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Why you need to become a business that breathes: welcome to the era of 'living services' and 'liquid expectations'

Our wired world and rising ‘liquid expectations’ are leading more businesses down the path of digital transformation. But those transformations often fail. Fjord’s Andy Polaine talks to Maya Breen about what the era of living services means for businesses and why those that want to stay alive must find ways to come alive like never before.

Digital transformation is no small undertaking. And it’s not just about creating a few new products or services. But many organisations don’t realise this and decide to take it on anyway, doomed to fail before they even begin. Fully making the most of different digital technologies in every part of a business means fundamentally changing how it operates from the inside out – and this impacts everything from its organisational structure to the behaviour of its people.

Fjord is a world-leading design and innovation consultancy that was acquired by Accenture Interactive in 2013. Its APAC regional design director, Andy Polaine, says usually its clients turn to digital transformation because of a stark realisation that they must improve their customer experience as everything becomes more digital.

Because we're so accustomed to great digital experiences, consumers’ ‘liquid expectations’ are rising. Explaining the concept, Polaine says: “It’s this idea that your expectations for an experience are liquid in that they transcend industry boundaries.” He compares the experience of using Airbnb or Uber to your bank, where, after using those modern digital services, we wonder why everything else can’t be that good. This in turn can lead to employee disengagement and it’s these factors combined that are fuelling the digital transformation stampede.

Getting in their own way

By 2020, the size of the digital transformation market is predicted to reach US$369 billion, but 70 percent of programmes will have failed. And in a decade, by 2027, only 25 percent of S&P 500 companies are expected to still exist at all.

“Usually it’s the business getting in the way of itself from providing a great experience,” says Polaine. “So really the transformation starts at that experience end but it kind of pushes back into the organisation.”

Once they discover the extent of change required, businesses can be reluctant to disassemble their existing processes and current structures. They would rather add something instead.

“People are a lot more comfortable adding than they are taking away and when they do take away, sometimes they take away a ‘limb’ and it’s fatal,” Polaine says. “If you’re just looking at a spreadsheet and you’re just looking at the numbers alone, you’re really missing the human component that makes organisations sing. I think what a lot of businesses struggle with is a commitment to focus and a willingness to probably cannibalise some, if not all, of their existing business.”

By 2020, the size of the digital transformation market is predicted to reach US$369 billion, but 70 percent of programmes will have failed. And in a decade, by 2027, only 25 percent of S&P 500 companies are expected to still exist at all.

He finds that many companies want to have their cake and eat it too; they want to be innovative but without the risk of failing and so don’t fully commit to it.

“But the process of not committing wholeheartedly and sort of half doing it means that they are almost sure to fail,” he says. “The decision not to do it at all means that someone else is going to come along and disrupt them. So it’s better to disrupt yourself than have someone else do it for you.”

Once again, he cites Airbnb as an example of a company that is always doing pre-mortems on who might put it out of business in ten years – and then, importantly, it acts on that information.

Unique, like everyone else

So how are businesses today going to make sure they’re still around in ten years? This is where the idea of ‘living services’ – a service that is tailored to customers – comes in.

“We’re in a bit of a transition point at the moment,” says Polaine. “We’ve had this massive rise of different applications and services. We’ve all got a zillion apps on our mobile phones, each of those apps has got a little red badge with a large number on it of all the things you haven’t tended to and so the psychological noise of that is quite draining and there’s a lot of evidence that it’s really disturbing cognitively. We think the joining up of some of those things in the background and making them very personal is the future of living services – by which we mean taking things off the thinking list.”

We can expect living services to infiltrate every part of our lives. And organisations will need to evolve into ‘living businesses’.

“Businesses are really trying to provide these services that learn from you, that evolve and respond and understand you almost as if they’re alive and in order to do that you actually have to transform the business into what we call a ‘living business’” says Polaine.

One of the rules of famed industrial designer Dieter Rams was that, at its best, design is invisible. And that’s what we’re seeing in the digital space. Polaine points to Google Now, which offers advice like 'you should leave to meet your friend now' to help users avoid traffic and save time. To do this, it pulls different data sources together – in this case the person's contacts, calendar and current location – to make life easier.

He says a living business is able to easily respond to changing demands thanks to four quite human ‘vital signs’: personality, instinct, relationships and craft. The first is about how strong the organisation’s sense of purpose is and how well it is expressed, something he says Netflix does very well; instinct comes down to how well a business can tackle unexpected situations (“If you’re really shackled to existing hierarchies and organisational structures it’s very difficult to actually adapt and change,” he says); relationships are about how the employees feel working there (are they like a cog in the wheel or can their ideas be heard?); and craft reveals how well the company is set up for making the most of talent and skill.

Designing for humans

But as our interactions with digital services become more human, there is a danger of unintended consequences around ethics and privacy. For instance, while voice-activated personal assistants like Alexa, Siri and OK Google are becoming increasingly popular, would you be comfortable saying your pin number out loud to check your finances?

“The big design challenge for us is to really understand where the permissions lie with that and what is fantastically magical for people and what is really creepy,” says Polaine. It would seem expectations for complete data privacy are a thing of the past, as 80 percent of 20 to 40-year-old consumers believe it no longer exists, according to a recent survey by Accenture. But expectations for transparency and knowing their data is in safe hands is definitely on their radar. The survey found 70 percent felt businesses aren’t transparent enough about how their information is being used and 87 percent thought there should be more safeguards in place to protect their personal data.

But the report expects living services will serve as “an antidote to the distraction engine phenomenon” fuelled by the waves of the internet and mobile. So if you’ve ever felt like your attention is being pulled in every direction by too many digital devices you can’t live without anymore, you’re in for some relief. Our growing interaction with the digital world is changing to make the real world more manageable. And businesses that can provide that relief are set to prosper.

Where will we experience living services?

OUR HOMES: Managing energy, shopping, security, environment, entertainment, our diaries and budgeting.

OUR BODIES: Fitness and dietary advice, training, illness diagnostics and personal health diary planning.

OUR FAMILIES: Everyday schedule management, diary coordination, location and status updates and cultural and social event recommendations.

OUR JOBS: Coordinating travel arrangements, diary workload management, learning and reading recommendations, resource management and decision-making advice.

OUR TRANSPORT: Driving management and support, maintenance management, route planning, traffic information, insurance assessments, roadside attractions and services, media and work communications, fuel and energy management, social media and entertainment.

OUR MONEY: Balance management, moving money, shopping decision-making, investment advice, mortgage advice and borrowing.

OUR SHOPPING: Automated ordering, price comparisons, discount or promotion research, budget advice, automated search and offer comparisons and social sharing.

OUR LEISURE TIME: Real-time, contextually appropriate recommendations, content curation, bespoke offers, information on travel/parking options, decision-making tools.

OUR LEARNING: Learning and career plans tailored to the individual child’s specific developmental needs, right down to real-time monitoring of mood and alertness; automatic recording of students’ presence or absence from a class; real-time parental involvement in classrooms.

OUR CITIES: Managing congestion, combatting crime, street lighting, infrastructure, the environment, building repairs, waste collection and planning.

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