Just finished watching Richard Buchanan’s keynote at the Service Design Conference 2011 (via @pennyhagen).

There were lots of points that were interesting to me, but a couple stood out. One was the purpose of an organisation not being profit, but instead the delivery of goods and services. The second was three key areas that he highlights where service design is of particular interest: health care, community design and public services design. The third was the need to extend service design into the culture of an organisation.

Overall a thought provoking talk very much aligned with my perspective of service design and Zumio’s approach/purpose.

I’ve just completed 3rd semester of my masters degree, and I wanted to share one of the papers I wrote on the concept of Platforms for shared value creation, that builds on the model that I outlined in my Web Directions South 2010 talk.

The paper, which is provided under a Creative Commons license:

…proposes a model of service delivery that has the potential to create shared value (Porter & Kramer 2011), addressing pressing societal and environmental needs while delivering commercial returns. The aim of this paper is to introduce the model — the “platform for shared value creation” (PSVC) — as a first step towards further exploration in the future. The model is not yet fully-formed and as such this paper should be considered more as “thinking in draft” for further discussion and refinement.

While the nature of these things means it takes an academic tone, I hope that it provides some value as a contribution to discussions around shared value, Collaborative Consumption, and social innovation. I would love to know any feedback you might have, so please drop me a note in the comments if you find it useful, or want to challenge or probe any of its assertions.

Yesterday I had the good fortune to attend the first (and hopefully not the last!) Service Design conference in Sydney. It was great to have the opportunity to connect with so many familiar faces and like-minded folks to explore the emerging field of service design.

I’m not wired to live-blog these kind of things, but I noticed Mal Booth was doing a fantastic job if you’re after a blow-by-blow description (or just check out the #sd2011 hash tag).

The day was great overall (all but one presentation was excellent from my perspective), and over the fold I want to outline three of my highlights from the day.

Highlights

Tim Fife, In the service of…

This high-level review + a brief case study really resonated with me. Tim outlined a perspective on Buchanan’s “4 orders of design”, ranging from visual communications (2D design), object design (3D design, industrial design etc.), interaction design, and organisation design.

I am particularly interested in the shift towards 4th order design (organisational design) and the challenges of bottom-up vs. top-down approaches, and how service designers might play a role at this level of an organisation.

He also emphasised the importance of balancing organisational intent (which we refer to as purpose in our framework) with human-centred design, but also the importance of supporting systems and operational considerations.

All of this was very familiar from our own practice, but it was great to see it pulled together into such a well presented communication.

Melis Senova, Service design for corporates vs NGOs – is there a difference?

Melis presented some, by her own admission “generalised”, learnings from working with NGOs and comparing these to corporate projects.

I get the sense that a lot of the work/case studies that Melis was drawing upon were donor focused (e.g. working with fundraising teams on donation forms etc.), though I may be wrong there. One piece that I think was missing from the presentation (and I recognise that presentations like this can’t cover everything!) was the role of service design in engaging constituents and stakeholders in the delivery of the “service” — from an NGO perspective, the societal change that is intended.

There are a couple of aspects to this: the use of social networks to achieve/promote change (e.g. the 350.org model), the use of tools to sway decision makers (something Melis touched upon in response to my question/suggestion during the talk), but also the achieving of behavioural change within the stakeholder base (which may not necessarily mean “supporters” per se — for example, campaigns for sustainability or public health that aim to change or challenge people’s behaviours — Hello Sunday Morning being one example that comes to mind.

While in a general sense I think Melis’ points were valid, I do question how much NGOs maintain a sense of empathy with their supporters (especially where NGOs are positioned as “experts” within their area of interest/activity), and also while I agree NGOs typically have a much tighter connection to overall purpose, my experience suggests that often the purpose/objectives can sometimes be a bit broad and require clarification to be really powerful and actionable in a service design context.

I make these observations not as a criticism of Melis’ talk — I actually found it very thought provoking as it challenged me to examine my own experience in non-profit contexts, which is exactly what I was looking for from the day.

Siobhan Toohill and Adrian Wiggins, Creating better places to be

I was really looking forward to this preso and it didn’t disappoint. It was awesome to see Ezio Manzini’s work mentioned, along with Collaborative Consumption and a raft of other thinkers (many of whom I’d not heard of — plenty to follow up!)

It really resonated to see the ideas of creating the pre-conditions for communities and value to form presented in a context such as the conference. I also had so many questions — about shared value (especially in a retail context, an important part of Stockland’s business), but also in terms of the role of Stockland in community support after a development has been sold etc. But unfortunately was not able to connect with Siobhan or Adrian after the conference — something I’ll have to follow-up on.

Final thoughts

There seemed to be a couple of themes across the day, but the one that really caught my attention was the connection between service design and “change management”. This is something I’ve identified in our practice — whether it be looking at social media, sustainability, agile management, or design thinking/service design, that a lot of the work is in supporting and enabling change within the organisations we serve to support the implementation of solutions, as much as determining the shape of those solutions.

Having recognised this, I’ve undertaken an elective as part of my Masters study in leading and managing change, and it has been very helpful in understanding different schools of thoughts, frameworks and approaches to change management. I’m positive that this is going to help inform our future work in a service design context.

All in all it was a terrific day, and I’m really looking forward to future events. If yesterday was anything to go by they will be well worth the investment to attend…

In agile management and lean startup circles I’ve seen mention of the concept of a Minimum Viable Product. A very rough summary of idea is: to create only the necessary features to get a product (or service) into the hands of actual customers to get feedback and start to evolve, refine and further develop based on actual usage, rather than hypotheses of what people might use.

The aim is to both reduce waste (by not investing effort where it’s not needed/warranted) and to help increase innovation potential by observing how people actually use the product, perhaps uncovering unexpected uses or directions that aren’t immediately obvious to the design team.

To be sure, this remains a pertinent goal, but in chatting with the crews at Interaction Consortium and infoding this past week, we’ve lamented the fact that creation a “minimum” and just “viable” product is just a little uninspiring — not necessarily something that gets the creative juices flowing.

In these conversations I suggested instead that perhaps we should aim for a “Minimum Inspiring Product” (MIP). “Inspiring” in two senses — firstly, it’s about building something that will not just meet minimum requirements, but what is likely to get people excited about the product — that unique twist that makes something remark-able (in the parlance of Seth Godin).

But inspiring also in the sense that it inspires use and action, and new ideas. Something that people will want to engage with. If the product is just the bare minimum, it’s less likely to inspire the level of engagement required to actually achieve the benefits of the incremental development approach (as outlined earlier).

This, perhaps, is what Buster Benson was suggesting when he said “People who talk about minimum viable products tend to focus more on the minimum and less on the viable.” (thanks to @infoding for the reference.)

I hate to drop in an Apple reference here, but I think that’s perhaps a fair description of what they have done with the iPod, iPhone and iPad lines. Each was lambasted for what it left out (suggesting a minimal approach), but they also managed to provide inspiration that ultimately drove commercial success. These weren’t a minimum viable product, as there was clearly much more delivered than a bare minimum, and each emphasised that inspirational aspect. They inspired action, play, exploration — and, I think one could argue, lust ;) — that has in part led to the success of the apps ecosystem.

Internally, of course, it’s still important to build iteratively, and in this sense the minimum is sometimes necessary — especially to make sure we respect the YAGNI principle. But in terms of releasing a product or service into the wild, perhaps the MIP is a better target.

We’re delighted to have urban and social planning consultancy Urban Affect on board as a partner. In this guest post (reposted with permission), principal Allison Heller shares some of her thoughts on CSR and social engagement.

A new year is often a time of reflection among businesses on strategic directions and corporate goals. For many firms, sustainability — environmental, social, economic — is fast moving up the agenda.

Raised regulatory standards and consumer expectations are today demanding far more from companies than an annual CSR report and a handful of associated token initiatives. The genuine integration of sustainability within an organisation may require significant organisational change and improved stakeholder engagement.

The Centre for Social Innovation — a partnership between the Universities of New South Wales, Melbourne, Western Australia and the Swinburne University of Technology — has been undertaking research on this shift taking place in the corporate sector in recent years. Researchers Gianni Zappala and Sarah Adams’ 2010 paper, The Integration of Corporate Responsibility: Evidence from leading companies in Australia & New Zealand (PDF 266 KB), considers the level of integration of sustainability principles and practices achieved to date.

The paper defines Corporate Responsibility (CR) as “understanding and minimising a company’s negative impact or footprint on society and a broad range of stakeholders including the planet and environment, its employees, the communities in which it operates and the governments which make the laws.” It utilises data from the Corporate Responsibility Index (CRI) benchmarking tool developed by Business in the Community in the UK in 2002, which is applied annually in Australia and New Zealand by the St James Ethics Centre.

The reseach found that “corporate responsibility is on the whole well integrated into the way that leading companies in Australia and New Zealand are doing business.” However it suggests that firms could improve in four key areas, including ensuring improving CR training at board level and improving the extent and quality of stakeholder engagement.

The following criteria are suggested as a measure of firms that have achieved genuine integration of CR principles:

• Adopt a holistic conception of corporate responsibility or citizenship;
• Have board level governance systems to oversee CR policies and practices;
• Have senior leaders that champion CR internally and externally;
• Have a range of structures and systems to integrate CR across the business, including risk management systems, stakeholder consultation schemes, sustainability training for managers and employees, establish and monitor key performance indicators for CR, and
• Have an open and transparent approach to CR information disclosure (eg undertake assurance of their CR reports).

There is no denying the challenge for corporates in moving to greater levels of stakeholder engagement and associated transparency. However in many cases this is a necessary first step on the road to more sustainable, productive and profitable business. Which companies will rise to the challenge in 2011?

Certainly a man that’s speaking my language — economist and business school professor Michael Porter interviewed for the Harvard Business Review (via Umair Haque):

There are a few particular points of note I picked up watching this interview. At around 4:20 he says:

we once thought that if business just increases its profit, what’s good for business is then good for society. … we need to kind of think differently: what’s good for society is good for business. And that sounds like a play on words but it’s really quite a profound difference in perspective. The [concept] of “shared value” says that, actually creating societal benefit is really a powerful way to create economic value for the firm.

A short while later (at around 6:37) he says:

But that kind of profit creates shared value — it’s not just profit at the expense of society or the expense of the consumer, it’s really profit by benefiting society and the consumer.

On this latter point, in previous posts I’ve used the phrase “shifting from extracting value from the market, to creating value with and for the market”, which very much aligns with this theme.

At 8:31 he goes onto express the potential for competitive advantage inherent in such and approach:

I think the great strategies of the future are going to have this dimension. The companies that are going to have the more sustainable advantage are not just going to be making these minor cost and quality differences, they’re going to be engaging communities they’ve never served before; they’re going to be thinking much more deeply about the underlying human needs that are related to their products.

I would add, underlying needs that can be effectively determined using service design and design thinking approaches ;) He goes on to talk about building the shared value proposition into the core of the business strategy, another theme that I, among others, also propose.

His discussion on increasing farmer capabilities (around 11:00) reminded me also of what MTC Group is focusing on in their business.

Just before the holiday break I had the pleasure of catching up with the folks at Headshift (who I think are doing great work) and during the conversation we were considering how slippery the term “social” can be.

Along with others in the Dachis Group, Headshift use the term “social business” to describe their work, which they use as a term to describe to businesses that use “social technologies to improve business performance, communication and customer engagement”.

This is quite a different definition of “social business” than is used In the non-profit and social innovation space — i.e a business at has social outcomes as a core focus.

During the conversation I mentioned that at Zumio we work at the intersection of three different worlds, all of which include “social” as a key descriptor, but where that term means something different in each instance.

Social networks: here “social” refers to the social relations and peer connections between individuals, and how social technologies are enabling these connections.

Social design: as outlined in the presentation I gave at Enviro 2010 earlier in the year, this refers to including people (both internal and external) in the process of design, but also designing for social use — including consideration of behavioural norms and social interactions in our designs.

Social innovation: here “social” refers to positive social outcomes (and environmental benefits) from our activities, often borne of social needs and actions (e.g. communities creating their own solutions).

Each of these areas of focus has a significant history and background of practice — terminology, methods, framing/perspetives etc. — and each in itself has a depth that can take some time to explain and “unpack”.  Which makes it all the more challenging to try and explain succinctly what it is that Zumio does ;)  But combined, we think these focal areas can be a very powerful force for positive change.  Hopefully, over time, they will become more widely known and accepted, making the story a little easier to tell.

And of course, if these ideas do become more “mainstream”, society will of course be reaping the benefits of each approach, which can only be a good thing.

In the time I’ve been actively engaged in business sustainability, I’ve noticed that report after study after survey that shows that a majority of customers have environmental and social considerations at the forefront of their mind when making purchases. For example, this 2008 McKinsey report (free registration required to read article) highlights that “87% of consumers worry about the environmental and social impact of the products they buy”. In the Australian context, research carried out by NetBalance for the Australian Food and Grocery Council (AFGC) reports “80% consider sustainability issues when putting products in their shopping trolleys”.

Yet this latent desire to make ethical choices in purchasing is also shown to be missing in action, outside of a significant minority. The same McKinsey report suggests 33% make such purchase decisions (which is similar to other reports I’ve read) and the AFGC finds that only 13% of Australians buy environmentally-sustainable food and groceries from the supermarket (as an aside: this figure seems low — I’ve seen other statistics that show organic produce as being much more prevalent than this, and that these purchases would be considered “environmentally-sustainable” — something to look into further).  Trendwatching place these figures at 40% and 4% respectively (based on Journal of Marketing data).

In considering this gap, we find many stated reasons as to why intention isn’t translating into action. Most commonly cited is price — reports I’ve read (coupled with my own experience) suggest that customers aren’t willing to spend more than a 5-10% premium for “green” products, if they are willing to spend more at all. And of course products with a price premium were much more likely to feel the pinch of changing economic circumstances.

But there is more to it than that — performance is another, where “green” products are seen as inferior to mainstream products. As Joel Makower asks, why does “green” not equal “better”?  Convenience is another factor, with limited availability of green options through mainstream channels (e.g. mainstream retailers, such as Coles or Woolworths here in Australia). Each of these is noted in both the McKinsey and AFGC summaries — and each is weighted against the environmental or social benefits of the product when making a decision. The AFGC report notes that only a small number will compromise on cost or convenience for environmental factors.

So what to do? We could try to change people’s priorities, to get them to change the weighting the put on each of these factors. I suspect this won’t get very far though… As I noted in my Web Directions South presentation, a lot of successful social innovations aim to actually flip the equation — to make the more sustainable option also cheaper, or more convenient, or have better performance, rather than forcing this kind of trade-off.  Companies leading in the Collaborative Consumption space often fit this category.  Trendwatching call such products Eco-superior or Eco-easy.

Bridging the gap

But why aren’t more companies doing this? Why aren’t there more products like this in the market? I think part of the challenge is that when companies are considering sustainability factors in their products, they focus on specific attributes of products, rather than thinking more holistically. What this means is that their consideration only extends as far as lessening the impact of certain ingredients — e.g. substituting an eco-friendly alternative as a key material or ingredient in a product.

Often this results in a more expensive product that doesn’t perform as well as the mainstream alternative. But more importantly, I think it misses the bigger opportunities of taking a sustainable approach to business – the kind of opportunities outlined by leading thinkers like Makower, Gil Friend, Paul Hawken and William McDonough.

These opportunities require a more holistic approach that considers the broader context in which a product or service exists. In Natural Capitalism, Hawken, Lovins & Lovins call this “whole of systems thinking”.

For those familiar with design thinking or service design approaches, this will be a familiar theme — core to these practices is assembling multi-disciplinary teams that take a broader contextual view (informed by design research) to uncover opportunities for rethinking the role of organisations and the products and services they provide that can create whole new classes of products (or, perhaps more accurately, product service systems).

The iPod/iTunes ecosystem is an oft-cited example of the possibilities of rethinking the system, rather than innovating purely on product attributes (while this isn’t explicitly for sustainability benefits, it does demonstrate the concept in practice).

In Blue Ocean Strategy, authors Kim and Mauborgne suggest a similar approach in their guide to formulating a successful product/business strategy. They reference this as an opportunity for innovation — without considering sustainability as a factor. However, it seems clear to me that the same principles are at work in books like Cradle to Cradle and Natural Capitalism, and are also cited in papers on design thinking in business (as I covered in more detail in my paper on Design Thinking and Sustainability).

This, I believe, is where design thinking and service design can play an enormously positive role in progressing sustainability. As it inherently takes an innovation frame, it is appealing to business. However, the opportunities for including the building of social capital and environmental benefits in the broader contextual frame of reference are huge — creating significant wins for business and society simultaneously.

Thanks to everyone who came to see the presentation at Web Directions South yesterday, and sorry we weren’t able to have a bit more discussion at the end of the session — some great questions and ideas came up that I would have liked to explore further.  I’ve posted the presentation to Slideshare:

Or you can download a PDF of the presentation, along with notes (PDF 14.4 MB), including pointers to the various sites and articles I mentioned in the presentation.

As I hope is obvious from our work and the posts on this site, we’re very passionate about engaging people in the process of design, so we were  delighted to be able to contribute a small something to the participatory design community as a sponsor of the Participatory Design Conference for 2010, being held in Sydney (in part co-ordinated by our friend and colleague @pennyhagen).

The “prototype” programme is now up, and it’s looking like it’s going to be a great set of sessions.  And the industry day seems like a great opportunity for those of us in the design field to connect with the academic world of participatory design.  I know that I’ve certainly benefited tremendously from the academic literature on the topic (esp. during the preparation of my recent paper), so am looking forward to more cross-pollination of ideas at the conference…