 In this video, you're going to learn what is organizational design and why you should care. Here's the guest for this episode. Let the show begin. Hi, I'm Peter Merholtz and this is Service Design Show, episode 110. Hi, I'm Mark and welcome to the Service Design Show. This show is all about empowering you with the most effective skills and strategies so you can design services that win the hearts of people and business. And the guest in this episode is the co-founder of Adaptive Path, he's the former head of design at Groupon and he's the author of a book called Organizational Design for Design Organizations or Orc Design for Design Orcs. His name is Peter Merholtz. In this conversation with Peter, we're going to go back in time and unravel the path of how he went from studying anthropology to writing a book about organizational design and what we can learn from that journey. So after watching this episode, you'll hopefully see why organizational design is really the new frontier for any service designer. And at the end of the episode, we're going to do a small giveaway contest where you can win a signed copy of Peter's book. I'm reading the book right now for the second time and I really think it's a must read for any service designer. So if you want to make a chance to win a signed copy of this book, stick around till the end of the episode. If you're new to the Service Design Show and I know that a lot of people still are just discovering this, I would really encourage you to hit that subscribe button and click that bell icon because we bring a new video about service design at least once a week. All right, so now it's time to sit back, relax, and enjoy the chat with Peter Merholtz. Welcome to the show, Peter. Hi, thank you for having me. Nice to have you on. Before we started the chat, I was referring to the book you wrote, Orc Design for Design Orcs. I don't know if it's been following you around, but I love this book. I think that it's a book that everybody who's listening to the Service Design Show should read. But anyway, yeah, that's you as an author, which we'll be talking a lot about. But for the people who don't know who you are, could you start with a 30-second introduction and then we'll do like the elaborate version? Sure, so the 30-second introduction is I'm Peter Merholtz and currently I am an organizational design consultant focused on design organizations. So I help companies figure out how to get the most out of their design orgs, how to make them most effective. That can be anything from recruiting and hiring to how the design team is organized to certain tools for professional development like career ladders and skills, matrices, and all that kind of stuff. All the sexy stuff. Very sexy, the sexiest stuff. When you think of design, you think of all the operational challenges. But it's still it's extremely important and we'll definitely touch upon that. Peter, just to get you to get to get to know you a little bit better. That's a tongue breaker. We're going to do a 60-second rapid fire question round. So are you ready? I'm ready. OK, what's always in your fridge? Milk. Which book are you reading at this moment? The Changeling by Victor Lavelle. Well, add it to the show notes. Which superpower would you like to have? Invisibility. Interesting. And what did you want to become when you were a kid? I actually I knew I wanted to do something with computers beyond that. I wasn't sure what that meant. Oh, man, a lot of people have that. And final question, which will be a really interesting one. In your case, your first memory of service design. My first memory of formal service design was in I think it was 2005 or six. We were a adaptive path was four or five years old by then. And we had recently hired Dan Saffer, who's since gone on to write books on interaction design. And he had come out of Carnegie Mellon's interaction design program where he had taken service design classes with Shelley Evanson. And we're sitting in a meeting and we're talking about our work and how we do our work. But we're not using the language of service design. We're just talking about our approach to research and design. And Dan looks at the stuff we're doing. He says, you know, in school, we call this service design. And we all looked at him like, what's that? And it was basically from that point on, again, 2005 or six, that adaptive path started seriously looking at service design as a practice to develop. Maybe we need to get Dan on the show as well. We haven't I haven't had Dan on the show. If you need more middle aged white men, Dan can be one of them. We'll add them somewhere down down the list. Um, so Peter, the reason why I reached out to you was mostly the book, which I think, again, is super relevant and interesting, but also to learn a little bit about the evolution and the path that your own career has has taken. And I think it would be interesting to sort of wind the time back a long way back and to see, like, how did you get started in this field? Where did you move and how did you eventually end up being interested in a sexy topic like organizational design? So how far how far do we need to get go back in time? Probably college. My degree is an anthropology, even though as when I studied my degree or doing my degree, when I left school, I had no expectation of using anthropology. Um, but then a few years later, I found myself practicing user centered design and learning about methods like ethnographic research and thinking, wait a moment, I studied that in school. Um, so it basically starts then, but there were two threads. There was anthropology as a major. And then I got really into multimedia design. Um, first is a, uh, working for a professor who was interested in computers and education. And then right after school, my first, uh, real job was, uh, with the Voyager Company, who was a CD-ROM publisher and multimedia publisher in the mid 90s. And, uh, from what I, uh, read from your story, uh, through publishing CD-ROMs, that's also when you sort of got, um, uh, you stumbled upon a thing called, uh, yeah, design and it wasn't UX back then. Uh, I mean, this must be late, late 90s, early 2000s, something like that. Even earlier than that. So, so, uh, uh, there were a couple of books that ended up being formative for me as well. When I was still, I'd have still been a student or right after I graduated and I was doing this work for this professor at Berkeley on computers and education. He out on his bookshelf, a book, Information Anxiety by Richard Saul Werman, and it's essentially an ur text of information architecture. He talks about how he, how he has developed a practice of organizing information. He's trained as an architect, but he worked solely in information. And I realized that you could, that someone was thinking about the organization of information in a formal way and in a way that, um, made sense to me, that was kind of how I saw the world was reflected in, in this book. So I realized, oh, there's a, there's a practice here. There's a field here. Then, um, this first formal job doing CD-ROM publishing, uh, one of the CD-ROMs we created was part of a series called the expanded book series, where we would take existing books and add multimedia content to them. And, uh, we were doing that with three books by Don Norman, his first three books. So everybody knows Don Norman's first book, the Design of Everyday Things, but we also did, uh, a book called Turn Signals are the facial expressions of automobiles and things that make us smart. So we took the text of these three books and it was essentially a hypercard stack, but then we augmented it with audio and video of Don explaining the concepts of the book in a way that made it easier to understand. And it was reading these books by Don Norman that I was like, oh, there's not, so not, not only is there a whole like field and practice around information design that I hadn't been aware of. Now I learned about essentially cognitive psychology. And by his third book, I think Don had already been working at Apple. Um, and so he's starting to talk about user interface design and human computer interaction. And those were light bulb moments for me as well. Like, oh wait, these are practices. These are, these are fields. These are industries that you can work in. And what made sense to me is a quick story. When I was a, when I was working at Voyager doing CD-ROM work, my first formal job, so I started as an intern, but when they hired me, they hired me to do QA and QA was button mashing, right? Just trying to make a CD-ROM break by hitting, you know, clicking around and seeing if I could get, get it to crash. And then I record those bugs. But what I started to do is I would file bugs about, um, things that didn't make sense to me, though, one in particular that I remember, we were doing a CD-ROM for, um, People Magazine's first 20 years. And so there's a lot of content. And so you have to be able to search on that content. Um, but also People Magazine was a very photo rich experience. So there is this, uh, a lot of image navigation. And we ended up using a magnifying glass to both mean search as in search the content, but also to zoom in on parts of the image. And so I filed as a bug, we're using the same icon to mean two different things. And the designers like, well, that's not a bug. That's how I designed it. And I'm like, yes, but that makes sense. Yeah, that won't make sense for the users because they don't know if when they click the icon, are they going to be searching the text or are they going to be zooming in on the image? And I realized that I had a knack, a kind of knack for that kind of heuristic evaluation and reading Don's book helped me situate that knack within this practice of cognitive psychology and human computer interaction. And, um, what's the leap from, uh, bashing on a keyboard, trying to, uh, uh, let CD-ROM scratch to founding, uh, one of the leading strategic design agencies in the world. What happened, what happened there? When you say banging on a keyboard, it makes it sound like I'm one of those million monkeys trying to type Shakespeare. Um, so leaving, uh, when I left the CD-ROM publisher, I ended up, uh, moving back to San Francisco and working for a design firm called Studio Archetype, and it was one of the first, um, traditional design firms to really embrace digital. There were already some digital agencies like, uh, organic and razorfish. Uh, Studio Archetype, though, was one of the first kind of traditional, uh, kind of, uh, design firms that had done a lot of identity design, um, branding type of design, packaging design, they were one of the first to really embrace digital, uh, wholeheartedly. And so I, I started working for them and that's where I, uh, was exposed to design as a formal practice. You know, my prior jobs, I'd been exposed to design as a concept and as a field, but now I'm working in a design context and seeing designers how they work day in and day out. I was hired as a web developer. My marketable skill was HTML. So I was hired as a web developer in a design context. And then, uh, after a year, I shifted roles out of web development and I became their first interaction designer. I had taken a night class on user-centered design and usability engineering, and so I changed my role. So, um, I worked as, uh, in this, for a design firm for a couple of years, uh, emerging as an interaction designer. I was independent for a little while. I ended up, um, starting writing and speaking about design. Uh, I had my blog, peterme.com, starting in 1998. And that got me some recognition. So then I had, um, uh, my first head of design job was for a company called the opinions, which was one of these kind of dot com boom companies. Um, where, uh, my title was creative director. Now we would call it head of design. Uh, I was there for a little over a year, um, leading design for this, uh, company, and then, uh, after a year, um, it came clear that it was time for me to move on and it was around that time that I reached out to a number of friends who, uh, I had met through conferences and other kind of community events and we formed adaptive path and we launched in 2001. Um, the story of adaptive path, you talk about it as a strategic design firm. When adaptive path started, it was just a web UX firm. We were just like, we were all web people, you know, probably most notably Jeff Vien, who'd written the web monkey column for hot wired. Um, but we were all a bunch of web folks, uh, who just wanted to do web user experience. Um, over time though, uh, one of the things that we realized was we were uncommon in that we had this kind of strategic bent to how we approach design. We didn't want to just execute on, on wireframes and screens. We, we were always asking our clients these why questions, uh, uh, essentially around the strategy that was driving the design because we knew for our design to succeed, it had to work within a strategy. And our clients often didn't actually have a good, uh, answer to, to our why questions, um, because they hadn't considered the strategy. They just knew they needed a website. Um, and so over time at adaptive path, our practice emerged or evolved from being a web user experience practice to a strategic design practice and, and service design practice. Yeah. And that makes a lot of sense. And we have to recognize that again, this was like a long, a long time ago in the, in the field of, um, service design UX, uh, design, you were truly pioneering. I'm sure you had a lot of, uh, uh, evangelizing and convincing, um, to do. So the, uh, the, the people, the people who are listening right now might be wondering, where is this heading? We're heading towards organizational design. So stick with us, but we need to sort of unfold the story, how we, how we got there. So, um, adaptive path was transitioning from doing, uh, web design, UX, design, interaction design work to more strategic design work because the clients didn't have these strategic answers. And you, uh, probably recognize that design was a very effective approach to actually get those answers and to help them move forward. Now we fast forward. I don't know how many 10, 12, 13 years adaptive path gets acquired, uh, by capital one, right? That, that's basically what happened. Yes. What happened with you, uh, during that acquisition? Yeah. So I, I wasn't actually at adaptive path when it was acquired. So adaptive path is founded in 2001. I left at the end of 2011 and I had been, I, I needed to get out of consulting, um, uh, kind of leading to the organization part of the story. I realized that in order for me to feel like I was making the kind of impact I wanted to make, I needed to be in house because it was inside those organizations where all the little decisions were being made that ultimately affected the quality of what was being shipped. And as a consultant, you only, you don't get access to, to those, um, uh, ongoing processes. Um, so I left in 2011 adaptive path stuck around for a few years. I was an advisor, uh, uh, I, I, I did some work with them. But in then 2014, they got acquired by capital one. Uh, I wasn't part of the acquisition from a service design aspect. I think there's something interesting to say though, because, um, by the time of the acquisition, adaptive path had pretty much evolved into a service design consultancy, um, which was really hard in the United States. Uh, still as if I hear the stories from the community. Yeah, yeah. I mean, and, and it's still hard, uh, to be a service design consultancy in the United States. Um, and so, you know, how what the, the practice internally at adaptive path was definitely one of service design that often wasn't how it was being marketed because companies just buying that. Um, what was interesting though is when, when capital one acquired adaptive path overnight, capital one had the largest corporate service design practice in America, if not the world, because they had these 20 to 25 designers who all they were doing now was service design for capital one. Um, so I always think that's an interesting kind of moment in at least in the United States and the evolution of service design. Um, so, so I wasn't part of that acquisition. I did a couple years later do a long contract with capital one, uh, helping them with some work design stuff, because I still knew a bunch of people there, obviously, um, but I had, I had taken out, I had taken off in 2011 and pursued, um, a design executive career, um, most notably working at, uh, I led design for Groupon, um, took a team from 25 people to 60 people. This was in 2012 to 2014 and relevant to, you know, this, the, the service design show, uh, topic, my philosophy at Groupon as a design leader was trying to, um, bring the mindset of service design into Groupon to get the team, to get my design team to be thinking about matters of customers and the journeys they're on and the phases of journeys. Um, and to, and to really look at, uh, to use that as a lens for how we were delivering our experiences, as opposed to when I joined the company was very product and feature focused, right? You just kind of executed on one feature and then you executed on another feature and you executed in another feature. And it wasn't really seen how these things, um, uh, were should be coordinated to deliver on a higher order experience. So that was, that was kind of the, the, um, innovation as it were that I brought to Groupon from a kind of mindset standpoint around design. So again, we have to recognize this is six years ago, uh, uh, six, seven years ago, people are like going back to your statement that you wanted to get outside of consulting and into, uh, in-house in, uh, being more strongly involved with the operation. I think a lot of designers have that feeling at some point. I also hear a lot of designers at some point say like, uh, being in-house is, uh, isn't sort of the, um, I don't know, the, the thing that they expected. There are different challenges you, you get to work on less diverse challenges. Um, what was your experience in-house and especially with, uh, with the lens from how do you convince or, um, get other people within our, no, within an organization that doesn't have a strong design heritage to have them adopt this, this mindset. What did you encounter there? Yeah. Um, so I want to start by, um, affirming what you're hearing from the community about the challenges of being an in-house designer and, and, and particularly an in-house service designer. Most companies would not know what to do with someone in that role. They tend to think of design primarily as, uh, uh, delivery mechanism, uh, asset development, production kind of function. Um, not as a strategic, um, uh, contributor. Um, I think that's starting to change, but that's definitely been, um, the, been true for, for a while. My journey is, um, atypical because I didn't come up, uh, in-house. You know, I was able to establish my, uh, experience and, and frankly reputation in a consulting context. And then I was able to hop into design executive roles on the right level. Yeah. Uh, yeah. So I, I came in at a higher level. And so, um, I didn't, I found I didn't have to do a lot of, uh, evangelizing or making the case for design. I just got to do it. I got to do what I felt was right because I was senior enough that I had the authority. I had, uh, budget. I had, um, the, the expectations of like you, this is yours. Just run it as, as you see fit because that's your responsibility. And so I was able to, um, the, the two roles where I've had real time to kind of develop a, a practice and, and lead design where one was a group on and one was at a, my most recent full-time, uh, job was at a company called Snagit job. And in both contexts, um, I just made it happen because I was the guy in charge and so a group on, I didn't have to ask for permission, uh, to, uh, practice design the way I felt it should be practiced because there was no one to look to, but me. Um, and as long as what I was doing was better than the people who preceded me, everyone was happy. Um, so group on is a, I have a question about this because, uh, okay. Great. So apparently group on already bought in, into the idea of the value of design. What, what did you hear from them? Once you were on board, what did they buy into? What was their image and what made them, uh, invest so heavily in this back then again, six, seven years ago. Yeah. So they probably, um, they recognize the value of design as a mode of consumer engagement and enticing. They remember at the time there was this app called path, this, this, uh, social network, uh, for a hundred, you know, for groups of 150 or smaller. And, and path was really kind of had gone to market very heavily with really sexy interface design. And that was this kind of standard bear. And I remember my boss who was the head of product saying, we want path like design. And I recognized that that was kind of the tip of an iceberg, but you know what, I'll take whatever I can get to start with, right? So there was, there was this understanding. I think essentially the iPhone had kind of primed the, the market, particularly these, these companies who were focused on consumers, right? So Groupon is primarily a consumer app. It had primed these companies with the importance of, um, that, that high polish consumer facing experience. Um, and so, so that was my way in, uh, as a designer and, and what everybody wanted, right? All the product people, all the engineers, they recognize. Yes. Design matters. Um, what I was giving them though was, um, you know, if you think of like, uh, uh, Jesse's planes, right? The five, uh, the elements of user experience, right? That polish is, is that top plane of surface, maybe, um, remember the order, maybe the, the, the skeleton plane right below it. But there's a whole lot of other stuff below the surface that, that I knew about that they often didn't know about. But I, I was going to bring it anyway. And so, um, you know, I guess, I guess if there's a lesson to be learned with the Groupon experience, it's to, um, use the energy, uh, uh, uh, and interest in design that's demonstrated like lean into that, but don't, don't only give them what they're asking for, because they only know usually what superficial give them what you know they need. And what they needed was, um, structural design. I mean, uh, uh, uh, the, as I was explaining before, everything was very product or feature kind of focused and, and disconnected. So, you know, I ended up, um, investing more heavily in research, user research, there, there was a user research team, but all they were doing was heuristic evaluations. So I gave them the space to do proper research, to really understand customers and their journeys. And then I reshaped the design organization into a series of teams that were meant to kind of map to, um, aspects of the customer journey and where we could approach those problems more holistically than had been before. And so not just at that surface level that was being asked of me, but at these more deep levels of, of structure and strategy that were also important to deliver a great experience. Yeah, yeah, yeah, yeah. So, uh, and I think this is already a very valuable lesson like a lot, the superficial layer of design, that's the tangible thing that, that is the thing that attracts, um, people outside of the design space. But, uh, once they get the appetite for it, uh, and they ask you, can you deliver on this? Then you are, then you are at the table where you can have the conversation, okay, in order to actually deliver this, you need like, this is below the, the, the water level. This is the, this is the tip of the iceberg. And here's the rest. So, um, yeah, it makes the conversation, um, uh, easier. Right. And then they had an appetite for design because of the examples that were set in the industry by players like Apple and PATH. Right, yeah. Yeah. And, and I think what's, what's crucial and it's, it's become a focus of mine in this past couple of years is, um, the role that you, that leadership plays. And in this case, specifically design leadership, um, right. As a design leader, based on my experience, I knew that, you know, even if they're asking for, for just the tip of the iceberg, I knew what it took to get there. And, um, I think a lot of design leaders recognize that Brett, but they're not often willing to, um, put themselves out there to, to demand it, but if not them, no one else will. And so there, there was a role that's, that's played by the leader, just making it happen, even if someone's not asking for it. Hmm. And that's maybe also our transition into more the organizational design part, because I was, I'm curious like, sure, you can say, uh, we need to do all the things that are below the water level of the, the iceberg, but that doesn't, that in a lot of cases, uh, the organization isn't willing or able or, uh, interested in giving you the resources, the space to actually do that. They are just, uh, focused on the superficial layer. Well, what, what, how, yeah, again, maybe this is the transition into organizational design. Like, but how do you get them to also invest in those other things that need to happen in order to deliver that experience? Um, yeah, again, this is, I mean, the, the simple answer is, uh, as an executive, I had pretty free reign to shape my, my team as I saw fit. So I couldn't necessarily shape the whole organization, but I could shape design to deliver, uh, as, as I saw fit. So when we think about Groupon, as I mentioned, I reorganized, um, my design organization into a series of teams where they were meant to map to different parts of the customer journey. Um, uh, at, at the biggest scale, Groupon was a marketplace. So I have one team dedicated to the shopping experience, one team dedicated to the merchant experience. And then within those, there were sub teams to bite off different aspects of, of those journeys. Now, to your point, though, um, the rest of the organization wasn't necessarily shaped the way my team was. And so, so there's this, uh, I don't know, interpretive experience that needs to happen where, you know, the product organization has just organized, however it's organized. In this case, it was basically organized my feature. And so my team ended up almost having to, um, I ended up having to use design as this kind of a layer that connected all these features that were just kind of scattered to the winds. Um, my, uh, there's this model within design or within product development and companies that there's this idea that design should be embedded in product teams. That's not how I operate. I keep design out, uh, not, I don't allow design to be embedded in product teams. I have design operate as their own coherent design teams and they are connected to product teams as needed, right, to deliver on the journey. But if you start embedding designers and product teams, you get to that kind of, um, atomism and, um, uh, narrow thinking that I think, uh, people who've responded to you have complained about before. Um, and so, you know, to answer your question, how, uh, there's a few thoughts here, right? I think there's something worth sharing when it comes to the journey that many designers are on. Um, at the start of my career and basically through starting adaptive path and into adaptive path for a while, I thought as long as I deliver good design, that is sufficient. But, you know, we would deliver good design and then it would never, it wouldn't get shipped and we didn't know why and it was clear that like just doing design well wasn't enough. So then usually the next stage in the journey is, well, if, uh, and this was our experience at adaptive path, right, the reason the design didn't ship was because we didn't have the right strategy. So I'm going to now move upstream. I'm going to help shape our product and business strategy using these design methods and by having the right strategy, that will set up the, that builds the case for good design and then the design will ship. And while that, um, I think increases the chances of good design shipping, um, it's still, there's a lot of crappy experiences out in the world. It was clear that, that simply driving strategy wasn't enough. And for me, the realization was like there's this next layer that is the organization and how it behaves and how it's structured and the mindset of the organization that, um, overwhelms even the most, uh, the best strategic intent. Right. There's this, uh, quote attributed to Peter Drucker, uh, culture eat strategy for breakfast. Right. And so that's why I kept moving, um, deeper and deeper up into the order up and further and further upstream was because I saw that if you don't shape your organization, right, it doesn't matter the brilliance of your strategy, the ways that the company is operating and is structured will, will chew it up and turn it into the same mush that everything else gets turned into on its way to being shipped. And so I felt that it was crucial to focus on how do we shape organizations so that they, um, without thinking are able to deliver better experiences. You know what I find interesting in these discussions and, uh, I, I've been saying that the organization is the design material of service designers, but I, I actually never, uh, reflected on the question, like, why is it that designers that sort of need to take on the task? Isn't this the job of the CEO, the, the business process, people like, why is this task put on our shoulders? What is your take on this? Um, I think there are, I think my, so I think the reason that designers are driving this is due to a fundamental shift that is occurring in how, um, businesses deliver their value. Um, and it's directly at the heart of service design. It's why, yeah, I know this conversation is important, right? Every business is now a service. Uh, when I give a talk about this, I talk about cars, right? And there's this idea of buying a car. And, um, I think that is an experience we're seeing less and less of, because I don't need to buy a car if I can use Lyft and Uber, if I can use, uh, car share services like Zipcar or Get-Around or in the, um, here in the Berkeley Oakland area, there's a service called Gig, where I can use an app on my phone, reserve a car in my neighborhood, unlock it with the app, drive it anywhere in the East Bay, park it anywhere in the East Bay, lock it and walk away. Now, all of a sudden, my household, which in the United States, I'm, you know, uh, there's four of us, me and my wife and two kids, by and large, my household is, would be considered a two-car household. You know, a car for me, a car for my wife. We're a one-car household, and that car is, goes unused most of the time, but we almost never need more than one car, because when we do need a second car, we can now just augment it with all these services. I'm saying that because there's this recognition or this, this evolution that's happening where, um, uh, every company is turning into a service firm, and when they, when that happens, um, the locus of value shifts, right? So, in a, in a product mindset, the locus of value is in the product, and so it's a lot about reducing costs, manufacturing, quality assurance, yeah, total quality, six sigma, all that. Exactly, exactly. It's about, yeah, it's about efficiencies. When we shift into a service context, um, it's now about the relationship between a customer and the, and the company, and, um, companies, the problem is all these companies are still structured and organized and operate as if what they're delivering is products, and what they're actually delivering services. So, design though, the reason design ends up, this is to, it's a long answer, but you gotta, you gotta go, you gotta go deep before you get to the, you get to the answer. Design is, um, the reason design is, is, is, is kind of at the front line, or is at the forefront of this, is because when you practice human-centered design and you realize what's going on in the market with your customers, um, you're, you realize like how your company is operating is flawed, because that's not how customers are trying to consume your, the value that you have to offer. Yeah. And so I think designers are, there's two or three reasons why design seems to be leading this. Designers are the sensors, the, uh, the sense makers of the world outside, and they're realizing like, oh, something is changing in terms of value delivery in the world, we need to react to that. So that's the first thing. Um, the second thing is, within these organizations, design teams are relatively small. So at Groupon, my largest design team of 60 people was still way smaller than the rest of product development, right, where we had hundreds of engineers and probably, uh, over 100 product managers. And so my design team, being relatively small, um, I can, um, I can re-design, I can restructure that team on its own, separate from how the rest of the product development organization is happening. And so there's this opportunity, design is nimbler than the other functions. And so design can end up, um, reshaping itself, I think, more easily. It's a smaller boat to turn around. And so that's another reason I think that design ends up, um, driving this. And then the third reason, um, is those traditional functions, right? Your business process engineering function, your HR functions, your organizational psychology functions, right? One, those are all in this mindset of, um, 20th century kind of industrial thinking. But two, those are practices that historically have not embraced designer design thinking. And, but designers, at least, uh, uh, my flavor of design, we love models, we love frameworks, we love, we love figuring out, I mean, I've got a model back here, uh, on a whiteboard. Um, we love figuring out how to, how to re, uh, reframe, restructure, reshape the world. And so we see the organization as just another design problem, and that we have something to bring to that design problem based on our experience as designers in terms of, in order to deliver on this value that we're seeing out in the world, we need to change how we're operating, um, uh, internally to, to meet that. There's a lot there. Yeah, well, yeah. Um, and what, what brought it home for me as the, I always refer for myself to the progression of economic value, a model, again, a model introduced by Joe Pine, I think in the experience economy book, and where it really clearly shows that we're shifting, we're already shifted from a product to a service, uh, um, uh, ecosystem, and the value is created in a different way, uh, around services than around products, and, uh, you need different, a different paradigm, a different mindset, a different approach to create value around services. So, yeah. And again, I like what you said that the organization just becomes another design problem. That's, yeah, that's I think the, uh, the optimistic my, the optimistic attitude of designers where we think we can actually, uh, fix, fix everything. Um, so, uh, I want people to, to read the, the book for themselves, because I think there's still a lot of good things in the book. But when you sort of reflect on the last five years since you wrote the book, what do you feel, um, has changed? Or, yeah, let's start, let's start there. Let's start there. Um, well, Sunny has changed. I, when we wrote the book, uh, so we wrote the book in 2015, beginning of 2016, and it came out in the second half of 2016. So, uh, we started writing the book five years ago. Um, uh, a few, a number of things have changed. We've seen design continue to scale. Um, at the time we were just starting to see design at scale, but it was pretty nascent. Um, in the five years since, um, you know, every business has, has been building out their in-house design teams and often building them out to be, uh, 50, 80, 100, 200, 400. I mean, you know, there's some companies with thousands of designers, you know, IBMs or whatever. Yeah. And so we've, we've seen, we've continued to see design scale. As design is scaled, um, uh, one of the biggest changes that is specifically relevant to the book, I don't know how relevant to, to your audience, but I'll discuss it anyways, which is the creation of design operations as a, as a, as a practice, right? Because design operations, design, design operations, yeah, design, design ops, yeah, yeah, design ops, yeah. Design operations, design ops, we didn't use the phrase design ops in the book. That, that word had not existed. And now it's everywhere. And, um, design ops arises because in order to support these scaling design teams, you needed now an operational function because what was happening was you get these really big design teams that were basically just, um, they were getting chaotic. They were, they were getting entropic and it was problematic. There's a relationship here that I think is worth connecting for service design, because something that hasn't changed but should have in those five years is a greater internal appreciation of service design. And there's a, there's a number of reasons why, why this hasn't happened. There was literally yesterday, I responded to a tweet by John Cutler where he was wondering why there wasn't more service design within B2B SaaS companies, because he's like, these B2B SaaS companies, I mean, the last letter of that last S-Mean service, but none of them really think about, they, none of them embrace service design, almost none of them embrace service design as a practice internal. And I said that, um, the primary reason is that I think a lot of folks don't even know that service design exists. Like it's just still like it's not, they're not aware of it, so they wouldn't know to ask for it. And when they think of design or, and if they found out about service design, they'd be like, oh, well, for me, what I want from design is asset production and delivery. What's starting to change though, I've been working with, I've been doing some work with Zendesk, I've been doing some work with Wells Fargo, and I'm mentioning both of them, they are hiring these roles, they're calling them product design architect or UX architect, but these are essentially service design roles. These are super senior strategic design roles meant to look across a broad swath of the user experience, meant to connect of, you know, in service design lingo kind of front of the house and back of the house concepts of what's going on outside, but also what do we have internally to deliver on that. And what's interesting to me is that the two companies that I mentioned are companies where their design leadership has a longevity in design and knows the value of strategic design. The head of product design at Zendesk is this woman Kim Lennox who worked with me at Adaptive Path, so of course she knows about the value of service design and strategic the head of design at Wells Fargo, at least this one team I'm working with is Karen Hansen, she came up it into it, into it was one of the few companies that hired design strategists 10-15 years ago. And I think what they are seeing is as design is scaling, as you're getting these teams of 100 designers who are primarily working on these very feature-oriented small problems, they're seeing the problem, they're seeing the big problem that's arisen when you've just got a lot of folks working in isolation of one another and not having a coordinated. And so these folks are creating roles for really senior, I mean these are like director level roles, but they're individual contributors, they won't have reports, truly senior folks to help figure out how do we bring all this stuff together. And so, you know, I am hopeful that this is the start of a trend where we will see service design embraced internally much more as these design org scale and people realize that things are spinning out of control. Yeah, sort of what I've been feeling the last year, maybe two years is that service design for a very long time has been a solution to a problem that a lot of organizations didn't see and they didn't feel a pain. And what I think is now becoming apparent is when customer experience comes on the boardroom table and customer experience is being treated as a way to gain competitive advantage, then suddenly people start looking for ways to actually work on that customer experience and then it becomes much easier to sort of provide a solution. So, I think the conversation around customer experience is the thing that will be driving the design practice or appreciation of the design practice within organizations forward. So, I think organizations first need to sort of see that there is an opportunity or problem that they need to fix. And that's slowly accelerating. It's accelerating, but it's generational and it's going to take a while for it to feel, for it to get anywhere that your audience would want it to be today. It's just going to take a while for these companies to embrace and understand that. Yeah, and at the same time I was having a conversation with somebody who's working at a big pharmaceutical company and he literally told me, like, we need as much designers as we can print these days. Like, we can't have enough. And if pharmaceutical companies are getting into this, is if the other types of sectors and fields are getting into this, there will be like, it won't be a linear evolution. This, we are on an exponential path. I think that's true. I think that's true. I think we are. Is there a question that we should have discussed but didn't up till now? Oh, not. Let me think here. We've pretty much, you know, I guess one thing that's probably worth discussing and it's reflected in the book. So even though my book is largely around digital product design, I try to situate it at the outset in a context of service design. And I think what we as an industry need to do, we can't get precious about service design and that it can only be done in a certain way and it has to be done right and it can't be purely digital. It has to be omnichannel and this, that, the other thing. I think we need to encourage companies and colleagues to embrace a mindset of service design regardless of how they're going to actually be delivering their work. With the recognition that as companies embrace that mindset and as design teams embrace that mindset, over time they will evolve into doing service design the right way even if at the outset it's all very screen-based and it doesn't feel very service design-y. I think I've seen a little bit where service designers can sometimes be their own worst enemies because they get so precious and yeah, purest and orthodox around how it's supposed to be done and then you know, perfect is the enemy of the good. You just don't get anywhere with that kind of mindset. You got to ease into it. And so that's, I guess we have, I don't know if that's a, just a final thought in terms of how do we help, because I'm a super service design advocate and evangelist and I want every company to understand and practice and embrace these approaches but we can't get high-minded and purest about it or we're going to blunt our ability to have an impact. I totally agree. So Peter, the book again, I'm going to flesh it over here. I'm at chapter six about hiring and recruiting which is super relevant because we're doing service design jobs .com but we sort of agree to do a contest and give away a signed copy to a lucky listener or viewer of the service design show. Now the question that people need to answer in order to make a chance it will be a raffle to win a signed copy of your book. The question is who are the seven founders of Adaptive Path, all of whom are still active in this work in some way or another today. And we're looking for exactly the correct spelling otherwise you're out. Sure, it's not that hard to find so. Yeah, when people want to continue this conversation with you what's the best way to get in touch? There's two ways. You can always find me on Twitter at peterme or through my website petermerholtz.com that's my professional website and there's a form there and I read every email that comes through. Awesome, we'll make sure all the links of course are in the show notes. I would love to do another episode someday which you may be in a year when the new, when the updated edition is out. Sure, it might be a little longer than that. I'll try to push you to get it out there. Peter, thanks for sharing with us. About this super important topic, sharing this with the service design community. My pleasure, Mark. Thank you. If you want to make a chance to win a signed copy of Peter's book, make sure to leave a comment down below and answer the trivia question who were the seven founders of Adaptive Path and you might be the lucky person who gets the book. If you enjoyed this episode, make sure to grab the link and share it with one other person today who might find it helpful as well. That way you'll help to grow the service design show community and that helps me to invite more interesting guests like Peter here on the show for you. If you want to learn more about effective skills and strategies that help you to be... If you want to learn more about effective skills and strategies that help you to design services that win the hearts of people and business, check out this next video because we're going to continue over there. See ya.