Leading Through Service Innovation

Executive Summary

Services are the dominant driver of the US economy. According to the Bureau of Labor and Statistics, services make up 80% of our economy and the 10 industries with the most dramatic salary growth are all in service-providing sectors. Many organizations provide services to internal and/or external customers but fail to ever identify themselves as service organizations and thus miss opportunities to lead and innovate in their market space.

Although services require the same treatment as products: design and development, testing and market research, and refinement over time, organizations rarely have formal processes, roles and practices for developing, managing or innovating their services as a portfolio.

Additionally, organizations that offer products have introduced and adopted formal, full life-cycle development processes for bringing to market new products and implementing new technologies which service organizations have, for the most part, failed to do.

As organizations begin to view themselves as deliverers of services, the need for the same formalities as product organizations have becomes more apparent. Without a formal, full life-cycle development process for their services, organizations fail to maximize return on investment, infuse discipline into the development process and manage expectations and customer needs.

We have found that successful service organizations adopt a few key practices:

• Services Perspective – understand their business as a collection of services (a portfolio), and have a clear view on what drives service development
• Innovation – infuse innovation practices throughout the lifecycle to build unique offerings to maximize convenience, loyalty and value
• Portfolio – manage their service offerings as a portfolio, much as IT and product portfolios are managed with categories, criteria, and key metrics,
• Process – adopt a full life-cycle process for service offerings from concept innovation and business cases through checkpoint reviews at key milestones
• Cultural readiness – invest time and effort into ensuring their culture can adapt to the changes that innovation requires

Consequently these organizations’ innovative capacity and the value of the services they offer depends upon a strategic mindset that takes into account the clarity of factors such as the audience, intent, scale, actors and experience persona provided by a service….

Continuing yesterday’s Avatar theme on not destroying the planet, I looked again at the video clip of Ray Anderson, CEO, Interface FLOR speaking about the events that led him to commit his company to sustainability.

It started with his reading a book, in 1994, by Paul Hawken, The Ecology of Commerce which talks about ‘the death of birth”.  This was a phrase and a discussion that profoundly moved Anderson.  At this stage he started to get interested in the argument against plundering the Earth for profit.  10 years later his company started to hear customers asking them “what are you doing for the environment?” the answer was ‘not enough’ as far as Anderson was concerned. Galvanized into further action, described in his book Mid Course Correction,  by these types of things happening in the external world Ray Anderson has led the internal world of InterfaceFLOR into a very different way of operating than it had in 2004.

The company adopted the 2020 sustainability vision “Achieving Mission Zero™” which is their “promise to eliminate any negative impact Interface has on the environment by 2020”.  To this end he has led both service and product innovations that are taking the company down the route of achieving the target.  Winning the 2006 UK EDF Energy Environmental Impact Award in association with the Institute of Environmental Management and Assessment the company was applauded for two service innovation initiatives:

• Evergreen Carpet Leasing System – in return for a monthly leasing charge, InterfaceFLOR undertakes to maintain, replace and recycle all its carpets, ensuring sustainability throughout the lifespan of a carpet
• ReEntry® – InterfaceFLOR collects used carpet tiles for refurbishment and re-use

In 2009 Anderson spoke at the TED Conference on the Business Logic of Sustainability.  He described himself as a “recovering plunderer” of the Earth.  As the introduction to the speech notes “At his carpet company, Ray Anderson has increased sales and doubled profits while turning the traditional “take / make / waste” industrial system on its head. In a gentle, understated way, he shares a powerful vision for sustainable commerce”.

In 2009 InterfaceFLOR was the first carpet company in North America to receive third party verified Environmental Product Declaration status, based on full the lifecycle assessment (LCA),  that InterfaceFLOR has used in its own product measurement, such as progress on reducing dependence on virgin raw materials, reducing fossil fuel dependence and using renewable energy, and reducing greenhouse gas (GHG) emissions.  In the TED speech Anderson said he thinks he is 50% towards reaching his 2020 goal and reinforces the point that there is a strong business logic to working towards that goal. Among the business benefits he cites.

• Development of the company’s product and service innovation skills
• Increased employee motivation and productivity as they are working for a higher good
• Sustained profitability during economic turbulence
• A more positive customer experience – resulting in repeat and referred business

His is a convincing and powerful voice advocating ‘more happiness with less stuff’, not just for the current inhabitants of the planet but also for ‘tomorrow’s child’.  As he says “We are part of the web of life and we have a choice to make during our brief visit to this planet – to hurt it or to help it.  It’s your call.”

For further information, please watch Naomi’s 7-Part Series on Sustainability

-written by Naomi Stanford, VP of Business Strategy and Design at Anerian, LLC.

Naomi Stanford is an expert organization design and human capital consultant based in Washington DC. Her current work is leading large scale organization design and change programs in Government and commerce. Her skills and experience were honed in the UK private sector where she worked in very large multi-national companies. Her earlier career was in graduate and post-graduate level business education and she maintains this affiliation by teaching organization theory on the doctoral program at Capella University (US), and human resource management at Roffey Park Institute (UK).

She has a PhD (focused on growing leadership capability) and two Master’s degrees. Additionally she is a Certified Management Consultant and a licensed corporate Wellcoach.

She is the author of two books on organization design: Organization Design: The Collaborative Approach, and The Economist Guide to Organization Design. She has written many articles on aspects of organization design and development and frequently spoken on the topics at conferences.

You can also view Naomi’s 7-Part Series on Sustainability in Anerian’s Video Learning Lab.

The other day I wrote about Amazon’s lists, profiles, and so on.  I sent off two enquiries (but on one form) to their ‘contact us’ service having previously trawled through the FAQs and not found my questions either posed or answered.  Within about eight hours I got a response to both – but as two separate responses (one from a do-not-reply email and the other from a customer service person called Surya P).

The first response which was to my question:  Can I have just one profile on Amazon rather than two (currently one personal one and the other an author one)?  The answer is:  “Unfortunately, it’s not possible to link your profile page to your author central page. I’m sorry for any inconvenience this may cause”.

The second response was to my question: Can my Listmania Organization Design list be made private while I work on it?  I asked this because I do not want to put up a list that has only a handful of items.  I want to spend time collecting and loading the items before I publish the list.  The answer to this question was: “To make the wishlist private I have included the information below”.  That was ok, in that it gave me detailed information, but I had asked the question about Listmania and not about wishlists.  So the information was of no value to me as one of the things I do know how to do is to make my wishlists private or public.

I had another go of sending of the Listmania question. This time putting Listmania in upper case letters and making the point that I was asking about LISTMANIA and not about wishlists.  The answer to my question came back – again within about eight hours “I am sorry we are not able to make your Listmania List private”.

What I enjoyed about these responses (or did I?) was that each of the three emails had, in the signature block, “We’re Building Earth’s Most Customer-Centric Company”.  So now I’m just wondering what the construction process is and how far they have got (or think they have got) with it.  Meanwhile: I have deleted off  Listmania my Organization Design List Two (which currently has only one item).  I’ve decided to construct it as a private wishlist and when it is complete there transfer it to the Listmania page.  On my personal profile page I have put a note saying “please see my author page for more information”.  So I have managed a couple of workarounds.

At the same time I was conducting this Amazon exercise I was also reading a short piece in Baselinemag The Evolution of Organizational Process.  In this the author observes that

“Despite a multidecade focus, business-technology processes in many companies are unmanaged, invisible and unmeasured.  Consequently they are executed haphazardly and inconsistently.  This results in delays, errors, low quality, and high overhead costs. …”

The reason suggested for this is:

“many processes cross an enterprise’s internal and external boundaries as part of business networks and, therefore, they become the province of no one. … there are no single point-of-responsibility process owners.”

It seems to me that Amazon’s processes are in that category (although some I’ve experienced as superb for example their process for telling me the status of my order). I’m guessing that the patchiness of customer service is because they are not looking across processes but rather within them – so the Listmania team is not learning from the wish list team, and the personal profile people are not aware that some of the profiles belong to people who are also authors because the author team is in insufficient communication with the personal profile team for whatever reason.   To solve these types of issues and speed up the building of the Earth’s Most Customer-Centric Company – some service portfolio thinking and related innovation is required.

-written by Naomi Stanford, VP of Business Strategy and Design at Anerian, LLC.

On January 15th, 2010, attendees networked with each other, spoke to Anerian staff members, and shared in some breakfast goodies. Marco Davis, Nekosi Nelson, and Stephanie Potter from Ashoka shared with us a little about Youth Venture’s mission and what they are doing around the world.

We hope you’ll make it out to our Q2 Kick-Off Meet ‘N Greet on April 9th at 7:30-9:30am! The tentative theme will be “Helping the Homeless and Feeding the Poor”.

(*Please note these events are NOT fundraising opportunities nor sales pitches.*)

Below are clips from Ashoka’s Presentation and Q & A session!

You can discover more about Ashoka’s (www.ashoka.org) Youth Venture (www.genv.org) through their websites.

Naomi Stanford – LivingChristmas.com

“My favorite service innovation for 2009 is the Christmas Tree for Rent service.  I noticed it in the NY Times at the beginning of December 2009, and particularly liked the idea that people could have a tree but in a sustainable way – they can return it, alive, to the nursery after the season. It sprang to mind today as I walked to work past at least ten Christmas trees lying abandoned on the sidewalk, looking desolate with the hacked off bit at the bottom and shreds of tinselly stuff on the branches.  How long they’ll be there is anyone’s guess. Not only is the idea of sustainable Christmas trees a great service innovation, but they are delivered and collected in trucks run on bio-diesel. Additionally, the trees are cared for by adults with disabilities; the drivers will pick up donations for Goodwill and used wrapping paper for recycling; and the Web site also sells eco-friendly, fair-trade ornaments.”

Tara Carcillo – Wraparound Milwaukee

“Wraparound is a social service program that was launched in 1995, designed to serve an annual 1300 youth with diagnosable mental health disorders such as depression, attention deficit disorder, or learning impairments that prevent normal functioning in home, school, or outside community settings.  Over 50% of these children come from families at or below the federal poverty line. Wraparound attempts to reduce costly and arguably ineffective residential care options by offering a host of individualized treatments that allow youth to stay with their families.

Depite the fact that this program is 15 years old, I found this to be a particularly powerful innovation due in part to my opportunity to learn more about the work of Washington DC’s Court Services and Offender Supervision Agency this past fall, through one of our client engagements.  Trends in crime and offender behavior reveal that CSOSA and agencies like them will need to make a greater investment in programs and services that support expanding mental health needs of the offender community and to be able to reach out to offenders who are committing their first crime at a younger age than has occurred in the past.  I see the Wraparound Milwaukee program as an example of an innovative program that will respond to current needs as well as future trends in offender supervision and create a pathway to reduce recidivism.”

Carla Voorhees – Rent the Runway

“Rent the Runway is a new website that allows women to rent high-fashion dresses a few days at a time for a fraction of the cost. Delivered and returned through the mail, Rent the Runway dresses are on the cutting edge of style. Rentals are approximately 10% of the dress’ retail price. For example: a dress that retails for $1500 can be rented from Rent the Runway for four days for only $150. One of the reasons I love Rent the Runway is their fun approach to categorizing their dresses. Not only can you view them by designer, but you can also view them by occasion or trend. Occasions range from “black tie affair” to “this-is-getting-serious-date”. It’s a fun way to find the perfect dress.

Overall I think Rent the Runway has an opportunity to tap into the new “recessionista” trend. Women still want to dress beautifully, and this is a way to do it without having to pony up the big bucks for a dress you might only wear once or twice. With the same amount of money, you can wear 10 dresses from Rent the Runway. Cheers to that.”

Ed Anderson – Plumpy’nut

Plumpy’nut is a high protein and high energy peanut-based paste in a foil wrapper- similar to peanut butter- that is used to treat sever malnutrition in children. The product is easy for children to eat since they can feed themselves the soft paste. Formulated in 1999 by Andre Briend, it requires no water preparation or refrigeration and has a 2 year shelf life. Plumpy‘nut was first used during the crisis in Darfur in western Sudan, where it fed 30,000 children and cut malnutrition rates in half.

Amanda Antico-Majkowski – Livescribe  Pulse SmartPen

“Some say that the art of the “to do” list is a thing of the past. I may have agreed with them until I was given a gift as 2009 came to a close. That gift is called the SMARTPEN. According to their website, the Smartpen is ‘A computer in a pen that helps you never miss a word™. Pulse™ records everything you hear, say and write, and links your audio recordings to your notes.’  I am a DIE hard listmaker. Making a list clears your mind for so many reasons and it pulls things together. A lot of things get said during the day, but a “to do” lists means that the something said was important enough to act upon. Really, for me a to do list is a religion. I make lists big and small. I can no longer count how many ‘cute’ note pads I have, but the SmartPen changed all that. I can put everything in one place, and then DOWNLOAD it on my MAC (which is inevitably cuter than any pad of paper). I can now, take handwritten notes and “hear” what I was thinking when I wrote it down — which brings me back to the meeting in moments. I can now search for words in a matter of seconds – which saves hours of time.

In his book, Crazy Busy, one of my favorite authors and a man that literally changed my life. Edward ‘Ned’ Hallowel,  says this about being busy: ‘Being too busy, which can seem necessary and unavoidable, can become a habit so entrenched that it leads you to postpone or cut short what really matters to you, making you a slave to a lifestyle you don’t like but can’t escape. You can be so busy that you don’t even take the time to decide what actually does matter most to you, let alone make the time to do it.’ By recording everything with my SmartPen, I never feel too busy and I feel a sense of  ’its there, I can get back to it’. The notes that needed to be typed immediately after a meeting are a thing of the past. I can move right to the next meeting without fear of losing the important things that were said.”

Jesse Blaine – Accessible Cell Phone Banking

“The accessibility of mobile banking for low income people in developing countries has allowed for increased commerce, higher margins for family businesses (90% of population in AFRICA), and allowed a new class of people to think about saving.” Read a study conducted by Vodafone.

Corrie Davidson – Domino’s “Pizza Turnaround” Campaign

“Domino’s Pizza had consistently been getting feedback that consumers didn’t like the taste or quality of its main product – its pizza. So in response to this -and after making pizza for 50 years-, Domino’s changed their ingredients and launched a whole new campaign embracing the fact that they previously had an inferior product but cared enough about their customers to change for them. A bold move for such an established brand to alter their core offering. Whether you like their old flavor, or new, or wouldn’t touch it with a ten foot pole, it is still a great example of corporate ‘honesty’ spun into a great advertising campaign. Dominos listened to their customers, changed their product, and are now putting themselves into the social media world full force in an effort to rebrand themselves. They host a live twitter stream on their site broadcasting ALL thoughts on their new pizza – good and bad – which gives them credibility. They are producing web videos, have facebook fan pages, and even laugh when noted comedian Stephen Colbert mocks them. Its not just a new flavor Dominos is delivering, but a new personality behind the brand.”

Steve Lynott – “Sipark” Siemens Parking Guidance System

At Munich Airport’s parking garages, LED display panels inform drivers entering the airport how many vehicles are parked in the garages.  As soon as the vehicle enters the parking garage, it is directed to the closest vacant parking space. With a sensor installed at each individual zone and aisle, the system continuously monitors the number of vehicles that are en route to parking spaces. This enables the central guidance system to ensure that too many cars aren’t directed to a given area, which might then become too full. An ultrasound sensor is installed at each parking space to determine if it is occupied. If someone has inadvertently left a luggage cart in the space, however, the smart sensor recognizes that the object is not a car.

This Q1’s Speaker will be Marco Davis from Ashoka’s Youth Venture Program. Youth Venture helps teams of people start new youth-led organizations.

As part of our Kickoff each quarter you will be able to connect with other prospective business partners, share some ideas and meet new people. We look forward to catching up, and taking part in this quarter’s Wii challenge!

Location: Anerian, LLC
1250 Connecticut Ave. NW
6th Floor
Washington D.C. 20036

–Parking in garage of building available as well as metered street parking. Metro accessible via the Red line at Dupont Circle (South exit) and the Orange line at Farragut West (18th St. exit)–

The A-Ha Moment

Ed Anderson brings more than a decade of expertise in the management of complex and unique IT and management challenges. He has a strong, proven reputation for building and leading highly successful, productive and innovative teams while establishing and refining effective policies, procedures, processes, and best practices and applying them to achieve timely, unparalleled results.

He received his Bachelors of Science degree in MIS at The American University and has been recognized in the following ways:

Top 100 CIOs, EWeek Magazine 2007

Top 100 Most Influential Blacks in Engineering, Black Engineer Magazine 2006, 2007

Executive Working Board, American University, Kogod School of Business

Executive on the Grounds for the Masters of IT, University of Virginia 2006 2009

http://www.anerian.com/our-team

View the rest of Ed’s series here:
http://mll-sae.org/expert-zone/16-topics-for-cios-and-ctos

Web 2.0 can mean a lot of different things.  Where do we start? What do we want to get out of this?  Is there a way to measure success?  The reality is that Web 2.0 is unique to every agency.  The goals, objectives and desired outcomes are also unique to every agency.  Anerian believes there are four essential domains that should be understood as we go down this path:

1. Strategy: What is our end in mind?

2. Brand: How do we want to present ourselves to our community?

3. Audience: How does our audience want to communicate?

4. Tools: What are the tools that accomplish the goals and create ease of communication for the community?

Sometimes the most difficult part of Web 2.0 is resisting the lure of sexy tools and their vices (low cost and limited security).  Engaging the internal customers and thinking strategically about Web 2.0 can be equally challenging.  One thing for sure in the IT business, things are never as simple as they seem.

But there are compelling reasons for government to pursue Web 2.0. The ability to develop non-traditional solutions, quickly, outside of the Agency’s legacy infrastructure for one.

To utilize cutting edge capabilities, such as social networking, to get closer to constituents for greater transparency.  And the ability to extend an Agency’s relevance by combining a well-built website with social networking with web-based conferencing to create an expanded community around the mission, a topic, or an event would be another value add.

A simple example would be a conference.  We have all been to conferences.  Register, get a hotel room, find a cheap plane ticket, decide whether or not a rental car is needed, and pour over the agenda to determine which sessions to attend.  But what about the staff members who could not fund the trip or their schedule did not permit it?  What do they do? What about having a web-based conference that compliments the actual conference, where a virtual attendee registers for the conference, determines the topics, speakers, or issues (or they can “attend” the whole conference) that are most important to them and they are connected to an online community of people who share their interests.  They can see the conference, over the internet in realtime or at their convenience, and then can ask questions to the presenter or to their online community. If the presenter is getting a number of similar questions, they can create a blog to reach out to the attendees (both virtual and on-site attendees) and create a dialogue that can continue as long as needed. Or the presenter can create a webinar or discussion forum to reach the attendees and address the questions. This community can exist year-round, with the annual conference being the cornerstone of the their interests, research, discussions, and relationships.    It does not replace the physical conference, it extents it from an event to an experience.

There are numerous examples of how, with a good plan, these solutions can add value to an Agency.

Tell me your thoughts.  How would you utilize Web 2.0 in your Agency?