An Evangilist of Innovation

Business901 Podcast Transcription
Implementing Lean Marketing Systems
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An Evangelist of Innovation
Guest was Sylvain Cottong

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At the Crossroads of Economics, Society, Culture & Technology is…

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Economist by education, Sylvain Cottong has
spent his career at the intersections of business,
society, technology, science & culture, with the
value of design for process, service & product
development and more generally with leadership &
innovation. Sylvain speaks at conferences around
Europe on Internet, Innovation, Social business,
Communication and Design related matters. He lives & works in
Luxembourg and Berlin.

His areas of interest and expertise are:
 Leadership and innovation management
 Service innovation
 Business model innovation
 Social business & enterprise 2.0
 Intellectual capital management & learning organizations
 Complexity management, trendwatching, backcasting & forecasting
 Customer experience management, service dominant logic & social
CRM
 Design management, service design & user experience design

Where you can find him:
 strategybuilders.eu: A Luxembourg based network of international
consultants.
 projetspublics.lu: A Luxembourg based public sector innovation
consultancy.
 nectar: A Berlin based user experience design & service innovation
agency.
 integratetplace: A design consultancy specializing in 3 dimensional
design & urban communication
 Member of the Internet of Things Council
(http://www.theinternetofthings.eu/),
 Care To Design healthcare service design collective
(http://caretodesign.com/)
 New Club of Paris (http://www.new-club-of-paris.org/).


Transcription of Podcast
Joe Dager: Welcome everyone. This is Joe Dager, the host of
the Business901 podcast. With me today is Sylvain Cottong.
He is located in Germany where he is a practitioner of both
Service Design and the Business Model Generation platforms.
Throughout his career Sylvain, who is an economist by education,
has worked at the crossroads of economics, society, culture and
technology.

As an early Internet evangelist he has been advising
governments and companies of strategies for the networked
society.
After having spent time in the user experience design community
he then started being involved and interested in strategic
planning, innovation management, service design, design
thinking, social and public sector innovation and technologies,
intellectual capital and the future of work.

Sylvain, I'd like to welcome you after that introduction. Could you
fill in any gaps that I left out about yourself and tell me about
your organization?
Sylvain Cottong: Hi Joe, and thank you very much for having
me for the podcast. I'm quite honored. Hello to everyone, who
will be listening to the podcast.

First, I'd like to add that I am also based in Luxembourg, so I'm
switching between Luxembourg and Berlin. Sometimes in
Luxembourg, sometimes in Berlin but these are quite close
locations so you could say it is in the Germanophone area of
Europe where I'm located, basically. But as Luxembourg is my
original country, I'm also involved in the French speaking
community because that's a place where German and French
come together.

For the rest, I think that your introduction was already quite
explaining of where I come from, what I do. My organization is a
consultancy. I call it a new management consultancy. I have been
stepping through all those innovative stuff happening over the
last 15 to 20 years and getting each time into new subjects that
were arising. I'm certainly more interested in, what I would say,
and social science part of management more than into the
financial, technical or legal part of it.

Joe: I find it pretty interesting that you are an economist who
practices innovation. You may have to go back a bit but how did
that come about?
Sylvain: Economists try to measure innovation, especially
today. I just wrote a report for the Luxembourg Ministry of the
Economy on service innovation. They try to understand what
innovation is and how to measure it and how to support it better
and what is the criteria, the real criteria that they should take to
support companies starting that are innovative, etc.
Innovation is a very economic concept today as we know that we
can't really go on with that much more cost-cutting and newer
customers or markets because a lot of stuff is saturated.
Innovation gets one of the most important, if not the single most
important driver for new value creation. Economists definitely get
much more interested in how innovation works, what it is and
how to measure it. That's not the easiest stuff for them because
innovation is not something that you could measure, like water
flow or something like that.
Joe: You hit a key point right there. Even though I come from
the process methodology world, I simply don't think faster,
better, cheaper works anymore because it's not sustainable. It's
the innovation side, and that user and customer experience side
is where the growth for your company is located today.


Sylvain: Yes. Of course. I totally agree with you, and I'm also
totally convinced about that.

You could also look at it from a different point of view, from the
microeconomic point of view, which is about value creation and
value perception. What do people consider as value? This is
something that might evolve over time. This is dependent on
what culturally is going on. This is also dependent how people are
connected and can talk to each other, how information is
circulating, etc.
This of course, we all know, is something that fundamentally
changed since the emergence of the Internet, starting from
something like '95 maybe where all these things change. That's
also why economists are interested in it because microeconomics
is a part of economics, so there's also Service Dominant Logic,
you might know about Vargo and Lusch, writing about Service
Dominant Logic in a more academic way, how marketing is
changing.
By reading their articles you see that in fact they are talking
about the microeconomic paradigm of value. What is value, how
does a customer see value? Where does he see value? That's
pretty much something I am very interested in and of course
from the customer's perspective, and this is also very interesting
for economists, because it's where it all starts.
Joe: Well, you bring up S-D Logic, which I'm a big proponent of,
and it does seem that's been stuck in academia a little bit, and
that it's just coming more to the forefront.
Sylvain: I totally agree and as with all these more theoretical
ideas, they start rather in science than academia. Because while
economics at the base is a science, do you use the wording of the
economic science, it sounds pretty much academic and not much
like everyday business or marketing.


I totally agree that the Service-Dominant Logic mindset is pretty
much entering somehow everywhere so their theoretical
framework is something that can help explain different things
happening i the markets out there right now, I think.
Joe: You were very early into the Internet world. Then you
evolved in the user experience, and now that has taken you into
service design. Can you tell me what the difference between user
experience design and service design is, or is there one?
Sylvain: Yes, that's a big discussion going on in the community,
in the communities of user experience designers and the service
designers alike.
It's pretty interesting, because I started in the user experience
design community that even didn't exist when the Internet
emerged. The first stuff was the usability guys, the UPA guys; the
Nielsen Norman groups stuff, etc., which was more about the
traditional HCI usability thing.

But then quite soon people realized that there's something more
into that than the pure usability stuff. There has been user
experience design as a discipline emerging, integrating many
more things than just maybe the usability part of it -- meaning
design research, better understanding customers' needs and their
problems to be solved, empathy, ethnography and all that stuff.
On the other side also how to create compelling
experiences -- not only get things working, but also make things
fun, and make things engaging, compelling, etc. So especially in
a world where there was suddenly much more different types of
information emerging. How could you make sure that you gain
more attention than your competitors? All these things gain much
more importance.
What the user experience does is, looking mainly at the digital
interfaces, the digital experiences. That's where it comes from,

the websites or on the computers. Then it started also to be the
mobiles and mobile phones, and now it's everything. It's talking
with other devices like Internet- enabled devices.
In fact, it's about interactive design; it's about identifying all
these touchpoints in the digital experience and trying to optimize
it in terms of experience, in terms of jobs to get done, in terms of
all these things.
Service design pretty much is similar, but it considers all the
touchpoints, all sorts of touchpoints beyond the digital ones. And
if you think about all the possible touchpoints, you immediately
see that there might be a lot of them. So it's the call centers, but
maybe it's the company cars, it's how warranties are handled, it's
how many, many things are done.
All these things have to work together to create that interactive
compelling experience for the customer. So they also share the
same methodologies in terms of design research. They maybe
have different prototyping methodologies because they prototype
different things. Some of them are also quite similar.
For example, the customer journey maps, also the blueprints.
You could use it for digital experience only, but you can also use
it for experiences beyond the digital experiences. So in service
design, the digital experience is just one part of it.
It is interesting to see that, at the beginning, the two
communities were quite different. The user experience designers
and the service designers, because the service designers tended
more to come from the pure design community, whereas the user
experience designers were people quite early involved in digital
stuff. So maybe more like graphic designers or some
programmers and stuff like that.
Then on top of that there is also the customer experience
community emerging, which are more people coming from the

marketing side. But, in fact, they just all got in a way; I would
say, taken by the same things happening in the markets but from
different points of views and different angles.
Joe: I'm going to have to throw something in there. It sounds
like we just have more sellers than buyers, so we have all these
different designers converging on the one customer.

Sylvain: There is something in that, and if you follow some of
the blog posts by some known people in the area of UX service
design, customer experience they start to write about it. In fact,
we're talking all about the same thing, so we should maybe have
one single language, which would make it easier for us.
Joe: Let's get to the practical side a bit. How do you introduce or
define service design to a customer?

Sylvain: That always depends on the customer and the context
because you have to always get people where they are. So you
first have to understand where they are, of course.

Maybe what their problem is, and how they think, and which
industry they are in or whatever, so that's something you just
have to feel when getting introduced to people.
A way I like to take to introduce it is simply telling them that they
should imagine themselves, what they would like to have as a
service experience, when they go to that place, or to that seller,
or that supplier.
Then also asking them, for example, why did you go to this one
and not the other one? What was the reason, etc.? Then they
start to come up with reasons, and I can point to them and tell
them. Well, that's exactly what service design tries to do to get
hold of these things, to structure these things, and to put it all
together.


And then, of course, the conversation moves on to more details,
but that's quite a good way to take them because who doesn't
want to have good experience when he goes to a seller?
Joe: Now do you actually conduct training sessions in service
design or do you just jump into using service design to solve
customer problems?

Sylvain: No. Well, this is quite mixed because there's often kind
of workshops involved in customer projects at the beginning. I'm
also thinking of conferences where I'm invited. A mixture, but at
the end my aim is to do projects to design compelling services.
Joe: One of the concepts that I think is difficult is when you
have a product- dominated company and when you first introduce
service design or thinking in a service dominant way, is that
difficult for them to grasp? Do they have trouble with looking at it
other than within their own four walls?
Sylvain: Again, it depends on whom you have in front of you.
So there are some of them that understand more easily and
others that might not be as easily, but what I try to do again is
the same thing. I ask them, "So, your product, what does your
product do? Why do you think that a customer buys your
product?" The answer, well if it's a toothbrush, it's for brushing
their teeth, of course.
So they solve a problem with your product. They, in fact, brush
their teeth. They want something done; they want something to
get the job done so in fact they get a service by using your
toothbrush.
That's the frame, I'm getting them into the service dominant logic
mind set. And quite rarely people are not agreeing when you take
it this way around, you know, because it's quite a natural story at
the end. But that's only one point.


The other point is there is a lot of talk today in "servitizing" your
product that means finding some additional types of service
around the product. So there is the basic service, in terms of
service dominant logic that each product provides because it's
only in service avatar, or it masks service provision in that logic.
But if you better understand people's context and the jobs, they
try to get done from their point of view you can often find
different models with additional types of service around your
basic product service. Because in the view and in the eyes of the
customer, this is something that goes together and this is the old
question of inside-out and outside-in.
Inside-out means that you produce something, and you have the
view of how you produce the toothbrush, and that's what you
know and that's what you think. The customer, he has maybe a
different problem. He has to get up in the morning and get ready
to go to work. That's how he sees the thing, and tooth brushing is
just one point of it.
And if you look at these things in that way you find room for
service innovation. You find room for "servitizing" your product.
You find room for a lot of new ideas.
Joe: I notice you've been working with the business model
canvas. Is that the area that you've really addressed with it? I
mean to go in there and evaluate the jobs to be done and start
building from that platform. Is that how you are using the
combination of service design and the business model canvas?

Sylvain: Exactly, because all these things go together, you
know? For me, the business model canvas is kind of a top- level
view on all the activities on the value chains, but in terms of
interactions and networks, I would say.
And as we all know today, the interactions of networks are
getting more important because the value isn't in the flows and

the networks and on the stacks anymore, and because
information is available to everybody.

Of course, the business model canvas is a very interesting tool.
First, you get a different picture of your existing business model;
often many people don't look at their business model from this
relational networking and interaction point of view.

It's also quite easy to understand. My experience with the canvas
is that they are always quite happy to do that exercise, to get this
different view from what they are doing. Within the business
model canvas, there are the building blocks talking about
customer segments, about customer relationships and stuff like
that.
That is, where service design gets in because to design these
relationships and to understand these segments, well, they have
to do some design research, some ethnographic research and
also the more traditional quantitative research. Of course, have
the tools to design these relationships that in fact are the services
that are delivered and the way that they are delivered.
So in terms of strategic business consulting, all these tools work
together. The one is maybe a broader view. The other one is
detailing some point of it, etc. So what I try to do is get my own
mix of tools and models.
I'm also using different ones. I'm also using stakeholder
mapping; some value network analysis; some SWOT
analysis -- the good old SWOT analysis, a very good thing to
start. I would even say you should start with it. And then also the
Blue Ocean strategy model is very interesting if you want to see
how within a business model you could do the difference, etc.

It's understanding how all these things and tools work together,
and that's what I like to do. And that's one of the reasons why
I'm involved with different types of community, the service

design community, the user design community, but also more
economists' communities, marketing communities, etc., to try to
understand what is the common ground that is emerging there
because that is where the new value, and the new knowledge is.
Joe: I think you brought a particular point up earlier in that
statement that I think few people look at it from this viewpoint.
That is that all of these different components of the business
model canvas, when you go through them, the real value is the
strength of the connections between these components.
I always use it in a marketing sense that you have all these
different events or all these different programs or sales calls or
whatever out there. It's not any particular event or node that
creates that much value. It's the strength of the connection
between all of them is where the value is.

Sylvain: It's the connections that are important. This again also
links to what the people from the social business movement are
saying that the value isn't the networks and not in the stacks any
more. The more you are in different networks the more you can
create value. You have to also be more open and more
transparent to do that.
There are implications of how you organize internally, which
means that you have to have flattened hierarchies within your
company. You have to connect also your employees so that you
can better connect to all the different partners, suppliers, etc. So
some people are saying business -to -consumer and the
business-to-business will disappear. We will only have people to
people left now because everything is going to be somehow
connected.
In the end it is about the people that connect and about the value
they can create for each other. That's exactly the reason why the


business model canvas is so interesting because it takes this new
reality and puts it somehow in the front of how value is created.

Joe: I think the canvas allows you to iterate, to make changes
easily as that networking takes place and as that network grows.
Sylvain: Of course, it's a kind of an agile tool. Well anyway,
everything is agile today.
So we won't talk about agile any more soon, I think, because
everything is agile. It's just a new model. And of course, the
business model canvas is also very well-suited to do iterations, to
test some stuff, to simulate some stuff, etc. As it is that many
networks and flow-based and connection-based, it really is very
easy to use for these kinds of simulations.
Joe: How do you get an organization to start thinking this way
because most of us are still trapped in that goods dominant-type
logic? Is it something an organization can learn?

Sylvain: Well, you have to talk to them. You have to explain to
them. What I basically try to do is when you get in front of
decision-makers and executives, they, well, normally they tend to
be people that have some analytical mind, and anyway, they are
forced to think about the future of the organization.
What I basically do is just get into the same type of conversation
that we just now had and try with some simple examples to
illustrate to them what the mindset is, what it could be and how
things are changing, etc. Works quite well, which doesn't mean
that they immediately jump on the project the day after, but it
starts working in their heads and it's like all this change,
high-level change projects that you might do, people need to
have some time, they then start to dig a little bit themselves into
the subjects to understand a little bit better, etc.


Then something like six months later or sometimes 12 months
later, they are there. "let's do a project. That sounds interesting,
you're completely right about it."
Joe: I come from the process methodologies, and I come from
an engineering background and engineering world. I've really
noticed a big difference the last couple of years, getting involved
around designers and services I'm thinking, because when I talk
the engineers and when I talked to the analytical people, there's
the five whys.
We're coming up with root cause, here's the answer. When I talk
to designers, I often get the feeling the solutions are only
temporary. Is that the real difference in the mindset?
Sylvain: There is a difference in the mindset analytical minds,
they work much more linear, and often in terms of predictability.
On the other side, designers have this mindset they're always in
the future, so they're always in "what might be," "what could be
very different from now."

Which is of course, let's say, a financial planner, is most
interested in at the beginning because he wants to have security,
he wants to plan, etc.
But all the analytical guys, they also start to notice that times are
changing, and they are very, very rapidly changing in terms of
unpredictability and insecurity and stuff like that, so they see with
their traditional tools that it isn't sufficient anymore to plan the
future.
That also makes them a bit more open and interested in what a
different type of mindset could be. Then again, design thinking, in
a way, tries to bring all this stuff together.
It's not about getting rid of the analytical and the more formal
thinking, but it's about putting these two together because we

face new challenges to go one step further in our models to
manage and to deal with the challenges.

Joe: It seems to me there are so many tools in design thinking
and service design. We talk about storytelling, journey maps,
theaters, safaris. Is there a simplified approach?
Sylvain: It's more about a mindset, I would say. Then different
tools you can use. The mindset is getting this different type of
use together instead of having the one view that maybe was the
ruling view for the industrial age, for the last 300 years, in terms
of unlimited resources and everything is predictable.
Now, of course, these are new and emerging disciplines, so the
tools are developed, somehow, as from scratch by the community
by itself. It's also interesting to notice that a lot of this stuff,
doesn't necessarily first emerge in universities, but within the
practicing community, and they do that theoretical stuff in
parallel to develop through them the molds.

And then it enters the universities to start teaching the models,
which are very interesting evolution and another consequence of
this changing landscape of knowledge communities that are
connected and not necessarily need to be academic knowledge
communities anymore, etc.
At the end, it is a challenge to understand all the truths that are
out there to analyze them, and then you have to make your own
choice what makes sense for you and how to attempt to put
together a particular project without just taking textbooks that
are out there and using every single tool and method for every
single project.
That just certainly doesn't work. Everyone must have his own
little R&D on top of it and put together all the different
methodologies in a way he thinks fits well for dealing with that


type of project. That's basically what I'm doing with all the stuff
I'm doing now.

Joe: What do you enjoy the most about your consultancy?
Sylvain: Well, to be self-employed, first. Second, to have a
freedom of choosing the projects I want to do, targeting the type
of customers I want to work with and, also, being able to decide
what I will develop next as a new type of service or a new type of
knowledge integrating into my package, or whatever.

So that's pretty much what I like. Being into all the innovative
stuff, I like the future. I like everything that is tomorrow, that will
be tomorrow, that is just emerging. I like new things that solve
problems in different ways, etc. So, of course; you have to have
a curious mind.

Joe: You have to answer a question for me when I was looking
at your site. What is the New Club of Paris?

Sylvain: Well, the New Club of Paris is a gathering of people
from around the world that basically has been working for the last
10 or 20 years on the subject of the intangibles, or intellectual
capital.
What they try to do is show the importance of intellectual capital
and intangibles in value creation and also in the competitiveness
of companies and in the competitiveness of nations, meaning that
our traditional accounting systems tend to look at mostly the
tangible values because that's the ones that are most easily put
into a price, into a money amount of something.
Now, the way you do knowledge management, the way you train
your people, the way you do networking and connect to different
type of communities, all of these things are very difficult to
evaluate in terms of money. But we all know, and there is also
what service economy modeling says, that skills and

competencies are, in fact, what is exchanged at the end on the
market because it is those which provide the service and the
experience on top of the product.
The New Club of Paris is looking at these concepts at a very
abstract level. They are mainly economists and academics,
professors, etc., but also some other professionals, high-level
consultants from European Investment Bank, World Bank, etc.
And to explain to decision makers that there is something
changing and we have to find new ways of measuring this.
This is a big challenge, of course, because a lot of things would
have to change in microeconomics and macroeconomics in terms
of how accounting is done. This also joins stuff done by, for
example, Nobel Prize winner Stiglitz working on new
measurements of GDP, beyond GDP, etc. All these things are
linked.
What is very in testing is that what is happening in terms of
concrete projects, when we're talking about service design, about
empathy, about ethnography and about all these things of
networks and the value of networks, but it's basically what they
are talking about in terms of the intangibles and intellectual
capital. So again bringing this high-level
microeconomic/macroeconomic analysis together with what is
really happening in everyday markets and companies. That's the
New Club of Paris.
Joe: What I'm thinking is that what gets measured is what gets
done, that old saying. And if we're not measuring knowledge, if
we're not measuring some of the intangibles, it's difficult for our
organizations to focus on.
Sylvain: Of course, so that's one of the problems. We all know
that they are very important in terms of competitive advantage
and value creation, but we don't have, really, models to measure


them. So we're facing quite a challenge. This is something that
isn't really solved yet.

If you look at banks, for example, they start to do these kinds of
analyses. It's interesting to look at how they do because they are
confronted with it because when they have to decide to give
some money to an entrepreneur, they have to understand how
high the risk is. They have to understand all the elements that
could contribute to the risk, of course.
That's again very basic economic behavior. They feel that all
these intangibles, of course, are getting more important in
evaluating their risk of giving money to somebody or not. So they
try literally to develop their internal models of evaluation where
they take in to account these intangibles.
But it's not something that is commonsense, I would say. So
everybody is trying to do it his own way and what the New Club
of Paris tries to do is can we come up with something that could
be used by everybody, which could be a new model for
everybody.
Joe: What's next on the horizon for you?

Sylvain: 2012 turns out to be a very busy year, so I have to find
the time to think about it. What is happening is that, for example,
I just got involved on a project in an architectural process. We
decided to make a workshop about architectural service design
and service dominant logic together. That's one thing.

I recently got involved in the Internet of Things Council, which is
a very interesting area as well because I turn out to be a
gadgetist, as you might have understood also, getting early
interested in Internet stuff, etc. There is so much potential
service innovation in the Internet of Things area. But there are
also quite some ethical challenges. There will be implications on


financial markets and stuff like that. So that's also something I'm
quite interested in.

Joe: How can someone contact you?
Sylvain: My website, www.strategybuilders.eu. You can also find
me on Twitter @sly. Or you can just Google my name, Sylvain
Cottong. You'll find me on the different networks. It shouldn't be
that difficult if you really want to contact me.
Joe: Sylvain, it was my pleasure to have you, and I thought you
shed some light on the new and expanding world of service
design. Thanks again.
Sylvain: Thank you very much, Joe. Bye-bye.



Joseph T. Dager
Business901
Phone: 260-918-0438
Skype: Biz901
Fax: 260-818-2022
Email: jtdager@business901.com
Website: http://www.business901.com
Twitter: @business901

Joe Dager is president of Business901, a firm specializing in
bringing the continuous improvement process to the sales and
marketing arena. He takes his process thinking of over thirty
years in marketing within a wide variety of industries and applies
it through Lean Marketing and Lean Service Design.

Visit the Lean Marketing Lab: Being part of this community will
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