Be more than a one trick proposition
By Chris Aitken
While many successful startups and even traditional business appear at first glance to be outstanding at offering only a single service or product – closer inspection reveals that many companies such as PayPal, Google, Facebook, Apple, Amazon actually provide a range of services and products to distinct customer or market segments.
At the outset of a successful startup your efforts may centre exclusively on your one unique service or product concept. However, it is not uncommon for this to morph over time into several related but distinct products or services – driven by the particular needs of distinct customer segments.
The question then becomes how to design services that are mutually complementary and not competing, and how to do this in a way that naturally ensures continuity of great customer experience? There are certainly many examples where the introduction of a new product or service has led to confusion for new customers or disenfranchisement of existing customers.
I believe the concept of a Service Portfolio unlocks a number of important perspectives and considerations that can be easily overlooked during the process of Service Design.
This article is the fourth in a series that describes the separate design activities that make up the FromHereOn Business Design Method. In this article we cover the topic of Service Portfolio Design and why it is important.
WHAT IS A SERVICE?
At FromHereOn we define a Service as an undertaking to provide a specified product or outcome that is requested or purchased by customer and provided to an agreed level of quality or performance. To design a service we follow a diverge/converge human-centred design process – starting with the customer and their ambition and ending with a defined service concept and prototype.
We consider a service concept to be distinct if it is unique amongst the services a company provides (and not just a variation of an existing service) and/or it is provided to a new market segment (i.e., not just to a new segment within an existing market).
We reserve the term Product to mean a tangible output provided to a consumer via a service. A Product can be owned by a customer (unlike a Service).
WHAT IS A SERVICE PORTFOLIO?
Sooner or later the design of single services or products within dedicated service design streams becomes insufficient to ensure that the collection of all services and products the company provides to consumers represent a coherent system ‘eco-system’. We call this collection of all the company products and services the company’s ‘service portfolio’.
Optimal service design can only be achieved in the context and with reference to all other services provided by your organisation.
The mix and match of services can be mutually reinforcing or counterproductive, therefore there is a need to make the assessment of the contribution of an individual service to the overarching intended customer experience.
HUMAN CENTRED SERVICE DESIGN WITHIN A PORTFOLIO
Our design process starts with an empathetic, well researched understanding of the customer and their job or jobs to be done. We use the Value Proposition Canvas to understand match between current services and service features, and customer Jobs, Gains and Pains. Unmatched Pains are often candidates for new service features (and sometimes whole new service concepts!). We then ideate over a matrix of Customer Pains and dimensions of Capability (people, process, information and technology) to generate 100’s of service features. We then coalesce these into an initial service concept of ‘hypothesis’.
The process then continues to test this initial service hypothesis and understand desirability from the customer’s perspective. We then further refine and move to rapidly prototyping the service concept to gain more feedback on concept and ways to improve it. We also review the service concept at this stage in the context of the company’s overall service portfolio – are there double ups or gaps?
The last phase of service concept design is to consider its viability and feasibility. Both these assessments are also undertaken with reference to the other services in the service portfolio. For example, a service concept might be high desirable but not at all profitable for the company. However, from a portfolio perspective the revenue loss that this service represents might be easily offset by revenue from other services, especially where the service results in heightened market profile for the company overall.
Having verified the viability and feasibility of the service concepts in the portfolio these assessments together with the customer desirability assessment are used to develop a horizons roadmap for implementation. For service concepts that are high desirable, clearly financially viable and eminently feasible it is often a very small step to rapidly move from the prototype to your initial minimal viable product (or service).
SERVICE CONCEPTS AND JOURNEY MAPS
Conventional wisdom says that a service design project starts with developing a Customer Journey Map – however, in our experience we find that this is often not the best place to start. While a Journey Map is an excellent tool for understanding current customer experience it does not always lend itself to understanding precisely what it is that the customer is trying to achieve (i.e., the customer job to be done) – and therefore the reason they are using your services. We also find that a Journey Map can often perpetuate current state thinking as they are typically developed with reference to the current service offering. Similarly, when using a Journey Map to plot out a future state service experience even if customer jobs are well understood - it can be difficult to not be overly influenced by how things are done today. It can also be unclear how exactly to partition the journey into discrete service interactions. For these reasons our starting point is always the customer jobs, pain and gains – mapped to actual or potential future service features, and using these to work up a series of service concepts.
However! once you have a defined and prototyped portfolio of service concepts – then it makes a lot of sense to construct a future state Journey Map by combining service concepts over the customer lifecycle to validate the completeness of the portfolio, consistency of experience, as well as test that customers would indeed use several services over the course of their interactions with your company.
SERVICE PORTFOLIO AND CAPABILITY
The final reason that a service portfolio is important is its relationship to business capability. Because the service portfolio is a comprehensive view of all services a company provides, it can be mapped to the company’s Business Capability Model – a comprehensive view of all the company capabilities. Capabilities are logical groupings of people, process, information and technology resources that collectively are responsible for a particular output or outcome (think Business Function). Any individual service provides access to a unique orchestration of capabilities that collectively deliver the specified service products and/or outcomes. Changing the services included in the company’s service portfolio will likely change the capabilities needed to deliver the portfolio.
By mapping the service portfolio to business capabilities, a company is able to identify those capabilities on which many services are dependent, and identify the maturity of those capabilities. Cornerstone capabilities of low maturity typically represent service delivery risk, and ought to be the focus of future investment and remediation.
SERVICE PORTFOLIO DESIGN - NEXT STEPS
Taking and enterprise-wide perspective when undertaking service design introduces an increased level of sophistication and thinking about the services and products that you offer to customers. The combination of services and products becomes another dimension of competition and comparison between companies from the customer perspective. This broader perspective also throws up potential re-use of existing capability to provide new services – as well as a comprehensive understanding of the net impact of the lifecycle of individual services.
In a competitive environment where the only constant is change – the ability to turn services on or off and easily understand your capacity to do so is an ability that is a differentiator.