Services are agreements between people for arrangements between things. Services exist because people own things, and because they don’t. People own some things, some others they don’t. Some people own things because some people, they won’t. Therefore, things people own attract things they don’t. Things have needs.
At the heart of services are things acting towards the welfare and wellbeing of other things, through the twin principles of sharing and caring. The radar tracks an aircraft for safety and guidance. The medical instrument monitoring a patient’s heartbeat. The auditor’s ability to analyze financial statements itself is a thing. The authority in the signature of a chartered accountant is backed by public trust. A blockchain is a thing made of up mathematical things that are hard to break, keeping track of things without the need of centralized things that we otherwise need.
There are different kinds of arrangements between different kinds of things, but they are all about performing and providing. Different kinds of agreements can promise the same kind of arrangement. The possibilities are exciting, when we upgrade our understanding, of why services are what they are, and how they come to be. Services make things more than what they already are.
Useful and valuable things
Assets are things that are useful and valuable. They are valuable because of their potential to be useful in the context of an activity, task or job. A kettle has the potential to warm up the water for a cup of tea. The fridge has the potential to keep milk fresh in anticipation of tea. The cup the potential to play its usual part before giving the dishwasher the opportunity to clean it. Each is part of a daily routine, procedure, or script that according to which someone can live their daily life, and go do their thing, which might be fly a plane, treat a patient, or pass a law. In realizing their potential, these everyday things make life better for their owners and users.
A kettle produces hot water when it is time for tea, or for something else. A cup can be used for measurement, or as a pen holder. A favorite cup also has the potential to store memories and feelings, possibly because it is a gift or souvenir. A fridge can keep things cold, but also serve as a space for memories, souvenirs and, reminders. That would make floor space in the kitchen more valuable. Things can store more than one type of potential. Owners and users define the various contexts for things to be useful and valuable, and therefore define a dynamic range across which potential becomes actual, when a thing is put to a particular use. The more general purpose a thing is, the wider the range. Things such as time, money, and identity have a wide range. A precision surgical instrument, or an ASIC chip, have far less.
Things are valuable because they are useful. The more useful they are, the more valuable they become. It’s hard to imagine life without a smartphone and Internet. They are valuable because they are useful in more ways than one. A driver’s licence or identity card is valuable because of that many ways it can be put to use, to gain access and claim privilege. Things that are useful and valuable are considered to be assets.
Assets have an economic life over which they produce a stream of benefits. The value of the asset depends with the prospects of such flows. Land appreciates in value, as so do knowledge, skills, and experience. Most cars lose value with every mile driven, while some gain vintage. Assets may simply fail, in predictable and unpredictable ways. The kettle may accumulate crust, an aircraft may suffer rust, a credit card may lose trust. Underperforming assets are not able to actualize their full potential if they are idle or impaired. It’s true of tangible and intangible artifacts.
Assets are said to have a shortcoming when they’re not in the right condition or state to take advantage of an opportunity to be useful. They suffer shortfalls when they don’t have what it takes to get the job done. Shortcomings and shortfalls may be unforeseen and unexpected but not necessarily unfortunate. They may be sporadic, temporary, and transient, or they may be periodic, perennial, and persistent. Indeed, they could be part of a plan, or by design. Shortcomings and shortfalls are fundamental to why the potential for services exist.
The nature of things
Some things are pure public goods such as public roads, waterways, airspace, forests, and fisheries, subject to the tragedy of commons. Other things are guarded by privacy laws and property rights. Some things are not available for sale, such as brand names and royal charters, while the sale of others is strictly forbidden such as certain munitions, controlled substances, and cryptographic devices.
Some things are such that the enjoyment by some does not preclude enjoyment by others (up to a limit). For examples millions of people qhgDQ and UX binge-watch popular shows on services such as Netflix, or a live telecast, all at the same time. That’s why the digitization of things creates new levels of welfare and benefits. This is true also of more intangible public things such as safety, security, clear air, quiet and peace of mind.
Others things have harder limits. An Airbus A380 can carry a lot of passengers and cargo at the same time, up to a limit defined by the maximum take-off weight and cabin configurations Every additional seat in business class make take away space from two seats in economy class. Also, when the aircraft is busy flying passengers on a nonstop flight to Dubai, it cannot at the same time be flying them to Washington DC.
There are things that move and those that don’t move. Things may move through spaces like an aircraft. There are things that do not move through space but can be subject to movement through time, airports, runways, and time slots. Some are durable such as aircraft, buildings, recordings, and a person’s identity. Others are perishable, such as a live performance, privacy, or pineapples. Time is a highly perishable thing, as are memories for those suffering from dementia.
Tangible and intangible things
Some artifacts are useful and valuable primarily due to their physical presence, forms or selves. Buildings, vehicles, equipment, and passports are examples of such things. Some tangible artifacts are useful because they are digital. They are images, projections or copies of other things that are physical, and can be useful independent of what they represent. They can be useful in ways physical things cannot be. Examples: Satellite image, video stream, software app, music, documents, passports. There things that are useful and valuable because they embody or represent data, knowledge, information or insight. We depend on these intangible artifacts for the know-how, know-what, know-why, and know-who. They are things that know. Their value is independent of physical and digital things in which exist. For example, algorithm, coordinates, database, design, directory, forecast, measurement, and patents. Then, there are things that glow. These artifacts are useful and valuable because they project status or privilege. Their value is self-reflecting and social. They may be extremely intangible but just as durable, or not temporary, transient, or ephemeral. Examples: identity, license, authority, permission, cash, stock, loyalty, goodwill, trust, vote, relationship, reputation, passport.
A thing can exist as one or more artifacts. A biometric passport is a physical artifact with printed information, it is a digital artifact with biometrics stored on a chip, it is information that knows, and it is a privilege that glows. The tangibility and intangibility of artifacts, has implications on how they can be useful and valuable, and therefore what services they need or can provide. 1
In the Netherlands, Elisa Giaccardi of TU/Delft and Nazli Cila of the University of Amsterdam University of Applied Sciences, are among a group of researchers promoting a new school of thought in industrial design. They believe, to improve the quality of life of people we should better understand things that add to it or subtract from it. Through the ethnography of things, they make it possible to uncover, understand and appreciate relationships and interactions between the things people care about, interact with, and make use of, as part of their daily lives, at home, at work, and the spaces in between. “What would the world look like from the perspective of an electric kettle, and how might that reveal new possibilities?” For example, they study the tiny social network of a kettle, fridge and cup (k-f-c) to see how they depend on each other and interact to serve a useful purpose in the lives of their beneficiaries and benefactors. The insight from it is fascinating.
Thing-centered design broadens the scope of design to reveal new and interesting possibilities. Thing-centered design advances the art with object personas, making it possible for us to have a single view from which to design for human beings and human things. Putting people first need no longer be a dilemma. Being thing-centered does not detract us from human-centered in approaches to design. It helps us broaden our views and balance our perspectives. We can better design for people and their needs, by better understanding the lives of what they consider to be as useful and valuable things. In fully actualizing their potential, these everyday things make someone’s life better. For example, by studying the k-f-c configuration, researchers are uncovering better ways to improve the quality of life of the elderly. Thing-centered design becomes more profound when we include highly intangible things such as safety, security, privacy, and peace of mind. Things whose presence is made more tangible by their absence.
By understanding the motivations and expectations of people, we can better understand the things they care about, and design a solution for the job to be done. That’s called putting people first. However, people may not always be in a position to articulate their needs, particularly when the solution is in the form of service. Therefore, we have the option of better understand their needs by studying how things are embedded in the routines of people and organizations, or their jobs to be done.
Studying things and their people, helps us corroborate our understanding and avoid confirmation bias. Thing-centered design shows how we can uncover dependencies and interactions by studying the emplacement and movement of things within a frame of reference, which could be a simple task someone is trying to accomplish. The cross-validation and reconciliation across human-centric and thing-centric views, is especially valuable in eliminating blind spots and identifying potential conflict. That’s why thing-centered design is valuable for thinking in services.
Thing-centered design also helps better understand the dependencies and interactions between things that Elisa and others call horizontal social arrangements. The kettle and fridge may collaborate with a cup for tea, and with a pot for a tagine. They are all sorts of possibilities and potential from which one can identify the most meaningful and promising ones, leading to new and interesting ideas for services. Think of for example all the different services possible through the arrangements of maps, messaging, and machines that learn.
The universe of services has always been expanding. Larger sections of growing populations with higher income levels lead to greater opportunity costs, as living is more personalized and work is more specialized. The division of labor among people drives greater dependency on other the work of people and other things. The division of labor among things is also a reason why the universe is expanding, as things connect to other things. Many of these connections require arrangements also known as services, which require things to be smarter and self-driven.
An asset can act upon other assets and render them to a preferred condition or state. Fixing the shortcomings of the underlying artifacts is the super-power of the asset. The performance of such superimposing actions is a fundamental aspect of how services create value. The ability to time and again deliver such performance and reproduce the effect is called a capability. Bing and Google have the capability to convert text into search results within a fraction of a second.
Capabilities are the knowledge, skills, and experience of people, things, or organizations. They’re systematic and idiosyncratic ways of getting a job done implemented through systems, processes, methods, tools, and techniques. They get better over time, getting the job done with greater accuracy, efficiency and reliability. Capability maturity models measure organizational learning. Machine learning improves the maturity and intelligence of machines, robots, and software.
Capabilities are embedded in resources. Aircraft represent both the capability and the resource for transporting passengers and cargo, quickly, safely and efficiently over very long distances. Airlines maintain surpluses for each route in terms of available seat miles (ASM) and cubic feet of cargo. They increase the surplus on a route by operating additional flights. Or they can increase it by deploying aircraft with greater super-power in terms of take-off weight, fuel efficiency, and range. Airbus and Boeing have competing aircraft designs for how airlines can have greater super-power for a given surplus.
Hereafter, we refer directly to assets and their superpowers as capabilities (C), and to assets and their shortcomings as artifacts (A)
Just as an asset can face a shortfall, it can also field a surplus when it has capacity that is available to others as a resource. A socket supplies electricity as a resource to the kettle in need of energy to boil water. A runway provides the length of pavement aircraft need to have during taking off and landing events. Surpluses may be private and not public, and therefore neither available to others, nor advertised as part of a service.
Hereafter, we refer directly to an asset and its surplus as resource (R), and to an asset and its shortfall as event (X).
An electric kettle is an event that switches on and off. The electrical socket and electricity flowing into it is the resource. Electricity flowing from a Tesla Supercharger is a resource for the event that is the battery of a Tesla Model-S not fully charged. The moment the battery is fully charged, the spot where the car is parked becomes a resource for which Tesla charges car owners a parking fee. The now fully charged parked car is the event. The aircraft taking off is a separate event from when it is landing. The same runway may be the resource in each case.
The timing and duration of surpluses are concurrent with that of shortfalls. When a resource appears within an event, as in the case of electricity and the kettle, it is called provisioning. When an event occurs within a resource, as is the case of take-offs and landings within assigned time slots, it is called hosting. Provisioning and hosting are primary ways of making resources available to events. Provisioning can be within hosting, and hosting can be within provisioning. Events express their shortfalls in terms of the need to have access to a resource. Access is a form of demand. Resources express their surplus in terms of availability, which is a form of supply. Availability and access together define affordance, which is a fundamental aspect of how services create value.
A shortfall is an event where an asset needs other assets to get the job done. It’s tea time and the kettle is short of electricity and water which is why utilities are services. During the lending process a loan application is short of a credit score. During the landing process an aircraft is hopefully not short of a runway. The assets might be complementary to each other such as the aircraft and runway. They are supplementary when airlines expand their fleets by leasing aircraft from ILFC or AIG.
Shortcomings can create shortfalls
Impaired assets have diminished potential. The difference between the full and the diminished potential of an asset creates a shortfall. When a taxi driver’s license is suspended, the person’s ability to drive a vehicle is fully impaired. That creates a shortfall that public transportation might have to fill, or, a self-driving taxi 2.
Shortfalls can be predicted, prevented or purposely maintained. During peak hours and peak seasons, service providers routinely add additional staff, infrastructure, and facilities, to avoid shortfalls in the first place, but not letting their capacity get overwhelmed or stressed. The promise of cloud computing is partly that you can have any shortfall you want, anytime you want it, and for however long. Cloud computing services such as Amazon AWS and Microsoft Azure can be fantastic because shortfalls can be designed to be elastic.
How long is forever, Alice asks, to which the White Rabbit replies, “Sometimes, just one second”. Alice in Wonderland, by Lewis Carroll
Timing and duration
Shortfalls have timing and duration, and may occur whenever there are windows of opportunity for the asset to be useful. Whenever implies wherever. Timing is meaningless without location or place. The duration of a shortfall could be anywhere from years and months to minutes and seconds. It implicitly depends on how long the window is open, and the time between openings and closings.
A shortfall could occur at many different places at the same time, as experienced by digital platforms streaming videos of a live event, or at many different times at the same place as experienced by an ATM that needs to have an adequate supply of currency notes at all times. The timing and duration of shortfalls mark the demand for access to other assets, in the shape of spots, lines, and areas, across geographies and timeframes.
Not everything worth owning can be owned. Not everything that can be owned is worth owning. An asset may be too costly to maintain and therefore too risky to maintain, especially if it remains underutilized. Or, for various reasons, not limited to the vagaries of demand, supply, property rights, rules, regulations, social norms, and market trends, it may simply not be available for purchase. Rump steaks you can buy anywhere, but “Trump Steaks” you can only license.
Therefore, services not only eliminate shortfalls; they actually encourage them as a habit. Spotify encourages you to develop a habit of not having purchased music, not just for music already released, but also for music not even conceived. Similarly, some financial services encourage the habit of spending against future income, through various forms of lending. By subscribing to such services, consumers are not as much succumbing to their shortfalls as subscribing to them, by substituting actual assets with absent ones.
The absent asset
The absent asset is presumed to be there without being there. The Airbnb apartment, the Uber vehicle, and the Spotify song track, are newer examples of assets people expect to be there for them, when they need them, so they decide to not actually own them. The absent asset is peculiar in that its absence is marked by its prominent presence, in the programs, plans, blueprints, and journey maps of those who pay for services, and those who offer them.
The absent asset in the design of an electric kettle is the electrical socket that supplies energy. The absent assets in the design of an airline’s flight schedule are time slots, gates, and runways. The absent asset in the design of Netflix largely used to be the US Postal Service, but now it is a high-speed broadband connection through cable or wireless. It is interesting to note that the contentious matter of network congestion and net neutrality is being argued over what is absent asset from the consumer perspective.
Absent assets are marked by their presence.
A shortcoming is not necessarily a defect. It may just be an asset that is not in a preferred condition or state in which it is more readily useful in the context of a job to be done. Money in a bank account in a particular currency is perhaps busy securing future spending and earning interest. But when the owner needs to pay for a purchase, the money needs to preferably be immediately available in the form of a payment authorization at a point-of-sale (POS) terminal, or in the form of bank notes or bitcoin in Bali. In other words, we can say assets have a resting glitch face when they are in a normal state, but not readily useful for the next opportunity that emerges. There is nothing inherently wrong with them, but the opportunity cost associated with their current state makes them appear to be that way.
When shortcomings are defects
Assets can suffer from damage or loss that actually impair their ability to perform as assets. For example, a drilling machine may break down from wear and tear. Football players may get injured, which forces them out of the game. Credit cards are lost, passwords are forgotten, and identities are stolen. To restore its full potential, the asset then needs to go through some form of recovery or repair. Some assets can never fully recover from damage or loss, which is why many services offer some form of prevention or protection, or failing that, insurance that covers at least the financial risk related to the loss in the value of the asset. That could be as tangible as life and limb, or intangible as opportunity costs, future earnings, and reputation.
Being out of place
Even when in good condition an asset could unfortunately be out of reach or out of place when most needed. Travelers may own a car back home but it’s not there when they need one after arriving at their destination. Therefore, renting a car or bicycle, calling a cab or Uber, or using mass transit is most likely the solution. In some cases, it is possible to fix the error in the GPS coordinates of the asset by transporting it to right in place at the right time. Services such as DHL, FedEx or UPS can ship a document or parcel overnight so it has the desired coordinates the very next morning. One of the promises of cloud-based services such as iCloud, Dropbox and OneDrive is having access to your files online from practically anywhere. In a certain sense, files and photographs are transported to the device or screen at hand.
Beauty is in the eye of the beholder
In some contexts, the shortcoming of the asset is simply that it’s unclear, uncertain, or unrecognized. Fixing it requires some form of evaluation or assessment. The creditworthiness of a cardholder is unclear to the POS terminal, which is why VISA and MasterCard are able to charge a small fee to figure things out within a few seconds for the POS terminal and merchant. Inspectors from the US Department of Agriculture and the NVWA of the Netherlands, help certify agriculture produce to be safe or of a particular grade. At that point the produce as assent gains economic value in the form of its retail price, and social capital in the form of a casting call for a gourmet recipe. Municipalities receive tax revenue from local economic activity, but not until a tax authority recognizes the financial asset in quarterly or monthly statements filed by local businesses.
The only shortcoming may be a new aspiration, when an asset seeks to be useful and valuable in a new way. New aspirations may require new shapes and forms that permanently alter the personality and character of an asset, to make it useful across a new range of conditions and states. A digital photo from a family vacation is good enough as it is, to share with family and friends on Facebook or Instagram, but what if it wants to be the family picture on the office desk. It needs to be printed on good quality paper, framed and set. Or, for example, when goodwill needs to be a charitable contribution, or political beliefs need to be a campaign contribution. That’s when a highly intangible asset, needs to become a more tangible one through a digital payment, or cash in the hands of those being helped.
Affinity and attraction between things
Shortcomings are why things feel the need to be rendered to a particular condition or state. Shortfalls are why they feel the need to have access to a resource at a particular time or place. Superpowers are why some things are confident about fixing a shortcoming. It’s their creed. Surpluses are why they can eliminate a shortfall by filling the gap. Artifacts and events offer needs. Capabilities and resources offer actions or deeds. They have the confidence or creed. Things have affinity and attraction for other things. There is social capital.
The kettle, fridge, and cup (k-f-c) have affinity and attraction for each other because together they form a configuration that has meaning and purpose in the context of a job to be done, or the making of a fresh hot beverage. Similarly, the aircraft, runway and time slot (a-r-t) make it possible for people to fly from one place to another, and the passport, scanner and database (p-s-d) help them get a boarding pass in the first place.
Any given thing can choose to be artifact, event, capability or resource. As an artifact or event it projects the aura of demand by advertising shortcomings and shortfalls. As a capability or resource, it projects the aura of supply by advertising superpowers and surpluses. The aura of demand attracts the aura of supply. Opposites attract. Things develop meaningful relationships with other things by projecting attractive auras.
Things have feelings
They feel the need to have
And feel the need to be
Things have callings
Be the gap for others to fill
Or be the filling
Things in need
Things in deed
One and the same thing
Surpluses and superpowers are projections of one and the same thing . Shortcomings and shortfalls are projections of one and the same thing. An asset may at once project all four kinds of aura, being a capability and resource to another asset, while itself being an artifact and event. The aircraft that transports passengers and cargo, itself needs capabilities and resource to support in on the ground and in the air.
Services fix shortcomings. Laundry services dry-clean dresses, suits, and other pieces of clothing for a considerable fee. Accounting firms specialize in finding and fixing errors in financial statements, and in balancing the books. Orthodontists set teeth straight. Companies specialize in find and fixing vulnerabilities in enterprise software, security systems, and supply chains.
Services fill shortfalls. The airport puts a runway under the aircraft, after having provided a time slot and a gate. Banks extend a line of credit for a business plan to be executed with adequate working capital and without compromise. Market research firms offer insight for foresight in the form of predictions, forecasts and trends, so product managers can make decisions under lower levels of uncertainty and risk.
Performance and affordance
Meaningful associations lead to mutually beneficial arrangements between things through which they offer each other performance and affordance. Affordance is how the water fills the kettle, and how the shape and volume of the kettle holds while it’s being heated. Performance is how the heating coil or element makes the water boil by converting electricity into intense heat, and how the water submits itself to the heating. The combined effect of performance and affordance is that water of a required quantity of water is efficiently, reliably and safely heated. Kettles vary in price largely according to the performance and affordance they can deliver, or how many cups of water they can heat and how quickly due to their wattage. Much like aircraft vary by how many passengers they can fly, how fast and how far.
Affordance and performance are mutual arrangements between things; how things fulfill the needs of other things; need-to-have and need-to-be
An artifact’s need-to-be, translates into demand for some action to be taken or a task to be performed (AC). The capability with matching ability offers up the actual capacity to perform that task through an activity (CA). Activity and task together define the concept of performance. Similarly, an event’s need-to-have translates into a demand for some level of access to a resource (XR). The resource with matching ability puts up the actual capacity-to-provide or availability (RX) for access. Availability and access together define the concept of affordance
potential >> actual actual << potential
artifact > shortcoming > need-to-be >> demand for action > task activity < capacity to perform << deed-to-fix < superpower < capability
event > shortfall > need-to-have >> demand for access >> access availability < capacity to provide << deed-to-fill < surplus < resource
task activity == performance
access availability == affordance
Performance and affordance are dual aspects of the same arrangement between things. Aircraft cabins and cargo holds are part of the affordance for passengers and bags to be transported. The airframe and engines provide the lift, thrust and control that deliver performance. An MRI machine scanning a patient’s anatomy in thin sections is part of a performance. The machine accommodating the patient, and the care settings at a clinical point-of-care are part of an affordance. Facebook promises advertisers large and thin slices of an audience as part of an affordance so it can display ads to the targeted users as part of a performance.
Cell phones, towers, pipelines, gas, grills, steaks, plates, tables, a billion dollars, lines of credit, shipments, shipping containers, goods, store shelves, and shopping lists. Visas, passports, scanners, identities, votes, ballots, ballot boxes, and elections. Pregnancies, babies, beds, hospitals, and health plans. Launch pads, rockets, satellites, cameras, and huge tracts of arable land.
Permutations and combinations
Permutations and combinations of all sorts of capabilities, resources, artifacts, and events lead to billions of configurations within which there is scope for performance and affordance. Changes in society, government, and markets coupled with advances in science, technology, engineering, arts, and management, add new configurations every day.
Not every configuration is meaningful. Even within meaningful configurations, performance and affordance may not be desirable, feasible or viable due to various forms of costs and risks. A smartphone can take pictures, store files, and transmit them. But should it be allowed to? Is it desirable? What if the document contains sensitive or classified information, such health records or military briefings? Lack of trust diminishes the potential for performance and affordance between things.
In theory, there is performance and affordance between datasets and devices. That doesn’t mean the device can handle the data for computation, storage, or transmission, do it efficiently, reliably, and securely. Is it feasible? Facebook coaxes users to connect and produce content through the news feeds and timelines of family and friends. Yet, many users are wary of the performance and affordance between algorithms and their privacy.
Things have opportunity costs
Assets have constraints
Assets expend themselves towards performance and affordance, therefore there are limits to their participation. The electricity charging the kettle, at the same time can’t charge a phone. The stock on a store shelf that fills one shopping basket cannot at the same time fill another thing. When a washing machine works on a load of laundry, it consumes water, electricity and detergent. It also consumes a bit of itself because of wear and tear. The drum has mileage. Even if the asset itself is durable, there is a limit to what it can do because time is a perishable thing. A bike locker storing and protecting one bike, may not be able to do the same for another at the same time. Which is why airlines are driven by the metric of available seat miles.
Things have expenses
Among other things, aircraft need fuel, landing rights, runways, and gates. X-ray machines need huge amounts of energy to produce the energy for medical scans. Medical isotopes that are increasingly scarce. Hospitals may not have enough supplies. Equipment breaks down. Assets fielding a superpower and surplus can themselves face shortcomings and shortfalls. They need maintenance and repair to continue to project their auras of performance and affordance towards artifacts and events. They have to be taken care of.
Things need promises
Performance and affordance are a set of promises. The socket promises stable voltage and amperage the kettle can trust. In return the kettle promises to draw current in a way that doesn’t trip things up. Dropping digital files in specially marked folders makes them magically appear elsewhere on different devices anywhere in the world. Changes are instantly reflected everywhere. It’s like magic. A tiny icon of a box or a cloud indicates files are shared, synchronized and safe. The runway is there for the aircraft to land, even in the middle of the ocean, on an aircraft carrier, no matter how hard the landing. Aircraft simply promise not to land without permission.
People step out and announce plans to be somewhere knowing they can hail a cab, invoke a ride on Lyft, or swipe their cards at the next metro station. Transportation in the form or the other, will materialize. Business make plans knowing various forms of lending will fill the gaps in financial capital. Contracts are signed because courts exist.
Things are magically there but who puts them in place, with superpowers to flex and surpluses to spare? From where do they get confidence and their diplomatic grace to promise performance if affordance is in place? How do things that have just met gain goodwill and trust? Trains keep rolling so the tracks they don’t rust. Who promises the train for the track? Who gives assurances? How do arrangements become agreeable?
The people behind things
Owners and users
Things have owners and users. Users of an asset may also be its owners, but not always. Owners allow others, with whom they relate with in some way or the other, to make use of an asset. Making use of an asset does not require ownership, merely the permission or privilege. Patients give physicians the permission to make use of their health records. When loan officers make use of workspace, data, and applications of bank, to process a loan application, their employers, the bank, directly benefit from the work they get done. Airline pilots don’t own the aircraft they use to fly passengers and bags on behalf of airlines. Nor do police officers own the badge of authority, weapons, or uniform. Loan officers, pilots and police officers are agents because they act on behalf, and at the behest, of their respective enterprises.
Assets are valuable for the benefits they generate for their owners. The benefits accumulate over the economic life of the asset but so do the costs of maintenance and care. We’re only now realizing the lifecycle costs of protecting our identity and privacy across all the platforms and services we use. Every opportunity for the asset to be useful defrays the total cost of ownership (TCO), and justifies spending on maintenance and care. Underutilized assets can be costly. Separating the concern of ownership from the concern of use creates additional opportunities for the asset to be useful and valuable. Banks and other financial institutions let others make use the money of yet others, sometimes switching owners and users several times a day. Netflix streams content it licenses from studios. Airbnb allows total strangers to make use of an apartment, while its owners are away for the weekend.
In future, Mercedes-Benz or Ford may be able to put your self-driving car to work, while you are out of town or home having dinner. The car pays for its maintenance with the money it earns. With artificial intelligence, it might also gain valuable driving experience that it could license to nervous self-driving cars from out of town. There is no reason Four Seasons, Marriott, or the Hilton Group couldn’t do the same, because it may only be a matter of time before Airbnb operates a hotel, the way Netflix now increasing streams its own content, and how Amazon now owns and operates book stores.
There is no sense in owning everything even if the possibility exists. Not everything that can be owned is worth owning. Not everything worth owning can be owned. Ownership may simply be not desirable, feasible, or viable. Air forces around the world may own radar systems, runways and hangars for their fleets. Airlines prefer to rent. There are corporate jets, private jets, and fractional jets for those who find ownership an attractive proposition for their particular patterns of use. Most travelers rent seats and stowage space for checked baggage. People rent things they rarely use, such as tents, trucks, and tuxedos, as well as things they frequently use such as buses, software, and music.
By forsaking ownership of a thing in favor of simply its use, we create new demand for services. But, for the service to exist, somebody else has to own that thing, care for it, and keep it ready for use. The sharing economy is as much about transfer, redistribution, and consolidation of ownership of things as it is about any absolute reduction of it. In fact, in some sense it may actually proliferate some things we otherwise do not need such as apps, maps, profiles, histories, invoices, payments, data and privacy.
Customers and service providers
Airlines combine their aircraft (a-) with the runway and timeslot (r-t) from the airport to field the (a-r-t) configuration that offers performance and affordance to passengers and bags, with every flight they operate. In the a-r-t configuration, airlines own the aircraft but choose to use the runway and time slot. The separation of ownership from use promotes a type of “division of labor” and specialization that contributes to the growth of services. Those specializing in owning artifacts and events and operating shortcomings and shortfalls are customers. Those specializing in owning capabilities and resources and operating superpowers and surpluses are service providers. Customers can themselves be service providers in some adjacent arrangement in which customer assets are service assets. Airports promise airlines who promise passengers who promise to be somewhere.
Performance and affordance leads to higher utilization rates for both types of assets, thereby improving their social life and increasing their economic value. Airlines add flights while airports add time slots and terminals. Conversely, the prospects of underutilized assets motivate customers and service providers exchange promises of demand and supply. In services, you cannot demand supply, without supplying demand. The benefits of using what others own, and the benefits of owning what others use, thus form a feedback loop that reinforces further commitments from each side.
The promises and assurance encourage artifacts and events to be less bashful about their needs, knowing there are capabilities and resources backing them. They encourage capabilities and resources to be audacious with anti-needs. Anti-needs are strategic reserves of service capacity set up in anticipation of needs. They encourage artifacts and events to be themselves or whoever they want to be, by nudging them to take on new challenges and opportunities. Construction engineering services from Skanska, BAM and Balfour Beatty, encourage infrastructure projects to take on challenges of breaking ground based on location, location, and location. The legal services of Saul Goodman encourage chemistry teachers in Albuquerque, New Mexico, Saul Goodman take on the challenges of breaking bad, with discretion, discretion, and discretion.
Healthcare providers maintain anti-need for entire populations across a wide range of diseases, treatments, and clinical points of care, so people have greater flexibility and freedom in career and lifestyle. The banks of Wall Street offer ‘wealthcare’. Law enforcement agencies provide peace of mind in the form of safe and secure environments so citizens with their liberties, freedoms, rights can be who they need to be.
Outcomes define the benefits
Between a million kind of things there may be billions of feasible arrangements for performance and affordances. Not all of them lead to services. Why? 3 Because performance and affordance to be desirable, they must lead to outcomes that generate the promised benefits for both sides. For customers, the payoff is in the form of the benefits of their assets being more useful and valuable in some immediate context. For providers the payoff is in the form of payment in cash or kind. In-kind payments could be in the form of goodwill or trust. For the wash cycle, goodwill exists from both the washing machine and the load of laundry belonging to the same household. At laundromats, cash is not only appreciated it is much required. Government agencies may offer services on a non-profit basis, but earnings are still a must, albeit in the form of public trust.
For performance and affordance to be viable, however, there is a minimum level of commitment each side has to make for needs and anti-needs to socialize. Demand needs to fully engage with supply. At the same time, the benefits have to be promisingly high, and the costs promisingly low, for demand and supply to cross their thresholds. Patients have to spare time for care through lifestyles and treatment plans. Health providers have to put in play nurses, physicians, care settings and medical supplies.
Benefits attract. Costs detract.
Experiences define the costs
For costs to be as low as promised, there are to be rules of engagement. The process of capabilities and resources engaging with artifacts and events should be efficient, reliable, and secure. The process of engagement requires dialog and interaction between users and agents. Users commit artifacts and events to the process. For capabilities and resources agents do the same. Customers and providers are the entities. Users and agents are their personas whose participation is most obvious and visible during the engagement process.
Experience is the process of people and their things engaging with other people and their things. (fuller the engagement; faster the fulfillment). The experience is for the sake of outcomes and not the other way around (unless “an experience” such as listening to a live concert in Berlin Tempelhof, or floating in the Indian Ocean in Bali, is itself the outcome). Outcomes are what people enjoy and experience is what they endure. The design of a service is therefore about using creativity and imagination to systematically reduce costs by improving experience.
Dichotomy of demanding and supplying
Demand and supply define the two sides of a service. For every part of demand, there is a counterpart in supply. Performance and affordance are both have parts and counterparts. Outcomes are payoffs for one side and payments for the other. Experience is as much for the user as for agent. This demand-supply dichotomy defines for every part, a counterpart. The parts and counterparts together make the service a whole thing.
The whole is other than the sum of the parts. Kurt Koffka
The parts and counterparts are the basis of flows and counter flows between the two sides. In an ideal scenario, services create the most value when there is balance and harmony between the two sides. The direction in which payments flow define the polarity, and distinguish demand from supply. It is a closed loop system in which some form of payment must also compensate for the spending of superpowers and surpluses. This makes thinking in services a bit more systematic, if not scientific.
Duality of performing and providing
Performance and affordance define two aspects of a service. For every aspect of performance there is an aspect of affordance. Fulfillment of an artifact’s need-to-be produces one aspect of an outcome. Fulfilling the event’s need-to-have, produces the other aspect. Both aspects of an outcome are to be found in a single result. This duality derives from artifacts and events being two aspects of the same assets, as with capabilities and resources. It follows that, there are two aspects of experience. One is about users giving agents custody and control of the artifact. The other has to do with agents giving users custody and control of the resource. Even though both aspects may be completed through a single interaction, from design perspectives they are separately considered.
It’s like looking through a pair of 3D glasses and seeing a single coherent image with clarity and depth, instead of two sets of blurry lines. Conversely, we always see one thing as whole whereas it is made up of two.
In some services this separation is apparent, while in many others it is not. As a simple, example, while checking whether the passenger has paid for performance, the conductor also checks if they’ve paid for affordance. If they’ve paid for second class travel, they shouldn’t be seated in the first class coach, or in the wrong seat when seats are reserved. From a design perspective, the two aspects of a service are at the same time both separate and one.
Services are arrangements that make things people care about more useful and valuable, through performances and affordances. They’re agreements between customers and service providers, on sharing the costs and risks of outcomes and experiences.
- Bank notes and coins may be inconvenient and yet they afford a level of anonymity that is valuable to those concerned with increasing lack of adequate privacy in transactions. Also, their physicality is reassuring and provides for more self-control than non-cash forms of payment (the “cashless effect”). Which is why the oldest central bank in the world, Riksbank of Sweden is putting a lot of thought into the idea of the world’s first entirely digital legal tender. ↩
- Enterprise Rent-a-Car executed a blue ocean strategy by setting up shop next to auto body shops where impaired vehicles go for repair. ↩
- Services exists so people and their things have the freedom to pursue happiness and health in their own curious ways, and be undeterred when confronted with new challenges and opportunities. However, services often fail to meet expectations, in competitive scenarios, while some services thrive, others barely survive. Competition for a service come from unlikely places but paradoxically also from customers choosing the alternative of do-it-yourself (DIY). Performance and affordance are arrangements between customer assets and service assets. If the arrangements are tedious, time-consuming, or cumbersome, customers may find their total cost of utilization (TCU) too high. Much like owners get rid of high-TCO assets, customers forsake high-TCU services.
- From the customer perspective, services may fail to produce in artifacts and events the particular effects that make underlying assets more useful and valuable. Or, services fail to make it happen at a TCU lower than DIY. From the provider perspective, it may simply not be worthwhile to offer a service within a particular market spaces or segment because even if the needs aren’t hard to fulfill, the demand may be too difficult to serve. They may be wary of the hidden costs and risks embedded in every unit of demand, due to the vagaries of artifacts and events that project the needs. Even with lean manufacturing and just-in-time production, everything on the bill of materials (BOM) and assembly chart is already in place before fabrication and assembly. Service providers in contrast find themselves in a game of Tetris with demand as pieces of various shapes falling onto the moving line of time. Synchronization of capacity and demand can get out of whack and frantic. If Charlie Chaplin were alive, he’d help see in a sequel titled Modern Timelines. The challenge is not peculiar to commercial services. Government and nonprofit organizations face similar challenges. Service providers have the additional risk of having to maintain adequate stocks of supply, so they invest in the capabilities and resources that store the potential for performance and affordance. While they can add capacity they go they have to make a threshold level of commitment to start with, on the basis of which promises can be made. Depending the type of underlying assets, the scaling of up and down of capacity can be easy, inexpensive, costly and hard. Then there is the matter of having to allocate that capacity in a way that’s most efficient, so when demand actually arrives, the capacity is ready to respond. ↩