Fjord Service Design Academy: A business case for transformative services

1. A business case for transformative services A business case for transformative services Nancy Birkhölzer, @nancybi Melanie Wendland, @melaniewendland Fjord Service Design Academy @fjord Slide 1 © Fjord 2012 | Conﬁdential
2. Transformative? Slide 2 © Fjord 2012 | Conﬁdential
3. Last year in San Francisco Socio-ecological Service Design Slide 3 © Fjord 2012 | Confidential
4. Transformative services are services that change the way individuals or groups behave in order to foster wellbeing and satisfaction of the individual or group. Slide 4 © Fjord 2012 | Conﬁdential
5. Sounds nice, but … Slide 5 © Fjord 2012 | Conﬁdential
6. Transformative services are services that change the way individuals or groups behave in order to foster wellbeing and satisfaction of the individual or group… while providing sustainable business value Slide 6 © Fjord 2012 | Conﬁdential
7. Why should we bother? And what has this to do with service design? Slide 7 © Fjord 2012 | Conﬁdential
8. Individuals change Carb on Fo otpri nt Organic CSR Slide 8 © Fjord 2012 | Conﬁdential
9. Needs of individuals change, too Self-actualization Love, belonging, self- esteem Food, shelter, safety Slide 9 © Fjord 2012 | Conﬁdential
10. Organizations change Slide 10 © Fjord 2012 | Conﬁdential
11. Markets change Slide 11 © Fjord 2012 | Conﬁdential
12. Market opportunities for new products and services change, too Slide 12 © Fjord 2012 | Conﬁdential
13. Society changes bility Financ ial insta Climate c hange Aging popu lation gap P oor rich Heal th issue s Slide 13 © Fjord 2012 | Conﬁdential
14. Transformative services impact Society Individual Organization Market Slide 14 © Fjord 2012 | Conﬁdential
15. So where are we now? Slide 15 © Fjord 2012 | Conﬁdential
16. From the experience economy to the economy of transformations… Slide 16 © Fjord 2012 | Conﬁdential
17. Signals of transformation ISM PROSUMER SLO W LIVIN G CROWD SOURCING REPUTATION CAPITAL Slide 17 © Fjord 2012 | Conﬁdential
18. Designing transformative services Slide 18 © Fjord 2012 | Conﬁdential
19. 8 Key ingredients Slide 19 © Fjord 2012 | Conﬁdential
20. Connect to a community Slide 20 © Fjord 2012 | Conﬁdential
21. Wheelmap.org – accessibility wiki About Transformation type “Wheelmap.org is a map with wheelchair-accessible places. Individual, Society Everyone can – like in Wikipedia – access the site via the Internet or iPhone and ﬁnd, add or edit places.” Transformational aspect Empower people with disabilities & make it fun for them to get around the city like everyone else. Key characteristics Slide 21 © Fjord 2012 | Conﬁdential
22. Slide 22 © Fjord 2012 | Conﬁdential
23. Match NEEDS & WANTS Slide 23 © Fjord 2012 | Conﬁdential
24. Kickstarter – co-funding About Transformation type “Kickstarter is a funding platform Society, Individual for creative projects.” Transformational aspect Enable individuals to help individuals to realize their projects. Key characteristics Slide 24 © Fjord 2012 | Conﬁdential
26. Form new habits Slide 26 © Fjord 2012 | Conﬁdential
27. Kochhaus – walk-in recipe book About Transformation type “Kochhaus ist das erste Lebensmittelgeschäft, das sich Market, Individual konsequent dem Thema Selber- Kochen widmet und nicht mehr nach Warengruppen, sondern nach Rezepten sortiert ist.” Transformational aspect Make it easy for people to enjoy healthy home-cooking. Key characteristics Slide 27 © Fjord 2012 | Conﬁdential
29. Establish platforms Slide 29 © Fjord 2012 | Conﬁdential
30. Gidsy – marketplace for services About Transformation type “Gidsy is a marketplace for authentic experiences. Besides Individual, Society, Market booking fun stuff to do, anyone can host activities.” Transformational aspect Empower individuals to start making money by offering a service based on a personal skill. Key characteristics Slide 30 © Fjord 2012 | Confidential
32. Empower the individual Slide 32 © Fjord 2012 | Conﬁdential
33. CitiBank, iPad Banking About Transformation type Banking app that combines traditionally separated banking services into ONE Individual, Organization service. Helps customers to explore and compare their own spending with those of others. Key transformational aspect Personal finance management app to empower customers to make smart financial decisions. Key characteristics Slide 33 © Fjord 2012 | Confidential
35. Embed services seamlessly Slide 35 © Fjord 2012 | Conﬁdential
36. DriveNow About Transformation type Car sharing, pay by the minute. No extra Society, Individual costs like fuel or parking. Transformational Aspect Make car sharing so easy and eﬀortless by providing a real alternative to owning a car or using other forms of transportation Key characteristics Slide 36 © Fjord 2012 | Conﬁdential
38. Enable responsible actions Slide 38 © Fjord 2012 | Conﬁdential
39. AlertMe About Transformation type Stop wasting energy, start saving money Society, Individual Transformational Aspect SmartEnergy gives you real-time and historical visibility of energy use in your home, giving you greater control over your household costs and putting an end to bill shocks once and for all. Key characteristics Slide 39 © Fjord 2012 | Conﬁdential
41. Foster co-creation Slide 41 © Fjord 2012 | Conﬁdential
42. Spotify – the “anytime” music library About Transformation type “Eine umfassende, jederzeit Market, Individual verfügbare Musikbibliothek” Transformational aspect Enable access to all music anytime. Shift to “sharing and using” instead of “owning”. Key characteristics Slide 42 © Fjord 2012 | Conﬁdential
44. Infusing love into services Slide 44 © Fjord 2012 | Conﬁdential
45. “I love my health insurance” Slide 45 © Fjord 2012 | Conﬁdential
46. Measuring success from Attention to Interest to Desire to IMPACT Slide 46 © Fjord 2012 | Conﬁdential
47. Businesses! “Our total revenue this year was 7500 transformations” Slide 47 © Fjord 2012 | Conﬁdential

Editor's Notes

Relating to the theme of the conference we are presenting our view on why designing transformative services can provide real business value to organisations.

What do we mean when we speak about “transformative?”

At the international Service Design Conference in San Francisco last year Peter Scupelli and Kristin Hughes of the School of Design at Carnegie Mellon University presented the perfect case of transformation. Within a project on socio-ecological service design they had engaged with a local community to co-design and co-create a sustainable program that would help individuals change their behaviors towards nutrition and exercise with the goal of preventing and fighting obesity and its health related issues.

“Transformative services are therefore services that change the way individuals or groups behave in order to foster wellbeing and satisfaction of the individual or group.”Services are less discussed as design objects and more as means for supporting the emergence of a more collaborative, sustainable and creative society and economy.

Now you ask where is the value for running and maintaining a business? How can businesses be profitable and grow with transformative services?

The definition that we therefore want to look at more closely is:“Transformative services are therefore services that change the way individuals or groups behave in order to foster wellbeing and satisfaction of the individual or group while providing sustainable business value.”

But still why should service businesses bother? And what has service design to do with it?There is a number of reasons why businesses should create services that have transformational character for their customers.

Individuals change. People are becoming more aware of the products they buy, they seek for transparency about the origin, the production and the environmental impact of a product/service. Buying a product or service often requires agreeing with the philosophy of the provider, e.g. 85% of consumer prefer socially responsible brands according to a global survey by Edelman. Companies have to cater to this change of consumer behavior.

Needs of individuals change, too.With the rise of the creative society, where people aspire to take their life and destiny into their own hands and find creative solutions, services need to address this need of self-actualization of its customers. Individuals want to feel empowered by the services they buy. While Maslow saw the need for self-actualization at the top of his pyramid, the pyramid is now being turned around and self-actualization can be recognized as a basic need services need to address.

Organizations change.Companies are facing the “product to service” change and need to adapt new ways of doing business. Processes, skills and strategies need to be developed in order to compete in the rising “service & experience economy”. Trends like globalization add additional challenges in the business environment. These internal earthquakes put many companies at risk.

Markets change.The market is saturated with products and services. Never has an economy seen a market with such a variety of specialization and choice. At the same time there is little or no growth in a maturing market and competition becomes hugely difficult. Since consumers are knowledgeable and oftentimes see products as commodities the need for differentiation becomes a key driver to success. need for differentiation.

Market opportunities for new services and products change, too.In such a complex world with too many choices, individuals feel overwhelmed with the variety and complexity of offerings at hand. The rising product and service fatigue among consumers resulting from these developments makes the market even more unpredictable.

Society changesFinally global challenges such as financial crisis, aging population, poor rich gap or climate change are the type of challenges no business can ignore. In order to face these dramatic changes and be prepared, businesses need to identify ways of dealing with these challenges through their offerings. No single business can address the challenges in society on its own but needs to participate in finding creative solutions in collaboration with other companies.

Transformation can happen on the individual level, organizational, market or societal level.These challenges on the individual, organizational, market or societal level leave us with the question of where our economy is at right now? And how transformative services can make a difference.

What Pine and Gilmore describe in is book on the Experience Economy is that we move through different phases of the economy. According to the authors right now we are in the experience economy, where businesses can differentiate themselves with services staged as experiences to their customers. The better an experience is staged and performed to its audience, the more successful that service business will be.

But Pine is seeing already the transition into the transformation economy. Experiences alone won’t be enough to make businesses succeed and fulfill people’s needs if we look at the challenges stated above.

A few signals can be detected that the change into the economy of transformation is underway. Several trends show us that the change is happening. Reputation capital:Reputation becomes a major factor in how individuals can influence groups and societies. Individuals are motivated by non-monetary rewards and go the extra mile to contribute time, skills and intellect for personal satisfaction and social goodwill. Crowdsourcing:Groups become increasingly open to gather physically or virtually to generate and implement ideas in a bottom-up, ad hoc and hierarchy-free manner to solve complex, multi-dimensional problems.New forms of ownership:The idea of ‘ownership’ is changing: driven by new motivations like environmentalism, optimum resource use and conscious consumption along with increasing costs and new ways of collaboration. As a result, the duration and nature of how people want to own things is shifting to be more flexible. Slow living:People are becoming more conscious of the role that time plays in shaping life quality. They are prioritizing experiences, connection with others, health, holistic well-being and creativity in place of speed and pace of life. Prosumerism:The line between producers and consumers blurs as people harness new ways to influence, design and produce the products and services that they consume, continuously during the product life cycle.

What does all this mean for the design of services?

Here are 8 ingredients that are inherent to transformative services. For each ingredient one example service is highlighted that showcases that specific service aspect. Applying these ingredients to your service offer will help design services that can have a real impact on its users.

1. Connect to a communityServices in order to be transformative in character should have social relevance. This means that they are deeply integrated into a social community and empower this community to achieve their goals. Design services that positively impact the lives of individuals within a specific community (e.g. middle class, elderly, women, children etc.) for long-term business success.

How does wheelmap.org work?A simple traffic light system marks the wheelchair-accessibility of a place: Green signifies good accessibility for wheelchair users, orange means e.g. the absence of toilets, and red marked places are inaccessible for wheelchairs.For whom is wheelmap.org meant?Wheelmap supports people with mobility impairments in search for wheelchair-accessible places. This applies to wheelchair users as well as wheeled walkers or families with baby carriages.Wheelmap also wants to motivate owners of places to think about the wheelchair accessibility of their facilities.

2. Match wants & needsIn a time of prosumerism and the shift from owing to using, it becomes increasingly important to help people find what they are looking for. Identifying people’s needs and wants and matching the right individuals together will be a successful means to create services with transformational character.

Kickstarter is the world's largest funding platform for creative projects. Every week, tens of thousands of people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields. Every project is independently crafted, put to all-or-nothing funding, and supported by friends, fans, and the public in return for rewards.

3. Form new habitsSwitching of the alarm while sleeping is an example of how automated and integrated certain behavioral patterns can become in our life. If services can help people to establish and maintain new behaviors, new habits are formed and transformation happens. When designing transformative services we need to identify what kind of habits exists or need to be created in order to improve the person’s wellbeing. or need to be created in order to improve the person’s wellbeing.

Kochhaus was founded 2010 in Berlin with the vision to streamline the usual steps necessary between the idea of a meal and it’s realization.No dish costs more than 10€ per person.No dish takes more than 1 hour to prepare.It enables people - tired of take-outs, restaurant visits or fast food - mto cook their own proper healthy meals at home while minimizing the time needed to buy all the necessary ingredients.On top it enables customers to improve their cooking skills based on the easy recipes.

4. Establish platformsRather than offering the solution from start to finish, it is more valuable to establish a platform where individuals and businesses can collaborate.No one expects a single company to solve a social challenge stand-alone. Think about partnerships for added value and to enable long lasting change. The more open your platform is and the more people you enable to participate the more likely you will establish a transformative service. Apple’s app store is one example of an open platform that has changed a whole industry.

You probably all know ETSY, the biggest platform from the DIY movement.Do you also know Gidsy?Etsy enables people to sell their crafted products.Gidsy enables people to turn their skills & knowledge into a sellable service.Through offering the platform Gidsy enables every individual to get exposure and makes sure people can find the offered service.

Previously (before Gidsy) it would have been quiet difficult for Thekla to find participants for her baking course.And it would have been equally difficult for people in Berlin to find someone who could teach them Grandma’s Käsekuchen recipe.

5. Empower the individualPeople want to feel empowered to take their lives into their hands. The more transparent and semantic information is delivered through a service, the more the customer will feel empowered to take valuable decisions that have an impact on her personal life, society or environment.

A case study by Fjord.Fjord helped Citybank to transform their business and customers with an iPad app that empowers user to take financial planning into their own hands.By offering both transparent indepth analysis of the customers financial data as well as explorative features such as comparing your spendings to others, the service helps individuals to get a better understanding of personal finance management and therefore bring them closer to fulfilling their actual needs. Empowerment through transparency and contextual information.

6. Embed services seamlesslyThrough the synergy of digital and physical services new interaction paradigms emerge. Interactions with digital systems become more embedded into our real world and vice versa physical and more natural interactions start to become more relevant and empowering to people also in digital contexts. Smart services can offer contextual help with as little interaction as possible. The less visible the interaction, the more powerful for the user.

DriveoNow, a car sharing joint venture of SIXT and BMW is so easy and effortless that the service integrates seamlessly into the user’s life.The reduction of the user interaction to the mininum makes up the service’s transformational aspect. Sharing a car becomes easier than owning a car.No need to pay for gasoline or parking and easy booking and pick up are just examples of how the service is succeeds in embedding itself.

7. Enable responsible actionsSustainability is the capacity to endure. Sustainability has been recognized by many thought leaders as the most important aspect to focus on. But sustainable services do not only mean dealing with environmental issues but also take into account economic and social wellbeing. The more a service can enable a customer to take responsible actions, the bigger the impact on society, economy or environment will be.

AlertMe, a case study by Fjord.Fjord helped Alertme to lift up their user experience and make the service’s core value proposition, sustainable and responsible actions combined with cost savings, more evident to the user. AlertMe is a smart service that helps individuals to monitor and adjust energy consumption at home with the purpose of reducing costs and saving the environment. By making set up, monitoring and learning tangible and effortless in an engaging and connected way, the benefits of such a service become clear to the individual instantly. Responsible actions that offer clear benefits like cost saving motivate people to change their behavior.

8. Foster co-creationLast but not least fostering co-creation in services will empower individuals to move up the Maslow pyramid and help fulfill their needs of self-actualization. Empowering individuals to co-create experiences and be part of shaping the service offering they will enjoy, will make the service more relevant and targeted to its audience.

Spotify managed to create a service of co-creation by offering people to create, collaborate on and share playlists. Giving people the possibility to contribute in defining what the service experience shifts individuals from consumers to creators, or from users to contributors.

Whilst in the experience economy delivering experiences often means short-term engagements with customers, business are faced with the question more and more as to how we can deliver services that establish lasting customer relationships? How can we engage customers over a longer period of time and provide them with meaning and satisfaction?The 8 ingredients of transformative services are one answer to this.

After hearing statements of love like “I love my iPhone” for the past years, wouldn’t it be time we could say “I love my health insurance”?

Business success of the future should be measured not only in attention, interest or desire of a service in the market but through its impact it has on society.

In this sense our ambition is to dream: Future revenue will be counted in number of transformations rather than financial transactions.

Fjord Service Design Academy: A business case for transformative services

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Fjord Service Design Academy: A business case for transformative services

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