How to design services models for impact and sustainability

When it comes to designing services and experiences tools from service design, evaluation and start-up thinking can be used to ensure that we’re developing something that works, that people want and that will be sustainable long term.

30 September 2019

by Chris Vanstone, Chief Innovation Officer, TACSI

The tradeoffs

Being a customer is a very familiar experience for all of us — holding a customer experience perspective can help us understand what makes a service that people want to use and keep coming back to.

Let’s take buying a coffee as an example.

For a coffee shop to succeed, it has to have a product (coffee) that people want. It must also be a great experience that people want to return to. And, it’s got to be profitable enough to stay open. The balance of these three elements make a successful service and a successful business.

If you were running a coffee shop you could try to improve your product by buying better beans and hiring a more experienced barista. However, if the price of coffee stays the same, the quality of service may go down because you’ve got less money to invest in the upkeep of the premises or in serving staff. Increase the price of the coffee, and you’ve got a stronger financial model on paper, but you may start losing customers to your more affordably-priced competitors.

With any of these situations, the risk is that your customers aren’t happy. They’re not getting what they want, and neither are you. As a result, your business struggles. Without a sustainable business, you can’t grow; you can’t create the impact you want for your customers.

It’s notoriously hard to run a successful cafe. Designing a successful community-led initiative or social service is even more difficult.

In a coffee shop, you primarily have one customer: your coffee drinkers who decide where to buy and what they’re willing to pay. Social services typically have 4 or 5 different customers, each with a different kind of influence on decision making. This may include the beneficiaries of the service, their families or carers and paying customers – the funders.

Three innovation views and tools

Teams designing in the complex place-based settings can keep in mind three views to steady their course:

  • Impact View: Taking this perspective will help you focus on developing services that create transformational change and value for people.

  • Sustainability View: Taking this perspective will help you develop services that are desirable, feasible and viable now and into the future.

  • Experience View: Taking this perspective can help you develop services that people want and delight people.

For a successful service and business all three aspects need to be in balance. Each of these views has a handy tool to help you apply it to your context and organisation.

Impact — Theory of change

‘Theory of change’ frames the impact perspective. It answers the questions: how does what you do lead to a positive impact for people? Theory of change helps you and your organisation create a clear story about impact.

A tool drawn from evaluation and social science, theory of change usually involves developing a diagram that steps out how certain activities lead to intended or unintended outcomes. Once drawn, it helps you test the logic of your model.

Our monitoring and evaluation friends at Clear Horizon emphasise that “The key is to try to think in terms of ‘outcomes.’ – how will your activities in turn lead to small changes that in turn lead to changes in health or wellbeing for people.” This kind of intentionality helps you check if your interactions create ongoing value for people — and which activities might not be leading to something very useful at all. The theory of change holds you to account for meaning what you say and saying what you mean. The theory of change also helps you be explicit about the difference between the actual impact of your service and a larger vision you hope to contribute to.

Here is a theory of change template; it can be used for current services or to visualise a future, better service you’re developing.

Sustainability — the business model canvas

The business model canvas and back of envelope calculations frame up the assumptions about the sustainability of your service or enterprise – is it desirable and feasible and viable. Do your customers want it (desirability), can you deliver it (feasibility), do the numbers stack up? It’s a canvas developed by consolidating many frames into one handy tool.

The business model canvas is often complemented by a back of the envelope costing. The back of the envelope zooms into the bottom boxes of that business model canvas by listing costs and revenue of your business’ core functions. This kind of simple math is how Elon Musk (CEO of Tesla and SpaceX) pitches solutions that seem conceptually impossible. He’ll run back of the envelope calculations for cynics to prove you actually can transport people underground at 200km / hr — and you can do it for less money than what it would cost to renovate the subway system. Whether you’re transporting people in innovative underground tunnels or to a doctor appointment, knowing cost and revenue gives you leverage to make decisions about financial risk and safety.

The business model canvas developed by Strategyzer and used by businesses around the world.

This is the ‘back of the envelope’ template to help you lay out costs and revenue and make rough estimates about the financial viability of particular service.

Experience — service blueprint

The service blueprint visualises the components of service or business. It details what people will think, feel, say and do before, during, and after a service experience. (Remember that great, well-priced coffee with rude staff and insufferable queues is not a business.) The service blueprint looks at the service experience from a user’s perspective and documents what needs to happen. It’s also a framework to help other locations replicate quality and practices from one site to many.

To create significant change you’ll need more than a good service, you’ll need a great one. We’ve learned how people using services trust word-of-mouth recommendations from friends and trusted others most. As a service provider, you’ll want to make sure people have good things to say about your service experience. Sometimes it’s small things like biscuits or a warm welcome at the door that make the difference.

Here’s a basic template that you could write in, and digital versions are also available.

These three views are intimately intertwined. Each activity in Theory of Change should have a considered experiential design within the Service Blueprint. And each activity within your Service Blueprint relates to some sort of cost, revenue, channel or partnership within the Business Model Canvas. Any change in one of the three views will affect the other two. In our experience developing services across sectors (disability, child protection, home and housing) balancing experience, impact, and sustainability is what sets great services apart from mediocre, short-lived ones.

There’s lots to think about when you’re developing a new service. If you’re going to do just three things, keep the balance between impact, sustainability, and experience in mind.

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