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The Future of Service Design
SERVICE EXPERIENCE CONFERENCE / November 2016
Leah Buley // The Future of Service Design // Service Experience Conference 2016
What is the current state of
service design in the economy?
80%
70%
60%
50%
40%
30%
20%
10%
0%
1965 1975 1985 1995 2005 2015
Source: US Bureau of Economic Analysis
SERVICES
GOODS
The service sector is the economy.
GOODS AND SERVICES AS % OF GDP
80%
70%
60%
50%
40%
30%
20%
10%
0%
1965 1975 1985 1995 2005 2015
Source: US Bureau of Economic Analysis
SERVICES
GOODS
(And with each recession services grow.)
GOODS AND SERVICES AS % OF GDP
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.015%
10%
5%
0%
-5%
-10%
-15%
% CHANGE GDP
FINANCE, INSURANCE, REAL ESTATE
PROFESSIONAL & BUSINESS SERVICES
EDUCATION, HEALTH CARE, AND SOCIAL ASSISTANCE
1965 1975 1985 1995 2005 2015
25%
20%
15%
10%
5%
0%
Though most of the growth is in just a handful of industries.
Source: US Bureau of Economic Analysis
52%
80%
57%
45%
88%
70%
48%
24%
Digital
Face-to-face
Call centers
Traditional media
HOW CxOs INTEND TO INTERACT WITH CUSTOMERS
TODAY
IN 3-5 YEARS
TODAY
IN 3-5 YEARS
Source: IBM Global C-Suite Study, 2013
Meanwhile, organizations move digital.
Which may explain why service design often lags other fields.
0
20
40
60
80
100
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
UX
CX
SD
Source: Google Trends
100%
80%
60%
40%
20%
% OF INTEREST OVER TIME AS INDICATED BY GOOGLE SEARCHES
“We see a growing corporate recognition of the benefits of service
design and design thinking in general, largely driven by extended
service ecosystems being developed around products, the connected
consumer’s omnichannel expectations, and the rise of digital self-
service.”
— US-BASED AGENCY
This raises lots of questions in the field.
This raises lots of questions in the field.
We saw further evidence of this yesterday.
But big differences remain
between service design and other
forms of design.
TANGIBLEINTANGIBLE
Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis."
The Journal of Product Innovation Management 33.5 (2016): 527-548.
Experience innovation is not heterogeneous.
TANGIBLEINTANGIBLE
Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis."
The Journal of Product Innovation Management 33.5 (2016): 527-548.
Experience innovation is not heterogeneous.
ProductsServices
TANGIBLEINTANGIBLE
Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis."
The Journal of Product Innovation Management 33.5 (2016): 527-548.
Experience innovation is not heterogeneous.
Tacit
Services
Delivered via interpersonal
communications
Explicit
Services
Delivered via technology
Products
Delivered via tangible goods
TANGIBLEINTANGIBLE
Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis."
The Journal of Product Innovation Management 33.5 (2016): 527-548.
Great service design looks different in different industries.
Tacit
Services
Delivered via interpersonal
communications
Explicit
Services
Delivered via technology
Products
Delivered via tangible goods
PROFESSIONAL SERVICES
HOSPITALITY
TRANSPORTATION
HEALTHCARE
BANKING
INSURANCE
TELECOMMUNICATION
UTILITIES
MANUFACTURING
CONSTRUCTION
AGRICULTURE
MINING
Tacit
Services
1.  Absorptive Capacity
2.  Organizational Design
3.  Service Innovativeness
4.  Internal Communication
5.  Launch Proficiency
6.  Innovation Strategy
TANGIBLEINTANGIBLE
Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis."
The Journal of Product Innovation Management 33.5 (2016): 527-548.
And success is driven by different factors.
Explicit
Services
1.  Knowledge Integration
2.  Cross-Functional Integration
3.  Market Orientation
4.  Synergistic Strategy
5.  Proficient Ops & Delivery
6.  Environmental Uncertainty
Products
1.  Product Advantage
2.  Market Orientation
3.  Launch Proficiency
4.  Dedicated Human Resources
5.  Predevelopment Task
Proficiency
6.  Innovation Resources, Market
Research, Team Climate
51%
37%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
Service design entails many different things.
51%
37%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
Service design entails many different things.
51%
37%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
Service design entails many different things.
51%
37%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
Service design entails many different things.
51%
37%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
This requires service designers to master many skills.
Not all service designers do all these in equal measures.
51%
37%
69%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
(This difference is the most shocking.)
51%
37%
69%
50%
24%
FUZZY FRONT-END
INNOVATION
PHYSICAL AND FACE-
TO-FACE DESIGN
DIGITAL EXPERIENCE
DESIGN
ORGANIZATIONAL
CHANGE
BUSINESS SYSTEMS
CONSULTING
Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
And the companies that say they do it all?
WHAT DOES IT ALL MEAN?
The service design field is
at an important moment.
Facing new
opportunities and new
entrants that challenge
the traditions
and values of classic
service design.
Facing new
opportunities and new
entrants that challenge
the traditions
and values of classic
service design.
Potentially at risk of
diluting its distinct
value by over-focusing
on digital and
undifferentiated
innovation.
Facing new
opportunities and new
entrants that challenge
the traditions
and values of classic
service design.
Potentially at risk of
diluting its distinct
value by over-focusing
on digital and
undifferentiated
innovation.
Offering help that
companies need now
more than ever (even
if they don’t always
know it).
What skills will service designers need going forward?
What skills will service designers need going forward?
1.  Organizational and systems design skills.
What skills will service designers need going forward?
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
What skills will service designers need going forward?
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
What skills will service designers need going forward?
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
4.  Knowledge management, er, management.
What skills will service designers need going forward?
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
4.  Knowledge management, er, management.
5.  Absorptive capacity (partnerships, innovation programs, trends & signals).
What skills will service designers need going forward?
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
4.  Knowledge management, er, management.
5.  Absorptive capacity (partnerships, innovation programs, trends & signals).
6.  An emphasis on execution.
BRIGHT SPOTS AT SX
Strong Industry Orientation
MONICA WEILER
STRATOS INNOVATION GROUP
SCOTT CHESROWN
VROOM
CHARU JUNEJA
DESIGN INSTITUTE FOR HEALTH
Optimizing The Organizational Structure for Service
RHIANNON ZIVIN
GRUBHUB
A (Hard Won) Market-Savvy Approach to Strategy
ADAM DOLE
GOKART LABS / BETTER
Sensitivity to Tacit vs. Explicit Services
“We thought the act of making
everything transactional was going to
make it more simple for the consumer.
What we learned is it made it more
complex... because we don’t hold their
hand through the process.”
Acknowledgment That Service Design is Fundamentally About Complexity
Doing great!
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
4.  Knowledge management, er, management.
5.  Absorptive capacity (partnerships, innovation programs, trends & signals).
6.  An emphasis on execution.
More work needed here.
1.  Organizational and systems design skills.
2.  Deep industry expertise or a strong industry orientation (either, or).
3.  A market-savvy approach to strategy.
4.  Knowledge management, er, management.
5.  Absorptive capacity (partnerships, innovation programs, trends & signals).
6.  An emphasis on execution.
Go forth and conquer.
leah@leahbuley.com
@leahbuley

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Leah Buley // The Future of Service Design // Service Experience Conference 2016

  • 1. The Future of Service Design SERVICE EXPERIENCE CONFERENCE / November 2016
  • 3. What is the current state of service design in the economy?
  • 4. 80% 70% 60% 50% 40% 30% 20% 10% 0% 1965 1975 1985 1995 2005 2015 Source: US Bureau of Economic Analysis SERVICES GOODS The service sector is the economy. GOODS AND SERVICES AS % OF GDP
  • 5. 80% 70% 60% 50% 40% 30% 20% 10% 0% 1965 1975 1985 1995 2005 2015 Source: US Bureau of Economic Analysis SERVICES GOODS (And with each recession services grow.) GOODS AND SERVICES AS % OF GDP -15.0 -10.0 -5.0 0.0 5.0 10.0 15.015% 10% 5% 0% -5% -10% -15% % CHANGE GDP
  • 6. FINANCE, INSURANCE, REAL ESTATE PROFESSIONAL & BUSINESS SERVICES EDUCATION, HEALTH CARE, AND SOCIAL ASSISTANCE 1965 1975 1985 1995 2005 2015 25% 20% 15% 10% 5% 0% Though most of the growth is in just a handful of industries. Source: US Bureau of Economic Analysis
  • 7. 52% 80% 57% 45% 88% 70% 48% 24% Digital Face-to-face Call centers Traditional media HOW CxOs INTEND TO INTERACT WITH CUSTOMERS TODAY IN 3-5 YEARS TODAY IN 3-5 YEARS Source: IBM Global C-Suite Study, 2013 Meanwhile, organizations move digital.
  • 8. Which may explain why service design often lags other fields. 0 20 40 60 80 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 UX CX SD Source: Google Trends 100% 80% 60% 40% 20% % OF INTEREST OVER TIME AS INDICATED BY GOOGLE SEARCHES
  • 9. “We see a growing corporate recognition of the benefits of service design and design thinking in general, largely driven by extended service ecosystems being developed around products, the connected consumer’s omnichannel expectations, and the rise of digital self- service.” — US-BASED AGENCY This raises lots of questions in the field. This raises lots of questions in the field.
  • 10. We saw further evidence of this yesterday.
  • 11. But big differences remain between service design and other forms of design.
  • 12. TANGIBLEINTANGIBLE Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis." The Journal of Product Innovation Management 33.5 (2016): 527-548. Experience innovation is not heterogeneous.
  • 13. TANGIBLEINTANGIBLE Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis." The Journal of Product Innovation Management 33.5 (2016): 527-548. Experience innovation is not heterogeneous. ProductsServices
  • 14. TANGIBLEINTANGIBLE Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis." The Journal of Product Innovation Management 33.5 (2016): 527-548. Experience innovation is not heterogeneous. Tacit Services Delivered via interpersonal communications Explicit Services Delivered via technology Products Delivered via tangible goods
  • 15. TANGIBLEINTANGIBLE Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis." The Journal of Product Innovation Management 33.5 (2016): 527-548. Great service design looks different in different industries. Tacit Services Delivered via interpersonal communications Explicit Services Delivered via technology Products Delivered via tangible goods PROFESSIONAL SERVICES HOSPITALITY TRANSPORTATION HEALTHCARE BANKING INSURANCE TELECOMMUNICATION UTILITIES MANUFACTURING CONSTRUCTION AGRICULTURE MINING
  • 16. Tacit Services 1.  Absorptive Capacity 2.  Organizational Design 3.  Service Innovativeness 4.  Internal Communication 5.  Launch Proficiency 6.  Innovation Strategy TANGIBLEINTANGIBLE Source: Storey, Chris, Pinar Cankurtaran, Paulina Papastathopoulou, and Erik Jan Hultink. "Success Factors for Service Innovation: A Meta‐Analysis." The Journal of Product Innovation Management 33.5 (2016): 527-548. And success is driven by different factors. Explicit Services 1.  Knowledge Integration 2.  Cross-Functional Integration 3.  Market Orientation 4.  Synergistic Strategy 5.  Proficient Ops & Delivery 6.  Environmental Uncertainty Products 1.  Product Advantage 2.  Market Orientation 3.  Launch Proficiency 4.  Dedicated Human Resources 5.  Predevelopment Task Proficiency 6.  Innovation Resources, Market Research, Team Climate
  • 17. 51% 37% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey Service design entails many different things.
  • 18. 51% 37% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey Service design entails many different things.
  • 19. 51% 37% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey Service design entails many different things.
  • 20. 51% 37% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey Service design entails many different things.
  • 21. 51% 37% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey This requires service designers to master many skills.
  • 22. Not all service designers do all these in equal measures. 51% 37% 69% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
  • 23. (This difference is the most shocking.) 51% 37% 69% 50% 24% FUZZY FRONT-END INNOVATION PHYSICAL AND FACE- TO-FACE DESIGN DIGITAL EXPERIENCE DESIGN ORGANIZATIONAL CHANGE BUSINESS SYSTEMS CONSULTING Source: Forrester’s Q3 2015 Global Service Design Agency Online Survey
  • 24. And the companies that say they do it all?
  • 25. WHAT DOES IT ALL MEAN? The service design field is at an important moment.
  • 26. Facing new opportunities and new entrants that challenge the traditions and values of classic service design.
  • 27. Facing new opportunities and new entrants that challenge the traditions and values of classic service design. Potentially at risk of diluting its distinct value by over-focusing on digital and undifferentiated innovation.
  • 28. Facing new opportunities and new entrants that challenge the traditions and values of classic service design. Potentially at risk of diluting its distinct value by over-focusing on digital and undifferentiated innovation. Offering help that companies need now more than ever (even if they don’t always know it).
  • 29. What skills will service designers need going forward?
  • 30. What skills will service designers need going forward? 1.  Organizational and systems design skills.
  • 31. What skills will service designers need going forward? 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or).
  • 32. What skills will service designers need going forward? 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy.
  • 33. What skills will service designers need going forward? 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy. 4.  Knowledge management, er, management.
  • 34. What skills will service designers need going forward? 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy. 4.  Knowledge management, er, management. 5.  Absorptive capacity (partnerships, innovation programs, trends & signals).
  • 35. What skills will service designers need going forward? 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy. 4.  Knowledge management, er, management. 5.  Absorptive capacity (partnerships, innovation programs, trends & signals). 6.  An emphasis on execution.
  • 37. Strong Industry Orientation MONICA WEILER STRATOS INNOVATION GROUP SCOTT CHESROWN VROOM CHARU JUNEJA DESIGN INSTITUTE FOR HEALTH
  • 38. Optimizing The Organizational Structure for Service RHIANNON ZIVIN GRUBHUB
  • 39. A (Hard Won) Market-Savvy Approach to Strategy ADAM DOLE GOKART LABS / BETTER
  • 40. Sensitivity to Tacit vs. Explicit Services “We thought the act of making everything transactional was going to make it more simple for the consumer. What we learned is it made it more complex... because we don’t hold their hand through the process.”
  • 41. Acknowledgment That Service Design is Fundamentally About Complexity
  • 42. Doing great! 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy. 4.  Knowledge management, er, management. 5.  Absorptive capacity (partnerships, innovation programs, trends & signals). 6.  An emphasis on execution.
  • 43. More work needed here. 1.  Organizational and systems design skills. 2.  Deep industry expertise or a strong industry orientation (either, or). 3.  A market-savvy approach to strategy. 4.  Knowledge management, er, management. 5.  Absorptive capacity (partnerships, innovation programs, trends & signals). 6.  An emphasis on execution.
  • 44. Go forth and conquer. leah@leahbuley.com @leahbuley