From silos to strategic service development

October 1, 2019
Kim Salmela
FutureGO

What if 70% of the money your company invests in development work is burned to ashes?

According to one study, the amount of plans produced by service design projects is not fully implemented in companies. Incredibly expensive development work, right?

In one project I implemented, the goals were to model the service in use, identify service gaps, increase customer understanding, and design a new, more customer-oriented service model. Already at the initial meeting of the project, I realized that the changes required by the service model would have points of contact in the organization beyond the functions represented by the project team.

As a result of the design project, I proposed a number of improvements:

  1. The decision-making power and resources required for customer relationship management must be brought closer to the customer interface with management thinking according to the Lean paradigm
  2. Customer material needs to be digitized - or rather extended to the core of the organization
  3. The IT architecture must be rationalized
  4. General instructions for certain service sequences should be developed for staff, as well as refining specific functions to improve the customer experience.

In none of the project meetings did I still see the people in charge of the IT architecture or management culture. No one seemed to be worried about change management or communication either.

Silos under control - raise development to a strategic level!

Too often, I run into the problem of silo-like development in business development projects. As the service model is developed, the project will almost invariably be defined at a strategic level and the design will be raised to a helicopter perspective. Goals, milestones, resourcing, staff involvement, scheduling, change management, data analytics, operational reactivity, and organizational-wide dialogue must all be present in order for development work to achieve its goals, and turn from cost to investment. Only strategic-level planning and resourcing can build cost-effective and scalable services, be it a traditional business model, a platform economy, or some other network-based business model innovation.

People produce service. As the service model changes, so does the way work is done. Such a change often raises concerns among staff about, for example, the status, the benefits achieved, and the content or continuity of the job. If these concerns are not addressed, varying degrees of resistance to change will emerge in the context of change. However, resistance to change is not just evil, it is a sign that people are reacting to change, engaging in it. Resistance to change may bring up aspects related to change that have not been taken into account, it opens a new kind of channel for dialogue between management and staff, and it also serves as an indicator of an organisation's reactivity and level of change capacity. With the right kind of interview for resistance to change, the concern of the staff can be turned into motivation and the resistance into a desire for change. And again, we are one step closer to success.

Agile change management requires continuous implementation of reforms

It is also absolutely essential that the design and implementation go hand in hand. As reforms are developed, they are also implemented. This approach enables Sprint-format project work, immediate testing of developed solutions, and fast iterations driven by customer data. The continuous auditing and development of the service business must also have a management mandate. In this way, the service design is removed from the silos. Strategic-level service design requires consideration of a few other factors, after which it becomes a strong competitive factor for the service business, a value creation tool, and a full-fledged tool for implementing the strategy. Another option is to belong to that 80% of cases where the implementation of the development work fails and the payback period of the investment becomes an infinite sign.

Combining data, organization, customer paths and their touchpoints, as well as systems thinking, information systems, and interfaces, requires a broad view of the entire business ecosystem. That is why we developed in Osaango, we support continuous development as a comprehensive service. It adapts the way and direction of change to the changing operating environment and strategy. Typically, with these principles, we develop not only an individual company, but also entire ecosystems or platform actors that want to overcome not only internal silos but also barriers between organizations.

Source: https://hbr.org/2017/07/stop-using-the-excuse-organizational-change-is-hard

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