This document discusses innovation approaches and the relationship between product management and service design. It provides an overview of each approach, noting their similarities in being agile, customer-centered, interdisciplinary, and iterative. Product management is framed as optimizing individual products or value pools, while service design takes a broader view of optimizing the customer experience across products. The document suggests that product management and service design are complementary rather than competitive, with product management best for optimizing business as usual and service design for addressing significant customer experience gaps across an organization.

1. Friends or Foes?
Experience Strategy, Service Design & Product Management
June 2019

2. 2
Z AC H A RY J EA N PA R A D I S
GVP, Experience Strategy & Service Design N.A. Lead
zachary.paradis@publicissapient.com
@zacharyparadis
Chicago, Illinois | www.id.iit.edu
This book is about innovation—
how to create value for people through
new or improved services and products.
Innovation doesn’t require unusual
genius or creativity, but lately all the buzz
surrounding innovation has made it look
awfully complicated. Naked Innovation
helps unveil some of the mysteries of
the process—stripping it down to reveal
structures that multidisciplinary teams
can share. Once you see the underlying
theory and the methods which flow from
it, you’ll become even more effective at
doing it yourself.
“A terrific contribution to the integration
of design and management”
roger martin, dean, rotman school of management,
university of toronto
nakedinnovationparadis/mcgaw
nakedinnovation
uncovering a shared approach
for creating value
Zachary Jean Paradis
David McGaw
IIT Institute of Design
nakedinnovation.com

3. Agenda
1. The (Digital Business)
Transformation Imperative
2. Innovation of Innovation Approaches
3. Competition or Complement?
4. Q&A
3

4. 4
The
(Digital Business)
Transformation
Imperative
01
Need to update image?

5. THE CUSTOMER CHALLENGE
Rapidly changing expectations–
what people consider best-in-class
today, will be out of date tomorrow.
5

6. The most important
single thing is to
focus obsessively
on the customer.
JEFF BEZOS
FATHER OF MODERN MANAGEMENT
2014 (and every year since) ”
“

7. The transformation imperative: exceptional experience drives business success
7
89%
of customers have
higher expectations
of customer service
than they did just one
year ago2
of companies expect
to compete mostly
on the basis of
customer experience
by 20161
of customers
reported switching
brands due to poor
customer experience2
60% 49%
stock market returns
versus laggards (5%)
or the S&P500 (20%)
2016 to 20173
34%
1. Gartner Leadership Survey, 2015
2. Global Multichannel Customer Service Report, 2015
3. Forrester CX Quality Can Affect Stock Performance, 2018

8. The transformation imperative: exceptional experience drives business success
8
4. Forrester Cxi, 2017
of brands excel in their customer
experience, according to their customers
4
YET ONLY
1%

9. THE TECHNOLOGY CHALLENGE
Every company is a technology company,
no matter what product or service it
provides. The companies that embrace this
fact are the ones that shape our world.
9

10. The transformation imperative: technology fueling rate of change
10
CUMULATIVECAPABILITY
T I M E
1 9 5 0 1 9 6 0 1 9 7 0 1 9 8 0 1 9 9 0 2 0 0 0 2 0 1 0 2 0 2 0 2 0 3 0
?
IOT AND SMART MACHINE
BIG DATA, ANALYTICS, VISUALIZATION
WEB 2.0, CLOUD, MOBILE
WEB 1.0 ECOMMERCE
CLIENT SERVER AND PCS
MAINFRAME
ARTIFICIAL INTELLIGENCE

11. The transformation imperative: technology fueling rate of change
11
1. Forrester/eMarketer
2. Forrester
3. Digi-Capital
4. Gartner
5. BCG
MOBILE/WEARABLES AI/AUTOMATION AR/VR CLOUD/SAAS IOT
91%
of global
consumers are
projected to have
a smartphone,
while 1-in-5 US
adults will use
a wearable1
$1.2T
of revenue will
be cannibalized
by competitors
leading with AI
and automation
from their less
savvy peers2
$120B
is the projected
annual market
size of AR and
VR by 2020,
with AR
accounting
for the great
majority, $90B,
of that total3
$436B
is the projected
annual spend
on cloud services
globally by 20204
$276B
is the projected
annual spend
on IoT tech, apps,
and solutions by
2020, with nearly
50% in utilities,
manufacturing,
and logistics5

12. THE BUSINESS CHALLENGE
Agility–the ability to move faster than
the competition, in line with customers,
is perhaps the single most critical
organizational competency.
12

13. 13
Old ways of addressing the
competition and opportunities
don’t work anymore.
IDEA
Relevant
Problem
1.5
Years
LIVE
Irrelevant
Solution
PrimeNow went from
Concept to launch in
111 Days
60%
Of the US population
in less than 30 months

14. The transformation imperative: agility is required to survive business in 2019
14
1. Harvard Business Review & Constellation NR
of the Fortune 500 companies
have disappeared.52%
1995 (The Birth of Amazon)
Average life expectancy - 75 years
2016
Average life expectancy - 15 years
IN THE LAST 15 YEARS

15. The CEOs of the most
successful enterprises…
place a higher
premium on agility
and experimentation.
IBM CEO STUDY 2016
”
“

16. 16
Digital Business Transformation
(DBT) radically changes what
is possible by revolutionizing
both value delivered to the
market, and the way in which
value is created by embracing
digitally-native mindsets, tools,
and process.
P EO P L E
T EC H N O LO GY B U S I N ES S
Transforming both the
“what” and the “how”
of value creation
“what”
“how”

17. 17
Innovation of
Innovation
Approaches
02

18. What is innovation?
Creating value for
people through new
or improved services
and products (or
creating platforms for
doing it systemically).

19. We are in an era of
continuous innovation.
We’ve entered an era forcing companies
to shift their priorities and activities faster
than ever before, presenting challenges:
• How to be as nimble
as possible, yet
optimize the business?
• How to transform the
core business?
• How to identify the
next big bet and
business platform?

20. In fact, we have seen a
vast array of innovation in
how to innovate.

21. A perspective
on innovation:
Different innovation
problems require
different approaches.

22. Different approaches for different problems
22
1
(Digital) Product
Management
Rapidly Evolve Offerings
2
Service
Design
Reimagine Offerings
3
New Product
Innovation & Labs
Identify New Offerings
4
(Lean)
Startup
Develop
Incremental Breakthrough

23. 23
Competition
or Complement?
03

24. Product management
is more important
than ever precisely
because new
innovations intersect
business, technology,
and design.
MARTIN ERIKSSON
MIND THE PRODUCT
2017
”
“

25. Service Design
will take over
the world!ALBERTA SORANZO
DIRECTOR OF END-TO-END SERVICE DESIGN, LLOYDS
2018
”
“

26. (Digital) Product Management and Service Design promise similarities
26
Product Management Service Design
Principles
& Benefits
• Agility
• Customer-centered
• Interdisciplinary
• Iterative
• Outcome-driven
• Agility
• Customer-centered
• Interdisciplinary
• Iterative
• Outcome-driven

27. (Digital) Product Management and Service Design promise similarities
27

28. What is (Digital) Product Management (a too brief primer)?
28
Product management is
a value focused approach
to running an organization,
requiring a shift from
projects focused on scope,
time, and budget to flow,
quality, and value.
Value
FlowQuality
Scope
Time
Cost
Deliver Value
early & often
Higher Quality
through rapid feedback
Do it fasterDo the right thing
Do it right
1 3
2
Optimise Flow
to deliver faster

29. What is (Digital) Product Management (a too brief primer)?
29
$
5
1. Carve the estate/offerings
into “products” (or journeys)
2. Each product gets an owner,
a ”mini-CEO”
3. Each product gets a
dedicated (full-stack) team
4. Each product gets a goal
5. The product is always
changing to maximize
progress, product-market fit
and business performance
1
2
3
KPI
4

30. 30
At Target, the first pilot of the new product management
and value model was put in place for Adaptive Mobile
Web. Key changes in this approach versus what had
previously been done included:
• Fully empowered product managers/owners
• Sub-product teams organized around customer journey
• Daily review of KPI’s
• Work financed by commitments
to KPI objectives – VC style funding – not features
• Teams have ability to reprioritize without
additional permission
Adaptive mobile web product
Pilot the shift to catalyze
the organization

31. 31
• Fully empowered product managers/owners
• Sub-product teams organized around customer journey
• Daily review of KPI’s
• Work financed by commitments
to KPI objectives – VC style funding – not features
• Teams have ability to reprioritize without
additional permission
Lead time from “Idea to live” 3 Weeks12 - 18 months
Number of Teams 60
Route-to-live time Minutes90 days
Done in SprintWeeks
Minutes1 week
Accessibility testing duration
Duration of Initial Code Quality Test
Time to execute test scripts MinutesWeeks
Time to create new development environments 10 minutesWeeks
Prototypes / experimentsDiagrams / boxesArchitectural communication approach
From To
Customer Satisfaction Score Mobile Web 7363
BUSINESS RESULTS
CUSTOMER IMPACT
YoY Revenue Growth 72%5%
Customer Satisfaction Score Tablet 7353
Multidisciplinary Teams
Agile Method & Mindset
Modern Devops
Test & Learn on Cloud
Micro-Service-Led Architecture
and App Consolidation
Culture
Enable a team to run fully on value, quality, and speed

32. -6
-4
-2
0
2
4
6
8
10
1 2 3 4 5 6
7
8
Modern Product Management’s strength is local optimization
32
Product Management
is the best form
of organizational
design and approach
to aggressively
optimize products and
drive market fit in BAU.
Product teams excel at
optimizing individual value pools

33. What is Service Design (another too brief primer)?
33
The Service Design
approach is value focused,
improving customer
experience while
simplifying and reducing
cost-to-serve by tying
customer value to how the
organization delivers.
DRIVE
CUSTOMER
RELEVANCE
REDUCE COST
TO SERVE
CUSTOMERS

34. What is Service Design (another too brief primer)?
34
Organization
and operations
BACK STAGE
(Operating Model)
• Process
• Compliance & Policy
• Product development
• Pricing
• Legal
• Operations
• Technology
• Etc.
FRONT STAGE
(All touchpoints)
• Communications
• Web
• Mobile
• Retail
• Employee
• Physical product
• Telephony
• Etc.
SERVICE DESIGN
Reimagining and orchestration end-to-end across the enterprise
Across every customer and employee touchpoint
Customer &
Employee
Touchpoints

35. -6
-4
-2
0
2
4
6
8
10
1 2 3 4 5 6
7
8
Service Design’s strength is regional optimization
35
Service Design is a
better approach to
optimize across products
for customer outcomes,
where significant gaps
exist in CX and in the
delivery of that CX.
Service design could reimagine the
journey of using these products,
front-and-back stage

36. -6
-4
-2
0
2
4
6
8
10
1 2 3 4 5 6
7
8
Service Design’s strength is regional optimization
36
Service Design is a
better approach to
optimize across products
for customer outcomes,
where significant gaps
exist in CX and in the
delivery of that CX.
Ultimately, seeing a set of products
as a connected offering with shared
customer outcome and capabilities

37. 37
T-Mobile reorganized around a set of prioritized journeys,
and we helped them leverage service design to make sure
the customer experience that was envisioned could be
realized in the most efficient fashion.
• In one example, ”Self-serve upgrade”
• We identified the lack of customers ability to upgrade
their mobile devices without coming to a retail store
• The service and digital design defined a new
experience, new business processes, and technology
requirements
• +$9M net revenue/savings in first quarter of launch
Design isn’t just skin deep –
the org and ops are just as
important to great CX
Research Provide Device Process & Update
Take My Device
Customer wants a quick way to return
their devices that is easy tounderstand
and initate from their prefered touchpoint.
Customer wants to be able tochoose a convenientmethod toprovide their device to
T-Mobile regardless of howor where they originally received it.
Customer wants to feel reassured that there device will be processed
quickly, efficiently, accurately, andtheir balance will be appropriately
adjusted .
Customer Trigger Customer Trigger Customer Trigger
Front-Stage Interactions Front-Stage Interactions Front-Stage Interactions
Back-Stage Activities Back-Stage Activities Back-Stage Activities
Self-Service Interactions Self-Service Interactions Self-Service Interactions
Line of sight
Line of visibility
Steps People Process Technology
Figure how to
get started and
what to expect
Decideshow
(where) they
want to interact
Request help
with returning
device
Initiatesa
legitimate
remorse return
Receivesreturn
shipping
instructions
Dropsoff
shipment
Views
accurately
adjusted bill
Remorse
Customers
ECR Team
Care Rep
RetailRep
Exchange
Customers
My.t-mobile
App
Upgrade
Customers
T-Mobile.com
Quick View
POS
Search online
Review physical
documentation
Call Care
Visit Retail
Look-up on T-Mo
digitaltool
Ask Social
Media
SocialMedia
Escalation
Verifyidentity
Look-up receipt
or verify identity
Identifyreason for
return
Troubleshoot
unnecessary
remorse
Identifiesif device
can be fixed of
exchanged
Initiate trade-in
Identifyoriginal
order &capture
remorse reason
Quarantine
Determine device
condition and
credit fee
implications
Verify
communication
preference
Log
transaction
history
Re-stock and
transfer
Quick Code
Reduce Shrink
Grand Central Issue receipt
Create return
authorization and
send handling
instructions
Print labeland
receive into
inventory
ReversSTO and
transfer
inventory
UPS pick-up,
handling and
tracking Receive
shipment, scan
IMEI and match
with return
authorization
Physical device
inspection,remediate
anyconditionsissues
and applycredits/fees
Quarantine
Device
handling
fallout
RAon the Fly
UPS Tracking
RADICALLY SIMPLIFY
the product
DIGITAL FIRST
experiences
CHANGE THE
WAY WE WORK
Invest in platform
capabilities to
UNLOCK DIGITAL

38. (Digital) Product Management and Service Design key differences
38
Product Management Service Design
Key
Differences
• Obsessively
evolutionary
• Independent teams
• Touchpoint focused
• Lean(er)
• Growth-and-profit-
driven
• Agility in BAU
• Entertains wholesale
reimagination
• Cross-enterprise
• Journey-focused
• Collaborative(er)
• Relevance-and-
efficiency-driven
• Agility in transformation

39. (Digital) Product Management and Service Design key differences
39

40. A COMPLEMENTARY OPPORTUNITY
Product Management and Service
Design work particularly well together–
in Digital Business Transformation.
40
Experience^

41. Working together: Service Design fills a mixed backlog for Product Management
41
Customer Journey Map Service Blueprint Mixed Backlog in Jira

42. Approaches work together to enable every aspect of Experience Transformation
42
E X P E R I E N C E
( T R A N S F O R M A T I O N )
S T R A T E G Y
Defines the major vectors
of transformation
(offerings, journeys,
capabilities, etc),
growth and efficiency
opportunities, strategic
enablement requirements,
teams that will execute,
and investment plan
N E W O F F E R I N G
O P P O R T U N I T Y
E X P L O R A T I O N
C O R E B U S I N E S S
R E I N V E N T I O N
S T R A T E G I C
E N A B L E M E N T
Explores net new business opportunities through a lean
startup-like Digital Product Innovation process to determine
what should be funded and scaled
Reimagining and realizing the major vectors of transformation–journey or offerings–leverages
Service Design to fill a mixed backlog of transformation opportunities across offering, CX,
capabilities, and modern Product/Journey Management & Engineering to realize the outcome
and ultimately own the evolution of the business
…
Enables the transformation by providing critical platforms–API and Capability Platforms,
tools–DevOps, and cultural change–Organizational Change Management, to drive agility and
ongoing evolution at the speed of the customer
Service
Design
Product/Journey Management
& Engineering
Journeys
API and Capability Platform Build
DevOps Tooling
Organizational Change Management
B L U E P R I N T
P R O T O Y P E
S C A L E
SHAPING PLANNING PROVING & ESTABLISHING
M L S
P R I O R I T I Z EI N T E N TS T R A T E G Y

43. -5
0
5
10
1
2
3
4
5
6
7
8
Experience Transformation Strategy’s strength is global optimization
43
Product Management
and Service Design
are both poor
approaches when
needing to determine
overall ambition and
longitudinal investment.
Transformation Strategy more easily
enables us to see opportunities
which are currently off the map, or
to consider defunding an offering

44. 44
‘Our ambition is to make the most of emerging technologies, modern engineering techniques and use of
data to transform customer experience. ’’
Operational Efficiency
Rated best account opening
journey in the UK
#1
Customer Experience Ways Of Working
Pensions
processing time
1
Day
22
Days
Interview time in
branches
50%
Pensions
operations effort
40%
75%
Relationship Manager
effort to on-board
SME clients
End-to-end time to
on-board SME clients
75%
6 Agile labs
Automated
testing
Route to
live time
5
Days
90
Days
Manual
testing
We’ve seen big results at a major UK bank by combining these approaches

45. 04
Q&A
45

46. thend
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