vol. 1 , no. 1
service experience camp 2015 edition
eu € 5 / us $ 5.50 / uk £ 4.75
The Service Experience Camp 2015 follows the topic ‘Struggling for change’. It explores the challenges innovators are facing when implementing new service offerings. This can include internal struggles such as gaining buy-in from management and frontline staff. It can be connected to the nitty-gritty of implementation, namely of bringing
Design can be a profession full of positivity, but sometimes it feels like we criticise each other more than we support each other. Designers are trained to receive criticism, but is it really a necessary evil in design?
The simplest way I know to make change happen is to set goals that you believe you are incapable of achieving. That forces you to give up the tools you know for new tools, and to move beyond the limits you perceive in yourself. —Mike LaVigne, Co-Founder & Product Owner, clue
—Dhyana Scarano, UX & Service Designer, futurice
You know you are on a good path when change is accepted – and seen as something desirable – by those struggling alongside you. When individuals start to enjoy constant change and aspire to always keep changing! —Nancy Birkhölzer, Managing Partner, ixds
study
What do service designers earn? How much do they make after two years in the job? How much after five? Which additional benefits do they receive? In which type of organisation do they earn the most? And how many consider changing jobs in the next 6 months? Find out in our explorative salary study, conducted in October. → page 10
guide
What to experience in Berlin? What to visit in Berlin when you are a curious service innovator? Which spaces and places do you need to see in the city? After spotting outstanding customer experiences for years and organising various ‘Service Experience Trails’ in the past, here is our first guide to Germany’s capital for people who seek delight. → page 6
a service concept to life. Involving service users and other important stakeholders can sometimes be a strenuous task. As Milo Tesselaar has put it, “you cannot get transformation as fast food because it is deep, slow, intense and uncomfortable”. We have asked service experience experts to share their thoughts on “Struggling for change”.
I truly believe in the power and story telling ability of Service Design to better the humanity, where I struggle is making Service Design much more then just a bunch of nice buzzwords to play BINGO with. For me there is no fail just build and therein lies the struggle for me. —Adam Cochrane, Hospitality Service Designer, factory berlin
What’s your #struggleforchange? Share your experience and perspective with the community in a tagged tweet!
community
How to build an active network of experts? How do you get experts together and make them share their knowledge and experiences? What does it take to build an active community of practitioners across industries and with diverse backgrounds? We tell how the service design scene in Berlin evolved and what makes it special. → page 12
the service gazette
On Participant Experience: Co-creating value at conferences
Contents 2 On Participant Experience: Co-creating value at conferences by Claudia Brückner 3 Living Services: the Key to consumer affection in the digital age by Thomas Müller 4 A Service for a very Moment: Customer Jobs & Contexts of Berlin’s Urban Mobility by Hannes Jentsch & Martin Jordan
by claudia brückner
5 Hello World: A conversation with BCG DV’s Thomas Fischer by Katrin Dribbisch & Manuel Grossmann 6 A Service Innovator’s Guide to Berlin: Service Design Studios & Special Experiences 8 Lean IoT service creation: Avoiding functionality without real customer value by Olli-Oekka Saksa 9 Business Models: Stay fresh, stay healthy by Philipp Ramspott 10 Salary Study: What do service designers earn? by Katrin Dribbisch & Manuel Grossmann 12 Service Design Berlin: How a Community Evolved in Berlin by Service Design Berlin
Imprint The Service Gazette • Vol. 1, No. 1 Contributors Martin Jordan Adam Cochrane Olga Scupin Claudia Brückner Olli-Pekka Saksa Hannes Jentsch Philipp Ramspott Johanna Härmä Sabrina Feuerherd Katrin Dribbisch Sebastian F. Müller Linda Kantchev Thomas Fischer Manuel Großmann Thomas Müller Mauro Rego and the service design community Person responsible according to German Press Law Martin Jordan Publisher Service Experience UG Wittstocker Str. 3, 10553 Berlin Printer Newspaper Club, Glasgow www.newspaperclub.com
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he Internet has fundamentally changed our ability to access knowledge, to communicate and collaborate. This causes vast consequences for conferences and similar events: The meaning of the expert (speaker) has changed as they barely hold exclusive knowledge anymore. As well the role of the participant altered with access to on demand information as well as tools to communicate and collaborate. But if you take a look into conference programs, it is very likely that you still find one keynote after another and very little other formats. It looks like, that conferences are still stuck in the „age of TV“ – when the roles of the sender and receiver were clearly defined. And although interaction and participation are essential parts of our everyday realities, many conferences still only offer a passive top-down experience. But in the 21st century – where information and knowledge are easily accessible online – we need new conference formats that are worth the travel to meet in one physical location. Formats that reflect those changes facilitate human interactions to tackle the unaltered need of participants to learn, exchange and network.
You might ask: What has this to do with Service Design? Well, Service Design or the so called ‘Service-Dominant (S-D) logic’ describes concepts of value-in-use and co-creation of value (instead of the idea of value-in-exchange of the Goods-Dominant logic).1 If you transfer this to conferences or similar formats, you are not selling the content to the participants, the values lies in the possibility to learn, exchange and network with other participants (and speakers or sponsors) – and is therefore co-created. And Service Design provides the tools to create conference experiences that facilitate human interactions,
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by designing user journeys across all touchpoints – no matter if they are physically tangible or digital. This is essential since (temporary physical) conferences takes place in the context of the digital space – a space that is continuously present, not only during a conference, but as well as before and after the conference. And guess who is already there? The (potential) conference participant, already exchanging on topics relevant to the conference. Conference organizers can not ignore this, but must develop formats that include touchpoint in the digital space – not only during a conference, but long before and after a physical meeting takes place. And I am not talking about touchpoints that are about buying the ticket, but primarily those that offer participants additional ways to interact and therefore learn, network and exchange. The same counts for the physical space that hosts the conference. It is insufficient to only provide a „neutral multi-purpose“ space (as offered by many convention centers). Instead you need to create a physical space where your participants can experience the topic(s) of the conference and that supports and enables interaction between participants, to make the journey to your conference worth the travel. Source: 1 – Vargo & Lusch, 2014
Claudia Brückner is an Event Experience Designer and Innovation Facilitator. She is a fearless thinker with a strategic aptitude as much as a risk-taking doer.
november 2015
sic volume to fit with the preferences of the person walking into the room, and take into consideration the time, temperature and daily behavioural pattern of that individual or family group. Designed to learn through real-time analytics, Living Services will be able to curate choices and deliver personalised recommendations tailored to the weather,
illustration by johanna hÄrmÄ
Living Services respond by wrapping around us, constantly learning more about our needs, intents and preferences, so that they can flex and adapt to make themselves more relevant, engaging and useful.
Living Services: the key to consumer affection in the digital age by thomas müller
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onsumers today are becoming digitally dizzy. We’re spoiled for choice by the ever-growing number of digital touch points, platforms, apps, operating systems and social channels in our lives, and we simply don’t have the time or the mental bandwidth to interact with them all.
to radically change the dynamic between brands and their customers and allow the creation of once unimaginable engaging experiences.
It’s something brands, who face major challenges when it comes to attracting and keeping our loyalty, will be all too aware of. British anthropologist, Richard Dunbar 1, discovered that there is a limit to the number of people who we can maintain meaningful social connections with. He argued that in societies across the world, that limit is 150. At Fjord 2, we believe the same is most likely true of the brands in our lives too, with only a certain number able to achieve a relationship with us that is meaningful and authentic.
Over the next five years, sensors, the cloud, connected smart devices and real-time analytics will come together to create a service environment more responsive than any we might have envisaged just a few years ago. This new dynamic is best described as Living Services. Living Services 3 describes a world in which brands start to use the vast network of sensor-rich objects connected in the internet of things to create digital services that come to life. They will use behavioural heuristics and real-time data analytics to anticipate individual preferences and constantly evolve to meet changing consumer needs.
So the biggest challenge for brands today is how to stand out amidst the digital deluge. The good news for brands is we are now on the cusp of the next major wave of transformative digital services, which are set
Living Services will transform and improve the way we live, automating many of the smaller, more mundane activities we do every day. At home, personalised Living Services could adjust the heating, lighting or mu-
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our location, mood, health and even our bank balance. By continually learning and forging long-term, (and if they are to be successful) meaningful relationships with us, Living Services will come to know what we enjoy doing. They will understand the context of our lives, including our time and financial restrictions, how happy, healthy and fit we are, and with whom we are spending our leisure time. Ultimately, Living Services will become key to surviving in the modern age; helping to manage our digital lives and making the daily challenges we face much easier and more enjoyable. In the rush to move into providing digital services, brands—both established and new—need to ensure they are developing something that genuinely adds value as opposed to merely amplifying the virtual noise and clutter of consumers’ lives. In this always-on digital world, brands that master to deliver the right value at the right time and place to connect with, help and delight customers, will have successfully managed the transition to becoming a modern Living Brand in this era of Living Services. Sources: 1 – http://www.magd.ox.ac.uk/member-of-staff/ robin-dunbar/ 2 – https://www.fjordnet.com 3 – https://livingservices.fjordnet.com
Thomas Müller is a Regional Design Director at Fjord, Design and Innovation from Accenture Interactive. He is a design executive and brand visionary.
the service gaZette
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ustomers hire services and products to do a certain job. Once people spot a job in their life they start looking for a solution, an offering that helps them to get the job done. Which offering they eventually hire often depends on the circumstances in which the job occurs.
BVG & S-Bahn (Local public transport including overground, underground, trams and buses) “Get me to my destination during rush hour with a predictable time of arrival.“ characteristics: cheap, simple, passenger role, reliable, independent of traffic and weather
On a relaxed Friday evening a user might hire ‘Netflix’ for the job of entertainment. On another occasion the same user might prefer going to the cinema as their friends also have time on the same evening. The better a potential solution fits to the customer’s circumstances or specific context, the more likely she is going to hire it.
Taxi & uber (Chauffeur services) “Get me to the airport in the very early morning, but allow me to sleep as long as possible and save me time.” characteristics: convenient, a little luxury, private space, individual route, door-to-door, hassle-free
Customers are – as much as time and attention allows – constantly re-evaluating the performance of their hired solutions, especially for jobs that reoccur often. E. g. Is there maybe a new offering that does my job faster, more reliably, for less money with less effort? Besides these functional criteria, social and emotional aspects are considered, too. E. g. How does it make me feel? How will I be perceived by others? A few years back the most common way to get around in Berlin was either driving a privatively owned car, taking a cab or using the excellent public transport system. Now, the emergence of better connected services and customers allows more distinguished offerings for more narrow contexts to flourish. The job of getting from A to B within the city remains the same, but the context in which the job occurs leads to different services being hired to get it done. Following is an overview of Berlin’s most popular urban mobility services with their characteristics and examples of context of use …
car2go & Drive Now (on-demand, free-floating car rental services) “Get me to my destination during an off-peak time of the day when I have something to carry that’s too uncomfortable for public transport. Or when I want to upgrade myself.” characteristics: Independence, in control, around the corner moment, cheaper than taxi Flinkster & CiteeCar (station-based, prebooked car sharing services) “Get me out of the city with my family over the weekend.” characteristics: Reliable, planned, in control, guaranteed availability Call a Bike & Next Bike (station-based bike rental services) “Get me to work on a beautiful day when there is little time pressure” characteristics: physical activity, being outside, independent of streets and traffic, almost direct eMio (electric scooter rental service) “Get me and my partner to the brunch date with friends quickly.” characteristics: Agile, dynamic, eco-friendly, autonomous, in control, almost direct
A Service for a very Moment: Customer jobs & contexts of Berlin’s urban mobility by hannes Jentsch & martin Jordan
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All mentioned offers will solve the need of getting from A to B, but only one solution will tick more boxes and answer jobs related to a specific situation. To really understand a problem space, it is necessary to clearly describe the context of the customer’s situation. Taking a closer look and explicitly articulating contexts will not only help to clarify requirements towards a solution, but also to communicate them better. A situation can be deconstructed in various dimensions of contexts. Examining the When, Where, Who and What is a first structured approach to investigate contexts: When does it happen: season, day of the week, holiday, shortly leaving the house, noon, at sunset (also reoccurrences and patterns) Where does it happen: rural or urban spaces, indoor, outdoor, an unknown area, home, work, a cinema, an expensive restaurant, a shopping district Who is involved: alone, with friends, on a date, only a few or many people around What happens: talking, walking, carrying sth. heavy, weather conditions, traffic conditions Further insights can be delivered by looking at what actions were taken before and what is projected to happen after. Extracting all of this will lead to a deeper understanding of the customer’s motivations and anxieties. Service creators need to have clear vision and understanding of the context of their offering’s usage. Especially in crowded markets where various solutions are competing with each other to get hired by the customer to get her job done, a sharpened view on context can become essential to compete and thrive. Context knowledge will become the cornerstone to a new service’s success.
Hannes Jentsch is a freelance senior UX designer and UX lead. He works on product strategy and design for innovative digitial services. Martin Jordan helps organisations to create value with people and services that matter. He works at Nokia’s here. Besides, he is doing an mba in Espoo, fin.
november 2015
Hello World: A conversation with BCG DV’s Thomas Fischer
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here is a new player in town. In early 2014 the ‘Boston Consulting Group’ established its ‘Digital Ventures’ subsidiary and opened offices in Manhattan Beach, London, Sydney – and Berlin. It describes itself as a ‘corporate investment and incubation firm launching category-changing businesses at startup speed’. With BCG Digital Ventures itself growing at a similar pace and employing more service designers each month, we got curious. So we sat down with Thomas Fischer, strategic design lead in the Berlin office to learn more. Where does BCG Digital Ventures position itself compared to more traditional service design agencies? The ongoing rise of digital is leading to a host of fundamental shifts in how businesses operate and grow. Digital technologies are enabling new business models, which are in turn changing industry structures and creating new markets. We all know the story of Uber and Airbnb. Whilst previous disruptions have been driven by startups we believe the next 10 – 15 years will come from large corporates. These same large corporates have many of the assets startups covet from healthy balance sheets to known brands and a loyal customer base but they don’t know how to harness them for real innovation. This is why BCG Digital Ventures exists. We describe ourselves as business builders, the equivalent of a startup team in a box, building and investing in new businesses for our corporate partners. For me personally, the idea that I could play a part in building a real business was a big attraction to the firm and I am constantly amazed by the talented group of experts, visionaries and makers I get to work with. How close is the collaboration between BCG Digital Ventures and the Boston Consulting Group? We wouldn’t exist without BCG and BCG’s rich partner network opens the doors to some of the world’s most influential clients that we then have the opportunity of working with. However we are also very different. For one, we employ disciplines that BCG doesn’t from strategic designers, experience designers, software engineers, solution architecture, product managers
and venture architects. Our projects are called ‘ventures’ not ‘cases’ and we call our clients ‘partners’. We also work from dedicated Innovation Centres that feature scrum rooms for team meetings, venture rooms for teams to collaborate and village clusters for teams to engage. Our new Berlin Innovation Centre will be opening in early 2016. What does the work as a service designer at BCG Digital Ventures look like? How is it different to working at a regular service design agency? Everything we do has its roots in design, and the idea of harnessing innovation practices to create something new for our partners to build a new business. It all begins with an understanding of the customer, conducting ethnographic research to uncover their latent needs to identify new spaces for innovation. Unlike other agencies, we don’t stop at ideation. Our objective is to build a portfolio of concepts that we can then incubate and take to market as a standalone business with our corporate partner – and we have to bring that understanding of the customer through the entire process. Can you describe example type of work that you do on a daily basis? How long are the majority of your projects? As a Strategic Design Lead I typically have two - four designers and a mix of venture architects and engineers on my venture team. At the moment I’m about to kick off a really exciting project in the mobility sector. Right now, I’m busy planning our ethnographic research, reaching out to people from BCG who will collaborate with us on the venture, and making sure the team are properly briefed and engaged in the venture we’re about to work on. Our mission over the next six weeks is to identify a range of concepts that we can take into incubation and actually build. It’s a really exciting time. Does working as a service designer at BCG Digital Ventures mean business attire, long working hours and frequent business travels? No, definitely not. I’m sure people hear BCG and think ‘suits’ but actually as BCG Digital Ventures our office attire is pretty much what you’d expect to see in a
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startup. It’s relaxed and informal. From time to time the hours can be long but that’s no different to any other agency environment or startup and the company does put important emphasis on getting work life balance right. The most striking difference is the travel. Whereas a BCG consultant might travel frequently to work on site with clients, all of our work happens inside our own specially designed Innovation Centres. If I, as a service designer, am looking into joining BCG Digital Ventures. How are you different from other players in the field like Fjord from Accenture Interactive or McKinsey Digital Labs? It all comes down to the people and the type of work we’re doing. We’re building business and we’re attracting amazing talent in the process, and we haven’t yet seen a firm integrate innovation, incubation and commercialization capabilities to the extent we’re currently doing at BCG Digital Ventures. The real question is what do you want from your next role? Alright, so for our readers who are interested in a position at BCG Digital Ventures, what type of backgrounds are you mostly looking for? Can I apply as an ethnographic user researcher or designer with no digital experience? Or are you mostly hiring visual and user experience designers? We’re growing at a phenomenal speed and have a number of open roles across all disciplines; from strategic design to UX, UI and digital design, product management, venture architecture and software architecture. We’re looking for those ‘T-shaped’ people, this could be a mobile developer that is drawn to great design; an industrial designer that has a deep understanding of economics or the founder of a startup that was to create new businesses for some of the biggest global players. If either of these sounds like you, come and talk to us!
Thomas Fischer is a Strategic Design Lead at BCG Digital Ventures. Before joining Boston Consulting Group he held various UX roles at Bosch and Adobe.
the service gazette
A Service Innovator’s Guide to Berlin: Service design studios & special experiences
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erlin’s service design scene and service innovation community is young, vivid and growing. A key event was the first Global Service Jam in February 2011. At Fjord’s office in Mitte some 30 service innovators got together to prototype services. Since then service-minded people have been meeting regularly at the Service Design Drinks. In the meantime interaction design studios just as branding agencies started widening theirs offerings to service design. New agencies were set up. And global business consultancies founded subsidiaries in the city. Here is an overview of Berlin-based service design studios:
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BCG Digital Ventures Unter den Linden 10, 10117 Berlin www.bcgdv.com @BCGDV 2
Dark Horse Innovation Ritterstraße 12, 10969 Berlin www.thedarkhorse.de @darkhorseberlin 3
Edenspiekermann Potsdamer Straße 83, 10785 Berlin www.edenspiekermann.com @edenspiekermann
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Fjord Berlin Pappelallee 78, 10437 Berlin www.fjordnet.com/offices/berlin @FjordBerlin 5
Futurice Schützenstraße 6, 10117 Berlin www.futurice.com @futurice 6
FTWK Gürtelstraße 25, 10247 Berlin www.ftwk.de @FTWK
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Fuxblau Langenscheidtstr. 12B, 10827 Berlin www.fuxblau.de @fuxblau 8
IXDS Paul-Lincke-Ufer 39-40, 10999 Berlin www.ixds.de @IXDSberlin 9
Service Innovation Labs Heinrich-Heine-Platz 10, 10179 Berlin www.si-labs.com @si_labs
november 2015
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Audi City Kurfürstendamm 195, 10707 Berlin
photograph by audi city berlin
photograph by original unverpackt
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Audi City is a new showroom concept rethinking automotive sales. It blends the physical space and digital representations. Using the virtual car configurator becomes an immersive experience through large touchscreens, move controls in the floor and real-size projection walls. → www.audi-city.de/berlin
Original Unverpackt Wiener Straße 16, 10999 Berlin
Globetrotter Schloßstraße 78 – 82, 12165 Berlin
photograph by globetrotter
In the past few years big brands opened cutting-edge showrooms and concept stores in Berlin. Many of these combine thoroughly designed spaces with signature service offerings delivered by well-trained staff. Furthermore, a range of original physical startups launched. Here are some of our favourites:
Globetrotter is a retailer for outdoor equipment. Its Berlin ‘experience space’ encompasses more than 5000 m2. It includes a climbing wall, an indoor canoe tank, and a cold chamber—to test gear and clothing before buying it. In evenings it invites to lectures and movie nights. Through a partnership with the Institute of Tropical Medicine it offers vaccinations for various destinations. → www.globetrotter.de/filialen/berlin
OU, ‘Original Unpackaged’ in English, is Berlin’s first supermarket without convenience packaging. It promises a zero waste, no packaging grocery shopping experience, offering more than 530 products. The store opened in 2014 after raising 115,000 € in a crowd-funding campaign. OU also runs workshops on ‘unpackaged shopping’ to educate customers. → www.original-unverpackt.de H
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Q110 Friedrichstraße 181, 10117 Berlin
Kochhaus Akazienstraße 1, 10823 Berlin Bergmannstraße 94, 10961 Berlin Schönhauser Allee 46, 10437 Berlin
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Kochaus is a fresh take on grocery shopping. It describes itself as ‘walkable cookbook’. In the stores, 18 seasonal dishes are presented on 18 tables. Each table displays a recipe poster and the complete ingredients to prepare it, just in the right amount and quantity. Also, Kochhaus hosts cooking classes. → www.kochhaus.de
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Ritter Sport Bunte Schokowelt Französische Straße 24, 10117 Berlin
Nike Store Berlin Tauentzienstraße 9 – 12, 10789 Berlin
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photograph by nike berlin
photograph by fab lab berlin
Fab Lab Berlin Prenzlauer Allee 242, 10405 Berlin
Fab Lab is an open digital fabrication studio. Anyone curious can get access and receive training on 3d printers, laser cutters, cnc routers. It builds a community of makers and diy entrepreneurs. In its ‘Juniorlab’ it runs dedicated workshops for kids. → www.fablab.berlin
Q110 is Deutsche Bank’s forerunner and innovation branch. In its ‘Customer Lab’ the bank’s customers are in invited to co-create the future of financial services and related consulting offerings. Through workshop they can participate in the development of new and the improvement of existing products and services. Besides, digital banking prototypes are regularly tested in Q110. → www.q110.de
Nike’s latest store in Berlin offers, of course, its full range of sports wear, running shoes and casual sneakers. Yet what makes it special are the additional services and experiences: Nike has personal stylists, NikeiD terminal to customise products and Europe’s first Nike Training Club Studio. Professional trainers offer yoga, kickboxing and dance classes. → www.nike.com/de/de_de/c/nike-store/berlin
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photograph by ritter sport
Coje is an individual accommodation and co-working space in the neighborhood of Neukölln. It contains ten wooden cabins where guest can not only sleep, but also work. It is also used by creatives as meeting point and showroom. → www.coje-berlin.com
photograph by kochhaus
photograph by coje
COJE Karl-Marx-Straße 17, 12043 Berlin
Bunte Schokowelt (Colourful World of Chocolate) is the Berlin flagship store of German chocolate brand Ritter Sport. On the first floor customers can mix their own variant of the square-shaped bar, adding their favourite ingredients. The second level hosts a café and exhibition space. In the basement kids and teens have exclusive access to the workshop area where educators teach about the production of chocolate. → www.ritter-sport.de/de/besuchen/berlin.html
the service gazette
Lean IoT service creation: Avoiding functionality without real customer value by olli-pekka saksa
• Find a problem worth solving. Fall in love with your customer’s real problem, not your solutions to hypothetical problems. • Prove solution feasibility. Solve the problem, proving customer value with a small audience. If you aren’t able to capture value with a small group, you won’t be able to do it at all • Create a plan for proving product-market fit. You’ve solved the problem for a small group of people, but does it scale to be a viable business? • Prove business viability. Solve the scaled problem, capturing the value with larger audience • Create a plan for scaling up. Now that you’ve learned what the problem, solution and market truly are, figure out the expected returns. • Productise and scale. Build new functionality, measure impact and learn from measurements. Iterate. Based on what you learn, objectively pivot or kill functionality not worth having. How is this any better than the “traditional” approach? LSC starts with customer value. Proving value is the first gate, so you’ll never run into a situation where you’re missing customer value in an existing solution. From proving customer value, LSC moves rapidly to proving business value. To get past the second gate, you have to prove that customer value will actually scale into a sensible business.
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n their excellent Harvard Business Review article “How Smart, Connected Products are Transforming Competition”, Michael Porter and James Heppelmann analyse the impact of the internet of things (IoT) on products and competition. They provide a list of five strategic mistakes to avoid: 1. Adding functionality customers don’t want to pay for 2. Underestimating security and privacy risks 3. Failing to anticipate new competitive threats 4. Waiting too long to get started 5. Overestimating internal capabilities. I’ll concentrate on the one that comes up time after time in my conversations with key IoT people in industrial companies – adding functionality customers don’t want to pay for. IoT challenges are primarily related to customer and business value. A company we work with recently described their IoT work succinctly: “We are far ahead, but we’re just getting started”. This reflects the typical situation well: technical enablers are in place and technical innovation has taken place, but they’re still taking their first steps on the road to customer and business value. Systematic value innovation is a cultural thing, driven
by corporate structures. Large, established companies are, by design, built for incremental innovation and risk mitigation via planning. Typically, this involves detailed designs of the road ahead based on what has worked before, choosing overarching solutions that match a set of customer problems collected over a long period of time, detailed ROI calculations for future returns and lengthy product development cycles. The above approach works when a thorough understanding of the problem domain exists, no major disruptive forces are in effect and market is known as well as stable, with competition taking place between known peers operating on a similar frequency. We don’t yet know whether IoT is the third IT-driven productivity leap - after computers and the internet, as prophesied by the likes of Gartner and GE - or just hype that eventually settles down to become a force for incremental rather than disruptive change. Regardless of one’s stance on IoT, running into a situation where the customer value of your solution is not self-evident is a sign that the old approaches are not really working. start with customer value A lean service creation (LSC) approach turns the process upside down and starts with the value.
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New, innovative services are typically emergent markets for the companies developing them. Sizing up the market by peering into a crystal ball is highly unreliable. LSC makes no “vanity calculations”, but starts small and scales only when the problem, solution and market are understood and accurate ROI calculations can be carried out. Last but not least, our fast paced, digitally enhanced reality is more a complex system than a complicated but predictable clockwork. It makes more sense to test with smaller steps, measuring the real impact and learning from it, than trying to plan the final outcome of a set of actions that take place over a long period of time. When results are available quickly, it’s possible to focus on those areas where the measured impact aligns with expectations. Source: http://iotservicekit.com
Olli-Pekka Saksa is a business director at Futurice. He works with an awesome team and smart clients to build better digital businesses across industries.
illustration by sabrina feuerherd
november 2015
Business Models: Stay fresh, stay healthy. by philipp ramspott
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ealth is generally being described as „un-dis turbed inner life processes“. But how can these inner life processes work undisturbedly within a company when they are constantly surrounded by an ever changing external environment? The ongoing ICT revolution and its emerging new business models challenge the established players of the old economy. Rapidly evolving digital technologies and the possibilities they bring change the existing paradigms of business. New online platforms e.g. Uber for mobility, Facebook for communication or AirBnB for hospitality are utilizing digital technologies and are market-changing ways of designing a business. Difficulties for established businesses arise when it comes to sustaining or reinventing a competitive advantage in increasingly complex, digital markets. In effect, being able to perceive, understand and process external business model innovations is becoming a crucial competence to safeguard a company’s health and ultimately its survival. to keep your healthiness up, here is your apple a day For capturing key changes that are taking place at the moment, we identified the most fundamental building blocks among existing business models and compared them to newly emerging ways of business model designs. On the one hand we focused on the established franchise model as a reference point for rapid growth and reduced risk of old business models
and on the other on completely different digitally focused models, which challenge the old ones. Subsequently, we can now outline two out of eight of today’s most important ingredients for a healthy business model bringing maximum impact and fast growth, which at the same time reduces the demand on resources. shifting ownership of infrastructure Generally, the infrastructure of a business is a framework composed of elements like administration, investments, transportation and utilities. With the right mix of these elements a business can be run profitably. While a lot of old business models are founded on the ownership of massive, cost-intensive manufacturing facilities and stores, the reliance of this brick and mortar relicts is rapidly shrinking. Taking the example of Uber, taxi drivers themselves provide Uber’s core product: personal transportation. By outsourcing the necessary service infrastructure to the taxi drivers and only providing a single scalable software platform, Uber is able to drastically reduce infrastructure costs, offer lower prices and grow rapidly. This way the company managed to become one of the world’s largest mobility providers without actually owning a single taxi. growth-focused product and service design Growth strategies rely to a large extent on the product or service a business offers. A lot of existing franchise-companies follow a market-penetration strat-
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egy, which means putting a huge amount of money and effort in different marketing activities to build a brand, reach new customers and increase market shares. In contrast to that, the digital world offers new growth options which are closely connected to the revenue model. Spotify was able to increase and grow its customer base to up to 75 million active users and 20 million subscribers by offering a free music service which got organically recommended by users within their respective digital networks. In summary, the recent ICT development opens broad opportunities to form and reform fundamental building blocks of business models. As the examples above show, the dynamics of creating and capturing value within companies have been changed dramatically since new digital business model innovations arose over the last decade. For a greater chance for economical survival companies need to be open minded, exploratory and embrace the change digital innovation brings. Since innovations are found within competitors and partners alike, a company’s answer must be to adopt change. Change, in this case, seems to be the healthiest way to stay alive.
Philipp Ramspott is business designer at SI Labs in Berlin where he creates business designs that tell a holistic story and are economically advantageous.
the service gaZette
Salary Study: What do service designers earn?
Norway 4 Sweden 16 Denmark
Finland 18
1
Great Britain 18 Netherlands 5
Poland 5
Belgium 2 Germany 85 Austria 2
Switzerland 4 Italy 10
France 2
Slovenia 1
Spain 8 Portugal
1
In October 2015 we did an online survey about salaries in service design. We wanted to find out more about what people in the service design industry earn. The results shall help people in the service design industry to understand how well they are paid compared to others, what their work is worth elsewhere and might even serve as a resource for future salary negotiations. The study itself is explorative. It was open for 6 days and a total of 208 people participated in it. Due to the small sample, the study is not representative. There was a strong German bias amongst the study participants. 85 out of 208 participants stated that they work in Germany.
Turkey 2 USA
8
Mexico 1 2 Brazil Colombia 1
45% 19%
Israel 1 UAE 1
Australia 4 China
10%
of all participants work in agencies
of all participants work outside of the EU
41%
of all participants work in corporations
1
of all participants work in Germany
Additional benefits beyond salary
34%
receive no additional benefits
Apart from the regular salary additional benefits contribute to the overall compensation. Out of all survey participants only 34% state that they do not get any additional benefits. In the graphic to the right you can see the 5 most common types of additional benefits (multiple answers were allowed). Almost a third is given an educational budget, whereas almost a quarter respectively receives additional healthcare benefits (24%) and a retirement plan (23%). However, a company car (4%) and child care (4%) were only mentioned by a few. In the category “Other� participants mentioned health benefits, like gym access, free meals and transportation, such as monthly tickets for public transport, most frequently.
32%
24%
23%
educational budget
additional healthcare
retirement plan
Created by Matt Wilson from the Noun Project
11%
16%
11%
add. financial benefits
company shares
Created by Daniel Llamas Soto
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Created by Creative Stall from the Noun Project
november 2015
Salary in € according to years of experience 30%
0 – 2
20%
Years of experience
10%
<25k
25 - 35k 35 - 45k 45 - 55k 55 - 65k 65 - 75k 75 - 100k >100k
30%
3 – 5
20%
Years of experience
10%
<25k
25 - 35k 35 - 45k 45 - 55k 55 - 65k 65 - 75k 75 - 100k >100k
30%
6 – 10
20%
Years of experience
10%
<25k
25 - 35k 35 - 45k 45 - 55k 55 - 65k 65 - 75k 75 - 100k >100k
30%
> 10
20%
Years of experience
10%
<25k
Deep dive into data from Germany The largest group who participated in the survey were people working in Germany. That is why we would like to take a closer look at the data from Germany. 50% of all German participants with 0-2 years of experience earn between 25-35k (k = 1000 Euro / per annum). Roughly 18% earn between 35-45k and another 18% between 45-55k. Only 14% earn less than 25k. Within the range of 3-5 years of experience, the largest share of 41% earns 35-45k. 17% earn between 25-35k, 14% between 45-55k and 17% between 4555k. In the range of 6-10 years of experience, the largest group with 22% earns 65-75k. 35-45k, 45-55k, 55-65k and 75-100k each are evenly represented by about 17%. About 11% earn more than 100k. With more than 10 years of experience the largest group earns more than 100k with 37%. 6% earn 4555k, 25% earn 55-65k, 13% earn 65-75k and 19% earn 75-100k. Salary differences across organisation types The largest group across all countries within the study had 3-5 years of experience (32%). Therefore, we would like to take a closer look at their salary with regard to the two most represented organisation types: agency and corporation. In agencies, the majority with 3-5 years of experience earns 35-45k (30%), followed by 45-55k (21%) and 55-65k (18%). In corporations people with 3-5 years of experience seem to earn more. The majority (36%) earns 75100k. Only 18% earn 35-45k, while 9% earn 45-55k.
25 - 35k 35 - 45k 45 - 55k 55 - 65k 65 - 75k 75 - 100k >100k
How many people are considering to change jobs within the next 6 months? Overall almost half of all survey participants are considering to change their job within the next 6 months. However, when digging deeper, the willingness is on avareage amongst all highly dependent on the type of organisation. The survey participants figure below shows the data according to the top four types of organisations named in the survey. Whereas more than half of employees working for a corporation want to change their jobs, only 29 % of people working in SMEs do.
43% 54%
50%
43% 40%
35% 29%
Katrin Dribbisch is a PhD candidate at the University of Potsdam. Her research focuses on design thinking in the public sector. Manuel Großmann helps organisations to translate user needs into business models. He is cofounder of Fuxblau.
30% icons: matt wilson from the noun project, daniel llamas soto & creative stall from the noun project
Corporation
Agency
Freelance
SME
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the service gazette
Service Design Berlin: How a community evolved in Berlin
A
t the end of 2011 a small group of 12 people came together for the first Service Design Drinks in Berlin in a long time. Four years later, around a hundred-fifty service design enthusiasts gather every other month to discuss new trends, share project work and explore new tools with fellow professionals. After a topical input and an interactive exercise there is enough time to meet new people and have a chat over a drink or two. Compared to traditional networking formats the interactive exercise functions as an ice-breaker and helps to make first contacts with new visitors of the event. But how has the Berlin service design community evolved so strongly and what can we learn from it? First, service design as a field has become more mature. The first Service Design Drinks took place in small coworking spaces or public cafes. It is a special feature of the Berlin Service Design Drinks that we change locations every time. This forces us to keep exploring and we find the venues provide an additional incentive beyond the topic itself. Soon, service design agencies, like Fjord, IXDS, Futurice and SI Labs, became hosts of the event. In the recent past big corporations, like Volkswagen and SAP, have also opened their doors. Access to these attractive companies motivates new people to join and helps to grow the community.
tions are looking for formats and access to professional know-how to initiate and implement change processes. Knowledge that is shared, adapted and advanced beyond the boundaries of a single organisation makes them more productive. Local communities like Service Design Berlin offer an ideal environment to enable this kind of professional exchange and mutual learning.
Second, the variation of topics covered at the Service Design Drinks shows how service design is opening up. The thematic inputs of the early years concentrated on basic service design method tutorials. Over the years the practical application of service design has moved more into focus. The variety of recent topics has ranged from education, retail, financial as well as public services. This shows that the basics of service design are now known to a larger audience. Current challenges from the business sphere revolve around how to transfer this knowledge to new, less innovative areas.
get in touch www.servicedesignberlin.de @SD_Berlin www.fb.com/servicedesignberlin
cartoon by sebastian frederick müller
And thirdly, the community itself has changed. A few years ago hardly any Service Design Drinks participant had ‘service design’ in their job description, and now they more and more do. The field has professionalised over the time. Companies, like SAP, Volkswagen, Bosch, Sennheiser and many more have set up their own service design teams and are looking for young talent. Open networking formats can help to bring companies and professionals together in an informal setting. Service Design Berlin offers a number of formats with the goal to share and expand knowledge in the field of service design – all with a special emphasis on interactive learning. Since 2013 we are organising the Service Experience Camp once a year. This hybrid of conference and bar camp encourages attendees to play an active part and is characterised by a festival-like atmosphere. Here we could witness how service design has been applied to a Danish music festival, Berlin’s city cleaning services as well as in the Ministry of Manpower in Singapore. Comparatively new topics like service design are not only calling for new methods but for new ways of learning and sharing entirely. Agencies and corpora-
service design berlin’s team: Katrin Dribbisch is a PhD candidate at the University of Potsdam. Her research focuses on design thinking in the public sector.
Martin Jordan helps organisations to create value with people and services that matter. He works at Nokia’s here. Besides, he is doing an mba in Espoo, fin.
Manuel Großmann helps organisations to translate user needs into business models. He is cofounder of Fuxblau.
Mauro Rego is a multi-talented Brazilian designer with focus on motion and service design. He is a co-founder of Boana, a product design studio.
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Olga Scupin is co-founder of Fuxblau where she works as a business strategist. She has a strong interest in entrepreneurship and is a mentor at Axel Springer’s accelerator plug&play.