Why CEOs should understand service design and its relation to profitability
The 10th Service Design Global Conference 2017 (SDGC17) in Madrid was packed with success stories about organizations that have radically renewed their organizational structures and processes to fit design thinking.
Several European and American telecom companies and banks were presenting similar and enthusiastic transformation stories. Introduction of company-wide service design tools and processes had improved both customer and employee experience.
However, there still is a huge potential for improvement, like these examples mentioned in the SDGC17 presentations show us:
- 70 % of transformation projects fail.
- 90 % of the start-ups fail.
- 60 % service cost in the UK’s public sector is spent on calls and casework meaning responding to customer inquiries that relate to unclear terminologies or discontinuing processes.
- There are over 2 million irrelevant “zombie apps” that users don’t find or use. The author Joe Macleod said people search only 300 out of 2.2 million apps available. John Kotsier in Forbes states that almost 60 % of the top 500 search terms used in the AppStore are brands: names of companies or apps. The figure goes up to 80 % for the top 200, and 90 % for the top 50.
Why organizational transformation is mandatory?
There are key questions, particularly in top management’s agenda, that address to problems mentioned above:
1. How to make your brand and value propositions relevant and distinguished?
Do you really understand the customer needs and routines? Are you solving the right problems and do you understand the scope of the solution? Many companies fail to understand where they are in the interconnected digital ecosystem and how to stand out.
49 % of smartphone app users in the United States use merely 6 to 10 apps per week. It is challenging to become one of those without good insight. But then again, some value-adding apps grow fast. Deloitte’s Larry Keeley gave an example of Chinese WeChat Pay that reached 600 million transactions per day in only a few years.
2. Are your customer processes and terminology clear?
People are overwhelmed with information. The more complex your service, terminology or processes is, the bigger is the probability that “Google becomes the homepage of your service”, as the UK Government’s Head of Design Louise Downe phrased it. If the top management does not understand the role of user experience and design, it leads in sub-optimization, organizational silos and unclear user journeys.
3. How to build an organization and culture that are able to adapt to quick changes and shape their industry?
Services today require thorough understanding of systemic thinking and ecosystems. Large-scale innovations are extremely difficult to implement and the transformation initiatives often fail because they are too narrow. Organizations need new holistic management systems that will crush silos and improve stakeholder engagement and understanding.
4. How to create a strategy that will be delivered?
One of the key reasons for failures is that organizations have a lot of brilliant plans but in reality nothing changes. Never-ending transformation processes lead to change fatigue. In several SDGC17 service design cases it was evident that employee engagement and their role in implementing the new services were not designed well enough. Developing new solutions is hard work and it requires some collaborative learning through failures. Oftentimes, also a common language and tools for cross-functional development are missing.
Key take-aways from SDGC17
Design thinking has been proven to be effective in cultural change for many organizations. Service design has excellent tools to address the complex and systemic challenges when combined with traditional skills and understood and supported by the top management.
Successful branding and value proposition need strong insight
Successful organizations understand how to use contexts and user behaviour to make their messages distinctive. Both Louise Downe and Larry Keeley emphasized that technologically possible doesn’t make it right. Test your prototypes with head and your heart. Is your design good for future generations? User-centric vision does not work without personal insight. The clearer the vision is, the easier is also the collaboration.
Customer processes cross organizational boundaries
Build a holistic view and understand your place in the ecosystem. Engage with your customers and network to co-create the value. All the touchpoints have to be considered. Nowadays, everything happens through our mobile devices and thus every service has mobile touchpoints.
According to Deloitte’s Larry Keeler and the BBVA Bank, every successful development project team contains a multidisciplinary “triangle”: design, business and technology working together iteratively. Platform thinking enables the use of modular technologies.
Good culture is powered by service design
Enable people to work together and teach them how to utilize user-centric tools and methods. Making things open makes them better and more understandable. Reflect, learn and adjust, have fun and celebrate success.
Maastricht University’s Dennis Hambeukers and Marc Dolman stated that when you start caring about the users, something magical happens. It brings people together and creates a common sense of purpose. According to Larry Keeley’s vision, future organizations are like corals: self-organized, self-optimizing and easy to operate. CBi China Bridge’s Angela Li and Cathy Huang stated that the idea of a company has changed which requires new ways of working.
Traditional: Company + employees
Now: Platform + entrepreneurs
Focus on delivery. Strategy is delivery.
Implementation is vital but hard. Service design gives you good tools to embrace complexity, since it is all about breaking silos and merging into different disciplines. In order it to be effective, design thinking needs merge with existing management processes. It is like learning a new language. Dennis Hambeukers and Marc Dolman highlighted that traditional skills such as vision development, leadership, and communication are still relevant. Co-creative teams do not run by themselves but need to be combined with traditional skills.
Successful organizations focus on fast implementation. BBVA uses the ‘3–6–9 model’ in service development: a sprint of 3 days, followed by a prototype 6 weeks later, ending with a launch to the market after 9 months. Slow progress makes people frustrated. A good culture is not enough, if you don’t get measurable results: launching products quickly reduces the change fatigue and generates positive commitment and excitement.
In Kuudes, for 14 years already, we have used multidisciplinary teams, service design processes and tools in every project we do, whether the projects have been called service design or not.
Design and customer insight is embedded in all our work, stretching from category innovations (Arla Luonto+) to improving service capabilities of an organization (HAM) or massive co-creation of a brand strategy for city of Helsinki (Brand New Helsinki). Our customers tell that we help them renew and challenge the market. In addition, they learn new energizing skills and insights during the project. We are more than happy to assist anyone to the fascinating world of design. Please contact us for more information!
You don’t learn best by following the rules but you learn by doing, and by falling over and over again.
– Richard Branson