In this new article for Field Service News, Sam Klaidman, Founder and Principal Adviser at Middlesex Consulting, discusses the service leaders' journey to achieve their desired outcomes.
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Sep 02, 2021 • Features • Data • field service • Leadership and Strategy • Sam Klaidman
In this new article for Field Service News, Sam Klaidman, Founder and Principal Adviser at Middlesex Consulting, discusses the service leaders' journey to achieve their desired outcomes.
Here is an interesting conversation from Lewis Carroll’s Alice’s Adventure in Wonderland:
‘Would you tell me, please, which way I ought to go from here?’ [asked Alice.]
‘That depends a good deal on where you want to get to,’ said the [Chesire] Cat.
‘I don’t much care where—’ said Alice.
‘Then it doesn’t matter which way you go,’ said the Cat.
‘—so long as I get somewhere,’ Alice added as an explanation.
‘Oh, you’re sure to do that,’ said the Cat, ‘if you only walk long enough.’
Fortunately, service leaders know exactly where they want to go. They want to achieve the business objectives they signed up for in the strategic plan or in their individual goals and objectives (which are used to calculate their annual bonus.) Unfortunately, many of these leaders are missing a terrific opportunity to win their own version of the Euro Cup because they are not using all the tools available to them.
DRIP
Service businesses are buried in data. They get operational data from their products in the field, the people in the call centers, service managers, logistics people, and their peers in Finance, Marketing, Sales, Customer Success, and anyone else with an opinion. But what they are missing is insight – actually actionable insight. I call this condition DRIP:
Data Rich Insight Poor
Here is an example:
Most Field Service organizations survey their customers and measure one or more metrics they then use as key performance indicators (KPIs). The three most popular KPIs are:
- Net Promoter Score (NPS)
- Customer Satisfaction (CSAT)
- Customer Effort Score (CES)
You collect data about each customer and lump it all together to arrive at a single KPI number. Unfortunately, using any of these KPIs will not guide you to the actions you need to take to achieve your desired business outcomes like growing revenue, increasing employee satisfaction, and improving productivity. To get down to these actions, you must link individual data to actual actions taken by the customer to 1) find out what customers really did and how they responded to your survey and 2) go back and find out specifically what you have to correct to achieve a better outcome for your business.
The solution to the DRIP problem is to take your team on this journey:
There are not enough people doing this detail work, what one of my friends calls working in the weeds. So, let’s look at how NPS is generally used to see what you don’t want to continue doing.
Net Promoter Score
Net Promoter Score (NPS) first saw the light of day in 2001 when it was marketed as “The One Number You Need to Grow.” Today it is used in many businesses of all size and all industries. Also, it is used by many field service organizations. Interestingly, the NPS system has an enormous number of critics who think the whole thing is BS. However, there are real world examples that also support the validity of the system.
Let’s look at an example of where NPS and a high-level analysis yields some data that makes the analyst and their company feel like they are actually accomplishing something important. But they are not increasing desired outcomes.
A Quick Review of NPS
The interested party asks their customers the following question:
“Based on XXX, how likely are you to recommend us to a friend or associate?”
They use an 11-point scale where 11 is definitely likely, 5 is neutral, and 0 is definitely unlikely. The results are then grouped as follows:
The 2 green scores are promoters, the 2 yellow are passives, and the 7 reds are detractors. The NPS score is the percent promoters minus the percent detractors so the score can be anywhere from +100% to -100%.
Some Data
Here is a chart produced by Bain & Company, the originator of the NPS system.
In this example, the surveyors are not worried about the NPS score: they want to understand how customer’s feelings correlate with their buying intentions. In this case, the promoters appear to be about 90-95% likely to consider their current manufacturer, the passives 75-80% likely to consider the incumbent, and the detractors only 40-45% likely to consider their current supplier.
Since the surveyors know the score each individual submitted, they can create unique programs to follow up with their customers in individual segments, or even sub-segments, to identify the reasons behind their feelings and then either correct any issues and/or offer compensation if their issue is beyond their control or unresolvable. Of course, in parallel, they must look at their internal procedures and policies to prevent alienating other customers.
But this is about intent. One of my all-time favorite business books is “Five Frogs on A Log” by Mark L. Feldman and Michael F. Spratt. The book is about mergers and acquisitions and is scary. The title comes from a child’s riddle:
Five frogs are sitting on a log.
Four decide to jump off.
How many are left?
Answer: Five.
Why?
Because deciding and doing are not the same things.
This is important because we don’t care what people say they will do; we care about what they do! A customer who says she will be back to you tomorrow with a purchase order is worthless until the P.O. is actually received and booked.
With respect to the Bain & Company data, I think it would be much more useful if the question were reworded to “Based on XXX, how likely are you to lease or purchase your next vehicle from our brand (or maybe from our dealership)?” After all, your business objective is to sell or lease vehicles, not get referrals. Then the surveyor could track each respondent and find out the percent at each response level, e.g., 0, 1, 2… who leased or purchased a car from them. It might take one or two years to understand the value of increasing the percent of promoters by one point, but at least they would be able to move ahead with their CX program based on actual data.
Another Example but About Service Parts Usage, not NPS
Data - Your business is the Field Service arm of a hardware product OEM. And, unfortunately, you consume a large amount of parts every month. To find out what is going wrong, you have your parts manager prepare a report of actual total usage by part number and another report breaking out the same data but by type of transaction; i.e., installation. warranty, billable, and service contract. You quickly notice that one expensive part is the most used part during warranty.
Insight - If you are only concerned about minimizing your customer’s downtime, you would increase stock levels. But if your desired outcome is to increase company profit and CSAT levels, you would make sure that each defective part is returned for failure analysis.
Action – The failure analysts would share the FA results and the total cost of each field repair with both Engineering and Manufacturing. Most likely, the results would be either a part redesign or modification plus a change in manufacturing process
Outcome - When this is done, you might find it relatively inexpensive to swap out the old design whenever you have a field engineer on-site with access to the equipment. And obviously you would pull all the old parts from stock and replace them with the new design. Your overall cost savings is your desired outcome.
Conclusion
Without linking your data to your desired outcomes, you are basically looking at a gratification metric. It makes you feel good, but it doesn’t get you any closer to where you have to get.
Note: Net Promoter, Net Promoter Score, and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.
Further Reading:
- Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
- Read more exclusive FSN articles by Sam Klaidman @ www.fieldservicenews.com/sam-klaidman
- Find out more about Middlesex Consulting @ www.middlesexconsulting.com
- Read more articles by Sam Klaidman on Middlesex Consulting Blog @ middlesexconsulting.com/blog
- Connect with Sam Klaidman @ www.linkedin.com/samklaidman
Mar 23, 2021 • Features • Data • Nick Frank • field service • Leadership and Strategy
Nick Frank, Co-Founder and Managing Partner at Si2 Partners, discusses how companies can successfully integrate knowledge and data into their business processes in this new article for Field Service News.
Nick Frank, Co-Founder and Managing Partner at Si2 Partners, discusses how companies can successfully integrate knowledge and data into their business processes in this new article for Field Service News.
While the vast majority of organisations recognise that managing Knowledge and Data is a key source of competitive advantage, how many equip their team members with the understanding to effectively integrate these solutions into their operating processes?
Within the Service Leaders Network, we recently ran a collaboration project with a small number of Service Leaders to look at this challenge. The result has been the development of a pragmatic framework and self-assessment tool, that all service professionals can apply in their day-to-day working environment. A simple management blueprint that encourages managers to ask incisive questions that will increase the likelihood of success of their Data or Knowledge projects
The conversation came about when we asked a group of service leaders about their Knowledge and Data challenges. The topics included access to expert product knowledge, sharing specialist competencies, knowledge retention, competency management, knowledge transfer... The list was indeed long and many of these challenges you no doubt can relate to.
As the collaboration project progressed, the group realised they needed a framework to judge what was good practice across different solutions and approaches. They recognised that most managers understand WHY knowledge and data is important to them and they know WHAT they need (hence the long list). But where there is a big hole is HOW to get there. Through a slow process of virtual meetings, one-on-one interviews (this was the time of COVID) and supporting analysis by a facilitator, we moved towards the framework you can see. A simple tool developed by managers, for managers that helps them take actions that will increase the likelihood of success for their data or knowledge solution.
The thinking framework consists of four interdependent factors that should be considered when integrating a data or knowledge solution into an organisation’s processes:
- Purpose
- Data Architecture
- Process and Tools
- People
For a business process to leverage data and knowledge to the full, all four factors should be considered and where necessary planned for. This is especially important where investment is made in specialist tools and technologies such as a Service Management Software, Human Resource IT solutions and Advanced Analytics Data Solutions. Let’s look at these four areas in a little more detail:
Purpose:
This is the “Why” of the data solution and can be articulated in different ways depending on where the project lies on the Strategy – Operations continuum. Purpose of the data solution should contain some, but not necessarily all the following components:
- Fit with the vision and strategy of the company
- The KPI’s or performance measures to be influenced
- The risk to be managed
- Value created, costs reduced, or loyalty created
Without a well-defined purpose, the project is likely to lack direction and so disappoint or fail in its return-on-investment objectives.
Common mistakes: A company who invests in SharePoint with a generic goal to ‘share data in the business’, without understanding the KPI’s being influences or the data being collected. They are often disappointed with the results.
Data Architecture:
With a clear understanding of Purpose, it is possible to define the data/knowledge to be collected by the process, or the data/knowledge required to support the process. Knowing whether this data is structured (numbers) or unstructured (text/words) is key to defining how it is collected and analysed within the business process.
Common mistakes: Defining Key Performance Metrics indicators without understanding if the data can be collected and analysed in a sustainable fashion.
Process & Tools:
The next component is to define how data/knowledge fits into business processes and the tools required to ensure it is presented in such a way such that decisions can be made. Often managers will jump to this step without understanding Purpose or Data Architecture resulting in sub-optimal data/knowledge solutions. Common mistakes: Remote Data Capture is a common data solution, but it does need to be built into the Service process if it is to deliver sustainable value. Too often it is seen as just another activity we do.
People:
Without people’s willingness to engage in the Knowledge management process, initiatives will fail. The key is to design this factor into the Knowledge/Data Project at the start, whether that is building a culture where knowledge is shared, developing the skills required to support the process or simply good old-fashioned change management to ensure engagement. This is the component that many business leaders miss when implementing knowledge management solutions.
Common mistakes: Within the Service CRM processes, users do not update master-data, or worse still, simply bypass specific data entry requirements to save time, as they do not understand the implications of their actions.
Want to know more about your own skills, take this very short 4 question self-assessment using this link: https://si2partners.outgrow.us/si2partners-3
If you want to know more the Knowledge and Data Implementation framework, then you can contact nick.frank@si2partners.com and he can support you with engaging workshops that will help you and your team identify how to integrate data into your business processes. Si2 also have run a series of workshops that help service professionals to become more data savvy. To date more than 200 professionals have participated in these programmes which aim to raise their bar in terms of how to use data.
Further Reading:
- Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
- Read more articles by Nick Frank on Field Service News @ www.fieldservicenews.com/nick-frank
- Find out more about Si2 Partners @ si2partners.com
- Connect with Nick Frank on LinkedIn @ www.linkedin.com/in/nick-frank
- Follow Si2 Partners on Twitter @ twitter.com/servitisation
- Contact Nick Frank by email @ nick.frank@si2partners.com
Nov 12, 2019 • Features • Data • management • Digital Transformation
Data visibility and automation are key to transforming a service organisation. Increasingly, Field Service operations are looking to better data, in taking advantage of technology transformation and servitisation. In the third article of this...
Data visibility and automation are key to transforming a service organisation. Increasingly, Field Service operations are looking to better data, in taking advantage of technology transformation and servitisation. In the third article of this series, Paul Smedley, in his latest article in a series for Field Service News, looks at many practical examples of successful change...
Nov 01, 2019 • Features • Data • Data Analytics • Future of FIeld Service • Machine Learning • data science • IoT • The Field Service Podcast • Field Service Podcast • Field Service Scheduling • Tata • TCS • Gopinathan Krishnaswami
Kris Oldland, Editor-in-Chief, Field Service News hosts with Gopinathan Krishnaswami, Senior General Manager, Global Head, Infrastructure Alliances at Tata Consultancy Services as his guest as the two dive into the importance of data in field...
Kris Oldland, Editor-in-Chief, Field Service News hosts with Gopinathan Krishnaswami, Senior General Manager, Global Head, Infrastructure Alliances at Tata Consultancy Services as his guest as the two dive into the importance of data in field service including how much data is too much data and the importance of Machine Learning in getting actual insight out of the deluge of data you may be drowning in.
Sep 16, 2019 • News • Automation • Data • frost & sullivan • Marketing Services • report
Marketing automation solutions market to reach $6.36 billion by 2025, finds Frost & Sullivan
Marketing automation solutions market to reach $6.36 billion by 2025, finds Frost & Sullivan
Sep 09, 2019 • Fleet Technology • Data • fleet • Fleet Operations • TomTom Telematics
Fleet managers are set to gain valuable insights into how innovative data management can help them future-proof their businesses at TomTom Telematics’ Let’s Explore 2019 on September 12 in Surrey, UK.
Fleet managers are set to gain valuable insights into how innovative data management can help them future-proof their businesses at TomTom Telematics’ Let’s Explore 2019 on September 12 in Surrey, UK.
May 20, 2019 • Features • Data • Nick Frank • digital disruption • Digitalization • Servitization • Si2Partners • Service People Matter
Over the last three years there has been a huge emphasis on the need to invest in technology to stay ahead and be the disruptor.
As many leaders struggle to move towards the enticing digital visions being painted, we have seen a more nuanced approach emerge. We perceive that leaders are switching their emphasis back to creating a solution focused culture where people have the imagination and customer focus to create and deliver new value offered by digital technologies.
In the coming years we believe we will see companies focusing on three areas in the growth journey:
1. Digital Servitization: the notion of digitising the back-office processes and enabling data capture in the product infrastructure to enable new value through services
2. Data Analytics capabilities: Turning the data into insights through being able to turn Business Problems and opportunities into Data Solutions that leverage their company unique knowledge.
3. Trusted Advisor Mindset: Having the trust of customers and the communication skills to turn intangible data into valuable actions that drive growth.
Digital Servitization
Now more than at any other time, businesses are focused on how to use shifts in technology to reduce costs and find new value propositions. But understanding how it all fits has proven more elusive to business leaders. Those that are making most progress have broken the Digital Transformation process into more meaningful chunks. They typically have two areas of focus:
1. Installed-Base Digitalisation:
Designing the products and supporting operational infrastructures that generate data, so that it can be collected, analysed and then monetized through service-based business models. Generally, investments have been made in:
- Technology that enhances the product and company infrastructure to enable Digital Support, such as remote data collection, diagnostics or predictive maintenance.
- Capabilities and technologies in the organisation that enables Data Analytics, such machine learning, visual analytics and business intelligence technologies.
2. Back-Office Digitalisation:
The tools we use to manage our business back office which sustain and improve margins /profits. Examples might be Service Management solutions, CRM and ERP. Generally, there are two aspects to consider in terms of system and process development:
- Technology that enhances the product and company infrastructure to enable Digital Support, such as remote data collection, diagnostics or predictive maintenance.
- Capabilities and technologies in the organisation that enables Data Analytics, such machine learning, visual analytics and business intelligence technologies.
Only when companies have reached a level of maturity in both Back-Office Digitalisation and Installed-Base Digitalisation, are they ready to, explore new business models such outcome based or subscription based services.
Data Analytics Capability - Business problem before Data Solution
The use of sophisticated Data Analytics technologies to gain insights into processes and product performance is slowly becoming part of management thinking. But again, progress is slow as many leaders are intimidated by the jargon and lack of understanding of the business case. We have found successful companies have followed these three steps:
1. Articulate the business problem to solve and why (Value)
Before investing in digital technologies, the most successful companies have a clear idea of the business problem to solve and the value it can potentially bring. Often there is some experimentation/prototyping that may occur to build knowledge of the business problem and confirm value. They look wider than their own business processes or customers processes, the hand-offs between the different stakeholders in their value chain. Often, they will use ecosystem analysis, the value iceberg principal or points-of-selling approaches to identify value opportunities.
2. Define the Data Problem
The next challenge is how to turn the business problem into a business data hypothesis. This would describe an expected or speculated relationship that we hope to determine through the analysis of data. For example, the hypothesis for a predictive maintenance solution might be: ‘We can identify the failure patterns for hydraulic system as well as general machine performance using pressure, oil contamination, temperature and humidity data from the PLC, such that we can predict failures and recommend corrective actions.
Why is this important? Data Scientists cannot tell you patterns that interest you without knowing the area of interest! Hence converting the business problem into a hypothesis is a key part of the process and applying the scientific method which is question led and iterative. But the hypothesis does not have to be correct.
It is very likely that it will change as more knowledge is gained about the data being analysed or definition of the business problem evolves. One must expect a certain amount of iteration from business problem to data problem as our knowledge expands, and this in turn helps deliver optimal business value. It is critical to be very clear about the business problem and the data required to understand it.
3. Pilot before Scale Up
Now that the data problem is defined, managers can understand where they may have organisational and infrastructure gaps for their project, and from this be able to identify the first steps of their roadmap to a data solution. It is important that these early steps include a pilot of the solution. The goal is to quickly understand if our solution is likely to be successful, and the actions to be taken to scale up across the organization.
"Over the last three years there has been a huge emphasis on the need to invest in technology to stay ahead..."
Often in business we take it for granted that we have all the capabilities in house. However, in today’s world, where the use of technology is rapidly evolving, it is very easy to become ‘out of date’ from both a business mindset as well as technology capability.
To help leaders understand the strengths and weaknesses, Si2 have worked with The Data Analysis Bureau to develop a short 10 minute maturity self-assessment which will you help you identify your strengths and weaknesses as you move from Business Problem to Data Solution.
There are just 10 questions and you will get personalised feedback as to your situation and what you can do. Use this link to access the assessment.
Trusted Advisor Mindset
The biggest enabler of the ‘digital’ ideas we have discussed is not so much the technology but the mindset of your people. The Trusted Advisor mindset is more than just being able to talk to the customer, solve problems and sell ideas. It is a whole attitude where we focus on solutions, continuously moving customers towards their goals whether they be internal or external.
This is the type of mindset that has leapt onto the potential offered by digitisation, long before it entered the language of today’s business. Trusted Advisors have clarity on their role and an understanding of how to talk to customers so that they achieve a WIN, WIN, WIN:
• A Win for the customer so that every conversation they have moves them closer to their goal
• A Win for the company to develop customer loyalty and profitability
• A Win for themselves so they feel great about their job
What makes a Trusted Advisor different? At the very minimum they are good customer problem solvers. What starts to differentiate them from others is their ability to have meaningful conversations with customers that always seem to move towards solutions. They are able to provide options together with the benefits for various decision the customer might make.
They normally have a high level of personal maturity in that they do not try to tell customers what to THINK. Instead they influence them by what they SAY and DO, and because they consistently deliver, customers trust their advice. As the notion of a Trusted Advisor is widely used across sales & service, the job context is extremely important.
For example, in field service and technical support the Trusted Advisor role is more about providing options than closing deals. Whereas in sales it is more about how we build rapport and credibility within a consultative selling process.
Clearly understanding the context in which the Trusted Advisor mindset is being developed is vitally important to successful adoption. Service leaders who want to improve how their teams communicate with customers, might consider having the following conversations with their own people:
• Clarify what you mean by a Trusted Advisor and the role they play in your organisation. In particular the customer needs and what makes them successful, as well as your companies business goals. This is where distinguishing the difference between selling and advising will be absolutely critical to your success;
• Develop a Mindset where every conversation we have with customers moves them a step closer to their goal. It may not be the complete solution, but it is a step in the right direction no matter how bad and uncomfortable the situation is. This very basic philosophy is key to training your people to deal with conflict, as well encourage them to have dynamic and collaborative relationships through solution orientated language;
• Provide Tools and methods that allow us to actively listen, to talk more effectively, to manage conflict and resolve difficult customer situations. These tools are critical to helping us to prepare ourselves to be a Trusted Advisor in what can be challenging and stressful situations;
• Practice in real-life scenarios with your team to see how they react under stress. We are constantly amazed at how confident many service people are about talking to customers in a training environment, yet it all falls apart in a customer situation.
• Refresh: Developing how your team interacts with customers is not a one-off event and needs to be constantly mentored and coached.
Digital People Increasingly we anticipate that Service organisations will take a more balanced approach to Digital. Yes, they will invest in the technology, but they will do so with a clearer idea of the value they are trying to capture. They will understand that the key to new business models will be to have automated their back-office processes as well as how to capture and action data from the product infrastructure. They will increasingly focus on developing a solution orientated innovative culture which is the key to leveraging the opportunities offered by new technologies and paradigms of thinking.
Nick Frank is Managing Partner at Si2 Partners. If you would like to talk more about any of the topics discussed in this article you can contact him at nick.frank@si2partners.com.
Apr 14, 2019 • Features • Management • Data • Jan Van Veen • Monetizing Service • moreMomentum • Products as a Service • Customer Satisfaction and Expectations
Central question
Many manufacturers experience pressure on growth, revenue and margins. Their products and services are being commoditised. Competition from lower cost alternatives are arising. On the other hand, there are huge opportunities with new technologies, value propositions and business models.
One of the important trends is that value propositions and offerings become more data-driven and more service-oriented, which go hand in hand.
Besides predictive maintenance, most of the value from data is related to how clients use the equipment or products and to their operations and processes. Helping clients improve on this by nature is a service.
However, many manufacturers are product-driven businesses which do not fully appreciate the value that (advanced) services have for their customers and their own business.
So, one of the central questions is: How to Monetise Services and Data to Grow in a Disruptive World? The capability to monetising service and data is mission critical for sustainable performance and existence of manufacturers.
In a series of articles, we cover four critical steps that make the difference between success and failure in monetising services and data:
• Solve bigger customer problems;
• Articulate the value;
• Build momentum with clients to adopt;
• Build internal momentum.
Developing new data-driven solutions and services is all about extending the existing business model, which leads to different challenges than many other initiatives and programs in a business. Recognising this in advance will help understand the challenges and best strategies.
In the previous articles of this series, I have described critical success factors for monetising service and data, such as Solve Bigger Problems,Better Articulate Value and Remove Obstacles for Clients to Adopt. In the end, this all has to be done by people and teams in your organization.
Common mistakes
In this article I will describe common mistakes that many companies make, which holds them back in having fluid and energising change, and to move beyond business-as-usual in their endeavours to monetise service and data.
No North-Star
Many companies, including manufacturers, do not have a clear picture of where the industry is heading and where their business is heading. It is unclear for their employees what needs to be developed and why.
More specific, for many employees it is not clear why the new service and data-driven solutions are that valuable to clients, how it would fit in the overall core business and why it should be paid for by clients. Often, the indicated direction even suggests the opposite and may give room to the logic that value added services and datadriven solutions are (free) features to support the product sales.
Just imagine how a hypothetical mission statement “… being the world’s leading manufacturer of construction equipment and engines” would help develop and monetise advanced services and data-driven solutions.
Blinkered
People in manufacturing are often biased towards products, equipment and technology. They have a narrow view on:
• Customer problems beyond the requirements for the products and equipment;
• How other actors in the industry are developing with advanced data capabilities, which could become competition to the current position of a manufacturer;
• How new technology can be applied to develop new value propositions, solutions and operating models.
This will affect how product managers, marketing and innovation will develop new services and data-driven solutions. Too often, we see that the services and solutions do not always solve a customer problem and hardly differentiate from services and solutions competitors are offering as well.
It will also affect how their colleagues in the operations (sales and delivery) understand and engage, as there is no compelling context to understand the importance of the new services and solutions, let alone be engaged.
Top-down P&L thinking
Too often, we see that developing and launching innovations, such as new advanced services and data-driven solutions, stagnate because of the decision-making habits in an organisation. Typically, we see one or more of the following:
The strategic intent from senior leadership is unclear, hardly based on a well-developed shared concern, not giving a clear path on what services and solutions to develop, nor on what the strategic priorities and objectives are, to be successful. So, employees are not really enticed to take action and therefore no change.
The strategies and plans are more short-term which emphasise short term financial objectives, leading to two different scenarios:
Financial objectives are not articulating the need for services and data-driven solutions, nor specifying which portion of these objectives should come from services and data-driven solutions. Often, employees are actually motivated to stay away from developing and launching the new services and data-driven solutions.
Or, in case the financial objectives also assign financial objectives coming from services and data-driven solutions, there is a lack of description of qualitative objectives and strategic priorities on how to arrive at those financial goals. The result is often a lack of initiatives and progress, or lack of alignment and results.
Top-down strategies from senior leadership are so specific and instructive that these actually dismiss other employees taking ownership of the plans, and/or adjusting plans and local strategies where needed.
Paralysis by control
Top-down control mechanisms from the last few decades are a huge obstacle for fluid and energising change in an organisation and therefore hinder the initiatives like monetising services and data. More specifically, we often see the following patterns;
Internal conflict of interest in the product sales teams, because they are often incentivised on sales volume.
It does not make sense for them to sell complicated service contracts. It hardly affects their commission, consumes a lot of time and may even put their product sales deals at risk. Instead, it is more beneficial to please their clients by offering discounted services.
In case there is a separate service sales team, for the same reason, there are often internal arguments on who owns the client and what is the best plan forward with each client. In the worst case, this even leads to having different faces towards the clients, leaving them confused and with a bad customer experience.
Control mechanisms that are too strict create an unsafe environment in which employees show defensive and risk-avoiding behaviour. Instead of trying, learning and being successful in monetising new services and data-driven solutions, they instead become complacent and resistant.
Typical signs are pointing fingers to other teams to take action, declaring that the new services and solutions are not the core business, that customers don’t want to pay and referring to other companies who have tried and failed.
Some solutions
Many things come into play when increasing momentum for monetizing (new) services and data, and preventing existence of too many obstacles and resistance. In general, the more adaptive and fluid change in a business, the easier a specific innovation on service and data.
We have seen that leading manufacturers have adopted 4 winning habits which sets them apart. These winning habits define how both operation and innovation is lead. In the next paragraphs I will describe the 4 winning habits in relation to monetising services and data.
"People in manufacturing are often biased towards products, equipment and technology..."
Direction
Leading companies have a transformative vision and mission on where the business is heading, what needs to change and develop, and why this is important considering the changes in the industry. This is a quite a holistic picture in which all stakeholders and entities in the business can relate and get direction on how to develop themselves, their teams, their department and their business unit.
It provides an outside-in picture on how the business is and will be relevant to a certain industry and customers. It explicitly points out how the business will add value to clients and that this requires certain technology, (data-driven) solutions and services.
Now imagine how the following mission statement will drive the development and implementation of new services and data-driven solutions: “Our purpose is to enable healthcare providers to increase value by empowering them on their journey towards expanding precision medicine, transforming care delivery and improving patient experience, all enabled by digitalizing healthcare.”
Discovery
Here I want to focus on two phases on innovating your services and datadriven solutions: the development phase (including ideation, selection and design) and the implementation phase
For design purpose
In general, the envisioned services and data-driven solutions differ significantly from current business logic, mindset and operations in your business. Even though anyone in the organisation could raise great ideas, it is crucial that the development of the new services and solutions are done by dedicated teams with the right expertise and focus.
They need to ensure they are open-minded and unbounded by current (and old) business logic and pathways. In terms of discovery, this means they should:
Talk with other stakeholders in client organisations (rather than the ones your organisation normally speaks with) - for example, the CFO, CEO, VP, Innovation, commercial leaders, etc. Build a new expert-network outside the organisation - which is outside the current network of partners, suppliers and clients - including the academic experts and consultants in areas you usually have no relationships with and talk about topics other than current technology, products and service, and more about major trends, visions of the future industry,key challenges and strategies of different actors in your and adjacent industries.
This will not only help to obtain more ideas for future success, it will also help to change perspectives and business logic within the innovation teams and the rest of the organisation, by sharing these insights.
For implementation purpose
Once the new solutions and services have been designed and developed to a scalable offering, it probably needs to be embedded in the existing organisation. Now, the risks of resistance or complacency may come into play.
The more developed the mindsets and habits are on “digital” and change, the more fluid the implementation and change will be. This can be promoted massively by strong Discovery habits: Involving key players in the operating organisation, well in advance of the implementation, into the initiatives for launching new services and datadriven solutions - for example, by having a frequent dialogue on shared concern and discussing the alternatives to solve these concerns. This can be done by frequent conversations or including them in the extended innovation team.
Having everyone involved in discovery activities that do not require too much expertise and dedication, for example, by having colleagues; Have broader conversations in their day-to-day conversations with clients, suppliers and partners. You can provide them with topics and questions to help open the conversations
Joining events with customers where you discuss trends, visions, needs and how they see your added value. Join conferences within your own industry and even other industries and sharing new insights and learning points from the expert teams, painting a picture of what is going on in the outside world, how this may impact your business and how this will/could be addressed.
Decision making
In line with the mission, vision and direction leadership of leading manufacturers, have a clear strategic intent on:
Result objectives - for example, overall growth aspirations that new services and data-driven solutions are crucial and how much business is expected to come from these new services and solutions. Strategic objectives on which offerings and capabilities need to be developed.
Next, they have a clear (top-down) strategy which articulates crucial choices on how to achieve these objectives in a few phases. This should provide a common roadmap on which offerings to develop, how to sell them, to whom and by whom, how to organise marketing, sales and delivery, and which obstacles to overcome.
This strategy should address all stakeholders (including R&D, marketing, product-sales, service sales and service delivery) who have direct influence on implementation and success.
With this top-down strategy, still, a lot is left open on how to achieve the objectives. Local teams are empowered to develop their local roadmap and strategy, and to take full ownership of the local development, learning, capability development and execution. This will allow them to mitigate local strengths, weaknesses, opportunities, threats and market circumstances.
Dialogue
With a constructive and forward dialogue between individuals, teams and departments, issues are solved in a fundamental and sustainable manner, hence building capabilities to perform.
For monetising service and data, this means that: Ideally, services and data-driven solutions are being sold at point of sale (when equipment is sold) - maybe not the full package, but the entry level offering which will be the first step to the next level mature offerings. Commission structure of sales people needs to be designed in such a way that it promotes the right focus and behaviour.
I have seen quite a few examples where equipment sales people were quite successful in selling service contracts once the commission they would receive was tied to the sale of a service contract.
Sales people who sell advanced services and data-driven solutions need to have specific skills and background, which are not necessarily the same as skills required for selling the products and maintenance services. Most stateof-the art sales techniques such as Solution Selling, Challenger Selling or Value Selling, assume a fluid and educated dialogue on related business domains.
Often, these conversations should happen with other stakeholders at the client organisation, maybe at higher seniority levels. The different teams need to have the confidence and safe environment to learn and develop these skills and knowledge, and become fluent in these conversations and sales approaches.
Different teams in your organisation need to be “in the same boat” without conflicts of interest. We currently see more and more companies aligning targets and incentive schemes, in which common and shared objectives prevail above individual targets.
Full transparency in key performance indicators on progress and results is required, to have all stakeholders have the necessary insights to be able to take ownership and accountability and intervene when/where needed.
Benefits
The leading manufacturers, ahead of the game, have built momentum for continuous and easy change from the inside, moving beyond “business-asusual”. Their teams are passionate and eager to perform, learn and pursue opportunities. Instead of resisting new ways of thinking about customer challenges, customer value and their business, they focus on customers and pursue opportunities to increase value.
Monetising services and data has become a logical part of their overall vision and strategy. They are better in solving bigger customer problems, better at articulating the value for customers and in removing obstacles for their clients to adopt the new solutions. As a result, they better differentiate themselves – in the eyes of their customers - from their competitors. They perform better and have more resources to keep innovating their business and hence grow in our disruptive world.
Boost your monetisation If you want to accelerate the monetisation of your (new) services and datadriven solutions, I would like to recommend:
• Review your business alongside common mistakes and suggested solutions, and add the discrepancies to your strategy;
• Download the scorecard How to Monetise Services and Data here;
• Book a Discovery Call with Jan van Veen;
• Join our upcoming Impulse Sessions on How to Monetise Service and Data. These are full day interactive meetings with like-minded peers during which we will exchange experience, insights and challenges.
Essence It’s not about making money from new services and data-driven solutions; it’s about being highly relevant and valuable to clients in a sustainable manner and empowering your people to do the same.
It goes without saying that if you deliver value for money, you also get money for value.
Jan Van Veen is Managing Director at MoreMomentum.
Mar 20, 2019 • Augmented Reality • connectivity • Data • Future of FIeld Service • Workforce • Bill Pollock • Cloud services • FieldAware • IoT • skills • Strategies for GrowthSM • The Big Discussion • Marc Tatarsky • SimPRO • Waste Management
Concluding our series our experts, Bill Pollock, Strategies for Growth, Marc Tatarsky at FieldAware, and Richard Pratley from SimPRO, identify potential areas of concern for service companies to look out for in 2019.
Concluding our series our experts, Bill Pollock, Strategies for Growth, Marc Tatarsky at FieldAware, and Richard Pratley from SimPRO, identify potential areas of concern for service companies to look out for in 2019.
What is the biggest area of concern that field service companies should address in the next 12 months?
BILL POLLOCK, PRESIDENT, STRATEGIES FOR GROWTH
The biggest area of concern for field service companies in the next 12 months will be, if they’re already somewhat behind the technology curve (or with respect to the competitive landscape), what do they need to do today to ensure that they will not fall further behind? And, it’s not just a matter of technology either; many FSOs will need to alter their corporate philosophy and mentality as well.
Technology goes hand-in-hand with the personnel that use it, so attention must also be given to how the organisation goes about replacing, and/or supplementing, its existing field force with new hires or the use of outside, third-party “feet on the street” support.
The services world is evolving so quickly, that any missteps along the way can be devastating – so every step, every move counts.
There will also be no time for any intra-mural infighting – only for collaboration and inter-departmental cooperation. Equipment will keep on breaking, and end-of-lifecycles are getting increasingly shorter. As such, there will always be the need for services organisations to deliver their support! However, only those that have the technological and corporate wherewithal to continually improve the way in which they deliver their services will rise to the top of the competitive order – and stay there!
MARC TATARSKY, SVP MARKETING, FIELD AWARE
The phrase ‘doing more with less’ is common in field service and that can be in relation to numerous resources and assets.
The workforce is a key element in this equation and can preoccupy a great deal of management time. There are concerns over an aging workforce in field service, a high turnover of workers and a shrinking pool of talent as demand increases.
Technology plays a critical role in any succession and resource planning. This may be empowering the workforce with automation to streamline operations, bring in best practice and increase productivity without the need to increase numbers. Using technology differently or embracing emerging technologies to enable remote expert capabilities, so a more experienced worker assists others.
Also attracting new workers, especially millennials, for whom, the latest technology is a big part of everyday life. The technology has to be right for both worker and the organisation to get maximum benefit
RICHARD PRATLEY, MANAGING DIRECTOR UK, SIMPRO
Technology is changing at a rapid pace. The technology we use today is very different from that we used five years ago so businesses will always have the challenge of how they can ensure the systems and technology they use are still current. Taking a long term view of the business requirement is vital.
Many businesses consider an off-the-shelf solution won’t fit the unique needs of the business. But think again! Overtly customised solutions can lead to restrictions with software updates and integrations with other systems in the future - not to mention a great deal of ongoing expense and time that should be spent on running the business.
Cloud-based software providers frequently release new updates (that are included in the licence fee) to help businesses stay ahead of tech trends. By ensuring the systems you use now are fit for-purpose, you’ll be able to keep up with future technological developments.
You can read the first instalment of The Big Discussion here, the second here and the third here.
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