Service Innovation: How to go From Customer Needs to Breakthrough Services

In this book review Paul Hobcraft looks at “Service Innovation: How to go from customer needs to breakthrough services,” a book by Lance Bettencourt, published by McGraw-Hill.

I have always admired the work of Strategyn (www.strategyn.com) and its Outcome-driven innovation philosophy. The founder and CEO of Strategyn, Tony Ulwick wrote a book entitled “What Customers Want” in 2005, published by McGraw-Hill, that laid out his view on the use of outcome-driven innovation and the clear reason you need a focused, disciplined approach to understanding the unmet needs of customers to generate new product and service offerings.

In the intervening years there has been a number of articles that you can find on Strategyn’s website that added to this book but now we have a most timely addition from Lance Bettencourt, who works with Tony, by advancing this work in his book “Service Innovation: How to go from customer needs to breakthrough services”, published by McGraw-Hill.

“Service Innovation: how to go from customer needs to breakthrough services” fills a much needed gap in our understanding of service need from a customer’s perspective by providing a clear well laid out method to discover those often unmet needs and then how to address them in a systematic way.

Asking the right questions on service

Have you ever really asked “How do customers define value?” Also “What are customers trying to achieve?” It is those specific needs of the customer and what they are trying to get done in successful outcomes are the essentials for any value creation point. This is where they, the customer, measure success? This is the book to flip around your thinking on where to focus your service thinking, so you begin to see jobs or opportunities to innovate from a clear customer’s perspective, and answer those essential questions customers want answered and why are well covered in great detail within the book. If you want to understand a unifying logic for why customers exchange, and what they value, then it is not to focus on the means but the job they want to get done,  but this book tackles more importantly the why. This book is extremely valuable for understanding how to tackle innovation from the customers view, not your own, more myopic company view of value.

The simple argument of the book

Customers accordingly do not buy goods or services, they ‘hire’ products and service offerings which render them the service they need to get the job done well. Understanding this essential point that they are looking for the ideal solution and this creates the value for them, and equally for your own company, by providing it correctly for them. It is the ability to understand this essential ‘hire’ concept that is at the core of this book.

The book is structured between the methodology of discovering jobs that need to be done and the internal design of the understanding and alignment of the strategic options to provide successful services.

The first five chapters

The first five chapters of the book break down the discovery of potential service opportunities and one complete chapter is devoted to breaking down each of the specific aspects of service.

Chapter one is the foundation for uncovering different types of service innovation opportunities and goes into the need to get the job done and the equal need of obtaining a satisfactory outcome for each step of the execution of the job. Chapter two explains how you can uncover more jobs that might be satisfied. Chapter three introduces the universal job map that evolves throughout the book. It  also covers in this chapter ways to focus on  identifying how customers  can get specific core jobs simply done better and in this analytical process can reveal natural adjacencies for even more new product and services. Chapter four deals with the often difficult area of what a customer goes through when obtaining a service, and then offers guidance to improve the design of the existing service  to  achieve a more distinctive innovative and valuable service that would be even more valued. Chapter five shows how to discover opportunities for new and improved services that support core product offerings. This chapter gives a greater understanding of design opportunities that can generate new revenue-generating services to support the product.

The book then shifts into the internal perspective and the service strategy design

The last three chapters (6, 7, & 8) move into the provider’s perspective, outlining the necessary steps a company needs to take in providing the right service expected from the discovery stage. Chapter 6 deals with designing services from the internal customer’s perspective (your employee’s) to prompt you to think over an often neglected step, the elements for providing internally the successful service. Chapter seven outlines a comprehensive model of strategic design options that are available for key differentiation and also seeking breakthrough service concepts through superimposing these on the job maps created to achieve a comprehensive design for a service concept. Chapter eight discusses specific guidance for defining service concepts that will deliver the value customers are seeking, The chapter goes through this systematic process and its complementary insights offered throughout the book, to bring you to the final position that a company wants to occupy with its service: that customers will value and see as differentiated from competitive offerings to become your key offering point.

This book offers much to understanding innovation value

  • The book “Service Innovation” provides a cohesive discussion to manage service that makes it repeatable and systematic from the perspective that matters, the customers.
  • It not only provides a detailed discussion on the different value points within service, but it outlines a clear method to achieve this identification in its five discovery chapters and then offers the internal need for successful execution that are again, written from the customers perspective in its remaining chapters.
  • The book also argues there has been ‘constrained thinking’ in the past by trying to separate service from product, which has not been of the best value to the company. Service is becoming increasingly relevant to product and visa versa. Using this book for BOTH helps to reduce this suggested wrong focus of separation.
  • If you are open to either product or service opportunity, one aspect can ‘inform’ the other on which type of innovation to pursue. This book equally applies to product innovation in many cases, and equally written in that way, although as the author points out there are still differences between the two in a number of important ways.
  • One very important message from the book is in the correct discovery of customer needs, by having a well-defined approach to clear jobs (needing to be done) and outcomes through high quality descriptive statements that state the clear value from the customer’s perspective. These statements need careful framing for their contextual clarifiers, action verbs, objects of control, units of measurement and different optional examples depending on what aspect they are addressing (jobs or outcomes) to make these as clear as possible on potential opportunities. These statements provide the different needs and definition of success that the customer defines as job and successful execution. You might end up with 50 to 100 of these initially, to then rank in importance and ability to fulfil.
  • The book “Service Innovation” is not only about discovering clear opportunities for innovation but to improve what you do and provide a clear understanding of how to do it.
  • It provides 20 strategic dimensions along which services vary and provides a sound explanation of all the options each of these have as well as a host of other practical approaches to understanding ‘mapping’ the job or outcome.
  • The book points out from their experience that if you can provide distinct value, you have three times the success rate of me-too services. That alone is a powerful enough reason to understand this aspect of innovation management.
  • Lastly, it successfully argues the point of ‘matching’ what is valuable to the customer and can be differentiated from competitors The author also cautions that a firm needs to understand how to do this matching (exceedingly) well to deliver on this customer ‘need’ of solving their problems of jobs to be done better than others can do and giving them successful outcomes for value appreciation.

Summary of the book’s value

This is a timely and helpful book about an area that is increasingly becoming the most important generator of wealth in many countries, service. It focuses on the process of service, not service development or the ability of taking concepts to market; it begins the discussion or context of service experience design but leaves that for others to further expand upon.

The book provides the structured way to discover the multiple choices you have to differentiate service, it provides the potential for seeking out breakthrough services and is structured in a way that delivers service concepts and the value equation part that customers are seeking.

The book gives you a predictable, systematic and repeatable approach to work through in significant detail of what needs to be done to ‘resolve’ jobs, needs or unmet needs. It also provides those looking at Business Model Innovation or disruptive points a methodology that will not just help in the discovery of opportunities but in a way to work it thoroughly through for new value propositions.

Finally, my only criticism is there is a five-year time gap between Tony Ulwick’s initial book and this one. It has been too long for me to really understand and appreciate the way Strategyn went about this jobs-to-be-done concept in a comprehensive manner and this book helps to achieve that more detailed understanding of Service Innovation.

Service Innovation: How to go from customer needs to breakthrough services is a book I recommend  is valuable reading for anyone interested in innovating not just service and products but their business from the perspective of the customer, not your own.

By Paul Hobcraft, Contributing & Review editor.

About the author

Paul HobcraftPaul Hobcraft is the founder of Agility Innovation Specialists that focuses on Innovation exclusively through research and consulting. Paul spends much of his time between Asia and Europe bridging East & West in cultural and innovation understanding, after living for 16 years in Asia until 2008.  He has been in general management in a number of multinationals dealing primarily with start ups, turnarounds and restructures. He holds an MBA from Henley Management College, UK. His present research involves 35 different innovation themes including: the dynamics & fitness landscaping for innovation; sustaining institutional capability for innovation focusing on climate, culture with the emphasis on renewal, impact, & catalysing innovation; the required social systems, context, capability & competence building. Paul is presently located in Switzerland but maintains a base also in Singapore. Welcome to read more at: www.agilityinnovation.com
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