Innovation in Experiential Services

A report from London Business School

"Service innovation has proved an elusive area for many reasons, including the intangibility of services, the heterogeneity of services, much innovation being of processes rather than products and the lack of an identifiable R&D function. Much research has focused on services where products can clearly be defined (for example financial services), and where technology is being used to change the nature of the service or the business. However, as Salter and Tether (2006) have pointed out, there is an emerging research stream which addresses the particular nature of services such as intangibility, dependence on people and high levels of interaction rather than technologies.

This report examines innovation in experiential services. These are services where the focus is on the experience of the customer when interacting with the organisation, rather than just the functional benefits following from the products and services delivered.

The report is based on a continuing research programme on experiential services at London Business School. In particular it draws on a recent case-based study of eight design agencies and consultancies and nine successful experiential service providers. The report addresses the question of how do experiential service providers innovate, in particular the content of innovation and the process of innovation including organisation for innovation. Studying innovation in experiential services facilitates wider reflection on the subject of service innovation."

Download the report here.....

(via Design For Service)

Fundamental Changes

A 'must read' report from Swinburne University of Technology on user-led innovation.

"User-led innovation is transforming the way many organisations develop new products, services and knowledge. Service-based organisations in particular can benefit from leveraging the participation of their audiences, customers and citizens. Today’s consumers have much greater input into the creation and dissemination of the products and services they consume."

Download it here...

Service Design Changes The Rules

I've been taught some valuable lessons at school. Most of them I've forgotten from the moment I walked out of the school building for the last time. But, oddly enough, some ideas got stuck in my head.

For example, I learned the difference between branding and marketing. And I actually cherished that rule. For years I've been a pain in the ass of many marketing, brand and product manager telling them time and time again they should never confuse these two disciplines. Never!

But I feel it might be time to start questioning some rudimental principles. There is a service revolution going on after all. And what's a revolution without changing a couple of rules.

Let's assume for a second we live in a perfect world and service organisations are bold enough to go were no man.... etc. And they are actually going to embrace all the 'service design' principles. Than service organisations are going to be all about engagement, empowerment, co-ownership, meaningful relationships and building an organisation around the costumer needs and wants.

What could follow is this:

Identity = Image
A direct result of customer (and employee) empowerment, co-ownership and co-production. If you're customers can truly shape your organisation than your identity equals your image.

Branding = Marketing
This one scares the heck out of most organisations I know. The rule is: Marketing begins with the customer and branding begins within the company. But this is thinking in commodities not services. Co-ownership will hand over the brand to the customer.

Marketing communications = Internal communications
To deliver a great service everyone involved in the delivery should embrace the same set of values. And this means a customer-centered organisation can't differentiate between the people who work for the organisation and customers. They must be treated the same and given the same information. The only differences is that employees get paid.

This is just a thought that's been rattling around in my head for a while. And at DesignThinkers we use it as an inspiring starting-point to think up some innovative business-models. But my old marketing teacher is going to think I'm a raving idiot, so no change there.

Watch Out! Here Comes The Service Revolution!

You may not have noticed, but In the 'West" we are living in a so called service economy. This means we don't make a lot of stuff anymore. We just buy it.

We are able to do so in ever increasing quantities with the money we earn sitting in office buildings looking at computer screens. Producing spreadsheets. And if we are not looking at our screens we are sitting around a big table with lots of comfy chairs. Talking about our spreadsheets.

Sounds all right. But there is a problem. We don't make a lot of stuff anymore, but we don't provide a real viable alternative for it. My gut feeling says that If we don't use our hands, we should be using our head. And we are not using it. You don't have to be a economist to figure this out. If we don't change we will be in trouble. We won't be able to compete on any level with the big and slowly awakening giants like India, Brazil and China.

We, in the west, are living a service economy, that's a big change from a industrialized economy. But our way of thinking, our processes, the way we structure our companies, sell and market our products is still based on ideas developed in the industrial revolution. So it's about time for a new revolution. A service revolution.

In fact it is taking place right now and it's official name is the "third Industrial Revolution". Basically this is what's happening: Economists divide goods and services into tradable and non-tradable. And service has often been considered non-tradeble (and still is by many). But the boundaries are fading away. This means that more and more services will become tradable. This is were our greatest and possibly only opportunities for the future lie.

It's going to take some effort. Because, just like the other two industrial revolutions, it is going to change the way we work, live, and educate our children. So it's a big deal. But it's still early days and we don't really know what to do with it. Or we're just to bloody comfortable, rich and lazy and we don't want to see the necessity for change. So we just keep pushing the snooze button one more time. But it's time to wake up. Because it's never a good idea to sleep through a revolution. You'll miss all the fun.

What The Hell? (Talking Service Design)

I've been spreading the word on how important it is to stop treating service as a commodity for quite some time. I am, as you might already know, an enthusiastic supporter of the methods and tools 'service design' provides us. I feel like a preacher sometimes.

But soon after I started answering my calling, there is one thing I learned. I had to change the language I used. There is a particular jargon that accompanies this new field of expertise, and it can take some time getting used to. It can make everything sound a bit mushy and alien.

If I start orating about co-production, empowerment, service-delivery-blueprints, costumer-journeys, touch-points, service-ecology and so on, my clients generally start to get nervous. "What the hell is he talking about? I thought we were working on a marketing plan?"

So I changed my language. I started using words from the more familiar fields of branding, experience-marketing and, my personal favorite, life in general. This sounds easy, but customised words are sometimes pretty handy if you want to get to the point very quickly.

But until everyone knows what exactly a 'service-ecology' means, I'm going to shut up about it. It makes my quest a lot easier. And if clients still don't know what the hell I'm talking about, at least the familiar words give them a warm fuzzy and comfortable feeling. And that's all I want really.

I don't like them

I really don't like European Tenders. They just don't make a lot of sense. Not from where I'm standing, and certainly not from the clients point of view.

In my line of work it's almost always the same. Some selected agencies are being asked to write down an advise (amongst other things). But non of the parties can communicate with the client. This way all the agencies have the same information. Sounds fair.

But how can this help the company in selecting the best partners? How do they really know for sure which agency is the right match for them? In the end companies can choose between a lot of clever written documents pregnant with generalizations and assumptions. But an adviser must first and foremost be a good listener and work in close partnership with his or her client. It's the personal relationship and, dare I say it, chemistry which is such an important element if you want to do great and remarkable things.

And now they have a pile of paper in front of them. How can anyone really judge the content of these documents? It's such a waist of time. And not just the clients time. I can see them now, all those talented people battering away on there computers, hoping that their guesswork happens to be right on the mark.

And when the choices have been made. And all those plans end up in that big magical drawer that's never emptied but is never full (how can it be!). Then the real work starts. But client and agency still have to get to know each other from scratch. It's almost a blind date.

And the client probably liked the clever guy who wrote the document and explained it to them (they always like me), but they might hate the people who they are actually going to work with on a day-to-day basis (I usually lock them up in the basement until the deal is closed).

So in this situation it is common sense clients make the safest choice. They'll lean towards what they know. The big name, the company they already know or worked with. I know I would. And this means that new, small, less known companies have less of a change to get the contract. And the client has not been given the opportunity or the tools to make the best choice possible.

Now I didn't do any research, so I'm probably all wrong about this. But I just don't like European Tenders.

Business of Design Week Hong Kong 2008

This years Business of Design Week (BODW) was held in Hong Kong from the 10th until the 15th of december. The BODW is Asia’s leading international conference dedicated to design, brand and innovation. This years BODW partner country has been Italy and next year the honour has fallen to the Netherlands.

DesignThinkers was asked by the Dutch Ministry of Economic Affairs to create a visual identity to function as a banner for the entire Dutch contribution which has been given the title: 'Open Minds'. Besides that we were asked to come up with a concept on how to create anticipation around the announcement of the Dutch participation in 2008 at this years BODW.

We kept it nice and simple and let visitors of the BODW take a sneak peak at what the Dutch have to offer. Concealing rather than displaying. The curiosity of the people of Hong Kong did not let us down.

New agency

In april of 2007 Marjo Staring and I started DesignThinkers. A creative 'service design' and branding agency. We started the agency realizing that something is about to change. Something big.

New technological development, the growing importance of the service economy in the west and the changing expectations of people towards services were some of the developments that fueled our unrest. We kept thinking: are we still using the right tools? What do all these new developments actually mean?

I've always had a hard time distinguishing between Image, identity, branding, marketing, communications, public relations and what have you. Can't it all be summed up with the word relationhip-building? At least that word I can understand. It actually means something. In fact it probably means more than most organizations can handle.

A relationship is something you have to work on, it's never a one-sided story. Both parties have their responsibilities. And you can't be in a meaningful relationship with someone you don't know, don't like or just distrust. It sounds so simple but we all know, a good healthy happy relationship takes stamina and hard work.

This focus on creating a real meaningful relationship with your costumer is growing in importance if you are selling a product but, needles to say, it is absolutely crucial if you are providing a service.

This is the foundation on which we started DesignThinkers.