IT leaders across government are clearly re-energized about IT modernization, thanks to recent legislation, funding, and prioritization. It is a bit like the professional version of the end-of-school-year ice cream party many of us witness as our children set their sights on summer vacation. FedScoop’s IT Modernization Summit in March confirmed this excitement through interviews with more than 20 IT leaders from across government and industry.

Much of the chatter in the beltway about modernizing government technology systems focuses on cloud migration for email and reducing the profile for cyber attackers, but there are some foundational aspects of the way we think about IT modernization that we need to be considering as well. These strategies will push beyond the initial sugar high and into the sustainable successes we need to make IT modernization a reality over the long term.

Earn a seat at the table by framing technology in terms of mission impact

CIOs have long advocated for a “seat at the executive table” but it might not be clear to everyone else why this is so important. Unfortunately, some misguided souls may believe it is to provide a direct link to the help desk, to shepherd a pet project, or to get status updates on ongoing IT projects. Business function leads–like the COO or CFO–who already have a seat at the executive table understand how their key piece impacts the mission and have developed a capability to communicate in those terms. IT executives advocating for a seat at the table must be able to do the same by talking about how technology impacts the mission’s bottom line.

A good example of this comes from a story a colleague of mine shared recently. My colleague–a seasoned executive IT consultant–was meeting with an IT project manager and the IT project manager’s boss, who had responsibility for mission operations. The IT project manager had expressed frustration that outside technical teams had come to the facility to provide periodic system upgrades without giving any prior notice. The complaint began to ramble about how the unexpected outage would impact mean time to repair metrics and cause his team to work overtime that week. The IT project manager’s boss, shrugged off the incident and made it clear that periodic maintenance to IT equipment did not warrant her time and attention.

The executive IT consultant, who has earned a regular seat at the executive table and understands how to talk about technology in mission terms, explaining that the boss had unknowingly assumed specific operational risks during the maintenance period because the operating capability of their key missions systems was being reduced. And because the boss wasn’t aware of what was upgraded, how confident could she be that her mission capabilities were as effective now as they were prior to the upgrade? As our missions become more dependent on IT, so does our ability to effect mission outcomes.  

We are modernizing government services, not technologies

People who use government services care that their problem gets solved with as little effort as possible. Well-designed services should function smoothly and intuitively for its customers. But poorly designed services put the burden on the customers to get the service to function properly. This is too often the result of the false promise of technology – that through the magic of AI, big data, and [insert IT buzzword], we can take poorly designed processes and make them serve people’s needs better.

This is why customer experience is so critical to our IT modernization efforts. The role of customer experience in these IT modernization initiatives is not just designing a better user interface or pushing more short surveys at the point of service – it is fundamentally understanding the services that government provides.  Mat Hunter, Chief Design Officer at the Design Council in the UK, explains the concept as

“[Shaping] service experiences so that they really work for people. Removing the lumps and bumps that make them frustrating, and then adding some magic to make them compelling.”

Technology plays a major role in the way we deliver government services at scale. It impacts the reliability, security, and availability of government services; it provides us the power to customize and tailor the experience individually in real time for billions of people. And yet, for as much we rely on the technology to make the services work, we must always remember that technology is not the end game.  We need to continue to put IT in the service of people and remember that it is just a tool that enables a human-to-human connection to occur faster, more reliably, and more securely.

Innovation comes from deep customer understanding

With $100 million of Technology Modernization Funds on the table, government leaders are vying for some kind of advantage to get a leg up on the competition. I was speaking to a well-known innovation leader last week who indicated she fielded several calls from agencies about whether her team could use “innovation” help them find that next golden egg.

The answer lies within another capability that is already built into the IT modernization framework – service delivery analytics. We need to ask a few key questions about how we are serving our customers today to help target our modernization and improvement efforts for the future:  

1. “What does the customer care about?”
2. “What segments of the customer journey are we really good at and how do we ensure that every customer receives that quality service, every time?”
3. “What are we doing today that causes our customers frustration; most importantly, where does that frustration reach a level where they abandon or disengage?”
4. “How might we uncover latent demand or untapped potential where there is a need that is not yet being served?

The answers to these questions, at least in part, begin with an understanding of how service delivery is being measured today. Service delivery analytics can be a powerful engine to help resolve immediate customer issues but also help engage customers in an ongoing dialogue about where they are going long term.

It is a tremendous opportunity to follow customer needs and understand the delta between how those needs are met today, how those needs are evolving, and what you need to differently tomorrow in order to meet them.

GSA’s Center of Excellence Director (and Director of Technology Transformation Services and Deputy Commissioner of the Federal Acquisition Service) Joanne Collins Smee remarked at FedScoop’s IT Modernization Summit that

“Agencies need to enhance the capabilities of IT workers who are already in place.”

She also acknowledged USDA’s strategy to bring in top IT talent to help drive culture change across the organization.

Sustaining momentum for long term change in IT modernization

With the current energy and momentum for government IT modernization comes great opportunity. As we continue to position IT modernization for long term success, it is essential that agencies understand these foundational aspects of IT services and continue to expand the capabilities of boundary spanners who can effectively communicate in the language of the technology, the language of the mission, and the language of the customers.

Technical Assent’s vision is helping federal government organizations create excellent services. To do this, we emphasize with our government service design teams how important it is to “think like your customer.” What we mean by this is that we should have a good understanding of who our customer is and what they want. But here’s the thing—it’s almost impossible to think exactly like your customer in a realistic way.

My team is in the midst of designing and developing a solution offering that takes incredibly complex problems like rising sea levels and makes them approachable by turning them into collaborative games and exercises. We’ve spent months developing something we thought would make sense to our target client base. Last week, we went off-site and tested our offering twice with two groups of volunteers from government offices. The volunteers ranged from experienced SMEs to junior staff performing support work on the topic area.

The results?

Some people loved what we were doing. Some didn’t understand why we were talking to them in the first place. Some saw opportunities in our vision but identified things they wanted to change.

The Key to Success Government Service Design

Part of the reason consultants and designers spend so much of their time trying to think like their customers is that it’s incredibly hard—nearly impossible—to do. No matter how hard you work to understand your customer base, define personas, identify points of view, and create empathy, the design team is never going to be able to see things exactly like your customers do.

Part of this is the nature of human complexity; people are diverse and hard to predict. Part of this is natural bias on the part of the designer. But here’s the takeaway: no matter how much time you spend trying to think like your customer, the most important part of any design effort is to take the time to test your solution and gain feedback from actual people who are not you and who would conceivably be your customers.

This is not rocket science, but it’s a detail that is easy to forget or skip all together. Sitting in an office and iterating based on the team’s is a lot less work and a lot more comfortable than identifying effective, appropriate ways to test with government customers.

But despite the potential to be uncomfortable, do take this step. Schedule opportunities for real customer feedback early and often, and make sure you listen. After all, seeking customer feedback is not something that is just for private industry; this is absolutely critical to real success in government service design as well.

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.

As kids head back to school this fall, many will hear a familiar lecture reminding them of that last report card before summer and encouraging them to start off this school year on the right foot, creating good habits from Day 1. Nextgov’s Frank Konkel had a similar message for government in his recent interview with Forrester’s Rick Parrish. Forrester Research’s 2016 Customer Experience (CX) Index indicates that federal government agencies were collectively rated has having the worst customer experiences compared with 300+ consumer brands that included underperforming cable TV providers, internet service providers, and airlines. Furthermore, these poor ratings occurred despite the White House’s emphasis on improving customer experience over the past five years.

But the message is not all bleak – Konkel also noted a few bright spots, notably where agencies have demonstrated marked improvements in their CX Index demonstrating “money and resources currently being spent at those organizations is shifting customer perceptions.”

So, as we head back to school, we offer three habits that to focus on to improve customer experience grades in government throughout the year ahead.

Building Good CX Habits

Follow the Outcomes.  The business case for customer experience is about improving the performance of government services. High performing services — whether provided by government or commercially — are measured on how well they help their customers achieve a desired outcome. Just like we scoff at automating bad processes that deliver the wrong output faster, customer experience is another means towards the end of delivering a better customer outcome. Agencies need first be aware of what outcomes their customers are trying to achieve before they build the service to assist them.

Customer Satisfaction ≠ Customer Experience.  As Parrish notes, that while many agencies conduct traditional customer satisfaction surveys, they need to better track their customer behavior. Measuring only satisfaction at certain touch points (e.g., directing them to the correct phone number, correcting a problem in an online form, or responding to a phone call within the estimated response window) is insufficient because it does not inform the service provider whether their action contributed to the outcome. Understanding the decisions that customers make throughout their journey, whether to continue or abandon the service, is the key to better performance.  We need to create services where customers continually opt-in to the next step of the journey. This happens when services solve real problems, provide a customer experience that is consistent with American values, and meet customers’ expectations for aspects such as ease of use, availability, reliability, and security.

The Incentives for Better Government Just Aren’t There. One commenter to Konkel’s article noted that government is not incentivized to change because it lacks competition for its services; Government has a monopoly. Essentially this implies that customers have little choice of whether or not to do business with the government. After all, where else can you go for services like food stamps, airport security, or a subsidized home loan? Though this may be a dominant perception within and about government, it is also the most ripe for disruption.  Just as with commercial services, customers perceive a cost of using government services, even when they are being offered for “free”.

Am I sacrificing my privacy by giving up this information?

Who is really going to notice if I don’t pay my taxes?

This isn’t worth it, we will just get by without

It won’t harm anyone if I bypass this security measure

I had to take time off work to stand in this line to vote

These are all examples of customer sentiments measuring the opportunity cost of their alternatives and trying to figure out if its worth it.  When government understands its customers and the value of those other opportunities, it will clearly see the need to deliver a competitive customer experience.

Our team at Technical Assent works with government Program Managers to develop these habits from the start – building services that drive customer outcomes and position government services as the preferred alternative. We have found over and over again that government agencies who focus on their customers first, deliver higher performing services at better value for the taxpayer.

By John DiLuna and Jonathan Miller

For anyone who has ever studied Amazon or its founder, Jeff Bezos, one thing is absolutely clear: the customer is king.  Amazon’s focus on customer experience success was a founding principle for Amazon and remains deeply embedded in the company culture today.

After last week’s record earnings report, we wanted to see for ourselves where customer experience was integrated into Amazon’s operating model – not just as a corporate talking point but where it was really driving business decisions.  We studied 20 years of shareholder letters for evidence about the role that customer experience plays in the long-term financial success of the company.  What we discovered was an intrinsic interaction between customer experience and long-term financial thinking that acts as a catalyst for future financial success.  We identified three general principles that we hope will be helpful for organizations hoping to mirror Amazon’s customer experience momentum.

Obsessing over customer experience is the long game

Amazon unleashed something powerful by placing customer experience success at the core of their business strategy.  In addition, Amazon has always had a perspective of long-term success rather than short-term profits.  Bezos has highlighted this perspective in his shareholder letters since the first letter in 1996.  In his 2008 letter, he explicitly connects this concept to the customer:

“Long-term orientation interacts well with customer obsession. If we can identify a customer need and if we can further develop conviction that the need is meaningful and durable, our approach permits us to work patiently for multiple years to deliver a solution.”  

By investing in the long-term satisfaction of customers, Amazon has created a relationship which drives lifetime customers.  Early in Amazon’s life, the team identified three key things their customers valued in a retail experience: price, selection, and convenience.  Since then, everything Amazon does focuses on lowering prices, improving selection, and maximizing convenience.

In the early days when Amazon was solely an online bookstore, their business decision to present new books side-by-side on a web page with used versions of the same items was initially criticized, but it makes perfect sense when viewed through their customer-centric lens.  By creating this new environment of new and used books intermingled, they provided access for a wider audience of customers to be reached through price, selection, and convenience. It is the same for Amazon’s current experiments with drone delivery and same-day shipping.  Antagonists are unsure as to the current feasibility of these services because they have never been done to this extent for customers, but Amazon, true to providing the type of service their customers value most, is pursuing both for one reason: convenience. From the 1998 shareholder letter:

“We must be committed to constant improvement, experimentation, and innovation in every initiative. We love to be pioneers, it’s in the DNA of the company, and it’s a good thing, too, because we’ll need that pioneering spirit to succeed.”

Through the bull and bear markets of the last two decades, Amazon has remained steadfast in its commitment to provide exceptional customer experience.  This unwavering resolve to innovate around customers is a unifying force that helps the company push through the lean years when others may crumble or change course at the cost of their customers.

Use data to work backwards from customers and build customer experience success

When the entire workforce believes in customer experience success as the primary growth driver for your business, then it only makes sense that corporate strategy, business initiatives, and day-to-day operations fall in line.  This is the way it works at Amazon.  In many ways, this unified, corporate-wide belief simplifies governance and decision-making because culture provides a consistent framework to gauge the potential impact of new ideas.

Baked into the Amazon culture is the predisposition to work from the outside-in as well as to validate those decisions with data.  Bezos highlights that just about every important decision can be made through data. From the 2005 shareholder letter:

“There is a right answer or a wrong answer, a better answer or a worse answer, and math tells us which is which.”

Starting with the desired customer outcome, quantitative methods help sort through alternatives and establish priorities around what should be done first. We see this exhibited in the analysis Amazon conducts prior to making any foundational decision, which confirms that the solution drives the intended customer behavior and is financially viable.

Amazon has remained steadfast in their decision making process by holding uniquely to their core values of building solutions based on their customers. How Amazon makes these types of decisions is highlighted in the 2005 shareholder letter:

“To shorten delivery times and reduce outbound transportation costs, we analyze prospective locations based on proximity to customers, transportation hubs, and existing facilities. Quantitative analysis improves the customer’s experience and our cost structure.”

By methodically approaching expansion locations, Amazon highlights the need to be there for their customers while at the same time improving their own cost model.  Understand that the mindset Amazon uses embodies exceptional customer experience, an approach that leads to a repeatable pattern of customer driven decisions.

Customers benefit from improved service infrastructure

Continuous improvement is the third principle Amazon consistently emphasizes to create an exceptional customer experience.  When Jeff Bezos says “continuous improvement,” he is not referring to the catchphrase that is commonly used in business marketing materials.  His version of continuous improvement is fundamentally connected to customer experience and essential to Amazon’s business model.

Bezos explains this concept as driving the cost structure-price loop.  Quite simply, by continually lowering the cost structure of the business, Amazon can maintain downward pressure on prices.  Amazon’s customers like low prices, which keeps them coming back to the site.  The growing demand of potential buyers is attractive to sellers who actively seek to offer more selection. Amazon’s customers like more selection, which not only retains current users but fosters new ones and keeps them coming back to the site day after day, fueling the growth of the company.

In the Amazon model, driving the cost structure-price loop to continuously improve the underlying service infrastructure is both good business and a boon to their customers.  By systematically eliminating waste and scaling the value of their assets across the enterprise, Amazon also gets better at delivering new capability faster.  By focusing these efficiency efforts squarely on the needs of their customers, Amazon is better able to translate latent customer demand into real solutions and differentiate themselves from competitors.  Amazon has scaled this business for their long-term profitability through selection. In the 2003 shareholder letter Bezos explains:

“Increased volumes take time to materialize, and price reductions almost always hurt current results. In the long term, however, relentlessly driving the “price-cost structure loop” will leave us with a stronger, more valuable business.”

Every business system has some amount of waste, process variation, or inefficiency.  For customers of an online retailer, waste can be seen in the form of hold times, extra mouse clicks, confusing checkout options, or cumbersome return policies – the list can go on.  Waste results in effort a customer must expend in order to complete their order; and the more effort a customer has to exert, the less likely they are to come back a second time.  Amazon pushes to reduce customer effort; their One-Click ordering feature is the epitome of simplicity, automating a complex order and logistics process into a single mouse click allowing customers to receive satisfaction immediately.  Amazon’s continuous improvement initiatives reduce customer effort by improving the people, processes, and technology which have a direct and measurable impact on customer experience.

Final Thoughts

Bezos captures these three principles of customer experience success as foundations of “Operational Excellence.” Focusing on customer experience first provides a consistent framework for making strategically-aligned business decisions and a perfect filter for removing non-value add goods and services (things your organization does that customers generally don’t really care about).  Through the disciplined, data-driven application of these principles, Amazon increases asset velocity, revenue, and margin across the business.

And Amazon is proving that the model works.  Just last week, after nearly 20 years as a publicly traded company, Amazon announced Q1 earnings that shattered market expectations and raised stock prices by 12%.  Here at Technical Assent, being a company that values customer experience as an engine of growth, we couldn’t help cheering as they reached this benchmark of success. Indeed, the customer is king.

From Amazon’s 1998 shareholder letter:

“We intend to build the world’s most customer-centric company…Our customers tell us that they choose Amazon.com and tell their friends about us because of the selection, ease-of-use, low prices, and service that we deliver.”

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

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.

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.

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.

People working in government and nonprofits often refer to a personal calling to serve the public good. Their sense of purpose can be a source of energy for their peers and their customers cannot help but feel their enthusiasm for the mission. But even the most passionate public servant has an occasional bad day – it is human nature and most people are willing to give us a pass when we stressed or distracted.

Unfortunately, the service itself doesn’t get the same courtesy. Customers expect service quality to be maintained and the experience to be consistent despite the occasional system outage, process glitch, or failure of personality. Services have to systematically overcome these variables to consistently provide a relevant customer experience. As a service provider, here are three ways to develop a service-oriented mindset:

1. Find the Services, Find the Customers. The first step of a services mindset begins with the customers; identify what problem you solve for them and how they interact with your team to solve that problem. Both the solution and the interactions are part of your service portfolio. Some of these services are easily recognizable – like a haircut or table service at a restaurant – but some can be tricky. Business support functions like the Finance Department, Human Relations, and the CIO’s office can also be viewed through a services lens. Unlike consumer services, internal customers don’t typically pay with money but they do pay with their time. Scheduling a meeting to discuss next year’s budget, providing a brown bag session to present the impact of new hiring policy, or waiting for a call back from a technical expert are all examples of services that contribute to an internal customer experience.
2. Optimize Services Around Customer Needs. Once the services have been named, engage customers to better understand what is important to them – do they care more about accuracy or speed in the weekly report, are the templates provided helpful in crafting new job descriptions, what was the impact of the last system outage on their productivity. This initial feedback can go a long way, but look for opportunities to formally measure the performance of your services against these attributes. In a consumer service, service quality is captured in a contract document called Service Level Agreement; while it may not make sense in your organization to take it this far, it is worthwhile to communicate to your customers that your performance objectives are focused on the things they care about.
3. Build Service into the Culture. Shifting culture is never easy, but there are several things that leaders can do to change the tone of the conversation with their employees. First, involve them in the process we have outlined above, encouraging them to think about the services they personally provide and those they contribute to on the team. Expose them to new ideas and techniques for how to approach a customer conversation with empathy or how to constructively accept feedback. Teach them how to measure their service portfolio against customer performance attributes. Model the behavior yourself; emphasizing that the customer is always in the forefront of your mind. When pitching a new project, include the expected customer impact in your scope statement. When being briefed on an issue, first ask about the impact to the customer and how the customer is being taken care of in the interim before digging into the details of the problem. Each of these small actions can have a big impact when repeated consistently.

These relatively simple exercises will take some time up front but can have an immediate impact. We are currently mentoring a Support Department Head of a medium-sized organization responsible for IT services, acquisition and contracting, and human relations. While a little nervous about exposing some of her team’s shortcomings at first, she has found her customers are receptive to offering feedback and employees are energized about the opportunity to think more explicitly about serving customer needs.