Strategic PES, Product-Experience-Service, A visual tool to support SMEs through service-dominant logic.

tools & methods

Strategic PES – Product-­ Experience-Service

We found out that although SMEs are characterised as having a flatter structure than large enterprises, they keep the same decision levels (strategic, tactical and operational). Moreover, they focus on the tactical level, which ensures agility and flexibility, to maintain proximity and connection to the market and to connect the entire organisation.

A visual tool to support SMEs through service-dominant logic

Ricardo Mejia, PhD fellow at IDStudioLab in Delft University of Technology – TUDelft. He is strategic designer with experience as independent consultant, as advisor for the government, as director of R&D+i in the private sector and as researcher at different universities.

The National Design Program, NDP, as part of the Ministry of Commerce, Industry and Tourism of Colombia, promotes “design as an innovation driver for SMEs through the development of projects, workshops and by providing information in this field, within three strategic lines: knowledge transfer, promoting successful cases, and public policies.”1 The Strategic PES tool that is presented below was developed within the first line to tackle design-driven innovation projects. It has been applied in several workshops and subsequently as part of the Integral Design Tutoring Project (See Platform, 2012). SMES AND INNOVATION: A PARTICULAR APPROACH IS NEEDED

Jody Parra, Autonomous consultant. He is product/ service designer with experience as independent consultant in innovation management for business and organisations through strategic design.

80

touchpoint 6-3

SMEs play a central role in the European economy. They are a major source of entrepreneurial skills, innovation and employment (European Commission, 2005). Despite its importance, the body of knowledge about innovation has been developed with large enterprises in mind. Moreover, design-driven innovation is considered a privilege of the most advanced and specialised sectors of large enterprises. Thus, it is necessary to build specific tools and approaches that allow innovation and design a closer proximity to SMEs´ reality. Comparative analyses between SMEs and large enterprises have been conducted by assuming they are opposite test

in nature and by establishing polarities between them regarding their scale, maturity, complexity and capacity. However, beyond these differences, all modern organisations face the same challenges of innovation, an ongoing dialectical tension between two needs: exploiting, and exploring. Exploiting is finding a benefit in the present within a safety framework to "make money today" and exploring is looking for future opportunities within an uncertain context to “make money tomorrow” (Cornella, 2013). The way organisations resolve such tension, especially regarding their knowledge, characterises their potential to innovate. On the one hand, there are ‘divergent’ organisations: those that separate

exploitation and exploration as independent units, and that provide them with specific resources and depth of expertise, seeking to reduce and isolate risk and allowing them to use innovation as a function: ‘to innovate’. On the other hand, there are "convergent" organisations, where exploitation and exploration are mixed, integrated and developed across the board of the organisation. Since they share the same resources, these are mobilised in an emerging and organic way to take advantage of opportunities. These organisations, either by vocation or necessity, take innovation as an attitude and culture: "to be innovative". THE INNOVATIVE SMEs: A TACTICAL MODEL

Those SMEs with specific conditions that decide to face the innovation challenge are often structured as convergent organisations: ’innovative organisations’. From different perspectives, we notice an emphasis on people with four groups of specific interests: markets, leaders, teams and competitors. Market empathy, leader vision, team creativity and competitor monitoring are the approaches of innovative SMEs. This characterisation allowed us to establish an analytic quadrant on which to build four basic content blocks to manage the organisational strategic reflection: why (values underlying the organisation); whom (stakeholders’ value ecosystems within the organisation); how (knowledge, resources and skills to create values) and what (supply structure).

A VISUAL METAPHOR: THE FISH AND ITS ECOSYSTEM

We use the metaphor of a living being – a fish – whose goal it is to move forward and interact with its stake­holders within a specific context (ecosystem), to communicate in a meaningful way the idea of ’innovative organisation’. This metaphor facilitates a strategic con­ver­sation between designers and entrepreneurs and allows the measurement of areas of reflection in a visual way. The main conceptual strength of the fish is the duality between head and tail. The head represents the sense of purpose that leads the strategic direction. The tail acts as a steering wheel that drives the enterprise according to the market forces.

touchpoint 6-3 81

tools & methods

An enterprise is not only the organisation itself, but also the set of actions it undertakes within a specific context. It is a contextual entity and thus defines its framework and time-based courses of action to achieve its objectives. For this reason, the metaphor is extended from the fish to the ‘ecosystem’ as a contextual representation within which other areas of strategic reflection appear.

operational level by means of products and/or services. And on the other hand, it also articulates the value capture at a strategic level through business models. The main challenge of the fish body is to shape the journey, and coordinate the ecosystem’s interactions in order to deliver a solid, seamless, and meaningful experience through it. It is divided into the following parts:

THE STRATEGIC PES DESCRIBES AN INNOVATIVE ENTERPRISE AS A BRAND-LED, USER-DRIVEN AND EXPERIENCE-ORCHESTRATED

THE HEAD: THE BRAND

ORGANISATION

The brand is understood as a tool to connect the values, mission and vision of the company, installed as a driving force for the future. Its challenge is to be a sense-making lens that yields coherence between the projected value (identity) and the perceived value (image) as well as between their present values (mission) and future values (vision) (Roscam, 2013).

By deploying the Strategic PES and the ecosystem we could visualise a time-based strategic relationship between the whole and the parts and how it can be addressed to chart the roadmap. The strategic PES works in the following way:

1. Discovering the value of the users and the brand essence and, from there on, defining boundaries and destinations. 2. Building a bridge between brand and users by means of this experience and thus being able to specify products, services and business models. 3. Unfolding decisions over time to establish gaps and inconsistencies with a view to setting further opportunities. 4. Tracing possible strategic paths to establish various journeys in order to reach a clear goal. The Strategic PES acts as a tool or as a platform, depending on the state of progress of the project. First of all as a business diagnostic tool to evaluate the company as a whole, discovering relationships between stakeholders. Secondly as a platform to design paths and

THE TAIL: THE USER

The main objective of strategic planning is to be understood not as something absolute, but as something relative to time and context. This is achieved by identifying its boundaries (shape and size of the opportunity territory boundaries), routes, pace and destination (possible future scenarios), by viewing these decisions unfolding in time and by establishing their implications. STRATEGIC PES, A VISUAL TOOL AND PLATFORM TO DRIVE INNOVATION THROUGH DESIGN

Strategic PES stands for Product Experience Service. In Latin America PES is pronounced the same way as pez which means ‘fish’. It is a visual tool and platform to visualise, analyse, diagnose and plan enterprise projects, together with the enterprise as a whole. It uses the ‘fish’ and ‘ecosystem’ model to connect different approaches and ways of design, which, in turn, allows the enterprise to create, offer, deliver, capture and communicate value in a relevant, meaningful and consistent way. 82

touchpoint 6-3

Design approaches the customer as a user rather than as a consumer and creates both with them and for them. It seeks to understand the behaviour of the value exchange (interaction) between user and organisation throughout a cycle, in which many stakeholders must also be satisfied. The main challenge of the tail is to map stakeholders, flows and exchanges within the ecosystem and to identify nodes that allow control and balance. THE BODY: THE EXPERIENCE

Service-dominant logic proposes a line of reasoning where any sort of enterprise is perceived as a service enterprise. It is argued that there are no product enterprises offering goods or services, only service enterprises that (a) offer services, directly or (b) offer services, indirectly, by using products as a means to provide services (Valgo and Lusch 2014). Service is understood as the basis of the exchange value, as an interaction happening at a specific time and with a given duration that allows access to a benefit. Understanding the experience on a tactical level allows it to articulate, on the one hand, the value delivery at an touchpoint 6-3 83

tools & methods

to plan a strategic set of actions in the short-, medium-, or long-term. This strategic plan is set up in accordance with the gaps, inconsistencies and findings that have been found during the analysis. The ‘gap’ is understood as an empty space in the organisation, for example something unresolved,. An ‘inconsistency’ is a non-strategic oriented relationship between some of the components of the organisation, for instance a product in the portfolio that does not represent the value of the brand. The ‘finding’ is an opportunity of intervention that could build bridges between gaps and inconsistencies and align them strategically through the service-dominant logic.

as an extended customer instead of focusing just on the pregnant patient herself. Different personas were created in order to visualise the needs, expectations and aspirations of each family member regarding the ultrasound exam. A comprehensive blueprint of the service, including several definitions of the most important touch points, was the main deliverable at the tactical level. Some general suggestions about the company’s long-term vision and the definition of design requirements for the interior design of the new offices were the deliverables of the strategic and operational levels, respectively. CONCLUSIONS, FINDINGS AND CHALLENGES

OBSTETRICIA Y GINECOLOGÍA LTDA: A CASE STUDY

O&G Ltda. is a medium-sized organisation located in Bogotá that provides assistance in different subspecialties of gynaecology and obstetrics. Relying on the best human talent, it is an important name at a national level: the firm has been a technology leader for years. It claims that, in 2015, it will be a company that will have increased its own infrastructure, will be recognised in the area for the quality of its services that will make it a centre of excellence on an international level in providing specialised medical services, clinical laboratory services and teaching and research. The company took part in the design tutoring project with the intention of gaining insights regarding a comprehensive service based on a new experience for pregnancy check-ups (ultrasound exams). A set of four-hour-long workshops were organised with the board of the company in order to apply the Strategic PES and analyse its findings. The team found a well-structured company with a high level of expertise that desired to know more about its customers and intended to establish a more empathic relationship with them. An explicit strategic plan and a full set of values were already defined, along with a well-balanced portfolio of services, and supported by strong internal capabilities. As a result of several interviews, observations and customer journeys, the patient’s family was defined 84

touchpoint 6-3

Since 2011, different versions of the Strategic PES have been developed. After their intensive application as a tool in 79 Design and Innovation Workshops for Business Competitiveness carried out for 4123 business people, and their trial in the Integral design tutoring project with companies like O&G Ltda, their relevance for SMEs is evident, especially in three different and complementary levels. First of all, as a tool to give support and facilitate the knowledge transfer process about design and innovation. Because of the lack of knowledge about these topics within SMEs, one of the most important challenges in an innovation project is to set up an explicit common language. The Strategic PES helps defining and placing into the right position the most important elements of the value proposition. As a visual approach, the tool gives the business person the possibility of having an overview of the company and to understand the complexity of their business and its relationships with stakeholders. SMEs are more focused on immediate gratification than on long-term fulfilment, focusing on the present and trying to meet their social obligations. This sort of short-term orientation is tackled by the tool acting as a metaphor, bringing the possibility of envisioning a long-term strategy focusing on the future, “willing to delay short-term material or social success or even short-term emotional gratification in order to prepare for the future.”2 At the end of the exercise, the business

people were aware of their company in a more holistic and empathic way. For O&G Ltda. in particular, the tool was important in order to discover and exploit new possibilities in its portfolio of services, and to improve the new service as part of its business strategy. This sort of unified vision is important in order to reinforce the value creation platform of this type of enterprise. The authors will develop a more structured platform that surrounds the tool and give it more support in order to introduce SMEs to service-dominant logic.

•

References 1 Ministry of Commerce, Industry and Tourism of Colombia, http://www. mipymes.gov.co/publicaciones.php?id=935 2 Long-Term Orientation vs. Short-Term Orientation: Hofstede's Definition ·· Cornella, A. (2013) Cómo innovan los mejores. Ideas x Valor = Resultados. Barcelona: Libros Infonomia. ·· European Community (2005). The New SME Definition, User Guide and Model Declaration. Enterprise and Industry Publications. European Community. Retrieved from http://ec.europa.eu/enterprise/policies/sme/ files/sme_definition/sme_user_guide_en.pdf ·· European Union. (2012, January 1). Sharing Experience Europe Policy Innovation Design. SEE Platform Bulletin. ·· Lush, R and Vargo, S. (2014) Service Dominant Logic. Premises Perspectives Possibilities. Cambridge: Cambridge University Press. ·· Roscam, E. (2013) ‘Brand-Driven Innovation’ in Advanced design methods for successful innovation. Lausanne, Switzerland: Ava academics.

touchpoint 6-3 85