Struggling to get service on the strategic agenda? Well to begin, let me say just one thing, it all starts by NOT promoting services and service innovation. Instead:

• Start with building a shared concern on a bigger game, an overarching strategic challenge of your entire business;
• Emphasise the challenge of broader and quicker business innovation – especially innovations which go beyond business-as-usual;
• Focus on changing and unmet challenges and problems of your clients.

Bottom line: If better services are the big solution, than what is the big problem your company is facing?

The problem

• Do your work with a manufacturer?
• And do you and your teams have great ideas and initiatives to innovate service?
• Do you encounter slowdown of these initiatives, often in favour of other initiatives on sales, product development and IT projects?

You are not alone. In this article I will share three tips to get services on the strategic agenda of a manufacturing company, just how successful manufacturers and their service leaders it.

The importance

The last few years have seen an increasing number of manufacturers making significant progress on developing their service business and continuing their servitization journey.

In today’s rapidly changing world with new technologies, changing customer demands and ongoing commoditisation in most industrial sectors, adopting a more service-oriented business model is mission critical for manufacturers to remain successful and get their fair share of future new opportunities.

"Sell the problem first instead of the solution..."

Manufacturers run the risk that data-driven service providers or system integrators build a strong position with their clients, reaping all the benefits of the new digital technologies and pushing manufacturers down the foodchain, where it becomes harder to escape from commoditisation.

The Solution

So, just like the leading manufacturers and their service leaders, sell the problem first instead of the solution you are trying to push forward. Which are probably services or servitization. Together with leaders from other functions, build a shared concern across the entire organisation around a bigger game, an overarching and critical business challenge for the business as the whole.

For most manufacturing companies, this shared concern will be around the following three elements:

1) To fight the ongoing pressure on performance, increasing competition and commoditisation of today’s products and services, your business needs to find new growth curves to secure success for the (near) future and secure a competitive position in your industry.

Main topics to discuss with your stakeholders are signs for this pressure on performance and the increasing pressure from the outside. Examples are:

• Low-cost alternatives, maybe from other countries;
• System integrators becoming more powerful in your market and
building stronger relationships with your clients;
• Data-driven service providers entering your industry, helping your clients with the digital transformation of their operations and the maintenance of their assets;
• And; of course, any information which indicates declining growth, margins and differentiation.

2) Slow pace of innovation and change, limited to improving business-as usual.

Today, with the many new opportunities from applying new technologies by your competitors, partners and clients, your company does not want to be left behind. You want to make sure your company gets a fair share of the potential benefits of upcoming opportunities.

"Your clients will have new challenges in their business and therefore their needs are changing..."

This means that a higher pace of business innovation beyond business-as usual is critical to stay relevant and successful. In most industries business models will shift towards a more holistic and inclusive value proposition, including services.

Do you want to assess your company’s capability to innovate and adapt in today’s disruptive world? Try our scorecard, Navigating Disruption. 

3) In today’s rapidly changing world, your clients will have new challenges in their business, and therefore their needs are changing. Sure, there will be (new) companies which will offer your clients great new solutions for these new, unmet needs. So should your company.

This requires deep customer insights which go beyond the existing customer insights, which are still related to requirements for your current products.

So, what are the critical business challenges of your clients? What are their visions for the future? What are their strategies? And which new pain points can your company help solving today or in the near future? Our worksheet, Building a Customer Story can be a valuable tool to structure your customer insights and turn them into a compelling and focused story of the customer pain points.

Once you have established a sufficient shared concern, you and your stakeholders will have a constructive dialogue on finding and pursuing new solutions to solve the shared concern. This will be fundamental for strategic commitment and alignment for the
strategic initiatives; one of which will be about developing a more service oriented business model.

"It is not about getting driving and pushing for more support to servitization initiatives..."

Building this shared concern is not a one-time action. It is an ongoing effort to build step-by-step a stronger and broader vision; to maintaining this vision and keep it alive throughout the bigger part of your organisation. This will help to build and maintain momentum in your company and get you ahead of the pack.

Conclusion

It is not about getting driving and pushing for more support to servitization initiatives. It is about driving momentum throughout the entire organisation to build and maintain momentum for continuous business innovation for maximum impact.

It starts with selling and promoting the bigger concern, not selling and promoting service. If better services are the solution, what is the problem you are trying to solve?

My suggestion for you is to:
• Build a shared concern for major business challenges of the company as a whole;
• Emphasise the challenge of broader and quicker business innovation for success and growth of today and future;
• Emphasise changing and unmet customer needs and their problems;

And, keep your answers to the following stress-test-questions up to date:
• What is the shared concern in your business?
• Is this really a shared concern or more your concern?
• What are the three to five strategic elements to solve this shared concern?
• And, how does service fit in?

Jan Van Veen is Managing Director at MoreMomentum