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Case Study: Creating a revolution

by | Feb 20, 2018 | Innovation Culture

Jan van Veen interviews a VP of Service Marketing of a global manufacturer of mining and oil&gas equipment, that has grown through advanced services.

Summary

It all starts by not promoting services and service innovation. 

Instead:

  • Start with building a shared concern on a bigger game, an overarching strategic challenge of your entire business.
  • Emphasise the challenge of broader and quicker business innovation – especially innovations which go beyond business-as-usual
  • Focus on changing and unmet challenges and problems of your clients

Bottom line: If better services are the solution than what is the problem?

The "problem"

Question:

  • Do your work with a manufacturer
  • And do you and your teams have great ideas and initiatives to innovate service?
  • Do you encounter slowdown of these initiatives, often in favour of other initiatives on sales, product development and IT projects?

You are not alone.

In this article I will share 3 tips to get services on the strategic agenda of a manufacturing company, just like what successful manufacturers and their service leaders did to get services on the strategic agenda.

The importance

The last years we see an increasing number of manufacturers making significant progress on developing their service business and continuing their servitization journey.

In today’s rapidly changing world with new technologies, change customer demands and ongoing commoditisation in most industrial sectors, adopting a more service-oriented business model is mission critical for manufacturers to remain successful and get their fair share of the new opportunities of the upcoming years.

The solution - how leading manufacturers did it

So, just like the leading manufacturers and their service leaders:

Sell the problem first, instead of the solution you are trying to push forward – which is services or servitization.

Together with leaders from other functions, build a shared concern across the entire organisation around a bigger game – an overarching and critical business challenge for the business as the whole. For most manufacturing companies, this shared concern will be around the following 3 elements:

Pressure on performance

To fight the ongoing pressure on performance, increasing competition and commoditisation of today's products and services, your business needs to find new growth curves to secure success for the (near) future and secure a competitive position in your industry.

Sustainable success

 

Main topics to discuss with your stakeholders are signs for this pressure on performance and the increasing pressure from the outside. Examples are:

  • Low-cost alternatives, maybe from other countries
  • System integrators becoming more powerful in your market and building stronger relationships with your clients
  • Data-driven service providers entering your industry, helping your clients with the digital transformation of their operations and the maintenance of their assets
  • And of course, any information which indicates declining growth, margins and differentiation

Slow pace of innovation, limited to business-as-usual

Today, with the many new opportunities from applying new technologies by your competitors, partners and clients, your company does not want to be left behind. You want to make sure your company gets a fair share of the potential benefits of upcoming opportunities.

This means that a higher pace of business innovation beyond business-as-usual is critical to stay relevant and successful.

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