Apple Newton

Service design is strategy and execution

21 March 2019 door Jan Van Caneghem

Service design is a technique that every company applies, good or bad, consciously or unconsciously. After all, design is much more than a visual appreciation for a product or service. It is the development of that product or service. In short, design is the product or service itself. What we usually do not pay much attention for, is the impact of service design on the organization. In her book ‘Service Innovation Handbook’ Lucy Kimbell goes deeper into one of the most important aspects: capacity. The resources and people inside and outside the organization (company or NGO, government department, etc.), determine how you can develop a service.

Most innovations aren’t thrilling, neither technological

This capacity is the key to innovation in the development of many innovative services. Innovation often does not answer a completely new question, but answers the question in a new and innovative way.

We still look to the movies we like when we like. Only, since Netflix, we don’t leave our living room anymore to do so.

We have not started massively reading books since the arrival of Amazon. But since Amazon, that book is delivered at our doorstep, accompanied with recommendations for some other books.

They are more of the same but better

A lot of innovation is limited to the different use of existing and trusted capacity. There are good and strategic reasons for this, both from the point of view of the future customer and from the interests of the company or the organization.

You want the customer to experience the same service differently, by adding another method or technology. This will be done with less friction if the customer is already familiar with that technology or method.

Innovations better don’t come too early

Apple developed a kind of tablet with the Newton in 1993. But according to the market, it was far too expensive, and the technology for handwriting recognition was insufficiently mature. What forced Apple to take the Newton of the market in 1998.

The choice of capacity for innovation

The choices that a company makes when deploying capacities are often at the core of innovation. These choices are also of strategic importance for the company. You can best test them against the following points:

  1. Technology and resources: are new technologies used? If so, are they already being used at similar service providers, or with the same target group?
  2. Environment: are adjustments to the business model in accordance with environmental conditions, such as legislation. Or better yet, are they responding to new and changing environmental factors?
  3. Market position: will the supply for the customer improve or exceed expectations?
  4. Values: is the innovation in line with the values of the customers and the values the company wants to embody?
  5. Culture: does the innovation fit within the culture of the company and its customers?
  6. Experience: what is the impact of your innovation on the experience of the customer?

Capaciteiten moeten juist worden ingezet

Netflix wanted its algorithm to predict viewer recommendations to improve by about 10 percent. For this Netflix offerd a price of 1 million dollars on Kaggle.

The result was an algorithm that combined ‘content recommendation’ and ‘collaborative recommendation’. The data scientists group ‘BellKor’s Pragmatic Chaos’ wrote an algorithm that performed 10.05% better than the existing Netflix Cinematch algorithm.

What Netflix had not taken into account was the cost to implement the algorithm and the profit this would bring them. Due to a negative relationship between the two, the algorithm has never been used.

In her attempt to improve the customer experience, Netflix lost sight of the fact that this improvement also entailed a cost, in this case an excessive cost.

Service design bridges the cap

It is important to ensure that the innovation you want to implement or the service you want to develop is examined from the perspective of both client and organization. Developing the right service and using the necessary resources in the most efficient way is what service design should do for your company.