1.3.1. Understanding Services and Value

💡 First Principle: Value is not delivered, but co-created, by enabling stakeholders to achieve their desired results (outcomes) through the use of tangible and intangible deliverables (outputs).

Scenario: A development team releases a new software feature (an output). However, users don't adopt it because it doesn't help them complete their work more efficiently (the desired outcome). The team realizes they focused on the deliverable, not the result for the stakeholder.

This subsection focuses on the fundamental concepts of what a service is, how value is perceived and co-created, and the results services aim to deliver.

• Service: A means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.
  • Practical Relevance: Understand the services your organization provides. What outcomes do they enable for your customers? What costs and risks are removed for the customer, and what costs and risks are imposed? Being clear on this helps you understand the purpose and value of your work.
• Value: The perceived benefits, usefulness, and importance of something. Co-created.
  • Practical Relevance: Value is subjective and perceived differently by different stakeholders. In your role, understanding what different stakeholders (customers, users, colleagues) perceive as valuable is key to prioritizing work and communicating effectively. Value is not just about features, but the impact the service has.
• Outcome: A result for a stakeholder, enabled by one or more outputs.
  • Practical Relevance: Focus on enabling outcomes, not just delivering outputs. Delivering a report (output) is less important than the decision made or action taken as a result of that report (outcome). Understanding desired outcomes helps align your work with business goals.
• Output: A tangible or intangible deliverable created by carrying out an activity.
  • Practical Relevance: Outputs are what you produce (a deployed server, a completed script, a resolved ticket). While necessary, focus on how your outputs contribute to enabling outcomes and creating value.

⚠️ Common Pitfall: Measuring success based on the number of outputs delivered (e.g., features shipped, tickets closed) instead of the outcomes achieved (e.g., improved user productivity, reduced business risk).

Key Trade-Offs:

• Feature Completeness (Output) vs. User Adoption (Outcome): A feature can be technically complete but fail to deliver value if it doesn't enable a desired outcome. Prioritizing outcomes may mean delivering a simpler output that is more effective.

Reflection Question: Describe a service you use. What is the tangible output you receive, and what is the intangible outcome it helps you achieve? How does this distinction clarify the service's true value to you?