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3 Tips to Get Services on the Strategic Agenda for Manufacturers

by | Jul 15, 2019 | Servitization

• 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? How do you get services on the strategic agenda of a manufacturing business?

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.

Assess your Innovation power

This Scorecrd will help you and your teams to assess the capabilities and practices of your business to innovate beyond business-as-usual and navigate disruption in your industry.

Changing customer needs

In today’s rapidly changing world, your clients will have new challenges in their business, and therefore their needs are changing. For sure, there will be (new) companies which will offer your clients great new solutions for these new, unmet needs.
So should your company.

This requires deep customer insights which go beyond the existing customer insights, which are still related to requirements for your current products.
So, what are the critical business challenges of your clients? What are their visions for the future? What are their strategies? And which new pain points can your company help solving today or in the near future?

Strengthen your customer insight

Customer InsightRapidly strengthen your customer insights by structuring the knowledge into a compelling and clear structure of the challenges, pains and mistakes of your customers.

With this insights, you will improve the customer focus and catalyse new initiatives.

Once you have established a sufficient shared concern, you and your stakeholders will have a constructive dialogue on finding and pursue in the new solutions to solve the shared concern. This will be the fundament for strategic commitment and alignment for the strategic initiatives, one of which most definitely will be developing a more service-oriented business model.

Building this shared concern is not a one-time action. It is an ongoing effort to step by step build on a stronger and broader vision, maintaining this vision and keep it alive throughout the entire organisation. This will help to build and maintain momentum in your company and get you ahead of the pack.

The Essence

It is not about getting driving and pushing for more support to servitization initiatives.

It is about driving momentum throughout the entire organisation to build and maintain momentum for continuous business innovation for maximum impact.

Conclusion

It starts with selling and promoting the bigger concern, not selling and promoting service.

If better services are the solution, what is the problem you are trying to solve?

  • Build a shared concern for major business challenges of the company as a whole
  • Emphasise the challenge of broader and quicker business innovation for success and growth of today and future
  • Emphasise changing and unmet customer needs and their “problems”

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

So; I have a question for you – I am just curious –

  • What is the shared concern in your business?
  • Is this really a shared concern or more your concern?
  • What are the 3-5 strategic elements to solve this shared concern?
  • And how does service fit in?
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3 Tips to Get Services on the Strategic Agenda for Manufacturers

• 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?

How do you get services on the strategic agenda of a manufacturing business?

Stay up to date

Receive the latest insights and updates.

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