Business Success or Failure 1. Empowering Leadership The first factor for business success is empowering leadership. This type of business management style has also been called transformational leadership. Transformational leadership is the type of motivational style that draws others in and inspires them to achieve something greater than themselves. However, the employees and staff members do not merely do the work; they also become better people in the process. More and more enlightened employers are learning that employee satisfaction has a direct impact on the quality and sustainability of the enterprise. In fact, companies like Google have paved a new road of follower-centered leadership by offering services that help employees feel wanted and make their lives more efficient and effective. Such services can include company buses to pick up employees, in-house fry cleaning and in-house day care services. When employees are able to worry less about day to day issues outside of work, then they feel empowered to think creatively about their work. 2. Well-Defined Vision The second factor to business success is a well-defined vision. A corporate vision is a scripted understanding of what a company wants to do and how they want to accomplish it. A well-defined vision allows members of an organization to unite for a common cause with singular aim and all energy focused in one direction. No matter which leadership theory one espouses, all leadership theories identified with positive outcomes include vision as part of the make up of a successful company. Organizations that actively scan the horizon and tweak and sometimes redefine their visions will more likely maintain a sustainable competitive advantage. 3. Relevant Knowledge of the Business Market A third factor for business success is relevant knowledge of the business market. In order to do anything well, a person or company must do their homework to gain a deep understanding about the factors that are essential for success. These days as the World Wide Web continues to expand, there is no excuse for a would-be entrepreneur to lack knowledge of whatever business they feel led to pursue. Sadly, many businesses are dead out of the gate because they do not take the time to gain a proper perspective on the industry. 4. Detailed Business Plan Another factor for business success is the formulation of a comprehensive business plan. Knowing about an industry and sketching out a vision is only the beginning of a successful enterprise. The next step is to take what you know and what you want to accomplish and write a detailed strategy for how to make it happen. A business plan covers all the related factors that are essential for a winning enterprise including vision, description of the market, projected financials, employee relationships and customer relations management (CRM). 5. Assessment of the Direct and Indirect Competition When getting ready to implement a new business, another important factor for success or failure is the nature of the direct and indirect competition for the same product or service. For instance, a person or group wishing to open an online outlet for used furniture should take adequate time to research how many other competitiors are trying to do the same thing. When doing the research the group should ask: who is the competition? What products and services do they offer? What is their pricing structure? What kind of shipping do they offer? and the like. Gaining a firm grasp of the competition can definitely make the difference between staying alive long-term or filing for bankruptcy. 6. Availability of Financing A sixth factor important to the success or failure of a business is available financing. The current economic crisis in America has made venture capital difficult to find. Of course, if a company can manage to avoid using credit altogether then this is not a problem. Still, most new businesses need some kind of seed money to get them up to speed and thus the ability to secure working capital is critical to keeping the doors open. 7. Solid Customer Relations Management A seventh reason for business success or failure is how a company relates to their customers. This seems like a no brainer, but the better an organization handles their client base the more apt it will be to stay in business. Enterprises that take time to think out common and uncommon situations before they encounter them will be more likely to keep customers coming back. Those groups that merely define their customer relationships on the fly or in the heat of the moment are doomed to fail. Well-Managed Supply Chain Another reason for business success or failure is how a company manages its inventory. in order to keep the right mix of products on the shelves, an enterprise needs to think through its supply chain processes. Too much inventory can tie up working capital, but too little inventory can lead to shortages and lower customer satisfaction. JIT (or just-in-time) inventory management is one supply chain strategy that has benefited such large organizations like Wal-Mart, Dell Computers, and Toyota Motors. 8. Proper Timing An eighth reason for business success or failure is timing. In 1998, when the latest housing boom began it was probably a good time to enter into the home mortgage industry; in 2006, when the housing bubble began to burst it was probably a poor time to set up a new mortgage outfit. Part of learning about an industry is getting a good feel for its business cycle; although trying to time the market can lead to indecision. 9. Well-Devised Decision Making System Decision-making is at the heart of any business and the best organizations have outlined a step of procedures involved in the decision-making process. Those entities that tend to practice participative leadership allow representatives from all departments to be involved in the process and seem to gain stronger employee buy in. Most poorly led organizations do not encourage participation and often lack a well-defined procedure for making decisions. One solid decisionmaking scheme is the nine-step problem-solving model. The steps in the model are: 1. Describe the situation in detail 2. Frame the "right" problem 3. Describe the end-state goals from a broad perspective of values 4. Identify the alternatives 5. Evaluate the alternatives 6. Identify and assess the risks 7. Make the decision 8. Develop and implement the solution 9. Evaluate the results 10. Government Regulatory Measures A tenth reason for business success or failure is how much the owners of an enterprise have a good grasp on the rules and regulations governing their sector of the economy; this includes having a clear understanding of the tax structure. Many would-be entrepreneurs charge into a good idea not knowing what restrictions apply to the execution of the idea. For instance, a businessperson may take a vacation in Southeast Asia, go shopping in a local bizaar, and think that he can make a huge profit importing garments and handicrafts. Accordingly, he may purchase 1000 shoulder bags for $3000 thinking he can surely sell them for $10 a bag back home. However, before throwing down his cash, he did not realize he would have to pay a duty of $3 a bag to export them from the foreign country; another tariff to import them into his home country; not to mention taxes on the income. Not knowing the extent to government interference in an industry can mean the difference between success and failure of a business. Another factors that contribute to Success/ Failure of a Business by George N. Root III When an entrepreneur opens a business, a great deal of work goes into making that business a success. An experienced business professional will tell you that success in business is planned and does not happen by accident. Several factors contribute to the success of a business, and understanding what they are and how they work together can help your business succeed. Business Plan A business plan is the blueprint you should use to operate your business. When you are contemplating the opening of a business, you need to create a business plan that outlines all of your business operations, including personnel needs, all budgets, sales and marketing procedures, manufacturing processes and revenue projections. Spend time developing your business plan and get input from people with experience in your industry. Go through several drafts before settling on your final plan, and be prepared to follow that plan thoroughly. Keep your plan dynamic by making updates as your business changes, and try to use your plan to help attract investors as well. Timing In some cases you have control over business timing, and in other cases you do not. If you were to open a VHS movie rental business as DVDs were becoming popular, then your business timing may be suspect. Analyze the marketplace and pay attention to consumer trends before deciding on what kind of business to open. If you can create a business that is on the cutting edge of consumer needs, then that can contribute significantly to the success of your business. Location If you place your trucking business several miles away from the major highways, airport and train depot, then your business location can hamper success. Moving your business closer to those key locations can cut down costs, and make you one of the companies closest to where your customers. Location can be critical in the success of a business. According Houston Business, the Houston theater community is second in total seating capacity in the country with 13,000. Only New York City has more theater seats than Houston. If you were considering opening a business that catered to live theater, such as a printing business for programs or a stage production company, then you could find success by placing your business in Houston. Cost Control Controlling the costs of your business means keeping all of your overhead costs under control, including manufacturing, advertising and location operations. By continually working to reduce costs, you can free up financial resources to be applied toward expanding your product line or increasing your marketing efforts. Industry Life Cycle Life cycle models are not just a phenomenon of the life sciences. Industries experience a similar cycle of life. Just as a person is born, grows, matures, and eventually experiences decline and ultimately death, so too do industries and product lines. The stages are the same for all industries, yet every industry will experience these stages differently, they will last longer for some and pass quickly for others. Even within the same industry, various firms may be at different life cycle stages. A firm’s strategic plan is likely to be greatly influenced by the stage in the life cycle at which the firm finds itself. Some companies or even industries find new uses for declining products, thus extending their life cycle. The growth of an industry's sales over time is used to chart the life cycle. The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline. Sales typically begin slowly at the introduction phase, then take off rapidly during the growth phase. After leveling out at maturity, sales then begin a gradual decline. In contrast, profits generally continue to increase throughout the life cycle, as companies in an industry take advantage of expertise and economies of scale and scope to reduce unit costs over time. STAGES OF THE LIFE CYCLE Introduction In the introduction stage of the life cycle, an industry is in its infancy. Perhaps a new, unique product offering has been developed and patented, thus beginning a new industry. Some analysts even add an embryonic stage before introduction. At the introduction stage, the firm may be alone in the industry. It may be a small entrepreneurial company or a proven company which used research and development funds and expertise to develop something new. Marketing refers to new product offerings in a new industry as "question marks" because the success of the product and the life of the industry is unproven and unknown. A firm will use a focused strategy at this stage to stress the uniqueness of the new product or service to a small group of customers. These customers are typically referred to in the marketing literature as the "innovators" and "early adopters." Marketing tactics during this stage are intended to explain the product and its uses to consumers and thus create awareness for the product and the industry. According to research by Hitt, Ireland, and Hoskisson, firms establish a niche for dominance within an industry during this phase. For example, they often attempt to establish early perceptions of product quality, technological superiority, or advantageous relationships with vendors within the supply chain to develop a competitive advantage. Because it costs money to create a new product offering, develop and test prototypes, and market the product, the firm's and the industry's profits are usually negative at this stage. Any profits generated are typically reinvested into the company to solidify its position and help fund continued growth. Introduction requires a significant cash outlay to continue to promote and differentiate the offering and expand the production flow from a job shop to possibly a batch flow. Market demand will grow from the introduction, and as the life cycle curve experiences growth at an increasing rate, the industry is said to be entering the growth stage. Firms may also cluster together in close proximity during the early stages of the industry life cycle to have access to key materials or technological expertise, as in the case of the U.S. Silicon Valley computer chip manufacturers. Growth Like the introduction stage, the growth stage also requires a significant amount of capital. The goal of marketing efforts at this stage is to differentiate a firm's offerings from other competitors within the industry. Thus the growth stage requires funds to launch a newly focused marketing campaign as well as funds for continued investment in property, plant, and equipment to facilitate the growth required by the market demands. However, the industry is experiencing more product standardization at this stage, which may encourage economies of scale and facilitate development of a line-flow layout for production efficiency. Research and development funds will be needed to make changes to the product or services to better reflect customers' needs and suggestions. In this stage, if the firm is successful in the market, growing demand will create sales growth. Earnings and accompanying assets will also grow and profits will be positive for the firms. Marketing often refers to products at the growth stage as "stars." These products have high growth and market share. The key issue in this stage is market rivalry. Because there is industry-wide acceptance of the product, more new entrants join the industry and more intense competition results. The duration of the growth stage, as all the other stages, depends on the particular industry or product line under study. Some items—like fad clothing, for example—may experience a very short growth stage and move almost immediately into the next stages of maturity and decline. A hot toy this holiday season may be nonexistent or relegated to the back shelves of a deep-discounter the following year. Because many new product introductions fail, the growth stage may be short or nonexistent for some products. However, for other products the growth stage may be longer due to frequent product upgrades and enhancements that forestall movement into maturity. The computer industry today is an example of an industry with a long growth stage due to upgrades in hardware, services, and add-on products and features. During the growth stage, the life cycle curve is very steep, indicating fast growth. Firms tend to spread out geographically during this stage of the life cycle and continue to disperse during the maturity and decline stages. As an example, the automobile industry in the United States was initially concentrated in the Detroit area and surrounding cities. Today, as the industry has matured, automobile manufacturers are spread throughout the country and internationally. Maturity As the industry approaches maturity, the industry life cycle curve becomes noticeably flatter, indicating slowing growth. Some experts have labeled an additional stage, called expansion, between growth and maturity. While sales are expanding and earnings are growing from these "cash cow" products, the rate has slowed from the growth stage. In fact, the rate of sales expansion is typically equal to the growth rate of the economy. Some competition from late entrants will be apparent, and these new entrants will try to steal market share from existing products. Thus, the marketing effort must remain strong and must stress the unique features of the product or the firm to continue to differentiate a firm's offerings from industry competitors. Firms may compete on quality to separate their product from other lower-cost offerings, or conversely the firm may try a low-cost/low-price strategy to increase the volume of sales and make profits from inventory turnover. A firm at this stage may have excess cash to pay dividends to shareholders. But in mature industries, there are usually fewer firms, and those that survive will be larger and more dominant. While innovations continue they are not as radical as before and may be only a change in color or formulation to stress "new" or "improved" to consumers. Laundry detergents are examples of mature products. Decline Declines are almost inevitable in an industry. If product innovation has not kept pace with other competing products and/or service, or if new innovations or technological changes have caused the industry to become obsolete, sales suffer and the life cycle experiences a decline. In this phase, sales are decreasing at an accelerating rate. This is often accompanied by another, larger shake-out in the industry as competitors who did not leave during the maturity stage now exit the industry. Yet some firms will remain to compete in the smaller market. Mergers and consolidations will also be the norm as firms try other strategies to continue to be competitive or grow through acquisition and/or diversification. PROLONGING THE LIFE CYCLE Management efficiency can help to prolong the maturity stage of the life cycle. Production improvements, like just-in-time methods and lean manufacturing, can result in extra profits. Technology, automation, and linking suppliers and customers in a tight supply chain are also methods to improve efficiency. New uses of a product can also revitalize an old brand. A prime example is Arm & Hammer baking soda. In 1969, sales were dropping due to the introduction of packaged foods with baking soda as an added ingredient and an overall decline in home baking. New uses for the product as a deodorizer for refrigerators and later as a laundry additive, toothpaste additive, and carpet freshener extended the life cycle of the baking soda industry. Promoting new uses for old brands can increase sales by increasing usage frequency. In some cases, this strategy is cheaper than trying to convert new users in a mature market. To extend the growth phase as well as industry profits, firms approaching maturity can pursue expansion into other countries and new markets. Expansion into another geographic region is an effective response to declining demand. Because organizations have control over internal factors and can often influence external factors, the life cycle does not have to end. An example is feminine hygiene products. Sales in the United States have reached maturity due to a number of external reasons, like the stable to declining population growth rate and the aging of the baby boomers, who may no longer be consumers for these products. But when makers of these products concentrated on foreign markets, sales grew and the maturity of the product was prolonged. Often so-called "dog" products can find new life in other parts of the world. However, once world saturation is reached, the eventual maturity and decline of the industry or product line will result. LIFE CYCLES ARE EVERYWHERE Just as industries experience life cycles, studies have documented life cycles in many other areas. Countries have life cycles, for example, and we traditionally classify them as ranging from the First World countries to Third World or developing countries, depending on their levels of capital, technological change, infrastructure, or stability. Products also experience life cycles. Even within an industry, various individual companies may be at different life cycle stages depending upon when they entered the industry. The life cycle phenomenon is an important and universally accepted concept to help managers better understand sales growth and change over time. PRODUCT DESIGN The detailed specification of a manufactured item's parts and their relationship to the whole. A product design needs to take into account how the item will perform its intended functionality in an efficient, safe and reliable manner. The product also needs to be capable of being made economically and to be attractive to targeted consumers. a. Quality Function Deployment In the world of business and industry, every organization has customers. Some have only internal customers, some just external customers, and some have both. When you are working to determine what you need to accomplish to satisfy or even delight your customers, then the tool of choice is quality function deployment or QFD. Background Quality professionals refer to QFD by many names, including matrix product planning, decision matrices, and customer-driven engineering. Whatever you call it, QFD is a focused methodology for carefully listening to the voice of the customer and then effectively responding to those needs and expectations. First developed in Japan in the late 1960s as a form of cause-and-effect analysis, QFD was brought to the United States in the early 1980s. It gained its early popularity as a result of numerous successes in the automotive industry. Methodology In QFD, quality is a measure of customer satisfaction with a product or a service. QFD is a structured method that uses the seven management and planning tools to identify and prioritize customers’ expectations quickly and effectively. Beginning with the initial matrix, commonly termed the house of quality, depicted in Figure 1, the QFD methodology focuses on the most important product or service attributes or qualities. These are composed of customer wows, wants, and musts. Once you have prioritized the attributes and qualities, QFD deploys them to the appropriate organizational function for action, as shown in Figure 2. Thus, QFD is the deployment of customer-driven qualities to the responsible functions of an organization. Many QFD practitioners claim that using QFD has enabled them to reduce their product and service development cycle times by as much as 75 percent with equally impressive improvements in measured customer satisfaction. Figure 1 — House of quality template and benefits Figure 2 — Waterfall relationship of QFD matrices B. Kano Model Noriaki Kano, a Japanese researcher and consultant, published a paper in 19841 with a set of ideas and techniques that help us determine our customers’ (and prospects’) satisfaction with product features. These ideas are commonly called the Kano Model and are based upon the following premises: Customers’ Satisfaction with our product’s features depends on the level of Functionality that is provided (how much or how well they’re implemented); Features can be classified into four categories; You can determine how customers feel about a feature through a questionnaire. Satisfaction vs Functionality It all starts with our goal: Satisfaction. Kano proposes a dimension that goes from total satisfaction (also called Delight and Excitement) to total dissatisfaction (or Frustration). In the image above, the dimension is annotated with different satisfaction levels. It’s important to note that this is not (always) a linear scale, as we’ll see in a second.You might think that you’d always want to be at the top of that scale, right? Well, it’s not possible.That’s where the Functionality comes in. Also called Investment, Sophistication or Implementation, it represents how much of a given feature the customer gets, how well we’ve implemented it, or how much we’ve invested in its development. This dimension goes from no functionality at all, to the best possible implementation. That’s why the term Investment is also very good for this concept. It is clear in reminding us of the cost of doing something. Naming aside, what’s really important is to know that these two dimensions put together are the basis of the Kano Model and determine how our customers feel about our product’s features, as we’ll see in the next section. The Four Categories of Features Kano classifies features into four categories, depending on how customers react to the provided level of Functionality. 1. Performance Some product features behave as what we might intuitively think that Satisfaction works: the more we provide, the more satisfied our customers become. Because of this proportional relation between Functionality and Satisfaction, these features are usually called Linear, Performance or One-Dimensional attributes in the Kano literature (I prefer the Performance). When you’re buying a car, its gas mileage is usually a Performance attribute. Other examples might be your internet connection speed; laptop battery life; or the storage space in your Dropbox account. The more you have of each of those, the greater your satisfaction. Going back to the graphic representation for the model, we see the dynamics of customers’ reaction to this kind of feature. Every increase in functionality leads to increased satisfaction. It’s also important to keep in mind that the more functionality we add, the bigger the investment we have to make there (e.g. the team to build it, the required resources, etc.) 2. Must-be Other product features are simply expected by customers. If the product doesn’t have them, it will be considered to be incomplete or just plain bad. This type of features is usually called Must-be or Basic Expectations. Here’s the deal with these features: we need to have them, but that won’t make our customers more satisfied. They just won’t be dissatisfied. We expect our phones to be able to make calls. Our hotel room should have running water and a bed. The car should have brakes. Having any of these won’t make us happy, but lacking them will definitely make us angry towards the product or service. Notice how the satisfaction curve behaves. Even the slightest bit of investment goes a long way in increasing satisfaction. But also notice how satisfaction never even reaches the positive side of the dimension. No matter what we invest in the feature, we won’t ever make our customers more satisfied with the product. The good news is that once a basic level of expectations is reached, you don’t have to keep investing in it. 3. Attractive There are unexpected features which, when presented, cause a positive reaction. These are usually called Attractive, Exciters or Delighters. I tend to prefer the term Attractive, because it conveys the notion that we’re talking about a scale. We can have reactions ranging from mild attractiveness to absolute delight, and still have everything fit under the “Attractive” name. The first time we used an iPhone, we were not expecting such a fluid touchscreen interface, and it blew us away. Think of the first time you used Google Maps or Google Docs. You know, that feeling you get when experiencing something beyond what you know and expect from similar products. Just remember that our brains don’t have to explode for something to fall under this category. It might be anything that makes you go: “Hey, that’s nice!”. This is best explained graphically. Look how even some level of Functionality leads to increased Satisfaction, and how quickly it rises. This fact is key to keep a check on the investment we make on a given feature. Beyond a certain point, we’re just over-killing it. 4. Indifferent Naturally, there are also features towards which we feel indifferent. Those which their presence (or absence) doesn’t make a real difference in our reaction to the product. These features fall along the middle of the Satisfaction dimension (where the horizontal axis intersects it.) That means it doesn’t matter how much effort we put into them, users won’t really care. This is another way of saying we should really avoid working on these because they’re essentially money sinks. The Question Pair that Uncovers Customer Perceptions We’ve now covered the first two parts of the Kano model: the dimensions of analysis and their interplay to define categories of features. In order to uncover our customer’s perceptions towards our product’s attributes, we need to use the Kano questionnaire. It consists of a pair of questions for each feature we want to evaluate: One asks our customers how they feel if they have the feature; The other asks how they feel if they did not have the feature. The first question is called the functional form and the second one is the dysfunctional form (they’re also called positive and negative by Jan Moorman.) These are not open-ended questions, though. There are very specific options we should use. To each “how do you feel if you had / did not have this feature”, the possible answers are: I like it I expect it I am neutral I can tolerate it I dislike it There are some things to consider when wording these options, and we’ll get to those later. After asking our customers (or prospects) these two questions, and getting their answers, we are now able to categorize each feature. c. Service Blueprint A service blueprint is an operational planning tool that provides guidance on how a service will be provided, specifying the physical evidence, staff actions, and support systems / infrastructure needed to deliver the service across its different channels. For example, to plan how you will loan devices to users, a service blueprint would help determine how this would happen at a service desk, what kinds of maintenance and support activities were needed behind the scenes, how users would learn about what’s available, how it would be checked in and out, and by what means users would be trained on how to use the device. Service Blueprints may take different forms – some more graphic than others – but should show the different means/channels through with services are delivered and show the physical evidence of the service, front line staff actions, behind the scene staff actions, and support systems. They are completed using an iterative process – taking a first pass that considers findings from personas, journey maps, and location planning and then coming back to the blueprint to refine it over time. Often blueprints raise questions that cannot be readily answered and so need to be prototyped; for instance by acting out an interaction or mocking up a product. Generally, one blueprint should be created for each core service, according to the right level of detail for each. Service design is the activity of planning and organizing a business’s resources (people, props, and processes) in order to (1) directly improve the employee’s experience, and (2) indirectly, the customer’s experience. Service blueprinting is the primary mapping tool used in the service design process. What Is a Service Blueprint? A service blueprint is a diagram that visualizes the relationships between different service components — people, props (physical or digital evidence), and processes — that are directly tied to touchpoints in a specific customer journey. Think of service blueprints as a part two to customer journey maps. Similar to customer-journey maps, blueprints are instrumental in complex scenarios spanning many service-related offerings. Blueprinting is an ideal approach to experiences that are omnichannel, involve multiple touchpoints, or require a crossfunctional effort (that is, coordination of multiple departments). A service blueprint corresponds to a specific customer journey and the specific user goals associated to that journey. This journey can vary in scope. Thus, for the same service, you may have multiple blueprints if there are several different scenarios that it can accommodate. For example, with a restaurant business, you may have separate service blueprints for the tasks of ordering food for takeout versus dining in the restaurant. Service blueprints should always align to a business goal: reducing redundancies, improving the employee experience, or converging siloed processes. Benefits of Service Blueprinting Service blueprints give an organization a comprehensive understanding of its service and the underlying resources and processes — seen and unseen to the user — that make it possible. Focusing on this larger understanding (alongside more typical usability aspects and individual touchpoint design) provides strategic benefits for the business. Blueprints are treasure maps that help businesses discover weaknesses. Poor user experiences are often due to an internal organizational shortcoming — a weak link in the ecosystem. While we can quickly understand what may be wrong in a user interface (bad design or a broken button), determining the root cause of a systemic issue (such as corrupted data or long wait times) is much more difficult. Blueprinting exposes the big picture and offers a map of dependencies, thus allowing a business to discover a weak leak at its roots. In this same way, blueprints help identify opportunities for optimization. The visualization of relationships in blueprints uncovers potential improvements and ways to eliminate redundancy. For example, information gathered early on in the customer’s journey could possibly be repurposed later on backstage. This approach has three positive effects: (1) customers are delighted when they are recognized the second time — the service feels personal and they save time and effort; (2) employee time and effort are not wasted regathering information; (3) no risk of inconsistent data when the same question isn’t asked twice. Blueprinting is most useful when coordinating complex services because it bridges crossdepartment efforts. Often, a department’s success is measured by the touchpoint it owns. However, users encounter many touchpoints throughout one journey and don’t know (or care) which department owns which touchpoint. While a department could meet its goal, the big-picture, organization-level objectives may not be reached. Blueprinting forces businesses to capture what occurs internally throughout the totality of the customer journey — giving them insight to overlaps and dependencies that departments alone could not see. Key Elements of a Service Blueprint Service blueprints take different visual forms, some more graphic than others. Regardless of visual form and scope, every service blueprint comprises some key elements: Customer actions Steps, choices, activities, and interactions that customer performs while interacting with a service to reach a particular goal. Customer actions are derived from research or a customer-journey map. In the our blueprint for an appliance retailer, customer actions include visiting the website, visiting the store and browsing for appliances, discussing options and features with a sales assistant, appliance purchase, getting a delivery-date notification, and finally receiving the appliance. Frontstage actions Actions that occur directly in view of the customer. These actions can be human-to-human or human-to-computer actions. Human-to-human actions are the steps and activities that the contact employee (the person who interacts with the customer) performs. Human-tocomputer actions are carried out when the customer interacts with self-service technology (for example, a mobile app or an ATM). In our appliance company example, the frontstage actions are directly linked to customer’s actions: the store worker meets and greets customers, a chat assistant on the website informs them which units have which features, a trader partner contacts customers to schedule delivery. Note that there is not always a parallel frontstage action for every customer touchpoint. A customer can interact directly with a service without encountering a frontstage actor, like it’s the case with the appliance delivery in our example blueprint. Each time a customer interacts with a service (through an employee or via technology), a moment of truth occurs. During these moments of truth, customers judge your quality and make decisions regarding future purchases. Backstage actions Steps and activities that occur behind the scenes to support onstage happenings. These actions could be performed by a backstage employee (e.g., a cook in the kitchen) or by a frontstage employee who does something not visible to the customer (e.g., a waiter entering an order into the kitchen display system). In our appliance-company example, numerous backstage actions occur: A warehouse employee inputs and updates inventory numbers into the point-of-sale software; a shipping employee checks the unit’s condition and quality; a chat assistant contacts the factory to confirm lead times; employees maintain and update the company’s website with the newest units; the marketing team creates advertising material. Processes Internal steps, and interactions that support the employees in delivering the service. This element includes anything that must occur for all of the above to take place. Processes for the appliance company include credit-card verification, pricing, delivery of units to the store from the factory, writing quality tests, and so on. In a service blueprint, key elements are organized into clusters with lines that separate them. There are three primary lines: 1. The line of interaction depicts the direct interactions between the customer and the organization. 2. The line of visibility separates all service activities that are visible to the customer from those that are not visible. Everything frontstage (visible) appears above this line, while everything backstage (not visible) appears below this line. 3. The line of internal interaction separates contact employees from those who do not directly support interactions with customers/users. The last layer of a service blueprint is evidence, which is made of the props and places that anyone in the blueprint has an exchange with. Evidence can be involved in both frontstage and backstage processes and actions. In our appliance example, evidence includes the appliances themselves, signage, physical stores, website, tutorial video, or email inboxes. Secondary Elements to Include in a Service Blueprint Blueprints can be adapted to context and business goals by introducing the additional elements as needed: Arrows Arrows are a key element of service blueprinting. They indicate relationships, and more importantly, dependencies. A single arrow suggests a linear, one-way exchange, while a double arrow suggests the need for agreement and codependency. Time If time is a primary variable in your service, an estimated duration for each customer action should be represented in your blueprint. Regulations or Policy Any given policies or regulations that dictate how a process is completed (food regulations, security policies, etc.) can be added to your blueprint. This information will allow us to understand what can and cannot be changed as we optimize. Emotion Similar to how a user’s emotion is represented throughout a customer-journey map, employees’ emotions can be represented in the blueprint. (Emotion is shown through the green and red faces in the example below.) Where are employees frustrated? Where are employees happy and motivated? If you already have some qualitative data regarding points of frustration (possibly obtained from internal surveys or other methods), you can use them in the blueprint to help focus the design process and more easily locate pain points. Metrics Any success metric that can provide context to your blueprint is a benefit, especially if buy-in is the blueprint’s goal. An example may be the time spent on various processes, or the financial costs associated with them. These numbers will help the business identify where time or money are wasted due to miscommunication or other inefficiencies. Conclusion Service blueprints are companions to customer-journey maps: they help organizations see the big picture of how a service is implemented by the company and used by the customers. They pinpoint dependencies between employee-facing and customer-facing processes in the same visualization and are instrumental in identifying pain points, optimizing complex interactions, and ultimately saving money for the organization and improving the experience for its customers.
