Sarah Nicastro: Welcome to the Future of Field Service Podcast. I’m your host, Sarah Nicastro. Today we’re going to be talking about what it takes to successfully introduce an as a service model. You may remember from the podcast, Scott Weller, who is partner with Mossrake Group. Scott, welcome back to the Future of Field Service Podcast.
Scott Weller: Thank you, Sarah.
Sarah Nicastro: Thanks for being here. Scott was on the podcast a while back with Howard Bowland from Schneider Electric, talking about their introduction of an as a service offering. I wanted to have Scott back because he has a lot of really interesting and valuable expertise in this area that I think our listeners will find a lot of benefit in hearing.
Sarah Nicastro: So, Scott, before we get into the content we have planned for today, tell our listeners a little bit about yourself and your background, and then we’ll get started.
Scott Weller: Sure. So, Scott Weller. I’m a partner with Mossrake Group. And we work with technology product companies who are looking to grow through services. And these days, that conversation inevitably goes to as a service models and outcomes based business. Prior to Mossrake, I was the global leader for the support services business in Hewlett Packard Enterprise, and in our time, there we built a multi-billion dollar IT as a service business, that’s now known as HPE GreenLake.
Sarah Nicastro: Awesome. Okay, so you have experience with this transition and evolution firsthand from your time at HPE and you also have a lot of experience helping organizations on this journey as well. You just mentioned two terms, and I want to clarify the intersection here of the terms outcomes based service, and then as a service. So, can you give some context on where you see those two things intersecting?
Scott Weller: Well, in our business, we, again, work with technology product companies, and usually, their identity is tied up in being product focused. And of course, they’ll have services to maintain the products. But shifting to outcomes is a very different kind of animal. Outcomes is about putting yourself into the customer’s shoes, looking at the business they’re in, and looking at what they’re trying to get done versus focusing on the particular asset. So, I suppose it’s not required to move to as a service to be able to deliver an outcomes basis, but what we find is, is that… Well, we haven’t seen an example of that, quite frankly. Customers really want to shift the way they procure, the way they consume value when they’re focused on outcomes. And so, we see those almost being synonymous but they’re not really synonymous, but in practice, they might as well be, from our experience.
Sarah Nicastro: Okay. That makes sense. So, you mentioned the word identity, and this is a term that we’ve talked a little bit about. And when you’re looking at transitioning to as a service, you have said that identity is a really big factor in that transformation. So, talk to us a little bit about what that means, what identity means for the business, and how it affects the journey.
Scott Weller: Well, so identity in a company is really around the unwritten rules, what we’re here to do, what we value, what we’re good at, what we’re known for, and identity gets codified into the business model, so that the value chain aligns to it, and really, the businesses optimize for that identity, and even over time, as the business might evolve, identity is what survives. And so, if you try to introduce a new business model into an existing business, what can happen is the entire value chain can work against you. It becomes a barrier.
Scott Weller: You think about sales, salespeople have to move from a transactional relationship to one that’s continuous and collaborative. And of course, there’s the never ending questions about, how do you get paid? You will find people in your company who firmly strongly believe that anything that leads to a monthly payment, that must be in the purview of the financial services organization or an external financial partner. And probably, the most difficult transition is for product development. You have engineers and product management who identify with making the coolest thing, the fastest thing, the best, the highest quality thing, and now they’re asked to be a supporting cast member in an ensemble trying to deliver unique experiences and outcomes.
Scott Weller: So, really, it’s a fundamental shift, it’s very difficult. And this is why you find a lot of mature product companies either haven’t started on the journey or are still on that journey even though there are clear demand signals from the market.
Sarah Nicastro: Okay. So, there’s a massive opportunity with this journey but there’s significant challenges in terms of intrinsically, that identity companies have and evolving that and overcoming what that means in terms of migrating the business towards this more modern approach. So, generally speaking, what’s the path? What do organizations need to consider? What’s the best approach to make progress here?
Scott Weller: Typically, when something this big, this kind of shift is needed, it’s a C level decision. And, of course, what’s top of mind there is, “How do we overcome the inertia within our company to do this and make the investments while still making our financials for the quarter and the year?” It’s not an easy problem to solve. So, what we’ve seen is there are usually two paths that are taken. One is, if you’re a technology product company, you engage a third party finance firm. And that’s really problematic, because number one, it puts another entity, another brand, another identity between yourself and the customer. I mean, you’ve worked out maybe how to do billing, but that hasn’t solved the problem of becoming an outcomes based or an experience based company, and customer see right through that. So, that to us is not even a good half step.
Scott Weller: The other approach, of course, that companies take is through mergers and acquisitions. And as we all know, acquisitions rarely fulfill the entire promise. It’s very problematic. You’re starting with two different identities trying to come together, two different value chains, mismatched expectations, and on and on. So, that’s a very high stakes, highly visible play to make. It brings in all kinds of special help to make it work, and so it’s really a challenge.
Scott Weller: So, really, our view is, we feel strongly and we’ve actually done this in practice, is that the microcosm approach is really the best one. The internal incubator, start small, an agile approach is really the best way for us to see this succeed, because in the end, what this approach does is it allows the new business model to essentially gestate within the existing machine and has to knock down all of these value chain barriers one by one, which is not a small challenge. But when you do it in a microcosm, it’s just much easier, and by the time the bigger machine realizes what’s going on, the model is entirely proven. And then the question is not whether it works, the question is, how do you go faster?
Sarah Nicastro: Right. Okay. So, one of the things I want to just touch on before we talk a little bit more about the internal incubator approach is this idea that the reason those other methods are problematic is because when you’re looking at introducing as a service, it isn’t about the financials, it’s about the value proposition, right? So, that idea of just, “Okay, so we’ll take our products from a CAPEX model to an OPEX model, and that will move us to as a service,” right? That’s basically faulty thinking, correct? Because customers are looking for, it’s not about the method of financing, it’s about the value proposition.
Scott Weller: Yeah. I mean, this is kind of a rat hole that you can get into in every conversation. And so how is this different than financing? And financing, really, if you think about it, is still very much a product focused, asset focused approach to the market. It simply is a different way to pay versus a very different kind of experience and outcome. Because if you work with financing, that’s great and there’s a place for that, but if you want an outcome basis, you’ve got to be thinking about what is the experience you’re delivering? Who’s looking after that asset in the customer context? Who’s there to ensure the promise is fulfilled? Who’s there to make sure that, as the customer evolves, essentially, the solution evolves with them? Again, a financing arrangement is still a transaction, versus an ongoing, continuous relationship that’s really more like a collaboration than anything else.
Sarah Nicastro: Good. And I just wanted to clarify that to make sure people understand that they are two very different things. And when you’re talking about getting the ultimate results of introducing this model, it’s in the context of moving toward that outcome or experience approach. Okay.
Scott Weller: Right.
Sarah Nicastro: So, let’s talk in a little bit more detail about the internal incubator or microcosm approach. So, this is something that we discussed in the context of the Schneider Electric example. I found it very interesting. So, in that instance, Howard in his region, along with Mossrake, has done this internal incubator type process. So, tell us a little bit about how that works and why it is a really viable option for companies that are looking to make progress on this journey.
Scott Weller: So, I don’t want to make it sound easy like there’s a silver bullet here, because it’s never going to be easy. And I guess the other thing I would say is, it does require a visionary leader on the ground. And this may be why companies don’t do it, because they can’t find that kind of person where they need them. But once you have someone who’s visionary, by that I mean they can see how this plays out, they’re getting the demand signals locally, they can see how this can play out, they really believe in the idea, and they’re willing to put their neck out a bit and have the courage to see it through. And I don’t use that term lightly in the context of business, because it is high stakes even if it’s in a microcosm.
Scott Weller: But with all that, I mean, really, it’s almost like the antithesis to the big, monolithic, multi-year, very expensive programs that big companies tend to embark on when they need to make a transition. It’s not common to say, “Hey, let’s go do a small thing, see how the market reacts, let’s see how a few customers react, let’s go after this.” And by the way, the local team has to be willing to do this as a second job. So, you have to enlist people who are game for this and have the right skills.
Scott Weller: So, it’s not like a miracle has to occur, but a lot of the right things have to come together at the local level to do this microcosm approach. But then, as I said, I mean, I can tell you from our experience back at Hewlett Packard Enterprise, and then more recently with Schneider Electric is, you do these small things, you test it, you come back, you refine, you pilot, you get a few customers, they tell you what’s good and bad about what you’re trying to do. And the thing then can grow. And if it’s going to fail, it fails quickly on a small scale without any of the reputational risk and financial risk really.
Scott Weller: But again, once it’s proven, companies can continue to study this and should we do it or should we… But I mean, there’s no question that it works, the only question might be, well, maybe it doesn’t work in every locale, and that’s fine. But again, in my experience, what happens is once senior management sees this, they’re like, “Okay, this is really good, and why aren’t you going faster?” If you think of the question.
Sarah Nicastro: Right. So, the microcosm, so we’re talking about taking a particular region or a particular area of the business and using it as that internal incubator. So, what does that process look like? And I know that at Mossrake, you guys are really working hand in hand as an extension of the team to take this from vision to reality, refinement to reality, etc. So, tell us a little bit about what that looks like.
Scott Weller: Well, like any other management consultant project with a client, usually, it’s begun by this visionary leader who may not have the skills in their team, or they may not have the positional authority, or even the credibility. Like a new leader can come in and they’re an unknown quantity, so they seek our help to really, first of all, determine, are the demand signals that they are personally seeing representative of the broader market? If so, then what is the opportunity in the market? And then get down to, okay, well, what do we want to offer here? Define that, build it out, again, using an agile approach, where you don’t solve every problem at the beginning, you know that you don’t know everything, and you start building.
Scott Weller: So, that’s how we did it as internal executives back at HPE, and that’s how we did it working with Howard at Schneider Electric, and that’s how we do it with our other clients that are in flight.
Scott Weller: And there are times we’ve seen where, once this is all laid out, a client might say, “Hey, listen, we have so many things on our plate right now, we just can’t do it. We think it’s absolutely where we need to go. We can’t do it.” Others are saying like, “We’re so late now. How do we do all this but speed it up?” And there are ways to do that, but also limits, because if you want to be thoughtful and build incrementally versus these large, monolithic programs, simply, there’s a point where you can’t make it go any faster.
Sarah Nicastro: Right. So, there’s a couple of things, if I’m reflecting back on the example that I’m most familiar with, about the microcosm approach that I think are really interesting to discuss. The first is the role that you played in terms of, not only helping create the value proposition or the go to market, but then also acting as a resource in terms of almost training in real-time on how to articulate that to customers, right?
Sarah Nicastro: So, I found that very interesting because when you’re making this big of a change in an organization, we’re talking about changing the whole way that you think about, deliver service, and engage with your customers, it seems terrifying to me to just say like, “Okay, salesperson, go have this conversation and see how it goes.” Right? And you guys played a very hands-on role in that process, so that through some cycles, you were able to help get those conversations comfortable and build those skills, almost leading by example, right? So, can you talk a little bit about that aspect of it?
Scott Weller: Sure. And I should say that we did what you’ve just describe, not just in the go to market, but across the value chain, having done it and lived it in another big multinational. But for sure, on the sales side, it’s things like, what is the story? What is the message and how do you package that as sales enablement? And then how do you begin to train up sales people who are, in a way, predisposed to a different kind of messaging verses what they’ve might have been massively successful doing before? It doesn’t necessarily mean that this is the kind of message they feel comfortable with, the storytelling might be quite foreign and uncomfortable to them.
Scott Weller: So, you have to intersect the right kind of messaging with the people who are able to receive it and take it to customers. So yes, we did a lot of that, shoulder to shoulder, as they say, with individuals. In the case of Schneider, COVID threw a wrench into our being physically present, we did some of that prior. But in any case, you do have to take that shoulder to shoulder approach and really support the sales activity with research.
Scott Weller: Back at HPE, I did the SWOT for a SWAT team approach, where some of my local leaders from the global team would literally fly out and do seminars, and go into customer situations and help either deliver the pitch or assist in delivering it, do post-mortems and all that sort of thing. So, yeah, I mean, you have to really understand that this comes down to people. Every aspect of this comes down to people. You talk to someone in product development, they say, “What’s in it for me? I want to make my cool stuff.” And so, really, it’s very much about people all through this, and sales especially.
Sarah Nicastro: And I think, again, the value of this internal incubator approach is, one, it’s at a scale where you’re able to provide that shoulder to shoulder type of support so that you really are having that opportunity in a vacuum to get that story right, refine that message, train those skills and how to have those conversations, and get it right before you expand it out, right? So, rather than trying to do it at scale and have however many customer interactions potentially go awry, you’re really refining that in this incubator before you start to take it out to the masses. So, it seems very smart to me. And I think that that was one thing I found really interesting.
Sarah Nicastro: The other thing I wanted to touch on related to the microcosm approach is this idea of, from the very beginning of it, you have the intention of documenting everything well so that there is an opportunity to, once you’re successful, expand it throughout the rest of the business. Can you talk a little bit about that?
Scott Weller: Yes, and I completely agree that this has to be well documented, again, across the value chain, every aspect. So, all the sales. I mean, we essentially have quite a sales library built up and, essentially, training programs, also partner program well documented. So, really, every aspect is within what we call an operational blueprint, so that when we’re no longer involved in the activity, the business is able to survive personnel changes and so on. It’s essentially a matter of institutionalizing what you’re doing to the point that it will survive personnel changes, and certainly, our involvement coming to an end. So yeah, I think that has to be really designed in upfront when you’re going to go down this path, that somehow you’re not going to have successful business in the moment, but nobody knows what to do when a new person comes in or an experienced person leaves. It’s really critical that you have everything written down.
Sarah Nicastro: Right. And I just think that’s a really good point, because this isn’t an internal incubator, like, “Hey, let’s try this, see what kind of success we find, and then we’ll figure out what comes next,” this is doing it with the intent of, “Let’s create the success in this microcosm with the ability to blueprint it and then take it throughout the organization.” Good.
Sarah Nicastro: So, you’ve mentioned agile a few times, and I want to talk a little bit about this because I think this is a term that just gets misinterpreted, or misunderstood, or thrown around a lot, and I want to talk about what it is, and isn’t, I guess, in regards to a project like this. So, tell us a little bit about what the agile process looks like within this microcosm approach?
Scott Weller: Sure. Well, again, it’s a process that’s, as I mentioned earlier, the antithesis to the big monolithic program, it’s really meant to be iterative and collaborative, collaborating not just with the end customer in terms of, what do you think about this, but also you have to collaborate with your channel partners, your sales organization, how you run inventory, how you do billing, all of these sorts of things have to be brought into the process.
Scott Weller: And, again, the presumption is that you have a pretty good idea of the pins that you have to knock down along the way, but you certainly don’t know everything. You have a pretty good idea about what will resonate with the market, but there are pieces that you can’t know, and you might have to, maybe not do a hard left or right, but you have to be able to shift direction. And especially for the sponsor of a program like this, they have to have a rapport with their peers and management chain that allow them to come in and say, “Hey, listen, what we’ve learned is we need to shift a little bit to the left or right, and that’s got to be okay. That’s not going to kill this,” right?
Scott Weller: And, again, keeping the reputational risk low, the financial risk low means that no one is going to lose their mind, their heads aren’t going to explode over some of these kinds of natural shifts. And at some point in time, after enough work has been done, there should be a hard go-no-go decision, not unlike the classic waterfall model, you do need to prepare for that moment in time where you’re going to say, “Okay, we’ve learned enough. Is this what we really want to do?” Because the next phase will inevitably require more people, more resources, more investment. And especially, if you’ve built a local successful business, now you want to take it on the road, and take it to other locales and try to build the business in those places.
Scott Weller: That’s a huge commitment and investment, and pretty soon, the company, if they haven’t by that time already, they’re going to be talking to the market about it, it’s going to become an investor discussion even. And so, you really have to be prepared for the bigger transitions. And so, there are some moments in time that are hard choice points, but not at the beginning, not in the initial build out, not in the figuring out, “Is this a business that works and is one that we want to be in?”
Sarah Nicastro: Yeah. I think there can be this interpretation of agile as just completely loosey goosey, and we’ll just go in and see what happens. I think the idea here is you have a good plan going in but you’re open to evolving, refining, learning, in those early phases to make sure that before you take it out of that microcosm, you have something that’s pretty well vetted and pretty proven.
Scott Weller: Absolutely.
Sarah Nicastro: So, that makes sense. What I’m curious about, Scott, is, what does this all look like from the perspective of the pilot customers?
Scott Weller: Well, pilot customers, I would say, if they’ve become a pilot customer, they appreciate this approach. The individual, the sponsor on the customer side is probably, you could call them an adventurer, a forward thinker, and they like being part of a process like this, realizing that they’re investing themselves, they’re investing their own time, it can be a distraction to do this in their business, but they’re game for it. And I would say, other than maybe a higher frequency of interaction, because again, it’s a collaborative process, we try to keep the burden low and we try to essentially create a commercial arrangement that allows them to go down the road with us, but at some point, say, “You know what, this was fun and all, but we need to take our hands off this wheel and go back to the former way of operating,” and that’s fine.
Scott Weller: So, you have to give them a path out, you have to give them a path to double down if they really like what’s happening. So, it does take a different kind of care process for this customer, beyond maybe your traditional product services, you’ve got to really look after them and make sure they’re good every step of the way.
Sarah Nicastro: And what’s your advice for fully leveraging success with a pilot customer once you’ve got to that point?
Scott Weller: Well, we do ask for references, if they would be willing to be a reference customer. Sometimes they have their good reasons not to be. If you’re in a sensitive industry, maybe being seen as the first or not being seen as a conservative brand might hurt you. So, they say, “Well, listen, we love this but we just don’t want to put our name on it.” Other times they love it, they want to be associated with forward thinking and innovation. And so, every customer is different, but we do ask for that.
Sarah Nicastro: Okay. So, we talked about the need for a visionary within the company to spearhead this, but as you mentioned earlier, especially early on in the process, you’re also asking a lot of people that are going to be involved that are early on, both keeping up with the day to day and the traditional way of doing things while also introducing this and working on this microcosm. So, I love that you call them adventurers. I think that’s really cool. I’m curious if there are, I don’t know, common characteristics that you look for. How do you find those adventurers and enroll them in this journey?
Scott Weller: It’s harder than it looks. You do depend on knowing people. And this is where the internal sponsor, they need to have their network of people, because you can find people who are really up for it but they’re just bored, they just want anything else as a distraction, but they may not be the kind of people that you need at the moment.
Scott Weller: So, you look for people who seem to be a high energy, always looking to find ways to do things in a better way or have a better outcome, people who were maybe questioning the system every day, asking themselves, “Can’t we find a better way to do this?” And it’s almost like you know when you see it. And even then, not everybody can sustain the level of energy and output, because working today is hard, there’s a lot of demands on people, and so sometimes people just have to excuse themselves on the process, that it’s the coolest thing ever but they just don’t have the bandwidth to do it. And even those who you get into these programs and they go on for a year or more, at some point, people may be looking at career transitions. And so, it’s not like you can get your dream team set up day one and then they’re there forever. People come in and out.
Scott Weller: So, this is where you’re constantly evaluating people for this, and hopefully, eventually, as the business takes off, you can put people into this new business officially, and they don’t have all the other distractions. But what we see happens, though, is, even when that happens, especially in this microcosm model, there are things that you have to overcome or build that you say to yourself, “Really, this should be a corporate initiative,” like when it comes to IT systems, for example. “Why should a local team be worrying about ERP or trying to get these systems to bend to the new model?” So, there’s always the next challenge, and people can get burned out.
Scott Weller: And so, it’s not enough to be the visionary leader, you have to always remember that this is a people things, people are at the core of all of this, and you need to really watch how people evolve themselves personally through this process.
Sarah Nicastro: Yeah. And I would think, as that visionary leader, you need these adventurers, not only to drive progress, but to keep your own energy high. Do you know what I mean? If you’re the only one that’s kind of pushing this, right, not only is that not feasible, but that would be a pretty isolated place to be. So, if you can find this network of adventurers that are excited about the opportunity and willing to work alongside to drive it, it’s beneficial in both ways.
Scott Weller: It is. Although I would just say that, really, the visionary leader has to be more a source of energy than a sink of energy. Unfortunately or fortunately that’s typically how it works.
Sarah Nicastro: Right. So, maybe they can get some of that energy from you and Mossrake instead of the team internally, right? Because they need to be providing it, not taking it.
Scott Weller: Yes.
Sarah Nicastro: Okay. So, this transformation to as a service depends on both internal and external influence. So, talk a little bit about how that materializes in the work you do with your customers.
Scott Weller: So, again, every customer is different. What we find are some common themes, though. I mean, even I would say more than ever, companies realize that what got us here won’t get us there. We might be at the top of our game, but the world is evolving and changing so fast. The chances of getting blindsided, particularly if you’ve got a lot of momentum and you’ve had a lot of success, is people will double down on what they did yesterday versus looking for the challenge to do something different today. And that momentum becomes nothing more than inertia to be overcome in the next turn of the business.
Scott Weller: So, I think this notion of optimizing, optimizing down, what you’ve got today as a path to success, really, I think is more and more… of course, companies want to optimize. Why be wasteful in what you do? But at the same time, optimization can mean that a company is fragile. And so the next time you want to introduce something different, then, really, everything breaks, there’s just fires everywhere. And so, how do you create a business that can be resilient through these transitions, and also, how do you engender in your people a kind of… Well, I always talk about three things; adaptability to the change, tenacity so that you can hunker down and get through it, and curiosity, because there are views that, really, without curiosity, civilization can’t really evolve and transform.
Scott Weller: So, these three attributes are so critical to engender in your people. You have to hire for it, you need to encourage that way of thinking. I’ve just seen in a lot of cases people will say, “Hey, I listen to what you’re talking about, and I have to admit, I’m not a very curious person. You give me a problem, I’m on it dog on bone. I’m going to make this thing happen, and that’s great, but I don’t think about, ‘Well, what does my peer do? What does this other group do? How are we working together to create this outcome?'” And you can see that if you had an organization that had those kinds of attributes and then learning, “Okay, today we’re product focused, tomorrow, we’re going to be outcomes focused,” you can see how having the right kind of mental model and attitudes within your people can make that transition really a lot easier or a lot harder.
Sarah Nicastro: Yeah. I think you’re absolutely right. And that goes back to the point you made about this is all about people, right? I mean, that is the key thing here. And there’s a lot of different enablers, there’s a lot of different do’s and don’ts, but your success or failure really comes down to who you have as a part of the journey.
Sarah Nicastro: Okay. Well, this is a lot of great information, a lot of good food for thought, and I’m sure there’s a lot of other things we could dig into, so perhaps we’ll do it again in the future. But for today, Scott, any other closing comments or words of wisdom that you want to leave the listeners with?
Scott Weller: In storytelling, it’s thought that really there are only a few unique themes, like coming of age, or good versus evil. One of them is about courage and tenacity, perseverance. And I would say that that is the theme of moving to as a service and outcomes. You have to have courage, or some small group of people have to have the courage to think differently, to put themselves out there a little bit, to champion the cause, to fight the good fight to stay with it through and through, and those kinds of people are hard to find. It’s much easier to play it safe and let somebody at the top of the company make the big decisions. And so, if anyone is listening to this that’s at that point where they’re ready to put themselves out there for something they believe, just go for it. It’s well worth it, and you can, as we did back at HPE, you can literally change the direction of the company.
Sarah Nicastro: Yeah. No, that’s really good advice, and I think you’re right that those people are hard to come by, and I hope the companies that have those people understand the value of those folks, right, because it’s a huge asset. So, thank you for that, Scott.
Sarah Nicastro: Scott Weller, Mossrake Group. You can find Scott and Mossrake Group on LinkedIn, if you want to check out a little bit more about what they do and how they work with different folks that are on this journey. So, thanks again, Scott, for coming on and sharing your wisdom.
Scott Weller: My pleasure. Thanks, Sarah.
Sarah Nicastro: You can find more content by visiting us at futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter @TheFutureOfFS. The Future of Field Service Podcast is published in partnership with IFS. You can learn more about IFS at ifs.com. As always, thanks for listening.