Product or Service?

Posted by on Mar 22, 2018 in Agile with a Purpose, Leadership | One Comment

This week, I had an interesting conversation about strategy and organisational design. The key question was:

“Are we a product or a service company?”

Which led me to think about the difference between a product and a service.

In my experience, both perspectives have been helpful, so I thought it’s just a “yes, and…” thing. The added perspective to integrate the service aspects of a product – “which job does our product get done for the customer?” – and the product aspects of a service – “what do customers take away so that they will likely come back?” – seems more valuable to me than the either/or question.

I still think that’s true, yes. And …

Relationships matter

The difference is a relationship that matters. We talked while waiting for lunch. I was looking at the fork in front of me and wondered, what would make this fork a service? A relationship with the maker! I did not know who made the fork and did not check, as I didn’t care.

For many products I use, I do care. And the more I care, the more the relationship matters, the more I perceive using the product as using a service.

So, turning this around: do you design and develop a product, or do you design and develop a relationship? And what difference does knowing that make?

And, what difference does reading this make? Let me know in the comments!

1 Comment

  1. Jan Schmiedgen
    March 23, 2018

    Hi Olaf,
    Too complex topic for a short comment. Happy to have a chat about that at our next meetup. There is a whole research stream on Service (Dominant) Logic. A German teaser you can find here: I find applying a service lens to the world incredibly useful – especially when working with engineers and execution-oriented ppl.


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