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The value of service design in a world of digital products

Luis Alt
Rosenfeld Media

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— Ben Reason and Luis Alt

This article explores the advancement of digital product design in organisations, its value and limitations, and what service design can offer to organisations that product design hasn’t been able to do.

Product design has penetrated most organisations. It has helped them ship products faster, keeping up with customer expectations and providing a way to perform transactions much easier through digital channels. However, we also see product design being limited to tweaking and adjusting tiny aspects of individual products that don’t talk to each other, thereby delivering a disconnected experience to customers. On the other side, service design’s role has been to connect the dots to bring a customer-centric perspective to organisations. It has moved beyond customer interaction deep into organisational transformation. We believe it is time for those two practices to work closer together.

From Services to Products

When Livework started, we envisioned a world where access, not ownership, would become prevalent. People would meet their needs or desires by subscribing to services, not by owning things — moving from a product mindset to a service one. But after a short period, service designers found themselves immersed in the activity of mapping and tweaking journeys to make services more pleasant and profitable. And while this is not bad, it falls short of how much value it can deliver.

With the launch of smartphones, and once connectivity became common, a new vision took centre stage, that of digital products. In this era, practical and straightforward applications replaced the complex old world of services. Users now have a remote control to interact with services and expect all organisations to be on this device.

Product Managers, Product Owners and CMOs became protagonists. Their role was to develop and ship new digital products that would transform organisations’ operations. To fit into this structure, designers had to adapt their work to agile practices. Mantras like ‘strategy is delivery’ held sway, and designers found themselves in never-ending discoveries that fed product teams with improvement suggestions. It was the birth of what we know now as (digital) product design.

In the big scheme, it seems like services became products instead of the other way around.

The trap of seeing products in everything

By definition, products are the output of a process. They are what organisations offer as a packaged value to customers. Organisations with a product mindset tend to concentrate on what they offer instead of the need they should satisfy. And since they adopt a more transactional perspective, they lack a complete understanding of customers’ needs, which drives organisations away from being customer-centric.

Experiences consist of many elements that bridge across multiple products and services. When you slice your organisation by products, you risk creating digital silos that will lead to disconnected and frustrating experiences. Besides, when you lose the complete cycle of experience, since the focus is on the transactional metrics of the product, there’s a risk of missing the relational side of human needs.

A good definition of service is that it is “an artefact that augments the potential to act of an entity perceived as a beneficiary”. It sounds wordy, but it basically means that anything an organisation does (artefact) to help someone (beneficiary) do something faster, better, easier, you name it, (potential to act) is a service. A service might help people do their laundry with less effort, get to faraway places faster, communicate with others at a distance, pay for things without cash, etc.

You might think products and services seem to be the same, but the usage of each term leads to different outcomes. While the focus of products is on what is being offered, that of services is on what the organisation will enable its customers to do.

In services, we also look at the spaces between transactions. We see how people change channels to fulfil a need or desire — and its evolution. So when we apply a service lens, we start paying attention to a relationship that develops over time.

Where product design gets it right

Our intention is not to invalidate everything the product mindset has brought to organisations worldwide. Seeing how the digital revolution has made most of our lives better and more fluid through those solutions has been amazing. And it is easy to see why the product view has taken such a dominant position in the digital landscape.

Enabling and fixing transactions to meet customer expectations

Since most people nowadays have access to smartphones (and the internet) and expect digital solutions to satisfy their needs and desires, product designers have been busy moving organisations to where customers expect them to be. Most transactions must be made available in a digital format, and plenty more need fixing. Taking our society to a digital landscape is currently the main benefit of product design work.

Autonomy to move quickly

By having a clear division around products, organisations provide teams with the right amount of accountability to decide what to do next. They are free to implement changes that might address business goals, which creates the right environment for teams to move fast. With more autonomy, organisations can ship products more quickly.

Fast reaction to changes in the market

Being digital means being where your customers expect you to be. With technologies advancing at a faster pace, organisations must build more screens (or other ways of interactions). Having teams dedicated to making those interfaces have helped organisations keep up with their expected pace, rapidly reacting to changes in the competitive landscape.

Constant learning and adjustments on the go

Services (and digital products) are not all implemented simultaneously, and once they touch customers, they will need adjustments. Having teams dedicated to a product means they build, launch and measure the impact of their solutions. This last part allows them to quickly learn what’s not right to make changes when needed instead of just hopping on to the next project.

Bridging products with services

Service designers have approached projects as industrial designers do for a long time. But whilst objects must be designed in advance so they can be manufactured, services have multiple moving pieces, which are not implemented all at once. They must constantly change, evolving according to customers and organisational needs. And while it might be a good idea to determine an ideal vision for the service, it starts to change as soon as it begins being implemented. Service design should take advantage of this aspect that product design provides.

Instead of tweaking and improving bits and bytes of siloed products, organisations must also understand how everything is connected. Find balance and synchrony among products to satisfy customers with an optimised operation. And whilst it is crucial to optimise customer tasks by improving products, organisations must also be on the outlook for innovating themselves. They should look for new ways of doing the same thing they do and also think of new things to do, always with customers and their service in mind.

Service design provides a big picture. It brings a holistic perspective to the customer relationship — how it is and how it could be. It tests hypotheses and ideas beyond the product, bringing back information that might change products and their configuration.

Everything an organisation does should be linked to value generation for customers. We know this because we’ve been helping organisations become more customer-centric for over two decades. We’ve seen what happens to companies that go through this transformation. They find a synergy between profit, efficiency and customer satisfaction. But to do that, they must have a clear understanding of how everyone’s work contributes to the ultimate goal of serving customers the right thing in the right way. And this is only possible with an outside-in mindset which service thinking brings.

Unpacking service thinking and design

There’s more to service design than bringing a customer-centric, outside-in mindset. Let’s explore that added layer of value that service design can get to the world of digital products now.

Alignment

Service design can convey a big picture of what the organisation offers to its customers and how it happens through a different array of services (and products). This connected and multi-layered understanding of a service helps to organise and find synchrony among various departments and groups of people (squads) to gain accountability, speed and efficiency by removing unnecessary structures and processes.

Human-intensiveness

Although product design has disseminated design to organisations, we believe it hasn’t been able to bring it in a complete form. As we pointed out before, the practice is narrow, with a common focus on short cycles. Service design can unlock collaboration across functions and drive a human way of deciding what to do next to a more strategic level, not just in the interaction layer. It creates space for more foundational types of work, which involves deep consumer research and longer cycles of ideation and prototyping.

Beyond improving services

Due to its more holistic ethic and a focus on the longer term, service design can push the boundaries of organisations and expand their scope. For example, it seeks to solve the ultimate challenge of moving organisations to a more sustainable future. It actively pursues solutions that are good for all customers (with a scope of inclusivity) and beyond them when it considers stakeholders like our descendants or the planet. And it does that while providing a valid business model instead of just an empty marketing statement.

Conclusion

It is easy to see why product design has become ubiquitous these days. There is so much digital work to get organisations up to date with customers’ expectations that an army of product designers and developers emerged. And while those interfaces must get built quickly, the convenience they bring is overshadowed by the complexity and messiness of disconnected products they generate when all they do is compete for users’ attention.

We believe service thinking and design can unlock organisations’ potential to think strategically and deliver great services. It does that by bringing a human-centred relational-based approach to organisations, which leads to better services for customers while also considering a more systemic understanding of their impact on society and the planet.

Product and service designers should get closer to each other and learn from each other’s practices. It could lead to more than better customer experiences and positive results for organisations. In the process, it could also help us be more aware of our impact, which should be positive for all life forms.

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Luis Alt
Rosenfeld Media

I observe (and write about) how people use services and how organizations provide them — Founder of Livework in Brazil.