Theory of Relatedness

Having defined the term “Service” and “Service Innovation” in my previous posts, let us  try to understand the motivation for all B-School gurus to research into this topic so extensively. All claim that “Service Innovation” will be the most important competitive advantage for firms in the 21^st Century.

This does not imply that every firm or business have to innovate with the end consumers directly.  This does not make sense. What has a manufacturer of ball bearings used in a car do with end consumer?  The end consumer is only concerned with enjoying a good driving experience with the car.  However intelligent ball bearings can continuously monitor their condition and transmit warnings to the provider of the car (say Toyota) who in turn will advice customer to do a preventive maintenance. We see that there is an element of relatedness in all things we use. Even though a car has few hundred thousand parts, consumers are not interested in having a fragmented service experience with each of those parts suppliers.

What consumers would love is “Great Experience with Toyota”. Toyota has to take the lead here to innovate this “experience” for their consumers co-coordinating with other parts of their eco-system which is totally transparent to the consumers.

Another example we could take is healthcare and telemedicine. Physicians require data collated from different devices that measure different parameters like blood pressure, temperature, blood sugar etc though each of the specialized devices manufactured by different vendors. They offer no value in isolation. In fact they will be out of business if they do not participate and co-operate with the platform leader who provides telemedicine services.

If we think a little, this “Theory of Relatedness” applies in all walks of our life like education, healthcare, wellness, entertainment, government services etc.  In my previous post we saw an example of how TV makers are racing to build their content platforms taking cues from theory of relatedness.

This theory is equally applicable for B2C, G2C, G2B  and B2B scenarios.

This leads me to think that eventually there will be at least one platform leader in every industry who would strive to establish their dominance with consumers to gain market share.

I envision that in few years down the road Toyota’s core competency may not be car manufacturing but something else. What a transformation!

I think government policy makers and strategic thinker recognize this huge opportunity to build service science competencies, jobs and economic growth through this channel across various industries.

To be continued in next post !