NIBS International Conference 22.5.2014 Lahti, Finland

Susanna Halla Lahti University of Applied SciencesDegree Programme in Entrepreneurship and Business Management

(c) Hallaus Oy 2013 (c) Hallaus Oy 2014

Research context

Research questions

Theoretical framework

Methods

Results

What next?

(c) Hallaus Oy 2014

Susanna HallaSisustusarkkitehti SIOKauppakatu 11, Heinola Puh. 044- 2085 685 susannahalla.fi

• was founded in 2012. (2009)

• Company provides interior design and housing renovation services in co-operation with its local business network.

• Growing strategy: networking with parallel business branches; building contractors, architects, other designers etc.

• Aim is to triple the sales during the next 3 years

• Vision: to be the most profitable interior design company at Päijät-Häme district in 2017

Organization structure of Hallaus Oy

(c) Hallaus Oy 2014

House renovation demand will grow strongly in Finland. There is urgent need for new business models.

New one-stop-shops renovation business models can be built up in small, agile design companies (Mlecnik et al. 2012)

Building contractors should realize, that they operate on service business.

• What are the critical success factors in interior architecture business?

• By what kind of metrics can the critical success factors be measured?

Research questions

• Fair revenue logic among business partners.

• Increasing customer understanding.

• Develop and productize new service consepts.

(c) Hallaus Oy 2014

Theoretical framework

• New business model serves customer needs better, from a new point of view, or more fulfilling way

• it is profitable and protean• it contains key elements, that competitors can not copy or imitate profitably.

(Torkkeli 2012, 20)

• Business model is company’s property (intellectual capital) • Key elements of Hallaus business model: strong network relationships and the brand

The elements of business model (Vainio et al. 2012, 38)

Fields of intellectual capital(Kujansivu et al. 2007, 29)

(c) Hallaus Oy 2014

Service design and lean tools

Build-measure-learn feedback loop (Ries 2011, 75)

Lean-canvas (Maurya 2012, 5)

Net promoter score (www.renps.com)

(c) Hallaus Oy 2014

Lean / Six sigma Service design

process driven experience driven

focused on reducing variation gaining insights from the outliers

problem focused possibility focused

eliminating wastesometimes it’s the generous gesture that wins and keeps customers

intimidating, confrontational language (black belt)

focus on the positive – asset based, what works

management driven – things done to staff

co-design approach – things done with people

deductive ontology abductive ontology

focused on learning from past, proven methods

focused on prototyping new possibilities

analytical thinking intuition

reductionist approach holistic approach

top down bottom up

Lean and service design, differences (Carr 2012)

(c) Hallaus Oy 2014

Methods

1. Structured survey (web-based) for the Finnish Association of Interior Architects SIO 16.5.2013.

2. Semi-structured interviews for 7 member entrepreneurs of the local network , september-october 2013.

(c) Hallaus Oy 2014

Results SIO http://www.kyselynetti.com/

40 respondents (n=300).

75 % works or have worked as an entrepreneur or freelancer.53 % have worked as an entrepreneur more than 10 years,25 % have worked as an entrepreneur less than 2 years.

Two main business improvement factors were (scale 1-4, average):

Company’s profitability must grow 2,96Company must become more well-known 2,89

Two least important improvement factors wereCompany’s premises must be reformed 1,85Company must get external support (funding, educational services etc.) 1,78

(c) Hallaus Oy 2014

Co-operation. Do you co-operate with other companies? (n=24)

• We co-operate regularly. 50 % (12)• We co-operate randomly, if the project requires it. 29 % (7)• We rarely or never co-operate. 21 % (5)

How do you find a need for co-operation in the future? (n=24)

• Prevalent situation is good. 42 % (10)• I am searching for opportunities to increase or deepen co-operation with other

companies. 54 % (13)• I am not interested in increasing or making deeper co-operation with other

companies. 4 % (1)

Most wanted business partners for me are: (n=24)

• Same business branch companies abroad 0% (0)• Same business branch companies in Finland 17% (4)• Parallel business branch companies abroad 4% (1)• Other partners (furniture manufacturers, contractors etc.) 12% (3)• Parallel business branch companies in Finland 67% (16)

Results SIO http://www.kyselynetti.com/

(c) Hallaus Oy 2014

• Persentage comission system is clear. The rules are same for everybody.• Financial benefit is not only or even primary goal in networking. Network

strengthening, shared customerships and learning from each other are more important.

Revenue logic

Increasing customer understanding

It is important, that• ”Vendor has a face; things are done interpersonally”.• ”Initial data is examined properly. If customer has bad experiences from

previous renovations, then we automatically are behind in customer satisfaction because we fix errors made by others.”

• ”Processes of a customer are identified well.”• ”Customer data is documented, and files are available for all.”• ”Increasing customer understanding must cause increasing service demand.”

Results Interviews

(c) Hallaus Oy 2014(c) Hallaus Oy 2014

Results Interviews

• Interviews indicated service consept development as the most significant critical success factor, because through that Hallaus Oy can specialize on its core competence: renovation planning and producing, and by doing that, strenghtening its brand on disjointed market.

• New concepts can be done rapidly. Transition from consumer-centred service provider to b-to-b- actor is the most significant chance in business model of Hallaus Oy.

• New service product targeted to real estate actors, SAMU –saneerauskohteiden muutospalvelu (SAMU renovation services) , was lauched in April 2014.

Service concept development

© Hallaus Oy Susanna Halla 2014

(c) Hallaus Oy 2014

• Topic for further study is to create a web-based data management system for renovation network and customer communication. This idea came up in several partner interviews. Preparation work started right after the interviews. If the project gets financing, the system development starts at spring 2014. Data management system and quality manual are products that can be licenced.

• In the future, the aim of Hallaus Oy is to develop its business model towards more intence and diverse co-operation with its network. New business model was launched and it is continuously renovated.

• One interesting future possibility is to productize and establish a franchise-business chain that provides renovation and design services nationwide.

(c) Hallaus Oy 2014

For further information: Please contact susanna.halla@phnet.fi