2006/10/07 09:05 Bob Lusch, "The Service-Dominant Mindset"

2006/10/07 09:05 Bob Lusch, "The Service-Dominant Mindset", SSME - Education for the 21st Century Conference, IBM Palisades, New York

Services Science, Engineering and Management Conference, at IBM Palisades, October 6-7

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

Steve Vargo & Bob Lusch, University of Hawaii and University of Arizona, "The Service-Dominant Mindset"

Fish or wheat:

  • Exchanges: competences for trading proteins for trading carbohydrates

Even in agriculture, work is done by services

  • Computers: informed matter with our intelligence
  • Service-dominant logic: focus on processes
  • Processes have no start and no end

What is a service?

  • Application of competencies, for the benefit of another entity
  • Sometimes done with goods, which we call appliances

What firms produce are not outputs, but instead inputs into another system

  • With scientific management, we treat humans like operant inputs, they're operand resources that do things
  • We sleep, work, and co-create
  • Consuming not the right idea, as they don't destroy, they co-create
  • Consumers assemble resources to co-produce

We've been on this journey from a goods-dominant logic to a transition, to service-dominant logic

  • Goods --> Services --> Service
    • Units of input, whereas service implies process
    • Service science, not services science
  • Products --> Offerings --> Experiences
  • Features / attributes --> Benefits --> Solutions
  • Equlibrium systems --> Dynamic systems --> Complex adaptive systems (learning and evolving)
  • Supply chain --> Value chain --> Value-creation networks or constellations

Big meta-questions (that Karl, from the Kauffman foundation brought up)

  • What is the theory of the firm?  What do firms do?
    • From producing outputs --> producing inputs
    • New institutions will evolve not just it's good for one firm, but when it's good for the whole system
    • Democracies work, because they're co-creation
  • How do firms do this?
  • Why do firms do this?
  • What scientific concepts and tools are dominant?
    • Towards discovery
  • (Could also ask what consumers do)


Value.  Definition of services, where there isn't a transfer of ownership.  Do have trouble when come to consumer goods.  Distinction between durable goods and consumable goods.

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