The following is an exclusive excerpt from Service Design: From Insight to Implementation, a new book by Andy Polaine, Lavrans Løvlie and Ben Reason. Rosenfeld Media has kindly granted us permission to share Chapter 2 - The Nature of Service Design, in two parts. See the first half, as well as an introductory note, here.

The Service Economy

In developed nations, around 75% of the economy is in the service sector, and this is where most new jobs are created. In Germany, known for its export prowess, the industrial industries dropped 140,000 jobs in 2010, while the service sector added 330,000 jobs, and private nursing services generate more revenue than the entire German automobile industry.¹ To an increasing degree, we also see that the design of services is becoming a key competitive advantage. Physical elements and technology can easily be copied, but service experiences are rooted in company culture and are much harder to replicate. People choose to use the services that they feel give them the best experience for their money, whether they fly low-cost airlines or spend their money on a first-class experience

Just as industrial design fueled the introduction of new products to the masses in the industrial economy, good service design is key to the successful introduction of new technologies. Design of new models each year became the recipe for maintaining the success of established products. In the service economy, services can be redesigned on a continuing basis to keep a competitive edge in the market.

Some of the greatest opportunities are found where a business model can be changed from a product model to a service model. A case in point is car sharing, where the business model has changed from selling the car as a product to offering access to the service of mobility.

Core Service Values

One way to understand services better—and what makes them different from products—is to examine what it is that people get from services. There are many breakdowns of the characteristics of services, some of which we will look at later in the measurement chapter. We have been developing a simple way to understand the generic types of value that services deliver to customers by cataloguing every service we have become aware of and then grouping them in relation to three core values: care, access, and response (Figure 7). Most services provide customers with at least one of these or, often, a mix of all three.

Figure 7 - Core service offerings can be grouped into three primary spheres: care, response and access.

1.) Services That Care for People or Things

Healthcare is the most obvious case of a service focused on care, but many maintenance services also have care as the core value. A famous example of a care service is the Rolls Royce aviation engine service that monitors aircraft engines in flight and has spare parts ready to be fitted as needed when a plane lands, anywhere in the world.²

Care for an object—a car, an air-conditioning system, a wool coat—is provided by auto mechanics, HVAC technicians, or dry cleaners. Care for a person is provided by a wide range of services, from nurseries to nursing homes. Accountants, lawyers, and therapists provide care for money, freedom and happiness.

2.) Services That Provide Access to People or Things

Many services enable people to use something, or a part of something, temporarily. A railway service provides a seat on a train for a specific journey. A school might offer a child a place in a classroom from the age of 5 to 11. A cinema provides access to a giant screen, a comfy seat, and 90-plus minutes of entertainment. Generally, the services for which access is the primary value are services that give people access to large, complex, or expensive things that they could not obtain on their own.

Other kinds of access services are those that give access to infrastructure over many years. Utilities, such as water, gas, and electricity, are ubiquitous examples in the developed world. The Internet is, of course, a relatively new infrastructure that enables a whole new generation of services that provides access to information, digital media, and technology on a shared basis. Spotify provides access to a huge music library. Google provides access to an enormous database of searches. Facebook provides access to billions of personal pages. In this sense, we can view the Internet as a kind of metaservice, because it enables the provision of many other subservices, which is why so many people insist that no single entity "owns" it. These services provide individuals with access to large infrastructures that are used in conjunction with many other people. They don't end up owning anything that they can take away and store or give to someone else, apart from the experience they had.

These services are often a fundamental part of people's lives that are typically noticed only when they are disrupted, such as when the daily commuter train is canceled, or when schools are closed due to heavy snow. People expect the infrastructure to always be there for them. As individuals, we understand that we all have our own experiences of the specific access we have to this infrastructure—this is the service layer that enables us to access our bit of the larger whole.

3.) Services That Provide a Response from People or Things

The third category is services that respond to people's (often unforeseen) needs. These services are usually a mix of people and things that are able to assist us: an ambulance rushing to an accident, a teacher helping a child with a math problem, or a store assistant finding a customer a pair of jeans with the right fit. Sometimes these "response" services are anticipated and people buy the right to them in advance through insurance policies, social welfare, or simply by their choice of brand experience. In many respects, response is the default understanding of what service is— think of a waiter responding to a request for a glass of water, for example.

Service is someone doing what he or she has been asked to do. In this sense, response services are fundamentally different from products in that they are not predesigned but created in the moment in reaction to a request. The three core service values overlap in many instances. An insurance service offers both access to a financial-risk-offsetting infrastructure and a response to a specific issue when a client calls with a claim. A healthcare service provides care on a personal level, but also access to a hospital facility if necessary. It will also transport a patient there in an ambulance if necessary. It is not so much that any one service fits only in one category, but more that the service has different core values at different times.Making the Invisible Visible

The above examples may well sound obvious. Most people recognize services when they see and experience them, but it is useful to describe and analyze them in this way precisely because services like these are so ubiquitous. It is this very ubiquity that leads them to being taken for granted by both users and providers alike. Thus, they become almost invisible elements of life. Utilities such as water and electricity are excellent examples of these kinds of services. It is only when there is a power cut or a burst water main that people realize just how dependent they are on these utilities and first start to think about the service infrastructure that is required to provide them. It is because many services are almost invisible that nobody takes care to design them.

This is not a conversation we would have if we were talking about a car or a smartphone because the design of these products is quite literally close to the surface and makes up a large proportion of the decision to buy or use them. As a result, service designers frequently need to make the invisible visible by showing customers what has gone on behind the scenes, showing staff what is happening in the lives of customers, and showing everyone the resource usage that is hidden away. Many of these aspects become part of the business and marketing case for the service (the service proposition).

The Performance of Service

The three core service value categories—care, access and response—define types of value that services provide to people. Seen in a purely task-fulfilling way, the actual outcome of many services is the same. Renting a car is a good example. Customers can get a car from any car rental company (they hope). Companies may compete on price, and that price may raise or lower expectations of what car and service we might get, but generally prices are similar across the board. The point of difference for any specific service is how it is delivered. We think of this as the performance of the service. "Performance" is a helpful word, because it means two things: performance as experience and performance as value.

1.) Performance as Experience

Performance, as we understand the word from music or theater, means the style or the way in which the service is delivered. This performance makes up the immediate experiences that service users have, and it is what people often refer to when they describe the service as "good." What they mean is that they liked the way they were treated or the way the service provider performed their tasks. Generally, this is in reference to service staff, such as the front-desk clerk in a hotel or a call center employee. It is useful to take this concept of performance and expand it from the individual to the overall performance of the entire service organization. If we use a musical metaphor to compare the service to an orchestra or a rock band, we can think of quality of performance in terms of how well all of the musicians came together to deliver the music. Music is an interesting metaphor in this regard, because in a band or an orchestra, each musician must play to the best of his or her abilities, yet at the same time play in harmony and keep time with the others. Things can quickly go awry if each musician simultaneously tries to play as a soloist.

We can go a step further to include the qualities that the venue or the support staff brought to the experience. Was the lighting good, and was the sound engineering supporting the experience? This kind of performance is where a service can have its own style—think of an airline such as Virgin, which have gone to great lengths to make the experience of a very rigid flight process different from their competitors by styling the manner, dress and actions of their inflight team, their digital and print communication, and a host of other touchpoints.

This "experience" aspect of performance is the delivery of the service to the service user on the "front stage." The idea of a music ensemble, harmonious across all aspects of the performance, is critical to services and a concept we will return to when we start examining how to align the complexity of touchpoints that make up service experiences.

2.) Performance as Value

The other meaning of the word "performance," equally useful to service design, is service performance as a measure of value. How well is the service performing? This measure is both outward and inward facing. Outward-facing value measurement asks how well the service is achieving the results promised to the service users. For example, how often does a hip operation result in a 100% recovery? Inward-facing value measurement examines how well the service is performing for the organization. For example, how cost effectively is it delivering hip operations?

This kind of performance is how businesses usually see their activities. Hence, services that we design and they provide will be evaluated in hard performance metrics. Service designers need to design for this aspect of a service as much as for the customer experience. This value aspect of performance is the "backstage" measure of the service by the business—all the things that happen behind the scenes that help create or run the service experience for customers but that they don't see. This provides a challenge for service designers. We need to be able to measure the cold, hard metrics of the business as well as make the case for measuring the soft and fuzzy aspects of people's experiences. This challenge is discussed in Chapter 8.

Unite the Experience

We doubt we have to preach the value of design to readers of this book, but we all have to make the business case to clients. In our experience, the design approaches described here can be quick, inexpensive, and effective ways to create service experiences that delight customers. Most services involve implementing a complex and usually expensive infrastructure, and our ability to develop quick, cheap prototypes of both products and services early in their development can save organizations enormous amounts of money in sunk investment that may later turn out not to work. Service design aims to unite the experience.

Summary

· Economies in developed countries have shifted from industrial manufacture to services. The problem is that many companies offering services still think about them with an industrial mindset and try to manage and market services like products.

· A common management approach is to divide an organization into departments, or silos. This may lead to each part of the service being well designed, but the real problem is that the entire service has not been designed as a coherent whole. The customer who experiences the whole also experiences the gaps between the touchpoints.

· Many organizations are organized in ways that actually prevent them from delivering good service experiences. The challenge is to redesign both the service and also the culture of the organization.