volume 3 | no.

3 | 12,80 euro

January 2012

From Sketchbook
to Spreadsheet

Service Design Creates Break

through Cultural Change in the
Brazilian Financial Industry
By Tennyson Pinheiro, Luis Alt and Jose Mello

Learning the Language of

Finance Gives Your Ideas the
Best Chance of Success
By Jrgen Tanghe

Designing Human Rights

By Zack Brisson and Panthea Lee

By Jan Erik Dahl, Jrgen Kjaergaard and Jakob Stoevring Soerensen

The Missing Link

The Service Promise and Delivery

Jan Erik Dahl,

senior management
consultant and chief
development officer, MSc in
Engineering and eMBA.

Jrgen Kjaergaard,
partner, MA.

Jakob Stoevring Soerensen,

management consultant, chef
and MSc in Business Administration & SCM.
The authors work at
Implement Consulting Group,
one of the largest management
consulting companies in the
Nordic countries. All authors
help service organisations
creating change with effect.

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Every day, the media feature stories of customers experiencing

how organisations both private and public fail to live
up to their service promises. This may seem uncalled-for,
since considerable resources are spent on both designing
these services and operating an efficient service delivery.
In this article, we will attempt to describe what was, until now,
the 'missing link' between these approaches the missing
link which, at present, seems to exist between the inside-out
production approach with design of efficient processes and
operational environments and the outside-in approach with
design of service experiences.
As illustrated in figure 1, the two approaches tend to challenge the commonality in the organisational language. The
marketer communicates output and experiences and the operator seeks to drive
process efficiency across the delivery.
Thus, focus is on the effect that may
result from operations specialists meeting
designers and customer experience specialists, but also indicates that the access
for service designers to top management
may be through understanding the operations and the world of service delivery.
Some underlying challenges are,
however, often present when these groups
of people meet. Based on the experience from
numerous change projects, these include:

The design, implementation and

operations phases are often handled as
separate disciplines with little mutual
involvement.
Operations are often not taken into
consideration when driving sustainable
change in the organisations service
design.
The cost drivers and the revenue
streams are often managed in separate
parts of the organisation with no
obvious link.
To mitigate these challenges, a dif
ferent approach to designing,
operating, optimising and developing
service organisations is needed.

cross-discipline

customer
service product

input
infrastructure, raw
material, equipment,
employees, technologies and facilities

process
experience

output
perceived value
measured in
result and
experience

outside-in

service delivery
inside-out

service operations

Figure 1: Inside-out vs. Outside-in Approach

A Holistic Perspective on Service

Organisations Attractive and
Efficient
A service organisation is normally acomplex organisation. Managing
service organisations requires managers
who, like great conductors, are capable
oforchestrating harmony based on highly
different instruments, individualities and
processes. Moreover since it is almost
impossible to control it all these conductors seek to master the art of facilitating
and coaching their people to do an excellent job, driven by a holistic understanding
and by passion for service excellence.
To help the operational conductors,
the function of the service designers

could be an active asset, but they need a

framework in which roles and responsibilities are clearly defined.
Thus, we introduce the concept
of the Service Delivery System. It can
be used to understand how to drive an
efficient service delivery while still being
attractive to customers, thus balancing
the outside-in approach of the market
orientation and the inside-out approach
of operations. The Service Delivery
System seeks to provide the user with
tools to ensure the attractiveness of the
service design balanced with operating efficient front and back offices.
Figure 2 illustrates (main dynamics in
red and toolboxes in blue) how we need to:

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By Jan Erik Dahl, Jrgen Kjaergaard and Jakob Stoevring Soerensen

1. Meet customer demand in the variety

that occurs from the customers we have
chosen to target.
2. Apply different approaches to optimisation that match different operational
environments and link these to achieve
holistic and smooth cross-functional
collaboration in order to drive the full
potential of efficient service operations
without compromising the attractiveness to the customers.
The funnel in the model illustrates that
a larger dispersion typically exists as to
the needs and expectations of the specific
customers than is the case in the delivery
models and management tools found in the
organisations operations engine. This is
also seen in the most standardised service

operations as customers in the most standardised fast food restaurants are able to
order a standard burger without pickles.
The two lines, the line of interaction and the line of visibility, illustrate
the already known organisational divides
seen in service blueprinting. The line of
interaction is the key focus area, as this
is where the services are perceived and
consumed, but also where the designer often clashes with operations. Here, the key
for service designers is to ensure that the
design of the overall service concept and
the underlying service packages answer
strategically anchored questions such as:
1. To whom shall the services be provided?
2. Where must the services be delivered?
3. When will the services be accessible?

organisation
local operational
improvement

local operational
improvement

back office

front office

customer

standards
service specification / delivery model process optimisation

service specification / delivery model process optimisation

service concept

service specification / delivery model process optimisation

service packages
service design

service specification / delivery model process optimisation

demand

service specification / delivery model process optimisation

stability

flexibility

line of visibility
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demand
demand
demand
demand

service outcome &

service experience

line of interaction

cross-discipline

Describing how the services will be

delivered is dependent on the distance
between the line of interaction and the
line of visibility. It is part of the service
design to decide where these lines
should be and how exactly we want our
customers to experience the contact
points that we decide should exist.
When such strategically
anchored design decisions are made,
the consequences are not always
entirely obvious, especially when the
organisations must manage many
service packages through multiple sales
channels. A recent Northern European
business case showed clear challenges
for a retail bank pushing their services
through an app as well as through
ordinary retail infrastructure. Internal
efficiency increased while moving the
line of visibility up through the funnel
and very close to the line of interaction
only to be separated by an IT and,
therefore, more controllable application.
The challenge, however, is that this has
expanded the scope of simple commodity
services and reduced the potential for
personal service as a differentiator, and
retail banking is now moving towards a
simple commodity. Almost all retail banks
in Northern Europe offer online banking
solutions. Thus, the new service design
actually became a challenge, as the ability
to differentiate diminished. Furthermore,
and because little attention was paid to
the back office functions in the design
phase, complexity increased as these
operational functions were not ready

Figure 2: Service Delivery System

and trained for the direct customer only

separated by a simple app platform.
In the model, the vertical
dimension illustrates that being in control
of everyday operations is required in
the different functional units, besides
being in control of the processes.
Most often, it is the responsibility of
a functional manager to ensure local
optimisation of operations ('being in
control of my unit'). The leverage point
of the Service Delivery System is the
service concept and packages for the
functional manager to deliver up to
the demand stipulated in the different
service packages. This approach increases
the pressure on the service designers.
Here, design does not stop with the
customer interface, but must articulate
the anchor point of the service delivery.
For designers, the split between
process optimisation and local optimisation of operations is underrated. Process
optimisation is a horizontal exercise
across all internal functions. Local optimisation of operations is a vertical exercise across the many different processes.
Hence, the focus of the Service
Delivery System is on HOW to deliver
the most efficient service without
compromising the 'what', 'when' and
'where' that have already been specified in
the strategically anchored service design.
The HOW underlines the needs for
involvement of the delivery organisation
in the conceptualisation of the service
design. Also, co-creation is not limited
to only user or customer involvement,
but needs to incorporate the knowledge
of operation. Without early involvement
of operations, service designers fail to
understand the organisations where

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By Jan Erik Dahl, Jrgen Kjaergaard and Jakob Stoevring Soerensen

they apply the 'who', 'when' and 'where',

increasing the risk of services never being
delivered as promised in the design.
Who Human Infrastructure and
Implementation
People make it happen. When
you strive for customer excellence,
it all comes down to the people in
the organisation: to their ability to
understand their customers, to translate
and transform customer demands and
preferences into efficient and attractive
value propositions and, not least, to
deliver these value propositions in
a dedicated and consistent fashion.
Literally, the 'human infrastructure'
of the organisation is as important
as organisational charts, formal
responsibilities etc., which makes
recruiting the right people and
keeping them dedicated, competent
and responsible a strategic task.
When you want to implement
changes in your service offer to the
customers which may be initiated by a
new customer strategy or new insight into
what the customers really favour you
need to orchestrate a change project.
Even technical solutions such as social
media require a change of behaviour by
the people in the organisation. When
changing, you may want to identify
change agents to facilitate the change.
Without discussion, operational
managers in the organisation are the
single most important change agents
to get on board. The challenge is how
to drive an efficient change process.
A common misconception of
strategic change is that you start with
a management decision and then

14

implement it. Roger Martin illustrates

this as the idea of the brain deciding
what the body should do. Instead,
strategy and design execution should be
like a white-water river where choices
cascade from the top to the bottom.
In a company, those in charge make
broader and more abstract 'upstream'
choices, and employees 'downstream'
are empowered to make choices that
best fit the situation at hand 2.
A way for service designers to
manage the upstream and downstream
processes should be ensured by an
upgraded collaboration between
designers and the operational managers.
Bonding their knowledge will ensure a
full picture on the change. This would
also make top management listen as
the change process covers direction
in the service promise and assurance
in the ability to deliver the service.
In God We Trust Everyone Else
MustBring Data
To be able to provide attractive
and efficient services, you need data
so that you can act on facts facts also
tend to be the language of the modern
service operations. This does not mean
that gut feeling is out, but data is a good
supplement to decision-making. An
insurance company had an apparently
successful inbound customer call centre
with a staff of 130 people. Data showed
that service levels for response time and
customer satisfaction were on target.
However, the customer churn rate was
still high, despite the good figures,
and the customers were very satisfied
with the different touchpoints. Data
collection and analysis revealed that

cross-discipline

many customers to the call centre had

decided to choose another insurance
company before they called, knowledge
that had not been gathered earlier by
the designers and operations, who
both looked at positive figures. To be
proactive, the company decided to
transfer people from the inbound call
centre to an outbound customer centre
that contacted customers. The insight
that provided this decision came from
experiments combined with careful
hand-held data collection: the company
carried out small experiments, i.e.
changes in the contact with customers
(timing, channel etc.) and carefully
registered the response from customers,
thereby learning what worked well.
Why is this an important
example for designers?
Well, you need to combine
exploration with exploitation when
designing services and to involve
operations as the key stakeholder
together with the customer. You cannot
develop, design or deliver services
successfully if you do not involve the
stakeholders in the experiment.
When your experiments prove
successful (and prove means that you
must bring data), you implement
them to exploit their potential. Data
will also make management listen.
Revisited The Missing Link
With this article, it has been our
intention to provide an overview of
the Service Delivery System that we
believe is a step towards closing the
missing link in the dialogue between
the service design community and the
service operations community. We hope

that we have succeeded in illustrating

an approach that we can use to discuss
the design of service delivery systems
that can consistently deliver the
intended attractive services to our
customers in an efficient manner.
To ensure a reliable service promise
where organisations efficiently meet
or exceed customer expectations, we
recommended that five key elements be
taken into consideration:
Service design and service delivery
must be seen and handled together.
People drive change, and the earlier
the involvement, the smoother the
transition.
Operations managers are the key
resource to the change process:
changeagents may help them.
Build organisations where the human
infrastructure supports the customeroriented change process.
Experiment when developing services
and use data and real-time customer
experience to support continuous
learning.
Best of luck to all of us in designing the
next service experience!

References
1 Johnston, Robert & Clark, Graham (2005).
Service Operations Management. Prentice Hall
2 Martin, Roger (2010). The Execution Trap.
Harvard Business Review, July-August

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