Progress Resource Mix

The progress resource mix, together with a proposed series of activities, makes up a progress proposition – an offer to help a progress seeker attempt to progress. The mix is defined as:

progress resources mix: a progress proposition’s varying amounts (including none) of:

  • employees,
  • systems,
  • goods, and
  • physical resources

that are offered for integration during progress attempts

Unlike the typical view of the world, in the progress economy there is no debate between goods and services. In fact, we see all four elements as being at the same level. Goods allow for the distribution of skills and knowledge across time and space. Although offering a goods-heavy mix places more skill/knowledge requirements on seekers

Understanding and crafting the right progress resource mix is the task of the progress helper. The mix needs to consider how it can meet functional, non-functional and contextual progress sought. As well as minimise the progress hurdles. In particular misalignment on progress proposition continuum and service required elsewhere hurdles.

And It is through the progress resource mix that the progress economy encourages us to addresses Levitt’s marketing myopia – a contributor to poor innovation performance.

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!

Levitt, as quoted in Christensen’s 2006 article “What Customers Want from Your Products

There is plenty of opportunity within and across elements for hunting innovation. And we find the fingerprint of altering the levels of elements in a proposition’s mix in many past and current trends. Including product as a service/servitization, digitization, digital twins, moving online etc.

Approach“from” Service Mix“to” Service Mix
Product as a Service / Servitizationpredominantly goodsphysical resources, systems and employees 
digitizationemployees and paper systemsdigital systems
artificial intelligenceknowledge/skills held in and applied by small number of employeesKnowledge/skills captured and applied by accessible, scalable digital systems
digital twinsgoodsgoods, perhaps repositioned as a physical resource. Introduction of systems (the digital twin) and employees to monitor
bricks to clicksphysical resources (locations) and employeesreduction in physical resources, increase in systems
How the service mix changes for some example well known innovation approaches.

Let’s take a look at each of the four elements of the progress resource mix and what innovation means for each of them. Then we’ll look at innovation across te mix. That is to say changing the amounts of the mix elements.

First, though, a quick recap of resource types.

Resource types: operant and operand

Resources come in two types: operant and operand. Where they differ is in how they participate in making progress.

Let’s start with operant resources. These need to act on other resources in order for progress to be made

operant resources: resources that act on other resources in order to make progress

Where they could be or acting on other operant resources. Or acting on operand resources. And operand resources are those that need to be acted upon in order for progress to be made.

operand resource: resources that need to be acted upon in order to make progress

So we are typically thinking of goods when talking about operand resources. A driver (an operant resource), for example, drives a car (an operand resource) in order to move themselves from point A to point B.

Though just remember that service-dominant logic informs us that goods are a distribution mechanisms for service (skills/knowledge). More on that later.

OK, now we’ll jump into the elements of the progress resource mix. Starting with employees! Which just happen to be operant resources.

Employees

Employees, in the mix, are those who work for/represent the progress helper and interact with the progress seeker. They are one of the helper’s operant resources. As such, they possess skills and knowledge that can be applied to other resources in order to make progress.

And service-dominant logic, which underlies the progress economy, informs us that:

Operant resources are the fundamental source of strategic benefit

service-dominant logic premise #

What does this mean for the mix? Simply put, employees are a key component in executing a helper’s strategic benefit. Something we don’t have to look far to find business leaders proclaiming:

Clients do not come first, employees come first. If you take care of employees, they will take care of the clients

Richard Branson

or

We built Starbucks brand first with our people, not with consumers. Because we believed the best way to meet and exceed the expectations of our customers was to hire and train great people, we invested in our employees

Howard Schultz

and

It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do

Steve Jobs

Indeed, employees are adaptable, autonomous, and situationally aware. They can react and respond to seekers progress attempts. We know that progress sought may evolve during a progress attempt. Employees are both a helper’s eyes and ears. As well as actors that can react to those evolutions.

And, importantly, employees play an important role in attempting to reverse or reduce any value co-destruction. Consider how customer service handles complaints. Or a social media team minimizing a public relations issue.

Ballantyne and Varey dig a little deeper and identify that knowing, relating, and communicating are the driving skills that operant resources need to have in order to be this source of fundamental benefit.

Naturally, a progress helper has other operant resources that do not interface with a seeker, i.e. not in the mix. These too are fundamental sources of strategic benefit. And include the skills required to identify the proposed series of progress making activities. As well as employees not interacting with seekers. Hunt (2004) identifies additional operant resources such as informational, organizational, and relational resources.

Potential employee innovation areas

Innovating the employee element of the mix is mainly about making them stronger operant resources.

We can consider aspects of an updated den Hertog model to see where this could apply to a helper’s “service delivery system”.

An updated den Hertog model reflecting the roles of tech, ecosystem and data in the modern world.
An updated den Hertog model reflecting the roles of technology, ecosystems and data in the modern world.

Improving the HR and organisational capabilities comes from den Hertog’s original model. And we can add three new capabilities to look at improving. These are: tech, partnership and data exploitation.

Within HR capabilities it’s worth noting that beneficial employee behaviour can be codified into new routines. Those routines, and therefore behaviours, can then be shared across all employees. This is something that Gallouj & Weinstein identify in ”Innovation in Services”. And so process innovation on the set of routines employees are using is an interesting topic.

Employees can be augmented with other elements from the mix. An employee moving an abnormal heavy object, for example, is almost certainly using some specialised device (a lift, a skeletal augmentation system, etc). Or, applying AI/machine learning to augment employee skills. Which leads us into the next element: systems.

Systems

When we talk about systems in the progress resource mix, we’re once more referring to outward-facing systems rather than internal. That is, systems with which seekers interact in order to attempt making progress. The new client interfaces of the updated den Hertog model above.

And we find that systems can be either an operant or an operand resource.

For instance, a word processor is a system acting as an operand resource. It needs to be acted upon to make progress (“be valuable” if we allow ourselves to be lazy with definitions for a moment). Whereas a telephone menu system – press 1 for account balance, 2 for balance transfers, or 3 to talk to an operator – gives a pretence of applying knowledge to direct calls to appropriate handlers. And AI/machine learning systems are operant resources. Applying skills/knowledge similar to employees (albeit currently in a narrow seam of scope).

Despite the above, systems are not restricted to digital interfaces. The dewey decimal classification used for organising content in libraries, for example, is a system. Where we find many books on innovation classified under the code 658.406. Which represents Technology and Application of Knowledge (6) >> Management and Auxilary Services (65) >> Management (658) >> Executive (658.4) >> Managing Change (658.406).

[to-do: see how Akaka and Vargo’s “Technology as an operant resource in service (Eco)systems” fits in here]

In this element we also include chatbots, digital assistants and the like. Over the years we’ve come a long way from the 1960’s Eliza. For example, on my last few flights I’ve been pleased with the airport’s chatbot ability to keep me informed about my flight, departure and arrival gates, and so on. Getting the info direct to my pocket and reducing the need to keep eyes on various information screens.

And I have friends who use Siri, Alexa, and other similar services on a regular basis. I even tried ChatGTP in December 2022 to see if it (he/she/?) could assist with the difficult question of “what is value?” (it created some nice text, but not the insight needed).

Innovating systems

There’s the famous quote from Marc Andreessen from 2011:

software is eating the world

Marc Andreessen

Which we can now interpret in the context of the progress resource mix. Mixes are becoming more system-heavy. Having fewer employees, physical resources, and goods elements. It is these system-heavy mixes that are eating the world.

In the future resource mix, artificial intelligence / machine learning systems will continue to blur the lines between employees and systems. Spohrer et al. (”Service in the AI era”) discuss how AI systems can be automative (replacing employees) or augmentative (enabling better employee performance). AI also benefits seekers by democratizing previously difficult-to-access knowledge and skills.

Who knows where augmented reality and virtual reality will take us (once the over-promising has subsided)? In Sweden, for example, parcels are delivered to a collection point by the postal service, and the recipient must do the “last mile delivery” themselves. The post service’s mobile app added an augmented reality function a few years ago, allowing me to project my parcel dimensions onto a flat surface. Now I can ”see” whether I have enough arm space to pick up my parcel on my way home from work, or if I should drop my bags off first and then go back out to pick it up.

The metaverse? I’m still to be convinced. It will come down to, as we’ll see in our discussion of innovation, what progress does the metaverse offer us to make better. And how does the metaverse reduce the six progress hurdles.

Goods

Goods are examples of operand resources. Remember that in order to make progress with these types of resources, they must be acted upon. They are usually physical, tangible objects. Although we can have digital goods such as digital films, music, and e-books, etc.

The distinguishing feature of goods in the progress economy is that ownership of them is permanently transferred from the progress helper to the progress seeker.

And it is important to appreciate that goods are simply another component of the progress resource mix. We don’t see any goods vs services debate (as we do in traditional thinking). Imagine, for example, the functional progress you are seeking is to physically travel from point A to B. Then you could:

  • buy and drive a car – a mix heavy on goods
  • rent and drive a car – a mix heavy on physical resource (ownership of the car is not transferred to the seeker), or
  • use a ride share service – a mix comprising employee, physical resource, and systems

These are all equivalent offerings on the progress proposition continuum of enabling to relieving progress propositions.

This thinking is possible because our underlying service-dominant logic informs us that:

Goods are distribution mechanisms for service provision

service-dominant logic foundation premise #3

But what does that mean? To me, that means goods freeze skills and knowledge. Allowing them to be moved through time and space and unfrozen (applied/integrated with) by the seeker as needed. Let’s explore this a little more.

Freezing and unfreezing service

Let’s start with a simple example. When you listen to a band perform at a concert, you are experiencing the direct result of the band (employees of a progress resource mix)) putting their skills and knowledge of how to play instruments to use. And you’re doing it where the band is playing and at the same time.

Whereas when you listen to a recording of the band, you are no longer at the same place or time as the performance. Instead, the performance above has been frozen in a recording studio onto tape/cd/vinyl (goods) or as a digital goods. When you press the play button on your playback device, the performance, that has been transported to your when and where, is unfrozen.

However, I’ll admit, that was a simple example. And there’s a little hint in there that goods may not freeze exsctly the same as the equivalent goods-light mix. They might require the seeker to acquire and co=ordinate several goods-heavy mixes. In the above a seeker also needs a playback device. A goods that captures the skills/knowledge on how to take a recording and turn it into audio.

Consider now what turns out to be a much more complex case. The simple functional progress sought of hanging a picture on a wall.

An obvious goods-light mix for this is hiring a handyman. But it’s hard to freeze a handyman’s skills and knowledge into one goods. Instead, they are spread over several goods-heavy propositions:

  • Finding an appropriate place in the wall to make a hole -the seeker needs:
    • knowledge of what makes an aesthetically pleasing position to hang a picture
    • a goods that helps measure and mark where to make a hole
    • a goods that captures skill of finding hidden water/electric cables in the wall
  • Making a hole in a wall – the seeker needs:
    • knowledge of the wall type
    • a goods that captures the skills to make a hole in a wall of that type (often a drill)
  • Securing the hook in the wall – the seeker needs:
    • a goods that freezes knowledge of securing a hook into a wall (let’s call it a wall plug)
    • knowledge that different wall plugs are needed depending on wall type
    • knowledge of wall type and weight of picture since that also determines which type of wall plug

It’s become surprisingly more complex. Now we can see that goods-heavy mixes are often a trait of enabling propositions on the progress proposition continuum. And why the other end of the continuum has what we call relieving propositions.

Implications of goods in the service mix

When using goods in the progress resource mix, there are a few things to keep in mind. Several of which are reflected in the progress proposition continuum.

The progress proposition continuum of enabling to relieving propositions. Showing the implications on/of the service mix, non-functional progress sought, and which actor drives the activities involved in the process of making progress.
The progress proposition continuum of enabling to relieving propositions. Showing the implications on/of the service mix, non-functional progress sought, and which actor drives the activities involved in the process of making progress.

And they are neither good or bad things. As always it depends on what progress – functional, non-functional and contextual – a seeker is trying to make.

An enabling proposition, with its goods-heavy mix, may entice a seeker looking for a sense of self-actualisation or achievement. And, since the seeker will own the goods, they will not be held up or restricted from making progress whenever they want. Compared that to engaging with an employee-heavy mix, where there are likely to be limited times available and frequently waiting lists.

Similarly, goods-heavy mixes place higher requirements on seeker’s having the necessary knowledge/skills. Both to use the goods and to know what other goods are necessary to successfully make progress. And let’s not forget, the seeker needs to know what activities to perform and when. There’s a risk to quickly raise the lack of resource progress hurdle.

As we saw, goods-heavy mixes place a greater requirement on the seeker’s knowledge/skills. Both on how to use the goods and to understand what other goods are required to make progress. Not to mention that the seeker must understand what activities to perform and when.

There is a risk of quickly raising the resource progress barrier.

However, this barrier can be lowered by providing instructions (the proposed activities of the progress proposition). Or instructional videos of the goods in use can be made available by the helper (and other forms of education/training depending on complexity/seeker desires).

Again, some seekers may enjoy the challenge of determining how to use the items. This is, afterall, how propositions arise. These seekers might use sites like youtube to show the goods in use.

More risk adverse seekers may prefer propositions at the relieving end of the continuum. There the lack of resource hurdle instinctively, but not necessarily, should be the lowest. The risk of them feeling they will do something wrong is also minimised.

It’s for the above reasons that misalignment between a proposition and a seeker’s desires on the continuum is a progress hurdle.

Another factor to consider is seekers’ access to latest technology. Offering goods means the seeker is the owner. And, because there is always a service exchange, owning a good entails providing a service to someone. Typically a larger service commitment than, say, using the same good without owning it (a physical resource). Upgrading a product to the most recent technology entails providing even more service. Something the seeker may decide is excessive. This provision of service elsewhere is, indeed, one of our hurdles to progress.

Finally, offering goods in the progress resource mix can also obscure progress made (or not) from the progress helper. Because the helper is involved in fewer, if any, of the activities involved in making progress. As a result, the progress helper misses out on useful in-use feedback. And misses opportunities to recover from, or reduce, value co-destruction. The helper needs to find other routes to do that. And seekers are not shy at finding ways to complain about their misuse of resources as a problem of the helper…such as on-line review sites or social media.

Goods innovation

There’s always room to innovate existing goods or to find new goods. Though care needs to be taken to not fall into the “add yet another razor blade” syndrome.

Hopefully you can see from our discussion here that goods innovation should be a relatively small part of your focus.

Now we’ll shift to the last element of the service mix – physical resources. And we’ll see that goods may also be a part of that, with a key change..

Physical resources

Physical resources are typically tangible items that are used in activities involved in making progress. They differ from goods in the progress mix in that ownerships stays with the progress helper.

We find there are two categories of physical resources.

Firstly there are items that are goods but which the helper retains ownership of. Consider the rental car in a car rental service. It is a goods in all physical aspects. However, because the progress helper retains ownership, it is classified as a physical resource in the rental company’s progress resource mix.

This ownership point has recently raised interesting questions about digital assets – streamed songs, videos, books etc. Are they goods or physical resources. Many might say goods. But remember when Amazon deleted e-books users thought they owned? And it turned out they weren’t owned by the users in that case. Or, similarly, Spotify uses digital songs as physical resources since you as a progress seeker do not own the songs streamed.

Secondly there are those physical resources where progress is made. Such as buildings. The hospital where operations take place, for example. And we can think of elements in this category in terms of Bitner’s servicescapes.

Bitner’s Servicescape. Innovation can be applied to any of the factors in here to innovate the physical resource in which a service is physically provided
Bitner’s Servicescape. Innovation can be applied to any of the factors in here to innovate the physical resource in which a service is physically provided
Innovating physical resources

Servicescapes can always be innovated. And often this will be tied to non-functional progress – feelings – though not exclusively. And Bitner’s model highlights plenty of space where we can hunt for ideas.

Another large topic of innovation is where we convert goods to physical resources. Shortly we’ll talk about this under the guise of servitization / product as a service and harnessing the circular economy. Such a move potentially lowers the service elsewhere progress hurdle.

Examples of the progress resource mix

Let’s pick the functional progress of getting some food in the evening to explore some progress resource mixes. We have a lot of options to address that. We’ll choose these three to explore:

  • cooking at home,
  • dining at a buffet restaurant, and
  • dining at a gourmet restaurant.

And progress resource mixes for each could be as shown in the followng diagram

Three example mixes for the functional progress of “getting food in the evening”. 
You can cook yourself, visit a buffet restaurant or a gourmet restaurant. Each requires a different service mix.
Three example progress resource mixes for the functional progress of “getting food in the evening”. 
You can cook yourself, visit a buffet restaurant or a gourmet restaurant. Each offers a different progress resource mix.

We need ingredients when we cook ourselves (which are goods). In addition to having the necessary pots and pans and an oven, microwave, air fryer etc (also goods). As a result, we’re looking for a number of goods-heavy progress proposals. Though we’re looking for negligible helper employees, systems, or physical resources. OK, you could argue that getting those goods needs some propositions with different mixes – shops. And maybe I need some instructions (recipies) on how to cook. But let’s not over complicate things.

If I go to, say, a Chinese buffet restaurant, I’m now at the relieved end of the progress continuum. I’ll keep doing some of the activities, primarily gathering and assembling my food. The helper, on the other hand, does the cooking, cleaning, and seating. As a result, employees such as chefs, greeters, and cleaners have been added to the progress resource mix. There is also the location (a physical resources) in which I will eat. So now the service-scape starts being of interest. And possibly some systems at work, such as time slot booking and payment.

Visiting a gourmet restaurant is similar to going to a buffet. However, employees are now a larger part of the equation. Not in terms of numbers, but of the skills that are expected to be used. I’m expecting to be wowed by the chefs’ creations, the sommelier’s wine recommendations, the attentiveness and knowledge of the wait staff, and so on. I also have higher expectations for the service-scape and the quality of the goods (ingredients).

As you may have spotted, innovation could be due to altering the offered progress resource mix.

Innovating across the progress resource mix

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!

Levitt, as quoted in Christensen’s 2006 article “What Customers Want from Your Products

The progress resource mix is partly where the progress economy addresses Levitt’s marketing myopia. Which is a contributor to poor innovation performance since we focus on innovating the drill, not the need for the hole.

We’ve seen in the sections above what innovation may mean for each element in the mix. Now we’ll say that altering the levels of elements in the mix is another strategy for innovation.

And we can readily find the fingerprint of this is yesterday’s and today’s key trends.

Approach“from” Service Mix“to” Service Mix
Product as a Service / Servitizationpredominantly goodsphysical resources, systems and employees 
digitizationemployees and paper systemsdigital systems
artificial intelligenceknowledge/skills held in and applied by small number of employeesKnowledge/skills captured and applied by accessible, scalable digital systems
digital twinsgoodsgoods, perhaps repositioned as a physical resource. Introduction of systems (the digital twin) and employees to monitor
bricks to clicksphysical resources (locations) and employeesreduction in physical resources, increase in systems
How the service mix changes for some example well known innovation approaches.

Product as a service / Servitisation
Digitisation
Artificial intelligence / machine learning
Digital Twins
Bricks to Clicks
Wrapping up

There are 2 key takeaways from this.

Firstly, we have defined the service mix as:

the service mix: the resources a progress helper offers to a progress seeker to integrate with during progress attempts.

It comprises varying amounts (including none) of employees, systems, physical resources, goods.

Where a progress helper will determine what their mix will comprise of to reflect what they believe is the best way to help seekers make progress.

We looked at each element in detail. Noted where AI and machine learning fit. And saw that elements are at the same level. There is no goods vs service debate in the progress economy. Indeed, we see goods as distribution mechanisms, in time and space, of skills and knowledge.

However, the use of goods in the mix may push up complexity and put more reliance on the skills and knowledge of the seeker for progress success. They also hide progress made in-use from the helper.

But, goods are beneficial elements for certain non-functional progress sought. For example self-actualisation. As well as addressing two progress hurdles: aligning propositions on the service-service continuum and service elsewhere.

Secondly, we highlighted there are vast zones of innovation to be found in the service mix. Both within each element and interestingly across elements. We can alter the service mix to meet the same progress sought. Which is the fingerprint found in many innovative topics such as servitization, product as a service, digitisation, digital twins etc,

Often our innovation zones today are restricted by our goods focus. Yet we see from the service mix that this is just a small part of a much, much, wider zone that can be systematically explored.

Add to the discussion…

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