Reconfiguring “Reconfiguring the Value Space”

In 2001, the late management consultant guru Richard Normann, best known for creating the idea of corporate “missions” in the 1970s, wrote the book Reframing Business: When the Map Changes the Landscape.

This book has become known, at least in Service Design circles, for creating a vocabulary for certain phenomena that have become commonplace when talking about services, particularly in chapter two, “Reconfiguring the Value Space” (pdf).

I’d heard some of the terms in this article just in the course of being a practicing designer for the last 20 years, but I’d never read the source material until last week when it was part of the syllabus of the Service Design class I’m co-teaching this semester. I read the article and it all seemed to make sense. Until I actually started to try to run examples through the model presented. And then it all broke down. The concepts were not helped by an extremely awful conceptual model either.

Normann’s model of “Drivers promoting Density”

If you don’t understand something, then you can’t teach it. At least not well. So in the spirit of learning something to teach, I’m going to attempt to break down Normann’s ideas and put them into a model that makes sense.

First the terms.

Normann starts with the Principle of Density: Density being the “best combination of resources mobilized for a particular situation.” An example he gives is an expert surgeon in St. Louis assisted by a consultant in New Delhi operating (presumably via robot) on a patient in Sofia. “Density” seems like a weird term for this. The idea seems to be that the constraints of time, location, and who performs a service no longer matter. This is nonsense practically, but we can say, sure, those constraints are definitely loosened in the 21st century. So far so good.

The next set of terms introduced is probably the most famous, those of Dematerialization and Unbundling. Dematerialization is, as the name suggests, taking something physical and turning it into something without form. Or, more precisely, something that can take multiple forms. Money is the classic example here, as we’ve gone from gold bars to numbers on a spreadsheet. Information does not need a physical form to carry it anymore. You could be reading this article on any number of devices, or having it read to you on a hearable, or maybe in some future time, having it inserted into your brain directly. Unbundling is a related concept that is pretty ill-defined in the original article, but seems to mean the separation of value from the original physical object. The object itself doesn’t lose value, but the dematerialized version has its own value, separate from the physical version. An apartment can be worth $200,000…or it can be worth $2000/month on Airbnb. The value of both can fluctuate.

When you dematerialize something, you can unbundle its value.

Already you can see that the diagram above makes no fucking sense.

The final term is Liquidity, “meaning that what has been dematerialized can be easily moved about.” If I take a picture of a house aka dematerialize it, it’s easy to post that picture on Instagram, in this article, or send it to you in a text. I can charge you money to see that picture online because now that picture has potential value.

So now let’s return to Density. Once you have dematerialized something physical, you can Rebundle it into something else, i.e. another product or probably a service. You could call it rematerializing, but maybe that’s a misnomer because it can stay dematerialized and still have value.

So here are some examples.

A musician makes a song. In Ye Olden Times that would be a single on a physical 45rpm vinyl. But now it’s probably recorded digitally, so it’s already Dematerialized and digital copies are separate from the master. Thanks to Liquidity, the song can go everywhere, onto Dense platforms like Bandcamp, Apple Music, Spotify, etc, where, thanks to Unbundling, it can make (probably very little) money for the artist on whatever platform it’s on. It can also be Rebundled onto an album, a playlist, a soundtrack, whatever.

A second, trickier example. Let’s say I own a restaurant that I want to get more value (money, mostly) from. Step 1 is I have to somehow dematerialize and unbundle it from the physical store. I can put my menu online and have people place an order there for pickup or shipping or delivery. Or I could rent out my whole space to pop-up restaurants. Or…

So this is where this whole thing breaks for me. In 2001, sure, this model was still somewhat theoretical. But in The Year of Our Lord 2023, it feels like there are a lot of missing steps and pieces to this model. Here are my amendments to Normann:

1. You have to Assess Resources that you have in order to figure out what can be dematerialized and unbundled. What do you possess that has potential value and can be separated from the physical asset (which might be you)? These could be physical resources like a space or goods, but could also be a skill or knowledge. In this Age of The Influencer, it could also be you’re just good-looking. What you chose to dematerialize (and what you deliberately do not) is a crucial step. There might be important things (recipes, intellectual property, security) you never want to dematerialize.
2. Once you’ve figured out what you want to dematerialize and unbundle, you need to figure out how to dematerialize and unbundle them. How do I dematerialize my boxing skills? Video? Text? Audio? These days that usually means What platform(s) should I put this on to get the most value? You can put them on multiple platforms. Liquidity makes that possible. Although there is often a hidden maintenance cost to dematerialization that is overlooked. If you’re on multiple platforms, you have to maintain each of them. It’s not free.
3. The platform you select will often do the Rebundling for you. If they’re successful, they probably already have a Density to them already. There are 100,000+ dudes on YouTube who would love to teach you how to fix your car. Spotify has millions of songs.
4. There are lots of other “things” you can Rebundle with. You can Rebundle with the same kind of thing (a cluster of songs or apartments for rent, for instance) or you can Rebundle with related things (e.g. apartments for rent and movers) or even disparate things (e.g. songs and cute animals). There are thousands of businesses to be made from finding unique bundles.
5. Some platforms like Yelp will dematerialize you whether you want them to or not. I call this Involuntary Dematerialization. If you run a yoga studio out of your home, it’ll probably eventually still show up on Yelp and other online platforms. You won’t get as much unbundled value from it, but at least you won’t have to manage it?
6. If you decide not to use a Platform, your Liquidity will suffer. You’re basically relying on word of mouth or traditional media now. If I put up a stand-alone website for my Artisan Knots business how will people find it? Eventually, Google will discover it one supposes.
7. There are platforms yet to be made that will Rebundle other things that we don’t yet know are able to be dematerialized and unbundled.
8. At some point, the Dematerialized might have to Rematerialize again. If it’s an all-digital service, sure, maybe not, but I’m going to want to stay at the Airbnb or get that procedure from the surgeon in St. Louis.

Here’s my revised diagram:

I’m still not entirely convinced this entire model isn’t flawed, but there are some interesting concepts Normann added to the discourse of Service Design. Hopefully, this reconfiguring of his ideas has unbundled some value for you.