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In the latest Field Service Podcast, Jan Van Veen discusses why manufacturers unable to innovate their business model risk falling behind their competitors.

 

In this special episode, Deputy Editor Mark Glover, speaks to moreMomentum's Jan van Veen who urges firms to take advantage of servitization and digitilastion and avoid stagnant business as usual behaviours.

Click here for material complimenting Jan's podcast including diagrams and charts. You can also contact Jan about any of the content raised in this recording and to find out how to get involved in Jan's new book, mentioned in the podcast, then click here.

Jan Van Veen,  founder of MoreMomentum continues his latest exclusive Field Service News series on how companies can monetise their services and data by exploring how companies can remove the obstacles that are stopping them build momentum with their clients. 

Central question
Many manufacturers experience pressure on growth, revenue and margins. Their products and services are being commoditised. Competition from lower cost alternatives are arising. On the other hand, there are huge opportunities with new technologies, value propositions and business models.

One of the important trends is that value propositions and offerings become more data-driven and more service-oriented, which go hand in hand.

Besides predictive maintenance, most of the value from data is related to how clients use the equipment or products and to their operations and processes. Helping clients improve on this by nature is a service.

However, many manufacturers are product-driven businesses which do not fully appreciate the value that (advanced) services have for their customers and their own business.

So, one of the central questions is: How to Monetise Services and Data to Grow in a Disruptive World? The capability to monetising service and data is mission critical for sustainable performance and existence of manufacturers.

In a series of articles, we cover four  critical steps that make the difference between success and failure in monetising services and data:

• Solve bigger customer problems;
• Articulate the value;
• Build momentum with clients to adopt;
• Build internal momentum.

Developing new data-driven solutions and services is all about extending the existing business model, which leads to different challenges than many other initiatives and programs in a business. Recognising this in advance will help understand the challenges and best strategies.

In the previous articles of this series, I have described critical success factors for monetising service and data, such as Solve Bigger Problems,Better Articulate Value and Remove Obstacles for Clients to Adopt. In the end, this all has to be done by people and teams in your organization.

Common mistakes
In this article I will describe common mistakes that many companies make, which holds them back in having fluid and energising change, and to move beyond business-as-usual in their endeavours to monetise service and data.

No North-Star
Many companies, including manufacturers, do not have a clear picture of where the industry is heading and where their business is heading. It is unclear for their employees what needs to be developed and why.

More specific, for many employees it is not clear why the new service and data-driven solutions are that valuable to clients, how it would fit in the overall core business and why it should be paid for by clients. Often, the indicated direction even suggests the opposite and may give room to the logic that value added services and datadriven solutions are (free) features to support the product sales.

Just imagine how a hypothetical mission statement “… being the world’s leading manufacturer of construction equipment and engines” would help develop and monetise advanced services and data-driven solutions.

Blinkered
People in manufacturing are often biased towards products, equipment and technology. They have a narrow view on:

• Customer problems beyond the requirements for the products and equipment;
• How other actors in the industry are developing with advanced data capabilities, which could become competition to the current position of a manufacturer;
• How new technology can be applied to develop new value propositions, solutions and operating models.

This will affect how product managers, marketing and innovation will develop new services and data-driven solutions. Too often, we see that the services and solutions do not always solve a customer problem and hardly differentiate from services and solutions competitors are offering as well.

It will also affect how their colleagues in the operations (sales and delivery) understand and engage, as there is no compelling context to understand the importance of the new services and solutions, let alone be engaged.

Top-down P&L thinking
Too often, we see that developing and launching innovations, such as new advanced services and data-driven solutions, stagnate because of the decision-making habits in an organisation. Typically, we see one or more of the following:

The strategic intent from senior leadership is unclear, hardly based on a well-developed shared concern, not giving a clear path on what services and solutions to develop, nor on what the strategic priorities and objectives are, to be successful. So, employees are not really enticed to take action and therefore no change.

The strategies and plans are more short-term which emphasise short term financial objectives, leading to two different scenarios:
Financial objectives are not articulating the need for services and data-driven solutions, nor specifying which portion of these objectives should come from services and data-driven solutions. Often, employees are actually motivated to stay away from developing and launching the new services and data-driven solutions.

Or, in case the financial objectives also assign financial objectives coming from services and data-driven solutions, there is a lack of description of qualitative objectives and strategic priorities on how to arrive at those financial goals. The result is often a lack of initiatives and progress, or lack of alignment and results.

Top-down strategies from senior leadership are so specific and instructive that these actually dismiss other employees taking ownership of the plans, and/or adjusting plans and local strategies where needed.

Paralysis by control
Top-down control mechanisms from the last few decades are a huge obstacle for fluid and energising change in an organisation and therefore hinder the initiatives like monetising services and data. More specifically, we often see the following patterns;
Internal conflict of interest in the product sales teams, because they are often incentivised on sales volume.

It does not make sense for them to sell complicated service contracts. It hardly affects their commission, consumes a lot of time and may even put their product sales deals at risk. Instead, it is more beneficial to please their clients by offering discounted services.

In case there is a separate service sales team, for the same reason, there are often internal arguments on who owns the client and what is the best plan forward with each client. In the worst case, this even leads to having different faces towards the clients, leaving them confused and with a bad customer experience.

Control mechanisms that are too strict create an unsafe environment in which employees show defensive and risk-avoiding behaviour. Instead of trying, learning and being successful in monetising new services and data-driven solutions, they instead become complacent and resistant.

Typical signs are pointing fingers to other teams to take action, declaring that the new services and solutions are not the core business, that customers don’t want to pay and referring to other companies who have tried and failed.

Some solutions
Many things come into play when increasing momentum for monetizing (new) services and data, and preventing existence of too many obstacles and resistance. In general, the more adaptive and fluid change in a business, the easier a specific innovation on service and data.

We have seen that leading manufacturers have adopted 4 winning habits which sets them apart. These winning habits define how both operation and innovation is lead. In the next paragraphs I will describe the 4 winning habits in relation to monetising services and data.

"People in manufacturing are often biased towards products, equipment and technology..."

Direction
Leading companies have a transformative vision and mission on where the business is heading, what needs to change and develop, and why this is important considering the changes in the industry. This is a quite a holistic picture in which all stakeholders and entities in the business can relate and get direction on how to develop themselves, their teams, their department and their business unit.

It provides an outside-in picture on how the business is and will be relevant to a certain industry and customers. It explicitly points out how the business will add value to clients and that this requires certain technology, (data-driven) solutions and services.
Now imagine how the following mission statement will drive the development and implementation of new services and data-driven solutions: “Our purpose is to enable healthcare providers to increase value by empowering them on their journey towards expanding precision medicine, transforming care delivery and improving patient experience, all enabled by digitalizing healthcare.” 

Discovery
Here I want to focus on two phases on innovating your services and datadriven solutions: the development phase (including ideation, selection and design) and the implementation phase

For design purpose
In general, the envisioned services and data-driven solutions differ significantly from current business logic, mindset and operations in your business. Even though anyone in the organisation could raise great ideas, it is crucial that the development of the new services and solutions are done by dedicated teams with the right expertise and focus.

They need to ensure they are open-minded and unbounded by current (and old) business logic and pathways. In terms of discovery, this means they should:

Talk with other stakeholders in client organisations (rather than the ones your organisation normally speaks with) - for example, the CFO, CEO, VP, Innovation, commercial leaders, etc. Build a new expert-network outside the organisation - which is outside the current network of partners, suppliers and clients - including the academic experts and consultants in areas you usually have no relationships with and talk about topics other than current technology, products and service, and more about major trends, visions of the future industry,key challenges and strategies of different actors in your and adjacent industries.

This will not only help to obtain more ideas for future success, it will also help to change perspectives and business logic within the innovation teams and the rest of the organisation, by sharing these insights.

For implementation purpose
Once the new solutions and services have been designed and developed to a scalable offering, it probably needs to be embedded in the existing organisation. Now, the risks of resistance or complacency may come into play.

The more developed the mindsets and habits are on “digital” and change, the more fluid the implementation and change will be. This can be promoted massively by strong Discovery habits: Involving key players in the operating organisation, well in advance of the implementation, into the initiatives for launching new services and datadriven solutions - for example, by having a frequent dialogue on shared concern and discussing the alternatives to solve these concerns. This can be done by frequent conversations or including them in the extended innovation team.

Having everyone involved in discovery activities that do not require too much expertise and dedication, for example, by having colleagues; Have broader conversations in their day-to-day conversations with clients, suppliers and partners. You can provide them with topics and questions to help open the conversations

Joining events with customers where you discuss trends, visions, needs and how they see your added value. Join conferences within your own industry and even other industries and sharing new insights and learning points from the expert teams, painting a picture of what is going on in the outside world, how this may impact your business and how this will/could be addressed.

Decision making
In line with the mission, vision and direction leadership of leading manufacturers, have a clear strategic intent on:
Result objectives - for example, overall growth aspirations that new services and data-driven solutions are crucial and how much business is expected to come from these new services and solutions. Strategic objectives on which offerings and capabilities need to be developed.

Next, they have a clear (top-down) strategy which articulates crucial choices on how to achieve these objectives in a few phases. This should provide a common roadmap on which offerings to develop, how to sell them, to whom and by whom, how to organise marketing, sales and delivery, and which obstacles to overcome.

This strategy should address all stakeholders (including R&D, marketing, product-sales, service sales and service delivery) who have direct influence on implementation and success.

With this top-down strategy, still, a lot is left open on how to achieve the objectives. Local teams are empowered to develop their local roadmap and strategy, and to take full ownership of the local development, learning, capability development and execution. This will allow them to mitigate local strengths, weaknesses, opportunities, threats and market circumstances.

Dialogue
With a constructive and forward dialogue between individuals, teams and departments, issues are solved in a fundamental and sustainable manner, hence building capabilities to perform.

For monetising service and data, this means that: Ideally, services and data-driven solutions are being sold at point of sale (when equipment is sold) - maybe not the full package, but the entry level offering which will be the first step to the next level mature offerings. Commission structure of sales people needs to be designed in such a way that it promotes the right focus and behaviour.

I have seen quite a few examples where equipment sales people were quite successful in selling service contracts once the commission they would receive was tied to the sale of a service contract.

Sales people who sell advanced services and data-driven solutions need to have specific skills and background, which are not necessarily the same as skills required for selling the products and maintenance services. Most stateof-the art sales techniques such as Solution Selling, Challenger Selling or Value Selling, assume a fluid and educated dialogue on related business domains.

Often, these conversations should happen with other stakeholders at the client organisation, maybe at higher seniority levels. The different teams need to have the confidence and safe environment to learn and develop these skills and knowledge, and become fluent in these conversations and sales approaches.

Different teams in your organisation need to be “in the same boat” without conflicts of interest. We currently see more and more companies aligning targets and incentive schemes, in which common and shared objectives prevail above individual targets.
Full transparency in key performance indicators on progress and results is required, to have all stakeholders have the necessary insights to be able to take ownership and accountability and intervene when/where needed.

Benefits
The leading manufacturers, ahead of the game, have built momentum for continuous and easy change from the inside, moving beyond “business-asusual”. Their teams are passionate and eager to perform, learn and pursue opportunities. Instead of resisting new ways of thinking about customer challenges, customer value and their business, they focus on customers and pursue opportunities to increase value.

Monetising services and data has become a logical part of their overall vision and strategy. They are better in solving bigger customer problems, better at articulating the value for customers and in removing obstacles for their clients to adopt the new solutions. As a result, they better differentiate themselves – in the eyes of their customers - from their competitors. They perform better and have more resources to keep innovating their business and hence grow in our disruptive world.

Boost your monetisation If you want to accelerate the monetisation of your (new) services and datadriven solutions, I would like to recommend:

• Review your business alongside common mistakes and suggested solutions, and add the discrepancies to your strategy;
• Download the scorecard How to Monetise Services and Data here;
• Book a Discovery Call with Jan van Veen;
• Join our upcoming Impulse Sessions on How to Monetise Service and Data. These are full day interactive meetings with like-minded peers during which we will exchange experience, insights and challenges.

Essence It’s not about making money from new services and data-driven solutions; it’s about being highly relevant and valuable to clients in a sustainable manner and empowering your people to do the same.

It goes without saying that if you deliver value for money, you also get money for value.

Jan Van Veen is Managing Director at MoreMomentum. 

Jan Van Veen continues his latest exclusive Field Service News series on how companies can monetise their services and data by exploring how companies can remove the obstacles that are stopping them build momentum with their clients...

 

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Catch up with the previous articles in this series How to Monetise Services and IoT and How To Monetise Services And IoT: Better Articulate Value now! 

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Central question

Many manufacturers experience pressure on growth, revenue and margins.

Their products and services are being commoditised. Competition from lower cost alternatives are arising. On the other hand, there are huge opportunities with new technologies, value propositions and business models.

One of the important trends is that value proposition and offerings become more data-driven and more service-oriented. However, many manufacturers are product-driven businesses which do not fully appreciate the value that service has for their customers and own business.

So, one of the central questions is: How to Monetise Services and Data in order to Grow in a Disruptive World? The capability to monetising service and IoT is mission critical for sustainable performance and existence of manufacturing.

In a series of articles, we cover 4 critical steps that make the difference between success and failure in monetising Services and Data:

1. Solve bigger customer problems, which is about creating significantly more value for customers. 
2. Articulate the value
3. Build momentum with clients to adopt
4. Build internal momentum for monetisation

 

Common mistakes

Too often we see that with (new) services, the new solutions and features we launch are not always that easy to start using for our clients. If the obstacles to adopt are too big and not solved, less clients will use it or will delay using it significantly, and in the meantime will not see the real value, in turn creating more obstacles and resistance, resulting in limited commercial success.

If you encounter such signals, it may not always be easy to get a clear picture whether;

1. Your clients simply do not have the problem that your solution is trying to solve
2. Your solution is not adequately fixing the problem compared to other solutions
3. There are serious constraints in applying your solution, even if it is a good solution

So, caution is advised in these situations not to jump to wrong conclusions.

For the sake of this article, let us assume 1) and 2).

The obstacles in applying your solution can be categorised as follows:

 

Lack of money

The new solution you are offering appears to be too expensive for your client.

It is seen as too big an investment and/or recurring cost in relation to the value they perceive will be received.

It could be that the issue is more related to the perception of the value, how well that has been articulated (see previous article on ‘Better Articulate the Value’) or that you are not talking to the right decision makers in your client’s organisation.

 

Lack of skills

Using the new solutions are too complex and difficult for your client, as they are complex to use and require a lot of training to acquire the necessary skills.

 

Lack of access

Often, the new solutions can only be used and generate value in certain circumstances.

Commonly overlooked is that applying the new solutions and receiving value from it, often requires:

• A significant change in the way of working by staff, which triggers too much resistance
• A significant overhaul of the processes and information flow
• A change in the structure of the organisation and roles, with some staff even losing their role/ job

 

Lack of time

For many new solutions, it takes time and effort to make sure they are adequately used and embedded in the organisation. If the pressure from daily business and other projects is high, it easily happens that adopting the new solutions is put on the back burner and falls off the radar.

 

Risk

In essence, there could be two main sources of perceived risk:

• The risk that the solution does not work as expected and hence does not bring value
• The more social risk of sticking out your neck for change which might not be accepted by stakeholders
• Too often we focus on the technical part of our new solution or features, and do not give other client needs and obstacles enough consideration,  when:
• Gaining customer insight into their bigger problems
• Developing a remarkable solution to solve these bigger customer problems
• How and with whom we discuss the client problems, and promote and sell our solutions

An interesting example is a major metal wholesaler that is looking into adding extra value to industrial clients by not only offering standard trade sizes, but other services too.

They also offer services like cutting, drilling, bending and even picking packages for direct delivery into different locations in the manufacturing  for their clients. This really solves a lot of challenges for low-volume high-mix manufacturers.

However, using these services means that equipment and people doing the pre-manufacturing work becomes redundant or they have to change their role. It also means inventory goes down, which changes the (perception of the) stability and contingency in the production line, depending on an external party.

The result was that initially most clients did not buy the new offerings, regardless of the well-articulated (financial) benefits and business cases.

At some point, stakeholders started doubting the potential of the added value services and whether to abandon the initiative or not.

 

Some practical solutions

Manufacturers that are quite successful in launching and growing customer adoption of the new solutions and features, have the following good practices:

1. The have a broader view on the bigger customer problems and challenges beyond the functional requirements of equipment. They better understand the operational and change challenges and therefore have a more integral view on what it takes to improve on these problems and challenges. Important obstacles are included in the design instead of as an afterthought.

2. They develop a more concrete and remarkable solution to solve the bigger customer problems. Where needed, the obstacles (in using the new solutions) are already designed into the solution.

For example:

a. They focus more on simplifying the solution, making it easier to use with less training and implementation effort for their clients.

b. Their solution is more than a technical solution and includes support in implementing and maintaining a new way of working.

 c. They offer an ascending engagement model in which customers step-by-step can implement and use portions of the overall solution. This way they can mitigate risk, reduce the change challenge and allow their organisation to become familiar with the new way of thinking and working. Simplify the solution and ease of use.

 

3. They involve the right stakeholders in the client’s organisation – who have a stake in the problem being solved, in the decision-making phase and in the implementation phase.

Further to the metal wholesaler example above, the next steps of the added services portfolio were to:

• Organise open workshops for clients, discussing trends and changes in the sector, and some best practices and success stories.
• Workshops with the client’s key stakeholders to get a full picture of the journey of maturing their manufacturing operation, supply chain, plant layout, equipment, competencies and people. And then use the information to develop a road-map on how to step-by-step develop. It also helped to get stakeholders on the same page and engaged.
• Provide project management and change management practices and resources.
• Organise pilot tests, get used to new ways of working and building trust.
• Offering ongoing performance management dashboards to get full visibility and transparency of performance, progress and issues. This helped preventing blame for every incident, and also helped to feed a continuous improvement programme.

 

The Benefit

Manufacturers that are better in building momentum with their clients to adapt to their new solutions, see that their customers fluidly adopt new solutions and have a fairly high pace of scaling up.

Hence, these manufacturers generate more new revenue streams with higher margins and differentiate more from their competition.

 

Give monetisation of Services and Data an Impulse

If you want to accelerate the monetisation of your (new) Services and Data, join our upcoming Impulse Sessions on “How to Monetise Service and Data”.

These are full day interactive meetings with like-minded peers during which we will exchange experiences, insights and challenges.

Book your seat @ http://fs-ne.ws/5gyg30mWzze

 

Essence

Our value is not only in the developing and offering of great solutions to our customers’ big problems, it is about how our clients use and benefit from our solutions.

 

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 Jan Van Veen is founder of MoreMomentum 

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Jan Van Veen continues his latest exclusive Field Service News series on how companies can monetise their services with IoT as he turns his attention to something many companies struggle with - better articulating their value proposition...

Central question: How to monetise Services & IoT

Many manufacturers experience pressure on growth, revenue and margins.

Their products and services are being commoditised. Competition from lower-cost alternatives are arising. On the other hand, there are huge opportunities with new technologies, value propositions and business models.

One of the important trends is that value proposition and offerings become more data-driven and more service oriented. However, many manufacturers are product-driven businesses which do not fully appreciate the value service has for their customers and own business.

So, one of the central questions is: How to Monetise Services and IoT in order to Grow in a Disruptive World?

The capability to monetising service and IoT is mission-critical for sustainable performance and existence of manufacturing:

In a series of articles, we cover 3 critical steps which make the difference between success and failure in monetising services and IoT:

1. Solve bigger customer problems, which is all about creating significantly more value for customers.
2. Articulate the value
3. Build internal momentum for monetisation

 

Common mistakes

Too often we see that (new) services, solutions or features are promoted without connecting the dots to their bigger problems.

For example, a client of mine – a major equipment manufacturer – experienced the power of explicitly connecting the dots. They were launching the first version of a portal to serve DIY clients which had their own maintenance departments.

They initially presented the benefit of the portal with many online manuals (version 1 of the portal) as a way to save time every time a maintenance engineer of their client would need to find the right manual. It appeared to be tough to sell paid subscriptions for this portal.

Only when the manufacturer articulated their view of the key problems of their clients’ maintenance departments and how the portal would solve these problems, did the clients get really interested.

The dominant problems of the maintenance departments were not finding manuals, but the daily pressure to increase availability and uptime at shrinking budgets and that, that their engineers had slow learning curves due to low volume of certain problem-solving work.

 

"A portal which would evolve into a broad toolset for best practices, troubleshooting and maintenance management was considered a crucial asset..."

 

A portal which would evolve into a broad toolset for best practices, troubleshooting and maintenance management was considered a crucial asset.

Furthermore, we often see manufacturers thinking and talking about features and activities, instead of customer value. Clients only pay for the value they perceive, not for what you do.

A striking example were field service engineers of another client, who would spend a full day in pairs to install equipment which was already delivered a  couple of days before. A few days after installation, another colleague would visit the client for training and commissioning.

The two engineers would unpack all components and assemble the components, connect it to a couple of other devices from different brands which involved many integration issues, connect their equipment to the computer network – which involved loads of security and networking issues which the engineers had to solve with IT departments – which by nature tend to be reluctant.

And here is how they briefed their client when they started the job: “We are here to unbox the components, put the bits and pieces together and make sure everything is there, so the trainer is ready to go……”

Their client did not even know what kind of complex integration problems the engineers were solving. Actually, their client even wondered why his supplier did not have more mature and efficient processes to get the job done. And by no means are the engineers to blame for this.

 

Some practical solutions

You can easily start improving on these common mistakes:

Build a compelling story of your view of your customers' challenges, opportunities and problems, which is validated by (a segment of) your customers. Relate this as much as possible to strategic or crucial priorities of your clients.

• Include a view on how your clients could best pursue these opportunities and solve these problems. Don’t make this a big thing, just start with a first strawman version and let it grow in time.
• Link the characteristics and benefits of your solutions and services to the view of your customers.
• If possible, quantify the benefits in terms of the strategic or critical priorities.
• Ensure that your value story is well articulated in your messaging to (the specific segments of) your clients and is consistent across all touch points. This may involve some staff training..

 

The Benefit

Manufacturers which are better in articulating their value see that both customer-facing personnel and their clients better see the value, better appreciate the value and therefore also find it more logical pay for this value.

Hence, these manufacturers generate more new revenue streams with higher margins and differentiate more from their competition.

 

Give monetisation of services and IoT an Impulse

If you want to accelerate the monetisation of your (new) services and IoT, join our upcoming Impulse Sessions on “How to Monetise Service and IoT”. These are full day interactive meetings with like-minded peers, during which we will exchange experience, insights and challenges.

Book your seat @ https://moremomentum.eu/impulse-sessions/ 

 

Essence

Delivering value to customers does not automatically also capture the value – that is, monetise the value delivered. If the delivered value is not clearly articulated for clients (and staff), both will take it for granted or maybe even not recognise it.

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Jan Van Veen, is Founder of MoreMomentum

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Jan Van Veen, Managing Director, moreMomentum, continues his series of articles looking at how service organisations can drive revenue from their services by harnessing the IoT...

Solve bigger customer problems

In the previous issue of Field Service News, I wrote an introduction on the topic “How to Monetise Services and IoT”, covering the dilemma of many business leaders in manufacturing.

In this article, I will elaborate on the first of the three critical steps which often make the difference between success and failure:

• SOLVE BIGGER CUSTOMER PROBLEMS
• Articulate the value
• Build internal momentum for monetisation

Common mistakes in the industry

One of the common mistakes is focusing on the smaller problems and making only small incremental improvements to services or solutions.

 

"One of the common mistakes is focusing on the smaller problems and making only small incremental improvements to services or solutions..."

 

These are typically the standard next step improvements most competitors bring to the market as well. Although these are also necessary improvements – adding features to your solutions - to sustain your market position, they are unlikely to bring about significant growth or opportunities required to monetise. For example, think of new features that car manufacturers introduce to their new models or weekly computer software updates that occur without paying more.

Another common mistake is focusing too much on only the availability and use of the equipment. In most situations, the extra value is having a broader impact of the value creation process for our clients. In most industries, the purchase, financing, and maintenance of equipment is a small portion of the overall budget.

 

Truck manufacturers as an example

As an example, while the sale of trucks was shrinking dramatically, leading truck manufacturers like MAN, DAF and Scania discovered that discounting the trucks did not have that much of an impact. One of the biggest challenges for truck operators was reducing fuel consumption. The leading truck manufacturers took this challenge beyond aero-dynamics and engine efficiency, and developed data-driven services to reduce fuel consumption by improving the way truck drivers drove the trucks.

 

Discovering the bigger customer problems

The ideal practice is to:

• Solve the bigger problems in a significantly better or more efficient way for clients, or
• Solve any new significant problems for our clients

Before developing new services and solutions, it is crucial to have a deeper understanding of the challenges and problems that your clients face. The following activities will prevent any bias from long-standing experience and business norms:

• Reframe addressable customer needs with your team and colleagues who are involved. The aim is to have a broader view and scope on customer needs. Explicitly ban objections against the idea of servicing those needs.
• Focus on actual “jobs-to-do” for your clients and areas where they are struggling or could improve. For example, improving uptime may not be that relevant for clients with a low utilisation rate. Whether you carry out professional customer research or not, it is always good if various colleagues have frequent open conversations with different stakeholders about views on the industry, trends, challenges etc. Sharing the following simple diagram during such conversations is helpful for you and your clients to keep the dialogue open.
• Explore how your clients are solving problems and what suppliers are helping them.
• Also, explore the needs and challenges of the customers of your customers. This will give more insight into your customer’s needs.
• Explore what needs you could/should be addressed now and in the future. With these insights, you can extend and enhance your vision, strategies and roadmap for innovating your services and generating new revenue streams.

 

The Benefit

Manufacturers that solve the bigger problems can better articulate the value for customers and staff, have higher momentum for change and monetisation, generate new revenue streams and differentiate themselves more from the competition.

 

"Manufacturers that solve the bigger problems can better articulate the value for customers and staff, have higher momentum for change and monetisation..."

 

]They perform better and have more resources to keep innovating their business, enabling growth in a sometimes disruptive world.

Monetisation of services and IoT – Impulse Session

If you want to accelerate the monetisation of your (new) services and IoT, join our upcoming Impulse Sessions on “How to Monetise Service and IoT”. These are full-day interactive meetings with like-minded peers during which we will exchange our experiences, insights, and challenges.

Book your seat @ http://fs-ne.ws/1pMC30lpssC

Essence

Great offerings and solutions won’t sell themselves!

It is various colleagues together that drive the value perception and sell the solutions, because of their eagerness and passion to perform, learn, develop and make new things happen, as well as avoid unnecessary obstacles that cause internal conflicts of interest and reduce confidence.

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Jan Van Veen, is Managing Director, moreMomentum, 

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Jan Van Veen of moremomentum concludes his series of articles on the 4 Winning Habits of successful service organisations focusing on the fourth and final winning habit: Discovery...

Following our introductory article about the 4 Winning Habits in the previous publication of ‘Field Service News’, I will now elaborate on the fourth winning habit: Discovery.

Common mistake: Being blind-folded

Humankind by nature tends to be fairly blind-folded, by its strong focus on opportunities and threats in the short term and directly related to its current situation. Companies often enforce this behaviour by:

• Low adoption of the first three winning habits (Direction, Dialogue, Decision-making).
• Not allowing time and resources in discovery and innovation, focusing on the exploitation of the current business model.
• Detailed and top-down control of exact discovery topics and assignments.
• Leaving all discovery activities for dedicated and specialized teams close to the board.

The consequences are critical for the sustainable performance and business innovations we need to thrive in a disruptive world. We tend to:

• Overlook longer-term opportunities and issues and misinterpret the potential impact of these.
• Overlook the real issue behind symptoms and fight the symptoms instead.
• Limit our options for solving problems or pursuing new opportunities and get stuck.
• Encounter resistance when developing and implementing new solutions.

In the past we have seen many businesses missing the boat - and we still do.

Just imagine what would happen if:

• Nokia and Blackberry did recognise that maybe, business-users at some point could expect touch screens, apps, multi-media and full connectivity.
• Polaroid did consider that digital cameras would become affordable for consumers.
• Airliners did understand that low-cost airlines could become attractive to business travellers as well.

The solution: All employees discover the future with an open mind

Leading companies drive their ongoing success with a strong habit of continuously discovering new opportunities and challenges.

Their discovery habits outperform the lagging companies, by:

1. Bringing the outside in
2. Using many sources
3. Involving involve all employees and many external stakeholders.

1. Bringing the outside in:

Every company has an eye open to the outside. They investigate trends with customers, competitors and technology. However, many miss opportunities and trends as they tend to be too focussed on:

• Topics with an immediate impact on current performance, less on future performance.
• Current needs of their best clients and less on future needs or on other market segments.
• Actions of competitors, less on what they potentially could do in the future.
• Trends with clear signs and high probability, less on trends with less clarity or probability.
• What they know for sure, less what they do not know. After all, staff are being paid for what they know”, not for what they do not know.

Leading manufacturers bring the outside in through the following practices.

Explore beyond business as usual:

The key is to be looking for (potential) trends and changes which do not directly relate to the current business model and operations. These insights will help prepare the business well in advance and to be the first to benefit from the change.

Leading companies also address the following in their discovery habits:

Market:

• Current and future needs of market segments which they do not serve, particularly if they appear not to be so profitable at the moment.
• (Latent) needs of their current clients, beyond the needs which they fulfil with their current products and services.
• Current and potential future needs of the clients of their clients.

Competition:

• Changing visions and strategies of competitors, other actors in the value chain and potential new entrants into the industry.
• Trends in adjacent industries and industries like data, algorithm-driven industries.

New technology:

 

• Emerging technologies with a low rate of adoption and application, like big-data, augmented reality artificial intelligence and how these will impact their (future) clients.
• Obstacles which currently prevent rapid adoption of the new technology and how these obstacles could be solved in the future.
• Economics, social demographics, politics, natural resources, workforce etcetera.

 

Explore weak signals:

Many lagging companies make themselves vulnerable to disruption by disregarding the weak signals. They tend to assess emerging technologies on their current possibilities and threats. They often see many reasons the impact will not be that high, for example, because of poor performance, high cost and narrow practical applications.

Many lagging companies make themselves vulnerable to disruption by disregarding the weak signals.We tend to disregard the scenarios that these obstacles may disappear in the coming years and how the adoption of the emerging technology could accelerate rapidly.

Many disruptive changes take one or more decades of exponential development and growth. In the first phases, the change and its impact seems to be insignificant. However, at some point, it quite quickly becomes significant and in a few years becomes main-stream. For many, this change comes out of the blue and is totally unexpected.

Leading companies explicitly focus on the weak signals. They are the first to see changes accelerating and obstacles for adoption of new solutions being eliminated. At the right time, they assess if they are ready for the change and are the first to act on the new opportunities and challenges.

Thinking in scenarios:

It is a challenge to tell in advance which trends and changes will really become real and have an impact on our business and which trends will only be hype or just stall. I think it is key that we accept the fact that we do not know. The

challenge is not making sure you do know, but that we are prepared to sense and respond in time.

Leading companies continuously develop and maintain scenarios for potential trends, changes and alternative solutions to respond. They understand which signals to be on the lookout for.

2. Many sources 

Leading companies see their innovation and changes being fed from many different sources for in-depth and broad discovery.

Internal and external sources

People with different backgrounds and opinions add value to getting new insights and arriving at better decisions. The most successful companies actually include many internal resources, which traditionally the lagging companies tend to disregard, like:

 

• Employees from other cultures, with different values, views and experiences.
• Employees who have a lot of experience from other industries.
• Employees from specific departments like R&D, service, finance, compliance and employees at lower ranks.

 

Leading companies also activate a broader network of external sources, including those they hardly meet during daily business. They actively seek to exchange insights with:

 

• Peers from completely different industries.
• Clients of clients of clients.
• Peers from other companies serving the same value chain.
• Experts and academics from different domains.
• Other stakeholders of client-organisations, who are not talking about the products and services.

 

Experiments

Leading companies not only talk and think about potential challenges, opportunities and solutions. That would lead to paralysis by analysis. They also learn by doing by:

 

• Innovate and develop step-by-step, starting with a first minimal viable solution and running rapid cycles of learning, adjusting and taking the solution to the next level. These are the Lean Startup and Agile approaches.
• Doing experiments, where we learn from what could happen in certain circumstances with certain solutions. These provide new insights which can be included in further decision-making on the direction and timing of a solution.

 

Experiences and failures

Leading companies learn from the things they did which did not work. They rapidly adjust and find new ways. They emphasize that it’s all about the learning, not about the failure. Their employees are more open to trying new solutions and practices, discovering and pursuing new opportunities, also when the results are not yet certain.

More and more companies cultivate the belief that failure is an option.

More and more companies cultivate the belief that failure is an option.For example, they organise failure-celebration-sessions, where colleagues present a failure, what they learned from it and how they would adjust their approach.

Another approach is not to use the word “failure”, but “discovery” or similar.

Like Edison said: “I did not fail, I just discovered 10,000 things that do not work.” This seems to work better than only reframing “failure”, even more so in cultures where losing face is a major factor.

3. The power of everyone in some discovery-mode

The most dynamic businesses empower all employees to do research, explore and define new ideas to improve and innovate, not a small specialised team dedicated for this job.

Everyone Contributes

Everyone in the organisation owns part of innovation and change, whether it is about implementation or identifying new ways to improve. They all have and search for the necessary insights. They all read, talk with peers from other companies and clients, do experiments, visit conferences, do external training and conduct their discovery projects.

This engages them to own the ideas and the execution.

Exchange and share

However, they do not discover everything themselves. They also exchange insights, experiences, opportunities and challenges they have discovered, hence learning from their colleagues and having their colleagues learn from them. This happens through collaboration tools, meetings within and amongst project teams and other in company events.

Bottom-up and Top-down

Everyone, within boundaries, takes their own initiatives to explore certain topics. Some discovery assignments come from higher management levels. This way they are committed to the effort it takes and to the outcome the generate and their colleagues generate.

Benefits

These open and forward-looking discovery habits make an organisation much more adaptive to any new opportunities, challenges and solutions.

They shape a huge army of open-minded, engaged and change-oriented employees. This is mission-critical for any company that wants to thrive in a rapidly changing and complex world.

The Essence

It’s not about having smart analysts and experts creating smart intelligence.

It’s about having passionate and engaged employees learning and discovering and making great ideas work.

Want to know more? access our eBook: How to Thrive in a Disruptive World - an eBook of 42 pages about disruption, the 4 winning habits for momentum in continuous and rapid change and 3 case studies (including Mars Drinks and Volvo Penta) Field Service News subscriber can access the eBook @ http://fs-ne.ws/AcQf30jhl0S

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In the Big Discussion, we will take one topic, bring together three leading experts on that topic and put three key questions to them to help us better understand its potential impact on the field service sector...

This issue our topic is the what to expect in 2018 and our experts are Michael Blumberg, Blumberg Advisory, Bill Pollock, Strategies for GrowthSM and Jan Van Veen, moreMomentum

The first question we tackled was What is the biggest challenge facing field service companies in the next 12 months?

Now let's turn to the second question in the discussion...

What is the biggest opportunity facing field service companies in the next 12 months?

Bill Pollock: The biggest opportunity facing field service companies today is the ability to compete head-to-head with any of their main competitors – however large or small – through the implementation and/or upgrade to a Cloud-based Field Service Management (FSM) solution. Over the past several years, Cloud technology has normalized the playing field for both FSM solution providers and their customers, who are no longer encumbered by the cost and complexity of their legacy premise-based solutions and applications.

Advances in technology are also giving a boost to those field service companies that have embraced these new technologies. For example, the greatest opportunities over the next 12 months will most likely be realised by those companies that will have already implemented Augmented Reality (AR) and/or Merged Reality (MR) into their field service operations. However, the most likely dominant field service organisations will be the ones that have also taken steps to explore the benefits of moving to an Artificial Intelligence- (AI) and Machine Learning- (ML) driven field service solution.

The technology is already there for every field service company; however, only those that embrace – and implement – these technologies will actually be able to reap the benefits.

 

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Jan Van Veen:  When talking about the biggest opportunities, I think we need to look beyond 12 months. It is mission critical to act now on future success.

Most industries are somewhere around the top of the life cycle and are facing (first signs of) commoditization.

The big opportunity for them is to go through the next life cycle where the added value is about enhancing the use of technology. The new value propositions will be heavily driven by data, algorithms and intelligence. The value will be far beyond predictive maintenance and uptime of technology.

This is a domain in which young, rapidly growing data-driven companies are in their comfort zone. So, the opportunity here is moving up the food chain and increase relevance for clients. By failing to pursue these opportunities, the threat is being forced down in the food chain and seeing other players deliver the high value, whilst seeing your role being limited to manufacturing equipment, spare parts and, to some extent, delivering low skilled hands-on machines for maintenance.

For those companies who are not ready to focus on these opportunities, I think your top priority should be to build the missing foundation and make sure you are ready to pursue the opportunities soon.

 

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Michael Blumberg: The biggest opportunity facing field service companies in the next 12 months lies in pursuing strategies that will advance their journey along the path toward servitization.

The specific strategies vary from company to company based on where they are on their journey. For some companies, 2018 will be the year when they finally transition their field service operation from a cost centre to a profit centre. For others, the opportunity lies in monetizing service offerings and effectively marketing and selling service outcomes.

Still, others will have the opportunity to invest in digital technologies that enhance service quality, boost productivity, and create an uber-like experience for their customers.

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In the Big Discussion, we will take one topic, bring together three leading experts on that topic and put three key questions to them to help us better understand its potential impact on the field service sector...

This issue our topic is the what to expect in 2018 and our experts are Michael Blumberg, Blumberg Advisory, Bill Pollock, Strategies for GrowthSM and Jan Van Veen, moreMomentum

So let's tackle the first question...

What is the biggest challenge facing field service companies in the next 12 months?

Bill Pollock: The biggest challenge facing field service companies in the next 12 months will be keeping up with customer expectations for service delivery as they continually raise the bar with respect to performance. This is not necessarily a “new” challenge – it actually has been one of the main challenges for field service companies year-after-year. However, the current environment of constantly improving technology and its availability through both the traditional, “tried-and-true” FSM solution providers plus the introduction of several new technology-based solution vendors makes this challenge particularly daunting for many field service managers.

Selecting which technology to implement is not the only challenge, however; field service companies must also be able to choose the right solution vendor to help them design, implement and support their newly acquired technology. Some of the most challenging questions may be, “If we’re already using Microsoft Dynamics 365 for our CRM solution, should we also use Microsoft Field Service?”; similarly, “If we’re already using Salesforce for our sales and marketing management, should we also use their Field Service Lightning solution?” Other questions may include, “Should we use one of the traditional FSM solution providers, such as Astea, ClickSoftware, IFS/Metrix, ServicePower, etc., or one of the newer providers?”; or “Should we use a UK-based solution provider, such as Fast Lean Smart, or Kirona, etc., rather than an off-shore-based provider?”

The choices are many – and no less challenging than they have been in the past!

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Jan Van Veen:  Most manufacturing companies and their service units struggle to innovate and change quick enough.

Technology is developing at an increasing pace; adoption of new technology has never been so rapid. In the digital era, we can expect competition from new entrants like innovative data- and algorithm-driven businesses.

So, the name of the game now is ‘Adapt and Thrive’ (or ‘Stagnate and Die’). The winners of the next decades will be those who can maintain a high speed of business innovation and change, and can cope with a high level of uncertainty and unpredictability.

What is holding most manufacturing companies back is;

• Slow change, whether it’s small change or bigger change
• Stuck in business-as-usual: innovations are predominantly incremental improvements of the status quo
• Lack of influence: individuals at all levels and in various departments see the threats, opportunities and the lack of progress, which frustrates them

I believe that one of the biggest challenges right now is to increase momentum for rapid and fluent change from the inside, and empowering employees at all levels to take ownership.

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Michael Blumberg:  In the short term, field service companies must also find ways to balance service quality and productivity with their financial goals and objectives (think costs and profits), all while striving to maintain exceptional levels of customer satisfaction and loyalty.

This objective holds true for any 12-month period under consideration whether the year is 2018, 2008, or 2028.

The challenge lies in developing and implementing a winning strategy based on current financial and operating constraints that each company faces.

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Jan Van Veen, Managing Director, moreMomentum, continues his exclusive series for Field Service News exploring the ‘4 Winning Habits of Long-Lasting Achievers in Service’ and looks at the importance of the third winning habit: Decision-making.

Common mistake: Dismissing employees to take ownership

During the last decades, if not centuries, it became a habit to have all important decisions in companies made at top management levels. The assumption traditionally is that this is where the skills, expertise and overview are to make the right decisions. The aim was to increase control, predictability and stability. This used to work fine in most sectors as they were fairly predictable and stable.

However, a lot has changed. Lifecycles of products, services and markets are shorter, changes are quicker, new trends and the future are less predictable, and the complexity of running a business has increased dramatically.

In more industries, companies are suffering from lack of adaptability and agility and falling behind the competition.

Here are a few symptoms we see from the traditional top-down management habits:

• Someone in the lower ranks who sees a threat or opportunity and wants to act on it first needs to discuss this with higher rank management to get their approval and buy-in/decision. There is a challenge that many initiatives face for the attention and favourable decisions from top management. These politics can be frustrating for employees.
• The time of decision-making by higher management is becoming scarce in the critical path for most initiatives. Necessary decisions are being delayed or being made without the attention required.
• The quality of decision-making suffers from inadequate information. Observations and information about threats and opportunities do not flow through the organisation quickly and accurately enough.[/unordered_list]

The solution: Unlock the huge decision-making power throughout the organisation

Leading companies have tremendous power, speed and responsiveness due to the following effective habits on decision-making:

• Top-down and bottom-up strategies and roadmaps
• Effective and efficient decision-making
• Full transparency

1.     Top-down and bottom-up strategies and roadmaps

Maintain an overall strategy and roadmap

The overall strategy and roadmap defines the changes required in different phases to achieve the envisioned future. It clarifies the focus and ballpark figures on key metrics towards the envisioned future. This provides a clear picture of the direction required for all entities of the business to shape their own role, contribution and strategy.

Typically, the leading companies have competence centres for various topics which provide best practices, frameworks, benchmarks and advice to the entities in order to develop and execute their strategies.

Each entity has its own strategy and roadmap

Based on the overall strategy and roadmap, each division, subsidiary and department maintains and executes its own specific strategy and roadmap. They own their plan and are fully accountable for the progress and results.

Larger organisations have a cascade of several levels of sub-strategies, which can contain dozens or many more sub-strategies.

Focus on “new”

Within most successful companies, the strategy and roadmap is about moving towards the future. It’s about doing new things and doing things differently in order to achieve new performance levels and future success. An excel-sheet with numbers, for example, does not achieve this purpose on its own.

2.     Effective and efficient decision making

Many business leaders fear that decentralized decision-making leads to chaos and that control mechanisms are needed to prevent this. Most companies still use traditional “plan & control” mechanisms which require complex, expensive and time-consuming coordination systems.

The following practices ensure that decentralized decision-making is powerful and secures performance;

Structure of decision making units

Every team fits in an overall structure of roles and responsibilities with clear objectives. Each team develops, maintains and follows their own strategy which contributes to the overall strategy and roadmap.

This provides clarity to everyone who decides on what, and how, decisions relate to each other.

Decision-making protocol

Every team follows a decision-making protocol which provides guiding principles and rules on;

• How autonomous the team is for the different domains that make decisions
• How to align with other stakeholders
• How to handle objections from stakeholders, depending on the impact this might have for other stakeholders and/or the organisation as a whole
• When decisions have to be handed over to other decision making units[/unordered_list]

Some decisions hardly have an impact on other teams and can therefore be made autonomously.

Other decisions have a minor impact on the work of other teams. These other teams are informed about the decision, how this will impact them and how they are expected to adjust. The other teams provide feedback and suggestions, however it remains up to the deciding team how they incorporate the feedback and suggestions.

Some decisions could have a major impact on other teams or the organisation as a whole. For these decisions, there is a protocol in which other stakeholders can raise objections that need to be processed adequately. In some cases the decision has to be handed over to another team who has the responsibility of the bigger picture.

3.     Full transparency on performance and financials trigger crucial initiatives

In many organisations, the flow of information is limited because of lack of information systems, defensive behaviour, limited willingness to openly share and too little interest in the overall picture. As a result, people miss opportunities and make wrong decisions. This reduces collaboration and initiatives throughout the organisation and increases resistance.

Constructive and well informed dialogue, strategy development and decision-making require that everyone has the same, and adequate, information about results, failures, progress, opportunities, threats, trends and practices.

Leading companies are transparent about the following:

• Financial figures of the entire business, as well as the different entities
• Progress of projects and initiatives
• Challenges or issues they are facing, including failures
• Customer feedback
• Decisions
• Practices or processes[/unordered_list]

Benefits

The benefit of encouraging decision-making throughout the entire organisation is that, on all levels in the organisation, teams and employees have engagement and ownership. They aim higher, pursue more opportunities and achieve more. Decision-making is faster, more responsive, has higher quality and is executed quicker.

The result is that the business is more adaptable to changes and therefore performs better today and will also perform better tomorrow and further in the future.

The Essence

If we think that it’s about control, stability and predictability, then we’ve missed the point! It is about thriving in a changing and unpredictable world, full of opportunities that we need to discover. It’s about passionately exploring, developing, learning and discovering what works, and what doesn’t work.

‘Magic’ happens when you bring together business innovation and employee development and empowerment.

How well has your business adopted the 4 Winning Habits?
Discover your momentum for innovation and change with the online Momentum Scorecard find out more @ http://fs-ne.ws/mpKJ30ibWsb

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