 Hi, I'm Damien Kernighen and welcome to the Service Design Show. In the Service Design Show, we talk to people that are shaping the service design field. In this episode, my guest is Damien Kernighen. Damien is the founder of Proto Partners, which is the very first service design agency in Australia. And he just told me he met one of our previous guests, Eder Grosskamp Abing, through Twitter. And they are still very close friends. We'll be talking about business value and service design. In particular, how to link the things we do in service design to the value it creates for business. If you're interested in that, make sure you stick around till the end of the episode. Welcome to the show, Damien. Thank you very much, Mark. Nice to be on. Nice to see you finally. We're a bit in a time zone difference, so it's pretty dark and winter at your place. And it's not a quite sunny day in Utrecht, but it's a summer day in Utrecht. It's a summer day. And I always monitor the weather in Holland, because I've got a good friend, Eric, who was on your show last week. And I always like to see the difference between Sydney weather and Dutch weather. And I think even though it's deep in autumn here, I think our days are still warmer than yours. But hey, you're on the cusp of all these wonderful countries and we're in the middle of nowhere. So it comes and goes, doesn't it? Damien, so let's jump right in. And my question to you would be, what is your very first memory of service design? Ah, it's a very vivid one. I started my firm Predapartisan May 2008, about three months before the financial crisis. I think you call it the financial crisis in Europe. We call it the GFC down here. And it was all going swimmingly well for about three months until the financial crisis hit and then our revenue stopped. And I had a partner at the time and long story short, but we'd never talked about how much financial runway we had. And his was short and mine was a little bit longer. So he left six months after we started the business just before Christmas. He left the business and he went back to find a job and I decided to stay. And we just had our second sum. So I went off in our summer holidays, because down here it was summer in December, January. So I went off for three weeks and I came back. And at the time I had no clients and the economic situation was pretty bad around the world. And I remember coming back and thinking, what am I going to do? And I sat at my desk all by myself. I said, what am I going to do? And we had been for the first six months of our life at Predapart, we've been a product innovation firm. We tried to be. But there really just wasn't the market for it here in Australia. So I remember somebody saying to me a few months earlier, now you should look at service innovation. And I kept it in the back of my mind. And we'd followed this design thinking approach to product innovation. So I've been reading about and studying design thinking for a long time. But we hadn't really looked at service innovation. So I literally came in on the first morning, I came back to work mid January 2009 and I googled service, I think it was design thinking and service innovation or something like that or design service innovation. And I popped this link to, and I think it was called Journey to the Interface. I think it was written by Joe VP, some other lady who I sorry, I can't remember her name, but it was an 80 page book. And I think it was about social design, more social design than service design. But for memory, it was about 80 pages long. And I had a beanbag in my office, I printed out the whole book. I sat down with my beanbag and I read it from cover to cover over the next hour and a half. And when I got to the end, I thought this is the most amazing thing that I've ever heard of. I cannot believe how exciting it is. And I rang my wife and I said, darling, we are getting into the service design business. And she said the service design, what? I said, it's the service design business, it's going to be the next big thing. We're getting into it. She said, if you say so, darling, I trust you. And I hung up the phone and I went from there. That's a bit more of a story, but that was my first memory of service design in January 2009. And I was looking at our conversation history. And I think it was also 2009 that we actually first met online through comments on blogs and Twitter. What was the same period? It was the same period I met Eric Roscoe Mabbing and a few others, Mark Stick Dawn and a few others online. So yeah, it was great. So I spent the next few months trying to actually work out a methodology of how service design works, because Mark hadn't written a book and neither had anybody else. But I did visit your website a lot as I did others. We're quite fun times. Damien, let's explain the format of the show for the people who have never seen an episode before. And it's pretty easy. I've got three topics that we can talk about right under here on a paper. And you have a few papers with question starters, right? Can you show them up? Yes, you've got a few here. So what if? Yeah. They're all good service design questions. So what we'll be doing, I'll pick a topic. You'll pick a question starter and it's up to you to answer the question you formulated yourself. Is he right? It should be. Okay. So let me start with the first one. And yeah, this is a topic that's been on the show quite a few times. So I'm interested in your take on this. And this is about implementing service design work. What's going to start with? What would be the question? What if we actually implemented more service design work? What would be the economic and customer value? So I was having dinner with Kerry Badine, who I think a lot of the service design community would be familiar with. She was down in Sydney a couple of weeks ago, organized for her to come down and talk to some folks. And she took me out to dinner to say thanks. So we had a really good conversation about service design. And we were lamenting. We were certainly observing the fact that there is a lot, appears to be both in America and Australia, a lot of service design that gets done. And what I'm talking about there is design research, customer journey maps, even some prototypes maybe. But there's very few case studies or examples of work that has gone through from the beginning all the way to the very end. And I know it's something that we're working on really hard down here to actually keep on pushing that forward. So we do lots of design research work. We do lots of customer journey mapping work. We do lots of value proposition work. We do lots of conceptual work. We even do prototyping work. But we're trying to push through in terms of doing a lot more, trying to do business casing and then the development of that and then taking that through to execution and implementation. So Carrie and I were just both talking about that. And she said the experience was similar in America in terms of lots of people doing customer journey mapping and clients saying that's great. And we were sort of questioning each other as to why that may be. So I'll give you what we came up with. So our sense was, my take on it originally was that in the digital world, so the digital agencies, it's pretty sexy to introduce. If you do a bit of initial service design work or there's a concept that comes up and there's an iPad app or an iPhone app or a new website, that's quite tangible. It's quite sexy for people. There are budgets for people who are used to building all that type of stuff. And so it's relatively easy to actually get that type of work through because everybody understands it and conceptualize it. But quite often in the work that we're doing, that's not always an iPhone app or an iPad app or an interface or a portal. Isn't always the best answer. And quite often a lot of the work that we do, it's the boring stuff. It's the hard stuff. It's the grind stuff. It's the process. It's the policies, the people, all that. There are the things which you need to do. And if you rank them, and we do a lot of choice modeling in the work, we do to understand what's most important next third and prioritize that and give a quantitative sense of it, that when you look at that, it's actually the hard boring stuff. And a lot of organizations, people appear to be less up for it. And so it's not, as they say in communication, it's not what I say, it's that I communicate in a way that you actually understand what I say. So it's incumbent upon me to actually communicate effectively. And maybe that's the same for service design. As a community, we have to do a better job. We need to do a better job at explaining why they should put in the hard yards and the hard grind. And because there is an economic payoff, there's a financial payoff, there's a customer payoff for us. But we just see that there's a lot of shiny things. Kerry's perspective, which I think was also a good one, was that maybe the customer journey map is the shiny thing. That maybe it looks so good. It's visual. It's elegant. It's informative. It looks good on a wall. It's thin. Maybe that's our equivalent of the iPad app. And maybe a lot of people think that we should stop there. But I'm not sure that I don't think you and I should. Yeah, this is, like I said, this has been a topic on the show in quite a few episodes. And basically, this has been a topic for the service design industry since we started it. And there's a lot of focus on research and exploration. And everybody is having sort of an urge to translate that into results. And I think it's happening. But like you said, it's not that tangible always. And it's hard to quantify. Yeah. And I think we need to do a better job. So in terms of including measurements or business casing up front, I think there's more work to be done there. And I worked briefly for a few years in the advertising industry. And I could see and ad guys would come in and go, hey, look at this great ad. It's going to rock your world. It's going to be fantastic. And then the CRM guys would walk in and go, if you invest $100 with me, I can guarantee you I'm going to deliver $105 or $110 return. And in SEO or SEM, just keep on coming down. And your return, as long as it stays above investment, there's a financial payback. And sometimes I wonder whether the service design is similar to advertising in that sense, not in most senses, but in that sense, that when we don't do a good enough job of putting that financial lens up front as to the payback and producing a business case. But for me, it's really hard because services often are so complex. And there are so many stakeholders involved, so many channels involved. It's really a hard to pinpoint that the value you've actually created comes through service design. There are so many factors at play. Yeah, I agree. I mean, you're right. There's lots of channels. And maybe we'll talk about later on this linking customer experience and services undervalued. But yeah, I agree it's a challenge. Flip side of that is I think it's incumbent upon us. I mean, and please, I don't want to think about it. I'm sitting here saying woe is me. I think it's actually our responsibility to bring in the skill set to actually convince our clients that they should be. Well, while we're discussing this, I know I've talked to a company that actually quantifies the value they create on a touchpoint basis. So they don't look at the service at all, or maybe they do also, but they focus much more on quantifying the value per touchpoint. And that's easier to do. We might have an answer in that maybe making it smaller. Yeah, and we've done some of that work. We did some of that work with Virgin Mobile a few years ago, where we're actually quantified not only a measurement, so it's good to call an advocacy or customer satisfaction measurement by touchpoint or actually per phase of the journey. And then we actually put a, we actually did connect, we connected to NPS and the financial value. So it's, it's, it's there, but it's, I don't think we're doing enough of it. So listen, we're pushing really hard on it. I mean, and so we understand, I think for the service design, industry that the value is downstream, even though I think we do a lot of our work upstream in the research and design and concepts, I think for us as an industry, the value is significantly downstream. So I think we need to work hard to chase it. Let's, let's talk about value. So moving on to the next topic. This is the input I got from you. And it's about clear value proposition. Do we have a question starter that goes along with this one? The best one thing is, is how can we, but maybe if we replaced it much with how many value propositions. So we recently went through an exercise a few months ago where we actually went out, we're a big proponent of lean startup and running lean. So Ash Maroia, taking it that step further than Eric Reese. And I'm going out and asking our clients what problems we actually solve for them. And I was blown away by the amount of responses. And, and it wasn't like one response. There was like 10, 12 different things that we did for all our different clients. And so that surprised me that there was so many, there's so much variation in what we actually do. And so to continue the, the analogy with our digital friends, you know, if you're a digital agency or you build websites, it's very clear the problem you solve. I need a new website. I need an updated website. Can you go and build me one? But I'm, I'm for the service design for the clients we have, we've got a whole range of answers from you helped me cut through the bullshit at my organization. You, you helped me make insights actionable. You, you make things meaningfully simple. You bring credibility to the work that we're looking to do. You, I mean, it just went on and on and on. And so, you know, following the Ash Maroia model, which I'm a big believer in in terms of what problem do you solve? We solve 10, 12, 15 different problems. And so I'm sure there are people in the service design industry have cracked it. We certainly haven't. We haven't cracked it, but we're working on it. We think we're getting there. And so what does this mean for agency? Yeah, it's a great question. I think what it means is it's inefficient, because if, if you're a big believer in a clear value proposition, I'm sure most people watching this, this podcast will be, if you have a value proposition, a clear one, it's compelling, then it's far easier to, to get work to sell work, to keep on doing more work. And I think for services, I, I just don't think there's a very clear value proposition that we've been able to, well, we've sort of hit upon one recently in terms of, you know, we solve, we solve a big problem that your organization needs to be customer centered, whether it likes it or not. The big problem is, it wasn't built that way. And we solve that problem. So we've tried to aggregate the whole thing up. And we're testing that at the moment. So we'll see, see how that goes. But I think it just makes it difficult, I think, to grow as quickly as, and add the value that we know, I think all of us in the industry who work in it know we can, we can actually give. So my feeling is that the current wave of customer experience and customer centricity, that's, that might be the wave where service design fits in really well as service design provides you with a tool set and approach to deliver on a more customer centric organization. But if we go back five years, customer, customer centricity wasn't that big of an issue as it is now. Yeah, absolutely. And, you know, we're seeing it here in Australia and Australia and New Zealand, where we mainly operate, is that a lot of organizations are struggling. And I think that's clearly we can add a lot of value there. I think they are struggling in, in wanting to do it, but really not knowing how to do it. And even if you go in, we work with some of our clients and share tools and share capability, isn't it's not just, it's not a simple skill set which you can just pick up and action and run. And I do think we do help in actually cutting through for organizations at the speed of pace and the tool set that we bring to it. I think we can cut through a lot faster than you can sometimes internally. So we have a third topic and they all overlap and blend into each other. So let's see if we can add something to the discussion we're already having. And this one is called linking in improvement to value. Is there a question starter that goes along with this one? I think this one is there. How can we, how can we work? How can we link, how can we link services and customer experience improvement to value? So I know we've touched on it before, but we, I again, so again, instead of actually coming up with a new product, I invited some clients in to our offices here a few, a couple of months ago and ran them through a workshop of exactly this, you know, would you like to actually understand how to link customer experience to value? And as we said, it's not easy. And there was like, there was 10 steps to the whole program, but the first three were really just understanding, building a business case and understanding customer lifetime value, then looking at the customer journey and then linking that value to various parts in the customer journey. And then there were seven other steps which involve research and everything else that we do in customer service design. And I got back to that very first section of, well, how do you quantify it? And listen, we've done it a couple of times before. But even for the clients that we were talking to, there was a sense of, yeah, I know you've done it once or twice, but it's not probably the, it's probably not going to work in my organization and how rigorous is that information and can it be trusted? So for me, and for us here at Proto, like, we're working really hard on that and actually to actually develop those, those business cases, because I think in the, in a service design world, the observation is there's lots of designers which bring great credibility, clearly business and they're talking about business designs and you're seeing it on LiveWorks website and everybody else's now this introduction of business, which wasn't there sort of five years ago. So everyone gets it. But I think this sort of hard of nose consultancy, this commercial rigour needs to play a stronger role or maybe it's an equal role with with experience of service design. What are, what are examples that are inspiring to you? Do you have some examples from, from the field of service design cases or maybe different, totally different cases that do this well? With quantification? Well, I think the, the, the larger management consultancies do it really well. The McKinsey's and the Booz's and the Bain's at this point, I think they do it really well. I think they have a bit of a head start because they're connected at the C level and the funding, their payment, their payment terms are a little bit different to service designs, I think. But I think what they do is they establish the, I think they do well, they establish the financial case upfront. So there's the, there's the customer case and there's the business case. I don't think they do as well in the customer case or the customer understanding that we do, but I think they really do, they build that financial impetus. In fact, I was talking to services on a guy who came from, works in larger, very large financial institution here. So bank wealth management organization. And he, what they were doing is they had married Lean, let's call it value stream mapping, what people might call process mapping with value stream mapping with ideal customer journeys. And we've done some of this work as well and we find it pretty compelling. It is very compelling for clients. So you actually design the ideal journey on the top side, on the bottom side, you're actually creating the value stream map or the process map underneath it using a lean methodology. So you're cutting out non-value add and inserting value add, making sure it matches along the top's half. Anyway, they did this work a lot in this financial institution. Then they built the business case and I was saying, how do you make it sexy for them? We're talking, going back to that sort of iPad app. How do you make it sexy? He said, Damian, when you actually do the business case and you walk in and you say, listen, if we actually do this, it'll drop $50 million to the bottom line. The CEO gets, that's pretty sexy. That's actually enough, yeah. Let's go. And so I know we don't all, we have some banks as clients and stuff like that, but it is not always $50 million, but maybe it's $5 million, it's $500,000, it's $50,000, depending on which scale. But actually spending the time to do that analysis at the same time that we're doing the design research, maybe something we need to think a little bit more about. As I say, it gets back to actually bringing in the resources and making sure you have the resources that complement the designers to deliver that. So that's where our approach is. We have both commercial strategists and we have experienced or service designers, you'll see the sign there, it says, Proto-Partners Management Consulting. Service design doesn't really exist in Australia. In eight years, we've had one brief from a client, had the word service designer. So we use the term customer experience. At the heart of it, we are service designers, but we've decided, I did spend two years trying to sell service design back in 2009, but I didn't realize. So we'll call it whatever clients want to call it. Yeah. Maybe a bit of a different question compared to the value discussion we've been having. But when people approach you with the question and they mean, I want to get into service design. I want to start with service design. What would be your single most valuable tip for them? Read. Read a lot. Read an incredible amount. I think, I don't remember her surname. I think her first name is Tamsen. Could be Tamsen. I don't know. She was an ex-engine. I remember seeing a video back in 2010, I think it was the Portugal or some service design conference. And she gave a speech and I always remember it. She said, as service designers, I think she was talking about design research. Design research is where magpies. And I think that's an Australian term. Magpies? Magpies. Have you got magpies? Crows? Magpies. Yeah. It's a scavenger bird. And it goes from here, here, here, here and here. And I think we're seeing service design, there is a core, but then there's a morphing. And I know when I first started ProtoPartners, I just read for probably read for three years straight. But certainly the first three months to build methodology. So my advice to everyone is to read. Read a lot. What should we read? Well, they should read wide array of stuff. So yes, you should think about design and everyone will talk about that. But I think you should read about lean startup and running lean. So Ash Meroya. I think there's a whole range of lean books. So lean analytics, there's lean enterprise, there's a whole range of lean stuff. We're really big believers in combining that. I believe in reading business books, business casing. There's a great book on effortless experience, which I've just read, which I think was absolutely fascinating. What else have I got on my table? Well, at least not stick to the design field. That's what you're saying. I would say 20% of the books are, I'm not a designer. I'm a guy with an MBA with a great love of design and a big belief in design. But I would say 20% of the books I read are about design. The rest are about lean, a version of lean startup. They're about business. They're about just general consulting books. They're about customer experience. They're about service innovation. They're about innovation. You don't have to buy books. I mean, I say to people who want to get into it, just set up a Google alert with inverted commas service design and inverted commas customer journey mapping. Inverted commas, whatever you like and have delivered daily into your inbox and read and read and read. So that's my advice. And this is your opportunity to ask a question to the people that are actually watching this episode right now. What would you ask them? Well, I don't claim to have all the answers. So if anybody listened to me and said, listen, I think there's a really clear value proposition for service design, I would love to hear it. I do remember when I started in service design, trying to define service design was a big thing. And I remember you had a blog which got a lot of hits. And I don't know if it's still there. There's probably about 100 people by now. And it seemed to me that everybody got in service design, including myself, gave their own killer definition of service design. And I moved on from that a long time ago. But value proposition, what is the killer value proposition for the service design category? What's the biggest problem it solves? I'd love to know what people think about that. So that's my question. Let us know what's the biggest problem service design is solving? That's great. Far more eloquent than I. Damien, we're through our time. Thanks for being on the show. Thanks for giving us the opportunity to pick your brain and listen to what you're doing in Australia. Fantastic. Thanks, Mark. Really enjoyed it. I hope to see you someday back again in the Netherlands. I might be in your neck of the woods later on this year. Nice. Again, thanks Damien. What are your thoughts about the topics we've just discussed with Damien? Do you see a clear value proposition for service design? Let us know down below in the comments. If you enjoyed this episode and like to see more interviews with service design pioneers, be sure to subscribe to the channel and check out some of the past episodes. With the service design show, we help you to stay one step ahead by talking to the people that are actually shaping the service design field. Thanks for watching and see you next time.