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.

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