Accelerating value innovation: Don’t change people, let them change the company

Sep 15, 2016 • Features • Management • Jan Van Veen • management • Service Innovation and Design

Management Consultant and service management specialist Jan Van Veen looks at how you can drive sustainable success in your organisation by unlocking full and continuous value innovation power at your disposal...

As the world is changing at an increasing pace, companies need continuous value innovation at a higher pace on top of the current incremental improvements of their products, services and operations.

However, most companies struggle to innovate their business and fall behind (new) competitors who are successfully adopting change or even driving change in the industry.

Based on many consulting engagements and recent interviews (as part of my research) it appears that three key perspectives - on people’s ability to drive change, managing performance and customer value - do make the difference for success.

A typical example

The following is a typical situation:

A leading manufacturer of heavy capital equipment is trying to grow its services business, as capital investments in their industry have dropped dramatically and are not expected to recover in the near future. The focus is to grow the business from advanced maintenance and operating services and other business solutions, which should become more significant, compared to basic maintenance, repair and spare part services.

Most companies struggle to innovate their business and fall behind (new) competitors who are successfully adopting change or even driving change in the industry.

The CEO has been presenting the vision and strategy to the shareholders and analysts repeatedly, which was well received at the time. There is a clear burning platform and business case. The vision and strategy is well structured and solid. Clear bottom-line targets are established and assigned. New roles are appointed and adjusted repeatedly.

The organisation has been restructured a few times in a row. People are being pushed to the limit to achieve new, stretched bottom-line targets. Different task forces and a programme management office has been established.

However, progress is limited and the business results are not really improving.

Entities are blaming each other for not delivering: market units are frustrated that the business units do not develop the right propositions; market units are being blamed for not selling the new service offerings. Too many people consider their own performance being fairly well, without showing any concern about the bigger picture of declining performance, which is falling behind the competition’s performance.

There are many task-forces on various topics, most of which are not really addressing the real business challenge, but more focusing on improving traditional business as usual.

As a result, this company is being hit harder by the current downturn in their industry then its competitors. Shareholders’ confidence in the new strategy and the leadership is deteriorating.

Now, wouldn’t it be great if.... Instead of...

Wouldn’t it be great if this company would have been able to fully utilise their ability to adapt to change and peoples eagerness to learn, improve and grow?

Just imagine how different the picture could have been:

Many people within the company are aware of early signs of developments in the industry and changing customer needs. They are the first to discuss these changes with their customers and develop new solutions, in close collaboration with their customers.

Set-backs are crucial learning points to adjust strategy and actions and to continue thriving for success.

Step by step, in a continuous endeavour, the business is being progressing towards a shared picture of the future state. All departments (such as manufacturing, R&D, sales, technical services, marketing and solution centres) are collaborating with each other, with vendors, partners and clients and make things happen and are pursuing the same business priorities.

For sure, they had some set-backs and they expect more to come - after all, things often go different than originally expected.

However, nobody considers these set-backs as failures and these are by no means a threat for careers. These set-backs are crucial learning points to adjust strategy and actions and to continue thriving for success. People and departments support each other in doing what is needed to get things done and keep momentum in the innovation.

How to make this happen?

There are three key perspectives, which seem to make the difference for sustainable success. These perspectives define how we manage our businesses and how we engage people to change without creating obstacles or resistance.

Performance:

Sustainable and increasing success is achieved by continuously pursuing opportunities, adopting to changes, learning and building smarter capabilities for strong performance.

People:

People are considered to be eager to grow, develop and drive change when they believe in the reasons for change and they are not pushed into a defensive fight-or-flight mode. These good reasons are based on a compelling purpose and vision, not on burning platforms, financial business cases or shareholder-value.

Customer Value:

Customer value goes beyond the availability of your great products and technology. There are so many more ways to be valuable and relevant to the success of customers and their value creation process. With this broader view, you will recognise more customer needs and challenges, transcending product requirements and related maintenance services.

Practical example of modern management practices

The following are a few examples of modern management practices - driving sustainable success by mobilising people and maintaining momentum - which are based on these new perspectives.

Most of them can be easily implemented by just starting to more more of it - gradually - step by step.

Live a shared and compelling purpose and vision - every day...

Keeping this picture alive will rally all people in an organisation.

They see and believe in the opportunities to do great things and grow as a company, as a team and as an individual. Everybody has a common picture of the direction in which the company has to develop. This picture is much more compelling than “double digit growth”, “being customers’ 1# choice” or “being industry leader”.

Keep the voice of the customer alive - every day...

A living and up-to-date picture of customers’ challenges, needs and expectations will drive the right decisions, actions, ideas and intrinsic motivation for innovation as well as daily operations.

Start every meeting with a customer story or insight.

In practice? Start every meeting with a customer story or insight. In every discussion, review the impact of the topic for customers and search for positive impacts for customers. Let everybody in the company talk with customers about their views on the industry, their challenges, their strategy and their customers.

Extend customer insights beyond your business as usual - without blinkers...

Without this insight it is hard to develop and increase your relevance and differentiation for customers and develop your business to outperform the industry now and in the future.

Too often, customer insights and feedback which do not directly impact current products, services, marketing and sales are neglected. Sticking to your “core-business” can be a risky attitude.

Respond to (potential) changes outside - again without blinkers...

Have everybody in the company continuously build awareness about what is changing in the outside world. What is (potentially) changing in technology, politics, regulations, demographics, customer needs, habits, competition, other industries, etcetera.

What impact could these changes have on your work and your business? Which opportunities could arise? Which competencies and capabilities would you need? Which signs could indicate that the change is really happening - now? What can be done now to be prepared to respond rapidly when needed and do this quicker than any other actor in the industry?

Manage high performance through a strategic dialogue - ongoing...

Outcome based, bottom line targets show the direction and priorities for managing and developing the business into a fit organisation with the required capabilities and business model to perform.

Targets are aligned with priorities and strategic objectives. Stretched targets explicitly assume change is required to meet them - so work smarter, not harder or faster.

Targets are aligned with priorities and strategic objectives. Stretched targets explicitly assume change is required to meet them - so work smarter, not harder or faster. Not meeting targets doesn’t mean somebody will be burned in the next business review meeting.

These business review meetings are transparent and constructive discussions about the performance, root causes, alternatives, measures and priorities. Discuss and agree how other teams or entities can contribute to achieve the objectives.

Align expectations and targets of these teams with the (new) priorities of the business and the specific teams and entities to really enable them to help.