Jeff Melton: Service Design and Operations

Executives are being challenged to provide customer experiences that resemble those of leading digital players. Jeff Melton, a partner in Bain’s Performance Improvement practice who leads the firm's Service Design and Operations work, explains how responding to the challenge requires designing episodes that are outstanding for the customer and reliable for the company.

Read the Bain Brief: AI Is Lifting Service-Center Performance

Read the transcript below.

JEFF MELTON: Boards around the world are struggling and responding to the challenges of digitization. At cocktail parties, in conversations with customers, the comparisons they're hearing are no longer about their competitors. It's about the great experiences that people have with a Google or an Amazon. And they're challenging their executives to create experiences just like that: simple, quick, reliable. And they're challenging their executives and their CFOs to take out costs, to take out the human element associated with delivering those experiences.

Now, responding to that challenge of digitization starts with design. And companies are investing in design. They're building design teams. They're bringing in design capability from the outside. But what you choose to design is of central importance in this, and in our view, where you start is with the episode. Now what we mean by episode is customers experience their providers through a series of discrete events. We call those events episodes.

Those events have a definable beginning. I need something. I express that need. I feel that need. The end: when that need no longer exists. So I need. I have. Everything in between is what we call the episode. Designing a great episode is always constrained by performance targets—performance targets in experience terms. I need to get 30 points of improvement in NPS out of this. And in economic terms. I need to get more revenue, or I need to take out half the costs.

Making that happen requires you to design both how you want the customer to feel—what emotions do you want them to experience, and what emotions do you want them to definitely not experience—and for your performers. Like, if you're Domino's Pizza, and you want that pizza to be there hot and quick, you've got to design for the chef who's making the pizza. You've also got to design for the person who's delivering the pizza. And if you want that experience to be reliable, you've got to design a kitchen and a delivery system that can also be easy for those people to deliver every time.

Once you've got that episode designed the way you want it, you have to then be able to turn it into what we describe as operational design. So what demands does this new episode design place on your functions? In the pizza example, do I need more ovens? Do I need more chefs? Or do I need fewer? Do I need more drivers, fewer drivers, et cetera? Because getting the episode designed step-by-step, just right, isn't enough if you don't have capacity right and the skills right to deliver it at each step along the way.

So ultimately, being successful and effective in responding to the challenge of digitization all comes back to the episode and designing an episode that's outstanding for the customer and reliable for the performers.

Read the Bain Brief

AI Is Lifting Service-Center Performance

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