SDN Team
Author - SDN Team

Silicon Valley is the home of most of the world’s most influential tech companies. A focus on design and customer experience is everywhere, from the CEO down to the newly hired designer. Many tech companies that once dominated through features and functionality now compete almost solely on the customer experience. But today, competing on the customer experience of touchpoints isn’t enough.

This article by Erik Flowers and Megan Miller is part of Touchpoint Vol. 8 No. 1 - Service Design and CX: Friends or Foes? Discover the full list of articles of this Touchpoint issue or flip the preview to get a sneak peek at more fascinating articles! Touchpoint is available to purchase in print and PDF format.

 

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Just ten years ago, having a dedicated experience design team would have been an exception, not a rule. As technology has boomed, especially with the introduction of the smartphone in the past ecade, experience design has grown from a luxury to a necessity. Today, we see design at the forefront of company identity, and not a single company would admit that customer experience isn’t a top priority. It has been the best way (so far) for companies to differentiate in a sea of rapidly innovating competition. 

Yet experience design in the technology industry has largely remained confined to the digital medium, and companies still approach design from the perspective of the product and its digital interfaces. This deeply-rooted culture of the 'product' – the software, website, or mobile app – still reigns supreme across Silicon Valley and drives much of the strategic integration of design into company culture. 

A changing landscape

Design in tech is rapidly evolving. There are new players on the scene, such as Airbnb, Uber and Instacart, service-based companies that are using technology to deliver fantastic service experiences, where the technology is purely an interface layer to facilitate the delivery of value to the customer. These companies are taking The Valley by storm and are playing a major role in shifting customer expectations. 

Companies such as these are standing out because of their focus on using digital as a means to meet real-world, non-digital customer needs. For example, shopping for groceries, getting a ride across town quickly or saving money on an overnight trip. The digital experience is a means to providing service, not the other way around. Their delightful, orchestrated, multi-channel experiences are being embraced by customers and are establishing a new bar for consumer entitlement and expectations, not just with similar services, but across all industries.

More and more, we are seeing these 'liquid' expectations prevail (a concept championed by Shelley Evenson of Fjord), where customers expect the same level and quality of service regardless of the channel, medium or industry. As they swipe left and right on their smartphone screens, they ask: 'Why can’t the post office be more like my experience with Instacart? Why can’t my medical provider have the same on-demand service experience like Uber?'

These liquid expectations, in combination with a much more mature, technically-savvy customer base, has led to a rapid growth in customer entitlement across all industries. Customers are seeking more value from digital technologies, expecting a product to become a service and businesses to become service providers. People don’t want a shopping app to just show them what is available to buy, they want a company to take care of the shopping for them, full stop. People don’t want an app that can call various cab companies, they want a company to provide them with a safe, fast and convenient ride.

CUSTOMERS NOW HAVE 'LIQUID' EXPECTATIONS OF SERVICE EXPERIENCES THAT CROSS INDUSTRIES, FROM FINANCE TO HOSPITALITY TO ENTERTAINMENT. DIGITAL EXPERIENCES ARE ENABLING THESE LIQUID EXPECTATIONS, PROMPTING CUSTOMERS TO ASK, 'WHY CAN’T MY ENTIRE DATE NIGHT BE LIKE THIS?'
CUSTOMERS NOW HAVE 'LIQUID' EXPECTATIONS OF SERVICE EXPERIENCES THAT CROSS INDUSTRIES, FROM FINANCE TO HOSPITALITY TO ENTERTAINMENT. DIGITAL EXPERIENCES ARE ENABLING THESE LIQUID EXPECTATIONS, PROMPTING CUSTOMERS TO ASK, 'WHY CAN’T MY ENTIRE DATE NIGHT BE LIKE THIS?'

An opportunity for service design

This is why now is the time for service design in Silicon Valley. How companies deliver their service experience is becoming just as important (if not more important) than the value offering of the product itself. The product then becomes just a touchpoint of their holistic service experience.

Over the past decade, the product itself was the differentiator, but this is all changing. More and more we are seeing companies shift towards a services model: where once they offered a single app or product, now they are trying to offer more. A prime example is a typical Software as a Service model (SAAS), where we see the service layer being added to online software, previously treated more simply as a product, now becoming a monthly subscription model but still not managed as a coordinated, end-to-end service experience. Think of Adobe as an example, where Photoshop once required a one-time payment for software as a product, but now is part of the Creative Cloud subscription service.

As companies add value through new offerings, layered onto a product-based infrastructure, service ecosystems are being established organically around what once was core product-based functionality. These ecosystems of offerings are what we as service designers understand as connected services. But the tech industry is late to the service design party, and the lack of strategic planning or foresight regarding products turning into services leads to an unorchestrated and ad-hoc ecosystem of services.

This inheritance of a product-based mindset and organisational structure is a major challenge for Silicon Valley companies who are trying to adopt a services approach. Although specific touchpoints may have ownership and design teams supporting them, the gaps between these touchpoints and the ecosystem of the service as a whole may not have an owner to provide holistic design direction. Customer experience and design are still stuck in product-based silos, instead of transforming the organisation to think holistically across a multi-channel experience.

This results in customers having to assemble their service experience from the various product offerings on their own, instead of the way it should be, where the business designs the end-to-end service that the customer experiences. It is between these gaps and organisational silos where service design will help companies stay cohesive and deliver customer experience that goes beyond just delighting on a touchpoint-by-touchpoint basis.

SHIFTING FROM PRODUCTS TO SERVICES REQUIRES NOT ONLY A NEW MINDSET AND METHODS, BUT ALSO NEW ORGANISATIONAL STRUCTURES. WHEREAS IN A PRODUCT BASED ORGANISATION, TEAMS ARE ORGANISED AROUND EACH PRODUCT AND ORGANICALLY PIECE TOGETHER THE CUSTOMER EXPERIENCE OF COMPANY OFFERINGS, IN A SERVICES-BASED ORGANISATION, TEAMS ARE ORGANISED IN ALIGNMENT WITH THE END-TO-END CUSTOMER EXPERIENCE OF THE SERVICE, WITH EACH 'PRODUCT' AS A TOUCHPOINT ALONG THAT JOURNEY.
SHIFTING FROM PRODUCTS TO SERVICES REQUIRES NOT ONLY A NEW MINDSET AND METHODS, BUT ALSO NEW ORGANISATIONAL STRUCTURES. WHEREAS IN A PRODUCT BASED ORGANISATION, TEAMS ARE ORGANISED AROUND EACH PRODUCT AND ORGANICALLY PIECE TOGETHER THE CUSTOMER EXPERIENCE OF COMPANY OFFERINGS, IN A SERVICES-BASED ORGANISATION, TEAMS ARE ORGANISED IN ALIGNMENT WITH THE END-TO-END CUSTOMER EXPERIENCE OF THE SERVICE, WITH EACH 'PRODUCT' AS A TOUCHPOINT ALONG THAT JOURNEY.

The service design transformation

Companies have an opportunity to differentiate on how well-designed their holistic service experience is, across channels and beyond just digital. Many companies are already trying to make this transformation, but don’t yet have the tools or mindset to make the shift. This is where service design can offer a new approach that goes beyond customer experience to evolve the way the organisation operates. This requires a shift in mindset from product to service, a shift in the way organisations are structured to make space for service design to happen and a rise of design leadership to help organisations adopt more integrated and holistic approaches to designing for services. 

We, as service designers, have an opportunity to lead this influx of practice into the technology industry, helping organisations see their ecosystem of products as interconnected services and growing capacity for designing across the service ecosystem they are creating.

Challenges for change

This transformation will not be easy. There are major  challenges that we face in bringing service design to a product-based technology culture. The first is mindset. Helping companies see the difference between providing excellent product experiences and excellent service experiences will be critical to making this transition. This involves educating teams on the end-to-end customer experience that crosses touchpoints and channels and helping them see where they fit in that end-to-end experience.

The second challenge is organisational and involves understanding the difference between managing a product and managing a service and implementing this change across the organisation. Product management is much more siloed and focused around the specific technology or product being provided to the customer. Services, in contrast, involve the many layers of that service experience, from sales to onboarding, to customer support and incident management. This service management practice looks very different from an organisational standpoint and may require a shift in core  structures and reporting in a fundamental way.

The last challenge is one of capabilities: the development of services methodologies and practices across the organisation. This involves the introduction of service design and service management tools and best practices to all levels of the organisation, helping staff grow in their abilities to support a customer perspective in providing service experiences, no matter which silo they sit in.

THREE MAJOR CHALLENGES AND OPPORTUNITIES FOR SERVICE DESIGN: DEVELOPING MINDSET, CHANGING ORGANISATION AND BUILDING CAPABILITY.
THREE MAJOR CHALLENGES AND OPPORTUNITIES FOR SERVICE DESIGN: DEVELOPING MINDSET, CHANGING ORGANISATION AND BUILDING CAPABILITY.

As we mentioned earlier, there are many companies in Silicon Valley that are facing these challenges head-on, and adopting service design as a core competency in their organisations. But this adoption of service design has yet to become the norm. Silicon Valley is still a place built on delivering value through product-focused touchpoints. How do we help create adoption of service design practices in organisations that are struggling to even understand how their products are becoming services?

Facing the challenge

We have to help our organisations understand a services mindset: not just the customer experience, but the internal business experience side of it as well. We do this through introducing core concepts, terminology and methods and tying those to the heart of the business in a tangible way. This will help us adopt a more end-to-end customer-experience mindset across our service experiences and allow us to build organisational bridges between touchpoints in a holistic way and to consider the variety of paths by which a customer can travel through a multi-channel space of a service experience. In this way, we can create customer experience that is seamless and navigable and organisation structure that supports the design of and transition between touchpoints to meet customer needs and expectations at each phase of the journey. 

We also have to help our organisations to see the path of transformation from products to services and to understand what this might mean for managing both customer experience, as well as business process. This may mean leveraging service management practices, facilitating cross-functional collaboration by acting as internal consultants and establishing new lines of communications internally within the company.

This will require new roles to emerge that will take responsibility for designing service experience across the service ecosystem, roles that are accountable for end-to-end customer experience across the organisation. These new roles will help align internal, touchpoint- specific teams to the overall customer journey.

Lastly, we have to help our colleagues build capability for integrating service design into their day-to-day work. This means enabling them through developing shared terminology, frameworks and methodologies that embody a services-based approach. It means empowering them to utilise service design practices and helping them integrate their work into a broader context. 

The time is now

The need for service design is being driven by a combination of customer expectations and organisational growth. Customers are now expecting that companies serve them in more ways than just offering products and, to meet this demand, companies are now producing a more diverse ecosystem of offerings for their customers to interact with. This expansion of both customer expectation as well as company offerings is only going to accelerate: it’s a part of the trend towards personalisation and the ‘customised service’ economy. 

Much as, over the last decade, we have seen a transition of UX as differentiator to UX as requirement, we believe that service design is poised to be the next big differentiator in tech. As the medium of brands is becoming more and more irrelevant, the only thing customers will attach to our names to is the service we provide.

But companies should not feel like they have to reinvent the wheel. Technology companies can benefit from looking to and adapting the ‘design-for-service’ practices of mature service-oriented industries, such healthcare, finance and hospitality that have already embraced service design at the core of their business. By co-opting practices from these service sectors, tech companies can gain a huge head-start in developing internal services infrastructures to meet the challenges that lie ahead.

Empowering the future 

For Silicon Valley to adopt service design, we have to make the space and empower our organisations. Designers have to be empowered to extend the reach of what it means to design to include the things that happen in the gaps between touchpoints. Companies have to be empowered to recognise the larger picture they are creating and place people into roles that can help design for the experience of that larger picture. And, most of all, leaders have to be empowered to allow these changes to take place and to have the courage to embrace the future of technology as a service.

The future of Silicon Valley is not about technology. In a place of boundless inspiration, innovation and invention, we have the responsibility to introduce the new normal. To create a future where the value we provide is no longer derived solely from the products that we build, but from the service that we perform for our customers.

Erik Flowers
Erik Flowers - Principal Service Designer at Intuit

Erik Flowers is a Principal Service Designer at Intuit, a financial services company, where he is re-envisioning customer experiences, and building organisational capacity to design end-toend and surface-to-core.

Megan Miller
Megan Miller - Senior Service Designer for Stanford University IT

Megan Miller is Senior Service Designer for Stanford University IT, where she works to design seamless and quality customer experiences for the university and build momentum around service design.

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