The California Academy of Sciences, a natural history museum in San Francisco re-opened last fall in a $488 million eco-friendly building. Beyond the new digs, they also apparently have a new attitude as well. They now stay open late Thursday nights and transform the museum into one of the city’s hottest night spots. More than 3,000 people drink and dance while touring the hands-on tide pool, aquarium, planetarium and four-story tropical rainforest. But book your $10 ticket now because they often sell out in advance.

Who the heck wouldn’t want to hang out in a cool aquarium for happy hour, rather than sitting in bar? We’re glad to see that the lawyers haven’t killed off this idea (can you imagine the wrangling that took?) and see this as a great example of service design. Museums are, after all, in the service business, delivering memorable learning experiences. Massive sums of money are put into bricks, mortar, collections and all the people needed to support it. So why not leverage those sunk costs into new and innovative revenue streams?

It makes perfect, brilliant sense to open the museum after-hours in this way. It provides an uber cool backdrop for socializing, and who knows – you just might accidentally learn something while sipping your mojito.

A recent article in the Wall Street Journal, entitled “The New, Faster Face of Innovation” points out that technology is transforming innovation because it allows companies to test new ideas at speeds – and prices – that were unimaginable even 10 years ago.

Changes implemented on websites or even in-store promotions can be launched, watched and analyzed all within a 24 period. In turn, the authors believe that innovation is becoming a “way of life” at more and more enlightened companies, and we say it’s not a moment too soon. Companies will (or should) be willing to try new things because the price of failure is so low.

In turn, customers should be getting better tailored services, products and offers. This is all good news for service design. These are the types of clients we love to work with; they think big, start small and act fast. And in the end, they win because their customers win.

Starbucks is taking a page from Toyota’s playbook in their new focus on streamlining the coffee-brewing process. From bending over to scoop coffee from below the counter, to eliminating idle moments waiting for expired coffee to drain, an 11-person team is bringing the gospel of “lean manufacturing” to more than 11,000 Starbucks stores.

According to the Wall Street Journal, Starbucks says the efforts are already helping its bottom line, as shown by quarterly results last month that beat analysts’ expectations. However, there are some employees who fear that the new efforts will turn them into coffee-making robots.

This focus on streamlined operations is an interesting complement to the other tack that Starbucks is taking with some of its stores in “de-Starbucking” them. Stores across the country are being revamped to look like locally-owned coffeehouses, complete with local artwork, baked goods and live music. The stores go by the name of their street address i.e. “250 Chestnut” and have drawn mixed reviews from observers. While some accuse Starbucks of going “stealth” in trying to pretend to be a local small business, customers who have actually experienced the stores give them high marks for being much more community-oriented, fun and funky than their corporate brethren.

Turning a ship the size of Starbucks is a slow and daunting task, but we give management credit for both their initiative and imagination. This is a great example of service design in which they’re using both sides of their brains; focusing on both mechanics and aesthetics, to improve both the bottom-line and the customer experience. How can you do the same in your business?

A recent article on Retail Wire details how PetSmart, the big box pet supply retailer, plans to add in-home services to their revenue mix. Services will include dog walking, backyard clean-up and aquarium set-up, all in an effort to differentiate itself from Wal-Mart, which offers everyday low prices on pet supplies and even pets, such as fish.

PetSmart currently offers grooming, training and kenneling at many of its 1,137 stores.

“In-home services are a big opportunity, but we have a lot of work to do before we determine how to make that work,” Robert Moran, who became the pet retailer’s chief executive officer last month after serving as COO since 2001.

Conversely, any move by PetSmart into at-home services would put pressure on the many mom & pops currently supplying those services.

“I would really question the training of the people they would hire,” said Jill Tuesday, owner of No Furry Worries in Huntington Beach, Calif., a local entrepreneur providing dog walking and pet-sitting services. “You can’t just hire a bunch of kids and then expect people to let them into their homes.”

But then again, that’s exactly what Best Buy does with the Geek Squad.

Where are the opportunities to enhance your existing core business with specialized services? This is where a service design review can help.

We have posted four new videos today which cover a range of topics related to service design. Click here to check them out.

We recently came across an amazing service designed for kids; a Brooklyn, NY storefront appears to cater to outfitting superheros for his/her next crusade. The shelves are lined with tools of the trade – invisibility paint, capes, deflector bracelets, and bottles of chaos and anti-matter. Customers are treated as real superheroes throughout every facet of the customer experience – and take an oath when they leave the store not to share trade secrets with “villains.”

An actual business generating real revenue, this novel idea actually creates a comfort zone for the real business in the back-room; a non-profit creative writing and tutoring center called 826NYC.

Imagine students, who are hesitant at best when their parents sign them up for extra help (equaling extra homework.) Now they enter a cool and unique storefront, and get to the tutoring center through a secret bookcase in the back wall. What kid wants to walk into a storefront that says “Tutoring Center?”

826NYC is the second in a series. A pirate supply store called 826 Valencia, located in San Franscisco, was the first tutoring/creative writing center and was the brainstorm of Dave Eggers, author of the Pulitzer Prize finalist novel “A Heartbreaking Work of Staggering Genius.”

Since then, sister sites have popped up all over the country with different themed storefronts. Seattle has a space traveler theme and 826 Michigan is a robot supply and repair shop.

Many times, we assist our clients in finding new service design concepts in the most obvious places. This story also shows that sometimes you have to “zig” when logic would tell you to “zag.” Kudos to Dave Eggers and everyone involved with his tutoring program for thinking differently in order to help kids bridge the gap between their own inner hero and their schoolwork.

Click here to see a Dave Eggers discuss this project at the 2008 TED conference.

Thanks to Mark Davis and his staff at Bentley University, in Waltham, MA. Their “Art & Science of Service” conference last week was a big success, with attendees from industry and academia who came from as far away as Germany, the Netherlands and Israel. There were lots of good contacts and networking opportunities. Our workshop, “Thinking Outside-In: Identifying New Service Revenue Opportunities” on Friday (see photo), generated some good interaction among the attendees. Thanks to all who contributed!

Some key takeaways from my conference notes:

• Out of IBM’s $103 billion USD of annual revenue, services now respresent more than half – $57 billion USD.
• IBM: Service science is more like biology (focused on classification) than physics (focused on mathematizing).
• “Service is value co-creation” – not just about money, but also about knowledge.
• At one hospital in the Boston area, a 1% turnover equals $250,000 USD. At one point, their turnover (prior to a new management team with a service design focus) was up around 20%.
• Why not show the wait times in an emergency room, similar to an airport terminal or deli counter?
• M2M acronym equals “machine to machine”
• Technology which enables M2M is exploding – both embedded devices and the back-end services. (Can security risks/opportunities be far behind?) This will have big impact on service design.
• What’s needed is a conference specifically focused on “service design in healthcare.” Lots of best practices and case studies, but it such a large sector that it needs its’ own vertical focus.

We recently attended a meeting at Turbine Hall on the shore of the Delaware River, just south of Philadelphia in a town called Chester. What an amazing rebirth of a building that was designed for something completely different.

We love these types of conversions because they are perfect examples of service design. After all, for decades this building housed massive electrical generators, which provided essential services to both consumers and businesses. As technology advanced over the years, a new power generation plant was built in a new location, rendering this massive structure obsolete – until a group of visionaries saw the potential and applied service design principals to re-imagine new possibilities.

Built in 1916 by The Philadelphia Electric Company, and completed two years later, the Chester Power Station is an example of early twentieth century greatness.  The building was designed by architect John T. Windrim, and engineer W.C.L. Eglin. It was also Windrim who designed The Franklin Institute, The Academy of Natural Sciences, and The Free Library of Philadelphia.

In 2001, the building underwent a $75 million transformation and now hosts a wide variety of high-technology businesses inside. The great open area that once housed the power-generating turbines is now a mixed-use event facility aptly named Turbine Hall. The space is 40,000 square feet with 100 foot high arched ceilings, and a beautiful view of the water. If you’re looking for a dramatic space to host a large event, check out this space.

A big part of our business is working with companies to understand the changes that technology – and specifically broadband – can bring to their business. There is probably no better example of this than the coming wave of “Connected TV” in which consumers will be able to connect their high speed broadband connection (via wire or wireless) directly to their HDTV set. The net result is the ability to watch any Internet video on a big, crisp screen from the comfort of your couch or favorite easy chair.

There is a lot of great content on the Web that will just never make it onto a cable channel. Whether it’s big-idea speakers from the TED conferences, or “how to” videos from Instructables, or independent films from Atom, I want to watch this long-form content on my TV, not my PC.

While this has huge impact for consumers, it will fundamentally change the relationship that HDTV manufacturers have with their customers. To date, the consumer’s “relationship” is with their cable provider. Historically, the TV manufacturer simply sold a big piece of glass, diodes and plastic and that was it. Less than 5 percent of consumers even sent in the warranty card.

But with the advent of connected-TV, the consumer electronics companies now find themselves in need of service design. Because now they have a very tight connection with the consumer and the revenues from services over the life span of the product will far exceed the revenues from the hardware. After all, there’s got to be some way of organizing and navigating the ever-growing mass of video content that is out there which in turn will lead to a wide variety of other value added service.

This is why we’re excited to be working with AnySource Media. They essentially empower the HDTV manufacturers with a four-pillar platform that brings Internet video to HDTV. These pillars include the embedded software that resides in the HDTV, pre-negotiated video content deals, an advertising platform that dynamicaly matches viewers and contextual ads, and a backend data center that ties this all together.

Connected TV is a “tipping point” technology. You’re already seeing the first few models come with many more to follow in 2010. I predict that by 2012, we’ll all be reminiscing about the “old days” when you couldn’t access your favorite show from the cloud, on demand.

This is not about watching more TV – this is about watching better TV, which means content you want, when you want it.

Pricing levels and methods are an important part of service design. Especially when you are changing them for a pre-existing service. That’s why it was interesting to see the awkward way in which Ryanair, the Irish discount airline, is handling their most recent announcement.

In a move to further automate their service, Ryanair, the Dublin-based budget airline announced it would introduce a $7.50 USD on-line check-in fee per passenger, per flight on new bookings. In addition, they plan to fine customers $60 USD if they do not print out their boarding passes prior to arriving at the airport. The airline hopes to shut down al of its traditional check-in desks at 146 airports by October 1st.

The move will eliminate about 100 jobs at Irish airports and Ryanair is set to save millions of pounds by ending its contracts with check-in services at European airports. Ryanair says the proposal will help passengers avoid “time wasting queues and delays.”

We’re all for that, but why charge a customer to check-in online if a) you are realizing dramatic cost-savings in the process and b) it’s the only way they can use your service?

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