Design-Driven Service Innovation –Introducing Techniques for Changing the
Meaning of a Service
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Abstract
This research develops a method called design-driven service innovation (DDSI) by
incorporating the approach of design-driven innovation (Verganti 2009) into service designfor promoting the radical innovation in the meaning of a service. In particular, it provides a
guideline to reframe the context in which a targeted service is used, and also techniques to
explore the new meaning of the service by blending the primary context of service usage
with different contexts that satisfy the essential property of key interpreter’s unique vision.
By demonstrating how the method facilitates the process of design-driven innovation, thispaper clarifies the benefits of focusing on the meaning and context of a service for service
design and innovation.
KEYWORDS: design-driven innovation, meaning of a service, context, service innovation

Introduction
There is a common understanding among practitioners and researchers of service design thatthe involvement of users in a design process is a distinguished characteristic of the field(Holmid & Evenson, 2008; Holmid, 2009). Such an emphasis on user involvement, reflecting
the nature of user-centered and human-centered design approaches which the methodologyof service design is based on (Merger 2004), naturally influences the development anddiffusion of techniques used for designing services. Indeed service designers often resort tothe techniques for collaborating with customers such as contextual interviews, culturalprobes, and co-design or participatory design workshops (Stickdorn & Schneider, 2010).
However, compared to the popularity for doing research and co-producing solutions withcustomers, service designers rarely claim the necessity to distantiate the customers
intentionally in order to make a breakthrough vision for a service as a surprising proposal tocustomers. Regarding such a provocative vision making, Verganti (2009) introduces thepage 1

approach of design-driven innovation (DDI) in which designers, with the help of otherexperts called key interpreters, change the meaning of product radically to generate aninnovative product that seduces customers. Verganti (2009) characterizes such an approachas the innovation of meaning to distinguish it from the technology-push innovation and also
from the market-pull innovation.
Because Verganti’s interest focuses on the product innovation, even though he mentions
about its applicability to service innovation, researchers and practitioners in service design
have not been paying much attention to his research and the examples of its application toservice design are quite limited. One exception is found in an application of DDI toservitizing products (Baha, Groenewoud & Van Mensvoort, 2014), though it does not deal
with changing the meaning of an existing service. As for a methodical study, Schmiedgen(2011) discusses the difference and the relationship between design thinking and DDI
referring the models of innovation introduced by Kumer (2009). Wetter-Edman (2011) also
compares DDI and user-centered design to show based on empirical studies of service
design practices that designers actually combine these two approaches in a dynamic spiralway, which is contrary to the dichotomous view introduced by Verganti (2009) and Norman& Verganti (2011). Based on the result, Wetter-Edman (2011) asserts that service designers
are already practicing the approach of DDI as their expertise in a complementary way touser-centered techniques. However, it is not clearly stated in the research that how
strategically those designers’ design-driven approaches aim at changing the meanings ofservices.
Regardless of the degree to which the approach of DDI is performed strategically by service
designers in practice, we are not able to depend only upon experienced designers forgenerating a breakthrough vision considering the fact that many recent service design
projects are involving a various stakeholders including ones who are not trained as expert
designers. Verganti & Öberg (2013) also emphasize the role of the top management and thenecessity of involvement of leaders in the radical innovation of product meanings because“the center of attention should not be on implementation nor on creativity, but on strategy”.
To promote further the application of DDI to strategic service design and innovation
projects, it is desirable for various participants in the projects to understand the strength of
DDI and be able to use it.
This research develops a method called design-driven service innovation (DDSI) as a set oftechniques used for service design projects by incorporating the approach of DDI to change
the meaning of a service for its breakthrough innovation. In particular, it introduces aguideline to reframe the context in which a targeted service is used, and also techniques to
explore the new meaning of the service by blending the primary context of service with its
apparently distant contexts that satisfy the essential property of key interpreter’s uniquevision.
In the following, this paper first explains about the strategy to integrate DDI into service
design. Then it introduces the techniques of DDSI by demonstrating how they actuallyfacilitate the design process to change the meaning of a service. Finally, it summarizes thebenefits of the method and further discusses on the future research possibilities.

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The strategy to apply DDI to service design
Need for techniques to guide the meaning change

The process of DDI consists of the three stages of listening, interpreting, and addressing(Verganti 2009). At the listening stage, an internal design team makes a network of externalinterpreters who are experts in the research of targeted life context to have dialogues withthem for reframing the context and deriving a radical change in the meaning of a productused in it. The design team then moves to the interpreting stage where they integrate theinsights drawn from the previous stage with their company’s assets and knowledge to
explore the possible realizations of a breakthrough concept for the product. The last stage iscalled addressing in which the company resorts to the interpreters once again to ask them topromote the company’s vision using their seductive languages and expressions so that the
proposal becomes more meaningful and attractive to future customers. Whereas Verganti(2009) describes the detail of activity for each stage by referring to the topics such as
recruitment of interpreters for listening, the organization of workshops for interpreting, andthe usage of cultural prototypes for addressing, he does not provide specific techniques ortools for facilitating the process of DDI. Although the framework of DDI is theoreticallyformulated and the procedure to execute the approach is left for the strategy and creativityof each company, it would be helpful for the company to have some techniques or tools thatguide the practice of DDI.
Reframing the context

The point Verganti makes for claiming the importance of DDI is that a visionary company
should look at how the current context of life where a product or a service is used isevolving and also should explore how they could change the context so that people could
give more attractive meaning to the product or service. To understand this claim correctly, it
is especially important to pay attention to the expressions, ‘the meaning of a product’ and‘the life context’. Regarding ‘the meaning of a product’, Verganti & Öberg (2013, p.87) haveprovided the following definition. “To clarify, when we mention ‘product meaning’, we
relate to the purpose of a product/service as perceived by the user. It is about the purpose
for why a product is used, not how it is used (the user interface), nor what the productconsists of (its features)”. As for ‘the life context’, Verganti (2009, p.12) uses it without aclear definition, just presenting its examples such as ‘dinner with family at home at night’.
For the purpose of our research, we define the meaning of ‘context’ roughly as a set of
behaviours or activities performed to achieve some (life) goal. More precisely, when we use
the expression ‘the context in which a product or a service is used’, it is assumed that we arelooking at some archetype of activity pattern found commonly in the behaviours of atargeted user group. Using these definitions, it becomes possible to grasp more explicitly the
relation among the context, the meaning of a product/service, and the change of themeaning as following. When we say that the context of life is changing, it now means thatthe life goal and the activity pattern to seek it are changing. Also when we mention that themeaning of product or service has changed, it denotes that the purpose to use (or the roleof) the product or service in an activity to achieve some goal has changed. Then, as animplication from these clarifications of the terminology, we notice that a drastic change inthe context (the goal and the activity to achieve it) in which a product or service is usednaturally prompts a drastic change in the meaning of (the purpose to use) the product orservice. The techniques this research introduces aim at reframing the context strategically forpromoting the change in the meaning of a service.

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Changing the meaning of a service

The emphasis on the meaning and the context discussed above has further implications forthe application of DDI to service design. Compared to the product, a service deals (orinfluences) more directly with the user’s context. It intervenes in the user’s behaviour andjourney by introducing interactions with various touch-points like things, people, and places
in order to support the realization of the user’s goal. In other words, every service is trying toparticipate in and so modifying the user’s context to co-create values with users and otherstakeholders. However, it is also important to recognize that a service from one provider is
not able to change or control the whole activity context since the user of the service always
integrates it with other resources such as ones obtained from other providers and also theuser’s own actions and competences to achieve the goal (Vargo & Lusch, 2004). Suchincompleteness of a service necessitates the consideration of the meaning of a service, i.e.,
the role a service takes in achieving a user’s goal and also the view of a service ecosystem, i.e.,
the relationship between the service and its surrounding services and resources to constitutethe whole context.

Design-driven service innovation
The method of DDSI consists of three techniques that assist the activities of the first twostages (the listening and the interpreting) of DDI applied in a service design project. The
reason of the focuses on these stages is that these two are dealing directly with the process tomake a new proposal while the last stage concerns mainly on the communication of that
proposal, though it is possible to extend the method to include a technique for theaddressing as discussed later in this paper.
The first technique of DDSI is called Contextual Reframing. Contextual Reframing is used in
the listening stage to reframe strategically a life context in which a service is used intoanother related socio-cultural context for promoting the dialogue with key interpreters. The
second technique is named as Structural Interpreting, which is applied in the interpretingstage to grasp the essence of key interpreter’s unique perspective in a structural diagram,setting a direction for the ideation of the new meaning of the service. The third technique,Contextual Blending is finally introduced to develop a concept for new service experience byintegrating the primary context where the existing service is normally used with someapparently distant contexts in which people already realize the essence of key interpreter’svision. The overall structure of the method of DDSI is represented in Figure 1 and the threetechniques used in the method are detailed in order as follows.
Contextual reframing

The first question a company has when it begins a DDI project for service innovation iswhich context they should investigate to find a new meaning for a service. The appropriate
choice of a service context is also necessary for recruiting appropriate interpreters for design
discourse. For example, if a company aims at generating an innovative service concept for a
supermarket, a dominant view of its use context is preparing meals at home. Since we cannot
expect a radical reframing of the concept of supermarket by thinking just inside such an
ordinary context, it is more beneficial to look at its associated contexts such as family
conversation at table (an activity that follows meal preparation), housework sharing (a larger
context that includes meal preparation), or healthcare (a context that has a causal relation tomeal preparation). It is possible to use a symbolic association technique here to find some

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Figure	  1	
  Overall	  structure	
  of	
  the	
  DDSI	
  methodideas of life context by deriving associative words (or images) from the words expressing thecharacteristics of current dominant context. For a commercial project, however, it isespecially important to focus on a context for which the company could expect to attract
new customers or generate a new opportunity for existing customers to use the service.
During such research, the company may also consider their assets applicable to and theconsistency of their brand image with the focused new life context. In addition to suchbusiness-oriented interests, the company could further consider how a targeted context
relates to some emerging social issues or concerns on which more and more people aregoing to need new solutions to keep or improve their current wellness levels.
We could add a useful tip for reframing the context too. When a company is trying tomodify a context in which a product or a service is used, they necessarily look for a newreason why people use the service. It is sometimes easier to pay attention to those who are
not currently using the service to find out a new context that could make a reason for themto use the service, rather than figuring out a new reason for the existing customers directly.
Regardless of the techniques to find a new context, as Verganti (2009) mentions, the context
the company focus on must be one that its competitors are rarely looking at. Thus, thedesirable context to explore a new meaning of a service is one that has a potentially strong
connection to the current use context but has not been seek for as a major reason to use theservice due to the biases and assumptions of dominant perspective. In general, we can expectthat more difficult imagining a new context is in terms of association to the current use
context, more radical and innovative a new meaning of the service becomes in the newcontext.

page 5Structural interpreting

At the interpreting stage, an internal design team of the company confronts the mission to
generate breakthrough concepts for a new service that change the meaning of service
drastically. Structural Interpreting is a technique used for supporting the ideation of a newservice concept based on the insights collected through the design discourse with key
interpreters. Suppose that the design team is now provided with many unique visions about alife context, the question they ask is which vision is radical enough and in what sense isinsightful to navigate the ideation of breakthrough concepts. Sometimes various opinionsfrom a number of interpreters may cause difficultly for the team to evaluate the visions andset a direction to seek new concepts for a service. To assist a design team in such a situation,
the technique of Structural Interpreting together with a tool called as Positive Shift Diagram(PSD) are introduced to represent an interpreter’s perspective in a common structural
framework helping the team to evaluate if the vision could really evoke a drastic andmeaningful shift for a service. A PSD follows the same format as the diagram introduced forbreaking conceptual biases by Hideshi Hamaguchi, a former design strategist at Ziba Design
and is known as the first inventor of USB flash drive. According to Hamaguchi (2012),
because our conceptual bias is often trapped in a trade-off relationship between two
properties such as tangibility and data size in the case of computer memory, it is necessary
for an innovator to find a solution that satisfies these properties simultaneously by breaking
the relationship. In a DDSI project, a PSD characterizes similarly an interpreter’s vision interms of the trade-off relation that the vision breaks.
Let us now look once again at a supermarket as an example. Suppose that a company
managing a supermarket chain in Japan launched a service innovation project to change themeaning of supermarket for Japanese customers. While the numbers of female entering into
the workforce and accordingly double-income household are increasing continuously inJapan, the average time a husband spends for housework including meal preparation is stillmuch shorter than that a wife does. Considering that housework sharing for a doubleincome family is an emerging issue in the country, the company might decide to focus on theissue as a social context in which a new meaning of supermarket is explored. Through thediscourses with key interpreters on this topic, the design team of the company may beinterested in a vision to challenge the dominant view of seeing housework as burden thatspouses should share equally through a division of labour. The interpreter’s unique vision
criticizes this dominant view and provides a new perspective that regards housework as an
exciting creative project, which partners can collaborate on with flexibility. In this case, thedesign team may translate the interpreter’s view into the two PSDs represented in Figure 2
and Figure 3.

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Figure	  2:	
  Positive	  shift	
  diagram	
  on	
  creativity-­‐seeking	
  and	
  efficiency-­‐seeking

Figure	  3:	
  Positive	  shift	
  diagram	
  on	
  freedom	
  and	
  duties

First, Figure 2 shows the trade-off between efficiency-seeking attitude and creativity-seeking
attitude, on which the dominant view of housework is positioned at the lower right on the
curve meaning that housework is usually treat as bothering tasks to be worked throughefficiently as possible. On the contrary, people usually see a project of making art works,
which is positioned at the upper left on the curve, as a very creative activity and they mostly
tolerate its inefficient process. Against such perspectives, the new vision looks for the
possibility of creative housework, which satisfies both creativity and efficiency
simultaneously, being positioned at the upper right in the figure. Secondly, Figure 3 depicts
another trade-off between a spouse’s freedom (the other spouse’s duties) and duties (theother spouse’s freedom). In other words, the trade-off explains a division of labour thatwhen the number of one spouse’s duties in housework increases, the freedom of his or herhome and work life decreases. However, the new vision reveals that if both spouses can
switch their roles and shares of housework flexibly according to their fluctuating work-life
conditions, instead of relying on a fixed division of labour, they actually have more choices

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in the patterns of their housework sharing, thus increasing the degree of freedom in eachside’s work-life management.
Contextual blending

Once the important characteristics of interpreters’ future-looking perspectives are
summarized in PSDs, the design team can use these for the ideation of a new service byasking how a new service could support the positive shifts that break the current dominantview. To support such ideation, DDSI uses a technique called Contextual Blending todevelop a new vision for the service experience by integrating analogically the context wherea targeted service is normally used with another activity context that typically breaks thetrade-off depicted in a PSD. The technique of Contextual Blending is developed based on
the theory of conceptual blending introduced by Turner & Fauconnier (2002), which
explains, in the framework of cognitive linguistics, the structure of metaphorical cognition interms of the integration between two different conceptual spaces.
In the case of the supermarket innovation project, the company looks for a typical activity
context, outside the context of supermarket use, where creativity and efficiency are
simultaneously satisfied, and also another activity context where freedom and duties are
simultaneously satisfied. One candidate for the former can be the context of a co-design
project in the sense that participants in a co-design project usually seek for a kind ofcreativity to solve a problem collaboratively and at the same time try to complete it
efficiently within some limited time and budgets. Similarly, the context of a team sport suchas football or basketball can be a good candidate for the latter because we often observe
flexible role switching among the players depending on the changing condition of the gamedevelopment, thus keeping the good balance of players’ freedom and obligations.
After setting appropriate contexts that realize the positive shifts, the design team then picks
up some properties from these analogical contexts and also some from the context oftargeted service usage to integrate these properties into a new blended context in which the
expected positive shifts would be realized by the usage of a new service. The process to use
the technique of Contextual Blending follows as below. First, suppose that the design teampays attention, as properties to pick up, to the process of a design project known as the
double-diamond consisting of the four phases of Discover (research), Define (problem orvision setting), Develop (ideation and prototyping), and Deliver (implementation) (Design
Council 2007). They could integrate the structure of this process with the characteristics ofmeal preparation to derive a new process of meal preparation as a co-design project. For
example, the Discover phase for the meal preparation project means to do research on the
foodstuffs sold at a supermarket and reserved in the home refrigerator as well as the physicalconditions and the appetites of family members. As the Define phase of meal preparation
project, a couple of spouses define a theme for a dinner menu such as preparing a meal forkeeping them warm in a cold weather. They then move to the Development phase where theideas for a particular menu and its possible recipes and ingredients are explored. Finally at
the Deliver phase, they decide a menu and its recipe and negotiated who buys foodstuffs andwho makes meal for the dinner (Figure 4). Regarding the properties of a team sport, thedesign team may be interested in its various aspects such as training, team management, andstrategy. Then they may ask how spouses can develop their cooking competencies and whatkind of training program is appropriate for them to practice different work formations andflexible role-switching for meal preparation. Moreover, they could imagine the possibilitiesof having a strategy meeting for making decisions on buying foodstuffs smart and also hiring
an experienced coach for supervising their cooking performances.

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  Meal	  preparation	
  as	
  a	
  co-­‐design	
  project

By using Contextual Blending, the company is now able to develop a new vision and ajourney for an ideal meal preparation experience in the blended context. For example, a new
vision for meal preparation can be described as a collaborative dining design project for
spouses, who change flexibly their formation of cooperation like a team sport according to
the work-life conditions of both sides. Such a clear definition allows the design team to draw
a new experience journey of meal preparation to realize the concept and a new role(meaning) of supermarket to support it. For example, a supermarket may play a role of a codesigner or a facilitator who participates in the dining design project together with spouses.
The co-designer-like supermarket helps researching foodstuff, proposes possible themes fordinner, assists exploring and deciding a menu and recipes, and finding appropriate
ingredients. In addition, in considering the application of digital technologies, thesupermarket can provide the customer with an online dining design laboratory where thespouses pursue their dining design project using their PCs or smartphones when they are
traveling or having break at their offices. The online design laboratory can be a virtual spacefor brainstorming menu ideas and also for a meeting room to decide which spouse shops or
cooks. It may further connect with the food stock inventories both of supermarket andcustomer’s home (say, through a intelligent refrigerator) so that it supports the spouses’
design project based on the live information of the food stocks. Continuing such ideation,
the design team may happen to come up with a new concept for the retail space of thesupermarket. Since spouses of double-income households usually have a limited amount oftime to do shop at a supermarket or cook at home, they may prefer home delivery or justpicking up foodstuff they have already bought online. For such customers, the supermarket
does not necessarily have a large store space but may need a convenient pick-up window for
the online shoppers. Or it may also need a new facility for cooking staffs at the supermarket
to precook meals according to the order made online by the customer. Figure 5 shows theimage of the derived service concept.

page 9Figure	  5:	
  Image	  of	
  the	  service	
  concept	
  for	
  changing	
  the	
  meaning	
  of	
  supermarket

Discussions
In the previous chapter, the method of DDSI was introduced by demonstrating how its
techniques facilitate the process of design discourse of DDI when applied to the innovationof a service. In particular, this method provided the procedure to transform the current
meaning of a service into a new meaning of the service that reflects an interpreter’s uniqueperspective on the reframed life context. Although it is necessary to test the method withreal projects for the practical evaluation, we can expect that the approach of DDSI does notjust let DDI being more accessible for service design practitioners, including non-experts indesign, but also encourages them to coordinate strategically the meaning of a service and thecontext in which the service is used. Indeed, once a company defines clearly a breakthroughvision of a life context and a novel meaning of a service to support it, these help thecompany to design the service with keeping coherency among the parts (a behaviour andinteraction at each touch-point), the whole (a user journey and experience), and its
environment (the life context) of the service.
Such systemic coherence in designing a service along a breakthrough vision also supports thebranding of the service. Since the meaning of a service the customer perceives can be
influenced by its brand communication, the branding of a service works effectively for thecustomer’s perception of the meaning of a service if it reflects appropriately the vision of thelife context for which the customer feels empathy. Moreover, the relationship between themeaning of a service and its branding is not limited to such a one-way effect by the brand on
the customer’s perception of the service. According to Merz, He, & Vargo (2008), theliterature on branding has shifted its focus over the past several decades from viewing abrand as an identifier or an image to viewing it as a dynamic and social process. The authors
further explained that this shift has happened in parallel to the shift in the marketing
literature in general from goods-dominant logic (brand value is embedded in the physical

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goods) toward a more service-dominant logic (brand value is co-created with all
stakeholders). Therefore, it becomes important for the project of design-driven service
innovation to generate opportunities for all stakeholders to communicate on the newmeaning of a service promoting their participation in the process for the co-creation of its
brand value that reflects the breakthrough vision of the context.
This line of argument on service branding also indicates the importance of addressing in theprocess of DDSI, which is not dealt with in the current method. Verganti (2009, p.194)
explains the activity of addressing in terms of what he calls as a cultural of prototype, i.e., “anarticulation of a new meaning and language”, represented in various formats including books,
exhibitions, cultural events, and concept products, used for the codification and diffusion of
the company’s new interpretation and vision. For the future research, it is an interestingquestion to ask what kind of form and expression would be appropriate for the cultural
prototypes to address the design discourse on the meaning of a service.
In addition, the method of DDSI introduced in this paper does not cover the issue oftechnology epiphany, which is a merge of the radical innovation of meanings withtechnological breakthrough (Verganti 2009). Although it is not clear if there is a significant
difference in the approach for technological epiphany between product innovation andservice innovation, the development of a technique to promote technology epiphany for
DDSI will encourage a meaningful collaboration among engineers, designers, and businessstrategists.

Conclusions
The method of design-driven service innovation (DDSI) was developed as a set oftechniques for applying the approach of design-driven innovation introduced by Verganti(2009) to service design. DDSI provides a guideline to strategically reframe the context inwhich a targeted service is used, and also a technique to grasp the essence of the uniquevisions of key interpreters in a structural format. DDSI facilitates a company’s process togenerate a new meaning of the service by blending the primary context of service with its
apparently distant contexts that stratify typically the visions of key interpreters. Besides the
direct merit of using DDSI for service design, this paper also discussed about its applicability
to service branding as well as its possible extensions to support addressing and technology
epiphany for the future research. The techniques elaborated in this paper do not limit thepossible approaches to incorporate DDI into service design but encourage further
development of techniques and tools for that.

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