In the progress economy we draw a direct line from this hurdle to Rogers’ innovation adoption theory. Specifically the perceived attributes of the proposition:
relative advantage
compatibility
complexity
trialability
observability
Progress seekers, according to the engagement decision processes, may decide to not start, or to abandon, a progress attempt if they feel a progress proposition’s adoptability is too low.
Since a progress helper exists simply to gain progress seekers using their proposition(s), their goal should be to continuously understand evolving progress sought and innovate to increase adoptability of their progress proposition(s).
But be careful. As always, it is a case of know your progress sought. Snapchat has a relatively more complexity interface than other photo sharing apps…keeping parents out of the system, much to the joy, and progress sought, of the younger generation.
Rogers’ other five adoptability variables – communication channels, nature of the social system, type of adoption decision, and, extent of change agent’s efforts – have varying impacts depending upon context and use of propositions.
Unlike the other components of progress we don’t usually envisage contextual progress changing over time. Therefore, it usually represents constraints under which functional and non-functional progress are attempted.
As seen above, examples of contextual progress relating to the functional progress of “transporting myself from A to B” could be “during rush hour” or “don’t know how to drive”. Of course we could argue that changing those contexts could be a progress sought. But let’s consider this for a moment…
Example A – changing the rush hour context is not something we can do, except for deciding to transport outside rush hour. That, by our definition of progress – moving over time to a more desired state – is not progress
Example B – not knowing how to drive could be changed…but it would be better expressed as it’s own functional progress sought (with it’s own associated contextual progress)
An increasingly important operand resource consisting of structured or unstructured information that can be leveraged when making progress.
The use of, and need for, data for decision making has long been known. Better data should equate to better decisions. And nowadays data fuels the advancement of artificial intelligence.
digital goods
An intangible goods. Usually transported electrically.
For example an e-book instead of a physical book; or a streaming song/video instead of vinyl/cd/dvd.
If ownership of the digital goods is not irrevocably transferred to the seeker, then it is, instead, a physical resource within the progress resource mix.
disruptive innovation
Innovation that initially creates and offers a progress proposition who’s progress offered better matches the progress sought of progress seekers who have been left behind, or ignored, by improvements to incumbent progress helpers’ progress propositions. And then repeatedly innovating that offering towards attracting mainstream progress seekers.
Disruption occurs when mainstream progress seekers begin to use an entrant’s progress proposition in volume.
Progress helpers are constantly innovating to improve the progress offered by their progress proposition. Not least to address progress sought becoming more demanding over time. However, when they do so to solely address the progress sought by their most demanding progress seekers – who typically offer the most effort in service exchange – they begin to exceed or ignore the progress sought by less demanding seekers.
As a result, the lack of resource and effort elsewhere progress hurdles increase for those seekers. A gap in progress offered is created. Into which entrant progress helpers emerge, offering progress propositions that offer to, again, reduce the hurdles.
Incumbent helpers tend not to respond vigorously to these new helpers. They are innovating chasing higher profitability in the more-demanding progress sought segments. And, at the same time, the entrant progress helpers are innovating to improve their progress offered (drawn by the higher service exchange potential of moving up).
Disruptive innovation is perhaps the most misused phrase in innovation. Partly as the word lends itself to great marketing copy relating to “move fast, break things”. The referenced article is a good read, showing that Uber, for example is not disruptive innovation.
The effort elsewhere progress hurdle relates to the progress seeker’s phenomenological feeling of how much service (”effort”) they are requested to give in equitable service exchange for a specific progress proposition. And we say ”elsewhere” since service exchange is often indirect.
According to Service-dominant logic, “service is fundamental basis of exchange“. That is, we exchange service for service (rather than cash for value). However, these exchanges are often indirect. And the progress economy adds that exchange should be equitable in terms of effort.
Progress helpers signal the equitable exchange for their progress proposition as price (a number of service credits (effort) and frequency of exchange(s))
A progress helper will generally try to maximise the effort it receives in an exchange for its service. However, they exist simply to gain progress seekers using their proposition(s). As such, their goal should be to continuously innovate to reduce (sometimes perceived) effort requested in exchanges. For example:
Subscription models – reduce perceived effort per exchange (in return for more exchanges)
Substitute models – use other sources of service credits to reduce effort requested from seeker – freemium models, ad-based, etc
Deferred/extended service credit exchange schemes – loans, buy now pay later…
Tiered propositions – offer varying levels of progress (functional, non-functional, contextual) for varying service-credits
It is not uncommon to hear business gurus relate the flexibility of employees in resource mixes through phrases such as:
Clients do not come first, employees come first. If you take care of employees, they will take care of the clients
Richard Branson
Emloyees are the most adaptable progress resource mix element. Being able to be trained, to learn with each successive progress attempt, and, to react to situations.
And, if allowed to by the progress helper, employees are capable of actively adjusting progress offered during progress attempts to reflect evolving progress sought. As well as autonomously seeking to minimise/reverse a range of factors contributing to value co-destruction.
Is Artificial Intelligence an employee in the mix? The distinction between employees and systems is becoming increasingly hazy. And the progress economy is somewhat agnostic in this regard: AI is generally an operant resource, as are employees and systems(if used that way). The ability to slide between five equal level ‘knowledge and skill encapsulating’ resources is the beauty of the resource mix. We’ll leave it as Spohrer et al remind us in 2023s “Service in the AI era“: AI can be used to augment or automate employees.
Other non-human candidates as employees would be animals – service dogs, for example.
Finally, the existence of employees in the progress resource mix suggests the proposition is towards the relieving end of the progress proposition continuum.
As such, enabling propositions place higher demands on the progress seeker compared to relieving propositions (which are at the other end). They require the seeker to:
have the skill and knowledge to integrate with the goods/physical resource
link additional progress propositions together to achieve full progress sought (since a goods often helps with only part of the progress attempt)
But they have non-functional progress that might be being sought. Progress seeker reduces the likelihood of being “held-up” in making progress while waiting for someone else’s resources to become available. Or they may be looking for a sense of self-worth/satisfaction. Perhaps even relishing the challenge of working out the activities.
To start engaging a proposition, a progress seeker needs to see enough potential progress and that the six hurdles are low enough. Whilst to continue, they need to feel they have sufficient progress achieved, see sufficient potential progress, and that the six hurdles remains low enough.
Abandoning an attempt – a discontinuance – could be due to disenchantment with the progress proposition. Not enough progress achieved as expected; or remaining progress potential is not enough; or experience shows one or more of the hurdles are too high.
Or an attempt can be abandoned due to replacement. Where the seeker has identified another progress proposition they now phenomenologically feel better suits their progress attempt.
Typically governmental legislation or institutional requirements. Such as requiring various non-functional/contextual progress relating to safety (for example requiring seatbelts in cars or speed limiters) or the environment (the proposed ban on fossil fuel engines in the EU).
However, most actors will want to see this as an equitable exchange. That is to say the level of effort you put into your service should match the level of effort I put into mine. Or that the smaller effort service is performed several times to give equality.
Since service exchange is often indirect, the equitable service swap can be some combination of service and service credits (in practice, usually completely in service credits).
It can be usefully categorised, using Lovelock & Wirtz1 original classification of services:
People processing
Possession processing
Mental-stimulus processing
Information processing
For some (toy) examples of progress sought, including functional progress, see below.
Various progress offered through progress propositions can be imagined and offered by progress helpers to meet progress sought. Focussing only on functional progress, the best offer, for example A, would help the seeker achieve the full 50km. Anything less, and functional progress potential seen by progress seeker for that proposition likely starts decreasing.
Now, there are valid reasons for under/over offering progress. We risk hiding by trivial examples of distance (which you either make or don’t). And disruptive innovation is an example where initially under offering may be a good approach.
A helper that cannot offer full progress might chose to co-ordinate with other helpers that complete them. A helper that can offer to get a seeker 40km by train might see benefit of co-ordinating with a local bus operator for the final 10km. Rather than leaving the seeker to do that. Or a new helper might see the opportunity in offering such a service.
ownership is irrevocably transferred to the progress seeker prior to any resource integration
they i) freeze specific skills and knowledge of the progress helper allowing those to be distributed in time and space and ii) those skills and knowledge are unfrozen during acts of resource integration
At first glance, the concept of goods freezing skills and knowledge allowing their transportation may appear strange. But it quickly became a natural way of thinking. And it liberates us from an unnecessary long-running debate over goods vs. services. Opening our minds to just how flexible the progress resource mix is.
For example, vinyl/CD/digital stream can all freeze a band’s performance in different formats. Those can then be transported to wherever you want. And you unfreeze them by using an appropriate music playing device. That device itself has frozen the engineers’ skills who knew how to playback audio in a particular format. When you press play, those skills are unfrozen.
And this example highlights something we often find with goods heavy progress resource mixes. They are often quite specialised. And a progress seeker needs to know what other propositions they need to link together to make the totality of their progress sought. As well as how to use the propositions they are linking.
Usually it is the progress seeker that integrates with goods. But there is nothing preventing the progress helper. Updating operating system/firmware on connected devices at a progress seeker’s location is a progress helper integrating with goods.
Finally, the provision of goods in the progress resource mix suggests the proposition is towards the enabling end of the progress proposition continuum.
goods-dominant logic
Today’s predominant, taught and applied, logic on how our world works. It views outputs (goods), and therefore manufacturing, as the dominant aspect. Value revolves around value-in-exchange, focussing us on the point of sale and away from pre/post opportunities.
Services are treated in the same way as goods, ie a focus on the outcome rather than how that outcome is achieved. And are seen as poor relatives to goods, they are:
intangible
inconsistent
inseparable
require the involvement of the customer
you can’t create an inventory
Vargo & Lush began the argument against treating services this way on their way to describing service-dominant logic. Arguing, for example, that inconsistency should be seen as customisation; intangibility as benefitting from simpler supply chains and increased ease of replication.
They further tackled the view of value-in-exchange, shifting us to see service (application of skills and knowledge for benefit) as the basis of exchange. Which leads us to thinking in terms of value-in-use and value co-creation – the fundamentals of service-dominant logic.
Vargo, S., Lush, R. (2004) “The Four Service Marketing Myths”, Journal of Service Research; Vol 6; Issue 4; pp 324-335, DOI: 10.1177/10946705032629
i
ideation
A creative process of generating, developing, communicating and sharing ideas. Often the first step of, but not sufficient for, innovation.
There are many that will say Innovation starts from ideas. And that ideation is where those ideas emerge and develop. But for innovation there needs to be successful, sustainable, execution of ideas.
Having the idea to build an elevator to the moon is not an innovation. It is just an idea. Building and running such an elevator whilst maintaining the (economic) survivability of the organisation doing so, makes it an innovation.
And, keeping with the moon elevator, for it to be a successful innovation, there needs to be an underlying need for it. If no-one has the need to go to the moon, then a moon elevator would not be a successful innovation.
The lack of confidence progress hurdle relates to how much confidence the progress seeker phenomenologically feels they have in achieving a progress proposition’s progress offered during a progress attempt.
A seeker needs to have confidence in the progress proposition (and the progress helper) helping them reach the progress offered.
Confidence often boils down to a seeker’s past experiences with i) proposition under consideration, ii) similar propositions, and iii) the progress helper.
Where the proposition and helper are totally new to the seeker, then hurdles such as adoptability and resistance are likely to dominate (and be interpreted as confidence).
Since a progress helper exists simply to gain progress seekers using their proposition(s), their goal should be to continuously understand evolving progress sought and innovate to minise seekers’ lack of confidence.
Helper’s can best increase future confidence by ensuring a seeker feels the current experience is the best possible. Indicating a need to be more conversational and adapting progress offered during progress attempts. Servicescapes also play a role. Would you seek a medical procedure in an unclean facility, for example.
Brand, and brand extension look to capitalise on awareness of confidence.
Examples of resource in the progress economy are quite broad; even though our focus is usually on resources the progress seeker has access to and integrates with. These cover, amongst others:
skills and knowledge
time
systems/goods with which to make progress (these freeze skills and knowledge for use later/elsewhere)
Lack of resource is the fundamental progress hurdle. And from it, the opportunity for progress propositions arises. Where the intention of progress propositions is to make available additional resources to the progress seeker to help them progress. A progress proposition comprises a progress resource mix – skills and knowledge encapsulating components – together with a proposed series of progress making steps.
Since a progress helper exists simply to gain progress seekers using their proposition(s), their goal should be to continuously understand evolving progress sought and innovate to minise seekers’ lack of resource.
For example offering a “fly yourself airplane” proposition may address a progress sought and related lack of resource for the progress sought of self transportation. But it likely exposes a new lack of resource. Namely, skills and knowledge of how to fly. Plus adoptability (ease of engaging) and resistance (postponing/rejecting) progress hurdles may spike along with the effort elsewhere hurdle (loosely think price) being too high.
Examples of this resource type are the hospital building where an operation takes place, the wind shelter on a snowy arctic mountain pass or the web site, mobile apps, metaverse etc.
A call centre building or an intranet would not generally be a location. Since the progress seeker would not interact with them. However, here we have to be aware of who the progress seeker is. An call centre employee, in their role as a progress seeker, may well be interested in the call centre location.
Groups of progress seekers who seek, or are prepared to compromise to seek, a similar specific aspect of progress.
Through the progress economy lens, every actor is seeking to make progress with all aspects of their lives. Giving us one giant market/segment of progress seekers. However, that is somewhat impractical for helpers to craft progress offered against – who can help everyone, progress with everything?
Segmentation allows us to focus by grouping seekers by specific aspects of progress sought. And that grouping is down to progress helpers to identify.
Two areas of interesting segmentation come in disruptive innovation and Blue Ocean Strategy.
All progress propositions lie on a continuum between enabling and relieving propositions. Similarly, a progress seeker also mentally takes a position on the continuum for a specific progress sought.
The distance between these two positions, as felt by the progress seeker, is the size of this progress hurdle.
Since a progress helper exists simply to gain progress seekers using their proposition(s), their goal should be to continuously understand evolving progress sought and innovate to decrease the misalgnment. Either by:
For the progress economy, we need money to have only the properties defined for service credits, namely:
Fungible: One service credit is viewed as interchangeable with another.
Portable: Progress seekers can carry service credits with them and transfer them to others.
Durable: A service credit must be able to withstand being used repeatedly.
Acceptable: Everyone must accept service credits in service exchange
Uniform: All service credits must have the same service exchange power.
Limited in Supply: can’t be easily created or counterfeited – if they can, then arbitration of service exchange would quickly break down. (note: this is subtly different to scarcity, which is tied with value)
Money though has a wider set of properties, see Hull and Sattath (2021), as a:
“medium of exchange (Jevons (1) describes a medium of exchange as something that is ‘…esteemed by all persons… which any person will readily receive’
standard of deferred payment (means of settling a debt)
Whereas functional progress captures the hard aspects of progress, non-functional progress addresses the softer side. Often it relates to adverbs: quickly, safely, cheaply etc. But there are many other aspects it can capture.
There is a useful hierarchy we can lean on for inspiration of non-functional components.
Traditionally these are seen as goods or physical resources. So much so that in goods-dominant logic they are seen as the resource type that hold value. In our service-dominant logic view, they are seen differently.
An operand resource that has become increasingly in demand and useful in progress making is data.
A resource that acts on other resources resulting in progress being made.
Service-dominant logic informs us that operant resources are the fundamental source of strategic benefit. And typically these type of resources are human related, such as specific skills and knowledge. But they can also be organisational, informational, relational, etc.
Notable operant resources in the progress economy are:
Progress seekers’ skills and knowledge – Alves, Ferriera and Fernandes (2016) found increasing a progress seeker’s expertise has a positive impact on value co-creation
Madhavaram & Hunt (2008) introduce a hierarchy of operant resources. Those higher in the hierarchy are harder to obtain, but give greater benefit. For example market orientation (not all helper operant resources need to be in the progress resource mix).
Inherited from the underlying service-dominant logic, phenomenological is best simplified as the lived and living experience an actor brings to a decision. Where:
a) lived experience – the ”baggage” we bring from all past attempts to make progress (both for this and other progress sought)
b) living experience – how we’re feeling today, how we’re expecting to experiencing this attempt to make progress, how we are experiencing it, etc.
It’s why you feel the way you do about self-service supermarket checkouts and your friend feels different. And why you might use them all the time; or only in certain circumstances; or refuse to ever use them.
In practice, physical resources are goods that are hired out. A hire car, for example, or tools etc. Digitally we can think of movies, books, songs. Often, progress seekers consider these to be digital goods; however, if ownership is not irrevocably transferred to the seeker, they are physical resources in the mix. This is quite common – for example, you do not own songs on Spotify. And Amazon has previously removed paid for books, ironically such as George Orwell’s 1984.
Finally, the progress helper does not have to necessarily own the physical resource. Consider progress propositions that allow physical resource owners to profit from spare capacity (the so called sharing economy). Loan your tools that you aren’t using, for example, through Hygglo. Or making your property you are currently not using available on Airbnb.
profit
The difference in effort between effort given in providing a service and the effort in the service(s) offered in exchange. Usually this is in the form of service credits.
Price “becomes part of the value proposition” (Kowalkowski). It is not a measure/signal of value. Rather, in the progress economy price signals effort requested for equitable service exchange – size and number of service applications in exchange for requested service. To an extent, price is the business model.
It is set by a progress helper. Who may use various approaches to arrive at it – such as summing together the service efforts of all parties involved in the progress helper plus profit). And is seen by progress seeker as the effort elsewhere’ progress hurdle.
When engaging with a progress propositions we see progress helpers as offering to help progress seekers move towards a progress offered state. And there needs to be some relation between progress sought and progress offered for the proposition to be of interest to a progress seeker. In such a situation, progress seekers follow the engagement decision process.
Lovelock & Wirtz1 developed a classification of services which might be useful to repurpose as a classification of progress:
the progress state a progress helper is offering to help reach when a progress seeker engages with their progress proposition
it has a relation to progress sought, but need not exactly match (here we find explanations for mainstream progress sought, segmentation, disruptive innovation and blue ocean strategy
We see these decisions being made primarily by the progress seeker. And they may decide to abandon their progress attempt if they believe insufficient progress has been made, in comparison to their expectations, by the time of judgement.
Sometimes the progress helper will make a parallel judgment within a specific progress attempt. And, if they believe insufficient progress has been made, in comparison to their expectations, they may decide to withdraw from that progress attempt. Whether or not they make such a judgement, and how much weight they give it, appears to be related to where their progress proposition sits on the progress proposition continuum. Where doing so for enabling propositions, in which the progress seeker drives the progress making activities, appear to be of less interest.
Insufficient progress achieved may be due to value co-destruction. For which either party may attempt to rectify.
Where the progress seeker is attempting to progress on their own, the similar progress decision process informs us there are the same repeated decisions. But in this case there is no progress helper involved.
To start, a progress seeker needs to see enough potential progress and that the lack of resource hurdle is low enough. Whilst to continue, they need to feel they have sufficient progress achieved, see sufficient potential progress, and that the lack of resource hurdles remains low enough.
Abandoning an attempt – a discontinuance – could be due to disenchantment that the above criteria are not met. Or due to replacement. Where the seeker has identified another approach they now phenomenologically feel better suits their progress attempt.
A progress helper is either a single entity (person/firm/organisation) or an ecosystem. To paraphrase Drucker:
the purpose of a progress helper is to attract maximum equitable service exchange (number or size) with progress seekers – as such a progress helper has three, and only three, functions:
marketing – continuous discovery of ever evolving progress sought
executing – delivery of progress offered
innovating – continuous innovation of progress offered towards the ever evolving progress sought
The frame of reference of seeker/helper can be adjusted to look at the seeker/helper relationship within a progress helper. Where helper becomes seeker and various internal functions become helpers.
They are a part of the judgements from which views on value emerge. And reducing them should be an aim of (systematic) innovation.
We identify six such hurdles in the progress economy. A lack of resource hurdle being fundamental, giving rise to the opportunity for progress propositions. And, in turn, progress propositions give rise to five additional hurdles.
how many service credits – amount and frequency – does a progress seeker need to get from elsewhere in order to meet that requested by the progress helper in order to engage the progress proposition (more formally: to participate in service exchange)
There needs to be a close relation between progress offered by a progress helper and progress sought by a progress seeker. Otherwise the progress seeker will not see enough progress potential in the proposition (and therefore be unlikely to engage).
We visualise this relationship in the progress diamond tool.
Though this need not be a 100% match. And indeed this is a zone for innovation, where:
over offering – may be an attempt to offer latent progress sought
can I make sufficient progress towards progress offered given my general experience and awareness of the progress proposition
During progress attempt:
can I continue to make sufficient progress to progress offered given my general experience plus the experience I have now gained in the progress attempt so far
is progress offered still close enough to my progress sought
If it is felt there is insufficient progress potential then the progress attempt may not be started or may be abandoned. This insufficient progress may be due to value co-destruction. Which either party may attempt to rectify.
In the progress economy we observe progress propositions arise from a progress seeker encountering a ‘lack of resource’ progress hurdle. Some other actor has solved that hurdle and now offers their help to others. However, the act of offering a progress proposition raises five additional hurdles.
Help comes in both the form of a progress resource mix as well as a proposed series of progress making activities. Examples are the process to follow when hiring a car, or instructions on how to use a screw.
The progress seeker may or may not follow proposed activities. And the impact of that – potential value co-destruction and abandoning a progress attempt – is loosely related to whether the proposition is an enabling or relieving one.
We also find that propositions exist on a continuum. If the proposed activities are primarily driven by the progress seeker, the proposition is towards the enabling end. If, on the other hand, the activities are primarily driven by the progress helper, then the proposition is towards the relieving end of the continuum.
As well as positioning propositions, we can visualise where the progress seeker wishes to be in the continuum. The gap between proposition and seeker’s wishes is a progress hurdle. As well as a zone for innovation.
The progress proposition continuum supports our discovery of what it means for the progress seeker to be at a position on the continuum. And the distance a proposition is from that point is one of six progress hurdles.
The progress resource mix, when combined with the proposed series of progress-making activities, forms a progress proposition. The mix itself is the specific combination of resources offered by a progress helper that:
they believe addresses a progress seeker’s initial lack of resource progress hurdle to achieving the seeker’s progress sought
aligns with their proposed series of progress making activities.
Although, offering a progress proposition introduces five new progress hurdles. As well as potentially introducing new lack of resource progress hurdle aspects.
Innovation: can be hunted through altering the proposed mix. We find that there are often many mixes that can be offered. Due to progress sought consisting of various functional, non-functional and contextual components. Combined with progress helpers over/under offering help on various permutations.
The above diagram shows three mixes that might meet that the toy example of functional requirement of “getting something to eat”: i) cooking at home ii) eating at a buffet restaurant and iii) dining at a 4* restaurant. Each mix is naturally different. Innovation lies in understanding and reflecting a best proposed mix.
One important thing to note is that all elements of the mix are equal. There is no goods vs service debate, for example, as we see in goods-dominant logic. This frees us to swap (or slide between) various elements. Lowering employees + physical resources (a typical relieving progress proposition) and increasing goods (a typical enabling progress proposition) moves one way along the progress proposition continuum; and we can go the other way too.
Progress seekers are looking to move to more desired states (progress sought) in every aspect of their lives. Sometimes its functional progress – to become better educated, to transport themselves to another place, to get nourishment – sometimes non-functional – to be relaxed, get happy – usually a combination. And often informed by context.
Alternatively, progress seekers might look at engaging a progress proposition provided by a progress helper. In which case the decisions in the engagement decision process guide the attempt. This process is an enhancement of the progress decision process; taking account of the lack of resource plus five additional progress hurdles associated with progress propositions.
Progress propositions contain a progress resource mix and proposed series of progress making activities (which are mostly resource integrations of seeker and resource mix resources). The proposed activities may be driven by seeker or helper. And who primarily drives them positions the proposition on the progress proposition continuum of enabling to relieving propositions.
“innovation resistance seems to be a normal, instinctive response of consumers” (Sheth and Ram, 1989)
“customer resistance is usually one of the most significant risks to innovation” (Heidenreich & Kraemer, 2015).
Since the aim of a progress helper is to gain seeker’s using their proposition(s), their goal should be to continuously innovate to reduce resistance to their progress proposition(s).
Usefully, Kleijnan et al. propose this hierarchy of resistance. Along with aspects that contribute to them.
The act of applying one resource to another with the intention of making progress
There are some rules:
Operant resources can integrate with other operant resources and/or operand resources.
Operand resources – typically goods and physical resources – can only be integrated with operant resources.
Where it appears two operand resources are integrating, it is always the case that there is an operant resource performing the integration.
s
series of activities
A series of activities performed during a progress attempt with the intention that i) each activity moves the progress seeker forwards towards their desired state, and ii) when completed, a progress seeker has achieved maximum progress.
Knowledge of, or the skills to identify, the series of activities to reach progress sought is a fundamental operant resource in the progress economy. Where the progress seeker lacks this, they hit the lack of resource progress hurdle. And will likely abandon their own progress attempts.
instructions, recipes, and so on, which may be partially, or fully, ignored by a progress seeker
processes the helper uses to guide a seeker, eg workflows in systems (hiring a car, as an example), Agile development methodologies, etc
contractual defined terms/ways of working; which, I suspect, are more common in business to business situations.
During execution, individual activities may be driven by the progress seeker or progress helper. The primary driver of the series of activities positions the progress proposition on the progress proposition continuum. And the distance between where the progress seeker and proposition are on that continuum is another progress hurdle.
Progress achieved increases as activities are completed. Likely increasing the views on the emerging value. However, in some situations value only emerges once all activities in the series are completed. Due to the joint endeavour nature of activities in a progress proposition, we observe value-in-use.
Not following, or hindering, the proposed activities may lead to value co-destruction.
service (verb)
i) “the application of competences (knowledge and skills) for the benefit of another party”*
ii) “the application of knowledge to co-create value”**
These are equivalent definitions. The first from Vargo & Lush when introducing service-dominant logic; the second from the International Society of Service Innovation Professionals; and the third is how we express service using the progress economy terminology.
Transferable tokens, with no inherent value, used as place holders for service in service exchange. They enable indirect exchange as well as mediating temporal and magnitude differences in service being exchanged.
mediate differences in timelines of service exchange.
Service credits are a means of accounting for delayed exchange.
Actor A can exchange service credit rather than service with Actor B. At a later time point, Actor B can exchange that credit (or an equivalent) with Actor A for their service.
mediate differences in effort between service in serviceexchange.
Service credits allow signalling of service effort of a service and comparison of efforts between service.
Let’s say Actors A and B determine themselves and agree that Actor A’s service involves four service credits of effort and Actor B’s involves two per exchange. Equitable exchange from Actor B for Actor A’s service would be one of i) two Actor B’s service; or ii) one Actor B service and two service credits; or iii) four service credits.
enable indirect exchange.
Service credits are transferable between actors
Actor A may accept service credits from Actor B in service exchange and subsequently use those in service exchange with Actor C.
We need service credits to have several properties. These are similar, but perhaps not as exhaustive as money. Within a given community of progress seekers and progress helpers service credits must be:
Fungible: One service credit is viewed as interchangeable with another.
Portable: Progress seekers can carry service credits with them and transfer them to others.
Durable: A service credit must be able to withstand being used repeatedly.
Acceptable: Everyone must accept service credits in service exchange
Uniform: All service credits must have the same service exchange power.
Limited in Supply: can’t be easily created or counterfeited – if they can, then arbitration of service exchange would quickly break down. (note: this is subtly different to scarcity, which is tied with value)
Service credits are an abstract concept and can be implemented in may ways. They may be physical/digital tokens passed between actors. Or ownership recorded in some central/distributed register.
It turns out that money/cash has been the most successful implementation of service credit, to date. Although stones and gold have previously been used, and cryptocoins may have a future.
Vargo & Lush (2004) introduced service-dominant logic as an evolution to goods-dominant logic. By 2016 they were summarising it with 11 foundational premises as follows:
Of which the five in bold (FPs 1, 9, 6, 10 and 11) are seen as axiomatic.
Instead, service is seen as the fundamental basis of exchange. All social and economic actors are resource integrators. And value is co-created, determined uniquely and phenomenologically by the beneficiary (progress seeker), whilst co-ordinated through actor-generated institutions and institutional arrangements.
There is no goods vs service debate in service-dominant logic. Goods are seen as distribution mechanisms for service – they freeze a service, which is unfrozen when the goods is used. This allows us, amongst other things, to reason about progress resource mixes and progress proposition continuum.
Here’s the main references on service-dominant logic:
Vargo, S., Lush, R. (2004) “The Four Service Marketing Myths”, Journal of Service Research; Vol 6; Issue 4; pp 324-335, DOI: 10.1177/1094670503262946
Vargo, S. L., Lush, R. (2004) “Evolving to a New Dominant Logic”, Journal of Marketing; Vol 68; Issue 1; pp 1-17, DOI: 10.1509/jmkg.68.1.1.24036
i) goods-dominant logic perspective – an economy where provision of services, as opposed to goods, is the primary economic activity
ii) service-dominant logic perspective – an economy where exchanging the application of skills and knowledge for benefit is the basis of economic activities
The goods-dominant perspective is quite pervasive in our world. Often being taught in (business) schools. It is based on exchange of output for money, so called value-in-exchange. And sees services as inferior to goods. It arguably starts in 1776 with Adam Smith (Wealth of Nations) viewing manufactured items – things that could be stored and exchanged for money – as wealth-generating. Services were not.
However, we need phrases such as “shifting to a service economy” to reflect the fact that goods are a diminishing part and service increasing part of our economic outputs today.
But, jump forwards to 2017, we find a different story and need phrases such as “shifting to a service economy”. Food delivery service Just Eat’s revenue was £546Mn. Uber’s $11.3Bn. Apple’s 2018 service revenue was $37.2Bn (14% of overall revenue). Securitas’ revenue was 92Bn SEK. And Handelsbanken2017 revenue was 41Bn SEK.
The OECD, in 2000, was saying:
“manufacturing [is] slipping to less than 20% of GDP and the role of services rising to more than 70% in some OECD countries”OECD, 2000
And Chesbrough’s Open Service Innovation projected the US economy would be 80% service-based by 2050 (with the handy figure in Figure 1). The UK reported its 2017 economy was 79% service-based. And it is not just a “developed” world phenomenon. Nigerian reported its 2010 economy was 50% service-based. By 2017 it had grown to be 55.8%.
Whereas the service-dominant logic view is based on how outputs are produced – through the application of skills and competence. Goods are seen as distribution mechanisms for service (service singular to distinguish from goods economy thinking of outputs). And therefore there is no shift to a service economy, rather the classic era shifts in economics are in reality shifts in skills and competence seen as beneficial.
But there are some specifics of service exchange we need to consider beyond the simple Actor A and Actor B exchange services (where they act as both progress seeker and progress helper to each other). In the real world we need to:
mediate differences in time of exchange of service.
Actor A might want Actor B’s service in January but Actor B doesn’t need Actor A’s service in exchange until November.
mediate differences in effort between exchange of service.
Service-exchange would be expected to be with service of equivalent effort. However, Actor A may feel their effort of providing service is greater than Actor B.
Note we are not talking about value here, since that can only be determined by the progress seeker (Actor B in this example). But the concept of price emerges.
To survive, a progress helper (a single entity or ecosystem) needs to obtain, as a minimum, an equal number of service credits for engaging in helping a progress seeker progress as it expends on doing that.
In general, systems can be either technology or processes. However, in the progress economy, we limit our perspective to only technology. Why? Any progress helper’s processes with which a progress seeker interacts are viewed as the series of progress making activities. These, of course, could be implemented in technology.
Unlike other elements of a potential progress mix, technology can be either an operant or an operand resources. It depends on how it participates in progress attempts.
Take a word processor. It needs to be acted upon in order for progress to be made. In this case the system is an operand resource – one that needs to be acted upon for progress to be made.
Emerges from unique and phenomenological judgements of progress and heights of progress hurdles. It is disassociated from price.
Judgements are made before, during, and after progress attempts by both progress seekers and progress helpers.
Before engaging
Progress helpers judge how much progress sought they feel they can offer and how low they have lowered the hurdles (price is one of these hurdles)
Progress seekers judge if there is enough progress potential and if the progress hurdles are low enough to start engaging
During engaging- at various points, likely aligned with the end of individual activities in the series of progress making activities:
Seeker judges if enough progress has been achieved, if there is enough progress potential remaining and if the hurdles are low enough to continue
Helper judges if they can still help seeker progress in the progress remaining; or if they need/can adjust progress offered based on what they have learnt from progress achieved.
After engaging
Seeker judges if enough progress has been achieved
Helper ideally judges if progress offered was enough and was achieved
The predominant actor making judgements is the progress seeker.
In all judgements the actors judges if value co-destruction is occurring and if they want to recover from that or abandon progress attempt.
Value emerges from making progress. When engaging with a progress proposition then we see value as being co-created since making progress is a joint endeavour between a progress seeker and a progress helper.
The progress zip tool is a useful way to visualise value co-creation.
A view of value creation that sees value as a property of goods/service. Manufacturers embed value through taking an input and creating an output. Value is realised at the point of sale by exchanging for cash. From which point the customer proceeds to use-up or destroy that embedded value.
This view is the basis of goods-dominant logic – the traditional view of the economy. It is based on the view the manufacturers successively embed additional value in a goods at each step of the supply chain. Eventually that embedded value is exchanged for money with a customer. That customer then proceeded to destroy/ear-up the embedded value.
It is, unfortunately, a restrictive view of value creation. Missing out on opportunities post the moment of exchange and based on the manufacturer believing they know best in value.
Similar thinking is often applied for services with just some name changes: service provider creates services that are valuable, and exchange happens when a consumer uses the service.
A view of value creation that sees value as being increasingly created as progress is made. Though this value may be recognised on a different schedule.
When a seeker engages a progress proposition we use the more complicated view of value-in-use which also takes into account a progress helper’s perspective.
A view of value creation that extends value-in-use to reflect the context of the use (e.g. time, place, social setting etc)
Value-in-use conceptualises that value is co-created whilst seeker and helper jointly make a progress attempt. In service-dominant logic Vargo & Lush pushed that their original definition of value-in-use needed to take account of context. For example the time or place of use, or the social setting etc.
In the progress economy, this context is captured as part of the progress state. And so we generally use value-in-use.
A view of value creation that sees value being increasingly co-created during a progress attempt as a progress seeker engages a progress proposition. Though this value may be recognised on a different schedule.
Value-in-use is a special case of value-through-progress. One where a seeker engages a progress helper’s progress proposition.
Like value-through-progress, there is no value created before the progress attempt starts. And value is increasingly created as progress is made.
Which means that a progress proposition can only offer value – seen as progress potential. And progress accumulated as progress achieved. Thi is phenomenologically and uniquely determined by both by the progress seeker and progress helper. Though the determination may be different.
At the start th progress helper value cannot be created and embedded by a manufacturer. Rather it is co-created when a proposition is used.
However, this does not preclude a progress helper having a view on how much value they feel they can help create (ie how much progress they can help a progress seeker make).
