This course is
offered during the FALL semester.
This is a Related course of the MOT program.
This is a new course, not only within Haas and the MOT Program, but within academic campuses around the world. This course is an experiment to address a burning issue in business today: most of the economic activity in developed economies is services-based. Yet most of our knowledge about innovation is based upon products, not services. A recent survey by the National Academies of Engineering found that “the academic research enterprise has not focused on or been organized to meet the needs of service businesses”.1
This is not an abstract concern for Berkeley students. More than 70% of the graduating class from Haas took jobs in knowledge-intensive, service businesses. Looking further on in one’s career, more than 63% of the INC. 500 companies in are services companies. Service businesses represent the future for the vast majority of Haas and MOT students. The course should be risky, exciting, and useful. We will read draft chapters from a forthcoming book that the professor is publishing on this topic. So it won’t be perfect! But the instructor has received great evaluations from MOT students in the past. Come check it out!
Our course will examine services innovation in two blocks. The first block will cover key concepts for services innovation, including how services innovation differs from product innovation, the role of openness in services, the role of business models, and co-creation. The second block will introduce several tools and frameworks to apply those concepts to specific services situations. These include process design, process mapping and improvement, business models, co-creation, and platform innovation.
We will cover services in several industries, ranging from health care, to banking, and IT. We will also discuss whether and how product-based businesses can transition to services-based businesses. We will have some outside speakers in class as well, from Creative Commons, SAP, and other companies. Here are some of the themes for the course:
1) Innovation in services is not the same process as innovation in products. Services are intangible. They often are consumed as they are delivered. In fact, the customer often co-creates the service experience with the supplier.
2) The Critical Role Customers Play in Services Innovation. Customers of services are not simply passive consumers. Instead, they are engaged in defining and shaping the experiences they obtain from services. Services innovation processes have to find ways to incorporate active, and interactive, relations with customers.
3) Openness is an essential tool to create economies of scope and economies of scale in services businesses. Services that incorporate external as well as internal sources of information provide a greater range of service offerings, for better “one stop shopping”. Services that exploit internal and external demand for their use attain world class volumes, spreading fixed costs over more transactions, reducing the cost per transaction and often improving the quality of the transaction.
4) Services business models differ from product-based business models. We will be quite precise about defining a business model, and explore a variety of methods for articulating, designing, and managing business models in services. We will find that they differ from product-based business models, and these differences constitute important barriers companies must overcome when shifting towards services. The good news is that technologies are emerging to help model business processes in useful ways. They can enable a richer exploration of alternative business models that might differentiate the business from competitors.
1 The Impact of Academic Research on Industrial Performance, National Academy of Engineering, (National Academy Press: Washington, DC) 2003; p. 8.
Course Syllabus (pdf)
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