Tragedy of Costs

Services are hardly designed >> Benefits poorly articulated or unaccounted for, while costs are readily apparent >> Costs are overt, benefits are covert >> Customers become cost-conscious >> Cost-cutting ensues >> Benefits decline >> Cost-benefit ratio suffers >> More cost-cutting >> Lean operations prone to failure without adequate safety margins >> Business as usual >> Risks materialize >> Budgets depleted sooner >> Risk-averseness sets in >> Plans for new and exciting products deferred >> Cost-benefit ratio suffers >> More business happens >>  “What have you done for us lately?” >> Sociotechnical debt >> “This is an attempt to collect debt. Any information obtained will be used for that purpose” >> IT in debtor’s prison of sorts >> Untapped service potential >> Unexplored economies of scope >> Unachievable economies of scale >> Cost-benefit ratio suffers >> October trip to Orlando >> Peer-group pressure sets the goal >> Maturity assessments saps the soul >> Process improvement efforts >> Services are hardly designed >>Benefits poorly articulated or unaccounted for, while costs are readily apparent >> Costs are overt, benefits are covert >> Customers become cost-conscious >> Cost-cutting ensues >>>>

Book abstract; feedback welcome

(Below is the abstract of the book I’m writing, titled “Thinking in Services”, to be published in June 2018 by BIS Publishers, Amsterdam. Please let me know what you think).

Services are part of the daily life of individuals and organizations. A day without paying for or providing them is inconceivable. They come in all shapes and sizes, and some we don’t even notice until something goes wrong. [With this book you can create your own field guide]. Too small to notice, or too big to fail, changes in technologies and societies are making the universe of services expand faster than ever before, and with it the challenges and opportunities for design. [This book is the Hitchhiker’s Guide].

New kinds services and new modes of failure expose customers and service providers to new kinds of costs; the unexpected, unpredictable, and unacceptable kind. [The book shows how to cope with the uncertainty and risk embedded in design]. That’s why, more than ever before, we care about the design of services we pay for or provide.

But perhaps we don’t understand services as much as we think we do. That limits our understanding and appreciation of their design. [Imagine physics before Niels Bohr’s atomic model]. Even simple services are complex in nature because of the way supply dynamically meets demand, in physical and digital spaces, across which humans and machines try and have meaningful dialog and interactions. And, while discipline of interaction design is more advanced than ever before, the thinking is still limited to the surface layers of touchpoints and interfaces. [This book helps you go beyond, with systems thinking for service design]. This book provides a universal model for services, and a new way of explaining their structures and behaviors through the language of design [Design thinking for services].

This book introduces a simple and elegant framework [based on a 4×4 grid called ‘a 16x frame”] for developing news ideas and concepts for services; for critically evaluating their designs; and for developing today’s solutions that don’t create tomorrow’s problems. So, whether developing a customer journey map, that could be particularly complex, or negotiating a billion dollar service contract, that somehow must leave all parties better off, this book shows how with bit of creativity and imagination, we can systematically get it done, frame by frame. [The book teaches you how to “read and write” a 16x frame, and provides 16 examples from across industry and government].

Design implements policy and strategy. Therefore, it requires effective collaboration between functions and disciplines that (unfortunately but understandably) speak different dialects of engineering, finance, and operations. Not just that, most projections of the future suggest humans and machines need to communicate with each other about design. Therefore, with inspiration from biology and computer science, this book introduces [what could be] a basic language for service design.

Four types of stakeholders in services

Every service has four types of stakeholders, whose interests define the outcomes and experiences, and give shape to the contract.It is these stakeholders you’re designing for. Payers and enterprises are entities that define the outcomes. Users and agents are personas that define the experiences.

Four types of stakeholders and how they’re related

In general there can be 1…N entities and personas on each side of the service contract. In the simplest cases there is exactly one entity and persona on each side, as in the case of the a single-person household hiring someone who is a solo act to clean the house, or fix the plumbing.

payer:user :: agent:enterprise (entity:persona :: persona:entity)

In the most complex cases, there are multiple entities and personas (NNNN), as can be found in government services paid for by taxpayers, made use of by other taxpayers, operated by a collective of government agencies, who employ civil servants to deliver the service.

1 1 1 1

1 1 1 N

1 1 N 1

1 1 N N

1 N 1 1

1 N 1 N

1 N N 1

1 N N N

N 1 1 1

N 1 1 N

N 1 N 1

N 1 N N

N N 1 1

N N 1 N

N N N 1

N N N N

Entities and personas are driven by their respective motivations and expectations.  It follows that there are can be up to four different sets of motivations and expectations. There are two sets when users are the payers, and the agents are the enterprise. For example, Peter pays Paul to cut his hair. Paul is a fantastic hair stylist and a solo act. He promises and then he delivers. Otherwise there may be three.  From a design perspective, even if their interests aren’t in direct conflict, it’s problematic enough if they’re not incongruent. The more divergent they are separate, the greater the agency problem.

The agency problem will be lesser, since the agent acting in their own self-interest will still be acting in the best interest of the enterprise. The problem in the case of an incompetent, irresponsible, or unethical agent, there is no recourse with an enterprise. Also, such service providers being so dependent on usually a single person, are usually unable to assure continuity or scale.

The good news is, there is less likely to be a conflict between the motivations of the buyer and that of the consumer, assuming people know what they want. Negotiations can be quick and simple, not consumers have just as much the right to be fickle-minded or unsure. It is easier to get consumers to check a box and click to accept a service agreement without reading the fine print.

Humans or machines

Entities and personas can be human or machines. By machines we mean autonomous agents embodied in hardware and software, capable of projecting both presence and intelligence, capable of dialog and interaction, and vested with responsibility and authority. 2017 saw the emergence of artificial intelligence and machine learning, both, in the consumer and enterprises segments of markets such as healthcare, transportation, and financial services.

H H H H

H H H M

H H M H

H H M M

H M H H

H M H M

H M M H

H M M M

M H H H

M H H M

M H M H

M H M M

M M H H

M M H M

M M M H

M M M M

Say something

For selfish and unselfish reasons, close the loop. It is critically important to give service providers feedback on the quality of their service, even if it’s awkward and inconvenient, and especially when they don’t ask. Why? Every piece of feedback is like pixel being updated. The service provider gets a more complete and updated picture of the design of their service may be lacking. The picture emerges over time and changes as the service encounters new challenges and opportunities. Services are complex products that even when designed, take time to evolve in way that is more continuous than the manufactured product. Services are products of materialization.

Why?

Services exist,
Because people own things.
Some things they own; some others they don’t.
Some people own things because others, they won’t.
Things that are useful and valuable.
From tractors, towers, and transmission lines,
To privacy, privilege and peace of mind.

When things they really care about,
Have affinity and attraction, and there is no doubt,
There are economies in sharing and caring,
To promote the dynamic pairing,
Of supply and demand.
Thus human and machine overlords,
Make agreements of all sorts.

What they do is formalize,
How performances and affordances will actualize,
For outcomes and experiences to materialize.
So when users and agents they do engage,
Across field, channel, platform or stage,
There aren’t painful protractions, in
Their dialog and interactions.

Design thus seeks to minimize,
Transaction costs that could jeopardize,
The value each side expects to realize.
For profit’s sake or public good,
What’s clear and well-understood,
The payments made (in cash or in kind), are for
The welfare and wellbeing of humankind.

Services are equations

Customers and service providers are equated in terms of the outcomes and experiences. Each sides puts in time, money and effort. Feelings and emotions perhaps. Tangibles and intangibles. Experiences are part of what each side puts in. Outcomes are what they get.

Customers receive a payoff usually in terms of the results and benefits of whatever job the service gets done, such as the transferring funds, the issuing of a permit, the daily supplying of electricity, or placing in orbit of a communications satellite. Service providers receive a payment, directly or indirectly, in cash or in kind.

It is quite obvious users go through the experience primarily defined by dialog and interaction they have with the staff, facilities, and infrastructure that are part of the service. Agents, acting on behalf of the service enterprise, have a corresponding experience.

The design of dialog and interaction aims to minimize the cost of engagement and fulfillment. In services, experience is a transaction cost. Improving the experience results in the lowering of transaction costs.

frames

Even the simplest of services is a closed-loop system. What goes around, comes arounf. The demand side of the equation balances out with the supply side. We learned how to balance equations, in physics, chemistry and math. The same is with services.

Analogical reasoning as applied to services 

The base value system is a simple technique I’ve developed to be able to strip away all the words describing a service and get to the essence of it in verb-noun pairs. Apart from forcing a certain level of clarity, base values are also the basis for applying analogical reasoning to services as part of a method called This is Like That or TILT. It’s like tilting your head while looking at a service with a bit of curiousty and letting the realization appear like a rainbow.

Now, as I review the draft of my book, to identity parts I need to cut out, because there is too much material, I’m wondering if should leave in TILT or keep it out for some other time in future. Below are screenshots of some of the sections as displayed on the Ulysses app I’m using for writing and editing.

img_1818img_1817img_1816img_1815