- 1 Guiding principles
- 1.1 1. Focus on value
- 1.2 2. Start where you are
- 1.3 3. Progress iteratively with feedback
- 1.4 4. Collaborate and promote visibility
- 1.5 5. Think and work holistically
- 1.6 6. keep it simple and practical
- 1.7 7. Optimize and automate
- 1.8 Principle interaction
On the outer shell of the service value system (SVS) are the guiding principles and continual improvement. In order to support successful actions and good decisions, both of these components should be constantly considered at all levels.
1. Focus on value
Everything that an organization does should map directly or indirectly to value for its stakeholders. This value may come in various forms, such as revenue, customer
loyalty, lower cost, or growth opportunities. This focus on value principle encompasses many perspectives, including the experience of customers and users.
Who is the service consumer
As the service provider, you must consider who the service consumers and key stakeholders are (customers, users, sponsors, etc). It is important to not only think that a service consumer will be the only stakeholder – you might have a service which is targeted towards a sponsor which will then be consumed by the end users of that sponsor.
What is the consumers perspective of value
As the service provider, you must understand what perspective the consumer has towards the value a service will provide. Value itself can come in many forms; Increased productivity, reduced negative impact, reduced costs, better competitive position, etc. Knowing and understanding this perspective is what ultimately adds value to a product or service.
- Why the consumer uses the services
- What the services help them to do
- How the services help them achieve their goals
- The role of cost/financial consequences for the service consumer
- The risks involved for the service consumer
The customer (CX) & user experience (UX)
The customer experience (CX) and user experience (UX) are all the interactions of a customer has with an organization. These interactions are what shape how a customer feels about the organization and it’s products/services.
CX/UX can be subjective or objective depending on the customer – The final outcome for all customers consuming the same service might be the same and measurable (objective), but some customers might not enjoy the process they went through to get that outcome, where other customers love it (subjective).
Applying the principle
- Know how service consumers use each service
- Collect feedback on value on an ongoing basis
- Focus on value during normal operational activity as well as during improvement initiatives
- Include focus on value in every step of any improvement initiative
[Real estate example] We are considering creating a fully managed rental service for commercial buildings. We have identified our sponsors are the building managers, the customers are the individual condo owners and the users are anyone residing/renting in the condos. This service will add the most value to our sponsors as it will take some of the responsibility off marketing and managing each individual condo unit. There will be no need to increases condo fees for the customers (condo owners) as the sponsor will simply transfer their existing management costs to this service. The customers (condo owners) and end users (renters/owners) will also directly benefit as they will now have a single point of contact for all rental management.
2. Start where you are
Re-use, re-purpose, recycle, or up-cycle – Do not start from scratch and build something new without considering what is already available to be leveraged. There is likely to be a great deal in the current services, processes, programmes, projects, and people that can be used to create the desired outcome. The current state should be investigated and observed directly to make sure it is fully understood.
Assess where you are at
As an organization grows, so does it’s processes/methods being used to create value – these are a great starting point to review and re-use when talking about any value creation activities. It sounds logical, because it is; taking/building to re-use on something that already exists is faster and more efficient than trying to re-invent the wheel.
Make sure you’re asking the right questions (no questions are stupid) because not always does everyone have a firm understanding of how pre-existing services currently work.
The role of measurement
It is important to use the most up to date and relevant information when assessing where you are currently at. Old data or bias can easily and unintentionally impact how something is being measured.
A process under consideration to be re-used in new value creation could be looking at the wrong metrics which don’t directly related to the desired outcome.
Applying the principle
- Look at what exists as objectively as possible, using the customer or the desired outcome as the starting point.
- Are the elements of the current state ‘fit for purpose’ and ‘fit for use’?
- When examples of successful practices or services are found in the current state.
- Can they be re-use, re-purpose, recycle, or up-cycle to achieve the new desired state?
- Apply risk management when reusing the current state or creating a new state.
- Will there be continuation of old, bad, behaviors?
- What needs to be changed to mitigate these risks re-using the current state?
- What risks will be introduced when creating a new state?
- Recognize when nothing can be used from the current state.
[Real estate example] Our new fully managed rental service is very similar to what we are already doing on a much smaller scale with individual consumers. Some of the same processes for document management and marketing are already in place and can be modified slightly to accommodate a much larger building. We are basing a lot of our measurements off this existing small scale process which we plan on re-using, but must be mindful and only use these measurements as a guide as they should not be a target for this new service. It would be in our best interests to investigate other measures for success before proceeding with creation of this new service offering.
3. Progress iteratively with feedback
Do not attempt to do everything at once. Even huge initiatives must be accomplished iteratively. By organizing work into smaller, manageable sections that can be executed and completed in a timely manner, it is easier to maintain a sharper focus on each effort. Using feedback before, throughout, and after each iteration will ensure that actions are focused and appropriate, even if circumstances change.
A feedback loop is a term commonly used to refer to a situation where part of the output of an activity is used for new input. In a well-functioning organization feedback is actively collected and processed along the value chain. Well-constructed feedback mechanisms facilitate understanding of:
- End user and customer perception of the value created
- The efficiency and effectiveness of value chain activities
- The effectiveness of service governance as well as management controls
- The interfaces between the organization and its partner and supplier network
- The demand for products and services.
Iteration and feedback together
Working in an iterative manner with well defined feedback loops in a process will ensure all activities maintain a clear direction towards the creation of value through:
- Greater flexibility
- Faster responses to customer and business needs
- The ability to discover and respond to failure earlier
- An overall improvement in quality.
Applying the principle
- Comprehend the whole, but do something.
- Don’t get stuck in ‘analysis paralysis’, in which so much time is spent analyzing the situation that nothing ever gets done about it.
- Seek and use feedback at all times and at all levels.
- Any iteration should be produced in line with the concept of the Minimum Viable Product (MVP).
[Real estate example] We are engaging a few large building managers on a weekly basis to hear their feedback as we build the components of our fully managed rental service. So far the feedback has been overly positive with some constructive feedback towards the marketing aspect of each individual rental condo. They have requested a feature/product for individual customers (condo owners) to set a larger marketing budget. This new demand that has come through our feedback loop and we could provide a MVP for testing in the coming weeks to see if we can meet the requirements of the end customer without affecting the intended outcome of the service as a whole.
4. Collaborate and promote visibility
Working together across boundaries produces results that have greater buy-in, more relevance to objectives, and increased likelihood of long-term success. Achieving objectives requires information, understanding, and trust. Work and consequences should be made visible, hidden agendas avoided, and information shared to the greatest degree possible.
Whom to collaborate with
Collaboration is a two way street when producing a desirable and valuable outcome – It is important to identify and collaborate with the right stakeholders, which is anyone who has a ‘stake’ in that activity or outcome.
Poor collaboration from organizations to consumers can lead to services which don’t meet expectations, by not requesting feedback, or not listening to feedback provided by a consumer. The same can be said about ‘siloed’ departments where poor collaboration can lead to services not being adopted due to poorly communicated changes.
Communication for improvement
Find the right channels to communicate feedback for improvements – This could be with something as basic as a survey after a consumer has used a product/service. It could be as granular as sitting down with a customer to get an in-depth understanding of how they are using a service.
Urgency through visibility
Visibility helps create a sense of urgency which leads to a feeling of importance in each activity. If stakeholders (internal or external) have poor visibility, there is a risk of creating an impression that the work is not a priority and hence, not important.
Applying the principle
- Collaboration doesn’t mean consensus.
- Take in all angles, but make a logical decision for a value driven outcome.
- Communicate in a way that the audience can hear.
- Ensure you’re collaborating with the right stakeholders.
- Bring others into the loop to improve the audience listening.
- Decide on what data will be used to make a decision.
[Real estate example] Our whole organization had a general meeting last week to collaborate on the new rental management service. Everyone from different departments saw it as a great way to create value and have suggested some amazing ideas which could vastly improve the service. The customer service team also better understands the service and can start pitching it to existing clients to get some extra feedback. At the same time, three of our sponsors have been given access to the draft documents for the service and are eager to start a trail as soon as possible.
5. Think and work holistically
No service, or element used to provide a service, stands alone. The outcomes achieved by the service provider and service consumer will suffer unless the organization works on the service as a whole, not just on its parts.
It is important to understand how all parts of an organization work together to produce value. This requires end-to-end visibility of how demand is translated into outcomes (value) and the effect that changes have on the upstream and downstream activities.
Applying the principle
- Recognize the complexity of the systems.
- Collaboration is key to thinking and working holistically.
- Draw on knowledge in each area to identify what is essential for success.
- use automation and integration to promote end-to-end visibility.
[Real estate example] Our customer service team is now collaborating direct with our development team to create a new web portal for our rental management service. They have a very good understanding of what the customer needs and are a key to helping develop a useful product for this service.
6. keep it simple and practical
If a process, service, action or metric fails to provide value or produce a useful outcome, eliminate it. In a process or procedure, use the minimum number of steps necessary to accomplish the objective(s). Always use outcome-based thinking to produce practical solutions that deliver results.
Judging what to keep
Value creation should be the best judge of what to keep, and what to scrap. If a practice, process or metric isn’t adding value, then it should be removed.
Remember that value can be direct as well as in-direct – some activities/processes might not seem to add value without an understanding of why that process is in place or what it does.
With value creation and simplify in mind, it can be important to find a balance when objectives start to conflict.
One department might want customers to have more control over their online accounts so they can update their own customer information, but the security department is wary of creating such an open access model and decides that some data must be entered manually by the organization.
Applying the principle
- Every activity should contribute to value.
- Simplify as much as possible without sacrificing value.
- Do fewer things, but do them better.
- Respect the time of people involved in a process.
- Make it easy to understand.
- Look for ‘quick wins’ to delivery simply activities.
[Real estate example] Our sponsor (building management) recently suggested that we add another product for individual marketing for those who want to spend more advertising their property. To ensure that our rental management service offering is as simple as possible to understand without conflicting with the core objective, we have decided to keep additional marketing packages out of the core service offering and present it as a separate service offering to those individual customers requesting it.
7. Optimize and automate
Resources of all types, particularly HR, should be used to their best effect. Eliminate anything that is truly wasteful and use technology to achieve whatever it is capable of. Human intervention should only happen where it really contributes value.
The road to optimization
There are many ways services, products, processes or activities can be optimized and automated. Regardless of the specific technique used to optimize, the following high level steps should always be considered.
- Understand and agree the context in which the proposed optimization exists.
- Assess the current state of the proposed optimization.
- Agree what the future state and priorities of the organization should be, focusing on simplification and value.
- Ensure the optimization has the appropriate level of stakeholder engagement and commitment.
- Execute the improvements in an iterative way.
- Continually monitor the impact of optimization.
Normally with the use of technology to perform a repetitive activity or series of steps without human intervention. Without technology it could be something like a manual approval process where certain steps a change request management can be automatically approved based on the level of change required.
Applying the principle
- Simplify and/or optimize before automating.
- Define your metrics for the intended for a outcome and focused on value.
- Progress iteratively with feedback.
- Keep it simple and practical.
- Focus on value.
- Start were you are at.
[Real estate example] Our staff are saying there will be a lot of data to enter for each condo unit when on-boarding new customers for our rental management service. In collaboration with the IT department, we have come up with an optimized and automated way to export and import data using a few lines of code. The customer will simply upload a CSV file with their existing data and it will appear direct in our system.
Knowing the guiding principles is just as important as knowing how they they interact with and depend on each other. The relevance of each will be important at different stages but all should be frequently reviewed to determine how appropriate they are in a given situation.