Applying "Product Service Systems" to Corporate Environments

There’s a great article in the Boston Sunday Globe today entitled The Leased Life. It talks about what is termed the “product service system”.  The basic idea is that many of the things we buy we don’t buy because we want the thing itself, but what the thing can do for us.  We buy tomatoes or airline tickets because we actually want the thing, but we buy cars or refrigerators or power drills because we want what the thing does: getting us from Point A to Point B, cooling our milk, or making a hole in something.

I live in what, to most people, is a very affluent community.  We all have a lot of “stuff”.  When we need something, we typically go out and buy it (like Americans increasingly do, regardless of their means).  I live in a drafty old (for the US) house that requires some pretty specialized little repairs from time to time, so I own a bunch of what I’ve always thought of as “one time use” tools.  I needed to fix a hanging shower curtain rod, so I bought a little device (for $15!) that let me make a length of metal have threads on one end. Am I likely to need it again? Not a chance.  It’s often occurred to me that if I could just look into my neighbors’ toolboxes, then I wouldn’t need to buy so many of these silly little tools.  Better for my wallet and for the planet in general because fewer of these things would need to exist.

The idea with a “product service system” is that we look at those one (or just a few) time use things and figure out a way to provide them for people in a more economical way (for them) and a more efficient way (for the provider). There are great examples of this in the article.  Think of it basically like the leasing model that is in place pervasively for cars, and you’ll get the idea. There are even some Web sites springing up to facilitate this sort of transactions between neighbors.

What really got me thinking, though, is how cool it would be to apply this kind of thinking in a corporate setting, for real.  What if I need someone to help my team with some marketing concept for a few days? The barriers to this tend to be the inflexibility of corporate budgeting and internal cost transfers.  When I worked at Renaissance Solutions (long defunct) back in the late-1990s, one of the founders, Harry Lasker (a man perhaps too brilliant for any of us to fathom), often talked about a concept called “solution puts and calls”.  The terminology didn’t work for anyone, really, including Harry, but the idea was similar to a product service system.  If I have some extra expertise and time within my team, why not say to the organization: “I can offer you X.”  This can work as a sort of mart mechanism: some people offer solutions (the puts) and others publish the needs or questions (the calls).  (Yes, this is where, even if you’re following the word usage, extending the put and call concept from options trading falls down.) The quid pro quo on this could take many forms, and the exchange of internal funny money is only one possibility.  Too often organizations get too trapped in the control mechanisms which are in place to be able to be productive.

And, lest you thought you would be able to read an entire post form me without a mention of SharePoint, here’s where SharePoint can come in.  SharePoint is uniquely suited to provide the platform for this type of transaction.  Not only can it facilitate the put and call matching, it can also allow for mining the put and call content for interesting patterns and capabilities that organizations don’t even realize they have.  If we can see that there is a lot of “traffic” on a certain set of transactions, it may indicate latent capabilities within the organization we didn’t realize we had, excess capacity we can better repurpose, etc.  These capabilities can, and should have a potential impact on the organization’s strategy.  If there’s a huge capability that we didn’t know we had, then perhaps it’s time to look at how we can develop and monetize it.

I would love to work on a project like this because it really kicks things up several notches.  Unfortunately, it takes pretty visionary higher-ups to see that this approach can be fruitful and, in fact, improve not just the organization’s productivity, but also it’s general well-being, though a happier and more loyal culture.

3 Comments

  1. Marc,
    Nice idea! To expand on the concept of re-using vs. buying new, the mission of our new website called TriBarter is to help people, organizations and the planet by updating the practice of barter and making it more relevant to today’s marketplace. It allows members to trade goods and services without having to sort through lists to find a barter match, like on Craiglist. It also allows members to create communities (friends & family, local neighbors, etc.) to trade with. It’s free to sign up and to post, and it’s brand new. We’re in the process of building membership, and would appreciate your help in spreading the word.
    Thanks!
    Hedi

    Reply

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