access and sharing. We will present guidelines for creating value exchange networks and share some tools we’ve developed for creating networked services and business models in the sharing economy.TRANSCRIPT
Service design for networked business models Service Design Network Conference, Cardiff, 2013
Aldo de Jong, Co-Founder, Claro Partners
Share your thoughts? @claropartners #sharingeconomy #sdn13
Claro helps corpora7ons and startups to navigate disrup1ve shi3s in society and business
Jiri Belgium
Aldo NL
Rich USA
Megan UK
Mandy Lebanon
Elisabeth NL
Gunes Turkey
Abby USA
Mwenge Congo
Mercè Spain
Michael USA
We deliver business innova1on and service design in the context of disrup1ve shi3s:
Access Services enabled through networks Small data and personalised experiences Internet of Things
Ownership Services delivered by companies Big data and aggregated resources Internet of informa7on and people
Request our point of view paper on each of these topics at [email protected]
46 Stakeholder interviews 39 Expert interviews, plus secondary research
99 Ethnographic sessions
Collabora7ve and individual workshops with the par7cipa7ng companies
The basis of our thinking: two 6-‐month global open-‐innova1on projects
Business Perspec7ve + People Perspec7ve + Systems Perspec7ve
USA
BRAZIL
UK CHINA
INDIA SPAIN JAPAN
DENMARK
-‐
+
TIME Acquisi1on
JOY OF OWNERSHIP
BURDEN OF OWNERSHIP
Post-‐use Use
The burden of ownership is challenging the consump1on economy
The sharing economy emerges from communi1es of exchange. Trust between strangers is a new currency.
MY STUFF YOUR STUFF
EXCHANGE
GiffGaff has only 34 employees and the average response 7me to a customer problem is under 90 seconds
At its peak, Encarta had 62,000+ ar7cles. Its highly centralised control contributed to its failure
As of May 2011, Wikipedia had 3.5m+ ar7cles in English, and 18m in all its 261 languages
Networked business models are disrup1ng tradi1onal ways of doing business
50.000 Quickbase users exchange soXware solu7ons and knowledge with people like them
Microso3 has 35.000 engineers and designers who build solu7ons based on understanding customer needs
We call them Par1cipatory Service Networks (PSN)
A system where value is co-‐created and exchanged in a distributed way by a network of par7cipants. • Networked business models • Value exchange networks • Collabora8ve consump8on • P2P services • Bo>om-‐up value exchange • Sharing economy • User-‐generated content etc.
Landscape of Alterna7ve Models of Ownership & Value Exchange
claropartners.com > login u: pdfa pw: ownership
The access economy drives new business models
CAR USER
Car use u
t Rental fee
CONSUMER
Car u
t Paym
ent
Par1cipatory Service Networks (PSNs) are networked business models
CAR USER CAR OWNER Car use u
t Rental fee CONSUMER
Car u
t Paym
ent
PSNs are difficult for tradi1onal business to adopt
TRADITIONAL BUSINESSES
CONTROL Command and control chain Diffusion of control
VALUE CREATION Centralised value crea7on Decentralised value co-‐crea7on
LABOUR EFFICIENCY Aims at efficient labour use Redundancy and flexibility of roles
RESOURCES Resource alloca7on Resource aarac7on
AFFORDABILITY Limits to scale, speed and localness Unaffordable projects now
possible
DESIGNED vs. ORGANIC Highly designed and planned Organic characteris7cs
CAPITAL INTENSIVENESS High on the company side Low on the company side
ACCOUNTABILITY Clear role responsibili7es Diffusion of responsibility
PARTICIPATORY SERVICE NETWORKS
Tradi1onal service models
Networked business models
Networked business models calls for a shi3 in approach to service design
1. Focus on the individual customer
2. Design and deliver a service 3. Own a unique rela1onship with customer
1. Uncover opportuni1es in a network 2. Enable exchanges to deliver service 3. Iden1fy your role in the ecosystem
1. Uncover opportuni1es in a network 2. Enable exchanges to deliver service 3. Iden7fy your role in the ecosystem
1. Uncover opportuni1es in a network
Network What do they need? What do they have?
Individual customer What do they need?
Key ques1ons: • How are people connected within the network?
• What is their mo8va8on to join?
• What are the values exchanged?
1. Uncover opportuni1es in a network
How are people connected within the network? 1. Uncover opportuni1es in a network
What is their mo1va1on to join?
16Point of View | Participatory Service Networks
How do people want to participate?
Understanding how to build a sustainable business model that benefits both the company and the network.
Understanding participatory service networks from a people’s perspective is important when creating or participating in a network. Participants must be motivated to contribute in order tio increase the overall level of value exchange to encourage network effects; only when this happens will a network be sustainable and not require constant injections of investment of effort, money, and marketing.
PEOPLE NEED TO BE MOTIVATED TO FIRST JOIN, THEN CONTRIBUTE TO A NETWORK
To make a network sustainable, its participants need to put value into the ecosystem and to do this, they need to be motivated to contribute; very few networks work on goodwill alone. For a company to create a network that people want to join to and then actively participate in, different types of motivation need to be understood and then designed into the system. The motivation must come from the network and the value it provides to the participant.
For example, an instant, tangible reward in the form of a functional or emotional benefit can help a person to overcome the barrier of signing up or logging in. However, it’s important to know that more complex, long-term motivations are needed when encouraging people to actively contribute. Examples of these are intrinsic motivations (autonomy, mastery and purpose) and extrinsic motivations (recognition and rewards) which can both play a part in encouraging an initial – and then recurring – contribution.
Money as a motivator can have a positive or negative impact. In the GiffGaff network, (a UK-based virtual mobile operator whose service is largely defined and supported by its online community) financial rewards for contributions work well as small incentives. Conversely, in other circumstances the introduction of money can turn collaborative dynamics into more competitive ones where structural loops are lost and the network becomes fragmented. Of course, this competition can be integral to the model, but at other times it can limit value exchange to a simple, calculated transaction, especially in cases where the network is dependent upon people’s creativity.
The motivations to join a PSN are very different then the motivations to actively contribute. Initially, people need to be motivated with a tangible and immediate reward to join. The motivation to contribute is more complex, but can be based on long- or short-term benefits. Game play, friendly competition, recognition, incremental achievement and mastery can be this motivation, in addition to financial benefit.
1. Uncover opportuni1es in a network
SMALL + TOKEN-‐LIKE
SIMPLE, QUICK TRANSACTION
TANGIBLE BENEFIT
14Point of View | Participatory Service Networks
MAP OUT THE POTENTIAL PARTICIPANTS IN THE NETWORK
Networks are realized through the interactions between nodes – or actors – in the network. Once the actors are established, the types of value exchanged amongst them and their respective transactions can be identified to create scenarios which activate a sustainable value exchange network.
THE NETWORK MUST HAVE A HIGH-LEVEL, COLLECTIVE AIM
Overall, the participants of a service network share a common, high-level aim – a Collective Value Proposition – which defines the type of transactions and value exchanged within the network and is its reason for being; this high-level alignment of purpose across participants is crucial for making it sustainable.
It’s important to remember that it’s not necessary for a company to apply the networked model across the entire business in order to take advantage of the new opportunities. Often there is a subset of business activates that lend themselves most naturally to being addressed through a PSN initially, which can then be expanded organically over time.
Defining the network
Connections
Competencies
Knowledge
Resources
“By connecting with each other, we heighten our identity as Korean-
Americans.”
connecting to others
using skills to create value
sharing knowledge with others
providing funds/resources to others
“By connecting with each other, we will find out things we want to know about new
technologies.”
“By connecting with each other, we can learn how to speak each other’s
language.”
“By connecting to each other we can trade children’s clothes to save
money.”
A company can effectively map the value present both within their business and within their wider network (of customers, partners, suppliers) into four loose groups: resources, knowledge, competencies and connections.
What are the values exchanged? 1. Uncover opportuni1es in a network
1. Uncover opportuni7es in a network 2. Enable exchanges to deliver service 3. Iden7fy your role in the ecosystem
Single user experience Networked experience
Design the service journey
Design par1cipatory services
2. Enable exchanges to deliver service
Key ques1ons: • How is value exchanged?
• How to design for a networked experience?
• How to enable interac8ons and exchanges?
• How to encourage contribu8ons?
2. Enable exchanges to deliver service
How is value exchanged? 2. Enable exchanges to deliver service
Who is exchanging value?
What value is exchanged?
How is the value exchanged? Sketch out the network
Short descrip1on: RelayRides is a P2P car rental service. Private car owners to rent out their cars for money, to drivers looking for a close, and affordable way to rent cars.
Car users, car owners and RelayRides
Car, money, members, insurance
USER CAR
OWNER Car use u
t Rental fee
How do we design for a networked experience?
EXTEND USE JOIN DISCOVER USER
Car use u
t Rental fee
2. Enable exchanges to deliver service
How do we design for a networked experience?
EXTEND USE JOIN DISCOVER
2. Enable exchanges to deliver service
How do we enable interac1ons and exchanges? 2. Enable exchanges to deliver service
Trust in the value exchanged
Trust in other network par7cipants
Trust in the plahorm
How to encourage contribu1ons?
CONTRIBUTION"
2. Enable exchanges to deliver service
1. Uncover opportuni7es in a network 2. Enable exchanges to deliver service 3. Iden1fy your role in the ecosystem
3. Iden1fy your role in the ecosystem
BRAND
Branded experience
1:1 rela1onship with customer
Brand facilitates rela8onships in an ecosystem
Facilitate rela1onships among customers
BRAND
Key ques1ons: • What roles does the network need to func8on, and who can provide it?
• How to start and grow the network?
3. Iden1fy your role in the ecosystem
BRAND
3 OWNER ROLES
Community creator
Community orchestrator
Host
What roles does the network need to func1on, and who can provide it?
5 NON-‐OWNER ROLES
Crowd gatherer
Network enhancer
Conversa1onalist
Beneficiary
Builder
in
3. Iden1fy your role in the ecosystem
How to start and grow the network? 3. Iden1fy your role in the ecosystem
PSN
Emerge eg. Look for the right condi7ons to create a plahorm for exchange
Seed eg. Start the network in key places, with key actors and the right condi7ons to grow
Nurture eg. Encourage par7cipa7on and help the network to flourish
Weed eg. Discourage or filter out nega7vity which could reduce par7cipa7on in the network
Adapt eg. Allow the network to fragment or specialise if it needs to
Tradi1onal service models
Networked business models
Networked business models calls for a shi3 in approach to service design
1. Focus on the individual customer
2. Design and deliver a service 3. Own a unique rela1onship with customer
1. Uncover opportuni1es in a network 2. Enable exchanges to deliver service 3. Iden1fy your role in the ecosystem
Exercise
Design a networked service Value proposi1on template
Who is exchanging value?
What value is exchanged?
How is the value exchanged? Sketch out the network
Short descrip1on:
Share back @claropartners #sharingeconomy #sdn13
A toolkit to design a par1cipatory service network leveraged by:
7-‐9 March"Strategists, developers and designers all across the world come together in one weekend to explore, create and prototype a service."In Barcelona this is mentored by Claro Partners, their clients and other professionals."
Send us an email at [email protected] to be no7fied as soon as registra7ons open barcelonaservicejam.org
Explore more: join us for the Global Service Jam in Barcelona!
Aldo de Jong| Co-‐Founder [email protected] +34 647 857 922 (m)