The impact of the pandemic on these Service Design trends

Over the years we’ve written about service design and how our discipline contributes to tackling emerging challenges in businesses and public services. Covid has made us realise the four themes that underpin our work, regardless of trends and market fluctuations:

• Customer centricity: The experience economy is a fact and customer experience is now perceived as a key driver of business value. Yet, there’s more work to be done.
• Digital acceleration: Digital is as much about how organisations work as about creating opportunities with technology. Addressing the pace of change to stay relevant is on everyone’s agenda.
• Innovation by design: Everything as a service has expanded the nature of innovation: from inside out invention, to outside in value co-creation.
• Sustainable futures: Every organisation needs to prioritise their response to the climate crisis. Regulation, customers and ethics will demand it. This requires clarity of purpose and creativity from us all.

The shockwave of this pandemic amplifies and accelerates some trends and developments that were underway. Here’s how we see the pandemic impacting these four key themes in profound ways.

Customer Centricity

CX is here to stay as a key driver of business value. Consumers are looking to reduce their time searching, buying, using and disposing of products and services to maximize time well spent on the experiences they truly value. These ‘time/cost’ reductions offer opportunities to disrupt existing value chains. (Unlocking the Customer Value Chain, Thales S. Teixeira; The Experience Economy, Pine and Gilmore).

In short, time is the most valuable currency for humans. The pandemic has made us even more aware of this. Just ask yourself:

• Do your employees want to spend time commuting as before?
• Would you go back in line for groceries when home delivery saves the hassle?
• Would you wait for your account managers’ next quarterly visit to get familiar with a new product release?

This crisis has been a pressure cooker and research suggests we want to keep some of the benefits that it precipitated.

Shifting roles for CX teams

There are important implications on the organisational side. CX programs and teams have largely focused on analysing the voice of the customer and continuously improving customer lifecycles and key journeys. This is a slow and painful process for many.

If organisations want to drive real value from CX, they must adopt a more holistic approach. The entire organisation must align itself around the customer experience. This requires a company wide culture that values empathy, insight driven prioritization and long term customer relationships over transactional measurement, command and control approaches and short term interventions.

We are currently involved in helping cx teams make this shift in a variety of industries. Take for example a large international bank we have worked with the past years that is striving to become more customer centric. The work we do with them is not project based and doesn’t revolve around doing insight research and service design work for them. Our joint efforts focus on building a sustainable customer centric capability, including the customer vision, culture, governance model, metric framework, and architecture.

The case demonstrates how the role CX functions and centers of excellence have is evolving. It’s shifting from designing metrics, analysing research results and doing improvement projects, towards building customer centric (service design) capabilities and culture throughout the organisation. This comes with many challenges. However, when successful, the impact can scale across projects, initiatives and programs.

Want to know how we approach building these capabilities in organisations? Read our new whitepaper.

Digital acceleration

Over the past 20 years, digital design has been predominantly tech-driven, focusing new service development on emerging digital technologies. Often this is done as a parallel effort, alongside and not within, the rest of the business. The pandemic has highlighted the centrality of digital to business – often forcing it to the core of service provision (think not only e-commerce, but video General Practitioner consultations or remote court services). This acceleration has elevated digital, establishing it as a core capability.

The pandemic has shown we need to step up the game. Retailers with poor digital capabilities lost more business than those with high digital maturity. Others painfully discovered customers weren’t using their digital offerings as intended. As a result, they lost business due to poorly designed and integrated digital services. In other cases, customers could not find a digital service at all, causing overflow to other customer service channels. Bells are ringing in boardrooms and CIO offices globally.

Implications for the CIO office

Livework is fortunate to work with many CIOs and their digital leaders in media, consumer products, public sector, insurance and energy sectors. Increasingly, the CIO office is expected to lead, not follow, transformation.

This requires thinking through service strategy, service portfolio and client experience. Front-runners see service design as a way to develop these capabilities and lead by example.

One client in the public sector struggled to meet the needs of their organisation and the public it serves when it comes to accelerating the pace of developing a digital service portfolio and reaping the benefits of digital transformation. Our analysis showed they lacked a coherent service strategy, client orientation and a service design approach that enabled them to not just meet needs, but also lead the desired transformation.

Over the course of a year we helped them redefine their own role as a service provider, co-create a future state digital service portfolio and chart out a strategy and roadmap to make it come true. The shift is fully centered around internal client and external customer/user needs and has entailed the creation of new roles, the adoption of new ways of working, the embracing of new responsibilities, and the development of new capabilities.

This and other projects have reinforced our thinking that redesigning the role of the CIO office, to encompass facilitating IT management, systems change as well as leading digital acceleration through customer centric design and a service mindset, is key to sustainable transformation.

Service innovation

Innovation has been democratised over the past decades. As a result, many organisations have adopted design sprints as silver bullets to innovation challenges. Whilst this is a positive development, our innovation clients in a.o. the manufacturing, automotive and logistics industries notice that it’s not enough: there’s a stronger and continuing trend for innovation to transcend organisations. The true field of innovation is ecosystems. Ecosystem innovation is particularly difficult as its delves into wicked problems, defined by five key characteristics:

1. Human: they are rooted in human psychology and behaviour
2. Networked: they have many elements related among themselves
3. Open: they have no clear boundaries and are based on incomplete data
4. Dynamic: they are constantly changing with no clear beginning or end state
5. Complex: they are interdependent of many stakeholder needs and actions

Solving wicked problems through ecosystem innovation

A pandemic like Covid-19 has the elements above, making it hard to control. Countries and organisations had to develop new ways to fight it. They’ve had to set-up new collaborations with stakeholders from multiple disciplines as they sought solutions to emerging problems. Behavioural scientists are engaged to anticipate behaviour and reframe challenges. Because there is no precedent, every measure is treated as an experiment that creates new data and insights. You could say the approach is designerly, albeit not always of high design maturity.

In line with this development we are initiating a collaborative eco-system project in healthcare with one of our clients, who, in this case, is actually our partner. The project sets out to explore new ways of collaborating and innovating in eco-systems and to develop ways of working together that mitigate the 5 challenges mentioned above.

This case is not unique. What we see is that more and more organisations are experiencing the transformative power of transdisciplinary and designerly ways of working. Even better, in some countries we see people and organisations fighting the pandemic rooting to use similar approaches for climate change.

Solving wicked problems through ecosystem innovation might just have taken a big leap.

Sustainable futures

Has fighting a pandemic paused fighting the climate crisis? 2020 was the warmest year on record. We cannot afford a pause. But maybe there wasn’t one at all.

Last year, Livework’s founder Ben Reason identified five ways that design can build on its core qualities to address this existential threat. With those in mind, we developed a new approach to drive towards Sustainable Futures. We are currently testing this with clients. Thankfully, we are not the only ones doing this.

• One of Europe’s largest banks asked us to help identify barriers in core financing products and processes that hinder approvals on sustainable finance alternatives. The insights from our discovery will help them design services and interventions that help unlock the development of a sustainable investment portfolio.
• A European energy provider asked us to help build collaborative innovation capabilities with their ecosystem partners. This could help tackle challenges to large scale adoption of solar energy solutions. The vision and commitment are there, it’s a matter of time until they become a reality.
• A large waste management company is partnering with Livework to explore the road to zero waste, and the role of waste management in the transition towards a circular economy.
• A large city in the Netherlands is building a service design and innovation capability that we are helping shape. The energy transition is a key challenge we’re using as a living lab to evidence the value of design approaches to the municipality and their partners.
• If a resulting trend is for organisations and governments to better meet their sustainability objectives at pace, it might just make up for the hardship brought on by the pandemic. The pandemic is having an impact on key themes and challenges we are passionate about, as it amplifies and accelerates what was already happening. Let us know if you’d like to turn these challenges into opportunities.

Thank you for reading.

*Thanks Clara & Alexandra for your contribution to this article.