By Chris Vanstone, Lauren Weinstein and Lucy Fraser
In our last post, we talked about strategy and four different ways organisations can choose to play in the NDIS — by actively developing new services or by engaging in low-risk experimentation and observation. Whatever route you decide to take, there are three views which can help you navigate your journey. These views draw from business, service design and social science disciplines. They can be used to analyse your enterprise, other competitors, models you want to replicate or as a creative tool to name and test assumptions about a new service you are developing.
Founded on a powerful idea, NDIS gives people control over what they buy. The expectation is that the ‘service market’ will then respond with better more relevant services. Although typical in the private sector, this is a more radical notion for public service ‘markets.’ It means both providers and customers will engage with services in a new way.
However, being a customer is a very familiar experience for all of us — taking that perspective can help us understand what makes a service people want to use and keep coming back to.
Let’s take buying a coffee as an example.
For a coffee shop to succeed, it has to have a product (coffee) that people want. It must also be a great experience that people want to return to again. And, it’s got to be profitable enough to stay open. The balance of these three elements makes a successful service and a successful business.
If you were running a coffee shop, you could try to improve your product by buying better beans and hiring a more experienced barista. However, if the price of coffee stays the same, the quality of service may go down because you’ve got less money to invest in the upkeep of the premises or in serving staff. If you increase the price of the coffee, you’ll see a stronger financial model on paper, but you may start losing customers to your more affordably-priced competitors.
With any of these situations, the risk is that your customers aren’t happy. They’re not getting what they want, and neither are you. As a result, your business struggles. Without a sustainable business, you can’t grow; you can’t create the impact you want for your customers.
It’s notoriously hard to run a successful cafe. Designing a successful NDIS enterprise is even more challenging.
In a coffee shop, you have one customer: coffee drinkers who decide where to buy and what they are willing to pay. In the NDIS, providers have to design for four or five different customers, each with a different kind of influence on decision making.
People with disability will decide which services they use, and in many cases, these decisions will be influenced by families and carers. Local Area Coordinators will guide people with disability on which services are available and fit into their plan. NDIA planners decide what categories are in a plan and how much funding allocated for each. Additionally, the NDIA will set the pricing for an hour of each service.
Since the NDIS market has set price points and specific rules, service providers need the capability to innovate within certain constraints. Along with meeting their priority — best outcomes for people with disability — they’ll have another key constraint: financial sustainability. It’s not about profiteering. Rather, financial sustainability is about ensuring people with disability can rely on the service for years to come. On the other hand, prioritise finances too much, and you’ll lose sight of what’s important: people.
In some ways, the design challenge for NDIS service providers is similar to the challenge IKEA sets itself. IKEA starts the design of any new product by defining a price-point they know will be attractive to certain customers. Then it’s up to their designers to determine what materials or process can deliver at that price.
Organisations navigating the complex and evolving NDIS environment can keep in mind three views to steady the course.
Impact View: Taking this perspective will help you focus on developing services that create transformational change and value for people with disability.
Sustainability View: Taking this perspective will help you develop services that are desirable, feasible and viable now and into the future.
Experience View: Taking this perspective can help you develop services that people want, services that delight people with disability and their families.
For a successful service and business, all three aspects need to be in balance. Each of these views has a handy tool to help you apply it to your context and organisation.
‘Theory of change’ frames the impact perspective. It answers the questions: how does what you do lead to positive impact for people with disability? Theory of change helps you create a clear story about how your activities will deliver on the social purpose of your organisation.
A tool derived from evaluation and social science, the theory of change usually involves developing a diagram that steps out how certain activities lead to intended or unintended outcomes. Once drawn, it helps you test the logic of your model.
Our monitoring and evaluation friends at Clear Horizon emphasize that “The key is to try to think in terms of ‘outcomes.’ — How will your activities lead to small changes that, in turn, lead to changes in health or well-being for people.” This kind intentionality helps you check if your interactions create ongoing value for people with disability — and which activities might not be leading to something very useful at all. The theory of change holds you to account for meaning what you say and saying what you mean. The theory of change also helps you be explicit about the difference between the actual impact of your service and a larger vision you hope to contribute to.
This is a Theory of Change Template; it can be used for current services or to visualise a future, better service you’re developing.
The business model canvas and back of envelope calculations frame up the assumptions about the sustainability of your business —- is it desirable and feasible and viable? Do your customers want it (desirability), can you deliver it (feasibility), do the numbers stack up or will you run at a loss (viability)? It’s a canvas developed by consolidating many frames into one handy tool.
Our business modelling friends at The Difference Incubator, often complement the business model canvas with back of the envelope costings. The back of the envelope zooms into the bottom boxes of that business model canvas by listing costs and revenue of your business’ core functions. This kind of Simple math is how Elon Musk (CEO of Tesla and SpaceX) pitches solutions that seem conceptually impossible. He’ll run back of the envelope calculations for cynics to prove you actually can transport people underground at 200km / hr — and you can do it for less money than what it would cost to renovate the subway system. Whether you’re transporting people in innovative underground tunnels or to a doctor appointment, knowing costs and revenue streams give you leverage to make decisions about financial risk and safety.
This a Back of Envelope Template to help you lay out costs and revenue and make rough estimates about the financial viability of particular service.
The service blueprint visualises the components of a service or business. It details what people will think, feel, say and do before, during, and after a service experience. Remember that great, well-priced coffee with rude staff and insufferable queues is not a desirable business model? The service blueprint looks at the service experience from a user’s perspective and documents what needs to happen.
In the NDIS, service providers will need more than a good service, they’ll need a great one. We’ve learned that families using services trust word-of-mouth recommendations from friends and trusted others most. As a service provider, you’ll want to make sure people have good things to say about your service experience. Sometimes it’s small things like biscuits or a warm welcome at the door that make the difference.
These three views are intimately intertwined. Each activity in theory of change should have a considered experiential design within the service blueprint. And each activity within your service blueprint relates to some sort of cost, revenue, channel or partnership within the business model canvas. Any change in one of the three views will affect the other two. In our experience developing services across sectors (disability, child protection, home and housing) balancing impact, sustainability and experience is what sets great services apart from mediocre, short-lived ones.
There’s lots to think about when you’re developing a new service. If you’re going to do just three things, keep the balance between impact, sustainability, and experience in mind.
TACSI are currently using these tools and others on project work in disability, child protection, education and housing. If you’d like to talk more about process or these projects, contact Lauren.