How an unexpected alliance between Service Design & Business Design can help design better services

Published in ATÖLYE Insights · 11 min read · February 14, 2020

Insights on why and how new ventures can use the best of these disciplines together

Author: Carla Lemgruber, Senior Lead, Service Design, ATÖLYE Editors: Akar Sumset, Melissa Clissold, Özgür Arslan Translation: Gizem Unsalan, Ömer Ataş In-text visuals: Aleyna Tezer

Most companies, when seeking design consultancy, ask for shiny disruptive ideas in order to be innovative. But the more disruptive you wish to be, the more of a "startup mindset" you need. That means being ready to fail and learn. This is why one needs service design and business design to join forces and learn to tango together.

However there is a trap! Service design starts from mapping holistic journeys yet new ventures need a single sharp and unique value proposition. So how to choose which problems to solve first? How to go from ideal journeys to Minimum Viable Products (MVPs)?

This article is about how service design and business design can team up, and how we can "dance" together with our clients to bring future-ready experience-driven pilotable business ideas to life...

The more disruptive you wish to be, the more of a "startup mindset" you need.

Previous generations lived in the age of big corporations. However, when Silicon Valley came along, all everyone started talking about was how to be an entrepreneur and how to come up with the next "great app." And so, the lean startup approach started gaining momentum and spreading significantly in contrast to traditional ways of running businesses,.

As startups started to disrupt markets, organizations realized that they needed to reinvent themselves. But the more you aim for disruption, the more you have to build a focused offer (a unique selling proposition) to make sure that you are able to do a few things really well. The question then is how to design a "new sharp offer" when your starting point is a big organization with multiple and interconnected products and services.

The first and often overlooked barrier is regarding mindset. Generally, leaders of big companies have worked in large organizations most of their lives. As good as they may be at "making the machine run," they are used to thinking from the perspective of an established existing business within a saturated market, where the mindset is to widen your range as much as possible in order to stay ahead. Such leaders are used to making decisions based on clear KPIs and extensive data, usually developed through the traditional approach of business administration and marketing.

From the moment that the concept of design thinking started to spread a few decades ago, these large organizations have begun to see the value of design more and more (which is great for us!). However, they expect the method of design to run as systematically as their businesses do, and that is not how design works - uncertainty is always the birthplace of change; it is full of unknowns. Therefore, one of the first lessons that we have learned from working on such projects is with regard to how we should position ourselves as partners in this "joint learning journey" from day one onwards. We realized that we must help guide the client and involve them throughout all processes so that they may truly learn about the real challenges of bringing new ideas to life. This also allows the clients to be proactive and bring their own expertise to the table. As stated by Eric Ries, we should help clients face their first reality checks with courage, and set the stage for a learning path right from the beginning.

Service Design & Business Design - different starting points, and normally unbridged practices

When Service Design emerged as an official practice, it aimed to turn these existent large business-centric organizations into customer-centric ones. That means that every service design project starts with mapping reality "AS IS" with a human-centered and holistic approach, taking several snapshots of the system in order to identify and ideate on opportunities with which to delight customers and provide them with a new journey "TO BE."

However, when it comes to setting up a new startup, this process does not work that easily. That is because most startups are born from a unique and single value proposition -one idea that needs a sharp specific "job-to-be-done" that can be tested via an MVP (minimum viable product).

Here is where the conflict lies: business design focuses on one problem that needs to be solved, while service design focuses on the holistic journey and overall experience of people. Therefore, the delivery of service design will ideally lead to "many problems being solved" or "a bundle of correlated products." So, how must one choose which design concept to invest in? What should the MVP be? How do we choose just one value proposition to work on? What happens when you need not only one product, but a few combined, in order to make your market entry successful?

How to use the best of both worlds (in our experience)

When we faced such a challenge for the first time, we walked through the initial steps of service design: Starting from the client's product, we talked to users of existing or similar services to understand their pain points and needs, and benchmark the competition in order to understand where the market gaps (the blue ocean) were present. However, because our mission was to reinvent the sector completely, the needs that we identified were of a much broader scale than anticipated. We identified over 100 needs in 4 customer categories, and even after prioritizing the key pain points unsolved by the competition, we still had around 25 problems that brought about an opportunity for differentiation, for which we could develop solutions. Yet, combining all the ideas to generate "ideal journeys" became a real challenge, and that is when business design came into play!

Instead of designing the ideal journey from the perspective of connecting diverse solutions, we discovered (not smoothly but rather painfully) that there was another path. We outlined the ideal journey based on how we wanted the user to feel (from desperate to relaxed, from skeptical to trusting), and once more evaluated the ideas that had the highest impact in achieving the desired feeling. With those determined, the next step was to understand from which ideas we could build a new sustainable business model.

Interdependable disciplines: Service Design allows Business Design to be more customer-centric whilst Business Design allows Service Design to be more implementable

For creative minds, the ideation part is the most exciting in any project. But in order for a new business to be sustainable, you need good ideas that can provide you with revenue. So that was the first step for the business design part of the project: We went back to the research and re-evaluated our "user categories" in order to understand - from the ideas we generated - who needed what solution the most, and who was willing to pay for these solutions.

This may seem complicated, but if you ask enough "why" questions it becomes easier to achieve. Consider all the services you pay for: What value do they bring you? Do you pay for the convenience? Or is it about the entertainment that these services provide? Maybe it says something about who you are. Somehow, you saw value in this service and thought it was worth paying for. Thus, you need to find a similar sort of value for the people who will use your services.

Among your user categories, who are the people who already pay for other services that provide the same value in other sectors? Those would most likely be your early adopters (e.g. If you are offering convenience, these adopters could be people who already do online shopping even when it is a bit more expensive than going to the store). Then, it is a matter of estimating how many of these early adopters exist in the region in which you would like to launch your product (potential market size), and how much they would be willing to pay for each of your ideas separately ("fake door" online tests are a great way to do it).

So, when you think about prototyping and testing your ideas, do not only think to do so from the perspective of functionality or desirability, but also from the "CEO point of view." Such business design exercises will help you start from the ideas that would make people happy as well as create revenue. Then, convincing your clients that you have a great idea worth investing in becomes much easier (remember, they are leaders of big organizations with deep need of "reassurance" before taking risks).

Partners in conflict

So, what comes next? As you probably guessed, and as the lean approach suggests, you need to have a vision of the main concept, but you also need to take your prototype to users and test your new business through an MVP. And it is here that these two design disciplines may clash again.

Service Design is all about end-to-end experiences; and in our case, the offers we had that were "delighters" and generated user engagement were not the same as the offers from which we could generate revenue - which meant that our "MVP" was not really an "MVP." However, the lean approach needs to have a simple MVP to be launched and "fail as soon as possible" so that you can learn as fast as possible. So, if the new product requires a combination of solutions, you may have to further prioritize, and choose less for your first launch.

During that stage, what we learned is that it can be risky to design the MVP business plan before doing the customer validation of key features. We assumed that a more complex product was needed, and that made the amount of money needed to launch the MVP demotivating to key investors, who were not a part of the journey from the beginning.

And that is precisely the reason why the first step of the process should be to set the stage for a "joint learning journey" - so that when you start experiencing reality checks, your client and you have built enough trust, and are equally emotionally invested in the project, to make the necessary tough decisions.

8 Key learnings:

Be transparent about uncertainties, and build trust with the client for a "joint learning journey" from day one onwards.
Start by mapping the holistic journeys of your customers as well as all their pain points.
Identify which pain points are the most painful and/or bring about the most potential for differentiation (potential blue oceans) and ideate around them.
Design an ideal "journey to-be," not from the solutions you generated but based on how you want your customer to feel every step of the way.
Further filter your ideas by how much they might impact the life of your customers.
Go back to analyze your customer segment to see if those who need your product are also willing to pay for it.
Reprioritize your offers accordingly, and combine them into new businesses in order to identify potential MVPs to test their desirability and impact as soon as possible.
Keep in mind the challenge between the MVP and the full vision.

Aftermath and wishful thinking

This project and these lessons made me wonder why these design disciplines had not really been bridged before. Is it because good empathizers usually do not think about making money? Or is it that those who focus on profit do not think about the needs and realities of their users? Probably both, and much more. The fact is that the future of work (and business) is one that is highly collaborative, and therefore, as we preach that to our clients, we creatives also need to put that into practice and collaborate more!

As the service design lead in the project, having a business design expert with us as an advisor was a new and somehow confusing experience. We had our differences, but we also learned so much from each other. And now I see how much these two disciplines need one another for true innovation. After all, the biggest pain point of most service designers working on consultancies, including myself, is that our ideas never see the light of day, and in my view that is because we are not talking in the language of our clients enough: The business language. We are good at empathizing with our users but not with the people who asked for our help in the first place. Clients from big organizations need us to show them the potential of ideas in a way that they can understand, and we must help them overcome their fears and insecurities so that we are able to thrive and build a world in which we want to live together.

This was a snapshot of our experience working on projects co-led by both design disciplines.

What are yours?

Key tools and resources used during the project: