blue ocean strategy case study · blue ocean strategy case study - service nsw 5 at the end of 2012...

BLUEOCEANSTRATEGYCASESTUDY

“TransforminggovernmentservicedeliverytothepeopleofNSW”

Author:SusanKehoe

SusanKehoeStrategytoPerformanceConsultingGroup

Mobile:+61(0)409887685Email:[email protected]:www.strategytoperform.com

BlueOceanStrategyCaseStudy-ServiceNSW

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TableofContentsForeword

1 Introduction............................................................................................................................3

2 BackgroundtotheestablishmentofServiceNSW....................................................................4

3 ScopeofthisCaseStudy..........................................................................................................5

4 BlockstoValueInnovationinNSWGovernmentServicedelivery............................................64.1 TheBuyerUtilityModel............................................................................................................64.2 “As-is”StrategyCanvasforNSWGovernmentservicedeliveryin2012...................................7

5 ABlueOceanapproachtotransformingservicedelivery.........................................................8

6 PrinciplesforShapingStrategy................................................................................................96.1 ReconstructingMarketBoundaries..........................................................................................9

6.1.1 LookingacrossIndustries..................................................................................................96.1.2 LookingacrossStrategicGroups.....................................................................................106.1.3 LookingacrosstheChainofBuyers.................................................................................106.1.4 LookingacrossComplementaryProductorServiceOfferings........................................116.1.5 LookingacrossFunctionalorEmotionalAppealtoBuyers.............................................116.1.6 LookingacrossTime........................................................................................................13

6.2 FocusingontheBigPictureandanewBusinessModel.........................................................136.3 ReachingBeyondExistingDemand........................................................................................156.4 Gettingthestrategicsequenceright......................................................................................16

6.4.1 Buyerutility.....................................................................................................................166.4.2 Priceutility......................................................................................................................166.4.3 Costutility.......................................................................................................................176.4.4 Adoption.........................................................................................................................17

7 TheBusinessModelCanvas....................................................................................................18

8 TheServiceNSWValueProposition........................................................................................188.1 TheValueProposition.............................................................................................................198.2 TheProfitProposition.............................................................................................................208.3 ThePeopleProposition...........................................................................................................22

9 PrinciplesforShapingExecution.............................................................................................249.1 Overcomingorganisationalhurdles.......................................................................................24

9.1.1 Tippingpointleadershipandpeoplewithdisproportionateinfluence...........................249.1.2 BreakingthroughtheCognitiveandMotivationalHurdles.............................................259.1.3 BreakingthroughthePoliticalHurdles...........................................................................259.1.4 BreakingthroughtheResourceHurdles.........................................................................25

9.2 Buildingexecutionintostrategy.............................................................................................25

10 TheLitmusTest......................................................................................................................26

11 TheServiceNSWOutcome.....................................................................................................27

12 Conclusion..............................................................................................................................29

13 AdditionalResources..............................................................................................................29


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ForewordServiceNSWisanimportantinitiativeinthedeliveryofanimprovedcustomerexperienceforthecitizensandbusinessesofNewSouthWales.Iwaspleasedtobeapartofacommittedteamin2012bringingServiceNSWtolife,taskedwithmeetingtheNSWGovernment’scommitmenttoimprovecustomers’experiencewithGovernmentservices.AstheNSWGovernment’sone-stopshopforgovernmentservicedelivery,asatJuly2014,ServiceNSWhaddeliveredover3.5millioncustomerinteractionsacross3integratedchannels.Thisisoutstandingperformanceincustomerserviceandatestamenttotheapproachforitsdevelopment.Servicechannelsaredesignedwithcustomers,forcustomersanddeliveredbystaffthatareempoweredandsupportedtodeliverhigherqualityservices.WhetherinthecentresnowoperatingaroundNSW,throughtheimproveddigitalexperienceorthetelephoneservice,peopleareembracingtheServiceNSWpropositionineverincreasingnumbers.SuchsuccessisduetothededicationandcommitmentoftheServiceNSWteam.Itiscontinuingtospearheadthecustomerservicetransformationthatisunderwayinthepublicsectorandissettingnewbenchmarksforcustomerservice.MichaelPrattCustomerServiceCommissionerDepartmentofPremierandCabinet


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1 IntroductionBlueOceanStrategy1hasbeenusedextensivelytotransformthepublicsectoraroundtheworldatalocal,stateandnationallevel.Mostprominently,since2009theMalaysiangovernmenthasimplementedaNationalBlueOceanStrategytoliftthelivingstandardofthecountryandtostructuretheapproachtonationaldevelopmentandmodernisation2.ManycasestudiesofpublicsectorinitiativesarelistedontheBlueOceanStrategywebsite3.NotablyhowevertherearenocasestudiesoftheuseofBlueOceanStrategyinthepublicsectorinAustralia.ThiscasestudyisaboutthetransformationofgovernmentservicedeliveryintheNewSouthWales(NSW)stategovernmentofAustraliaandshowsthatevenifBlueOceanStrategymaynothavebeenexplicitlyusedintheAustralianpublicsector,BlueOceanthinkinghasbeenappliedinatleastonegovernmentagencyinNSWrecently.ThisstudylooksathowBlueOceanStrategyprinciplesexplainthesuccessofaneworganisationestablishedbythegovernmentofNewSouthWales,Australia.Thenewagencycalled“ServiceNSW”wascreatedwhengovernmentmovedoutoftheredoceanofovercrowded,complexandconfusingdepartment-centricservicedeliverytoanewmodelofgovernmenttransactionalservicedeliverythataddedsignificantlyimprovedvalue,reducedcostsandengagedpeoplebothinsideandoutsidetheorganisationtotransformtheexperienceofpeopletransactingwiththeNSWgovernment.ServiceNSWmovedintoanewblueoceanofsimplecustomer-centricservicedesignanddeliverywithaone-stop-shopmodeldeliveredacrossthreeintegratedchannels(digital,phoneandservicecentres)tomakeiteasyforcustomerstotransactwithgovernment.Theservicedeliverymodelwasbuiltaroundtheconceptofaone-stop-shop-onephonenumber,onewebsite,andintegratedservicecentresfocusedonhighqualityservicedeliverytotransformthecustomerexperienceforpeopletransactingwithgovernment.Thiswasanexampleofvalueinnovationingovernment.Itdemonstratesthatbycreatingagovernmentorganisationdesignedfromcustomerfeedbacktoaddresscustomerpainpointsandbychallengingtraditionalmarketboundariesbetweenthepublicandprivatesectors,theexperienceoftransactingwithgovernmentcanberapidlytransformedforcustomers;theemploymentexperiencecanbetransformedforstaff;andgovernmentcanachievecostsavingsthroughrationalizationofoverlappingservices.ServiceNSWwassetupwiththemission:Tosimplifythewaycustomersdobusinesswithgovernmentandtotransformourcustomers’experiencethroughexcellentserviceandqualityatanoptimalcosttoserve.Insixmonthsandwithverylimitedresources,anexperiencedteamofpeoplesetupaneworganisationthatdeliveredconvenient,simple,qualitymodernservicesonbehalfofstategovernmentagenciesacrossdigital,phoneandservicecentrechannels,supportedbyaleadershipandemployeeexperiencewhichhastransformedcustomersatisfactionfromlevelsaslowas13%toconsistentlyhigherthan95%sinceopeningforbusinessinmid2013.

1BlueOceanStrategy:HowtoCreateUncontestedMarketSpaceandMaketheCompetitionIrrelevantbyW.ChanKim

&ReneeMauborgne(HBRPress,Boston,2015)2https://www.blueoceanstrategy.com/malaysia-nbos/public-service/3http://www.blueoceanstrategy.com/blue-ocean-strategy-for-national-development/


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2 BackgroundtotheestablishmentofServiceNSWAustraliahasathree-tieredsystemofgovernment–thefederal(orCommonwealth)GovernmentofAustralian,stategovernmentsandlocalgovernment.NewSouthWales(abbreviatedasNSW)isthemostpopulousofthesixstatesofAustraliaandcoversanareaof809,444sqkmor312,528sqmilesontheeastcoastofAustraliawithSydneyasitscapitalcity.Ithasapopulationof7.5millionpeople.Everyyearthesepeopleundertakeapproximately40milliontransactionswiththeNSWgovernment.AttheNSWstateelectionsof2011theLiberal–NationalPartywongovernmentinthebiggestlandslideswingagainstanysittingAustraliangovernmentsinceWW2afterbeinginoppositionforover16years.Thestateeconomywasinthedoldrums,thestategovernmenthada$49billiondebt,therehadbeenalackofinvestmentinmoderngovernmentservices,ininfrastructureandinpeopleleadership.AsurveyconductedbytheBostonConsultingGroupandDBM4showedthatcustomersatisfactionwithNSWgovernmentservicedeliverywasat60%,17%belowthenextlowestgovernmentinAustraliaand28%belowtheleadingstategovernment.Customers(mostofwhomwerealsovoters)inNSWweredissatisfiedandfrustratedwiththeirexperiencewhentransactingwithgovernment.ThenewgovernmenthadsetoutanambitiousstrategyforchangebeforetheelectionandtransformingthestandardofgovernmentservicetothepeopleofNSWandrestoringtrustintheStategovernmentasaserviceproviderwaspartofthatplan5.ThecreationofServiceNSWwasanearlyhighprofileactionbythenewgovernmenttotransformthecitizen’sexperienceoftransactingwithgovernmentandwastargetedatdeliveringaone-stopshopserviceforarangeofhighvolumestategovernmenttransactionalservices.Theseincludedservicesfromahandfulofkeystatedepartmentsandcoveredsuchservicesasvehicleregistrations,certificates,licences,identificationcardsandpaymentoffines.

TheRationaleforChange

4CustomerServicesTransformation,July2012https://aiia.com.au/documents/event-presentations/2016/nsw/nsw_govt_forum_customer_service_transformation_jul_2012.pptxx5NSW2021https://www.nsw.gov.au/sites/default/files/initiatives/nsw_2021_goals.pdf

60% average & variable customer satisfaction with government service

delivery

380+ government operated shop fronts

100+ government call centres

8,000+ phone numbers

900+ individual government websites – including 52+ transactional websites


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Attheendof2012therewereanestimated380NSWgovernmentshopfronts,100callcentres,8,000phonenumbersand900websitesthatcustomersneededtoselectfromandnavigatethroughiftheyneededtotransactwiththeNSWgovernment.Servicestandardswerepatchy,atbest;operatinghourswereusuallyrestrictedtowithinstandardbusinesshours;serviceswereusuallydesignedfromagovernmentdepartment’sviewpoint,notacustomerviewpoint;andthegeneralstandardofservicesacrossdigital,phoneandservicecentrechannelshadnotkeptpacewithimprovementsthathadbeenoccurringinthewidercommunity.Overallcustomersatisfactionwiththeservicetheyreceivedwasat60%butthisdisguisedawidevariabilityinservicewithsatisfactionaslowas13%inplaces.Thecustomerexperienceofdoingbusinesswithgovernmentwasincreasinglyfallingbehindcommunitystandardsatthesametimethatgovernmentcostsneededtobecontainedandreduced.Abusinesscasehadbeenputtogetherfromwithingovernmentincorporatingcustomerresearchandproposingthecreationofa“one-stop-shop”governmentorganisationforthedeliveryofgovernmentservicestoreplaceaconfusingarrayofexistingservicelocations.ThisbecametheinitialfocusforthenewlyappointedNSWCustomerServiceCommissionerinJuly2012.TheCommissioner'sroleincludeddevelopingpracticalandsustainablewaystoensurethecustomersoftheNSWGovernmentreceivedthemodernqualityservicetheyhadbeenpromised. 3 ScopeofthisCaseStudyThiscasestudyfocusesonthestart-upphaseofServiceNSWfromDecember2012toJuly2014.ThebusinesscaseforServiceNSWwasformallyapprovedbytheNewSouthWalesgovernmentinearly2012andServiceNSWopenedforbusinessinJuly2013.Asatthedateofwritingthiscasestudy(December2015)ServiceNSWisstillexpandingasnewservicesareofferedthroughitsone-stop-shopbusinessmodel.Thefollowingtableshowsthetimelineofrelevancetothiscasestudy.

HistoryandMilestonesofServiceNSWstart-up

Date Item

March2011 NewNSWgovernmentelectedEarly2012 BusinesscaseforServiceNSWapprovedbyCabinetJuly2012 PremierappointsinauguralCommissionerCustomerServicefromprivatesector

withfirsttasktooverseeestablishmentofServiceNSWNov2012 ServiceNSWCEOappointedDec2012 ServiceNSWexecutiveleadershipteaminplaceDec2012 IndustrialactiondelaysstaffrecruitmentJan2013 Programofworkunderwaytoimplement‘proofofconcept’phaseofServiceNSWJuly2013 ServiceNSWgoesLive-onewebsite,onephonenumberandfirstservicecentrein

Kiama.Customersatisfactionat98%andneverdropslower.July2014 18centresopen,800plustransactiontypesoffered,926,000customersservedin

servicecentres,417,000customersservedbyphone,1.5millionvisitstowebsite,andexpansioncontinuing.Customersatisfactionat98%.


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4 BlockstoValueInnovationinNSWGovernmentServicedeliveryOneoftheelectionpromisesoftheincomingNSWPremierO’Farrellwas:“Torestoretrustinthestategovernmentasaserviceprovider”6.Thereputationofthestategovernmentbureaucracyandgovernmentwasatalowpointandhenceapriorityissuewastorestoretrustthatsuchagovernmentpromisewouldandcouldbekept.Deliveryintheeyesofcustomerswasacriticalissueforthenewgovernment’scredibilityandoneoftheearlyactionsofthenewPremierwastofillanewroleofthefirstCustomerServiceCommissionerinAustraliawithaseniorleaderfromthefinancialservicessector.TheCommissionerwastoberesponsibletothePremierforthedeliveryonthispromise.

4.1 TheBuyerUtilityModelCustomerresearch7highlightedthatcustomersfoundithardtomakesenseofgovernmentservicedelivery,wheretofindtheservicestheyneeded,howtogetreliableinformationfromthecorrectsource,andhowtodothiswithoutwastingalotoftime.

FeedbackfromCustomers

Customerresearchhadidentifiedrecurringcustomerpainpointswhentheytriedtotransactwithgovernment.Thebuyerutilitymapbelowshowsasummaryoftheseatdifferentstagesoftheservicedeliveryandcustomerexperiencecycleandtheimpactsoncustomers’satisfactionwithgovernmentservicedeliveryingeneral.

6NSW2021https://www.nsw.gov.au/sites/default/files/initiatives/nsw_2021_goals.pdf7TheCustomerImperative:Redesigningfor“CustomerInside”byMichaelPratt,CustomerServicesCommissioner,July2014http://bx2014.org/sites/bx/media/248.pdf


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Thehundredsofwebsites,phonenumbersandgovernmentshopfrontsprovidingadviceandtransactionalservicestothepeopleofNSWwerefragmentedanddesignedtosuitthedepartments’requirementsratherthanthecustomers’.Theywerehardtofindandaccessandoftenrequiredlongwaittimesandinvolvedconfusedcustomersgoingtothewrongplace,orhavingtogotomultipleplacestodotherangeofthingstheyneededtodo.Thestandardofservicewashighlyvariableandledtoapoorreputationforgovernmentservicesandabeliefthatgovernmentwasbureaucratic,inefficient,outofdateandnotfocusedonservice.

BuyerUtilityMap

Utility Experiencedneed/lifeevent

Searchforservice

Experienceofservice

Deliveryorfulfilment

Impressionofgovernment

Votingbehaviour

Customerproductivity

Timewasting

Variablestandard,fragmented,wastingtax

Manual&facetoface

Inefficient Negative

Simplicity

Fragmentedacrossdepartments

Confusing Bureaucratic&rule-bound

Error-prone,manualdeliveryorcollection

Unnecessarilycomplex&bureaucratic

Negative

Convenience

Organisedfordepartmentnotcustomer

Complex&bureaucratic

Atdepartment’sconvenience

Inconvenient&timeconsuming

Bureaucratic,inefficient&outofdate

Negative

Risk

Overlyriskaverse&rulebound

Badpress Negative

Fun&Image

Customerhadtofitin

Tedious,frustrating,confusing

Variable,officious,annoying,bureaucratic

Slow,oldfashioned,inconvenient

Seriousandimpersonal

Negative

Environmentalfriendliness

Manual&paperbased

Oldfashioned Negative

Inconsistentandout-datedservicestandards,fragmentedservicepointsfordifferentservices,multiplecustomerinteractionsfortheoneissue,andlackofon-linefulfilmentinservicedeliveryallcreatedmanyopportunitiestofixcustomers’painpointsandreducethecost-to-serve.ThiscustomerexperiencepatternproducedstrongdissatisfactionamongstvoterswithgovernmentservicedeliveryandcontributedtothebiggestlandslideswingagainstanysittingAustraliangovernmentsinceWW2.Theelectionpromiseofthein-cominggovernmenttorestoretheelectorate’strustinthestategovernmentasaserviceproviderwasacontributortothechangeofgovernment.

4.2 “As-is”StrategyCanvasforNSWGovernmentservicedeliveryin2012

Eventhoughthecustomerexperiencewasnotuniversallypoor,theprevailingpublicimageofgovernmentserviceswasofpoorqualityservice.The“as-is”strategycanvasbelowrepresentsthepredominantviewofgovernmentservicedeliveryandindicatesdimensionsthatcreatedcustomerfrustrationandinformedthedevelopmentofanalternativebusinessmodel.


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This“as-is”strategycanvashighlightstheBlueOceanopportunityareasthatexistedforimprovingservicedeliverythroughimprovingvalueforcustomersandalsoforreducingcost.

5 ABlueOceanapproachtotransformingservicedeliveryAttheendof2012thenewServiceNSWleadershipteamwasrecruitedtobringthebusinessplantolife.ThegoalwastoestablishServiceNSWwithin6monthsandtransformthequalityofcustomerserviceacrossmillionsofgovernmenttransactionsperyearanddeliveraconsistentlyhighstandardofservicewhilstreducingcosts.Thenewbusinesswouldprovidemodernsimpletouseintegrateddigital,phoneandservicecentrechannelsinitiallycoveringtransactionsfromsixdifferentdepartmentsand800differenttransactiontypes.Noothergovernmenthadsuccessfullyachievedsuchanambitiousprojectinsuchashorttimeframe.Manydesignandexecutionchallengesandriskshadtobemanagedsuccessfullytodeliverontheobjective.Inanalysingwhatwasactuallydoneandwhyitwassosuccessful,theestablishmentofServiceNSWcanbeseenasanexampleoftheapplicationofmanyoftheprinciplesofBlueOceanStrategyinmanagingbothstrategyformulationandexecutionrisks.BlueOceanStrategydescribesfourtypesofstrategyformulationrisksandtwotypesofexecutionriskthatneedtobeeffectivelymanagedtosuccessfullydeliversuchaproject.TheprinciplesproposedbyBlueOceanStrategyformanagingtheserisksaresetoutinthetablesbelow.Thefollowingsectionsofthispaperwillexaminehowtheserisksweremanagedintheset-upofServiceNSW.

0102030405060708090

100

NSWGovermentDepartments'StrategyCanvas2012

NSWGovtDepartments


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PrinciplesforFormulatingBlueOceanStrategiesStrategyRisks PrinciplestoShapeStrategySearch ReconstructmarketboundariesPlanning FocusonthebigpicturenotthenumbersScale ReachbeyondexistingdemandBusinessModel GetthestrategicsequencerightExecutionRisks PrinciplestoShapeExecutionOrganisation OvercomekeyorganisationalhurdlesManagement Buildexecutionintostrategy6 PrinciplesforShapingStrategy

6.1 ReconstructingMarketBoundariesSearchriskoccurswhenorganisationsdonotopentheireyestonewanddifferentopportunitiesandthuslimittheoptionstheyconsiderinstrategydevelopment.InsteadoftakingtheestablishedmarketboundariesforgrantedtheBlueOceanstrategistquestionsandchallengesthem.InthiscasethedesignofServiceNSWchallengedexistinggovernmentmarketboundariesandmindsets.TheSixPathsFrameworkoffersastructuredapproachtothinkingaboutwaystoreshapemarketboundaries.BlueOceanstrategistsexploreallsixandseektouseallorasmanyaspossibleinformulatinginnovativestrategy.InServiceNSWthereconstructionofmarketboundariesandtheintroductionofexperiencefromotherindustrieswasthecriticalelementthatbroughtsuccesstotheneworganisationandallowedittobecomesosuccessfulsoquickly.

TheSixPathsFramework

6.1.1 LookingacrossIndustriesStandardsofcustomerservicehadbeensignificantlyimprovinginprivatesectorserviceindustriesovermanyyearsandyettheseimprovementshadnotbeenadoptedintheNSWgovernment.Retailbankinginparticularhadworkedthroughmanyissuesintransactionalservicedeliveryinservicecentre,phoneandon-lineandmobilechannelsandmuchofthiswasapplicabletotransactional


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servicedeliveryingovernment.TheCustomerServiceCommissionerandmanyofthetopexecutivesrecruitedtosetupServiceNSWhadextensiveexperienceinretailbankingaswellasotherindustriesandwereabletoseetheopportunityandveryquicklyintroducekeyelementsofthisretailbankingexperienceintotheServiceNSWbusinessdesignandreplacetraditionalgovernmentdepartment-centricapproachestoservicedeliverywithmoderntestedcustomer-centricapproachesthatalsoreducedthecosttoserve.Experiencefromtheretailbankingsectorinmultichannelintegratedservicedeliveryandhowtomigratecustomerstolowercostphoneandon-lineself-servicechannelswasappliedtotheServiceNSWservicedesign.Takingacustomer-centricapproachtoservicedesignandinvolvingcustomersinthisdesignwasanacceptedpartofprivatesectorservicedesignbutwasnewtotheNSWgovernment.Modernservicecentreswithfast-movingqueuesandahelpfulconciergetoassistwithqueuemanagementandwithconversiontousingalternativephoneandweb-basedservicesalsohadbeeninoperationinretailbankingformanyyearsbutwerenotusedaseffectivelyingovernmentservicecentres.Bankingcustomersnowexpectedhighqualityphoneandinternetbankingwithprovisionof24/7serviceswitheasyself-serviceandon-linefulfilment.Thesechannelsimprovedcustomerserviceoptionsandreducedthecost-to-serveinbankingandwereacorepartoftheretailbankingbusinessmodelbuttendedtobeabsentfromgovernmentservicedeliverymodels.Goodpeopleleadershipskillsandpracticestocreateandmanageacustomer-centricserviceculturewithstaffwhoweremotivatedandempoweredtosolveproblemsandcreateapositiveexperienceforcustomerswerealsoknowninotherindustriesbuttendedtobeabsentfromgovernmentwheretherewasapreoccupationwithrules,regulationsandpolicy,cumbersomeprocessesandavoidingriskorresponsibility.Otherindustrieswithrequirementsforregulationandcompliance(suchasbanking)weresomehowabletomanageriskandcompliancebutalsodeliverabettertransactionalexperienceforcustomers.ThisexperiencewasalsobroughtintotheServiceNSWdesignandtraditionalgovernmentapproachesthatovercomplicated,confusedandbuiltinlayersofcostanddelaywerechallenged.

6.1.2 LookingacrossStrategicGroupsBlueOceanstrategistsdonotfocusontheircompetitivepositionwithintheircurrentstrategicgroupbutratherlookacrossthestrategicgroupswithintheirindustry.Inthiscasetheindustrywastherangeofgovernmentdepartmentsthathadbuiltuptheirownserviceofferingsinisolationandofteninbudgetarycompetitionwitheachother.Governmentdepartmentscreatedtheirownsiloesofdepartment-centricserviceprovision.Thisresultedinsignificantduplication,costandconfusion.ServiceNSWredefinedtheboundariesofserviceprovisiontoaddresscustomers’painpointsanddesignservicestofitcustomerlifeeventsratherthandepartmentalresponsibilities.Serviceswereamalgamatedintoaone-stop-shopsocustomerscouldaccessservicesfromarangeofgovernmentdepartmentsatonesite–onewebsite,onephonenumberandoneservicecentredesigned,notarounddepartments,butaroundcustomersneedsandeasyaccesstoservices.

6.1.3 LookingacrosstheChainofBuyersBlueOceanstrategistslookforopportunitiestomarkettoasmanycustomersegmentsaspossibleandlookforignoredorneglectedgroups.InthecaseoftheNSWgovernment,somegroupshadbeenneglectedinservicedelivery.Peoplewhofounditdifficulttotransactwithinnormalbusinesshours,whoweretimepoorandfounditdifficulttophysicallyvisitservicecentrestotransact,whowerelessmobileorwhofounditdifficulttonavigateandfindgovernmentserviceswerenotwell


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serviced.Althoughthesepeoplestillhadtoaccessgovernmentservicesfromtimetotime,accesswasveryinconvenientforthem.The24/7phoneanddigitalservices,theincreaseinon-linetransactionsandfulfilment,andtheintroductionofaconciergeinservicecentresimprovedservicesforthesepeopleaswellasforallcustomers.

6.1.4 LookingacrossComplementaryProductorServiceOfferings Complementaryproductsandprocessesaffectthetotalcustomerexperience,thecostofaservice,theenvironmentwithinwhichstaffsupplytheservice,andtheabilitytointroduceimprovementsquicklyandatlowcost.Thewholechainofactivitiesthataffectwhathappensjustbeforeorafteraserviceisreceivedandtheservicesprovidedbysupplierstoassistindeliveryofyourservicecanimpacttheserviceexperienceforcustomers.Solvingtheproblemthatthecustomersfaceinthetotalprocesscanradicallyaffectthevalueoftheservice.ThustheBlueOceanstrategistdoesnotfocusonmaximisingthevalueoftheirproductorserviceonlybutlooksacrossthecomplementaryproductsandservicesnormallyconsideredoutofscopeofabusiness.AtServiceNSWserviceprovidersandbusinesspracticesfromarangeofsectorsandsupplierswereusedtoquicklyintroducemoderncommercialpracticesintoservicedeliverydesignanduse.ThisexpertiseprovidedarapidleapinservicequalityacrossawiderangeofelementsofServiceNSW’soperations.Italsomodernisedtheworkenvironmentofstaff,theserviceenvironmentforcustomersandthespeedoffeedbackreceivedfromcustomersontheirimmediateserviceexperience.Forexample:

• anoutsourcedcallcentreproviderwasusedtogethighqualityphoneservicesupandrunningquicklyandtransformthesystemsandcustomerexperienceonthephone,

• awellknownAustraliandesignerwasusedforcorporatewardrobedesigntoprofessionalisetheimageofservicestaff,

• consultantsspecialisingincustomerexperiencewereengagedforcustomer-focusedbusinessprocessdesign,

• assessmentcentressupportedbyanexternalrecruitmentcompanyassistedwithstaffselectionforserviceorientation,

• variousproviderswereusedforrapidmodernizationofITsysteminterfaces,• retailbankingexperiencewasappliedtoservicecentredesigntomodernisethe

environmentforcustomers,• retailbankingexperienceinfluencedtheuseofaconciergeserviceforcustomergreeting

andtrainingcustomersinselfservice,• aspecialistwebdesigncompanydesignedtheuser-drivenwebsiteandintranetdesign,and• financeindustryexperienceinfluencedtherapidtouchscreencustomerfeedbacksystemon

servicewhichprovideddirectquickfeedbacktoindividualstaffontheircustomers’serviceexperience.

Allofthiscontributedtoarapidandefficienttransformationinservicetocustomersthroughend-toendprocessesthatsupportedthebusinessgoals.

6.1.5 LookingacrossFunctionalorEmotionalAppealtoBuyersGovernmenttransactionalservicesusuallygravitatetowardsfunctionalratherthanemotionalappeal.Howeverinservicecentresinparticular,theunexpectedimpactofthemodernvisualpresentationofServiceNSWoutlets,thewelcomingatmospherecreatedbytheconcierge,theeliminationoflongwaittimesandtheinvitationtoprovidesimplefeedbackwithnewtechnologycreatedanemotionalunexpected“wow”inthecustomers’serviceexperience.Onthephones,theimmediatehelpfulservicebyapersonratherthananIVRandnolongwaittospeaktosomeonealso


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createda“wow”inthecustomer’sexperience.Thiswasallverydifferentfromwhattheyhadgrownusedtoexpectingfromgovernment.Theserviceexperiencestirredanemotionalresponseofpleasurethatisreflectedintheconsistent98%customersatisfactionratings.Evennow,eyeswilllightupandcustomerswillsmilewithpleasureandcommententhusiasticallyabouttheirexperienceandtheimprovementinservicewhentheauthoraskspeopleabouttheirexperienceasacustomerofServiceNSW.Thechangeinserviceoutletpresentationfromthis…..

Tothis…..


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6.1.6 LookingacrossTimeGovernmentserviceshadnotkeptpacewithtrendsthatwerealreadystronglyentrenchedinthewidersociety.Increasingly24/7accesstoservicesandtheshifttodigitalself-serviceandon-linefulfilmentandaccessonmobiledeviceswerebecomingthenorminserviceprovision.ThemodernisationofservicedeliverywithServiceNSWhelpedtobringgovernmenttransactionalservicedeliveryintothecurrenteraofservicestandardsandpositioneditforfurtherdevelopmentsinamoderndigital,mobileera.Meetingtheacceleratingcustomerdemandfordigitalandmobileself-service,althoughrequiringinvestmentinnewtechnology,providedaplatformforthereductioninduplicatedshopfrontsandashifttolowercostdeliverychannelsthatcustomersareincreasinglyexpecting.

6.2 FocusingontheBigPictureandanewBusinessModelPlanningriskoccursbecausewelosesightofthebigpicture.BlueOceanStrategyusesthestrategycanvasasatooltofocusonthebigpictureforboththe“as-is”andthe“to-be”businessstrategyandusestheEliminate/Reduce/Raise/Createframeworktohighlightthefocusareasforvalueinnovationinthedesignofthenewbusinessmodel.

TheFourActionsERRCFramework


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Researchoncustomerpainpointsgaveaveryclearpictureofwhataspectsofthegovernmentservicecouldbeeliminated,reduced,raisedandcreatedtoplaceServiceNSWinanewBlueOceanofservicedelivery.TheseareasareshowninthefollowingERRCgrid.

ServiceNSWEliminateReduceRaiseCreate(ERRC)grid

Eliminate

• Poorpublicreputationofgovernmentservices(poorcustomersatisfaction)

• Governmentbureaucracy-drivenservicedesignforcustomer-facingtransactionalservices(notcustomer-centric)

• Transactionalservicesthatarefragmented,complexconfusingspreadoverhundredsofphonenumbers,websitesandservicecentresofdifferentgovernmentdepartments(noteasytofindandaccess)

Raise

• Publicsatisfactionwithgovernmenttransactionalservices(customersatisfaction)

• Staffselectedforserviceorientationandpeopleleadershipskills(serviceorientedstaff)

• Qualityandconsistencyofpeopleleadershipofstaff(customer-centric)

• Increasehoursofoperationtobemoreaccessible(easytofindandaccess)

• Numberoftransactionsthatcanbedoneonline(on-linefulfilment)

• Numberofpeoplechoosingtouseonlineselfservice(assistancetousedigital)

Reduce

• Highcostofduplicatedservices(price)• Complexityandhasslesofdealingwith

government(poorcustomerexperience)• Unproductiveunnecessarymultiple

visits,errors&reworkcausingfrustratedandconfusedcustomers(noteasytofindandaccess)

• Duplicationandoverlapinservicedelivery(duplication&overlap)

Create

• 24/7one-stop-shopacross3channels(easytofindandaccess)

• Moderncustomer-centricservice&processdesign(customer-centric)

• Modernfrontendsystemsforcustomersandstaff(modernsystems)

• Visualimpactofmodernserviceandwelcomingservicesinservicecentres(includingtheconcierge)(customerexperience)

• Designandservicestoencourageonlineselfservice(assistancetousedigital)

• Immediatecustomerfeedbackonservicesatisfactionlinkedtostaffmember(customersatisfaction)

• ServiceValueChainappliedtobackofficeservicessupportingfrontofficeservicedeliveryandculture(customersatisfaction)


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6.3 ReachingBeyondExistingDemandScaleriskreferstothefactthatgrowthislimitedbythesizeofthecustomerbase.BlueOceanStrategythinkingpromotestheopportunitytodramaticallyexpandthepoolofpotentialcustomersbylookingforopportunitiesthatextendthecustomerbaseintonon-customersgroups.BlueOceanstrategistsareinterestedinnon-customersastheyrepresentpotentialorlatentdemand.AsgovernmentorganisationssuchasServiceNSWdelivermonopolygovernmentservices,theconceptofnon-customersneedstobeconsideredmorecreatively.Theycouldbecustomerswhodonotuseparticularchannels(egdigitalorphone)ortheycouldbedepartmentswhochoosetouseanalternativeserviceprovidertoServiceNSWforthedeliveryoftheirtransactionalservices(egAustraliaPost).BlueOceanStrategycategorizesnon-customersinto“soon-to-be”,‘refusing”and“unexplored”non-customers.Somepotentialnon-customersinthesecategoriesforServiceNSWareshowninthediagrambelow.

ThreeTiersofNon-customersforServiceNSW

AsapriorityforServiceNSWwastodeliveronthegovernment’spromiseofbothtransformingtransactionalservicedeliveryandreducingservicedeliverycosts.ServiceNSWfocusedinitiallyonhighvolumetransactionsfrompilotagenciesthatcouldbemodernisedandstreamlinedandonconvertingnon-digitalcustomerstoselfservicecustomersbyprovidingeasytouseon-lineservices.ThepositivecustomerexperiencewouldcreateapotentialmarketformoreservicestobemigratedtoServiceNSWtofurtherincreasetheeconomiesofscaleandimprovetheserviceofferingofServiceNSW.Unexplorednon-customersoutsideoftheNSWgovernmentsector(federal&localgovernmenttransactions)oralreadyoutsourcedhighvaluegovernmentservices(egthosecurrentlyoutsourcedtootherorganisationsonafeeforservicebasis)couldbetakenonbyServiceNSWatalowercosttoserveonceServiceNSWdemonstrateditcoulddeliver.

• Departmentsconsideringoutsourcingtransactionselsewhere

• Citizensunhappywithgovernmentservices

• Non-digitalcustomersthatcouldbeconvertedtodigital

• Citizenswhosevotingbehaviourcanbeinfluencedbygovernmentserviceimprovement

• TransactionsoutsourcedtoAustraliaPostetc

• Federalandlocalgovernmenttransactions

• Privateenterprisetransactionsthatcomplementotherservices

UnexploredRefusingSoon-to-be


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6.4 Gettingthestrategicsequenceright

Businessmodelriskoccurswhentherightstepsaredoneinthewrongorder.ThesequenceofBlueOceanstrategyisafourstepprocessstartingwithbuyerutility,thenmovingtopricing,thencostthenadoption.Thesolutionmusthaveexceptionalbuyerutility,bepricedtothemassmarket,haveacoststructurethatisprofitableandresolvepotentialadoptionhurdles.ThefollowingmodeloutlinestheprocessofdeterminingiftheBlueOceanstrategyisreadyforexecution.StartingwithBuyerUtilitytheBlueOceanstrategistonlymovestothenextquestionwhentheyareabletoanswer“yes”.IftheanswerisyestoallfourquestionsthentheBlueOceanideaismorelikelytobecommerciallyviable.

6.4.1 BuyerutilityTheServiceNSWstrategywasstronglybasedonalleviatingcustomerpainpointsandcreatingaserviceofferingthataddedexceptionalvalueforcustomersacrossalldemographicsandregainingthetrustofcitizensinthegovernment’sabilitytodeliverqualityservicetopeopleinNSW.Customer-centricservicedesignandbuyerutilitywasattheheartofallaspectsofthebusinessdesignandthismindsetwasusedtounlockexceptionalvalueingovernmentserviceprovision.ServiceNSWwasalsoprovidingtheservicesofmultiplegovernmentdepartmentsthatneededtofeelconfidenttheycouldtrustServiceNSWtodelivertheirservicesandcomplywiththeirlegislativeandpolicyobligations.OnceServiceNSWdemonstratedthattheycouldbetrustedtodeliver,additionalagencieswouldbeapproachedtohavetheirtransactionalservicesincludedintheServiceNSWofferingthusallowingthoseagenciestofocustheireffortsontheircorebusiness.

6.4.2 PriceutilityServiceNSWwassetuponthepremisethatgovernment’scost-to-servewouldreduceoncetheproofofconceptwasestablishedandscaleachieved.ServiceNSWhadtoensuretheycoulddelivertheserviceoutcomeswithintightpriceconstraintsthatwouldsupportlongertermsignificantcostreductions.

BuyerUqlity

•  Isthereexcepqonaluqlityinthebusinessidea?

Price •  Isthepriceaccessibletothemassofbuyers?

Cost • Canitatainthecosttargettoprofitatthestrategicprice?

Adopqon • Whataretheadopqonhurdlesinactualisingthebusinessidea?


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6.4.3 CostutilityTodelivermoderntransformedserviceswithinthepriceconstraints,ServiceNSWleveragedlearningsandsolutionsfromotherindustriestoaccelerateinnovationandchoseminimalistsolutionsthatwoulddeliverbestvalueatlowcost.Deliveryofdigitalself-servicesolutionsthatcustomerswantedtousewasacriticalelementinreducingthecosttoserve.

6.4.4 AdoptionCustomerslovedthechangeasitmadetheirliveseasier.HowevercreatingpartnershipswithagenciestosupportadoptionofServiceNSWastheirreplacementserviceproviderwasachallengeandrequiredstrongcommitmenttorelationshipbuildingandgovernance,andthesupportofearlyadopterstobuildpartnershipssoagenciescouldleveragethebenefitsServiceNSWcouldoffer.


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7 TheBusinessModelCanvasTheBusinessModelCanvasisatoolthatshowsasimplesummaryofkeyelementsofabusinessmodel.ThecanvasbelowsummarisestheServiceNSWbusinessmodel.

ServiceNSWBusinessModelCanvas

KeyPartnersNSWgovernmentdepartmentsExperiencedcomplementaryserviceproviderstopartnerforrapidserviceimprovement

KeyActivitiesNSWgovernmenttransactionsacrossallchannelsCompliancewithlegislation&policiesRevenuecollectionfordepartments

ValuePropositionsTosimplifythewaycustomersdobusinesswithgovernmentandtotransformourcustomers’experiencethroughexcellentserviceandqualityatanoptimalcosttoserve.

CustomerRelationshipsTransactionalperiodicrelationshipswithgovernmentcustomers

CustomerSegmentsAllagegroupsanddemographicswhoneedtotransactwithNSWgovernmentGovernmentdepartmentsasclientswhouseServiceNSWastheirservicedeliveryarmfortheircustomers

KeyResourcesPeopleProcessesRelationshipsTechnologyInternet

ChannelsServicecentresPhoneDigitalAlldevices

CostStructureStaffcosts,Corporatecosts,ITsystemcostsandpropertycosts

RevenueStreams(*future)Budgetallocationsfromgovernment*Marginfromfeescollectedonbehalfofotherdepartments*Feeforservicefromdepartments

8 TheServiceNSWValuePropositionForastrategytobesuccessfulitmustalignthreestrategicpropositions–thevalueproposition(offeringdemonstrablecustomervalue),theprofitproposition(itmustbringsubstantialrevenueandprofittothebusiness),andthepeopleproposition(itmustmotivateandempowerpeopletoexecutethestrategy).


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8.1 TheValuePropositionTheERRCgridinsection6.2showsthekeyelementsthatinformedthedevelopmentoftheServiceNSWstrategy.TheStrategyCanvasbelowshowsthecleardifferentiationbetweentheoldgovernmentservicedeliverystrategyandthenewServiceNSWstrategyandindicatesthedimensionsthatweregivenprioritywhentrade-offshadtobemadeduetotimeorresourceconstraints.Thenewmodelaimedtocreatevalueinnovationbyreducingcostsandpriceatthesametimethatitproducedasignificantimprovementinvalueforthegovernment,clientdepartmentsandcustomers.ThetaglinefortheServiceNSWstrategywas“TransforminggovernmentservicedeliveryforthepeopleofNSW”.

TransforminggovernmentservicedeliveryforthepeopleofNSW

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ServiceNSWStrategyCanvas

ServiceNSW

NSWGovtDepartments


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TheBlueOceanStrategyCanvaswasnotusedinServiceNSWbuttheServiceNSWDNAdiagrambelowgaveasimpleclearpictureofthestrategy.Thiswasusedinallforumstoshowthevision,thestrategyandthemeasuresofsuccesstoguidedecisionmaking.Thisguidedthebusinessdesign,executionandperformancemeasuresofsuccessandinformedchoicesthatweremadeduringthebusinessdesignprocess.Itshowedthestrategynon-negotiablesandwhatsuccesswouldlookliketoall.

ServiceNSWBusinessModelandStrategy

8.2 TheProfitPropositionServiceNSWwasexpectedtoeventuallydeliversignificantsavingstogovernmentbyreducingduplicationinshopfrontsandphoneservices,streamliningprocessesandputtingarangeofstrategiesinplacetoencourageeasyself-service.Bystrippingawayunnecessarybureaucracyinservicedelivery,theaimwasnotonlytoimprovethecustomerexperiencebutalsotoreducethecost-to-serve.ThefactorsthatcreatedtheServiceNSWProfitPropositionareillustratedinthefollowingERRCgridandStrategyCanvas.

Leadership & Culture

Organisational Systems

Internal Service Quality

Employee Commitment

Outstanding Customer

Experience

Customer Satisfaction

Employee Productivity

Employee Retention

CUSTOMER FEEDBACK FOR CONTINUOUS IMPROVEMENT

ORGANISATION EMPLOYEES CUSTOMERSÈ È

Service NSW DNAVISION

MISSION

VALUES

SERVICE VALUE CHAIN

To simplify the way customers do business with government and to transform our customers’ experience through excellent service and quality at an optimal cost to serve

PASSION A great customer experience is our highest priorityTEAMWORKWe work together for positive customer outcomesACCOUNTABILITYWe work to create value and take ownership for the customer experience end-to-end

Putting our customers at the heart of everything we doDelivering more choice Making it easier to connect with us through a variety of easy to access channels Innovating, improving and simplifying how we do things

We are wired for service, with:Distinctive service culture Outstanding leadership and passionate people Quality technology and processes Partnerships built on mutual respect Good custodians of tax payers’ money

Top quartile employee commitment Top quartile customer satisfaction First choice provider of government services Solutions and savings for government

STRATEGY DELIVERY

SUCCESS

To be recognised as the distinctive leader in the provision of government services È

È È

È

È

È


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ERRCforProfit

Eliminate

• Duplication&overlapofservicesdesignedarounddepartmentalsilos

• Complicatedcomplexprocesses• Distortedviewofriskdrivinglayersof

non-value-addingbureaucracy

Raise

• Customerself-service

Reduce

• Costofmultiplehandlingofcustomers• Multiplewebsites,phonenumbersand

shopfronts

Create

• Streamlinedprocesses• On-linefulfilment• Conciergetoassistwithselfservice

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8.3 ThePeopleProposition

CentraltotheServiceNSWstrategywasthecreationofacustomer-centriccultureandworkplacethatencouragedcustomerservicethroughoutthewholeServiceValueChainfromsupplierstointernalserviceprovidersandleaderstofrontlinestaff.AttheheartoftheServiceNSWDNAwastheconceptoftheServiceValueChainandtheideaoftheinter-connectednessoftheemployeeexperienceandthecustomerexperience.Ifstaffweretodeliversuperiorservicetoexternalcustomers,ServiceNSWneededtocreateaworkplacecultureandprovideresourcesthatsupportedhighqualityinternalservicedeliveryandagreatemploymentexperienceforstaff.Leadersatalllevels,particularlytheCEO,hadakeyroleinmakingthishappen.Itemsthatweregivenpriorityincludedimprovingthequalityofpeopleleadership,empoweringstafftosolveproblemssotheycoulddeliverbetterservicetocustomers,providingawardrobetogivestaffamoreprofessionalimage,providingmodernworkplacestofrontlinestafffirst.Frontlinestaffwereprovidedmoreuser-friendlymoderntechnologytodotheirjobsandtouchscreentechnologyallowedcustomerstoprovidemoreimmediateandpersonalisedfeedbackontheirserviceexperiencefromstaff.IntheirarticleonBlueOceanLeadership8KimandMauborgnesuggestleadershipcanbethoughtofasaservicethatemployees,bossesandstakeholderseitherbuyordon’tbuy.Whenpeoplebuyaperson’sleadershiptheyarebuyingcertainleadershippracticesthatinspireemployeestocommittodoingtheirbest.Butwhenemployeesdonotbuyaperson’sleadershiptheybecomedisengagedandnon-customersofyourleadership.LeadersinServiceNSWhadacriticalroleinshapinganewcultureofpassionforcustomerservice,teamworkandaccountability.Leaderswerechosenmorefortheirpeopleleadershipskillsthantheirtechnicalknowledgeandstaffwereencouragedtosolveproblemstoprovidegoodservice.Expectationsforqualityservicewereclearandindividualandteamfeedbackfromcustomersonperformancewasimmediateandbuiltintohowstaffwereled.Thiswasaverydifferentworkplacetomanyofthetraditionalgovernmentworkplacesandstaffrespondedinwaysthatdelightedcustomers.Becauseoftheextentofthechangeinexpectationsofworkplacebehaviourandperformance,significanteffortwentintoexplainingthenewworkplaceandexpectationssothatimpactedpeoplefromagenciescouldmaketheirownchoiceaboutwhethertheywantedtoapplyforjobsinServiceNSW.ManyexistinggovernmentemployeesfromimpactedagenciestransitionedsuccessfullytoServiceNSW.SuppliersalsowerebriefedduringprocurementactivitiesonthenewcultureandexpectationssothattheyknewtheywereexpectedtoprovideaservicethatsupportedtheServiceNSWDNAandobjectives.TheERRCgridandtheStrategyCanvasbelowshowwhatchangedtocreatetheServiceNSWPeopleValueProposition.

8BlueOceanLeadershipbyW.ChanKim&ReneeMauborgne(HBR,May2014)


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ERRCforPeople

Eliminate

• Inconsistentmanagementofstaffperformance

• Distortedviewofriskholdingbackchange• Lackofperformancemanagement

Raise

• Timelypersonalisedfeedbackonservicefromcustomersandsupervisor

• Recognitionofgoodcustomerservice

Reduce

• Poorpeoplemanagementpractices• Oldhard-to-usesystemsforstaff• Bureaucraticfrustrationsthatdiscouraged

stafffromsolvingproblems

Create

• CompellingServiceNSWDNAvision• Leadershipaccountability&empowerment• Moderntechnologysolutionssupporting

frontlinestaffandcustomers• Modernworkplacesforfrontlinestaff

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AxisTitle

ServiceNSWPeopleProposiqon

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9 PrinciplesforShapingExecutionRepeatedresearchonthesuccessofbusinessstrategyandtransformationalchangereportsfailureratesfrom70%to90%.9Thisequatestoanextraordinarilylargewasteofresourcesinactivitiesthatareintendedtoimproveorganisationalperformance.Unlikemoststrategyframeworkshowever,BlueOceanStrategyrecognisestheimportanceoforganisationalandmanagementhurdlesandbarrierstochangeandbuildsstrategyexecutionstrategiesintothestrategyformulationprocessfromthestart.

9.1 OvercomingorganisationalhurdlesOncethestrategyisdefinedthereareanumberoforganisationalrisksthatmustbeidentifiedandovercomeifexecutionistobesuccessful.BlueOceanStrategyidentifiescognitive,motivational,politicalandresourcinghurdles.BlueOceanStrategyalsoproposestheuseof“tippingpointleadership”principlestoovercomethesefourhurdlesmostquicklyandefficiently.

Organisationalhurdles

9.1.1 TippingpointleadershipandpeoplewithdisproportionateinfluenceTippingpointleadershipchallengesconventionalwisdomwhichbelievesthemorecomplextheproblem,themoreresourcesarerequiredtoresolveit.MalcolmGladwell10hasillustratedinhisbookTheTippingPoint:HowLittleThingscanMakeaBigDifferencethatcertainpeopleexercisedisproportionateinfluenceinsocialnetworks.Byknowingwhothesepeopleareandinvolvingtheminthestrategyformulationandexecutionprocesstippingpointleaderscanbeusedtoaccelerateboththequalityandspeedofsolutionsandtheengagementofstaffinsupportofthechange.

9TheIrrationalSideofChangeManagementbyCarolynAikenandScottKellerTheMcKinseyQuarterlyno2200910TheTippingPoint:HowLittleThingscanMakeaBigDifferencebyMalcolmGladwell,BackBayBooks,newYork,2002.

CognitiveHurdle

PoliticalHurdleResourceHurdle

MotivationalHurdle


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InthesetupofServiceNSWastherewasnoexistingorganisation,mostinfluencewasexertedbypeopleinformalpositions–thenewPremier,theCustomerServiceCommissioner,Unionsandkeypeopleinimpacteddepartmentsexerteddisproportionateinfluence.

9.1.2 BreakingthroughtheCognitiveandMotivationalHurdlesThecompellingcaseforServiceNSW,thecustomerfeedbackdataandtheServiceNSWDNAandvisionforchangecreatedapowerfulstoryforbothintellectualandemotionalengagementofimpactedstafffromotherdepartments,forengagementofexternalstakeholdersandforattractingstafftojoinServiceNSW.ThecustomerdatatogetherwiththeServiceNSWstorytoimproveservicestotheNSWcommunityandtocustomersandtoimprovetheemploymentexperienceforstaffprovidedverycompellingrationalandemotionalargumentsforchange.TheconsistentfocusinthedesignofServiceNSWonimprovingboththecustomerandthestaffexperiencecreatedthesenseofbeingpartofsomethingtransformationalandgoodforbothsocietyandindividualemployees.Staffintheimpactedagencieswereinvolvedinregularcommunicationsandsomewereinvolvedinaspectsofdesigningtheneworganisation(suchasthedesignofthecorporatewardrobeandinvolvementinprojectteams).

9.1.3 BreakingthroughthePoliticalHurdlesHavingtheCustomerServiceCommissionerasasponsorreportingtothePremierandaccountablefordeliveryofoneofthePremiers’prioritiestoimprovecustomerserviceinNSW,provedanimportantpoliticalandbureaucraticsupportinovercomingthemanychallengesthataroseindeliveringsuchmajorchangeinsuchshorttimeframes.

9.1.4 BreakingthroughtheResourceHurdlesThebusinesscaseforfuturefundingofServiceNSWandcostsavingswasbasedonthereallocationofbudgetsfromexistingdepartmentsasservicesareprogressivelytransferredtoServiceNSWonafeeforservicearrangement.Fortunatelytheinitialfundingdidnotrelyonthisastheformulaforbudgetaryreallocationwasanongoingareaofdebate.

9.2 BuildingexecutionintostrategyManagementriskreferstotheneedtobuiltexecutionintostrategyfromthebeginningbywinningthetrustandcommitmentofpeopleimpactedbychangeinordertoinspiretheirvoluntarycooperationandproactivesupportsothatchangeisnotunderminedbymistrust,non-cooperationandsabotage.Unlessthepeoplemostaffectedbythechangeareinvolvedfromthebeginninginunderstandingwhychangeisneeded,andhaveanopportunitytocontributetoandinfluencethestrategyformulationprocessandunderstandwhatisexpectedofthemwithanychange,thewholestrategycancomeundonebecauseofdisengagementandimpracticalpoordesign.BlueOceanStrategyreferstotheneedfortheuseof“fairprocess”inthechangeprocessthroughinvolvingimpactedstakeholdergroupssotheyconsidertheyhavehadafairchancetoinfluencechangesthataffectthem.


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Executionhurdles

Settingupaneworganizationinonlysixmonthsthattransformedsomanyaspectsofhowthingswerenormallydoneingovernmentrequiredextensivestakeholderengagement.Thestoryofwhatwasbeingcreatedandwhy,theexpectationsofleadersandstaffintheneworganizationandtheprioritygiventodeliveringservicetocustomerswasaconsistentongoingmessagethatallowedpeopletoknowwhatwouldbeexpectedofstaffinthenewServiceNSWandwouldallowthemtodecideiftheywantedtoworkinthistypeoforganisation.Themessagewasalsocleartonewstaffthatmanyaspectsoftheneworganizationwerestillbeingworkedoutandtheywouldneedtoparticipateinsolvingproblemsattimesratherthanexpectingtheywouldcomeintoafullydesignedorganisation.Giventhechallengingchangeagenda,theshorttimeframesandtheagileapproachtoprojectdesignanddelivery,executionwasbuiltintothestrategyfromthestartandstakeholdersatalllevelswereinvolvedinthecompellingstoryforchangewhichcreatedsignificantstakeholderbuy-inandcreatedgoodwillintimesofconsiderablechangeandanxiety.10 TheLitmusTestWhencomparingdifferentideasforinnovationtheLitmusTestprovidesasimplegraphicalwaytoidentifywhichoptionhastheleastbusinessriskandhasthegreatestchanceofsuccess.Themoreticksanoptiongets,thegreaterthechancethatthestrategyhasbeenwellthoughtthroughandtheharderitisforacompetitortoreplicate.TheLitmusTestcombinesthestrategyalignmentofvalue,profitandpeopleandthesixpathstoinnovationthatwehavealreadydiscussed.ItthenaddsamarketingdimensionintheLitmusTestthatconsiderswhetherthestrategyisfocused,divergentandcompelling.Inotherwords,canasimplestorybetoldaboutthebusinessstrategythatwillcapturethecustomer’simagination.Customersandstaffwillbecomethemarketersiftheycanconciselyexplainthevaluepropositioninconversation.

Engagementofimpactedstakeholders

Expectationsofpeopleclear

Explanationofneedforchange&decisions


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LitmusTestfortheServiceNSWStrategy

StrategyAlignment

ConceptLitmusTest

SixPathstoInnovation

Ideas

Value

Profit

Peop

le

Focused

Divergen

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Compe

lling

Indu

strie

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s

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Complem

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TheServiceNSWDNAprovidedasimplecompellingvisionthatillustratedjusthowdifferentanddivergenttheServiceNSWmodelwasfromexistinggovernmentservicedeliverymodels.ThestoryofServiceNSWandtheopportunitytobepartofitscreationattractedpeopleandsupplierswhowouldnormallyneverworkingovernmentanddeliveredasignificantlevelofdifferentiatedservice.Thetaglineof“TransforminggovernmentservicedeliveryforthepeopleofNSW”wasfocused,divergentandcompelling–andwasdeliveredonfromdayone.Evennow,twoyearsafteropeningServiceNSW,customerscommentwithdelightabouttheirexperiencewithServiceNSW.11 TheServiceNSWOutcomeAsatJuly2014thestreamliningandsimplificationofdeliverychannelswaswellunderway.


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Fromopeningforbusinessinmid2013untilJuly2014,ServiceNSWhadhandledmorethan2.8millioncustomervisitsacrossdigital,phoneandservicecentrechannelswithgrowinglevelsofmigrationtodigitalchannelsforbothinformationandfulfillment.

Customersconfirmedserviceswereeasiertofindandsimplertoaccessacrossmultiplemodernchannelsandwereavailableoverextendedhoursand24/7.ServiceNSWcustomersatisfactionwasconsistentlyat98%acrossallthreechannelsandhadnotdroppedbelow95%sinceopening.


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12 ConclusionServiceNSWchallengedmuchconventionalwisdomaboutperformanceimprovementingovernmentorganisations.Itchallengedhowriskwasperceivedandmanagedingovernment.ItshowedthatspeedandservicetransformationwerepossibleandthatGovernmentservicedoesnotneedtobepoorquality.Itchallengedthedepartment-centricwayofthinkingandshowedthatcustomer-centricservicedesigndoesnotneedtocompromisegovernance.ServiceNSWdemonstratedthevalueofbringingpracticesfromothersectorsintothepublicsectortoacceleratemodernizationandchange.Italsoshowedthat,despitebureaucraticresistance,leaders,manyofwhomhadnotpreviouslyworkedingovernment,couldgetanewgovernmentorganizationupandrunningsuccessfullyandquicklywhilstcomplyingwiththebasicrulesofgovernmentandalsoremovingnon-value-addingbureaucraticredtape.Italsoshoweditwaspossibletocreateexponentialleapsincustomervaluewhilstalsosavingtaxpayersmoney.13 AdditionalResources

1. TheCustomerImperative:Redesigningfor“CustomerInside”byMichaelPratt,CustomerServicesCommissioner,July2014http://bx2014.org/sites/bx/media/248.pdf

2. CustomerServicesTransformation,July2012https://aiia.com.au/documents/event-presentations/2016/nsw/nsw_govt_forum_customer_service_transformation_jul_2012.pptx

3. ServiceNSW:Pioneeringaneweraingovernmentserviceswithsalesforce.comhttps://www.youtube.com/watch?v=YuJC2rqpD30

4. ServiceNSWnowopenhttps://www.youtube.com/watch?v=VNUOXUlYF2I5. ThetransformationalServiceNSWexperience

https://www.youtube.com/watch?v=dzohm7TFsOA

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