The first thing we noticed about Mikkel Rasmussen of ReD Associates was that he had no slides and only five points to cover during his talk. The second thing we quickly realized was that Mikkel is not a designer. The third thing we noticed was that he had some really good points to make about service design from the point of view of business.

As designers, it’s possible we get carried away from time to time about service design. I know I’m guilty on occasion. Mikkel’s presentation, entitled More service is not always good business, was a refreshing reality check centered around the messages that 1) designers should design consequences and that 2) designers need to be better at designing business models and business cases.

So, the five points of Mikkel’s presentation (note that number three was just slightly controversial):

1. Service needs design
2. Designers tend to overestimate their business skills and underestimate their design skills
3. Forget brainstorming.
4. Design consequences.
5. Designers need to be better at designing business models.

1. Service needs design

Mikkel’s first point was that service needs design more than design needs service. He listed a number of examples: a doctor and a new baby, a phone return policy, phone and navigation systems in a car. While these services might not have much to offer design, design has a lot to contribute to these services and others like them. Designers should recognize (if they don’t already) that most services could do with significant upgrades from a design perspective. However, designers also need to keep in mind the following considerations (Points 2-5).

2. Designers tend to overestimate their business skills and underestimate their design skills

Designers, though they are taught to listen to users, to construct prototypes, and to think about business plans, do not make good anthropologists, engineers, or business people. We simply don’t have the extensive training that members of those professions possess.

However, designers are great at:

1. Improving understandability: We make things simple, clear, and operable. We make services self-evident.
2. Improving usability: We make access easy, whether it be through universal access or navigating multiple cultures.
3. We can humanize environments, products, brands.
4. We are experts at selecting materials and shapes that are surprising and strategic (colors, emotions, etc.)
5. We add wit, delight, and appeal to a company and its offerings.

It is Mikkel’s assertion that designers should focus on the core of what design is good at and leave the rest to the experts. Personally, I found this point particularly affirming of design, with a caveat. It seems to me that as design penetrates new domains such as business, I’ve seen questions about how designers can contribute and whether they are even relevant any more. After all, if everyone is a “designer”, what does the designer do? Mikkel seems to have answered that.

However, the caveat is that I believe it’s still valuable for designers to acquire and use skills in other areas such as engineering and ethnography. Even if designers will never be as skilled as the experts, the exposure to these fields builds empathy, understanding, and competence in the designer. Those values contribute to making the designer even more valuable as a member within a larger team or corporate ecosystem.

3. Forget brainstorming.

For sure this was the most controversial portion of the entire Service Design Symposium. And I mean controversial in a good way, because it definitely grabbed our attention and because it sparked conversations and debate within the audience.

Mikkel’s point is that we cannot afford to pursue a strategy of designing service concepts where we say “it would be great if we could design the ideal world and let others implement it.” While many fingers could be pointed at service designers alone, even companies which should know better also do this. For example, the mobile phone company that says “we’re not a phone company any more, we’re a music delivery company.” The problem is that taking this attitude ignores the fundamental business of the mobile phone company: if the phones don’t work, then it’s just icing on a bad cake.

Mikkel wondered out loud why we are coming up with ideas that nobody needs, or nobody can implement. He suggested that we have a protocol problem, that we get off into space and leave everyone else on the ground to implement.

At ReD, they do not brainstorm. They take the perspective that quantity (of ideas) instead of quality does not work. Instead, they develop knowledge of the domain, engage in deep conversations, and utilize deductive processes to better design solutions for particular problems.

According to Mikkel, the myth of brainstorming comes from marketing science, which suggests that a) there is a differentiation myth (that the client needs to be completely unique or else it cannot compete) and b) you cannot compete on basic quality.

While he agrees that it’s difficult to design a good service, Mikkel also suggests that maybe it’s not the coming up with ideas bit which is difficult. Does a service need to be different? Not necessarily: it just needs to deliver a certain piece of value (there are many mobile phone companies, after all).

The five principles of service are therefore:

1. quality in the service and the product
2. simple
3. convenient
4. reliable
5. reasonable value for money

Part of the problem is that design consultancies are hired to do the “wow” part and not the implementable part. What’s wrong with making a telephone service easy to use, or air travel good value for money?

4. Design consequences

As designers, we need to understand the people we are designing for, both on the customer end and the business end. We need to be realistic about what solutions we propose in the context of their use: a proposal to track kids in a kindergarten with RFID doesn’t make sense because teachers are not technologists—they care about kids and don’t need technology to do that.

Likewise, we need to carefully consider the business environment in which we propose service concepts. Mikkel gave an example of a digital shoe which motivates you before and during exercise. The business model revolves around the fact that insurance companies have to pay out less for their healthier customers. Now the question is which company do you approach to pursue this concept?

While the immediate answer may seem obvious (an athletic-shoe company), it’s important to do some ethnography inside the company. For example, Adidas is a product company. They have no interest in services because they measure everything in shoes. As a designer, you can’t approach that kind of environment and expect a service model to make sense or to work because it adds costs and complexity to the company’s business model. The company wants concepts which makes their world simpler, not more complex.

5. Designers need to be better at designing business models

Ninety percent of business is costs. This reality is what service designers operate within. While he has not (yet) seen any companies who have R&D budget for service design, plenty of companies have product innovation budget under R&D. Another source of budget may be from the advertising budget. If ads are no longer working, then spend the money on customers. After all, a happy customer is the best form of advertising.

Two open issues surrounding services which need to be addressed are how to scale services to reach economies of scale (if it’s even possible) and how to create barriers to entry for a service?

Finally, when we design services, how can we avoid adding costs? If we can avoid adding costs, then it’s easier to get on a CEO’s agenda and for the business to make money (remember that 90%).

Up Next: Lavrans Løvlie of live|work.