growth in our stalled economy
the circular economy
**** Under Exploration and Documentation ****
The progress economy is a 4-layered actionable lens on the world that addresses the innovation problem.
At its heart, is a different, better, view of value. A belief that value emerges from making progress rather than being embedded and set by manufacturers.
Applying this lens, together with its tools, allows us to systematically hunt successful innovation, explore wider growth opportunities, and enable the circular economy.
The foundation of the progress economy is service-dominant logic. On to which we build three layers:
- Strategic – What is progress?
- Operational – How is progress made?
- Determination – Who determines progress, and how?
And it is within, and across, these four layers that we find a suite of tools enabling our systematic hunt for innovation and growth.
[ Icons for tools (to do: link individually) / link to tools page ]
We define progress as:
progress: moving over time to a more desirable state.
which leads us to the following high level definition of service:
service / progress proposition: an offer to help progress seekers make some specific progress.
although we’ll usually refer to service as progress proposition to avoid an unnecessary, and it turns out incorrect, debate around goods versus services. In the progress economy, goods are distribution mechanisms for service – just one element of a service-mix.
And now we can reveal that value is not set by manufacturers. Rather, it emerges from progress:
value: emerges whenever a progress seeker judges progress achieved and/or remaining potential progress
so leading using a progress proposition leads to value co-creation and value-in-use. Both being terms for progress achieved.
innovation: creating and implementing new – to the firm, market/industry or world – progress propositions that offer some combination of:
i) helping to make progress better
ii) helping to make better progress
iii) reducing the six hurdles to engaging.
Also flowing naturally from our definition of progress is our definition of markets:
markets: groupings of progress seekers who seek sufficiently similar progress
which helps move us away from the issue of marketing myopia Levitt highlights.
Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovationP. Drucker
people don’t want to buy a quarter-inch drill. They want a quarter-inch holet. Levitt, author of “Marketing myopia” (1975)
An innovation will get traction only if it helps people get something that they’re already doing in their lives done better..c. m. Christensen, author of “The Innovator’s dilemma“
the normative marketing goal should…be customisation, rather than standardisation…be to maximise customer involvement in value creationVargo & Lush (2004) “the four service marketing myths“
Once you free your mind about a concept of harmony and of music being correct you can do whatever you wantGiorgio Moroder
Our classic, economic and marketing, view of value is driven by the notion of value-in-exchange. Of successive manufacturers embedding or adding value. And of end users destroying/using that up; perhaps being able to restore/reclaim some value, but having to do so themselves. A combative world of manufacturers and users or customers; producers and consumers.
Here’s the problem…
This classic view encourages us to become myopic (short-sighted). We focus on the point of exchange. And, in order to create the value for that exchange, we focus on goods and manufacturing.
This results in a goods versus services rift. Where we describe services as poor relations to goods – they are intangible, inseparable and inconsistent, we can’t create an inventory, and they need customer involvement.
That limits our solution space…despite evidence that shows service is eating the world.Value-in-exchange thinking stunts our economic growth, causes the innovation problem and closes our mind to the circular economy Click To Tweet
And this preoccupation on achieving the value-in-exchange moment leaves us with little incentive or interest in what happens afterwards. Our economy acts in a take, make and waste manner. The absolute opposite to the circular economy.
Whilst this classic view has undoubtedly been successful; growth is stalling, and innovation is failing.
…and the solution
Our best alternative is the progress economy. Where we believe that value emerges from the amount of potential progress and progress made. Rather than being set by manufacturers.
Its roots are in the quotes at the top of this section. Work in the ’60s and ’70s by Drucker and Levitt, that we seem to have forgotten. Taken further by the likes of Christensen. And unlocked by the service-dominant logic of Vargo & Lush.
Thinking in terms of progress sought minimises myopic thinking. We search for various ways to help make progress. Our solutions (progress propositions) make use of the full range of a company’s potential service mix – varying levels of employees, goods, physical resources, and systems.
This broadens our solution space even more. We no longer look to add yet another blade to the razor. And redefines our view of markets.
Making progress is a joint endeavour. So now we observe value-in-use and value co-creation in place of value-in-exchange.
And by removing the limit on our visibility, that was encouraged by value-in-exchange, we opening our thoughts up to the circular economy (if that is progress being sought).
In the progress economy we believe that all actors are constantly seeking to move to more desirable (as defined by them) states. In other words, they are attempting to make progress in all aspects of their life. We call these actors progress seekers. And the more desirable states they seek are known as progress sought.
Entities/ecosystems form – we’ll call them progress helpers – offering to help progress seekers make specific progress: progress offered. That is, progress helpers offer progress propositions.
There is an clear relationship between progress sought and offered. But it is not required to match. A helper can offer to help make more or less progress than that sought. This is captured in the progress diamond tool. And is an area for innovation.
Progress, as a verb, means moving over time to a more desirable state. Where that state comprises functional and non-functional elements; informed by context. “I need to get somewhere 100km from here [functional] as quickly as possible [non functional] during morning rush hour [contextual]”.
As a noun, progress is something that is overwhelmingly and phenomenologically determined, repeatedly, by a progress seeker as progress achieved and potential progress. When compared to progress sought, the idea of value emerges.
When engaging a progress proposition, progress is jointly made through a series of activities that are mostly a) intangible and b) the act of integrating seeker and helper resources.
Seekers’ resources often include, but are not limited to, their time and knowledge. Whereas helper’s resources reside in what we call the service mix.
Where the service mix comprises of varying levels, including zero, of progress helper’s employees, physical resources, goods, and systems. Adjusting the service mix is an area for innovation (servitisation, product as a service, digitalisation, digital twins, applying artificial intelligence/machine learning, etc, can all be mapped to service mix changes).
The progress zip and service as characteristics tools help us explore how progress is made. The later also helps us explore the impact of innovations on an entity.
Who drives the making of progress?
Who drives the activities/integrations reflects where the progress proposition sits on the service-service continuum.
It’s usually the progress helper in a so-called relieving service. In an enabling service, on the other hand, integrations are most usually driven by the progress seeker. Moving the proposition to a new position on the continuum is an innovation move. And doing so usually results in a change to the service mix.
It is progress seekers who overwhelmingly determine amounts of progress. Doing so before, and during, engaging with a progress proposition. And the decisions are unique and phenomenological (based on lived and living experience).
Before engaging with a progress proposition, seekers determine if there is enough potential progress. And as they progress, they are constantly determining whether there is a) sufficient achieved progress and b) sufficient remaining potential progress. They also determine in those decisions whether six hurdles are low enough to begin and continue engaging.
These ongoing judgments are most likely made at the end of each activity in the process of advancement. This coincides with the availability of new information to the seeker. Which may also be used by the seeker to evolve their view of progress sought.
The Six hurdles tO engagement
When engaging a progress proposition, the seeker also determine whether six hurdles are low enough to engage. This view is captured in the engagement decision tool.
And these six hurdles are:
- Lack of seeker resource
- Adoptability of progress proposition
- Resistance to progress proposition
- Mis-alignment on service-service continuum between progress proposition and seeker
- Confidence in progress helper’s proposition
- Gaining required service credits (rather too simplistically: price)]
Interestingly, the first hurdle – lack of seeker resource – is inherited from our understanding of progress. And it is a driver for seekers to look for progress propositions. The five other hurdles then arise related directly to a proposition.
We don’t see value as being set by the manufacturer. Which then gets translated as price to be paid in a value-in-exchange moment.
Instead, in the progress economy, value is an emergent property. It emerges whenever a progress seeker judges the amount of progress they have made so far (progress achieved) and progress still possible (potential progress).Value is an emergent property – not set by manufacturers. It emerges whenever progress seekers judge amounts of progress made so far (progress achieved) and progress still possible (potential progress) in progress they are seeking Click To Tweet
These judgements are unique and phenomenological. Which explains why some progress seekers see more value in progress propositions than others.
And because making progress is often a joint endeavour, this why we say there is value co-creation and that we observe value-in-use. That is to say, progress is made together (co-creation) and through actions that integrate seeker and helper resources (in-use).
Finally, we deviate from service dominant logic by saying the progress helper may also determines progress (value). Because progress with a proposition is a joint effort, then it can be determined by both parties. A helper may, for example, identify that the progress seeker is hampering progress, or worse that value co-destruction is occurring. And in rare occasions they may decide to terminate service.
- explore more details about the progress economy
- what’s the relationship to the goods economy?
- what’s the relationship to the service economy?
- what’s the relation to the experience economy?
the progress economy – wider benefits
The progress economy explains the why behind many current innovation theories. For example, Blue Ocean Strategy (Kim & Mauborgne), Design thinking, Jobs to be done (both Christensen’s and Ulwick’s views) and disruptive innovation (in Christensen’s true sense).
And the progress economy‘s focus on progress encourages us to minimise our myopic (short-sighted) tendencies. Allowing us to avoid the “yet another razor blade” innovation syndrome.
Finally, this encouragement to be less myopic and to look beyond the point of sale is where we find a natural home for aspirations such as the circular economy – repair, reuse, recycle, etc.