Product or Service?

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!