Service Design for Business. Løvlie Lavrans

way to deal with internal and external challenges. It offers an approach to deal with strategic initiatives as well as operational challenges by asking three fundamental questions:

      1. What does this do for our current and future customers?

      2. How will our business be impacted?

      3. Which capabilities are needed by the organization to respond or to drive the initiative?

      The main objective of the approach is to resolve customer-related challenges, but balance them with business drivers and the organizations' capabilities. Other times, understanding the customers' perspective will provide clarity and direction needed to achieve business results or to drive organizational change. It is important to separate business concerns from the people, structures, and capabilities that make up the organization. In all cases, service design starts by taking an outside-in perspective, and drive this through real business objectives while considering an organization's capabilities.

      Customer-Business-Organization

Understand Customers and Build High-Value Relationships

      Seeing a business through customers' eyes offers powerful insights that make customers' expectations, experience, and behavior more tangible. It exposes customers' pain points and provides deeper understanding of their emotions as they interact and transact with a business. This enables companies to identify clear intervention points that can be leveraged to increase value for customers and deal with challenges, typically to:

      ● Increase customer satisfaction and improve the level of adoption

      ● Reduce customer irritations and prevent costly service failures

      ● Improve service experience for customers and build better customer relations

      Service design can identify exactly which actions will make a real difference to customers and helps execute improvements in a way that bring people real, tangible value.

Business Can Win with Customers

      Business objectives such as operational efficiency or higher market share bring many internal complexities with them when approached from the inside. A service design approach identifies key customer drivers that impact customers' behavior and finds customer-centric ways to achieve business objectives:

      ● Lower cost to serve existing and new customers.

      ● Increase customer retention.

      ● Create new sales or upsell opportunities.

      ● Successfully launch product and service innovations into the market.

      Solutions to business challenges can be surprisingly simple when taking an outside-in approach to expose what is really relevant to customers and when used to find solutions in other sectors and businesses. A service design approach can help both to imagine radical solutions to complex problems and to implement many small incremental improvements that together create massive top-line and bottom-line impact.

Align the Organization around Customers

      Aligning departments, channels, partners, and stakeholders requires management focus, as does the need to optimize and adjust the internal workings of the organization. This creates a strong internal focus and many organizations lose sight of the fact that the most important customer is the external customer. This results in practices, systems, and processes that do not serve customers, or worse, create obstacles for staff and customers. Understanding customers – especially their needs and expectations of the organization – translated to the reality of how the organization operates and runs enables organizations to achieve:

      ● Internal understanding and alignment

      ● High staff engagement and participation

      ● More customer-centric focus, leading to increased market agility

      A service design approach provides the customer as an outside reference, not only to align people in an organization, but also to deal with internal challenges around systems, processes, procedures, and policies.

      The concept of service design as a way to approach customers, the business, and organization is a model we refer to in many of the chapters in this book as we go about explaining how.

      Key Concepts

      There are some key concepts that lie at the heart of service design, and understanding them helps you get the most out of this book. In this section, we explain concepts such as design thinking, qualitative customer research, and visualization and how they form a base for the service design approach to business.

The Design Approach

      Companies often struggle to solve problems with the usual analytical and deductive tools. The design process offers a powerful alternative, providing a generative and creative approach to finding solutions.

Thinking By Doing

      In business thinking, the assumption is that the answers to most problems are already out there. It is a matter of finding and evaluating different solutions, and then of selecting the right one for the particular market.

      Design thinkers start from the assumption that there is a perfect solution out there, but it hasn't been invented yet. The design thinking approach helps you to imagine and test and redesign a solution quickly, until it matches the reality of the market. In practice, service design combines analytical and imaginative thinking.

Human-Oriented

      Another fundamental starting point in design is empathy with the human (customer) and their experiences. When a business challenge involves being successful with customers, or inspiring staff to adopt new processes or ways of working, this is a great advantage. Seeing the business through your customers' eyes can help people from the CEO to operational teams to make better decisions.

Creative Processes

      Design as an approach brings a whole raft of visual and creative methods to solve business challenges. Over the past two decades design thinking has shown that design processes can be applied not only to chairs and cell phones but also to complex problems like planning international security operations, optimizing hospital processes, and innovating banking services.

      Creative design processes can seem both frivolous and confusing at first, but prove to have massive impact on bringing innovative services to market and bringing the organization along on challenging change journeys.

Qualitative Research

      The service design approach puts emphasis on complementing quantitative research with qualitative methods. This enables teams to combine strong subjective understanding of the human experience with predictable patterns that apply to most customers. The result is services that not only satisfy customer needs and wants but also delight, inspire, and empower.

Insight versus Numbers

      Market research is typically quantitative, based on large numbers of respondents, and delivers a few statistical “truths.” Qualitative customer research can yield significant insight with a small number of respondents. Combining market facts with inspiring insights about the humans who actually buy your service increases your chances at achieving success in the market.

Understand Behavior

      Qualitative research helps to uncover the aspects of human behavior that can't be seen in the numbers. Diving deep into a few customers' lives will reveal the motivations for their actions and expose other things they do that can't be explained in a questionnaire.

      Observed customer behavior is a highly valuable source of information as it provides a clear picture of how customers really experience services in their everyday lives as well as their needs and values. This insight is useful in the creative process of developing services that work for customers.

      When behavioral insight is combined with economics, the results can gain highly strategic impact.

Insights That Drive Success in Practice

      Experiences are human and subjective and can't be quantified. This doesn't mean that customer experiences can't be approached in a rational way. A service design approach enables you to generate nonquantifiable insight