Service Design for Government
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U.S. Capitol during cherry blossom season represents the idea of government innovation

Government Innovation with Purpose in a New Administration

In April, I attended MITX’s DesignTech summit in Boston and had the opportunity to talk to a lot of really interesting folks designing innovations in the IT world today. As a government innovation professional, I particularly enjoyed the keynote by Gene Han – he said two things in that stuck with me:

  1. Innovation must have purpose
  2. Innovation is about getting things to work together (it’s not always about the most advanced technology)

 

Both statements are simple, and neither is totally new, but these are sometimes hard principles to remember and apply – particularly in the government innovation world. Mr. Han probably didn’t have the federal government (or state or local) in the front of his mind when he gave his talk, but it struck me how important these two principles are for the government (and those like me who support them) in this precise moment.

Big-budget departments like the Department of Defense have been talking about government innovation for some time – former Secretary of Defense Ash Carter gave a speech this week reminding the world of the steps he took to try to bring innovation back to Defense. However, the future of those initiatives is cloudy in a new administration with different priorities.

Other organizations, many with already small budgets, find themselves facing new budget priorities and potential for significantly reduced spending power. And yet, the country faces a lot of really important and unprecedented social, economic, and diplomatic challenges.

If the government’s goal is to continue (or even improve) its service to the public, they need to get innovating at a time when resources to innovate are increasingly slippery. Daunting, yes – but it can be done, especially if we remember to have purpose and make things work together.

What does federal government innovation look like in practice?

Focus on outcomes first

This sounds easy but can be surprisingly hard in government spaces where things are often done because of regulation or policy, not value. Identify what the improvement looks like in practice and then work backwards.   If you build something cool that no one uses, your “innovation” is without purpose – and therefore not really innovative at all.

Use the tools you already have

Think hard – and seriously – about how to use the tools you already have to create innovative government solutions. If you can reach your outcomes by rethinking process, training, and re-use (or better use) of everyday tools that everyone already has. This is where “making things work together” comes in. It doesn’t matter if it’s a laser-guided missile or a really well-designed process with a shared drive; if you’re doing something new to improve the status quo, you’re innovating.

Think about requirements as constraints, not restraints. Too often in government we get stuck in the mindset that “we can’t” because of all the requirements placed on us (interoperability, reporting, security, authority…the list goes on). If we start to think of these requirements as constraints (that which imposes structure) as opposed to restraints (that which limits), we suddenly allow ourselves to think more creatively and proactively.

Simplify

Another temptation for those swimming in government bureaucracy is to think that everything has to be highly specialized or complicated for it to work.   The more we focus on outcomes, the easier it is to focus on core requirements. This makes it a lot easier to find an iterative path to innovation: ways of making ideas, people, methods and tools connect to get things done.

 

Maybe there is hope for the White House Office of American Innovation after all.

runners on starting blocks at a track to represent government performance

Top Three Government Performance Indicators Every Agency Should Measure

The business case for measuring government performance is a consistent focus area for agency leaders, as government agencies are constantly challenged to demonstrate that resources are achieving intended goals and delivering value. To successfully measure agency performance, organizations must establish clear objectives that align to these outcomes.

  • utility (fit for use)
  • warranty (fit for purpose)
  • service delivery (fit for experience)

 

Why Measuring Government Performance Is Important

Government programs exist to deliver specific outcomes in support of a function or mission. For agencies like the Department of Veterans Affairs, ongoing performance measurement is essential in demonstrating accountability of government resources towards achieving specific outcomes in health, education, disability, and memorial benefits for veterans and their families.

Agencies must continually demonstrate success in this era of unprecedented transparency; the media, watch-dog organizations, and citizens have direct insight into government performance. The public has immediate access through social media to voice complaints and to highlight experiences that were less than satisfactory. Additionally, the media is following “big government” closely and congressional interaction and testimony is being shared as part of the daily news.

As a result of this level of public oversight, leading agencies are reconsidering how they measure and communicate their value directly to customers. As such, government agencies must create a credible brand of being the best at what they do for the best value. Additionally, while it is important to know that the resources were used in accordance with the laws and regulations, it is also critically important to demonstrate that the resources are effective, efficient, and relevant to their intended customers.

Three Key Government Performance Indicators

Considering the current level of scrutiny surrounding governmental organizations, Technical Assent has partnered with numerous organizations to develop metrics platforms using key government performance indicators. In our work at the Department of Defense, we track closure of capability gaps identified on our project baseline in addition to usability. Our most recent efforts have been focused on Veterans Affairs, as VA is laser focused on producing outcomes for veterans, such as healthcare, benefits administration, and memorial services. As part of the VA transformation, however, it is equally important to improve the internal government-to-government (G2G) shared services that enable VA employees to support the mission outcomes.

To achieve the MyVA goal to Improve the Employee Experience, all VA services must mark progress, highlight areas for improvement, and demonstrate areas where the government goals and objectives of the organization are being met and exceeded. These capabilities allow VA’s leadership and stakeholders to make critical decisions that accelerate change and ensure that VA is effectively and efficiently serving American veterans and their families.

Government Performance Indicator 1: Utility

Whether a service has utility is determined by whether it solves a customer’s problem or removes a constraint. For the government, a service has utility if it is relevant to the customer need and aligned with the core mission.

Government Performance Indicator 2: Warranty

Beyond solving the customer’s problem, the value of a service is also measured on its usability. Attributes of warranty include availability, continuity, security, and capacity (enough to meet the demand). The customer defines these performance targets based on their desired quality and perceived risk. In a shared services environment, customers may pay different rates for access to different tiers of service.

Government Performance Indicator 3: Service Delivery

As the utility and warranty of services become commoditized, customer experience plays a bigger role in customers’ perceptions of value. To be clear, the “experience” in this context goes beyond the user experience (UX/UI) of your website (or, for that matter, any one technology channel). This “experience” is the sum of all interactions that a customer has with a provider across all delivery channels throughout the lifetime of that relationship. In a G2G shared service environment, customer experience acknowledges that unsatisfied customers will seek out other alternatives.

 
While all three service attributes contribute to customers’ perceptions of service quality, it is the service delivery that elevates an organization’s brand and demonstrates organizational value and credibility. Providing an authentic customer experience certainly impacts the “what” of a solution and focuses on “how” the service is being delivered as customers learn about, narrow, select, consume, and retire a service. Moreover, effective service delivery can answer the questions such as who are you and what do you do well?

How We Can Help

Technical Assent specializes in improving government performance by optimizing the customer experience. Our Service Optimization Framework generates service solutions in-line with the Government Performance and Results Modernization Act of 2010 (GPRAMA) which are measured by their utility, warranty, and service delivery. As a CMMI-SVC organization, we have formalized this capability and successfully applied our approach to identify and model the correct performance measures, analyze the results, and make recommendations for improvements along with celebrating the successes.

customer experience has a cascading impact like a water droplet in a pond

Part II – How our simple meeting hack succeeded in refreshing executive leaders’ focus on customers

When we left this story a few weeks ago, our protagonist, the senior IT manager, and her team were reviewing a portfolio of IT projects.  Their objective was to recommend, in light of mandatory budget cuts, which projects should be funded and which should be deferred.  She had recognized that the conversation about these projects was overly focused on the impact to the IT organization and the impact to the customer was not being considered. The solution we helped her form was quite simple: hack the existing portfolio dashboard to explicitly identify the customer and describe the mission impact to that customer.

In the time between status meetings, the IT manager spoke to or visited all of the impacted customers. During these meetings, she listened to the mission and business requirements and did not focus on any specific piece of broken equipment.  As anticipated, the results surprised her – some customers’ issues truly impacted their ability to carry out their objective.  Others were similarly impacted, but had identified redundant capability or alternatives that provided a temporary solution. Based on the customer outreach effort, this collective insight could now be factored into the IT portfolio decision.

A week later, the IT manager held her weekly status meeting with the executive leaders of the IT organization, this time using the improved dashboard prototype and sharing the customer insights.  First, the IT manager described the recommended changes to the dashboard and her logic for restructuring it. Before she even dove into the projects themselves, the switch to customer focus had turned to “on” for the most senior executive in the room. By seeing the impact described in the language of his customers, he was immediately reminded of why these decisions mattered.

“the executive officers from each of our customers are going to come over here and hug you for this”

Keep in mind, this team generally considers themselves to be customer-oriented. However, like many of us when we are faced with a challenge, their natural inclination was to create fixes rather than step back and re-frame the challenge around their customers’ needs. This had been the phantom-like problem plaguing the IT manager and her team in their initial round of meetings.

Implied in the executive’s response is that the dashboard itself is now something he would proudly share with his customers. This immediate reaction towards transparency was not something we had anticipated in this experiment, but it is a great outcome. It promotes an honest relationship with their customers and enables the IT manager’s team to further clarify and validate these impact statements with the customers. Furthermore, sharing the dashboard sends a strong message to the customer that their mission support team understands their challenges, understands their equities, and has to make some tough decisions for the good of the service.

The resolution to this situation has been generally positive; in light of some tough mission decisions, the IT manager and her team was able to position the issues transparently and make recommendations that have a measurable impact to the mission outcomes that her customers care about.  It is important to remember that the original context of these conversations were about making difficult recommendations to the CIO about which projects to fund and which to defer.

Putting the decisions in customer terms can make the actual decision-making much harder, but weighing the mission impact to the customer as a key driver of the decision enables leaders to enter into the decision with their eyes open to the consequence of their decisions.

In the end, our simple change in this situation has sparked a change in the right direction allowing this service-oriented team to integrate customer impact and customer insight into decision-making. It also set the initial groundwork for more open and transparent conversations in the future.

customer experience has a cascading impact like a water droplet in a pond

This Simple Meeting Hack Helps a Problem-Solving Team Refocus on Their Customers

The big impact of a small change

At Technical Assent, we constantly emphasize the model of a service-oriented organization. One of the big reasons we focus on being “service oriented” is because these organizations are better attuned to the needs of their customers and aware of the value they deliver each day. With all of the pressures of running a program day-to-day, we tend to get lost trying to put out the daily fires and often lose sight of our work in the context of what’s in the best interest of our customers. This paradox is amplified when an urgent technical problem emerges and the responsible support team must quickly shift gears to address it. Fortunately, we have a simple hack that can really help the leadership team redirect meeting conversations and get the support team rightly focused on the customer.

Yesterday was a perfect example of this. I had the opportunity to talk to a senior IT manager who is part of a leadership team working through some tough issues in their project portfolio. As a result of funding cuts over the last few years, they have regularly reduced the level of service they provide as available funds have been redistributed to higher priority projects. Facing another round of cuts, her team is evaluating a portfolio of projects and making recommendations to several internal service providers and, ultimately, the chief information officer (CIO), about what should be funded and what will have to be deferred. To facilitate the conversation, the IT manager’s team developed a basic dashboard that outlines each project individually and provides leadership with a status and an impact. Very simply, the dashboard looks something like this.

We have all seen something like this projected on a conference room screen, right?  It looks innocuous enough – a simple project description, followed by a red, yellow, green status indicator, and finally, the What’s In It for Me (WIIFM) impact statement.

When the IT manager presented this at the weekly status meeting, she found that the dashboard was driving the wrong conversation among the leadership team. Based on the information provided, the leaders in the room dove right into the merits of different trade-offs in schedule and discussion about which upgrades provided the fastest technology. The IT manager left the meeting frustrated because the focus seemed to be misplaced. Everything was weighed against the impact to the IT organization instead of against the impact on the IT organization’s real customers, who are the crewmembers operating ships performing public safety missions along the Pacific coast. As she explained…

“For example, the impact of the XYZ server not being implemented is not just an increased implementation timeline. It actually has an operational impact to a number of ships who are operating in our area of responsibility right now. Without these upgrades they are not able to check the weather, receive intelligence briefs, or communicate with other partners.”

Could you hack the meeting?

Faced with this scenario, how does one IT manager use her influence to change the tone of the conversation and focus on the service impact to the end customer?

I see this kind of dilemma often with our clients at Technical Assent, so I suggested a simple experiment. The first step was to hack the existing dashboard to be more explicit about who the customer is and how they are impacted by each project. Our minimally viable product (MVP) of the new dashboard looks something like this.

The changes to the spreadsheet are simple; our hypothesis is that by presenting new information to the executive leaders – Customer and Impact to the Customer – the tone of the conversation will change. At first, when presenting information in a new way, we expect there to be some disagreement among the executive leaders about who the real customer is and the source of the mission impact data. Then, we predict that as the executive leaders begin wrestling with the real issues at hand, they will start asking for data that further validates the customer impact. This will force the IT manager and her team to dig deeper – to communicate directly with their customers, to validate the mission impact to the organization, and to recommend alternatives.

We predict that after the first conversation with executive leaders, the shift in focus will take root and will drive the next status meeting. The IT manager’s team will then be focused on describing the outcome that their customers need, and not on a specific technology solution. The more service-oriented team will continue to integrate the customer impact into each of the executive leadership conversations, facilitate decisions about providing a certain level of capability based on the impact to customers, and defend their positions using customer narratives and stories.

But the proof is in the pudding, right?  We will test our hypothesis over the next few meetings with executive leaders, track the discussion, note what questions are asked, and observe how responses are framed in order to see if our simple change is indeed causing a trend in the right direction.

Of course, this is just one way for teams to change the tone of meetings to have a focus on becoming more customer-driven. What are some other recommended starting points that you have seen and have worked well in your organization?

eli whitney innovation in muskets

What Eli Whitney’s 1798 Gun-Making Contract Can Teach Us About 21st Century Defense Innovation

In 1798, faced with potential war against France, President John Adams directed a threefold increase in the number of ready army soldiers.  At the time, gun-making was a complex craft; skilled gunsmiths worked by hand to create each distinctive weapon.  The young government didn’t have the capability to manufacture the weapons it needed, so Adams turned to private industry for support.

Eli Whitney, the famed inventor of the cotton gin, won one of the 28-month contracts to produce 10,000 “stands of weapons,” enough to outfit 80% of the army with new muskets. As the story goes, after two years of contract performance, Whitney had produced exactly zero guns. Instead, he had focused his attention on building a better system for building muskets. He built the factory and the machinery, trained a labor force for how to use it, and developed repeatable assembly process.  The result was the first weapons system where one musket behaved similarly to another and used interchangeable parts.

Outputs Vs. Outcomes in Defense Innovation

While there are certainly some starting points here for a conversation about acquisition reform, I’m focusing on a different, larger issue: how a narrow focus on outputs can distract us from pursuing the right outcomes.  Our military faces similar challenges today as they did in 1798, sharing  a need to rapidly scale its capability and evolve to multi-dimensional threat. Back then, they did it with more soldiers and more muskets; today we do it with much more sophisticated, integrated weapon systems.

We’re living in a new era for innovation in the Defense industry.  Defense Secretary Ash Carter is shaping and expanding an innovation unit in Silicon Valley (DIUx)—and the Department of Homeland Security is following suit.  Professors at Stanford University have students and soldiers collaborating to identify “hacks” for the way DoD does business. Groups like the Defense Entrepreneurs Forum (DEF) are facilitating discussions about major issues the Third Offset, Force of the Future, and Goldwater-Nichols Act Reform.  Earlier this month, the Senate Armed Services Committee released its draft of the 2017 Defense Authorization that splits the Pentagon’s largest office in an effort to improve management of research and development  efforts.

These examples suggest a consensus that fostering innovation in our defense machine is imperative to retaining our “edge” over competitors and obstacles—whether we are providing disaster relief and humanitarian support, or fighting large ground wars.  What government and defense leaders  don’t seem to agree on is where to start. What we really need is a system where we are continually getting better at getting better, where real change can happen faster than in 15-20 year increments.

Disrupting the Dominant Cycle of Thinking

Whitney’s brilliance is that he disrupted the dominant cycle of thinking at the time.  Instead of cranking out thousands of hand-crafted rifles, bayonets, and ramrods, he focused on building a system where new technology could be produced faster.  However, our current collective efforts to increase our technological advantages (e.g., Third Offset) seem more focused on buying better muskets—drone muskets, cyber muskets, nano-muskets, human-musket collaboration, inter-continental ballistic muskets—than building a system of innovation.  That needs to change.

Here’s a DoD-specific analogy for what that actually means.  Consider Innovation as an organizational capability gap.  DoD evaluates these gaps across Doctrine, Organization, Training, Muskets (i.e., Materiel such as equipment, tools, systems), Leadership, Policy, Facilities, and Policy (DOTMLPF-P).  Rather than looking first to innovative Materiel (“better muskets”) as we usually do, let’s first actually sit down and think hard about how we can innovate the way the department trains and equips our personnel to solve the problem in the context of the environment in which they must solve it.

Evolving Faster and More Effectively than the Competition

The ultimate strategy to counter competitors’ advantages (real or perceived) is a sustained, organic ability to improve and evolve yourself faster and more effectively than your competitors—rather than building a new portfolio of technologies.  If our objective is to create a system to get better at being better, there are two logical places to start:

Make the “Ability to Adapt” a factor for readiness.

Being ready to meet the demands of a mission is not simply a matter of assessing whether or not you have the right “kit” for the operation.  There is too much variation in the types of environments, the types of missions, and the circumstances surrounding those factors for you to assess readiness on equipment alone.  You have to assess whether or not the people and processes who will use the kit have the ability to adapt what they have (and don’t have) to fit the needs of the operation.

We need personnel who are ready to integrate themselves and their kit into the operation and be successful.  We need processes that allow them to do that—both in the field and in the headquarters functions that support them.  One way to do this might be to re-purpose some of the procurement budget for exercises. Don’t just assess readiness, test it.  Make these exercises faster to plan, less cumbersome to host and participate in, and cover more mission scenarios.  The more frequently we test ourselves, the better we understand our abilities, our needs, and the more we are inspired to innovate with real purpose.

Make non-materiel adaptability and innovation a tenet of the highest level guidance and plans.  

Strategic planning, policy, and doctrine provide a foundation on which much of the DoD’s ’s operations rest.  Like the mindset of our innovation efforts to date, these high level guidance and plans can also become too focused on “muskets.”  This is problematic because these high-level documents take years to formally update.  What’s published is often “behind the times”—describing situations and solutions that occurred in the past rather than enabling future success in what may be a completely new environment.  Fixing the strategic foundation that guides the way we “do” defense requires: 1) moving guidance, policy, and doctrine away from 3-5-year update cycles; and, 2) maintaining focus on enabling adaptability and innovation rather than focus on musket-based (“Materiel”) solutions.

 

John DiLuna and Danielle Wiederoder wrote this with me.

city of pittsburg hosted the 2015 National Veteran Small Business Engagement

Get Better Results Through Customer Experience

Presenter: Chris Bobbitt, Technical Assent

Focusing on Customer Experience and Customer Outcomes is critical to delivering the best results. Federal agencies such as Veterans Affairs, GSA, and DHS are realizing the inherent value of becoming customer-driven and how this approach can drive better mission performance. This session will cover why Customer Experience and Customer Outcomes are so important, how to understand them, why Service Management trumps Program Management, and why digital engagement only scratches the surface. The session will demonstrate how to apply this knowledge to design more impactful government programs, provide more effective support to these programs, and develop business more successfully.

Sign up here to participate.  #NVSBE

Photo of the Department of Veterans Affairs building in Washington D.C. MyVA is a customer-experience focused government service strategy.

Is MyVA the Future of Government Service Strategy?

Since its release this week, I have been absorbing and digesting the MyVA Integrated Plan published by the Department of Veterans Affairs. For those who haven’t seen it yet, it is the government service strategy for the transformation of VA to become more veteran-driven and ensure the veteran experience is predictable, consistent, and easy.

The MyVA Task Force has accomplished a lot since it was chartered just last year and the document does a nice job of bringing together all of the moving parts in an organization as big as VA. Here are a few highlights that stood out to me as evidence of progress:

VA took a look in the mirror

Using Secretary McDonald’s model for a high performing organization, the MyVA Task Force assessed the current state of the organization – successful outcomes and blemishes included. They looked at the operations, budget, and political environment in the context of their strategy to really understand the constraints they need work within going forward. This upfront transparency will go along way in communicating honestly with VA stakeholders.

VA is translating their government service strategy vision into action

The Plan translates VA’s customer-centric vision into action through five priorities,  Veteran Experience, Employee Experience, Support Service Excellence, Performance Improvement, and Strategic Partnerships. Each priority is supported by several initiatives focused on improving specific aspects of VA – this provides a clear thread between their vision and the actions being taken.

VA is holding themselves accountable

In the Plan, they highlight specific, measurable target outcomes. They talk explicitly about what changes to look for – a single customer-facing website, expanded training and leadership development for employees, and vastly improved internal support services – as evidence of change.

There is one statement, however, that rubbed me the wrong way. It comes in the final paragraph:

“If we do our jobs well, Veterans won’t think much about what we’ve done or how we’ve done it. They will just know they’re receiving some of the best health care anywhere in the world. They’ll know it didn’t take too long to apply for and receive their deserved benefits. They’ll enjoy the home we helped them to finance. Their lives will be richer because of educational opportunities and community connections VA helped to create. And their families will know they’ve been given the utmost respect and final honors when laid to rest.”

VA is selling themselves short, especially with the first sentence. Perhaps as they begin achieving success, the MyVA team will readjust their aim with their government service strategy so that Veterans will ultimately look to VA as the preferred service provider for healthcare, benefits, and memorial services. They will see the service quality they receive as honoring their decision to serve in the armed forces. And they will see all 300,000+ VA employees as advocates in their corner as they transition into civilian life.

Decades from now, I hope we look back and see this initial effort at VA as transformational for government writ
large. As VA learns, adapts, and succeeds, it will become the framework for how we design, implement, and manage government services in the future. Government agencies will look to customer experience as a way to ground their organizational strategies, engage their employees, and better accomplish their mission.

seeing through the noise to discover government's service portfolio

To Improve Your Team’s Performance, Start with Experience

In our view of the world, Customer Experience is the starting point for improving the performance of services. Adjust the angle of your head slightly and the concepts, tools, and methods being used to design better services can also be applied to improving business functions, programs, and operating units. Positioning yourself as a service provider immediately transforms why, what, and how you go about your work.

Here are three ideas to get you started.

Find Your Customers

Services only exist when there is a customer so the first step is to seek out the customer – the people who receive the benefit of the service. It seems like a simple enough concept, until it’s not… in a simple consumer service transaction, the customer is the person who pays for the service.  As transactions become more complex, the term customer can be confused with words like “stakeholder,” “management,” “buyer,’ or “oversight committee.” The ultimate goal here is to deliver services that provide real value to customers – the people who receive the benefit of the service – despite all other distractions.

See Services Where Others See “Business as Usual”

Take a look at the image below; 3D stereograph posters like this were once littered across shopping malls. They enticed shoppers to stop and look; separating by-passers into those who could “see” and those would keep walking because they tried before and it wouldn’t work. I fall into the latter category, but the idea is that you stare at the image deep enough and long enough and a second image will appear out of the clutter – usually a sailboat or a pod of jumping dolphins.

In many cases, looking for services in established organizations can be very similar to seeing the sailboat. It takes some practice at first, but once you get it, it is even harder to unsee it. Government Agencies and Businesses are functionally organized around the work being done, like Operations, Marketing, Finance, and IT. Service Designers must be able to see through these structures and pick out the services that are delivering real value to customers, i.e. outcomes. These are easy to find when a customer buys something – the transaction itself serves as the indicator that there was an exchange of value. It gets more challenging as we dive into the inner workings of organizations – the monthly budget analysis, the provisioning of services for a new customer, or the installation of a new network drop. Each can also be viewed as a service even though no money changes hands. When seeking out services in your organization, look for these 5 attributes:

  1. Intangible – in a pure service, the “thing” of value that is produced is intangible. We often “productize” these things – a dashboard, a report, a legal brief – but the real value is what went into delivering these in the first place.
  2. Inventory – There is none. In a service, the exchange of value happens at the point in time where it is transferred to the customer. The value is perishable in the moment that the service provider transfers their expertise, experience, or insight to their customer.
  3. Inseparable – Just like you cannot have a service without a customer, it is equally impossible to separate the service from the service provider.
  4. Inconsistent – Services are subject to variable demand and are provided on an as-needed basis.
  5. Involvement – There is a certain intimacy involved between the customer and provider where both have the opportunity to influence and customize the outcomes.

Practice applying these filters in your organization and you will quickly see your service portfolios emerge and how well they perform.

Follow the Customer Journey

With both the services and customers accounted for, the next step is to follow the customer journey – the series of decisions and actions that a customer makes from the time they first become aware of your service to the point where they retire it.

As a service designer, taking responsibility for a customer journey may seem overwhelming at first as it will likely the organizational structure. Customer journeys don’t necessarily align with siloed business functions; customers easily move from installation to a technical help desk call to a billing question and expect a consistent service experience throughout. This customer journey exercise often highlights gaps in existing technologies, employee knowledge, and processes in systems that have multiple owners.

Embrace the opportunity to work cross-functionally; the focus on improving customer experience is an invitation to put on your “big hat” and find opportunities to better integrate services that deliver more of the outcomes that matter most to your customer in the ways that are most relevant to them.

 

 

 

capturing customer experience in a service offering

The Experience, an Elusive Attribute of Service Performance

Delivering capability “As A Service” is making a profound impact on the service sector, forcing us to think differently about what and how services are conceived, designed, delivered, and managed. This impact presents itself in the fundamental way that we define the value of a service. Our current definition – based largely on its use and function – ignores the perceived value that customers place on the experience. This is despite a growing mountain of data that tells us otherwise.

Let’s dig a little deeper into how we determine the value of a service. The highly regarded framework for IT service management, IT Infrastructure Library (ITIL), provides a commonly accepted definition. This definition determines the value of a service around two key performance attributes – Utility and Warranty:

Fit for Use – Utility. Whether a service has utility is determined by whether it solves a customer’s problem or removes a constraint. It seems simple enough. If I am yearning for a warm drink in the middle of winter and someone offers to make me a hot chocolate – the solution has utility. Likewise, if you want to purchase a home but do not have the cash on hand, a bank can remove this constraint with a loan.

Fit for Purpose – Warranty. Beyond solving the customer’s problem, the value of a service is also measured for warranty – or fit for purpose. These attributes typically include availability, continuity, security, and capacity (enough to meet the demand). The customer defines these performance targets based on their desired quality and perceived risk. For example, the last customer in the hot chocolate line expects that the barista has sufficient ingredients on hand to serve everyone in line; the bank providing your home loan might stay open late or on weekends to better accommodate the schedules of full-time workers.

These two attributes – Utility and Warranty – clearly contribute to customer’s perception of value and provide a basis to compare the offerings among similar service providers. But Utility and Warranty seem to determine “what” the optimal technical solution is, but largely ignore “how” the solution is delivered (I say “largely ignore” here because an attribute such as availability may refer to providing the service at a specific time and place or through a specific communication channel). Our current definition of value is incomplete.

To make this point, consider a highly competitive market like the airlines where companies continually battle for market share. After a few generations, all the solutions begin to look similar – coach class feels equally cramped on every flight, there is some variation in coverage area, and maybe slight variations between pretzels or trail mix. But for the most part, they are the same. Where utility and warranty are being commoditized, some air travel providers opt to compete on experience – think of the no frills attitude of Southwest or jetBlue compared with the metropolitan tech savvy feel of Virgin Atlantic or Hawaiian Airlines’ Aloha greetings.

According to several studies, anywhere between 50-85% of customers are willing to pay more for a better customer experience.

Fit for Experience. As the utility and warranty of services become more similar, Customer Experience plays a bigger role in customers’ perceptions of value. To be clear, the “Experience” we are talking about here goes beyond the user experience (UX/UI) of your website (or, for that matter, any one technology channel). This “Experience” is the sum of all interactions that a customer has with a particular provider across all delivery channels throughout the lifetime of that relationship. Providing an authentic customer experience certainly impacts the “what” of a particular solution and also focuses on “how” the service is being delivered as customers learn about, narrow, select, consume, and retire a service.

Experience is a new frontier for differentiation and provides the opportunity to impact customers in profound ways. It does not exist in vacuum: Experience relies on both Utility and Warranty as a foundation to provide a durable competitive advantage. This means that we need to pay attention to all three of these performance attributes if we are to sustain truly exceptional services. Acknowledging Experience as something that customers value in concert with Utility and Warranty is a first step. We need better ways of measuring experience and tying it to customer behavior and customer outcomes so that we can better understand its contribution.