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Part Four of an exclusive Field Service News interview with Dave Gordon, Rolls Royce.

Here Dave speaks about the importance of being customer driven when it comes to developing excellence and innovating to achieve this, how they evolved their processes through collaboration with their clients, and finally why one size does not fit all when it comes to service delivery.....

Missed part one of this excellent series? Find it here

Missed part two of this excellent series? Find it here

Missed part three of this excellent series? Find it here

Want to see more? Subscribe to Field Service News by clicking this link and get access to download the full video in full.

Part Three of an exclusive Field Service News interview with Dave Gordon, Rolls Royce.

Here Dave speaks about how he measured the value of service, explains what he defines as disruption based availability (or project zero to give it its cooler sounding name) and how he uses greater understanding of his customers to motivate his own team at Rolls Royce.

Missed part one of this excellent series? Find it here

Missed part two of this excellent series? Find it here

Want to see more? Subscribe to Field Service News by clicking this link and get access to download the full video in full.

 

Part Two of an exclusive Field Service News interview with Dave Gordon, Rolls Royce.

Here Dave speaks about how he approached developing Rolls Royce's service delivery, and the importance of collaboration and trust, particularly when it comes to the proactive use of data to continually improve the service you are delivering to clients...

Missed part one of this excellent series? Find it here

Want to see more? Subscribe to Field Service News by clicking this link and get access to download the full video in full.

Last month myself and Field Service News Editor Kris Oldland were fortunate enough to interview Dave Gordon from Rolls Royce’s Defence business in Bristol, about their Services Journey and why it is so important to the future growth of the business.

Although Rolls Royce is a leading global manufacturing business, many people do not realise that over 50% of its revenues are now generated through Services. Initially Services became a strategic contributor to growth in their Civil business as they reacted to customer and market pressures.

In his own very engaging way, Dave Gordon describes about how the defence business has taken these processes and embedded them into its core offering. As VP of Service Strategy and currently LiftSystem Programme Director for the new vertical takeoff Lightening Fighter, he is uniquely positioned to talk about the transformation from time and materials support contracts to sophisticated advanced services.

Rolls Royce started their journey by understanding what being good at services really meant. They very much took an OUTSIDE-IN approach, not only looking at their own industry, but best practice companies in unrelated businesses. A major challenge was how to apply the undoubted technical and innovative capability of Rolls Royce, to the mountain of data collected on their products, and turn it into value for the customer.

 

Key to this journey has been changing people’s mind-set through the metric of ‘Customer Disruption Cost’. This measure calculated the direct and indirect costs to their customers if the engine was not available. The tangible benefit was that it enabled Rolls Royce to build a value based offer around the customers business needs. The hidden benefit was that it focused the people within the organisation on what was really important to the customer.

Dave explains the importance breaking down the innovation of services into bite size chunks.

Starting first with availability contracts on small modules, and gradually increasing the scope as their knowledge and infrastructure grew. Key was building a database of how the product was used, enabling engineers to model their equipment behaviour, so as to predict future performance. Then leveraging this knowledge and insight to develop new proposition and solutions.

As the service business has matured, the data capture and analysis has increasingly moved into customer located Service Delivery Centres, so making the value creation processes truly co-constructed.

But in this age of nervousness around cyber crime and intellectual property, he stresses that security and segregation of customer data is key to developing a trusting collaboration with the customer.

It is this collaboration that has been key to their success. So not only has it been a journey for Rolls Royce, but their customers as well. They have had to step back from describing ‘what they want’, to ‘where they want to be’.

Dave Gordon goes on to say ‘Creating the future’ is all about deepening relationships and harnessing innovation around customer value. Key is the willingness to listen but where necessary take risks and innovate ‘outside the box’ to make change happen.

This exclusive interview will be appearing on Field Service News across the next few weeks and you can find the first part of this series by clicking this link.

Part One of an exclusive Field Service News interview with Dave Gordon, Rolls Royce.

We speak to Dave about how Rolls Royce Aerospace have revolutionised the way service in the industry operates via their 'power by the hour' approach and how Dave and his team have taken this approach from Rolls Royce's civil business and applied it to their defence business.

Want to see more? Subscribe to Field Service News by clicking this link and get access to download the full video in full.

Field Service News regular Nick Frank returns to his series looking at various case studies from companies he has worked with both past and presesnt to help us better understand best practice in service. This time out Nick takes a closer look at customer satisfaction...

Do Satisfaction surveys or Net Promoter systems really tell you how your customer’s experience your company? When you are satisfied with your car, does it mean you will buy the same brand the next time round?  The reality is that tools such as these are better than no tools at all! They do bring a focus on the customer by employees. . But to really get insights in how customers currently experience your brand in terms of needs, expectation and value perception,  requires  more intimate forms of communication and most importantly a change in MIND-SET.

Industry leading companies tend to exhibit an OUTSIDE-IN approach. They actively search out their customer’s thoughts and act on them. They use more sophisticated methods to capture deeper customer insights. They are mature enough to take on-board comments, which might be negative or not fit their agenda, because listening and action are in their DNA.

The on-stage/back-stage model: 

Typically these companies recognise that customer experience is not just an outcome, but can be designed into the service delivery model. Key is identifying the key factors influencing the customer’s perception at each touch-point. The On-stage/Back-stage model is often a useful tool to do this.

These are easy ideas to accept, but a recent consulting experience really brought home to me that for many organisations it’s much harder to put into practice.

We were working with several very successful capital equipment suppliers with very similar situations:

• They want to gain deeper insights into how customers experience their service business.
• They desired to move to the next level as they moved through a period of service transformation.
• They want to go much deeper than their own Net Promoter Score / Customer Satisfaction programmes.[/unordered_list]

In one of these projects, we dealt with a division where a significant proportion of the revenue came from the consumables that supported the product. They decided to invest in a programme where they recorded their staff’s interactions at the touch-points and then interviewed various key stakeholders of their customers.

This brought some unexpected observations within the buying process. The buyers recognised and appreciated the company’s knowledge and professionalism.  But they felt frustrated that the Sales people did not bring any value to the table other than taking orders for consumables.  They actually felt let down, which significantly harmed their overall perception of the brand and encouraged them to look for new vendors.  They made explicit statement statements such as  ‘We want a leading Solution Provider and not merely a leading Product provider’.

Don't be defensive - all feedback is useful

The challenge for this organisations was to take the feedback at face value, not get defensive and take the actions needed for improvement. But this market leading organisation struggled to do this. Why?

Often organisations are structured in silo’s with very specific targets, which are not necessarily aligned with customer value. For example, sales people who meet their incentive plan from significant sales of consumables, are not enticed to walk the extra mile and deliver more value, as this could prevent them from meeting their individual targets

• A focus on short term financial targets stimulates attention on low hanging fruit which directly drives financial results
• Wanting to Stick to the product related values and competencies
• Not being able to accept another perspective on the world.

In truth it’s probably a mixture of the above. The moral of the story is that if you are not ‘truly’ open to what your customers need and say, or are not committed to acting on the feedback, you are probably stuck in an IN-SIDE OUT world. It’s hard to innovate for your customers and provide an excellent experience, when you are only focussed on internal issues such as the next quarters sales or your next product’s features.

And we know that the OUTSIDE-IN mind-set is more likely to lead to growth. Recent research shows that companies who push themselves to gain insights into customer experience from a wide number of sources, are more likely to achieve higher corporate growth. But its not surprising that those companies that make this effort have a better understanding of what is valuable to their customers and how to deliver a customer experience that will drive loyalty.

For more information on how to develop your MINDSET and Design Customer Experience into your Service Propositions, why not look at some of our courses on Service Leadership(23^rd Sept in the UK) and Service Design.

As the organisers of the Field Service Solutions Theatre at this year’s Service Management Expo, Field Service News was on hand to speak exclusively to a number of leading industry professionals straight as they stepped off the theatre podium. In this video series we are pleased to bring you the highlights from the Field Service Solutions Theatre.

Here we hear from Nick Frank a senior service management consultant with Noventum Service Management and a regular field service news columnist. Frank discusses his presentation on "Growth through Services" which was based on the results of a year long study held by Noventum Service Management trying to understand what are the key drivers for push a business forward and how does service relate to that?

 

Continuing his series looking at case studies of how service companies adapt their culture to improve their productivity Nick Frank, service management consultant with Noventum Service Management looks at how happiness became a key tool for Dutch firm Hutten...

It sounds so obvious that people are the key to any business change, so why do we often overlook their importance.  Is it because managers are so wrapped up in their strategies and actions plans, that they forget talking to customers and employees requires a different kind of language?  That the ‘just get it ***** done!’ mentality does not achieve the results they want.

Whatever the reason, the lesson we learn time and time again is that it’s your ‘people that make you stand out from the crowd’. So how do you then make sure that people development and communication is a key part of your plan.

Some companies take a very novel approach. Take Hutten, a leading Dutch kitchen service provider. Pascal Verheugd their HR director told us about their unique approach;

“Most companies, particularly in Holland, are driven by productivity and profit margins. Here at Hutten, we thought differently. We wanted to position happiness as the central driver within our company.

Working from the ground up, we engaged with all team members to develop our mission to promote the values of happiness, collaboration, transparency and sustainability across our organisation. This was not just a top down initiative, and neither was it only internally generated. Our partners, suppliers and clients are key stakeholders, so these values were generated also considering their input from the outside in.

This ‘happiness vision’ could have been difficult to justify on board level but in our case, the CEO, Bob Hutten and I were singing from the same hymn sheet. We were both of the belief that social innovation should be the most important goal for every company and that managing targets, bonuses and profitability simply isn’t enough.

People have to want to work for you. If they share the same values internally and are happy working together then it stands to reason that their happiness will create better productivity and that this will filter through to customers in the end.”

Now this may be a very different approach, but I am sure there is a lesson here for us all in both our professional and work lives!

So if you are interested to know more more about the importance of people in achieving your goals, you can get more information from this link, or you can sign up for our next UK Service Executive Leadership Course in September, where you will get an opportunity with your peers to develop your thoughts on people and leadership…and perhaps have a a bit of fun yourself.

 

 

The question of how to grow profitably is high on the strategic agenda of most companies, yet only few are able to realise it. In today’s world, many businesses are struggling to maintain their existing revenue and profit margins, let alone achieve ambitious growth rates. But there are also many exceptions!

Given that significant variations appear in the growth strategies companies choose and the role services play within this strategy, Noventum set out to answer the following two questions:

1. What are today and tomorrow’s key drivers for profitable growth?

2. What role do services play in respect to growth?

The research comprised of in-depth interviews and a survey conducted amongst board members, service managers and directors, primarily from B2B product-orientated companies across a wide distribution of industry sectors and company turnovers.

It was quite clear that companies exhibiting higher growth rates saw ‘services’ as one of their strategic solutions to achieving growth and not as a challenge in its own right.

We found that these companies tended to exhibit 4 key capabilities:

1. Deployed a wide portfolio of growth strategies

In order to outperform competitors on revenue growth and margins, companies should pursue a broad portfolio of growth strategies and not just the traditional few of  (1) Product growth in mature markets; (2) Product growth in emerging markets; (3) Product Related Services. When these 3 strategies are broadened by Advanced Services focused on solving company’s business problems, or improving a customer’s processes, revenue growth was generally above 11%. In addition these companies were more likely to achieve gross margins across the whole business of greater than 40%.

2. Innovate for customer value

Key to growth and profit margins is a focus on innovation in order to optimise customer value. Successful companies do this by employing multiple tools to glean customer insights and maintain a balanced portfolio between incremental and ‘game changing’ innovations.

3. Demonstrate Organisational Agility

We defined agility as the capability, dedication and culture to rapidly innovate on a continuous basis. The companies that achieve high growth are innovative in nature which leads to change. But all this change creates internal friction and conflict . Hence successful high growth companies develop a culture that can move and change rapidly giving the oganisation an agility to adapt to new ideas

4. Strategic alignment between service- and corporate strategies

Companies need to develop a clear long-term vision as to how to develop their service business, ensuring each step delivers a tangible and credible contribution to the overall performance of the company. Focusing on the overall value of service for the company will secure corporate commitment and thereby further enable (service) business success.

The bottom line: Advanced services are a key differentiator in driving companywide revenue growth.

If you are interested in understanding more about how advanced services differentiate the winners from the losers, you can down load  a summary of the research finding using this link.  Or if you would like to participate in our follow up research, you can join Noventum’s Service Innovation Programme on LinkedIn. When people subscribe they will receive our newsletter including the events updates such as the Servitisation conference in May at Aston Business School.

I will be presenting the research findings at this event, as well as at the Service Management Expo at the ExCeL in June.