An Evangelist of Innovation

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Podcast Transcription Implementing Lean Marketing Systems

An Evangelist of Innovation Guest was Sylvain Cottong

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Podcast Transcription Implementing Lean Marketing Systems Economist by education, Sylvain Cottong has spent his career at the intersections of business, society, technology, science & culture, with the value of design for process, service & product development and more generally with leadership & innovation. Sylvain speaks at conferences around Europe on Internet, Innovation, Social business, Communication and Design related matters. He lives & works in Luxembourg and Berlin.

His areas of interest and expertise are:        

Leadership and innovation management Service innovation Business model innovation Social business & enterprise 2.0 Intellectual capital management & learning organizations Complexity management, trendwatching, backcasting & forecasting Customer experience management, service dominant logic & social CRM Design management, service design & user experience design

Where you can find him:       

strategybuilders.eu: A Luxembourg based network of international consultants. projetspublics.lu: A Luxembourg based public sector innovation consultancy. nectar: A Berlin based user experience design & service innovation agency. integratetplace: A design consultancy specializing in 3 dimensional design & urban communication Member of the Internet of Things Council (http://www.theinternetofthings.eu/), Care To Design healthcare service design collective (http://caretodesign.com/) New Club of Paris (http://www.new-club-of-paris.org/).

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Podcast Transcription Implementing Lean Marketing Systems Transcription of Podcast Joe Dager: Welcome everyone. This is Joe Dager, the host of the Business901 podcast.

With me today is Sylvain Cottong.

He is located in Germany where he is a practitioner of both Service Design and the Business Model Generation platforms. Throughout his career Sylvain, who is an economist by education, has worked at the crossroads of economics, society, culture and technology.

As an early Internet evangelist he has been advising governments and companies of strategies for the networked society.

After having spent time in the user experience design community he then started being involved and interested in strategic planning, innovation management, service design, design thinking, social and public sector innovation and technologies, intellectual capital and the future of work.

Sylvain, I'd like to welcome you after that introduction. Could you fill in any gaps that I left out about yourself and tell me about your organization?

Sylvain Cottong: Hi Joe, and thank you very much for having me for the podcast. I'm quite honored. Hello to everyone, who will be listening to the podcast.

First, I'd like to add that I am also based in Luxembourg, so I'm switching between Luxembourg and Berlin. Sometimes in Luxembourg, sometimes in Berlin but these are quite close locations so you could say it is in the Germanophone area of Europe where I'm At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems located, basically. But as Luxembourg is my original country, I'm also involved in the French speaking community because that's a place where German and French come together.

For the rest, I think that your introduction was already quite explaining of where I come from, what I do. My organization is a consultancy. I call it a new management consultancy.

I have been stepping through all those innovative stuff happening over the last 15 to 20 years and getting each time into new subjects that were arising. I'm certainly more interested in, what I would say, and social science part of management more than into the financial, technical or legal part of it.

Joe: I find it pretty interesting that you are an economist who practices innovation. You may have to go back a bit but how did that come about?

Sylvain: Economists try to measure innovation, especially today. I just wrote a report for the Luxembourg Ministry of the Economy on service innovation. They try to understand what innovation is and how to measure it and how to support it better and what is the criteria, the real criteria that they should take to support companies starting that are innovative, etc.

Innovation is a very economic concept today as we know that we can't really go on with that much more cost-cutting and newer customers or markets because a lot of stuff is saturated.

Innovation gets one of the most important, if not the single most important driver for new value creation. Economists definitely get much more interested in how innovation works, At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems what it is and how to measure it. That's not the easiest stuff for them because innovation is not something that you could measure, like water flow or something like that.

Joe: You hit a key point right there. Even though I come from the process methodology world, I simply don't think faster, better, cheaper works anymore because it's not sustainable. It's the innovation side, and that user and customer experience side is where the growth for your company is located today.

Sylvain: Yes. Of course. I totally agree with you, and I'm also totally convinced about that.

You could also look at it from a different point of view, from the microeconomic point of view, which is about value creation and value perception. What do people consider as value? This is something that might evolve over time. This is dependent on what culturally is going on. This is also dependent how people are connected and can talk to each other, how information is circulating, etc.

This of course, we all know, is something that fundamentally changed since the emergence of the Internet, starting from something like '95 maybe where all these things change.

That's also why economists are interested in it because microeconomics is a part of economics, so there's also Service Dominant Logic, you might know about Vargo and Lusch, writing about Service Dominant Logic in a more academic way, how marketing is changing.

By reading their articles you see that in fact they are talking about the microeconomic paradigm of value. What is value, how does a customer see value? Where does he see At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems value? That's pretty much something I am very interested in and of course from the customer's perspective, and this is also very interesting for economists, because it's where it all starts.

Joe: Well, you bring up S-D Logic, which I'm a big proponent of, and it does seem that's been stuck in academia a little bit, and that it's just coming more to the forefront.

Sylvain: I totally agree and as with all these more theoretical ideas, they start rather in science than academia. Because while economics at the base is a science, do you use the wording of the economic science, it sounds pretty much academic and not much like everyday business or marketing.

I totally agree that the Service-Dominant Logic mindset is pretty much entering somehow everywhere so their theoretical framework is something that can help explain different things happening i the markets out there right now, I think.

Joe: You were very early into the Internet world. Then you evolved in the user experience, and now that has taken you into service design. Can you tell me what the difference between user experience design and service design is, or is there one?

Sylvain: Yes, that's a big discussion going on in the community, in the communities of user experience designers and the service designers alike.

It's pretty interesting, because I started in the user experience design community that even didn't exist when the Internet emerged. The first stuff was the usability guys, the UPA At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems guys; the Nielsen Norman groups stuff, etc., which was more about the traditional HCI usability thing.

But then quite soon people realized that there's something more into that than the pure usability stuff. There has been user experience design as a discipline emerging, integrating many more things than just maybe the usability part of it -- meaning design research, better understanding customers' needs and their problems to be solved, empathy, ethnography and all that stuff.

On the other side also how to create compelling experiences -- not only get things working, but also make things fun, and make things engaging, compelling, etc. So especially in a world where there was suddenly much more different types of information emerging. How could you make sure that you gain more attention than your competitors? All these things gain much more importance.

What the user experience does is, looking mainly at the digital interfaces, the digital experiences. That's where it comes from, the websites or on the computers. Then it started also to be the mobiles and mobile phones, and now it's everything. It's talking with other devices like Internet- enabled devices.

In fact, it's about interactive design; it's about identifying all these touchpoints in the digital experience and trying to optimize it in terms of experience, in terms of jobs to get done, in terms of all these things.

Service design pretty much is similar, but it considers all the touchpoints, all sorts of touchpoints beyond the digital ones. And if you think about all the possible touchpoints, At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems you immediately see that there might be a lot of them. So it's the call centers, but maybe it's the company cars, it's how warranties are handled, it's how many, many things are done.

All these things have to work together to create that interactive compelling experience for the customer. So they also share the same methodologies in terms of design research.

They maybe have different prototyping methodologies because they prototype different things. Some of them are also quite similar.

For example, the customer journey maps, also the blueprints. You could use it for digital experience only, but you can also use it for experiences beyond the digital experiences. So in service design, the digital experience is just one part of it.

It is interesting to see that, at the beginning, the two communities were quite different.

The user experience designers and the service designers, because the service designers tended more to come from the pure design community, whereas the user experience designers were people quite early involved in digital stuff. So maybe more like graphic designers or some programmers and stuff like that.

Then on top of that there is also the customer experience community emerging, which are more people coming from the marketing side. But, in fact, they just all got in a way; I would say, taken by the same things happening in the markets but from different points of views and different angles.

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Podcast Transcription Implementing Lean Marketing Systems Joe: I'm going to have to throw something in there. It sounds like we just have more sellers than buyers, so we have all these different designers converging on the one customer.

Sylvain: There is something in that, and if you follow some of the blog posts by some known people in the area of UX service design, customer experience they start to write about it. In fact, we're talking all about the same thing, so we should maybe have one single language, which would make it easier for us.

Joe: Let's get to the practical side a bit. How do you introduce or define service design to a customer?

Sylvain: That always depends on the customer and the context because you have to always get people where they are. So you first have to understand where they are, of course.

Maybe what their problem is, and how they think, and which industry they are in or whatever, so that's something you just have to feel when getting introduced to people.

A way I like to take to introduce it is simply telling them that they should imagine themselves, what they would like to have as a service experience, when they go to that place, or to that seller, or that supplier.

Then also asking them, for example, why did you go to this one and not the other one?

What was the reason, etc.? Then they start to come up with reasons, and I can point to At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems them and tell them. Well, that's exactly what service design tries to do to get hold of these things, to structure these things, and to put it all together.

And then, of course, the conversation moves on to more details, but that's quite a good way to take them because who doesn't want to have good experience when he goes to a seller?

Joe: Now do you actually conduct training sessions in service design or do you just jump into using service design to solve customer problems?

Sylvain: No. Well, this is quite mixed because there's often kind of workshops involved in customer projects at the beginning. I'm also thinking of conferences where I'm invited. A mixture, but at the end my aim is to do projects to design compelling services.

Joe: One of the concepts that I think is difficult is when you have a product- dominated company and when you first introduce service design or thinking in a service dominant way, is that difficult for them to grasp? Do they have trouble with looking at it other than within their own four walls?

Sylvain: Again, it depends on whom you have in front of you. So there are some of them that understand more easily and others that might not be as easily, but what I try to do again is the same thing. I ask them, "So, your product, what does your product do? Why do you think that a customer buys your product?" The answer, well if it's a toothbrush, it's for brushing their teeth, of course.

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Podcast Transcription Implementing Lean Marketing Systems So they solve a problem with your product. They, in fact, brush their teeth. They want something done; they want something to get the job done so in fact they get a service by using your toothbrush.

That's the frame, I'm getting them into the service dominant logic mind set. And quite rarely people are not agreeing when you take it this way around, you know, because it's quite a natural story at the end. But that's only one point.

The other point is there is a lot of talk today in "servitizing" your product that means finding some additional types of service around the product. So there is the basic service, in terms of service dominant logic that each product provides because it's only in service avatar, or it masks service provision in that logic.

But if you better understand people's context and the jobs, they try to get done from their point of view you can often find different models with additional types of service around your basic product service. Because in the view and in the eyes of the customer, this is something that goes together and this is the old question of inside-out and outside-in.

Inside-out means that you produce something, and you have the view of how you produce the toothbrush, and that's what you know and that's what you think. The customer, he has maybe a different problem. He has to get up in the morning and get ready to go to work.

That's how he sees the thing, and tooth brushing is just one point of it.

And if you look at these things in that way you find room for service innovation. You find room for "servitizing" your product. You find room for a lot of new ideas.

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Podcast Transcription Implementing Lean Marketing Systems Joe: I notice you've been working with the business model canvas. Is that the area that you've really addressed with it? I mean to go in there and evaluate the jobs to be done and start building from that platform. Is that how you are using the combination of service design and the business model canvas?

Sylvain: Exactly, because all these things go together, you know? For me, the business model canvas is kind of a top- level view on all the activities on the value chains, but in terms of interactions and networks, I would say.

And as we all know today, the interactions of networks are getting more important because the value isn't in the flows and the networks and on the stacks anymore, and because information is available to everybody.

Of course, the business model canvas is a very interesting tool. First, you get a different picture of your existing business model; often many people don't look at their business model from this relational networking and interaction point of view.

It's also quite easy to understand. My experience with the canvas is that they are always quite happy to do that exercise, to get this different view from what they are doing. Within the business model canvas, there are the building blocks talking about customer segments, about customer relationships and stuff like that.

That is, where service design gets in because to design these relationships and to understand these segments, well, they have to do some design research, some ethnographic research and also the more traditional quantitative research. Of course, have At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems the tools to design these relationships that in fact are the services that are delivered and the way that they are delivered.

So in terms of strategic business consulting, all these tools work together. The one is maybe a broader view. The other one is detailing some point of it, etc. So what I try to do is get my own mix of tools and models.

I'm also using different ones. I'm also using stakeholder mapping; some value network analysis; some SWOT analysis -- the good old SWOT analysis, a very good thing to start. I would even say you should start with it. And then also the Blue Ocean strategy model is very interesting if you want to see how within a business model you could do the difference, etc.

It's understanding how all these things and tools work together, and that's what I like to do. And that's one of the reasons why I'm involved with different types of community, the service design community, the user design community, but also more economists' communities, marketing communities, etc., to try to understand what is the common ground that is emerging there because that is where the new value, and the new knowledge is.

Joe: I think you brought a particular point up earlier in that statement that I think few people look at it from this viewpoint. That is that all of these different components of the business model canvas, when you go through them, the real value is the strength of the connections between these components.

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Podcast Transcription Implementing Lean Marketing Systems I always use it in a marketing sense that you have all these different events or all these different programs or sales calls or whatever out there. It's not any particular event or node that creates that much value. It's the strength of the connection between all of them is where the value is.

Sylvain: It's the connections that are important. This again also links to what the people from the social business movement are saying that the value isn't the networks and not in the stacks any more. The more you are in different networks the more you can create value. You have to also be more open and more transparent to do that.

There are implications of how you organize internally, which means that you have to have flattened hierarchies within your company. You have to connect also your employees so that you can better connect to all the different partners, suppliers, etc. So some people are saying business -to -consumer and the business-to-business will disappear. We will only have people to people left now because everything is going to be somehow connected.

In the end it is about the people that connect and about the value they can create for each other. That's exactly the reason why the business model canvas is so interesting because it takes this new reality and puts it somehow in the front of how value is created.

Joe: I think the canvas allows you to iterate, to make changes easily as that networking takes place and as that network grows.

Sylvain: Of course, it's a kind of an agile tool. Well anyway, everything is agile today.

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Podcast Transcription Implementing Lean Marketing Systems So we won't talk about agile any more soon, I think, because everything is agile. It's just a new model. And of course, the business model canvas is also very well-suited to do iterations, to test some stuff, to simulate some stuff, etc. As it is that many networks and flow-based and connection-based, it really is very easy to use for these kinds of simulations.

Joe: How do you get an organization to start thinking this way because most of us are still trapped in that goods dominant-type logic? Is it something an organization can learn?

Sylvain: Well, you have to talk to them. You have to explain to them. What I basically try to do is when you get in front of decision-makers and executives, they, well, normally they tend to be people that have some analytical mind, and anyway, they are forced to think about the future of the organization.

What I basically do is just get into the same type of conversation that we just now had and try with some simple examples to illustrate to them what the mindset is, what it could be and how things are changing, etc. Works quite well, which doesn't mean that they immediately jump on the project the day after, but it starts working in their heads and it's like all this change, high-level change projects that you might do, people need to have some time, they then start to dig a little bit themselves into the subjects to understand a little bit better, etc.

Then something like six months later or sometimes 12 months later, they are there. "let's do a project. That sounds interesting, you're completely right about it."

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Podcast Transcription Implementing Lean Marketing Systems Joe: I come from the process methodologies, and I come from an engineering background and engineering world. I've really noticed a big difference the last couple of years, getting involved around designers and services I'm thinking, because when I talk the engineers and when I talked to the analytical people, there's the five whys.

We're coming up with root cause, here's the answer. When I talk to designers, I often get the feeling the solutions are only temporary. Is that the real difference in the mindset?

Sylvain: There is a difference in the mindset analytical minds, they work much more linear, and often in terms of predictability. On the other side, designers have this mindset they're always in the future, so they're always in "what might be," "what could be very different from now."

Which is of course, let's say, a financial planner, is most interested in at the beginning because he wants to have security, he wants to plan, etc.

But all the analytical guys, they also start to notice that times are changing, and they are very, very rapidly changing in terms of unpredictability and insecurity and stuff like that, so they see with their traditional tools that it isn't sufficient anymore to plan the future.

That also makes them a bit more open and interested in what a different type of mindset could be. Then again, design thinking, in a way, tries to bring all this stuff together.

It's not about getting rid of the analytical and the more formal thinking, but it's about putting these two together because we face new challenges to go one step further in our models to manage and to deal with the challenges.

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Podcast Transcription Implementing Lean Marketing Systems Joe: It seems to me there are so many tools in design thinking and service design. We talk about storytelling, journey maps, theaters, safaris. Is there a simplified approach?

Sylvain: It's more about a mindset, I would say. Then different tools you can use. The mindset is getting this different type of use together instead of having the one view that maybe was the ruling view for the industrial age, for the last 300 years, in terms of unlimited resources and everything is predictable.

Now, of course, these are new and emerging disciplines, so the tools are developed, somehow, as from scratch by the community by itself. It's also interesting to notice that a lot of this stuff, doesn't necessarily first emerge in universities, but within the practicing community, and they do that theoretical stuff in parallel to develop through them the molds.

And then it enters the universities to start teaching the models, which are very interesting evolution and another consequence of this changing landscape of knowledge communities that are connected and not necessarily need to be academic knowledge communities anymore, etc.

At the end, it is a challenge to understand all the truths that are out there to analyze them, and then you have to make your own choice what makes sense for you and how to attempt to put together a particular project without just taking textbooks that are out there and using every single tool and method for every single project.

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Podcast Transcription Implementing Lean Marketing Systems That just certainly doesn't work. Everyone must have his own little R&D on top of it and put together all the different methodologies in a way he thinks fits well for dealing with that type of project. That's basically what I'm doing with all the stuff I'm doing now.

Joe: What do you enjoy the most about your consultancy?

Sylvain: Well, to be self-employed, first. Second, to have a freedom of choosing the projects I want to do, targeting the type of customers I want to work with and, also, being able to decide what I will develop next as a new type of service or a new type of knowledge integrating into my package, or whatever.

So that's pretty much what I like. Being into all the innovative stuff, I like the future. I like everything that is tomorrow, that will be tomorrow, that is just emerging. I like new things that solve problems in different ways, etc. So, of course; you have to have a curious mind.

Joe: You have to answer a question for me when I was looking at your site. What is the New Club of Paris?

Sylvain: Well, the New Club of Paris is a gathering of people from around the world that basically has been working for the last 10 or 20 years on the subject of the intangibles, or intellectual capital.

What they try to do is show the importance of intellectual capital and intangibles in value creation and also in the competitiveness of companies and in the competitiveness of nations, meaning that our traditional accounting systems tend to look at mostly the At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems tangible values because that's the ones that are most easily put into a price, into a money amount of something.

Now, the way you do knowledge management, the way you train your people, the way you do networking and connect to different type of communities, all of these things are very difficult to evaluate in terms of money. But we all know, and there is also what service economy modeling says, that skills and competencies are, in fact, what is exchanged at the end on the market because it is those which provide the service and the experience on top of the product.

The New Club of Paris is looking at these concepts at a very abstract level. They are mainly economists and academics, professors, etc., but also some other professionals, high-level consultants from European Investment Bank, World Bank, etc. And to explain to decision makers that there is something changing and we have to find new ways of measuring this.

This is a big challenge, of course, because a lot of things would have to change in microeconomics and macroeconomics in terms of how accounting is done. This also joins stuff done by, for example, Nobel Prize winner Stiglitz working on new measurements of GDP, beyond GDP, etc. All these things are linked.

What is very in testing is that what is happening in terms of concrete projects, when we're talking about service design, about empathy, about ethnography and about all these things of networks and the value of networks, but it's basically what they are talking about in terms of the intangibles and intellectual capital. So again bringing this high-level At the Crossroads of Economics, Society, Culture & Technology is‌ Copyright Business901

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Podcast Transcription Implementing Lean Marketing Systems microeconomic/macroeconomic analysis together with what is really happening in everyday markets and companies. That's the New Club of Paris.

Joe: What I'm thinking is that what gets measured is what gets done, that old saying.

And if we're not measuring knowledge, if we're not measuring some of the intangibles, it's difficult for our organizations to focus on.

Sylvain: Of course, so that's one of the problems. We all know that they are very important in terms of competitive advantage and value creation, but we don't have, really, models to measure them. So we're facing quite a challenge. This is something that isn't really solved yet.

If you look at banks, for example, they start to do these kinds of analyses. It's interesting to look at how they do because they are confronted with it because when they have to decide to give some money to an entrepreneur, they have to understand how high the risk is. They have to understand all the elements that could contribute to the risk, of course.

That's again very basic economic behavior. They feel that all these intangibles, of course, are getting more important in evaluating their risk of giving money to somebody or not. So they try literally to develop their internal models of evaluation where they take in to account these intangibles.

But it's not something that is commonsense, I would say. So everybody is trying to do it his own way and what the New Club of Paris tries to do is can we come up with something that could be used by everybody, which could be a new model for everybody.

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Podcast Transcription Implementing Lean Marketing Systems Joe: What's next on the horizon for you?

Sylvain: 2012 turns out to be a very busy year, so I have to find the time to think about it. What is happening is that, for example, I just got involved on a project in an architectural process. We decided to make a workshop about architectural service design and service dominant logic together. That's one thing.

I recently got involved in the Internet of Things Council, which is a very interesting area as well because I turn out to be a gadgetist, as you might have understood also, getting early interested in Internet stuff, etc. There is so much potential service innovation in the Internet of Things area. But there are also quite some ethical challenges. There will be implications on financial markets and stuff like that. So that's also something I'm quite interested in.

Joe: How can someone contact you?

Sylvain: My website, www.strategybuilders.eu. You can also find me on Twitter @sly. Or you can just Google my name, Sylvain Cottong. You'll find me on the different networks. It shouldn't be that difficult if you really want to contact me.

Joe: Sylvain, it was my pleasure to have you, and I thought you shed some light on the new and expanding world of service design. Thanks again.

Sylvain: Thank you very much, Joe. Bye-bye.

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Podcast Transcription Implementing Lean Marketing Systems Joseph T. Dager Business901 Phone: 260-918-0438 Skype: Biz901 Fax: 260-818-2022 Email: jtdager@business901.com Website: http://www.business901.com Twitter: @business901

Joe Dager is president of Business901, a firm specializing in bringing the continuous improvement process to the sales and marketing arena. He takes his process thinking of over thirty years in marketing within a wide variety of industries and applies it through Lean Marketing and Lean Service Design.

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