Designing the Business – The Next Frontier?

 

Companies have been putting a lot of time and effort to ensure they provide better, more engaging customer experiences – be it about making online shopping easier, or delighting passengers flying long-haul flights. This makes customers happier, and happy customers are worth more.

What we find, however, is that very few businesses succeed in creating truly great customer experiences.  Ask yourself what companies you have dealt with that really excel in making things easier or better for you. Not many I’d imagine.

One of the reasons that too often companies fail to achieve the holy grail of great experiences is that the innovation process traditionally starts by asking what customers want, and then try to embed this ‘ideal’ in the existing business model. This is where things become complicated, as often businesses won’t have the right channels, processes, systems or culture to deliver the intended experience.

One way to tackle this issue is by flipping the innovation challenge to its head. Instead of designing the experience around the business, companies should design the business around the experience.

For example, think about Nespresso. It’s one of the fastest growing and most profitable divisions at Nestle.

However, it wasn’t always a fairytale business story for them. In the  late 80’s Nespresso faced serious difficulties due to a non-performing business model. They had the same product, same value proposition, same ideas. However, their target customers were offices. Coffee pods and coffee machines were distributed by machine manufacturers through a joint venture deal. The issue was, business growth was well below than what they expected.

What did Nespresso do?  They kept the value proposition (restaurant quality espresso, easy to make) but changed the business model. Once they started to focus on the ‘home’ market through direct distribution fueled by an more upscale marketing strategy (aided by George Clooney as a brand ambassador), things changed radically, and the rest is history.

Innovation needs to happen in two directions: outside-in (to understand what customers want) and inside-out (to define what you business need to do meet you customers’ needs).

 

This post also appears on the Truth blog

Service Design Global Conference 2011

Last week I had the opportunity to present at the Service Design Global Conference in San Franscisco. Great to see some old friends and meet new ones.

My presentation was inspired by a few observations I got over the years working with Service Design, especially when trying to ‘sell’ service design projects to clients who are more likely to belong to a mainstream market.

If you are interested in learning more, you can donwload the presentation from here

Service Transparency

A while ago a fire ruined a small but charming restaurant situated in my neighbourhood. As soon as the owners started to get the place back in shape, I noticed that they were constantly leaving notes with updates on the window.

Keeping in touch with customers

These notes made me feel connected to what was happening in the restaurant. The owners could have left a simple sign saying: “We’ll reopen on June 11th.” But the decision to be open and transparent resonated with customers like me. It made me feel like part of part of closer to them.

Being transparent is a crucial step in making an emotional connection between service users and providers. It makes businesses seem more human and closer to their customers. It also helps to make customers feel more valued and trusted, which in turn leads to enhanced customer loyalty and advocacy.

Take UPS or FedEx as an example. These companies offer a fair degree of service transparency by allowing customers to track their packages in real time, leading to an extra level of reassurance and peace of mind.

In Brazil restaurants have to display a sign saying “please visit our kitchen” to comply with health and safety regulations. Although I haven’t met anyone who has asked for a kitchen tour, the offer surely makes the service provided by restaurants more transparent. As a result, restaurants seem more trustworthy and customers feel more comfortable.

However, there’s no such thing as a free lunch. In order for transparency to work, businesses need to ensure that not only the customer facing aspects of a service – but also the infrastructure enabling service delivery – are well designed. You probably wouldn’t recommend a restaurant with a dirty and messy kitchen, would you?

Good service is about trust, and being transparent is a certain way of gaining the trust of customers

This article was originally posted on the Engine website.

Service Design Conference

If you missed the last service design conference hosted by the Service Design Network, you can still check out the excelent presentations and some pictures on the SDN website.

Worth checking out the presentations from my ex colleagues from Engine, Tamsin and Joe.  Apparently Julia’s presentation, “Moving forward – learning from the health sector” was quite interesting too, but it seems that there is no link to download her presentation yet.

Service design in Brazil

Nice to see that service design is flourishing in Brazil. Design Loyalty is a service design consultancy based in Sao Paulo, and apparently they have been working with a few interesting clients.

What’s easier than 1,2,3?

Last Christmas I took an Air New Zealand flight from Auckland to Queenstown, and I have to say: it was the best check-in experience I’ve ever had.

Once I arrived at the terminal, I was quite impressed by how simple the process was. I basically had to follow two big signs on the concourse:

1. Start here (this sign was just above the self service kiosks)
2. Bag drop (this sign was just above a conveyor belt)

I got so excited about the whole thing that I had to take a few pictures while Jane, my girlfriend, was dealing with the check-in:

Scanning our e-ticket

Selecting the passengers

Answering the security questions

Printing the luggage tags

Weighing your bag and attaching luggage tags

Going to step 2: luggage drop-off

Job done!

The whole thing didn’t take more than 5 min!

Mpass: using your phone as a boarding pass

Air New Zealand is also rolling out self-service scanners at the boarding gates: you can either use your boarding pass or an mPass – a service that allows you to download your boarding passes for Air New Zealand flights onto your mobile phone. It generates a bar code that you can then scan at the kiosks to check-in or at the gates to board.

Scanning kiosks at the boarding gate

mPass: using your phone as a boarding pass

At Engine, we designed a similar concept for Virgin Atlantic, and the results were quite impressive. Check-in times were reduced by 50%, and passenger satisfaction increased substantially.

The great thing about this check-in is that it takes staff from behind the counter, enabling them to roam the concourse to help passengers. It’s a win-win situation: the airline has a much more efficient process, enabling staff to deal with problems that really matter (passengers with excess luggage or delayed flights), and passengers can go through a hassle-free check-in. Great example of how service design can bring value to both users and providers.

More info on Air New Zealand’s new check in here

Nordic Conference on Service Design

The Norwegian Design Council will host a conference on Service Design and Service Innovation in November.

They are inviting people to submit papers and abstracts on the following topics:

* boundaries, foundation and constituent parts of the emerging discipline of service design
* history and trajectories of service design
* inclusive-design approaches to services for all
* critical views
* methods, tools and processes
* case studies
* relation to design thinking, design leadership and design management
* education and research perspectives

more information regarding submissions and deadlines here

Designing services in Latin America

It seems that service design is starting to flourish in Latin America. Based in Chile, Broadeep employs T-shaped people to innovate services. Nice to see that service design is getting momentum in places other than Europe and USA.

Culture change

I found this interesting post from the Good Experience blog.  One of the key challenges of user experience is not to simply deliver a report with recommendations. More important than that, the challenge is to involve key stakeholders and decision makers during the research process, and get them more involved in what we call ‘the user centric approach’ to innovation.

Good practitioners know what their job really is: to spread customer-centered thinking throughout the organization. If you can get decisionmakers to sit in a listening lab for a day, you’ve hit a home run: they’ll start to “get it” within the first two 45-minute sessions.

Changing the organization is the brass ring. Once the organization changes, everything follows: from the strategy (“let’s provide world-class service to our customers, and measure our progress”) down to the tactics on the site (“let’s stop naming links with our internal jargon”).

via Good Experience

Airport + Hotel = waiting comfortably for your flight

I had to catch a flight from London to Auckland, with a 7-hour stopover in Shanghai.  And I have to tell you:  by the time you reach Shanghai, you’re already completely wrecked, and you know you are going to face another 12-hour flight to NZ.

Well, for those who want to have a nap or just chill out in a comfortable room while waiting for your connection, there is always the option to book a room at the Dazhong Merrylin Hotel. The hotel sits right inside the airport terminal, and you can book rooms for periods as short as a few hours. Extremely convenient and value for money.

I’m wondering why airports don’t do this more often. Hotels in terminals. You just need to walk around any airport, and you’ll probably see hundreds of people trying to sleep in the not-so-comfortable terminal seats. So, here’s an idea: capsule hotels (the ones invented in Japan, mostly used by office workers who can’t commute back home after a night out with colleagues) inside terminals. Cheap, doesn’t take too much space, convenient, and definitely more comfortable than any airport seat.

Looking for new ideas to invest in, Sir Richard Branson?

Peer Insight on designing in the services era

Tim Ogilvie, from Peer Insight, gave a talk at the Norwigian Design Council last month about how service design is helping companies to innovate, especially in an age where the deluge of offerings and commoditisation are leading to price-based competition (and therefore eroding ROI).

What’s interesting about the presentation is how Tim explores the interesection between design and business. Quite often, designers and business people don’t share the same views on the same problem. Business people are ‘left-brained’, and focus on execution . Designers are much more ‘right-brained’, focusing on exploration.

It is at the intersection between the design world and the business world that innovation trully happens.

you can download the presentation here

Thought of the day

“Successful innovation is a feat not of intellect, but of will. Those who braved the risks of failure did so out of noneconomic as well as economic motives, among them the joy of creating, of getting things done, or simply exercising one’s energy and ingenuity”

Joseph Schumpeter – Economist

Boeing revolutionizes flight

Boeing and Airbus have taken different routes in terms of product strategy. Airbus thinks big is better, and came up with the gigantic A380 for super long haul flights. Boeing believes that the future of travel will be more ‘hub’ based. People will fly medium sized planes to the main airports, and from there they will get connections to the final destination. It’s early to predict which strategy will be the winner, but from a passenger’s point of view, I already have my favourite: the Boeing 787 Dreamliner.

Not only is this aircraft built with the latest technology, such composite materials to make it more lightweight and heads up displays in the cockpit (the same technology used in military fighters), but also it was built with the passenger in mind.

Simple concepts, such the experience passengers have when entering the aircraft were taken into consideration. Instead of entering through the galley and feeling a bit claustrophobic right from the beginning, passengers flying in the Dreamliner see an open, welcoming space once they step inside. It feels more like arriving in a nice restaurant rather than boarding an aircraft.

it feels like entering in a restaurant through the kitchen

Another good example of user centric innovation is the lighting: to help your body adjust to the new time zone, the lights simulate the sunset and sunrise. Small things that make a big difference!

It seems that for the majority of us, economy class travelers, things will get a bit better!

New design thinking blog

source: Tim Brown, http://designthinking.ideo.com/

Tim Brown started a blog about design thinking, which is great. Lots of ideas and insights, not only from his posts, but also from people who are happy to comment and contribute to the discussion (as you might imagine, the blog is already quite popular!).

But this is a blog with a twist: as he described in the ‘about’ section, Tim is using the blog as a sandbox to toy with ideas around design thinking, share with everyone else, and promote discussions, which in turn might create more ideas. Any interesting outcomes will be part of the new book he is writing about design thinking. So, if you want to be Tim’s co-author, check his blog, and start contributing to the discussion.

Observe and innovate

I saw this interesting article on Fastcompany magazine, which once more proves that customer driven innovation is a really powerful tool to achieve competitive advantage.

Back in 2007, Virgin Megastores was outbeating competition, with a sales increase of almost 14%. According to Dee Mc Laughlin, the marketing chief, the recipy for success was quite simple: they just observe customers, and find out what they really want:

“We observe and then we innovate. For example, HD and Blu-ray are hot right now. We observed that our customers were saying, “what is the difference between the two?” You can tell them what the difference is, but unless they’re actually seeing what the difference is, it’s not going to help sales.

“So, we’ve put an HD and Blu-ray wall into all our stores. It’s really spectacular looking. Where before we had consumer confusion, which was potentially stifling sales of both systems, now our customers actually can see what the difference is and choose for themselves which format to buy.”

Innovation is not always rocket science (nor is something that needs a huge investment in R&D). Sometimes the most innovative solutions is right under your nose. It’s just a matter of oppening your eyes, and seeing what really matters.