The LAB: Innovating a Service Delivery Model with S.I.T. (July 2010)

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July 26, 2010
Green Field Innovation
August 9, 2010

The LAB: Innovating a Service Delivery Model with S.I.T. (July 2010)

A common question about structured innovation is can it be used on services. The answer is yes. A service is the same as a product in many ways, and the approach to using an innovation method like S.I.T. is the same. Let's consider a service example for this month's LAB. Imagine your company was a leading uniform and apparel rental service. You own a fleet of trucks and drivers as well as uniform design and fitting services. Your company delivers custom fitted uniforms to the client's location, picks up worn uniforms for cleaning, inspection, and repair, and returns them on schedule. In this highly competitive industry, the key to survival is to exceed customer expectations. The key to growth, on the other hand, is innovation. Let's use the Subtraction tool on this service to create new opportunities.

Lab_2

A common question about structured innovation is can it be used on services.  The answer is yes.  A service is the same as a product in many ways, and the approach to using an innovation method like S.I.T. is the same.  Let’s consider a service example for this month’s LAB.  Imagine your company was a leading uniform and apparel rental service.  You own a fleet of trucks and drivers as well as uniform design and fitting services.  Your company delivers custom fitted uniforms to the client’s location, picks up worn uniforms for cleaning, inspection, and repair, and returns them on schedule.  In this highly competitive industry, the key to survival is to exceed customer expectations.  The key to growth, on the other hand, is innovation.  Let’s use the Subtraction tool on this service to create new opportunities.
We start by listing the internal components of the service line:
  1. uniforms (inventory)
  2. fitting service
  3. design service
  4. fabric
  5. trucks
  6. drivers
  7. billing
  8. pick-up
  9. delivery
  10. cleaning
  11. inspection
  12. repair
  13. tracking
  14. contract
  15. sales representative

We remove a component but keep all the others intact.  Working backwards from this hypothetical solution, we consider what benefits it delivers or potential problems it solves.  We try to consider possible benefits of the “virtual service” as is, without replacing the component with something else.  Here are some examples:

1.  BILLING:  The uniform service is provided as is, but there is no billing for the service.  (The money is still owed, but the tedious process of preparing, sending, receiving, checking, accounting for, and paying invoices is gone).  Potential benefits include saving time, lowering cost, and reducing errors.  Perhaps this service is offered to clients for a small premium given the time and cost saving they would experience.  Or perhaps it is offered to certain top clients as a reward for loyalty.  Payment transfers could happen at point of service via the tracking system (a replacement).

2.  SALES REPRESENTATIVES:  This one always gets people’s attention.  How could you possibly provide a service to corporate clients without having a capable sales rep to maintain the business?  As with the billing ideas, this could save clients time they spend dealing with sales reps.  It would also free up sales reps to find new customers rather than maintaining current customers.  Perhaps this benefit is offered only to the most loyal clients who are least likely to need sales rep attention.  Perhaps they share in the savings through discounts on their services.  Create a new “platinum level” of clients who are so “special,” they have “earned the right” to eliminate their sales rep.

3. REPAIR:  Remove the uniform repair service.  Perhaps the service still involves inspecting uniforms but  just advising clients instead of making repairs. Or better still, perhaps there is no need for uniform repair because the garment is thrown away or recycled if it is damaged.  Is there a fabric technology that can be fashioned into a uniform, worn once, then recycled over and over?  Would the total unit cost be less than the traditional fabric uniform that is worn many times?  This would allow the uniform company to make short term rentals to clients doing one-time events.  The company could serve the low end of the market that cannot justify the cost of traditional garments.  This might yield a new business model that disrupts the competition.

4.  TRUCKS:  The temptation with this one is to replace it immediately with some other vehicle before fully creating ideas “as is.”  This is the hardest part of using the Subtraction tool.  The benefits of removing the truck seem obvious – lower cost, environmentally friendly, safer, etc.  But the trick is to push beyond the obvious.  How would it work?  Perhaps the truck is not removed entirely, but just part of the time.  Here is how a leading company did it: