Whilst some were heading out to the desert to watch the likes of Radiohead and Lady Gaga at Coachella 2017 early this year, others were in Palm Springs for perhaps the lesser known but equally fantastic Field Service USA.
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Aug 29, 2017 • Features • Management • Augmented Reality • Michael Blumberg • Field Service USA • IoT • Customer Satisfaction and Expectations
Whilst some were heading out to the desert to watch the likes of Radiohead and Lady Gaga at Coachella 2017 early this year, others were in Palm Springs for perhaps the lesser known but equally fantastic Field Service USA.
Field Service News sent Michael Blumberg along to talk to the USAs largest collection of Field Service professionals in one place, find to out what were the biggest challenges being faced by the industry at large and how we can overcome them...
In April this year I attended WBR’s Field Service 2017 in Palm Springs, California. While I was at the conference, I spoke to several Field Service leaders about their biggest challenges and the strategies they will pursing to overcome them.
Business executives often think their problems and challenges are unique to their specific situation. However, I was surprised to learn of the common thread that ran through my conversations with field service leaders.
Basically, four different themes emerged from my conversations. Rather than keep you in further suspense, let me share what I learned from my discussions:
Key challenge #1 - Keeping up with advances in technology:
Field Service leaders understand that their customers expect the same experience they do with using consumer electronic products. In other words, they expect an always on, always connected, always available service experience.
Strategy to overcome challenge - Develop & Implement an IoT Strategy:
Field Service leaders recognise that that IoT improves the customer experience in very much the same way it does with consumer electronics.
While field service leaders I spoke to agree that conceptually IoT is the right technology to achieve this outcome, they also admit that the real challenges lie in competing for capital resources to implement service led, IoT solutions and prioritizing where these investments should be made.
Key Challenge #2 - Determining which technologies enable an improved service experience:
Field Service leaders are faced with a myriad of choices when it comes to selecting and implementing technology to improve the customer experience.
For example, there’s various categories (e.g., AR, IoT, mobility, etc.) of technology to choose from as well several different vendors in each category segment.
It can be an overwhelming and taunting task to learn about every technology on the market.
Strategy to overcome challenge - Due Diligence and Planning:
Field Service leaders understand that they must adopt an objective approach to identifying, evaluating, and prioritising investments in technologies as well as vetting and selecting vendors. This means they must find the intellectual bandwidth and manpower to complete this strategic work of their organisation.
Key Challenge #3 - Keeping up with the skills gaps
Let’s face it, millennials are not lining up in droves to accept field service positions. In addition, the baby boomer generation in retiring from the workforce as a rapid rate.
As a result, Field Service leaders are under pressure to implement creative strategies to overcome the current and growing shortage of skilled technicians.
Strategy to overcome challenge - Implement Augment Reality (AR)
Many Field Service leaders perceive that AR solutions provide an effective solution for dealing with the shortage of skilled labor. By utilising this technology, field service organisations can do more with less. Basically, they can leverage the expertise of a limited number of skilled Field Engineers and distribute this knowledge remotely to a broad number of people.
Key Challenge #4 - Becoming a customer centric organisation:
Field Service leaders understand that if service business is going to thrive and grow then their organisations must become more customer centric. Unfortunately, some companies still have a product focused orientation.
Field Service leaders understand that if service business is going to thrive and grow then their organisations must become more customer centric
As a result, they are not making the necessary investments or resource allocations for the field service organisation to remain profitable and competitive.
Strategy to overcome challenge - Influence senior management on the value of service
Basically, Field Service leaders realise they must exert greater effort in influencing senior management on the benefits of becoming a customer centric organisation.
This means they need to build a strong business case as to why their companies should invest in technologies that make their companies more customer centric such as IoT, AR, FSM software, mobility, etc.
The business case must consider the impact of technology investments and process improvements on customer satisfaction, product sales, and the overall financial performance of the company.
Interestingly, the comments that I received were very consistent with the overall themes of the conference. Obviously, WBR has a good pulse on the industry.
Nevertheless, it is always great to speak to people one on one at industry conferences. I find these conversations provide so much more insight and context then sitting through a “canned” presentation.
The common thread between all these issues is that they involve the use of technology to optimise and improve field service delivery. This makes perfect sense as field service is a technology intensive business.
However, it is important that field service leaders do not fall into the trap of viewing technology as panacea for all aliments facing their organisation. The best technology is of little value without solid management, effective planning, and strong leadership behind it.
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Aug 24, 2017 • Features • Management • Michael Blumberg • Service and Sales
Michael Blumberg, President of the Blumberg Advisory Group discusses recent research his organisation worked on with Giuntini and Company on the processes being used to effectively sell extended warranty programs and argues that if you adopt the...
Michael Blumberg, President of the Blumberg Advisory Group discusses recent research his organisation worked on with Giuntini and Company on the processes being used to effectively sell extended warranty programs and argues that if you adopt the right approach, moving from customised service contracts to selling outcome based services isn’t such a huge leap of evolution...
No one can dispute the fact that manufacturers are placing increased attention on growing top line service revenue. Typically, this revenue is captured through the sale of EW/ES programs.
Given the level of focus place on this subject by manufacturers and service providers, Blumberg Advisory Group and Giuntini and Company partnered to conduct a study among professionals involved in selling extended warranty and/or extended service programs. To qualify as a survey participants, respondents had to influence, recommend or make decisions about these programs.
The objective in conducting the survey was twofold: To identify best practices involved in marketing and selling extended warranty and/or extended service (EW/ES) programs and to evaluate the impact of these practices on key performance indicators (KPIs).
As field service leaders may recognise, contract attachment and contract renewal are the most important Key Performance Indicators (KPIs) associated with marketing and selling of EW/ES programs.
The factors that drive contract attachment rates are warranty configuration and the types of marketing tactics employed.
Configuration refers to the length of coverage, level of customisation, processes engaged and resources employed in delivering the warranty, and entitlement levels offered. The survey results suggest that the more distinctions a company can make about its EW/ES program, they more likely customers will be to purchase it.
In other words, customers consider the value of a service contract before they purchase it.
This is an “eye-opener” because many companies have the view that a warranty is a warranty. The management within these companies believe that just because customers purchase their product they’ll also purchase the extended warranty.
Most of the companies we surveyed rely on traditional marketing tactics like sales aids (e.g. brochures) and direct sales to sell EW/ES programs. Usually, these tactics are employed at the product point of purchase.
Companies who continue to sell service contracts after the product sale are likely to experience a 20% improvement in attachment rates on average.
Manufacturers who experience high EW/ES contract attachment and renewal rates understand that the activities involved in marketing and selling these programs is separate and distinct from those involved in selling products.
In other words, service leaders in these best in class companies put as much time and effort into configuring, marketing, and selling service contracts as their counterparts in the product organisation place on designing, marketing and selling products.
Effective field service leaders recognise that service won’t sell itself. They understand that just because the customer owns the product doesn’t guarantee they’ll buy the service. In addition, field service leaders in these service organisations make sure they have the right systems and processes in place to market and sell service contracts.
While 87.5% of companies surveyed have a formal process in place to configure and price service programs, only 13% employ a Configure, Price, and Quote (CPQ) software application.
The trend toward customers wanting to buy outcomes as opposed to services or products will place even more pressure on field service leaders to become proficient at configuring, pricing, quoting, and selling service contracts.
While recent technologies like IoT, AI, and Big Data will make it easier for companies to deliver outcomes, manufacturers still need to provide customers with a contract that specifies exactly what is include in the “outcome” they have purchased.
For example, it defines the terms and conditions, the hours of coverage, the level of availability, the resources provided, and the processes engaged in delivering the agreed upon outcome to the customer. It also describes the level of entitlements and roles and responsibilities of the party providing the outcome as well as the party receiving the outcome.
Furthermore, it is likely that outcomes may differ from customer to customer.
Manufacturers who have not mastered the fine art of selling traditional service programs may find selling outcome based services a real nightmare.
Yet in many ways, selling an outcome based contact is no different than selling a customised extended warranty or extended service contract.
That’s why companies need to start investing in systems and processes that facilitate configuration, pricing, and quotation of services contracts today.
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Aug 22, 2017 • Features • Management • management • Nick Frank • Si2 partners • Trusted Advisor
Nick Frank, Founder of Si2 partners outlines some fundamental steps that field service organisations can take to ensure their field service technicians hit the holy grail status of ‘trusted advisor'
Nick Frank, Founder of Si2 partners outlines some fundamental steps that field service organisations can take to ensure their field service technicians hit the holy grail status of ‘trusted advisor'
In Field Service we have heard a lot about the undoubted benefits of developing the Trusted Advisor skill set, but very little on how leaders can achieve this goal. It is about time we looked at this journey from the perspective of the service technician, what kind of behaviours we expect of them and the support that they need.
In my experience, there are four key elements that enable a service professional to develop into a Trusted Advisor.
1. Fix yourself first!
The key to providing excellent customer care is to first know you! What you are good at, where you struggle and how you generally interact with others. Know this and you can start to develop some of the behaviours and capabilities needed to be a Trusted Advisor. Most important is to learn to be customer centred. In any interaction with your customers, a good rule of thumb is that the communication should be 2/3 the customer and 1/3 yourself. The customer must be allowed to explain their situation and expected outcomes.
The service provider should focus on questions that clarify the situation, take the actions required to address the concerns or issues, or explain the benefits of what has been done.
However, just being customer centred is not good enough. We have to know ourselves well enough to keep our emotions in check to stay assertive and solution focussed through the customer interaction.
2. Understand the business goals
The key reason for developing the Trusted Advisor skill set is to support our companies growth. This is not about being nice!! It’s about building a relationship where customers are open to a conversation on maximising value from their equipment. Tech companies such as Oracle have been starting to see this form of ‘Customer Success’ management as a key organisation capability, but it is equally important to equipment manufacturers.
To be able to deliver on this goal, service team members need to understand:
- How the business makes money and their contribution to that process.
- The expectations on them as a Trusted Advisor and where on the Support to Sales continuum we want them to be. This is key! One of the major reasons these initiatives can fail is that the service technician feels they have to sell, which can quickly destroy the ‘trust’ in the relationship. This is when communication and re-enforcement of the message is critical to success.
- The wider business offerings the company provides and the value they can bring to the customer
- In your industry, what does the customer really value and trust.[/unordered_list]
3. Fix the Customer
Only when you understand yourself and the customer, are you ready to act as a Trusted Advisor. There are some helpful guidelines that really can help technicians do an excellent job.
- Make sure there is a clear process and expectation for the customer interaction. For example I have heard many service managers use the mantra; ‘Fix yourself, Fix the customer, Fix the situation’
- Develop communication skills required to be successful such as ‘Active Listening’ to develop empathy with the customer, ‘Talk well’ to quickly identify the issue and ‘Develop Rapport’ to build the relationship.
- Make it easy to accesses information on the customer such as problem & upgrade history, BOM, visits and orders.
- Provide tools and training that helps technicians identify pain points and articulate the value of different options the customer might have.
- Provide a clear path to closing the sale that does not compromise the relationship. In most customer environments, trust is created because there is not a sales discussion but a benefits discussion. To close the sale, the Technician needs to have a very easy process that allows the customer to take the next steps without feeling they have been pressured. Generally this is either a lead generation process where inside sales will follow up and close the opportunity, or it might be the availability of a fast and easy order placement to satisfy the need for ‘low value’ orders.[/unordered_list]
4. Motivation - Practice makes Perfect
But how to ensure motivation? Some people are motivated by money and some are more motivated by solving the customer’s problems (generally technicians). There is no right or wrong answer, it all depends on your people and what makes them tick. Whatever direction you choose, you should make sure that the Trusted Advisor role is embedded in their job profile through balanced performance measures. Another important facet to motivation is to share best practices and experiences with colleagues.
Have senior technicians coach or mentor the more junior. Use direct customer feedback insights and processes to demonstrate that Trusted Advisor behaviour does make a real difference to customer’s satisfaction and loyalty.
Developing Trusted Advisor capability in your team is very much a management art. So gaining different perspectives from internal and external colleagues is extremely important as you raise self-awareness, discover the secrets of consultative selling, coaching and best practices.
If you would like more practical advice on how to get the most from your service operation, you can contact Nick Frank at nick.frank@si2partners.com
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Aug 10, 2017 • Features • Management • management • James Alexander
The New Driver of Business Success
Senior managers from all types of businesses in all types of industries are discovering that one role takes the spotlight in deepening key relationships—the field service engineer. No one has more potential impact...
The New Driver of Business Success
Senior managers from all types of businesses in all types of industries are discovering that one role takes the spotlight in deepening key relationships—the field service engineer. No one has more potential impact on the success of the company and its key customers than the FSE...no one. High-performing field service pros are where the action is, orchestrating a superb customer experience, proactively preventing problems before they occur, and leveraging relationships to rock out customers and lock out the competition.1
Research Validation: What Execs Say
Following are some executive comments taken from my research2 that reveal the power of the stellar field service professional.
One senior executive from a huge telecommunications company talked about it in terms of competitive advantage: “Our lifeblood depends on the capabilities of our top field service personnel to differentiate our company from others in the industry. They understand our customers’ issues and are creative in developing solutions to address them. They have become evangelists for our products and solutions and are often used in presales situations to demonstrate our capabilities.”
A global head of services for a manufacturing company put it this way: “Our field engineers make one million customer calls per year. When they build deep relationships, our customer loyalty soars. We must maximize this opportunity.”
Obviously, this is a topic of significance to business leaders and an evolution/revolution worth pursuing!
FLASH POINT: Unleash your service brilliance!
The Attributes of the Brilliant Field Service Professional
OK, so you’re convinced. But you’re probably wondering: What does a brilliant FSE look like?
Brilliant service professionals are, well, brilliant, and their glow lights the way to stellar performance.
Figure 1 illustrates the attributes of the Brilliant FSE. Let’s review this diagram from right to left, starting with the results: repeatable, sustainable performance.
Figure 1: Attributes of the Brilliant Field Service ProfessionalRepeatable, Sustainable Performance
When FSEs rock, the outputs are repeatable, sustainable, value-adding performance. The impact is huge: Loyal customers get phenomenal value from their investment in your company and sing your praises far and wide. Your company achieves strong, profitable growth, in both products and services, and locks out the competition. And you, the brilliant service pro, get the rewards and recognition befitting your contribution and your status. Sounds like a classic win-win-win to me!
Trust-Building Behaviours
Top performers get brilliant results by behaving differently from average service providers. They must do many things well, but the very best service pros act in ways that quickly build and maintain integrity. They ooze credibility as they proactively build trust.
Tools
The service rock star is a big believer in using tools. He enthusiastically embraces any checklist of required actions, set of practices, or relevant case study that can help him retain quality while doing his job faster and easier.
Competencies
Five competencies are integrated within the brilliant FSE:
#1 Value-creating mindset. The brilliant field services pro possesses a view of life based on creating value. He understands the big picture and collaborates with customers and colleagues to deliver business results and personal wins.
Here are what executives have said on this topic:
- “They build upon their credibility and relationship skills to find bigger customer needs and recommend appropriate solutions.”
- “They understand the big picture.”
- “Our top performers have a holistic viewpoint. They clearly see the importance and the fit of services and support as part of the overall solution when combined with hardware, software, and consumables. Our average performers fail to leverage the strength and diversity of our entire organisation.”
- “They have a program-level horizon instead of a project-level horizon.”
- “They look beyond their role with regard to ‘what would the CEO want to know?’”
#2 Customer acumen. The stellar FSEs knows a lot about his customers. He understands his customer’s industry, his customer’s markets, his company’s competitors, and his customer’s competitors. Furthermore, he is savvy about business in general.
Executive comments regarding customer acumen include:
- “They have knowledge of both the customer’s environment and our business. They take the trouble to understand more, and it pays off.”
- “They have a better grasp of overall business needs.”
- “They bring a rich portfolio of practical experiences and relationships with others, and they possess an understanding of business dynamics and market trends.”
#3 Relationship skills. The brilliant FSE knows that relationships are what matter in work and in all aspects of life. He is a master of the four core relationship skills of listening with intensity, probing with purpose, presenting powerfully, and acknowledging concerns.
Again, here are some direct quotes from my research participants that emphasise the criticality of these skills:
- “My top performers possess not just adequate or good communication skills, they have great communication skills.”
- “They communicate the invisible well.”
- “They display superior creativity in listening to customer issues and creating a solution strategy that clearly shows how it solves the problem quickly and thoroughly. The differentiator is their level of creativity, their understanding of issues, and the speed with which they react.”
- “They are superb communicators with clients, team members, and management within our company.”
- “They find a way to outline options and pros and cons to the customer in such a way that this becomes the customer’s direction.”
#4 Engagement management. The very best understand the steps to getting things done, how problems are solved, and how to best interact with the customer. Internally, he uses the knowledge management system, follows procedures, uses prescribed tools, and provides accurate updates on all work in a timely fashion.
#5 Technical proficiency. The brilliant services pro knows enough about his technology, products, and services to get things done. Interestingly, deep technical know-how is not vital in most situations.
Here are some comments from my research that demonstrate this point:
- “My star performers are all good technically, however, most are not technical experts--they know when to bring in technical gurus when needed.”
- “Interestingly, many of my people who customers see as trusted advisors are only technically adequate. They deliver their value through helping customers connect the dots--showing how the best use of our solutions can have a big impact on that customer’s issues.”
If You Want It, You Can Have It
So there it is: Five competencies that are enhanced by tools and mobilized by trust-building behaviors that will yield the results that customers crave and executives yearn for. Like anything of value, it will take some work, but the good news is that the attributes are known, the skills determined, and the steps to success defined. If you want it, you can have it.
Endnotes
- I talk in detail about the rising criticality of services within product companies and the opportunities and challenges it brings in my book Seriously Selling Services: How to Build a Profitable Services Business in Any Industry.
- Alexander, James A. 2007. “Transitioning Technical Experts into Trusted Advisors.” St. James City, FL: Alexander Consulting.
This article was adapted from The Brilliant Service Professional: Building Trust, Creating Value, Having Fun, by James “Alex” Alexander, and can be purchased on Amazon.com or the Alexander Consulting website.
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Aug 01, 2017 • Features • Management • beyond great service • Jim Baston
Charlie’s fictional journey to service sales nirvana continues as Jim Baston continues the serialisation of his excellent industry focussed book beyond Great Service continues...
Charlie’s fictional journey to service sales nirvana continues as Jim Baston continues the serialisation of his excellent industry focussed book beyond Great Service continues...
If you missed the earlier parts of this series you can catch up by clicking here
Last time Charlie and Ken had uncovered two hurdles that could negatively affect their efforts at getting their technicians to make recommendations to their customers. These were:
- The service person’s view of the salesperson
- The customer’s image of the service technician
They return to Charlie’s office. Charlie is ready to get started, but Ken points out that there are more hurdles to consider.
Ken begins: “…we might have to tighten up how we handle opportunities around here or our efforts could be in vain. Think back to the service meeting on Monday. Remember when Angus spoke about handling opportunities? Do you remember what he said? … when the lead is given, we don’t always follow-up in the timeliest manner."
"Put yourself in the tech’s shoes for a moment. There you are at the customer’s facility, and you see something that would benefit them. You work up your nerve, and as you ask them to sign your work order, you mention that you noticed something that might save them money (or time or improve air quality, etc.), and would it be all right if they arranged for someone in their office to call you."
The customer says yes.
Now the tech writes a note on the work order regarding the opportunity with the request that someone call them to discuss. One month later, the technician is back at the customer’s to perform maintenance, and the customer asks if anyone is ever going to call. How would you feel if you were the tech?”
“Well, I would be a little embarrassed and more than a little ticked off,” offers Charlie.
“Now, let’s suppose this happened again, with two or three different customers. How do you think this will impact your willingness as a tech to continue to speak to customers about additional things that Novus can do?
Skills adoption can be as much as four times more effective when combined with coaching. Training and supporting these new behaviours will also serve another purpose. It will tell everyone that this is an important strategic initiative
“Sometimes following up on opportunities is not enough either,” continues Ken. “It is important that we communicate to keep everyone informed. For example, how difficult would it be for the salesperson to send a note or voicemail to the tech that initiated the lead, to thank them and let them know they’re on the case?”
“I’m starting to get the picture,” says Charlie. “So, if we are going to ask the techs to reach out to the customer to discuss the things we can do as a company to help them, we’d better have a bullet-proof system for handling the opportunity and communicating to the techs our progress along the way.
I also hear you saying that despite the fact we are pretty good at this, it’s still not good enough. “… let me capture this as the 3rd hurdle: Systems and Processes for Handling Opportunities from the Field. Charlie writes this down on the whiteboard. “This is good, Ken. I think we are getting somewhere. Any other hurdles?”
“Yeah. … What we are asking will require some of the guys to change their behaviour and step into a role that might be uncomfortable and cause some uncertainty. To make matters worse, when they try something for the first time, they may not do it very well, which will add to the discomfort. When this happens, the path of least resistance is to revert back to the old ways. To get the results we are looking for, we need to be proactive in providing support and reinforcement to encourage their progress.”
“Why don’t we call it management coaching and support—that is, giving feedback to reinforce good behaviours, and encouragement to adjust behaviours that detract from their effectiveness in serving the customer’s needs?”
“Sounds good to me.”
Charlie writes: Hurdle # 4: Management coaching and support.
“If we are to make this work, we will need to provide ongoing resources to encourage the technician to take the risks accompanied with trying new skills—like speaking to the customer about our products and services and the potential benefits. I read somewhere that skills adoption can be as much as four times more effective when combined with coaching. Training and supporting these new behaviours will also serve another purpose. It will tell everyone that this is an important strategic initiative for Novus—not simply the latest management fad.”
Thinking about your business:
- Are your processes and systems for capturing and tracking opportunities clear?
- Do they allow any opportunities to “fall through the cracks?
- What steps do you take to provide encouragement and support for your technicians as they learn new skills and behaviours to become more proactive in making recommendations?[/unordered_list]
Next time we will consider what Charlie needs to do next to put his strategy into action.
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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...
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.
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Jul 27, 2017 • Features • Management • Mark Brewer • Dr. Stephen Covey • IFS
Mark Brewer, Global Industry Director, IFS discusses how leadership and management guru Covey’s approach can be easily adapted for field service management...
Mark Brewer, Global Industry Director, IFS discusses how leadership and management guru Covey’s approach can be easily adapted for field service management...
I recently had the pleasure of conversing with a Boeing executive at dinner during an event and the topic of effective leadership in regards to current organisational challenges came up.
We talked about Dr. Stephen Covey’s leadership training and how it had helped him evolve as a leader and ultimately equipped him to manage an effective, productive IT team.
The discussion made me think about the pressures on the field service industry and the demand for rapid transformation.
When faced with change, organisations need strong leadership and change management skills to be effective. In fact, Dr. Covey’s leadership steps can easily be applied to help a field service organisation on its digital transformation journey. Let’s explore a few of his recommendations in the context of field service transformation.
Focus on what matters most
What matters most are your customers. They are the bread and butter of your business
Any plans for digital transformation should keep this in mind. If you prioritise change based on how it improves your relationship with your customers, everything else falls into place, from service margin to cost reduction to operational efficiency.
Seek first to understand those you lead
Digital transformation means adopting new technologies and new mindsets. It means a lot of out-with-the-old and in-with-the-new. Whether you are applying optimisation to your processes, adding new technologies such as robotics or IoT, or adopting entirely new methodologies such as “uberization,” you need to be sure that your people not only understand the rationale but are also equipped to handle and embrace the change.
This may mean that you need to explore options such as re-education of your work force, hiring for skill gaps, creation of incentive programs and different recruitment tactics to ensure that your people will help you to drive change, rather than hinder it.
Sharpen the saw
Complacency is the enemy of digital transformation. Are you driving personal growth from the top level down at your organisation?
Complacency is the enemy of digital transformation.
Take steps such as attending training classes, tracking and mapping field service innovation in a five year plan, and creating futuristic opportunities such as a think tank at your organisation to ensure that you are constantly pushing the horizon when it comes to innovation, and subsequently, a unique competitive edge.
Begin with the end in mind
The value of KPIs and company goals is no foreign concept in field service but as simple as this advice may seem, it is imperative. The end doesn’t have to be a permanent fixture but an extensible one.
There may be multiple ends.
You may be focused on company numbers for this year, growth for next year, and market share in five years. Whatever the goals and KPIs may be, make sure they are attainable, accessible, and apparent. Whatever new technologies you plan to adopt or methodologies you plan to change, ensure that they are helping you to reach the end you have in mind. Navigate the minefield that is the multitude of recommendations on achieving digital transformation success by ensuring that any digital transformation journey directly contributes to the goals you have set.
Too often organisations underestimate the need for effective leadership and change management when it comes to transforming the business.
Digital transformation in the industry is driven by the consumer and often in a hurry to keep up, organisations adopt new technologies without a larger more encompassing understanding of the long-term ramifications and alternatively the value.
As Dr. Stephen Covey identified for the individual, the same concept can apply to an organisation as an entity. Strong leadership will propel an organisation through digital transformation effectively. The journey requires communication, collaboration, and leadership.
Dr. Stephen Covey’s seventh habit (of highly effective people) is to be proactive. Think ahead of your customer.
Think ahead of your board. Think ahead of your people.
The more forward facing your organisation is, the better equipped it will be to deal with rapid change in the market. When we live in a world of driverless cars, flying drones, robotics and more, your field service delivery will still be relevant, and that’s what matters most.
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Jul 25, 2017 • video • Management • agile • Coen Jeukens • digital disruption • Field Service Forum
Kris Oldland, Editor-in-Chief, Field Service News talks to Coen Jeukens, Chief Service Officer, D-Essence who was the Chair at this year's Field Service Forum hosted by Copperberg about the key themes of Agility and Disruption in Field Service
Kris Oldland, Editor-in-Chief, Field Service News talks to Coen Jeukens, Chief Service Officer, D-Essence who was the Chair at this year's Field Service Forum hosted by Copperberg about the key themes of Agility and Disruption in Field Service
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Jul 19, 2017 • Features • Management • AGeing Workforce • Connected Field Service • Michael Blumberg • Field Service USA • IoT • Uberisation • Parts Pricing and Logistics • Customer Satisfaction and Expectations
Worldwide Business Research (WBR) held its Field Service 2017 conference at the end of April with over 450 service leaders from top manufacturing and service companies in attendance.
Worldwide Business Research (WBR) held its Field Service 2017 conference at the end of April with over 450 service leaders from top manufacturing and service companies in attendance.
With so many service leaders in one place what better opportunity to find out what five key areas field service companies are focussing on? Michael Blumberg, was on hand to find out...
1. Leveraging IoT to drive service efficiency:
There has been a lot of buzz lately in the media and among industry analysts about the value of IoT in improving the efficiency of field service operations. No wonder it was one of the key themes of Field Service 2017!
IoT offers several benefits to field service organisations (FSOs) including the ability to remotely monitor machine performance, make proactive adjustments to improve machine life, predict when a machine is about to fail and provide proactive service, and remotely diagnose problems when the do occur.
As a result, FSOs can gain better control over costs and resources. While IoT holds great promise, many conference participants have not fully implemented end to end IoT solutions. Field Service 2017 provided them with an opportunity to gain new perspectives from Field Service leaders who have already achieved these outcome.
2. Embracing digital transformation to create a “Uber” like service model:
Today, many Field Service leaders are asking themselves if their service businesses are ready for uberization?
This question stems from the growing trend of companies to offer services through an always on, always connected, always visible, and always available business model. Technologies such GPS, mobility, optimisation software and innovative approaches to sourcing labour (think - gig economy jobs, crowdsourcing, contingent labour) have helped to facilitate these models.
Given that these technologies and labour models are also available to FSOs combined with the fact that consumers have grown to expect an “uber”-like experiences in general, Field Service leaders believe it is only a matter of time before they need to implement similar business models.
3. Creating and finding a new workforce:
A common challenge facing the field service industry, regardless of the technology supported, is the shortage of skilled field service engineers (FSEs). Let’s face it, the younger generation does not view field service as a “sexy” profession. Given other career paths, why would anyone want to fix broken products when they can be building the next “big-thing”.
On the other hand, there are a ton of good people out there who can perform field service jobs.
The problem is they either prefer to work freelance and/or lack the appropriate level of training or experience.
Field Service 2017 provided attendees with the opportunity to learn how Crowd-sourcing applications and Freelance Management Systems can provide access to a broader labour pool, and how Augment Reality tools can help less experience FSEs overcome any knowledge gaps they possess.
4. Optimising service parts management:
Managing service parts is the costliest aspect of field service management after managing labour.
Not only do customers expect their FSEs to arrive in a timely manner, they also expect them to resolve their issues right the first time. Having the right spare parts available at the right time is critical.
However, FSOs can’t afford to have too many parts sitting in many locations for too long as it causes a drain on profits. Optimization of spare parts, in other words, making sure you have just the right amount of parts at just the right number of locations is critical. Although this seems like an age-old problem facing FSOs, it is nice to see the topic on the agenda at Field Service 2017 since Field Service leaders need to continually refresh their knowledge of this subject.
5. Nurturing an environment of customer first:
This topic is also a long-standing issue facing Field Service leaders. It has gained renewed attention as companies place greater and greater focus on improving the customer experience.
However, there are still a great deal of high-tech companies who remain focused on putting their products first, customers second, and service third.
Competitive trends, technological developments, and market requirements are continually forcing companies to rethink this paradigm.
If Field Service leaders are serious about creating at customer first environment and want their service organisations to play a more key role in this shift, they must be able to influence their management teams to invest in the strategies, tactics, and tools that make this transition possible.
Learning about best practices and similar experiences from peers at Field Service 2017 helps facilitate this outcome.
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.
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