Living services - flexing around the 'customer as operating system'

In the first part of this two-part article, Fjord’s Chief Client Officer Mark Curtis discussed the emergence of Living Services, the next era of digital evolution. In this concluding piece, he focuses on the opportunities and challenges these pose for organisations.

The first challenge is the age-old one of knowing your customer, says Curtis:

Data is absolutely essential to understanding your customer better than anyone else understands your customers. This is the key strategic pivot.

Knowing your customer is not only about data, but also about quality and ethnographic research as well. Clients are saying ‘we do need to understand our clients in detail’. It can’t all be extracted from data, some of it has to be insight-driven as well. Knowing your customer is about a combination of the data and about insights and observing your customer as well.

I ran a start-up with millions of customers and remember looking at the data and wondering what it might. Typically I could see patterns in the data but didn’t know why they were there. The way to understand why they were there was to go to the head of our customer care team. Every single time he would say, because he’d been on the phone to customers, ‘This is what’s going on’. Nine times out of ten he was exactly right.

This essential data element reaches out to the design principles themselves, with Curtis suggesting that Living Services are as much of a challenge to designers as they are to organizations:

The facility to work with data will be a primary requisite for all designers going foward. They will have to be able to think about data and they will have to be able to think about data in a number of different contexts. That’s not just data visualization. It is also about thinking about data when you are creating a service.

It’s also, most importantly, about creating a service with data points that can be gathered while the service is live. Only by creating that flow of data out of the service can you then begin to understand the customer context, feed it back into the service and change the service in real time. So data really lies at the heart of living services.

From a design perspective, this is like moving from sheet music to jazz. That’s a major change for a musician; it’s a major change for the way we think about products and services together.


Flexing

The second requirement is about being able to flex technology:

This is about creating platforms which allow you to flex around the needs of the customer in real time. This is also a major challenge. Those companies who feel they are held back by their platforms and don’t gather the effort of will to change those to flex around the customer in real time, they will be left for dust.

So with ‘know’ and ‘flex’ as the two keywords, the challenge now is to design in the broadest possible sense in order for organizations to be able to execute on these. Curtis suggests:

This is very much the work that one would expect Chief Digital Officers to do. What is it that you want to know and what is it that you want to flex? The thing is, you can’t expect to know everything - that’s called God - and you can’t flex everything - that’s called IBM Watson, maybe. You can’t be God and you can’t be Watson, so what are you going to do?

You have to make some clever choices about what you choose to focus on because you can’t focus on everything. You cannot know everything about the customer. You can’t know the things going on in every aspect of their lives. But what are the things that you are going to know that no-one else knows, that you can apply in a better and more flexible way than anyone else.

This is something that just hasn’t been delivered in the main to date, for all the talk around one-to-one marketing. Curtis smiles:

I still don’t see stuff coming through the post that’s particularly well flexed around me. But now, the promise of one-to-one marketing and more importantly one-to-one service delivery are about to be made real.

Living Operations

The big challenge that needs to be addressed to empower this is to shift to a Living Operations model. Curtis says:

On top of knowing and flexing, this is the biggest challenge organizations are going to have to face, because to engage the customers in real-time you need to have an organization that can do that. Most organizations are not able to do that. Further than that, if you want to have customer speed and you want to be able to deliver a lot of autonomy to local units in order to deliver at customer speed.

There’s another important mindset shift that will need to take place, Curtis advises:

Silos and efficiencies for their own sake, driven by finance, will start to give way to flexibility. The organisations of the future, the ones that will win as we transition into this new future, will be the ones that focus on flexibility. The ones that focus on efficiencies for their own sake, will not and will lose customers very quickly. This is a big transition point psychologically for organisations to move away from worrying about efficiency to worrying about how to be the most flexible.

One way to think about all this is to embrace the term ‘volatile’ and work from there. Curtis explains:

Volatility is a good word to have. How volatile are you? If you’re not volatile then you’re a solid. Solids don’t change much. It usually takes earthquakes to change solids and then things get broken. Bad things happen, people lose their jobs, top to bottom.

The next level is liquid. This is where most media organizations have gone. Media organisations have been struggling with digital for a while, fighting with digital to understand it for 20 plus years. The problem for media organizations is that they’re in a liquid state and liquid only flows through the same channels. It takes a long time for liquids to carve out new channels. That suggests a constraint on those organizations that define themselves as ‘cheerfully liquid’.

The winners are those that are going to be in the state of gas, where you are going to be able to flow into new opportunities. We know who these organizations are. They are organizations like Facebook, like Amazon who are beginning to flow into every space. Uber is a very good example.

And just when the metaphor is stretched to breaking point, there’s one more comparison to come:

One of our colleagues said, ‘You do know there’s a state beyond gas called plasma. This is gas that can conduct electricity. We can only see a couple of companies in that state at the moment. Google is undoubtedly one. Amazon over the past year has begun to move into this plasma stage.

Brand issues

This raises some new problems for brands, Curtis cautions:

If you allow your services to flow through a number of other services, then the question becomes one of where is your brand dominant and where do you cease to have ownership over the experience?

The answer to this is that people need to begin to think about atomising their brands. You cannot own the experience at all stages of that experience any more. The best thing to do is to look at how you can chunk up micro-moments, experiences that you can deliver and make money on and deliver to the customer when they need them.

The winners will be those that chunk up their services and allow their platform to deliver those into the customer experience at the moment at which the customer wants it.

Curtis concludes:

One of my colleagues says that in the future, the customer will be the operating system. If that is true, organizations need to be able to have products or service available at any given moment.

Mark Curtis was speaking at The CDO Summit in London.