The concepts of product, service, solution, and experience
From my early days as an insurance management consultant, I thought about ‘product’, ‘service’, ‘solution’ and ‘experience’. Many decades ago, I developed a visual that had the four concepts in a step-ladder format: product at the bottom, followed by service, followed by solution and followed by experience. (Visualization of this idea not shown.)
It seemed to me that whatever a company, insurance company or company from another industry, primarily focused on (product, service, or solution), the company had to always ensure it provided a quality experience to its clients.
Of course, we knew in the late-1980s and know now that if a firm doesn’t think about, manage to, or otherwise provide a quality experience, it always provides some type of experience (usually an experience somewhere between horrendous and fair).
My thinking of the ‘placement’ of the three concepts (excluding experience) has changed over the decades since I was a management consultant and later in the late 1990s became a technology-focused insurance industry analyst.
Now instead of a step-ladder that a firm should move through to ‘get up to experience’, I think there is significantly more of an overlap between the three concepts to create an experience. In fact, I believe there is, or at least should be, more of an interdependence between (among?) the three concepts. The degree of overlap depends on the firm and its primary focus (whether product, service, or solution).
An aside: helping or hindering acquisitions
The degree of overlap will be a driver or an inhibitor to partnerships the firm makes. The overlap will certainly come into full force that will help or inhibit the success of acquisitions the firm makes. A product firm should have more success acquiring another product firm while a product firm will have more challenges acquiring a services firm or a solutions firm.
As one example, if a product firm such as Dell wanted to acquire a services firm, I believe it would have a rougher road to travel than if Dell acquired another product firm (such as EMC). Contrariwise, if a multi-concept focused firm like IBM (which focuses on product, services, and solutions) wanted to acquire a services firm like PwC Consulting, I believe the pairing would be relatively ‘easier.’ (I realize full well these acquisitions did happen.)
I am NOT making light or attempting to be glib about the major issues / challenges of any corporate acquisition. I’m hypothesizing one reason that an acquisition may happen more smoothly or encounter huge boulders in the path to success is the similarity or dissimilarity of the primary foci (product, service, solution) of each company.
Key skills and systems for each concept
Getting back to the three concepts, let’s add a few more factors for each of the three concepts into the pot needed to generate a quality client experience. I realize the following skills and systems are only the tip of a more extensive list of important skills and systems for each type of company focus. But I believe that, at a minimum, each of them must be present in each type of the three firms.
For companies that primarily focus on product (and the following applies whether we are talking about tangible or intangible products), I believe that the:
- key skills are: logistic (and distribution) skills and design skills
- key systems are: inventory management systems; and warehouse and distribution management systems
For companies that primarily focus on service, I believe that the:
- key skills are: interpersonal skills and industry knowledge (for each industry or industry segment the company provides service)
- key systems are: client relationship management systems; and channel management systems
For companies that primarily focus on solution, I believe that the:
- key skills are: having a holistic perspective and industry knowledge (for each industry or industry segment the company provides solutions)
- key systems are: resource management systems (encompassing all resources available to create the solutions the company offers) and an IP pipeline management system (encompassing all completed, in-progress, and on-the-drawing-board products and services the company has, is, and is thinking about offering clients)
There is one type of system that each type of company requires regardless of concept (product, service, solution): communication & collaboration systems that are used within the value web of processes and activities by the firm to create a quality experience for clients.
Questions for you
What skills do you think are (critically) important for each type of firm?
What systems do you think are (critically) important for each type of firm?