 In this episode, we'll be looking at service design in the outcome economy, using service design to explore new ventures and finally, what does service design look at speed and scale. So if you're interested in that, keep watching. And here's the guest for this episode. Hi, I'm P and this is the Service Design Show. Hi all, my name is Mark Fontijn and welcome to the Service Design Show. If you want to create more impact and change the world for the better as the service design, then you've come to the right place. Because here on the show, you get the chance to learn from the success of some of the world's best service designers. We talk about topics ranging from design thinking, customer experience, organizational change and creative leadership. If these are the topics you're interested in, be sure to know that we bring a brand new episode every two weeks on Thursday. So if you don't want to miss anything, click that subscribe button. My guest in this episode is a true service design pioneer. I'm super honored to have him on the show. He's the co-founder of the IXSD Academy, which is all about delivering disruptive innovation. His name is Peter Fossick. For the next 30 minutes, Peter will be talking about what does service design look in the outcome economy, why are companies using service design to explore new ventures and what does service design look at speed and scale in the era of cognitive computing. If you prefer to listen to a podcast version of this episode, head over to servicedesignshow.com slash podcast where you'll find this episode and all the previous ones. But remember, here on YouTube, you'll get content that isn't available as a podcast. That was it for the introduction and now let's jump straight into the interview with Peter. Welcome to the show, Peter. Hey, how are you? I'm great. Thanks. Awesome to have you on the show. We had a little chat before the episode and you've been in this industry for so many years. Do you actually remember the very first time you got in touch with the term service design? Yeah, I think the first time I remember using it as a way to describe an approach to transforming and innovating with services was probably with Chris Downes. We knew each other because I taught Chris Downes at Glasgow School of Art and Chris came to see me where I was teaching at Middlesex University and he'd set up this new consultancy called Live Work with Ben Reeson and those guys. We were discussing this whole approach to the way design from a human-centered and people-centered perspective was becoming more and more important in the context of services and transformation. So I kind of got it from him, really. So that was about 2007, I think, something like that, 2008. That's when I really kind of grappled with it as a phrase. We've been talking about holistic design for a long time even since the days at Glasgow when we were looking at design thinking and at Glasgow working with Norman McNally, we were talking to Stanford about how design thinking can impact business transformation. So even then we were grappling with it back in 92, 93. 92, 93, yeah. That's the nice thing about the show. Everybody sort of says at some point I just realized that it had a name what I've been doing for many years. Yeah, yeah. So I think for me it was about 2006, 70. Yeah. You gave me some three of the super interesting topics and let's just dive straight into them, right? Are you ready? Yeah, sure. All right. Okay. The first one and it's up to you to come up with the question, right? So make it really hard for yourself. The first topic is the outcome economy. Do you have a question around this? Yeah, it's how do we design services and add value in the outcome economy? One of the things I'm interested in and I've noticed is that, you know, as we've gone through this process of digitalization and increasingly what used to be analog experiences around products and interacting with physical experiences, whether it be spaces or with products, we're now in a position where we've moved to value and use and it's about how you deliver an outcome. And I think as designers, it's one, how do we enable that value to be understood and how do we deliver a point of production often in a service ecosystem? And then in the outcome economy, it's moved away from even providing services like, oh, well, we'll hire you the drill bit. So we'll hire you the drill like in the share economy, you know, let me go down the road and borrow the drill. So now it's really, well, what's the outcome? Ultimately, I need to get to get a really good set of holes drilled and maybe very precisely. And it's the outcome that I'm paying for rather than the service. And of course, let's be honest and be frank, you still need to use a service and you still need to use products and so forth. But I'm much more interested in that value in use or value in outcome. So it's shifting, I think, away from value in use to value in outcome. And that might, you know, I don't want that to be, you know, kind of just semantic wordsmithing, I think there's a distinction. You know, when you're using something, you're interacting with it. I might not be interacting with it. You know, I might not be interacting with part of the process. So I think, you know, we're moving away from a traditional way of value in exchange and products and value in using services to the value around how we get an outcome and a value, you know, delivered benefit, so to speak. What does this mean for designers? Well, I think for designers, we've got to grapple with a lot more moving parts. It's not just about designing touch points and looking at how we might bring together different channels to communicate. And it's not just about looking at processes and interactions. I think increasingly it's about redefining the way business turns up. It's about redefining the partnerships within those businesses. So increasingly we talk about ecosystems. And I think it's also about understanding what people value. And as a designer, that means using some traditional approaches to design or what we might call traditional approaches to design, which are people centricity and working with users and doing research. But I think increasingly we have to be a lot more savvy about business and a lot more savvy about technology. And that plays back into the whole kind of design thinking model with business technology, so, you know, feasibility, viability, as well as desirability. And I think that's a core. I mean, I always see that as a core. But I think, you know, if you get involved in business, you realize that business people think in a very different way compared to, say, technology people, compared to designers. And I think, you know, we have to be able to understand how business propositions are shifting and changing as much as how the tech changes as much as how people's behaviors change. And any clue? What is pushing this? What is creating momentum towards that outcome economy? Why now? Yeah, it's a good question. I think the momentum comes from the fact that increasingly it's less about holding and owning capital and capital products and assets. And it's much more about delivering a value. And I think, you know, the classic example, and it's quoted, you know, we talk about Airbnb, Airbnb doesn't own any hotels. It delivers a service. But increasingly the outcome is about, well, I want a great experience and I want to be able to, you know, do this in a very seamless way in terms of payment booking and so forth. But they actually don't have any physical assets. And I think, you know, digital technologies are informing this and the shift towards the outcome economy again is it doesn't really matter how you get there as long as you can deliver that benefit. And more and more stuff is becoming more and more aspects of that service ecology are digital and hidden and not so visible. And we're seeing a shift towards non-human intervention in the way things are configured and delivered. And that's the, you know, the area of cognitive computing, which we'll talk about maybe a bit more later. So I think there's a number of different factors. One is the theorization of products and services. Two is the increased role of digital. Three, supporting that is the notion of value and benefit where it's needed and increasingly less about owning physical capital, whether it be machine plan or whether it be physical things like buildings and or people, employees. And I think we've seen that, those kind of patterns and that vectoring occurring over the past 15 to 20 years. And we're at this kind of sweet spot now where it really is much more widespread, much more accepted. And of course, people are more savvy, digitally savvy these days, you know, whether they be millennials or even baby boomers. We're a lot more used to using these technologies, the more connected. And so we're able to deliver outcomes in a different way. And final question regarding this topic, you know, what is there to design for someone? You know, service design is already so holistic, so complex and people are questioning what are you actually designing. You know, in the outcome economy, it becomes even bigger and more holistic. What is there to design? It's a good question. I mean, I think, first of all, I think service design often is less about designing and more about planning or orchestrating. So I think often you can, you know, design is, it covers a multitude of sins. It's a broad church, isn't it? What do we mean by design, whether it's a process or a mentality or an activity? It can be a noun, it can be a verb, all that. I think service design in terms of the fact that it's often dealing with a lot of complexity, what's left to design? I think this is the challenge, isn't it? Because we're seeing an awful lot of value add coming these days from the things like cognitive and data analytics. You know, back in the 90s, there was a lot of value add around CAD and being able to manipulate three-dimensional analog forms and do that very quickly in speed to market, lean production, that sort of thing. And then with digital, it was all about how information could be shared quickly and efficiently. And now it's about how we can analyze that information and understand and infer around the complex nature of information infer new insights and deliver new, as it were, outcomes. So I think that it shifts and moves depending on where the technology is moving or where the value add can be provided. All right, topic number two. Topic number two is called venture as a service model. And do we have a question related to this? Yeah, so why is service design being used in venture as a service and why is that becoming important? So I came across this, I guess, when I was working in Australia and I did some work with Boston Consulting Group Digital Ventures which I was very impressed with their model of bringing design and into the entrepreneurial or venture side of service architecture. Boston Consulting, traditional consulting model service as a fee, senior partner comes in with a whole bunch of people and they charge by the hour of the day for a project and they provide consultancy, expertise, knowledge and strategy. And then what I saw with people like Boston Consulting Digital Ventures was this idea of taking an open innovation model, a lean startup model and using service design along with other design skills and tools and business thinking and technical thinking to invest and put your money where your mouth is. So service design was a big part of that because when you're designing a new business, a new organization, a new venture, I feel that you're really designing services. And so service designers were taking on an important role in businesses like that. And I think we've seen that increase in the over the past three, four, five years with people like Ernst Young and Accenture buying Fiord and so on. You're seeing that shift of thinking, a shift in practice and a shift in offering. But I think the big distinction with Ventures as a service is you actually go in in partnership and disrupt by circumnavigating the legacy culture and systems in order to kind of invent the new business that is able to move at speed and scale at speed because it's not encumbered with legacy culture, legacy systems. I find that very exciting because it's often harder to turn the tanker than it is to build a new speedboat and race ahead of it. But at some point, every speedboat, if it gets successful, grows and grows and grows into this larger, more difficult thing to steer. So it's part of that whole kind of product cycle. You reach your peak at the apex and then you come down and suddenly else comes along. But I kind of like this model, Ventures as a service. I think I recognize this with a lot of our projects and I think a lot of people watching this episode also recognize this as you go in, you do a project, you see all kinds of opportunities that you would like to act upon as a service designer but you see that the company, the organization isn't ready for it yet and you would really like to partner with them and let's take this on and let's make this a success. But the company is holding back. How do you bridge that? How do you get companies to actually adopt this kind of model? What do you need from a company? Not from the consultancy company but from the client perspective? I think that's a great question. As designers, I'm sure we'll all recognize that. Every company is at a different stage in terms of its willingness to accept that it needs to change. I think Crisis is the key catalyst there, which makes people focus and kind of precipitate around a particular need to change. And I think until you have Crisis, you don't change. It takes that, unless you're very smart and I think there are companies like Netflix. I think Netflix are really good at changing and adapting. I remember by... That's baked into their culture program. Yeah, and I think this is the key thing. You just mentioned the C-word, culture. And I think it's a cultural issue. You can throw as much design and strategy and ideation at something, but unless the culture is willing to behave in a way that enables change and people behave culturally in a way that they embrace discomfort and risk and have a growth mindset where they want to learn and change, then you're not going to be able to implement any form of innovation. And I think some businesses are better at others, that's it. And it is culture. And I love that expression, culture, each strategy, every day, all day. So that's a key thing, culture. But I think we've got two C-words. It's either a crisis or it's culture, right? Well, I think culture often creates crisis and then you realize you've got to change. And I think for me, that can come at a time where you realize, wow, we need to do this and we still have time to do it. And other times it's too late. So I used to work in North London helping small businesses innovate. And I realized very quickly that there were two types of companies, those who were embracing a change and willing to change and those who just didn't have the capability to. And you know what? Some companies deserve to fail. And that includes large companies, large corporates who we hold dear to our hearts. They're just not capable of changing fast enough or quickly enough in their culture, not so much in their organization but in their culture. And I think we're seeing that increasingly with incumbents, large traditional blue chip companies, whether it be in a sector like financial services or IT. You know, you've got so much experience. Have you seen, you know, a culture or a crisis is maybe something that we as service designers cannot create or maybe we can, who knows. But you know, have you found anything that helps to move these kind of organizations? Or do you say, you know, you're not ready for this yet. Come back whenever you are. Yeah, I've seen it. I think, I mean, I have tremendous respect for those in a company who are pioneering new approaches the way we work together and use design and use innovation. You know, not everything can be solved. Not everything's a design problem. Not everything can be solved by designers. Sometimes we'd like to think we can, but we can't. We often do. Yeah, and I've been guilty of that often where, you know, you have this feeling that if we just spend enough time working on this, we can solve it. And I have tremendous respect for those in companies who are pioneering new practices, helping the company transform. And I think increasingly we'll see service design playing, well, does play a big role in that. And we get involved a lot with HR, with human resources. We get involved a lot with people who are building new teams. I always used to say to students when I was teaching, look, there's things you can solve in your capacity as a civic person with your vote. And there's things that you can solve as a designer and there's things that you have to solve sometimes with a big, large baseball bat. And you've got to choose which hat to wear and which tool to use, whether it's the pair or the sword, you know. Yeah, maybe we should be practicing using the baseball bat more often. Yeah, yeah, I mean, sometimes you want to, don't you? It will probably speed up things, you know, decisions. Is it a yes or a no? Yeah. Topic number three, and this one is awesome. You've presented in the, at the service design network conference in Madrid, right? And I think this third topic relates to that. And it's called the era of cognitive computing. So what is your question? That's a big one. It's like, well, I mean, for me, is how might we deliver service design at speed in the era of cognitive computing? Let's first start at the end. What is the era of cognitive computing anyway? It's a great question. And it's, again, a very broad church. So, I mean, cognitive computing can refer to machine learning, artificial intelligence, robotics. I mean, it's a pretty broad range of different areas. And some companies like IBM will refer to cognitive computing. Other companies might refer to machine learning. But it's this idea that we've got smart machines that are able to process data very quickly and learn. And we have companies like Google and IBM where I used to work and Microsoft and Toshiba. All these companies now are exploring how cognitive turns up as an offering and how the next stage of the era of computing is around cognitive, having moved from programmatic and tabulated into now the era of big data and small data and how we actually analyze and teach machines how to learn and think. So cognitive really covers that. And I think one of the things we're seeing increasingly is what we call ambient intelligence turning up. So it's quite invisible. It's all around us. And machines are working at such a great speed now to handle such large amounts of data that humans can't possibly be involved in the process. So I'm interested in how design turns up, particularly service design turns up, and how we deal with things like people-to-machine interactions. Obviously, people-to-people were kind of covered off on that. We kind of understand that. It still has its challenges, but we talked about culture. But how do we deal ourselves into the game where it's machine-to-machine talking and working and designing? And we're seeing assisted design. Well, CAD, in terms of 3D design, has had assisted design for some time. And there's things like chip manufacturing and design where a human being could possibly deal with the complexities. It's all done by algorithmic machine learning and so forth. And then what we're seeing now is like Adobe with its Creator Cloud using AI to do assisted design around things like video editing and so forth. And we're seeing this happening more and more. And I think we're on this cusp of a new era. And in some sectors, it's maturing faster than others. But I think this is the era of cognitive computing. And the challenge I have as a designer is I turn up in a room with me post-it notes and me pens. And the reality is that the machines are doing it all by themselves. It's like, well, am I relevant? I mean, I'm using analog tools born out of an era of analog design where we were dealing with design thinking in the context of, say, designing products, which back in the 90s, that's where we started adopting these processes. We didn't have information at our fingertips about users and their behaviors. We had to do interviews and we had to do workshops. And I've seen more and more that that data is everywhere and that data is being continually collected, whether it be geolocationing, behavior on, declared data around searches. So all this data is kind of there. Now we have to think about how we turn up and our value as designers. And even it's being processed really fast by these machines. So there's a question there about how do we deliver innovation through service design and design thinking in this era of cognitive computing? You know, it seems so far away, but at the same time, you know, we all understand that lawyers will be replaced by AI. We understand that doctors, for a big part, will be replaced by AI. But we see ourselves as a design community, the creative ones, you know, AI will never be able to replace us, right, cognitive computing. And now we're talking, you know, that we don't, do we have to do interviews? Is that part of our work, you know, the analyzing, synthesizing information, is that part of our work? That becomes really scary, right? Yeah, I mean, I think that's a really good, really good kind of cup of key issues there, which I'll just unpack for a minute. One is we're seeing the white collar workers, professional classes being disrupted. So lawyers as a profession, you know, had a lot of power and control could charge large fees and they had to be imbued with large amounts of knowledge, very acquisitive knowledge, and they would hold that, and they would use that knowledge to do with complexity. So increasingly, we have computers that can do that. So the question is, do we need lawyers? And there's lots of people out there going, yes, let's get rid of the lawyers, you know. But, you know, I mean, it's the same thing in financial services. Do we need people to put trades in it? And if we have an algorithm, we have algorithms and programmed and machines learning and then, you know, anticipating change before it happens, you question what role do we play. And it's the same thing with design. Anything that uses heuristics rules and arguably design is about rules and we generate our insights through analyzing information that we acquire. Now machines can do that. And at the same time, we can then use design heuristics or design principles to say, well, you know, with this content and with this type of image and video, and in this fashion, you would say, well, why wouldn't you put that into some form of algorithm and why not use the little machine do that? And we are beginning to see applications and platform as a service offerings around, for example, web, which do that for you. There is all this, but, you know, I'm going to bring this back down and hopefully, you know, all the designers out there going, no, no, no. I think the reality is there's something remarkable about the human brain the way it works. And I was working with my daughter last night who is studying design at college and she was working on a campaign around sexual health for teenagers, which, you know, is something that, interesting topic, challenging topic. And the something we did is that we were messing about with some ideas and she got some fruit and she put it on a page and she wrote something around it and it was the physical actor doing that that spurred off an idea that she took a picture of her book with the fruit on it and it was a chance happening. It was that serendipity and I think that's something that's very hard to replicate in compute systems is serendipity. And I would always encourage people, you know, I think part of creative thinking is that kind of juxtaposition, that unusual discovery, because you're physically interacting with pen and paper, which I think is really important. And she would say, oh, that looks really cool, the style of the calligraphic writing that she'd written, the fact that she had a piece of fruit with some... a condom and all. It was the chance happening, you know? And she said, that's going to be my poster. And I thought that was great. And that's the serendipity that as humans interacting with our environment and with each other, that occurs that's really important. Can't really replicate that in a computer. Right. So, coming back to your question, what role does service design play in the... You mentioned speed in the role of creative computing. How could we summarize that? Well, I think service design, along with some of the other design practices around UX, UI, have to work out ways of being more expedient and faster at working around agile. So we've seen now, we've got DevOps, now we're seeing the emergence of design ops, some people call it DevOps, some people call it design ops, but design operations where we we're not kind of reinventing the wheel every time. We've seen a big shift away from the wild diagrams increasingly around agile, we're using user stories and we're trying to take those stories and use those as a common currency. We're seeing assisted design which can help us work quicker with workflow. We're seeing connected workflows through tools like Slack. And we're seeing that with these amazing arranger tools which allow us like virtual reality. So again, service design is not just about digital. We're also about the narrative of space. So things like VR and AR and how those connect together and how we work with other teams. So I think, you know, increasingly it's going to be about focusing on things like the synthesis and creative space. It's going to be about planning perhaps around how we can exploit serendipity. But I do think I mean, I haven't got the answer. I do think that we're going to see some significant changes with the way the creative and cultural industries turn up to deliver value. And service design I think is playing a big role in dealing with these complex ecosystems. But increasingly we'll see these ecosystems able to connect and share information and share viewpoint and work together in more collaborative ways. And I think part of our job as designers is to look at how we can reinvent ourselves somewhat by looking for opportunities to add value. And I think that's going to be coming back to things around, things like language semantics, identity, things like that. But I haven't got a clear answer but it's a very exciting time to be a designer as always. There's a lot of changing. That's good. Peter, I know you haven't prepared for this question but I asked this one to everyone and I give the opportunity to everyone. People are watching and listening to this episode. Is there something you would like to ask them? Yeah, I mean I'm really interested in how they're working together in this new era of always on instant data in this era of agile. I'm interested, I'm very interested in how they work speed and scale and what kind of hacks and cheats and best practices they have. And maybe they can share what their vision of the future is because I think it's always important to keep one eye on what's happened before, one eye on what's happening ahead and try and anticipate where change is coming. Or maybe what we do is we invent that change. So how are they inventing this change? How are they doing it? And that's exactly what the show is also for, looking into the future and then backtracing from there. Yeah, definitely. So yeah, answers on a postcard please. Or in the comments down below. Pete, thanks so much for giving us a little bit an insight in what's happening in your mind at this moment. If people want to get in touch with you, what's the best way? Oh, LinkedIn, just connect with me on LinkedIn. Happy to have a chat on there. I wish I could say Snapchat, but I'll leave that for my teenage kids. LinkedIn, it is. I'll put the links down below in the show. So thank you for your time. Thanks for being here. Now it's time to wrap up this episode. Fantastic. Thanks for the invite, Mark. Really enjoyed it and carry on. Fantastic show. So what are your service design hacks? Share your thoughts and ideas down below in the comments and remember more people like you are watching these episodes and your comment might just be the thing that helps them to achieve the next meaningful breakthrough. If you would like to learn more, check out some of the past episodes or head over to learn.servicesignshow.com where you'll find courses by leading service design experts that dig deeper into the topics we talk about on the show. That was it for this episode. Thanks for watching and I'll see you in two weeks time.