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Fit

to serve

The energy transition market is too supply-driven. Many actors, including like entrepreneurs, policy makers or community initiatives focus strongly on pushing technical solutions as products - emphasising their unique qualities or specifics. Only few have designed their solutions as services. These entrepreneurs and their solutions succeed in supporting their users to achieve their goals. They provide a valuable contribution to the energy transition as well. 

Shifting your mindset to services isn’t easy, or fast. But it is a proven way to thrive in the energy market. Projects and innovations that are designed and built as services, contribute to the energy transition in more substantial ways than product-oriented propositions. And energy entrepreneurs that have developed strong servicing capabilities, are arguably more successful in the energy market. 

A fit to serve enterprise can be characterised by:

  1. A value proposition that is described in value for user and value in use;

  2. A businessmodel that is designed to maximise value for users, stakeholders and society;

  3. Skills to source insights and convert them into new value are well developed;

  4. Skills to collaborate with multiple partners and to take leadership in creating collaborative solutions. 

 

This website provides entrepreneurs with guidelines to help them become fit to serve, and policy makers to better support these entrepreneurs in their transition.

Incorporate the human perspective in your value proposition, business model, market approach, public initiative or your community programme.

 

When it is about

SERVICES...

A smart home thermostat, product or service?

A thermostate is of no use when it’s lying around in its box or stuffed away in a drawer. Just a piece of plastic hardware containing hardly any value. But as a home owner, you value this thermostat. It enables you to control your indoor climate. So that you can come back to a warm home, after a long day at work or a long walk in the cold. As a user, you value the fact that someone installs it for you, you value the instructions to adjust the thermostat, you value the display that shows your energy use and the monthly reports that help you to save energy. The device itself might not be of much value, but as a service it enables you to achieve your goals.

This shows that as a provider of the thermostat, you’re not in the business of producing smart plastic hardware. You’re in the business of providing customers with a comfortable home – through a stable indoor climate. In fact, you and your customer co-create this value by using the thermostat.

And there’s more to it. In order to execute your offer on a daily basis, you collaborate with many others. Business partners, policy makers, competitors, banks, energy suppliers. And you have some sort of relationship with all these parties. What do you know of their needs, of their concerns, of what they value? And how is this reflected in your business model?

Mouse over to find out

Your offer is more than just an app, a website or a product. For your users, your offer is a means to reach for a desired outcome. Therefore, it is important to understand why your customer is using your offer, regardless whether your offer is a solar panel or a law. Even more, it is important to understand that, while using your offer, you and your user have a relation, that needs to be nurtured in order to stay valuable.

What does this mean?

This means that every actor in the energy transition market should think of the following questions. “Who is my user, why is he using my offer and how is my organisation supporting the user when he is using my offer? What is my users' preferred way to interact with me? How would I and how would my user define our relation. What efforts do I take to maintain this relation?” The answer to these, and many other questions like this that bring you the essence of what a service is:

A consistent reflection of the user in every aspect of your business.

This means your proposition should be designed as a step by step process in supporting your user in reaching his goal. A description of how a user finds, purchases, uses and continues to use your service. Ultimately this customer journey describes how the user achieves his goal by using your service.

When it is about

SERVICE SKILLS...

By now we know that a (new) service is composed of several different elements, closely linked to the dimensions of the business canvas. For these elements to work well together, you, as a service provider, need to develop several dynamic capabilities that have to do with the ability of your company to realise new solutions and respond to changes in the environment where they operate.

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Sensing: become a researcher every once in a while

Dive deep into the lives and contexts of your users in order to really understand their values, needs and dreams. Do the same for stakeholders and business partners

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Conceptualising – don’t do what your customers tell you…

Translate the lessons and insights from research into new value, new service features. This way you will be valuable throughout the use phase.

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Orchestrating – become the director of your service composition

Like a conductor, put all your effort into a coherent service experience. This requires intensive collaboration with stakeholders and business partners and continuous co-creation with your users.

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Scaling & Stretching - become your user’s valuable friend-for-life

Are you ready to expand your business? Provide new value throughout the customer’s journey and create new partnerships by stretching the service oriented focus throughout their business.

When it is about

SERVICE BUSINESS MODELS

In order to become fit to serve you might need to make some adjustments to your businessmodel. You have to incorporate the user perspective in every building block of the business model. Every part of the business model should contribute towards maximising value for your user and establishing a valuable relationship.

Mouse over to learn more about the difference between a product vs. a service supporting business model:

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Insulation – as a product

We are the best insulation company one can find. Our clients get the best value: high insulation value, a high reduction of CO2 emission and on average, our clients earn their investment back in less than 5 years. Insulated walls segments is a market in square meters. Roofs, walls, floors. With a centralised head office and local sales departments, they work to insulate as many roofs, walls and floors as possible. They put lots of effort in streamlining the value chain and lowering the costs. They have service level agreements with their key partners, to be sure their clients will not pay too much, and they will receive a good margin.

They are a certified partner of the manufacturer of the best quality insulation material \ one can find. The lifetime value of this material is long, its performance is the best. They work hard to close as many deals as possible. As soon as the work is done, the client pays the bill, and the relationship is ended.

Product business model

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Insulation – as a service

We support our homeowners to live in the most comfortable homes.  We support them throughout the journey of orientation, buying and using the insulation. We offer understandable, personalised quotes. We do not speak to much about saving energy, but after the installation, our clients receive a visualised report with their energy reduction.  Our clients are very happy. They save money and feel happy to contribute to a green planet.

 

Cosy living listens to its users. They learned that homeowners like their homes designed with nice furniture and a fireplace in wintertime. They are aware that many personal budgets for retrofitting are competing with budgets for a new sofa or a garden redesign. Cosy living aims for a long-term relation with their client. Their collaboration partners create new and customized benefits that meet the needs of the clients. Cosy Living does not focus so much on closing as many deals.  In fact, they value this transaction as the starting point for a long-term client relation. Their customers pay for the use, and the extra benefits offered to them.

Service business model

Services, on the other hand, cannot be touched and cannot be delivered to your doorstep. Also, the value of a service is only experienced during use. If a service is not used, the service simply does not exist.  As a consequence, a service always requires some form of interaction between provider and user. The moment of transaction is often not the end, but the start of a long-term relationship between provider and user. A relationship in which the provider is needed to be of value throughout the use phase. This demands that the provider understands its users, their needs, their preferred way of using their service, their context. The provider needs to be able to ‘translate’ this knowledge into a suitable service proposition and accompanying business model, including the revenue structure and the right choice of partners, and often needs to do this iteratively since user needs change in the course of the use of the service.

Learn more about service business models in part 3 of our webinar series
[coming soon]

It is about

COLLABORATION IN THE ENERGY MARKET

The complex energy market in transition is a tangle of wicked problems for many of which there are no obvious solutions. It’s also a highly regulated market, in which a wide range of actors play an active role. They regulate, stimulate, support, educate or subsidise the energy service market, using an even wider range of instruments. Despite these instruments however, it can be a real challenge to deal with setbacks and pitfalls. Most actors list similar types of barriers and pitfalls to service oriented business models. We categorised them into the following categories: complexity, uncertainty, technocracy, organised irresponsibility, and contestation.

We conclude in our research that these kind of complex systems could benefit greatly of a service perspective.

Mouse over each of the system barriers of the energy market to learn more. 

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Complexity cannot be controlled. It cannot be tamed. It certainly cannot be solved. At most, it can be improved. In this field of energy transition, we still witness many methods and instruments that in fact do aim to control or tame the problems. And they do so by using ‘old’ and conventional methods to solve – control - problems do not work, even can work counterproductive.

Complexity

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Many processes are currently designed and managed as if a clear and upfront known outcome is within reach. Also, there is thread of negative consequences when the pre-set goals are not met. This stems from a project mentality, which is a ‘normal’ practice, with a no regret decision making process, SMART indicators. But the energy transition is a process, characterized by dynamic, uncertain technological and societal outcomes. This process is far better served by collaborative learning along the way. As the whole of the problem or the solution is not known, decisions are based on 50% of the knowledge. Therefore, experimenting is thus key, as well as intensive evaluation and learning.

Uncertainty

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With so many actors and such a variety of backgrounds, confusion and miscommunication lurk. However, most actors do assume their counterparts speak the same language. After all, they’re all serving the same purpose: saving the climate, the globe. Reality is, they’re lost in translation. Maybe it’s too big a challenge to establish common ground, but there is lots op opportunity to reach for a better understanding of the various paradigms and worldviews of all these actors.

Contestation

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Due to the complexity and the heterogeneous group of stakeholders, there often is no clear leader. As a consequence, there is no overarching collaboration strategy. Individual measures, regulations etc. are not aligned. This leads to a situation where actors have to deal with conflicting schemes, rules, laws and procedures. Some of the more succesfull entrepreneurs take the lead, are a frontrunner. But in fact, many of them do this only as a response to the lack of leadership shown by governments.

Organised irresponsibility

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Rules, procedures, schemes even experiments are created to stimulate or regulate the market, to test or create new solutions. The vast majority of these rules is designed as a product. Every technical aspect is described, researched and designed in detail. Only a few are designed with the user in mind. How is the user served?. How is he informed, guided and supported throughout the use process? How is the user supported to take the next step?

It already is hard dealing with an individual ‘technocratic’ actor, but entrepreneurs experience dealing with a technocratic network of actors and elements like dealing with a technocratic block. In many cases, there hardly is any form of collaboration and various instruments are not in service of the user journey.

Technocratic

How to serve...

TRANSITIONS IN THE ENERGY MARKET

The transition is better served when complexity is embraced instead of controlled. Policy makers can drive this approach by facilitating multi-stakeholder collaboration. Create communities of practices and learning and allocate time to explore, understand, create and reflect. Establish long-term relationships built on trust between the heterogeneous group of actors that want to and need to be part of the solution, (even if they do not know yet what that solution is), and trust that all parties are working towards a mutual goal. Facilitate continuous dialogue to collaboratively identify the needs of all relevant actors and negotiate value.

The transition is better served when uncertainty is embraced instead of controlled. Policy makers can drive this approach by facilitating a culture of experimentation and learning. This can be done through the creation of incentives and places for focused experiments. A second clear path for policy makers is the development and adoption of new impact metrics and evaluation indicators that allow for unknown outcomes, and that socialise that the costs and risks of learning and not having them borne mainly by entrepreneurs and their clients.

The transition is better served when the ‘lost in translation’ and conflicting actions many stakeholders feel are aligned to support services. Policy makers can drive this by taking a first step towards collaboratively creating a new discourse and set of mutually reinforcing supporting activities. Public authorities can and should facilitate the processes leading to a better understanding of the various paradigms and worldviews of all system actors and their activities. They need to make sure these interconnected activities are reinforcing each other in the collective aim of supporting entrepreneurs delivering services to the transition.

The transition is better served when lack of governance and leadership is replaced by a sense of distributed ownership. Policy makers can drive this by taking a first step towards collaborative orchestration of repairing market failures. Specifically, they need to take an active and leading role in creating an overarching collaboration strategy, as well as in being the director. In order to incorporate this role, they could attract savvy actors as their ambassadors, as well as develop transition skills themselves

It is about

TRANSITION SKILLS...

Despite these system barriers, some entrepreneurs are successful in delivering business models and services that explicitly contribute to the energy transition. These entrepreneurs go beyond creating a service supporting business model, they create a transition supporting business model to deliver a transformative innovation as a service.

 

If you want to become a successful collaboration partner, you, as a provider of services to the transition, need to develop several capabilities. Those capabilities have to do with the ability to collaborate with multiple stakeholders to create workarounds when opinions, instruments, laws or policies hinder the rollout of your service. This will help you to unravel ‘The System’ into individual elements and individual actors and elements with whom you can establish a long-term relationship. By doing so, you will demonstrate leadership in creating transition solutions. 

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Sourcing: tapping into multiple resources

Being able to work around the complexity issue.  Reduce the complexity by sourcing intellectual, authoritative and economic resources to collaboratively work towards the creation of value for the multiple actors with whom you can establish long term strategic relationships.

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Discoursing– creating the story 

Create storylines that give shape to social and natural realities and also determine how these issues should be perceived and addressed. In other words, collective expectations and visions can function as a powerful institutional force, influencing the development and diffusion of innovation and are therefore a powerful element of agency for institutional entrepreneurs.

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Networking - positioning as part of the solution

Use your informal, organisational and institutional position to network. Build deep relations and create value for every relevant stakeholder. Take on the leadership role  when multistakeholder orchestrating is needed, often performing intermediary roles as part of your business model and value proposition. Acknowledge the diversity and contestation of knowledge in the energy field and take it as the starting point for conceptualising propositions that mediate or span across multiple interests. 

It is about

SUPPORTING ENTREPRENEURS

Supporting Policy instruments

 

Information supply and awareness raising

 

 

 

 

 

Subsidies and fiscal instruments

 

 

Capacity building

 

 

Business support

 

 

 

 

 

Infrastructure

 

 

Laws and regulation

Product supporting business model

Raise awareness on the value of a service approach, a user centred approach e.g. through a self-assessment tool. Provide inspiring examples of entrepreneurs that made the shift from pushing harder to a more service oriented approach.
 

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Develop and provide training in servicing skills: sensing; conceptualising, orchestrating and scaling / stretching.

Take a more active role in innovation and the process of servitisation.

 

 

 

Provide access to market data that opens up customer relations and quantitative and qualitative data on customers that can help businesses identify valuable customer segments.

Create trust among product pushing entrepreneurs in the value given by the market to service approaches by endorsing a type of service (brand independent), certification.

Service supporting business models

 

raise the awareness of the benefits and value of a service focus.

 

Provide subsidies and other fiscal instruments to support repeating and scaling successful, well designed servicing business models, subsidise process costs instead of only products.

Develop and provide training on sourcing complexity, discoursing and networking in the energy market.

Support them to become ambassadors and coaches for the product push typologies to foster training and learning between peers.

Facilitate cross boundary collaboration, with distributed capabilities in the network.

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Develop public procurement procedures that allow for outcome focused approaches.

Is your initiative fit to serve?

A THREE-STEP EVALUATION

 This test consists of three sets of questions. The first set consists of questions about your business model, then we ask about your capabilities and finally you will receive questions about the way you react on the market.

When completed, you’re provided with an advice on what kind of business you are in, the kind of pitfalls that are risky for you and some tips on possible next steps you might want to explore.

1

Evaluation

Business model canvas by Alexander Osterwalder consists 9 building blocks that are key elements for a business. There are 5 questions.

2

Toolkit

Entrepreneurs’ capabilities are, of course, significant. This section contains 4 questions about 4 capabilities.

3

Cases

They way of dealing with stakeholders affects the relationships with the market. 2 questions will help us evaluate your company context.

Contact us

About us

The User-Centred Energy Systems mission is to provide evidence from socio-technical research on the design, social acceptance and usability of clean energy technologies to inform policy making for clean, efficient and secure energy transitions.

If you have any questions or comments about the evaluation, please contact Ideate, Renske Bouwknecht.

About us

The User-Centred Energy Systems mission is to provide evidence from socio-technical research on the design, social acceptance and usability of clean energy technologies to inform policy making for clean, efficient and secure energy transitions.

If you have any questions or comments about the evaluation, please contact Ideate, Renske Bouwknecht.

Contact us

About us

u-logo.png

The User-Centred Energy Systems mission is to provide evidence from socio-technical research on the design, social acceptance and usability of clean energy technologies to inform policy making for clean, efficient and secure energy transitions.

The Netherlands

Dr. Ruth Mourik
Duneworks

Eschweilerhof 57
5625 NN Eindhoven
The Netherlands
Mobile: 0031 6 250 757 60
E-mail: info@duneworks.nl

The Netherlands

Dr. Boukje Huijben

Eindhoven University of Technology

P.O. Box 513
5600 MB Eindhoven
The Netherlands

E-mail: J.C.C.M.Huijben@tue.nl

European Copper Institute

Mr Hans De Keulenaer

European Copper Institute

Avenue de Tervueren 168, b-10
1150 Brussels
Belgium

Telephone: (32) 2 777 7084
Telefax: (832) 2 777 7079

E-mail: hans.dekeulenaer@copperalliance.eu

Sweden

Ms Lotta Bångens

Senior Consultant
Aton Teknikkonsult AB

St. Göransgatan 84
112 38 Stockholm

Sweden

Mobile: 0047 70 343 92 12

E-mail: lotta.bangens@aton.se

South Korea

Professor Suduk Kim

Department of Energy Systems Research
Ajou University

E-mail: suduk@ajou.ac.kr

The Netherlands

Renske Bouwknegt
Ideate
Soesterweg 316
3812 BH Amersfoort
Telephone: 0031 33 445 07 10
Mobile: 031 6 388 915 57
E-mail: renske@ideate.nl

Austria

DI Mr Reinhard Ungerböck

Grazer Energieagentur

Kaiserfeldgasse 13
8010 Graz
Austria

Mobile: 0043 316 811 848 17

E-mail: ungerboeck@grazer-ea.at

Norway

Even Bjørnstad

Enova SF

Postboks 5700 Torgarden
N-7437 Trondheim

Norway

Telephone: 0047 996 38 218

E-mail: even.bjornstad@enova.no

Switzerland

Lukas Gutzwiller

Swiss Federal Office of Energy, SFOE

CH-3033 Bern

Switzerland
Telephone: +41 58 46 25679

E-mail: lukas.gutzwiller@bfe.admin.ch

Ireland

Joanna Southernwood

National Expert, International Energy Research Centre (IERC)

Ireland

Australia

Tony Fullelove

National Expert and exco member

Net Zero Initiative and Microgrid

Monash University Australia

E-mail: fullelove@hotmail.com