With the topic of Servitization gaining more and more traction both in manufacturing circles and beyond a new industry book that provides a roadmap to making the shift towards advanced, outcome based services could well be of vital use for service...
ARCHIVE FOR THE ‘dr-michael-provost’ CATEGORY
Jul 30, 2017 • Features • Management • Andy Neely • Wolfgang Ulaga • books • Christian Kowalkowski • Dr. Michael Provost • Howard Lightfoot • Servitization • Servitization Conference • tim baines
With the topic of Servitization gaining more and more traction both in manufacturing circles and beyond a new industry book that provides a roadmap to making the shift towards advanced, outcome based services could well be of vital use for service executives across the globe. One such book Service Strategy in Action has just been published and Kris Oldland spoke exclusively to co-author Christian Kowalkowski...
I’ve met with Kowalkowski a number of times over the last few years.
More often than not it is at the Spring Servitization Conference, arranged by the Aston Centre for Servitization, (who themselves are part of Aston University,) which in itself is an interesting few days as it brings the universes of industry and academia together and there seem to be more and more people in attendance from both sides of the table each year.
Indeed, this should come as little surprise to anyone who has attended any field service oriented conference across the last few years. Servitization, arguably driven by the growing maturity of IoT, has become a mainstream topic within our industry and academics such as Aston’s own Professor Tim Baines, or Cambridge University’s Andy Neely - are both highly sought after for speaking engagements on the topic.
So given the rise in interest in Servitization, it is perhaps something of an anomaly that there are so few books dedicated to the topic. There is Baines’ own offering written with Cranfield’s Howard Lightfoot, 'Made to Serve' that is generally regarded as the go to book on the topic. Then there is Dr. Michael Provost’s excellent work ‘Everything Work’s Wonderfully’ but there is not a huge amount else.
At least until now.
Kowalkowski's new book Service Strategy in Action, co-written by Wolfgang Ulaga , is in many ways perhaps a natural sequel to Baines’ & Lightfoot’s Made to Serve, which although still superbly relevant to anyone wanting to understand the topic of servitization - is now approaching it’s fifth birthday.
And while the philosophy and concept remains the same, the conversation has evolved considerably within that period.
So how does Kowalkowski view the book?
What we wanted to do was come up with a really simple road map for service strategy in action, divided into twelve distinct step
Indeed, the book certainly has the well ordered structure of a manual or how-to-guide. However, given the heavy weight nature of the content this not only makes absolute sense but is probably essential for it to be easily digested as a whole.
Kowalkowski himself, is a softly spoken and quietly intense academic with a clear passion and dedication to his topic and this also flows into his written work. Without, the roadmap structure, there could have been a danger that this book could’ve become a book for academics, that lay-folk like myself (and much of it’s intended audience) may have found hard to navigate through.
As it is however, it provides a perfect reference tool for companies making their way through the maze of moving from a traditional break-fix/SLA based business model to an outcome based services model, where uptime and CSAT are the new golden KPIS.
So how does the book plot out your path towards a truly servitized business?
Actually, the path laid out by Kowalkowski and Ulaga is a fairly straightforward one, based on their work with a number of differing organisations. As with all good ideas this journey starts at the beginning by establishing a clear understanding of why companies should be taking this path in the first place.
And of course not all companies are created equal, and very few scenarios are ever the same. So the opening section of the book deals with understanding your organisations position.
“First of all the service imperative, why at all move into service in the first place,” Kowalkowski comments.
“Is such a move a defensive stance to defend a product business? Or is it more offensive to gain additional revenue streams? What internal and external drivers towards advanced services exist within your organisation? Are you perhaps already on a burning platform - in which case maybe you better move a lot faster?”
“It [Understanding your position] also enables you to access the low hanging fruit, but then if you want to make more profound changes then you need to transform your business model more extensively and different elements of it.”
What are B2B services – what are the key challenges? Products, are of course very heterogeneous but services are even more so
The book also focuses on the cultural elements of such activities which typically are overlooked in a lot of the other academic literature on servitization which do not touch much upon the softer issues.
Yet the cultural aspect is really important and a key inclusion the book as Kowalkowski explains.
“We have a framework, key characteristics of what becomes important when building a service culture,” he begins.
“It’s all about the starting points – you often start in a service desert, a very myopic perspective where service is a necessary evil. Then the journey is through a dark tunnel before you the see the first glimpse of the promising light where service becomes a key growth engine - and that should be the aim.”
Then this framework can also be used for analysing and diagnosing the internal organisation – where are you today and what do you need to do to get to where you need to be.
Do we have some people who are really strong and supportive within the service business and if so are they in the right place?
“It’s not enough to have a service enthusiast in middle management level.” Kowalkowski asserts.
You might need to have some service evangelist on the top level and you need the service promoters on the front office. Then you need to convince enough people who are fairly indifferent
“We explore how can you do this using established change management framework and how to apply that to a servitization context – so forming a strong guiding and coalition and then empowering others to act upon that vision,” he adds.
In fact, the approach outlined in the book utilises the well established Kotter’s eight step framework which we then applied to this context.
“We said what are the service specific traits of change management here and provide some examples of that instead of re-inventing the wheel,” Kowalkowski comments.
“You have these proven frameworks already and this is very much a change management effort. It is not necessarily the hard things that fail, you might have the technology in place but maybe a company may focus to much on what is technically possible.”
You need someone who can analyse the data and suggest improvements for your client’s business, and provide them with insight that they don’t necessarily have the time and resources to do themselves
In fact, the questions around how, when and why customers should be engaged within the process of moving to a servitized business model are also covered extensively within the book.
“We focus on the customer and the job to be done in really understanding and outlining how service innovation and development is different from product innovation. We look at strategy and how it is aligned to corporate thoughts?”
“Are you really prepared to cannibalise your business – is that even really necessary?” It may that it is not - depending on what your goal is for the service growth initiative is.”
Again the emphasis is very much about establishing a firm understanding of your own current position before proceeding further. “We offer a diagnostic test that asks are you are you fit for services, do you have the right resource for what it takes? We look at this in a very straight forward manner but it can be a good starting point for many companies.”
“Then we also look at how to move from free to fee, that is how to capture more value from your existing services – which again is a good starting point for moving towards advanced services, but is also useful for maximising revenue from and getting the most mileage out of your existing services.”
Finally, there is then a focus on building a service factory, which is also about improving existing services.
“We include an example of service blueprinting and how it can be used to improve the efficiency and productivity of the service business," Kowalkowski states.
“It’s all about managing efficiency, effectiveness and capacity utilisation. Again depending on the type of service business, then what productivity aspects are important can be defined.”
Whilst the change management and cultural question are in the main handled by Kowalkowski, the discussion around the transition from selling items, to selling services is a complex one and this part of the equation is handled predominantly by Ulaga.
“Transforming sales is of course a big thing as well and Wolfgang has been working a lot with the sales management - so this part of the book is all based on his extensive work in that area,” explains Kowalkowski.
There is, of course, a very different mindset between a service sales team and a product sales team. But should companies who move to advance services be focussed on retraining their existing staff or replacing them with a specialist sales team that understands and gets service sales?
“Obviously with the magnitude of change, understanding how important it is to get this right is key,” replies Kowalkowski when I put this question to him.
“We dedicate time to looking at the key aspects; what is the difference between industrial sales and service sales? The differences in learning orientation? Customer service orientation?”
Look at those who sell service, and who does so well and there is often a much more introverted personality amongst those who are successful
‘But look at those who sell service, and who does so well and there is often a much more introverted personality amongst those who are successful.”
It is of course all about the organisation and how to fit service into your organisation.
You will never have a one size fits all solution as different companies work in different ways but Kowalkowski points out that they have noted some “different development patterns over time, such as breaking up the silo mentality, how to foster the collaboration of central and local units and so on,” insight into which would pay for the price of the book itself.
Similarly, understanding if Servitization is right for your business is just a first step on that journey, having a road-map like this book is useful in terms of knowing where you are heading and how to get there. However, it’s also good to know how fast you should be going on various elements of the journey as well.
And this has been embedded into Kowalkowski and Ulaga work also. “In terms of what comes first, strategy or structure - for us it is about having enough in place to be able to initiate the change and execute it,” Kowalkowski comments.
“Maybe you can quite easily identify things that are currently lacking – e.g ‘we are not strong in risk management’. Obviously if a company is about to offer output based services they need to improve that before they can move forward.”
“Yet, whilst that is quite concrete and you could still grab some further low hanging fruit by reviewing your current service pricing – can you start doing something about that?”
“Maybe you need to just start changing cultures and processes for certain things – or even leave some problem areas as they are - as in the long term it may encourages other service and product sales, having a delayed benefit that outweighs the problem it creates today.”
Indeed, the questions around servitization are often as complex as they are numerous, yet the long-term rewards are numerous and long lasting. For anyone going through the shift to servitization books like this are going to be of huge use.
Be social and share this feature
Aug 10, 2015 • Features • future of field service • Dr. Michael Provost • Servitization
As someone who has been involved in the growing trend towards Servitization and Advanced Services since their inception, Dr Michael Provost is perfectly placed to help make sense of what can be a complex topic in his new book “Everything Works...
As someone who has been involved in the growing trend towards Servitization and Advanced Services since their inception, Dr Michael Provost is perfectly placed to help make sense of what can be a complex topic in his new book “Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management” (www.everythingworkswonderfully.com).
Mike’s book begins with an excellent short story that helps define Servitization in a clear and concise way. Click here to read the first part. Now Field Service News is pleased to publish the conclusion…
A Short Story (continued)
Peter Carpenter* managed to book some time with Anna Edwards* and they met two weeks later. Over coffee and sandwiches in Anna’s office, Peter went through the thinking he had been doing and showed Anna the ‘elevator speech’ that he had quickly put together during the train journey to HQ.
Anna stared at this for a minute or two before turning to Peter with a broad smile on her face. “I think you’ve cracked it, Peter!” she exclaimed. “I can see it now: our customers want what our power units do, not what they are. If we sell reliable power, not units, our customers will come to us rather than the competition to get what they really want and will pay us a fair price instead of ringing me up at all hours of the day and night demanding yet more concessions.”
“You realise, Anna, that this will mean the company will have to change its thinking, from top to bottom.” said Peter. “For example, we won’t be able to rely on profits from spares sales to offset any losses made on unit sales because spares usage will appear on our books, not the customers’. Our units will have to consume fewer spares than they do now. Engineering and Manufacturing will have to listen to inputs from Spares and Repairs and we will need to put comprehensive and robust systems in place to gather, store, process and output information about how our units are working in the field. It’s a whole different mindset and some of the current managers won’t get it.” “Don’t worry, Peter!” retorted Anna. “Those that don’t buy into this will either have to change their thinking or leave. I’ll need a plan, a budget and a list of the people you think you’ll need to help you for the next Board meeting, to which you are invited.”
It’s a whole different mindset and some of the current managers won’t get it.
The Board poured cold water on Peter’s presentation, but Anna insisted that Peter’s initiative had to be pursued, made Peter the Board member responsible and gave him her full support. The next few years were hard, but genuine progress was made by Peter and his team and even the most sceptical Board members couldn’t brush aside the company’s much improved financial state. Peter set up a subsidiary to ensure that the initiative grew without being stifled by the old guard, who saw their power and status threatened and pushed back hard. As predicted, those who didn’t fit into the new culture either left voluntarily or were asked to go.
MW4 grew rapidly: many managers and employees saw it as an opportunity to escape from the limitations imposed by existing corporate structures, the company was able to recruit many good people with the skills it required and those involved relished the chance to contribute fresh ideas. Eventually, as the market responded positively to the new way the organisation conducted its business and built more constructive relationships with its customers, sales and profits rose, the City started to take notice and the share price began to rise rapidly. Anna knew that she had turned the corner when she overheard a long-serving manager talk about product sales as the entry ticket to the true market, which was satisfying real customer needs rather than merely selling clever bits of metal.
The true market was satisfying real customer needs rather than merely selling clever bits of metal.
Anna was just finishing off her last cup of ‘canteen cappuccino’ when Peter breezed in. “The Oracle has spoken!” he exclaimed. “I am the new boss! It wouldn’t have happened without your unwavering support over the last ten years, Anna. Thanks for everything!” Anna stood up to shake Peter’s hand, knowing that the company would grow and prosper under Peter’s wise guidance. As she left for the last time, a thought struck her as she turned on the windscreen wipers: perhaps she should use the proceeds from selling some of her share options to buy that villa near Saint-Tropez that Chris had seen advertised in the FT. It would make a good surprise birthday present for him and provide a much-needed bolthole from the atrocious UK weather.
* Note: the company and characters are fictitious, but the scenarios are based on experience.
Please note that this short story has been previously published in the following:-
Provost, M. (2014). Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management - a Short Story. Asset Management and Maintenance Journal, Volume 27, Issue 5, September 2014, pp. 43-45. Mornington, Victoria, Australia: Engineering Information Transfer Pty Ltd.
Be social and share this article
Jul 29, 2015 • Features • future of field service • M2M • management • Dr. Michael Provost • Servitization
Whilst the trend towards Servitization is rapidly becoming increasingly important for manufacturers and one that will have a significant impact on how field services operate, it is often viewed as a complex subject.
Whilst the trend towards Servitization is rapidly becoming increasingly important for manufacturers and one that will have a significant impact on how field services operate, it is often viewed as a complex subject.
However, one man who has been involved with the movement since its early beginnings is Dr Michael Provost. His excellent book “Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management” (www.everythingworkswonderfully.com) is a distillation of his knowledge and experience in this area built up over nearly four decades, making it a much more accessible topic.
As an introduction, Mike opens his book with an excellent short story that neatly summarises the concept of Servitization. Field Service News is pleased to be able to share it with you here…
A Short Story
Anna Edwards* was a very happy woman. It was her last day as Managing Director of Precision Powerplants* and she was looking forward to a few months of rest and relaxation on the sunny Côte d’Azur with her husband Chris* while she pondered her next move. She knew that she was leaving the company in good shape for her successor (whoever that happened to be: there were several candidates from both inside and outside the organisation who were being put through the on-going ‘beauty contest’) and felt very satisfied with the progress that the organisation had made on her watch and the transformation that she had overseen.
The organisation’s reputation for well-engineered power units just wasn’t being reflected in profitable sales.
She decided to bring in Peter Carpenter*, an old friend from university whom Anna admired for his out-of-the-box thinking, no-nonsense tell-it-how-it-is approach and excellent people and communication skills. She sent Peter home to have a ‘big think’, telling him to stay away from HQ and the alpha gorillas all trying to outdo each other with short-term slash-and-burn fixes which Anna felt were the painful road to corporate oblivion. Peter’s brief was simple: produce a plan for getting out of the ‘commodity trap’ that the company had fallen into and do it quickly before the inevitable crisis came and the whole organisation would be brought to its knees.
Peter had been musing about how to save the company for a few weeks when Sara* burst in to his study as he was casually doodling on a notepad. “The boiler’s broken yet again, Peter!” she fumed. “I’ll have to cancel my day in town while I wait for the man to turn up to fix it. I bet he won’t even have the right parts in his van either! Why couldn’t the thing let me know that it was going to break, so I could arrange the repair at my convenience? Why can’t it tell the repair man what’s wrong? I don’t give a damn about boilers: all I want is hot water and a warm house! Looking after it is nothing but hassle!” She stormed out, clearly not at all pleased.
Just then, Peter had his ‘eureka moment’. Were customers thinking like this about power units? After all, they had businesses to run and their own customers to serve and didn’t want to worry at all about power sources. Were the units that they had bought just an irritating distraction to them, requiring time, effort and expertise to look after that they really didn’t have? What if Precision Powerplants used its expertise to look after the units it made (after all, the company had designed and built them, so no-one else should know them better) and charged for the power delivered, not the physical units? Would this idea get the company out of its death spiral?
Many of the capabilities needed were already in place: they just weren’t being brought together into a coherent whole.
Peter began to ask questions and research his idea in more detail and discovered that many of the capabilities needed were already in place: they just weren’t being brought together into a coherent whole. Peter found people in the organisation who had, despite some management objections and hostility from other co-workers, devised ways of mathematically modelling unit performance and creating actionable information from the data that could be gathered and transmitted from equipment in service: there were also experts in Spares and Repairs who knew how the units should be looked after. All this valuable and unique knowledge had been ignored by Engineering and Manufacturing who just wanted to design, make and sell units before pushing them out of the door ASAP. Something would have to be done to move the organisation from a product to a service mindset, Peter decided, if his idea was to succeed.
* Note: the company and characters are fictitious, but the scenarios are based on experience.
Look out for the second part of the story, coming soon!
Please note that this short story has been previously published in the following:-
Provost, M. (2014). Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management - a Short Story. Asset Management and Maintenance Journal, Volume 27, Issue 5, September 2014, pp. 43-45. Mornington, Victoria, Australia: Engineering Information Transfer Pty Ltd.
Field Service News is published by 1927 Media Ltd, an independent publisher whose sole focus is on the field service sector. As such our entire resources are focused on helping drive the field service sector forwards and aiming to best serve our industry through honest, incisive and innovative media coverage of the global field service sector.
Leave a Reply