What is Service Design and how it leads to innovation

Author: Marina Vitale

Date: 19th April 2017

Read time: 9 minutes


Innovation is a major challenge for most organisations. Whether it is required to improve products and services or to reshape internal processes, innovation is an attribute that all companies aspire to encompass within their identity. Improving efficiency or creating better products and services for customers are among the most discussed challenges for many board directors, regardless of the size of the company. Organisations, especially in the face of strong competition and disruption, crave progress.

The good news is there are many effective methods to generate innovation. Some companies invest in implementing new processes, others rely on marketing. Companies with robust capabilities focus their investment on R&D to make the case for innovation and increasingly there is an emerging trend for companies looking to promote innovation by investing in Service Design.


But what can explain the increasing interest in Service Design?


Service Design is a methodology that has been growing over the past 15-20 years and is now rapidly gaining momentum. During the last few decades, services have increasingly been recognised as a major driver of economic growth. Due to its ability to generate innovation, Service Design and Service Design Thinking have gained widespread support and become a central interest for many companies. Service Design focuses on solving complex problems and identifying opportunities to challenge the status quo with the goal to progressively improve and innovate the business.

Service Design shares many of the same methodologies and practises as other disciplines that share a common focus of innovation. Service Design is not the only and exclusive way to achieve similar results. With this mind, why are more and more companies deciding to focus specifically on Service Design Thinking?

Here are the key differentiators that characterise Service Design:

Generates innovation that real people not only want but also will actually adopt, by involving key actors in the decision-making process. Service Design methodology to be complementary to other innovative methodologies. Service Design is adaptable and applicable to multiple fields due to its footprint going beyond the pure design of a service and impacting on multiple aspects both inside and outside of how businesses operate. The key differentiators are the pillars that support the overarching process of Service Design and can be encapsulated in three main attributes:

  • Inclusivity
  • Adaptability
  • Flexibility

These points represent the uniqueness of the Service Design process and the principles through which it is able to generate progress and innovation.



Inclusivity to generate innovation that not only people want, but that they will actually adopt, you have to be inclusive.

Having a human-centered approach at the heart of Service Design, which strongly takes into account the end user in the creation of services and products. Service Design has the ability to impact strategic decisions of a company, with the decision making process no longer based primarily on figures and balance sheets but also on qualitative data; utilising key insights and looking foremost at people and their activities.

As previously mentioned, Service Design is not the only practice that uses insights derived from users to inform the decision-making process. There are activities within the broader marketing expertise, such as focus groups, that use similar methods. Similarly to Service Design, Marketing aims to pull innovation from the market.

Although, gathering and considering qualitative feedback might appear straightforward, it can reveal to be dangerous for two main reasons:

  • Users don’t always know what they want
  • There is a huge difference between what people say they want and what they will use or do

Service Design takes further steps to mitigate these issues, focusing on quickly building a prototyping solution and observing users and stakeholders using them. The observations are analysed within the context and experience of the experts, capturing spontaneous insights to iteratively improve a certain solution. By following this holistic approach, the Service Designer ensures diverse and valuable inputs are considered to implement an effective change for the proposed solution.

Whether the end solution is about prototyping a digital or physical product or instead a sequence of touch points and actions to re-create a service, the focus of Service Design is to implement and test meaningful change quickly, observing users, stakeholders and other relevant actors, interacting and improving on solutions to create as much innovation as possible prior to each release or launch.


Service Design should not be confused with Customer or User Experience.


This is because the End User which those disciplines focus on is only one of the categories that are usually brought into discussion within Service Design. In fact, key stakeholders; employees, customers and partners are equally at the center of the co-creation process, being actively involved in the critical phases of the process from research to prototype and testing.

The Service Design approach excels at anticipating and solving potential problems, often before they occur. This prevents the possibility of users experiencing a bad product or service and creates opportunity of gaining competitive advantages or challenge the status quo and improve radically.

Many situations that would frustrate users and slow down operational activities, can be prevented with Service Design. For example, a common situation of queueing at the airport with overweight luggage and being made to pay the extra fee for additional kilos. This scenario usually unfolds that, adding insult to injury, customers would need to pay additional fees at another desk before returning back to the original queue (nowhaving lost their turn), show the receipt and finally check in the luggage. This sequence of actions is clearly frustrating for the customer. Similarly, spending long periods of time, searching for or staring at a small phone screen in search of the “Make a Payment” etc will provide a poor customer experience and frustrate the user.

All these kinds of processes can be streamlined and improved in order to avoid any pain points and setbacks that have an impact on both user journeys and business operations. In fact, any products and services which involve multiple interactions on both digital or physical spaces or platforms, mean every second matters in providing users with an enjoyable and satisfying experience with the company and their brand.

Applying a Service Design methodology to tackle these kinds of challenges, will use tools specifically with the purpose to effectively identifying issues before they are launched and experienced within a real life scenario. By combining insights from your users, your key stakeholders and partners and by establishing a collaborative relationship between SD practitioners and clients, you will limit and reduce the risks while significantly improving the chances of success.




Adaptability is the capability of Service Design methodology to be complementary to many other methods and contextualised to create change inside and outside organisations

Adopting Service Design does not imply you can’t use other processes or adopt different procedures to foster innovation. Service Design Methodology is born out of a combination of Design Thinking and Lean approaches and so is very flexible nature. Service Design is the common thread that looks at many disciplines, acting as an overall connector, approaching problems from different perspectives and then providing coherent solutions.

Viewed in this manner, Service Design becomes a complementary way to make positive impact inside and outside the organisation. Outside of the company, it can help improve the relationship between company and its users, while contextualising service’s design within the organisation.

Service Design helps adaptability in the following ways:

  • Shifting the focus from your customers to your employees, Service Design can be a means for organisations to redesign the employee experience, unleashing their potential and therefore improving their satisfaction level to re-align personal and company goals.

  • Service Design tools are not only the domain of designers but can be learned and adopted by a broader segment of practitioners, to make an impact within the organisation.

  • Service Design Thinking can be adopted by employees to help them face challenges with different perspectives; empowering them to learn how to apply techniques to better serve customers or to improve processes at work and building capacity within teams.



Flexibility is the footprint of Service Design goes far beyond the design or re-design of a service and is applicable to multiple fields.

Service design it is not only related to the design or a redesign of service, but is also a methodology that can be applied to different contexts. To understand the footprint of Service Design consider the following scenario regarding the use of Service Design methods by various types of companies:

  • B2B or B2C companies that provide services, are nowadays mostly based on digital touch-points. They increasingly require the application of service design methods and user experience practices to provide their demanding customers with compelling offers and better and more efficient services.
  • B2B or B2C companies who are not “service-based” but instead have their focus on products, are investing in Service Design in recent years by “servitizising” their offer.

This can be done in three main ways:

  • By selling a products as a service (e.g. subscription models are a popular way to sell digital products)
  • Delivering products as services (e.g streaming, leasing)
  • Designing products with features that imply the use of a service to make them work or to fully exploit their potential.

Perfect examples of how to connect products with services

For instance, Sonos designs speakers in conjunction with music streaming services like Spotify, who designed speakers that cannot work without a subscription to one streaming music service.

Amazon Echo requires a subscription to Amazon Prime to accomplish one of the tasks it was designed for: revolutionising the online shopping experience, while being detached from any digital screen.

The company Fitbit designs fitness hardware in integration with third party services to boost the product’s efficiency, as the success of integration with apps like MyFitnessPal has shown.

Service Design can solve very diverse challenges, therefore its flexibility requires it to be prepared to embrace ambiguity and tolerate uncertainty more than in other disciplines.

Reframing problems as well as identifying opportunities are some the effects that might occur when you go through the stages of a Service Design iterative process.Service Design by its nature is very flexible and can have impact at different aspects of an organisation. Its results can be measured with many different metrics and KPI, depending on the challenge.

Big companies are investing in Service Design

As described earlier in this article, many reasons can explain the popularity of Service Design in recent years but who are the companies leveraging Service Design to grow and innovate?

Excluding well-known companies that incorporated Service Design design thinking approaches from their inception, nowadays even established large companies and more traditionally structured consultancies like Accenture, Capital One and Deloitte have recognized the importance of Service Design. In the past few years, these kind of companies have acquired more than 71 independent design consultancies as John Maeda points out in one of his recent articles: “companies like McKinsey and IBM have promoted designers to the top level of management” as an acknowledgment that design has already proven its effectiveness and positive impact on the business.

Other industry giants such as IBM and General Electric are also now using Service Design Thinking as an essential means for simplifying and humanising their products and services, giving Service Design Thinking a fundamental role and stating that “there’s no longer any real distinction between business strategy and the design of the user experience”.

The great interest of investing in Service Design was shown by IBM when it opened a design studio as part of the company’s $100 million investment in building a design driven organization. General Electric instead opted to hire the well-known agency Frog Design to help them spread the Service Design language, tools, and success metrics to support its emerging design practice within the organisation. Both companies wanted not only to create products but enable innovation and create cultural change along the way. This intention after all perfectly encapsulate the unique goals and beliefs of the practice of Service Design.

Key Takeaways

  • Service Design puts people at the center of its process. Although many other disciplines put users at center of their process, Service Design should not be confused with Customer Experience or User Experience because it has a broader footprint. Service Design also involves internal audiences such as partners, stakeholders and employees.

  • Service Design can be used to identify and solve problems along with other disciplines, becoming a complementary methodology and toolset, to help organisations achieve long term benefits both inside and outside the organisations.

  • Service Design by nature is flexible because it encompasses challenges related to processes, services and products.

  • In order to exploit the potential of Service Design, be ready to collaborate, think out of the box, and be open to change.