Report from the Field: Thoughts on Service-Driven Design

Posted by Chris Flanagan on May 20, 2009

“Service design helps consumers and businesses achieve their respective goals by creating systems of interactions that delivery on a brand promise.” ~ Continuum

Did you know that manufacturing's share of the total private U.S. workforce has been cut in half since the late 70s, shrinking to a mere 10% in 2006? According to a 2005 report by the Coalition of Service Industries, in the U.S., 84% of companies and 79% of employees are in the service sector. Sources of profitability are changing too.  In 2005, within the nation’s top 10 non-energy firms, 85% of profits came from services.

The lifeblood of the service industry – what defines the winners from the losers – is the customer experience. Yet few companies know how to innovate upon it. At this week’s experiential Service Design Workshop led by design firm Continuum, forty BIF community members were led on an exploration of service innovation and the process of designing exemplar customer experiences.

Do we really have to talk about feelings?

At the heart of every business strategy are underlying, unspoken assumptions about how your industry works and what your customers want. Designing a customer experience requires the ability to ditch all those assumptions. The basic premise of design-based thinking says that if you understand people's values better you can create better products and services for them. Easier said than done. Producing significant value from design involves a deep understanding of customer behaviors, corporate leadership, organizational culture, and cross-discipline work teams. It’s very helpful to think about design in terms of a whole system rather than discrete buckets of new products or services. Similar to an anthropologist on location, the best designers follow the consumer journey from discovery to return; informing contexts and obtaining a thorough understanding of the consumer's needs and aspirations as well as the environmental conditions and constraints in which they live. Ultimately, this leads to the discovery of many unmet needs and identification of unique opportunities. It's only after this process takes place when creativity and ideation kicks in. (Big no-no is to hold a creativity brainstorming session before the research is complete.)

Key takeaways from the workshop

Service innovators have to consider the ephemeral: Strategic thinking doesn’t typically engage the senses yet building an experience is a sensorial process. Although many corporate cultures are dominated by Six Sigma management theories, it's important to also figure out a way to understand consumer motivations, frustrations and expectations. This is a radical shift away from a corporate culture dominated by P&L statements, efficiency strategies and the like that dominates the logic about how business is done. Instead of the usual starting point of deficiency analysis in a particular product or service, give priority to understanding the emotions that drive buying decisions.

Diversity matters: Organizations need to be comprised of broad thinkers who have an ability to see a fairly large spectrum of possibilities. They also need to bring in disparate information, specialties, and technologies and apply them in a way that may not normally have been considered. It's about taking a problem, and turning it upside down, inside out and backwards. It's crucial that people look outside their comfort zone, and understand the culture of the moment.

Touch points are the atomic structure of customer experiences: Map them out! A customer journey map is a way to describe all the experiences a customer has with your company and the emotional responses they provoke - from their first impression of your building, to speaking to staff or receiving a service. This is an intensely rigorous process, particularly when a service offering is complex, with multiple interactions taking place over long timeframes with little by way of tangible outputs. But it’s also a very useful tool to help identify the  customer’s interaction with your organization, their thought processes and reactions to you, which often reveal opportunities for improvement and innovation in the customer's experience.

Beyond the baby/bathwater trope

Design-thinking is a powerful bridge between the creative right and analytic left. It doesn’t prefer one method of thinking over another but instead blends the positive aspects of both. It's worth mentioning BIF research advisor Roger Martin who is also Dean of the Rotman School. Martin has spent the past few years searching for patterns in thinking among great leaders. His conclusion: success comes from an ability to utilize tensions between different business models in order to build a better one. He calls it 'integrative thinking' and it's a direct assault on the reductionist, either/or approach to decision-making, which is typically taught in business schools. This holistic - and yes, more complex and often times ambiguous - approach to thinking, Martin says, is at the heart of many great, new business models.

Design-thinking does not and should not replace traditional strategic thinking. But it will help you avoid the trap that is triumph. As companies become successful, they bank on their core competencies, incrementally innovate on those same competencies and shift much of their focus to optimization and operational excellence. But, as BIF advisor and customer experience guru Jeneanne Rae insightfully says, “you can’t shrink your way to greatness.” Experimenting with new ways to deliver value is one of the most important things an organization can do.

Our thanks to the great team at Continuum and our diverse group of workshop participants for a fantastic day of learning, sharing and challenging exercises. Long live the post-it note!