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Regular contributor to this magazine, moreMomentum’s Founder and Director Jan Van Veen continues to urge firms to move out of their comfort zone in order to achieve real innovative change. Mark Glover picks some key points from Jan’s recent appearance as a guest on The Field Service Podcast.

The benefits of servitization and digitalisation continues to fill content in podcasts, conferences and academic papers. Indeed, much of Field Service News’ pages is dedicated to these two phenonium and how the service industry should embrace both.

However, it takes a certain amount of courage for firms to break free from their traditional business-model, which might well have served them perfectly well over the years, in order to undertake a strategy which demands a long-period away from the comfort zone.

I hosted the Field Service Podcast where Jan Van Veen, Director and Co-Founder of Consulting and Training company moreMomentum was a guest. Jan continues to work closely with manufacturers, encouraging business innovation and change in their make-up and I began the podcast by suggesting to Jan that some manufacturers are reluctant to make changes in their set-up; reluctant to innovate. “I think it’s more about making sure that everybody is happy,” he responds. “That everybody has the same sense of direction of what needs to happen, and then also to make it happen. I think this is the biggest challenge.”

The comfort zone here is ‘business as usual’. Firms, Jan believes, can see the advantages of servitization and digitalization as a release from the pressure of performance but they are struggling to make the process happen, or the rate of change is too slow.
“In general, what we see is that change is not growing rapidly enough in business,” Jan says. “There is more and more of doing the same, of doing business as usual which does incrementally improve business offerings, products and services etc., which is all good but that doesn’t take them to the future; that doesn’t help them reap the benefits of digitalization and servitization.

Jan identifies the comfort zone as something that manufacturers have been doing – albeit successfully – for many years: improving reliability and preventing disruption through a focus on asset uptime and product-related services. It’s a rut that could potentially leave firms lagging behind competitors, competition that could even come from their own customers as they become more digital savvy.

“I think that’s the main concern here,” Jan warns. “Digitalization is becoming more and more ingrained into everything a business does. We are seeing clients of manufacturers becoming more digital in their operations and therefore start to think about other solutions that can improve their own operations. The questions become about the role of the manufacturer in all this.”
It’s an interesting point and one that challenges the traditional notion role of a manufacturer.

Should they stick to the traditional product-related services offering or attempt to get closer to the business processes of their clients and pursue a more operational-oriented approach achieved through committed servitization and digitalization adoption? Jan, of course, encourages the latter, but admits the difficulties it poses, particularly when it comes to altering a rigid business-model, which involves risk and requires cultural buy-in.

“There’s a bigger bet involved,” he says. “We have to seriously re-invest in new capabilities, digital capabilities, new competencies, new operations and processes. It becomes about political decision making. Reframing and changing the business logic is something which any kind of business finds very difficult.”

Reframing and changing business logic, as Jan says, can be extremely challenging. Firms are reluctant to alter a process that may not be flourishing but is working. Tinkering with a framework does indeed carry risk where the fallout could be extremely damaging. However, most firms are aware there needs to be some type of change and innovation in order to improve processes, services and products. There is a range of innovation, ranging from short term improvements to disruptive radical change and it’s the most forwardthinking companies that embrace this entire spectrum that ultimately succeed.


   "Firms are reluctant to alter a process that may not be flourishing but is working..."


“They play the game on each type of innovation at the same time and are therefore working on performance for today, tomorrow and the day after,” Jan explains. “It means that every type of innovation and change has different challenges and pitfall and therefore requires different strategies and techniques. If we are not aware of that we will find ourselves applying the wrong approaches, which may work for one type of innovation, but not another. We then fail.”

The key in the process is business logic. But what exactly is it? How can we define it? Let’s strip back one of the basics of enterprise. Every industry or business has a prevailing set of thinking patterns or knowledge about their customer’s needs: yearly performance; information about competitors; world trends which we then, as a business, make appropriate strategic decisions from. It essentially defines how businesses act, decide, change and learn.

With this in mind and in order to helps businesses observe their own rationale for change, Jan has developed a Hybrid Innovation Matrix. Relatively small, incremental changes, shown in the bottom left of the matrix represent what most businesses are doing. These take place during the day which includes customer feedback, marketing and R&D. “I don’t think this is the real challenge here,” Jan tells me. “Most of the companies have that right. It becomes more challenging when we move up the left column to the bigger changes within the current business logic, such as applying new predictive technology in our maintenance and services. This includes political decision making and serious change management if you want to launch that new technology.”

 

Yet, it’s the red side of the matrix – the new business logic - splintered by disruption, that is the most challenging but most rewarding. The bottom right is where firms, by thinking about their current business model can start to extend and develop new knowledge and potentially reconfigure their business model. “Here, we are challenged by re-thinking, reframing, and, ultimately,” he says, “developing new models,” Jan said.

More generally, in the top right, darker red quadrant is where new solutions and markets are being created. Usually through a cluster of companies focusing on one area, for example, digital becoming more common in healthcare or the emergence of renewable energy. Here, Jan predicts the incubation of further ideas and disruptions. “We will see different kinds of developments going on and we still don’t know which one is going to emerge or be dominant, but one thing is for sure, in the next five to ten years, something serious will happen and change here.”

But how can companies use the tool to establish their own potential for change, or more specifically, make sure they’re avoiding ‘business as usual’? The key is ensuring any large-scale changes (top left of the matrix) such as a new software system, does not come at the cost of new business innovation that is incubating in the right-hand side of the matrix. “If that happens,” Jan says, “then you will see that every initiative in the right column will be sacrificed for something which has a shorter-term result in the left column, and then you’re really stuck in business as usual.”

Jan is passionate about change management and innovation and it was obvious during the podcast how much of a difference this matrix and other tools can make to a manufacturer’s outlook. He’s the first to admit that it’s not an easy process but is adamant about the advantages it can bring, an attitude affirmed when I ask what inspires him to do what he does. “I believe that it’s all about empowering and enabling everybody in an organisation to be eager and passionate about performing, learning, developing and growing; as a person and therefore as a business.

“It is all about people making it happen, and I’m a firm believer that people do drive change and want to change, as long as there’s a good reason and not too many obstacles. Therefore, we have to give them good reasons and avoid all the obstacles, and then,” he says, “great things can happen.”

We see increasing attention for the way to manage and lead organisations and teams and to build confidence to innovate and change in a rapidly changing world. The widespread fear to fail has a paralysing effect which hinders sustainable change, innovation and improvements.

To reduce this fear to fail, the idea has emerged that it is okay to fail:
• We should ‘Fail fast, learn fast’;
• ‘Failure is an option’;
• We should organise ‘Failure celebration nights’.

However, in practice I see many people finding it difficult to really embrace these concepts wholeheartedly. In the end, failure is a failure, it doesn’t feel right and by nature is something you try to avoid. It will not feel okay fail really, whatever we say about failure and how much we celebrate failures.

In some cultures, this is stronger than others. Besides that, most industries and companies experience increasing pressure on performance. So, should we take it easy when performance is behind expectation?

I fully agree with the point that many companies suffer from the paralysing effect of the fear to fail. However, I am afraid we are missing the point and do not get the right balance between accountability on the one hand and confidence to perform, learn, explore and change on the other hand.

Learning From Young Ambitious Athletes
I have the pleasure of being involved in coaching young and ambitious judokas who have a dream of participating at the Olympics some time. My sons are pretty fanatic judokas as well. They train hard - five evenings per week - and play three tournaments per month. Losing a match often happens very intensively: you’re on your own, and within a few minutes or even seconds you are violently thrown on your back – game over! If you’re not the top of the league (yet), you lose most of the matches.

How to stay motivated? How to keep on learning and performing? How to feel proud of what you are doing and accomplishing?
I’d like to share three things around failure and success, which I have seen working very well for these youngsters as well as for the leading and dynamic manufacturers which are ahead of the game during today’s rapid transitions and change.

Focus On The Right Actions To Get Results, Not The Results Themselves
Instead of focussing on winning the match, the most talented athletes focus on their task, doing the right things to have the best chances to win the match. They evaluate how well they performed their task and how they could do better. The end-result (winning or losing the match) is hardly indicative. There are so many other factors which influence the end-result. Their best match could be the one they lost, not the one they won.

In practice, many businesses focus too much on the results alone when managing their teams. Everything is okay as long as the results are okay. However, when they miss a deal, lose a client, or when a new service-product does not sell well, there is a problem
which has to be fixed ‘yesterday’. It doesn’t matter how - only the results count!

On the other hand, successful teams and individuals focus on building strong capabilities and competencies. They feel accountable for execution and results. Whenever either results or execution are below expectations, they review, find the root causes, try other approaches and learn. This will bring the best, sustainable results.
This is success! Not doing this – on the other hand - is the failing. So, failure should not be an option!


                       "Many businesses focus too much on the results alone..."


Articulate The Expected Outcome Of Learning And Experiments
I have seen how much more pleasure, engagement, learning and the results judokas get when they are very targeted in their learning and experiments. The experience the effects on intermediate objectives which are leading indicators for the overall result – winning more matches. For example, they will focus an entire tournament on dominating their opponents, force them to move and then experience how much more they are in control and get more opportunities to make a throw.

Too often, we see teams trying something new without being explicit about the expected effect and about how to ‘measure’ the impact. They tend to relate this impact to the end-result only. This reduces their ability to evaluate and validate their actions properly. They abandon good ideas too quickly because of the lack of performance improvement on the short term and move on to try something else. As a result, they learn slow and sometimes even follow unproductive paths.

However, successful teams articulate the learning objective, the expected impact and outcome of their initiatives and experiments very well. Whether it is about improving performance, finding new ways of working or developing a new service or business model, they have:
• A proper root-cause analysis;
• Clarity on critical assumptions which need to be valid for success;
• Formulated the critical questions;
• Designed their experiments to validate the critical assumptions and answer their key questions;
• Defined how to measure the results and validate their hypothesis.

Our Experiment-Learning-Card can help better articulate your experiments.

As a result, they can truly say that any answer or result is a good one and brings them further. A negative outcome is not a matter of failing at all. However, not following these kind practices is the failing. Failure should not be an option!

Like Edison said: “I did not fail, I only discovery 10.000 ways that don’t work.” Focus on learning from success and progress
Many young athletes with aspirations to get to the top – and ultimately will make it – are the winners at the moment. However, they have a mindset, attitude and practice to have a steep learning curve. That motivates and is the best predictor for good results.

Many of us often forget that we learn more successes and progress towards an aspiration than from failures themselves. Failures can increase a level of threat, stress and adrenaline, which can improve performance in a typical flight-or-fight situation. The effect is often short term and limits openness, creativity and collaboration. Which is not really a good situation for innovation and learning.
Our hormone-systems (dopamine, endorphin, oxytocin and more) are built around feeling rewarded and connected when achieving something (together), making progress and getting closer to the goals and feeling connected with
each other.

Every step we get closer to the desired result will motivate us more to be persistent and find ways to make the next step.

Conclusion
• Learning ≠ Failing and Failing ≠ Learning;
• Focus on actions and tasks for results;
• Focus on building capabilities for results;
• Celebrate progress and (small) successes;
• Specify objectives of learning, experiments and discovery as explicit as possible;
• Use our Experiment-Learning-Card to better articulate your experiments.

Jan van Veen is Founder and Managing Director at moreMomentum.