Service design is en vogue. These days even the most hesitating companies engage in little experiments with the ‘new discipline’. A myriad of methods and tools are taught and trained. ‘Mindsets’ we say have to be developed; philosophies shaped … And yet: Service designers still have a hard time legitimizing their ways of working to all these people in organization who do not seem to ‘get it.’ It still is hard to get really holistic service systems to work. When it comes to implementation, great experience concepts often face resistance not only from operations but also due to a lack of strategic direction. The problem is: When reasoning with top management, service designers are rarely on eye-level. This is not only because of current power structures but also because our notions of service design conceptualize the young field in a rather narrow way. Honestly, most predominant ideas of service design aren’t strategic at all. The HPI research fellow Jan Schmiedgen gave a glimpse into Service-Dominant Logic, an admittedly abstract but extremely handy theory of service, which provides you with a strategic lens on how to run your business, (re)define your market and even your industry boundaries. Amongst scholars Service-Dominant Logic is already perceived as a new marketing paradigm; a lens to view all economic activity in the world. For you as serve designers it might be a good foundation to base your strategic conversations with top-management on. If you really want to make ‘service thinking’ central to all our business activities, there is no getting around Service-Dominant Logic. The talk took place at the epicenter of the Berlin tech community – Factory Berlin in Mitte. Factory is the first and largest startup campus in Germany. With over 16,000 square meters of office space, Factory brings best in class technology businesses together with early stage startups and talents by providing an outstanding work environment, a curated community of founders and quality events.

1. Service
Design
Berlin
FAC TO RY B E R L I N / F E B R UA RY 2 4 , 2 0 1 6
Strategising
with service
as business logic

2. Katrin
PhD Candidate,
University of
Potsdam
Who is inviting?
Olga
Business
Consultant,
Fuxblau
Manuel
Service
Designer,
Fuxblau
Mauro
CEO &
Designer,
Boana
Martin
Experience
Designer,
HERE

3. Formats of Service Design Berlin
Service
Design
Drinks
Service
Experience
Camp
Service
Design
Dinner

4. How does it work?
Input Exercise Mingling

5. Broadcasting globally

6. What’s the big picture?
level 3
Techniques
methods and tools supporting
practices and the development
of mindsets
level 2
MindsetsPractices influence
support
attitudes, ways of thinking,
linked to principles
ways of working,
linked to principles
support
level 1
Principles
embodiedenacted
A Conceptual Model of Design Thinking (Carlgren, Rauth and Elmquist, n.d.)

7. Who is tonight’s speaker?
Jan Schmiedgen
Innovation Facilitator
& Design Strategist

8. A Brief Glimpse Into
‘Service-Dominant Logic’
A useful rationale for more ‘strategic
thinking’ in service design practice?
Service Design Drinks Berlin, February 2016, Factory Berlin

9. 32
Service?
Service as
an activity
Service as a perspective
on business and marketing
e.g. restaurant service, repair,
maintenance, transportation, call
center etc.
regardless of whether your core
business is a physical product
(good) or a service activity
Table: adapted from Grönroos, 2008

10. 32
Service?
Service as
an activity
Service as a perspective
on business and marketing
e.g. restaurant service, repair,
maintenance, transportation, call
center etc.
regardless of whether your core
business is a physical product
(good) or a service activity
Table: adapted from Grönroos, 2008

11. 33
It’s about basic truths how our
economy is really working
Service as
an activity
Service as a perspective
on business and marketing
e.g. restaurant service, repair,
maintenance, transportation, call
center etc.
regardless of whether your core
business is a physical product
(good) or a service activity
Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg

12. 34
Service as
an activity
Service as a perspective
on business and marketing
e.g. restaurant service, repair,
maintenance, transportation, call
center etc.
regardless of whether your core
business is a physical product
(good) or a service activity
Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg
Axioms and foundational premises

13. 35
Our »S-D logic examples« for tonight
Dinner
With
Friends

14. A5
FP11
Value cocreation is coordinated through actor-
generated institutions and institutional arrangements
A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
A1
FP01
Service is the fundamental
basis of exchange
A2
FP06
The customer is always
a co-creator of value
A3
FP09
All social and economic actors
are resource integrators
The Four Axioms
of S-D Logic
Value is cocreated by multiple actors,
always including the beneficiary

15. A1
FP01
Service is the fundamental
basis of exchange

16. A1
FP01
Service is the fundamental
basis of exchange

17. A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
A1
FP01
Service is the fundamental
basis of exchange
A2
FP06
The customer is always
a co-creator of value
A3
FP09
All social and economic actors
are resource integrators
Value is cocreated by multiple actors,
always including the beneficiary
Value?
Worth?

18. “Intangible Goods”
“Our Services”
‘Com
m
on’
Sense
says
A1
FP01
Service is the fundamental
basis of exchange
“Service Packages” “Service units”
Def.: The service product is a service that
can be sold and that is performed within
customer service (for example, inspection
of your car).
“Service Product”
Biased notions of ‘service’ in G-D logic

19. S-D
Logic
says
A1
FP01
Service is the fundamental
basis of exchange
Image courtesy: Hipster-Barber-Flicker-by-Thierry-Bignamini.jpg
The service nature of exchange is not always apparent

20. »Power by
the Hour«
Image courtesy: Wiki Commons, Julian Herzog (http://upload.wikimedia.org/wikipedia/commons/8/86/Rolls-Royce_Trent_900_AEDC-d0404084_USAF.jpg)
A1
FP01
Service is the fundamental
basis of exchange
W
hy
that
M
atters

21. G-D logic // Exchange Units: S-D logic // The Jobs-to-be-done:
“What we can sell you.” “Where we can enable / facilitate your JTBD.”
❖ Engine
❖ Spares
❖ Information (e.g.
monitoring reports)
❖ Time (man-hours of skills,
information and competencies)
❖ Through-life and obsolescence
forecasting and planning
recommendations
❖ Equipment configuration
advice for operational and
contextual capability
❖ Capability forecasting and
planning recommendations
❖ Equipment operating advice
❖ Equipment repair service
❖ Equipment maintenance service
❖ Component forecasting & provisioning
❖ Equipment performance
❖ Technical query resolution speed
42Image courtesy: Wiki Commons, Julian Herzog;
Table adapted from Ng et al. (2012)
W
hy
that
M
atters
A1
FP01
Service is the fundamental
basis of exchange
Goods become less decisive for company success

22. 43
‘Service’ is the application
of resources for the benefit
of others or oneself.
Lusch, R. F., & Vargo, S. L. (2014).
„
“
Image Source: https://pbs.twimg.com/profile_images/1727664467/Robert_Lusch.Books_1_.jpg;
https://pbs.twimg.com/profile_images/639038953/Stephen_Vargo005.jpg
A1
FP01
Service is the fundamental
basis of exchange

23. A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
A1
FP01
Service is the fundamental
basis of exchange
A2
FP06
The customer is always
a co-creator of value
A3
FP09
All social and economic actors
are resource integrators
FP7 The enterprise can (not deliver value,
but) only make value propositions
FP8 A service-centered view is inherently
customer oriented and relational
Value is cocreated by multiple actors,
always including the beneficiary

24. A2
FP06
The customer is always
a co-creator of value
‘Com
m
on’
Sense
says
Value is cocreated by multiple actors,
always including the beneficiary

25. S-D
Logic
says
A2
FP06
The customer is always
a co-creator of value
Value is cocreated by multiple actors,
always including the beneficiary

26. S-D
Logic
says
A2
FP06
The customer is always
a co-creator of value
Value is cocreated by multiple actors,
always including the beneficiary

27. S-D
Logic
says
A2
FP06
The customer is always
a co-creator of value
Value is cocreated by multiple actors,
always including the beneficiary

28. A2
FP06
The customer is always
a co-creator of value
W
hy
that
M
atters
Value is cocreated by multiple actors,
always including the beneficiary
People will ignore your value proposition!

29. A2
FP06
The customer is always
a co-creator of value
W
hy
that
M
atters
Image Source: http://www.bldgblog.com/2010/12/ventilating-mines-with-repurposed-airplane-engines/
Value is cocreated by multiple actors,
always including the beneficiary
Look!
It’s a hack!

30. A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
A1
FP01
Service is the fundamental
basis of exchange
A2
FP06
The customer is always
a co-creator of value
A3
FP09
All social and economic actors
are resource integrators

31. A3
FP09
All social and economic actors
are resource integrators
‘Com
m
on’
Sense
says
Firmeninfrastruktur
(z. B. Finanzwesen, Planung, Investor Relations)
Personalmanagement
(z. B. Einstellung, Training, Vergütungssystem)
Technologieentwicklung
(z. B. Produktdesign, Test, Prozessdesign, Materialforschung, Marktforschung)
Einkauf/Beschaffung
(z. B. von Komponenten, Maschinen, Werbung, Dienstleistungen)
Interne
Logistik
(z. B. Material-
eingang, Lage-
rung, Daten-
gewinnung,
Services,
Kundenverkehr)
Innerbetrieb-
liche Abläufe
(z. B. Montage,
Komponenten-
herstellung,
Produktion,
Nieder-
lassungen)
Marketing &
Vertrieb
(z. B. Vertrieb,
Verkaufsförde-
rung, Werbung,
Angebote
schreiben,
Pflege der
Website)
Externe
Logistik
(z. B. Auftrags-
abwicklung,
Lagerung,
Vorbereiten
von Kunden-
berichten)
Kunden-
dienst
(z. B. Installation,
Kundensupport,
Beschwerde-
management,
Reparatur-
dienst)
zende
esse
€ € € €
+ + + + + -----

32. ♂Ɏ
S-D
Logic
says
A3
FP09
All social and economic actors
are resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MICRO level
ƞǦ

♀
♂♂
ɉ Ǐ

33. ♂
♂
♂
♂ Ɏ
♂
+
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂♂
♂
♂
Ɏ
Ɏ
Ɏ
Ɏ
Ɏ
Ɏ
Institutions
Resource Integrators
Market
S-D
Logic
says
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MESO level
♂
A3
FP09
All social and economic actors
are resource integrators

34. Institutions
Resource Integrators
Market
♂
♂
♂
♂ Ɏ
♂
+
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂
♂♂
♂
♂
Ɏ
Ɏ
Ɏ
Ɏ
Ɏ
Ɏ
Institutions
Resource Integrators
Market
S-D
Logic
says
A3
FP09
All social and economic actors
are resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MACRO level
ƃ
♂
Ȗ
ǧ
ǹ

35. S-D
Logic
says
A3
FP09
All social and economic actors
are resource integrators
Structuration of service ecosystems (Vargo & Lusch, 2014 )
MICRO
MESO
MACRO
Market-facing, Public,
and Private Resources
Market-facing, Public,
and Private Resources
VALUE CO-CREATION SPACE
Value Co-creation Space
Nested networks
Value Co-creation Space Value Co-creation Space
Resource Integrator
/ Beneficiary / (Actor)
Resource Integrator
/ Beneficiary / (Actor)

36. A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
A1
FP01
Service is the fundamental
basis of exchange
A2
FP06
The customer is always
a co-creator of value
A3
FP09
All social and economic actors
are resource integrators

37. A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
‘Com
m
on’
Sense
says
Italian Miracle?

38. S-D
Logic
says
A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary
Image courtesy: Messy-Kitchen-by-Flickr-user-Mark-Knobil
Noodles Fast & Cheap!

39. W
hy
that
M
atters
Image Source: NASA-Desert-Landing-Public-Domain.jpg, Air-Malta-Pre-Flight-Inspection-Airbus-A320-Wikipedia-User-Kristoferb
A4
FP10
Value is always uniquely and phenomenologically
determined by the beneficiary

40. 60
Conclusion
What does that mean for you as an organization?
Image courtesy: Wiki Commons, Julian Herzog

41. Do you really think and talk ‘service’?
61
G-D logic S-D logic
Service = services understood as
packaged activities, i.e. ‘intangible
goods’ and ‘units of output’
Value = value-in-exchange;
‘worth’
Service = a universal
perspective on economics;
a strategic lens to (re)define one’s
organizational purpose, as well as
market and industry boundaries
Value = value-in-use;
value-in-context

42. 62
Take-aways
Your customer creates value; not you.
You can only humbly propose to participate in their value co-creation!
Value emerges differently depending on context.
You better know 1) how your offering gets integrated as one of your
users’ resources, and 2) make sure to collaborate in their value co-creation
spaces and integrate yourself proactively!
Your customers are your most precious resource.
Why aren’t they on your balance sheet?
And industry, why don’t you even know them … ?

43. References
Bettencourt, L. A., Lusch, R. F., & Vargo, S. L. (2014).
A Service Lens on Value Creation. California
Management Review, 57(1), 44–66.
Irene Ng, Glenn Parry, Laura Smith, Roger Maull, & Gerard
Briscoe. (2012). Transitioning from a goods‐dominant to a
service‐dominant logic: Visualising the value proposition of
Rolls‐Royce. Journal of Service Management, 23(3), 416–439.
Lusch, R. F., & Vargo, S. L. (2014). Service-Dominant Logic:
Premises, Perspectives, Possibilities (1st ed.).
New York: Cambridge University Press.
Ojasalo, K., & Ojasalo, J. (2015). Adapting Business
Model Thinking to Service Logic: An Empirical Study
on Developing a Service Design Tool. In THE NORDIC
SCHOOL - Service Marketing and Management for the
Future (pp. 309–332). Helsinki, Finland: Hanken School
of Economics
www.sdlogic.net

44. “Steve Vargo and Robert Lusch” via Twitter: https://
pbs.twimg.com/profile_images/1727664467/
Robert_Lusch.Books_1_.jpg; https://pbs.twimg.com/
profile_images/639038953/Stephen_Vargo005.jpg
“Desert scene” via Wikimedia Commons by Mlsra (Own
work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/
by-sa/3.0)],
“Rolls Royce engine” via Wikimedia Commons by Julian
Herzog, Julian Herzog [GFDL (http://www.gnu.org/copyleft/
fdl.html) or CC BY 4.0 (http://creativecommons.org/
licenses/by/4.0)],
“Man getting a shave at barber” - Flickr by Thierry
Bignamini, https://www.flickr.com/photos/ioleoso/
19674583490
“Cotton wad and whisk” by Unknown http://ak-
hdl.buzzfed.com/static/enhanced/webdr02/2013/8/5/12/
enhanced-buzz-16580-1375721473-20.jpg
“Whisk, spoon and whisk fly” by Spoon Art @ Pinterest,
https://de.pinterest.com/explore/spoon-art/
“Whisk, bowl and drill machine” by Unknown source
“Whisk lamps” by Anja Baumgärtel (Findelkind.biz), http://
findelkind.biz/chef_de_cuisine.html
“Preparing a thanksgiving meal”, Courtesy of James
Jaeger, http://www.loyolaphoenix.com/2013/11/
friendsgiving-meal-family/
“Jeffrey ‘AERODYNE’ Mine Fan”, Image courtesy of
Kentucky Coal Heritage, http://www.coaleducation.org/
coalhistory/tech2/e40a.htm, More info on ventilating mines
@ http://www.bldgblog.com/2010/12/ventilating-mines-
with-repurposed-airplane-engines
“Messy Kitchen” by Messy-Kitchen-by-Flickr-user-Mark-
Knobil.jpg
“Engine Inspection” by Kristoferb, Air-Malta-Pre-Flight-
Inspection-Airbus-A320-Wikipedia-User-Kristoferb.jpg
Sources of remaining images and icons:
Martin Jordan, Jan Schmiedgen, Depositphoto, Wikimedia
Commons Public Domain, NounProject, FontAwesome
Image Credits (in their order of appearance)

45. Exercise

46. Think & note
What does it take for people
to create value in daily contexts?
What resources need to be integrated?

47. Example: Dinner with friends

48. Collect integrated resources
in value creation processes
Own operant resources
(mental & physical skills)
Others operant resources
(mental & physical skills)
Operand resources
(Tools and goods)
What resources has the host to integrate to create value
with the service ‘AirBnB’ for himself and his guest?
Resource:
Benefit:
R:
B:
R:
B:
R:
B:
R:
B:
Resource:
Benefit:
R:
B:
R:
B:
R:
B:
R:
B:
Resource:
Benefit:
R:
B:
R:
B:
R:
B:
R:
B:
Value creation with dynamic resources integration in daily contexts

49. Doodle
Coordinate best time
Cleaning service
Getting flat clean before dinner
Neighbour
Providing olive oil as you run out
PayPal
Splitting bill for grocery shopping
Kochhaus
Providing exotic ingredients
Cooking experience
Ensuring dish qualities
Sense for timing
Ready when guests arrive
Pans & pots
Means for cooking
Cookbook
Tips & tricks and inspiration
Gas supply
Enabling oven to work
Potato peeler
Saving time in preparation
Decent lighting in living room
Creating right atmosphere
Entertainer qualities as host
Cheering everyone up
Interior taste
Cheering everyone up
Knowledge for open bottle by hand
Providing wine w/o bottle opener
Example: Dinner with friends

50. Evening impressions

51. Evening impressions

52. Evening impressions

53. Evening impressions

54. Who wants to
dive deeper into
service-dominant
logic with us?
Take the survey:
http://bit.ly/21pWRIC

55. Thank you!
servicedesignberlin.de
@SD_Berlin
@Jan_Schmiedgen
fb.com/servicedesignberlin
Icons by Lil Squid, Edward Boatman, Gonzalo Bravo, Jeremy J Bristol, Attilio Baghino,
Lorena Salagre, DesignNex, Nicholas Menghini, Joe Richardson, Guvnor Co, Mourad
Mokrane, Hadi Davodpour, iconsmind.com, Luis Prado, Erwin Supriyatna, Jens Tärning