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September 29, 2021 | 21 Mins Read

Darren Roos on the 2021 Gartner Magic Quadrant for FSM

September 29, 2021 | 21 Mins Read

Darren Roos on the 2021 Gartner Magic Quadrant for FSM

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Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. I'm joined today by Darren Roos, CEO of IFS, to talk about all things service and reflect a bit on the most recent iteration of the Gartner Magic Quadrant for Field Service Management. Darren, welcome back to the podcast.

Darren Roos: Thank you, Sarah. Thanks for having me again.

Sarah Nicastro: Yes. Thanks for being here. It's been another exciting year in many different ways and this marks the sixth consecutive year in a leadership position for IFS on the Gartner MQ for Field Service Management furthest for vision. How are you feeling about the MQ this year?

Darren Roos: Look, Sarah, we're incredibly committed to our customers and we've worked tirelessly with them building capability that's important for them to be able to run their businesses better. When we see that recognized in the MQs, it's obviously very satisfying. We have a team that's constantly thinking about what additional value we can make available to our customers. They're out there talking to customers, their challenges, day in and day out, and that means that we have a very open communication channel, the customers talk to us and that's reflected in our vision position. So, very proud, but it's a reflection, frankly, of the work we do with our customers and then that MQ is a by-product.

Sarah Nicastro: Yeah, absolutely, and reflecting on the last year, I know everyone's very tired of talking about COVID, myself included, but it is just an undeniable part of our reality. I will say that not being able to change that fact, it's made me very proud to be a part of IFS both in how you led the company to handle the impact of the pandemic internally, so the culture we have, and then also how we've banded together to help our customers in various industries, various regions handle the complexity that was thrown at them. When you think of the internal and external experiences of the past year, what comes to mind for you?

Darren Roos: Look, I think the key... First of all, thank you. It certainly didn't feel easy going through it.

Sarah Nicastro: It wasn't. That's a fair assessment and it still isn't, so yeah, for sure.

Darren Roos: I mean, that's a good point. I think, first of all, it's not over. Not only is COVID not over, but the repercussions and consequences of the decisions that have been made by governments and companies over the last 18 months will live with us for likely decades to come. At IFS, it was really about communication both with our employees, with the leadership team and then also with our customers. But if I just start with the internally, I was running these monthly fireside chats with the whole company, as you know, it was really about increasing visibility and giving people the opportunity to talk about what was on their minds, what were they concerned about. From an IFS perspective, the direction that we took, as you know, was to make sure that we protected jobs. I didn't want to be in a situation where we were having to make people redundant during COVID when they would be at their most vulnerable.

Darren Roos: Job security was my number one priority. And then, in reality, the business continued to grow and our customers saw value in what we were doing. In that dialogue with customers, immediately became apparent that there were ways in which they needed us to change what we were doing to be able to navigate these wild fluctuations in demand and work circumstances, so different demand and different work circumstance. Can we take a couple of examples of that with, for example, the technology like our IFS Remote Assistance, with Munters, they needed this remote assistance capability urgently to continue to run their business. We did the initial deployment in just six days and now we're expanding that remote assistance globally where we'll finish the full roll out globally in the next couple of weeks, and that includes build technicians, third line support who are using the solution on their existing mobile devices.

Darren Roos: We also had experts guiding customers and people internally on the opening of new production lines, for example, in their manufacturing facility in the Czech Republic. So, crazy levels of innovation within the business, but really rapid. That was capability that we had, but frankly, we just hadn't been as much demand, but because we had this dialogue, we were able to identify areas that we could help customers. So, that's one example. Panasonic was another one where Panasonic heating and cooling systems had been piloting remote assistance in the UK and in Germany. The feedback was overwhelmingly positive. Super interested in the technology throughout Panasonic and, in the pilot, it's super interesting how you learn new things that in addition to driving service consistency by having this remote capability, it also enabled them to capture and transfer knowledge while retaining technical insights that they just didn't have before that they're now used to educate and upskill their workforce.

Darren Roos: Just everything that we're doing has changed but it comes down to communications then close to our customers, close to the employees and finding ways in which we could help employees and then help customers.

Sarah Nicastro: Yeah. When I think about the communication side, it's a lot of honesty. I think about those fireside chats and that's one of the things I liked about them is you weren't pulling any punches, there wasn't this facade of everything's great guys. I mean, it was an acknowledgement that, "Hey, this is a really hard experience for us all to go through, and let me try and tell you as much as I know about the current moment, knowing it's all probably going to change again before tomorrow." I think, in the same way, our customers had to get very honest with us. Munters, for example, they had this on their roadmap, but just to your point, hadn't been an urgent priority. It was something they were prioritizing a bit ahead. The idea of them calling IFS up and saying, "Hey, we need this, but we need it right now," and being able to say, "Okay, what do we need to do to adapt internally to be able to boom? If this is going to help them, let's get it done." The speed of that is full.

Sarah Nicastro: But also, I don't want to say things have normalized. I just think, what does that even mean? I mean, that's a whole different conversation, but what's cool about Munters and another example is Alfa Laval. They also turned to remote assistance for business continuity, but they are evolving that use as the business needs change. Where it was we cannot travel, we need a way to do remote service as our lifeline, once travel became an option again, it's not we don't need this anymore. It's great. This is awesome. We have it. How do we evolve its use to become a part of our service delivery and our overall strategy?

Darren Roos: It's a great sustainability angle there also which every company on the planet today is thinking about ways in which they can reduce their carbon footprint by which they can run their businesses more sustainably. Travel is a huge carbon polluter and I don't know a single executive that doesn't have this on their agenda today and finding ways, as you say, in which they could sustainably change that dynamic of travel is huge. Massive. For people who aren't in service, you think about travel as transcontinental travel. But when you have thousands of tens of thousands of technicians that are driving around in polluting vehicles and historically the narrative would have been, can we convert these to electric, and now all of a sudden, because of COVID, you actually know you can do this remotely, that's a massive benefit and we definitely see loads of examples of that.

Sarah Nicastro: Yeah. It's a super good point. I mean, I've had a lot of conversations just over the last few weeks, one with Bureau Veritas, one with Tetra Pak, one with the Advanced Services Group at Aston, all around the shift people seeing in sustainability being a key factor to the driving factor in a lot of these decisions, technology investments, et cetera. I think that there's conversations I've had around the goal isn't all service be remote service, but when you're sending technicians out in a truck to drive however many hours or miles or kilometers, and for them to just say, "Yep, I went to figure out what's wrong, didn't have what I needed to fix it so I'll go back next week." You know what I mean? The idea of how much of that that is inefficient and unnecessary that can be eliminated is just astounding. Okay. It's been a crazy year and a lot of it has been challenging, but there's been a lot of good things going on too.

Sarah Nicastro: When it comes to the momentum that IFS has internally and related to service, we have not slowed down. We've just kept full speed ahead and then some. Can you talk about, you know, some of the highlights of the last year that I'm sure have had a big contribution to our leadership position?

Darren Roos: Yeah. Look, again, thanks to our customers, we've experienced a fantastic growth, significant growth in service management in particular, 2020 was another triple digit growth year. We demonstrated agility as we responded to these crazy needs that we just talked about in the way the market changed in providing solutions that were more relevant to customers and help them keep the business on track. We didn't just hunk it down and this year we are continuing the growth and transformation plan. We're completing our own digital transformation by implementing IFS cloud within our own business. We obviously have Clevest having joined the family in the utilities service management and asset management space, Axios in the IT service management space and Customerville customer satisfaction surveys, and those are just three of the acquisitions that we've done over the last 18 months. They're all connected by our goals to support companies as they evolve their own business towards servitization.

Darren Roos: We fully relaunched the IFS branding and our new product, IFS Cloud, obviously has come to market. In fact, we're coming up to the second release already now in October. Customers can see that this is why they're choosing IFS and providing the most incredible feedback to analysts like Gartner, et cetera, and others as we see in the MQ.

Sarah Nicastro: Yeah. It's funny, I was thinking one of the calls I was on this morning, someone says, "How's it going?" I'm like, "It's insane." The pace is crazy, but for me, it's energizing. I think that all of these things are very visible in the industry as to what is going on behind the scenes and it's fun and it's exciting, and it's all to your point geared toward what is the best value we can deliver to the customers, what do they need, how do we continue evolving to meet those needs and I just think that that's really cool.

Darren Roos: I think if I can comment on that. Every business leader deals with this challenge of change management. We are compelled to continue to evolve the business. There's a great Jack Welch quote around the pace of change in a business. Effectively, he says that when the pace of change outside the organization is greater than the pace of change inside the organization, the end is near. I think we can all relate to that. Even COVID aside, the landscape around if we think about the topics that we're talking about here, technology and servitization, they are rapidly changing. If you are static and you're not evolving, then you will not be competitive and you will likely not exist. But, the counterpoint to that is that people are naturally resistant to change. Employees don't want to be doing something different all the time.

Darren Roos: It is difficult to continuously train people and make them aware of new technologies and new capabilities. It's difficult to continuously evolve and change your business model. These are tickets to the game today and I think it's the organizations that have embraced technology to support the business, that have an appetite to change and evolve that are the ones that are most likely to succeed. It's the old Darwinian Theory of Evolution. It is the ones that evolve that survive, and that's what we're seeing. During times like this, that pace of change is much quicker and therefore much more difficult to manage.

Sarah Nicastro: Yeah, I haven't shared this with you, Darren, but I've tossed around the idea in my head multiple times and at some point I'll get to it. It's just something that would take up some significant concentration, but the journey that you've been on for the last three years at IFS, three and a half, and the journey that a lot of our customers are on in service really parallels one another in a lot of ways. This idea of disruption and innovation and change, and how do you modernize a company culture, and how do you put people at ease and bring people along on the journey and equip them with the training and knowledge they need and all of those different things, I mean, there's a lot of what we are going through as an organization that gives us a real sense of empathy for what our customers are going through as they face a lot of that same thing.

Sarah Nicastro: The shift to servitization or outcomes-based service or advanced services, I mean, it is a foundational shift in how a company does business and it's far bigger than just technology or just focusing more on service. I mean, there's layers and layers of everything that has to evolve. I think it's an interesting parallel that I'd like to explore a bit more at some point. Okay. One of the other things that was introduced in the last year is IFS's messaging around Moment of Service. I absolutely love this messaging. Tell me a little bit what that means to you as it relates to us and how we serve our customers.

Darren Roos: When the idea was initially pitched to me and as you probably know, Sarah, we didn't hire an agency to do this. We got a focus group of employees together, people that we felt were at the right mindset to be able to shape where we would go in the future and they did a load of work, and then we came up with that Moment of Service messaging. When I heard it the first time, it immediately resonated with me because what we recognize is that every single one of us understands the concept of the Moment of Service. We've all, whether it's buying a car and having that delivery, or whether it's having the, I don't know what you guys call it in the U. S., a boiler or geyser, the thing that makes hot water break down and then call a service company and the technician arrives, and you've got hot water again to stick the kids in the bath. We've all had that moment of service. The next step is appreciating and realizing that every single business has moments of service. When you're able to shape a business by helping them to create outstanding moments of service, which is what we do, it's the reason we exist, is to help businesses in the industries that we operate to orchestrate the parts of their business, their assets, their people, their customers, to orchestrate those to create outstanding moments of service.

Darren Roos: That's a fantastic thing to be able to do. When we think about the ways in which we've built out technology and the acquisitions that we've made with customable, being able to listen to our customer's customer at that moment of service and validate that we've given an amazing moment of service is really important. A lot of people think this is about us offering outstanding moments of service. Of course, that is important, and we measure our moments of service. Much more importantly, this is about how we help our customers create outstanding moments of service for their customers. They can be no doubt that if you stay close to your customers and you can create those amazing moments of service, then you have a sustainable business model. That's simple.

Sarah Nicastro: When I first heard this message, I immediately saw in my mind moment of service, but the word could rotate. So, moment of impact, moment of opportunity, moment of differentiation, moment of influence. There's all these things that that moment represents for businesses both that are trying to really optimize and protect and master that moment, but also those who are looking at how to evolve and innovate what that moment means for their business. I just think that I love the term because I think it can represent so many different things and is just super, super important, and really reinforces the really immense power that the frontline worker has in helping you carry out your service objectives, which I think is a whole another topic that's super important.

Sarah Nicastro: Okay. I realize I'm a service nerd and probably get a little bit overly excited about all of the potential and innovation and opportunity, but, trust me, I didn't think I would be here either. When I started and didn't know what field service was, I certainly didn't envision myself 14 years later being still fired up about this stuff. But, I think it is something that I get really excited about because I think that we've only just begun. Both IFS, I truly believe, and also the innovation and the evolution and transformation that's taking place, you know what I mean, we're there, but we've really only scratched the surface of all of the potential. Looking at the future and all of that opportunity, what do you think you would list as our biggest strengths and differentiators for helping our customers really seize that service opportunity?

Darren Roos: There's a few things I would talk about here but let me just start by saying that I agree a hundred percent. I think that we are at the beginning of a very long continuum of service improvement and artificial intelligence and machine learning, and next generation analytics, IOT, all provide for provide incredible opportunities for us to significantly improve what service means across virtually every industry, and anyone that asserts that it's just about the human touch, just doesn't understand it at all. There is so much that we can do and ways in which the insights and technologies that are available to us today that simply weren't available in the past, it really changes the game. So, the key things though, the ways that I think IFS specifically impacts the service capability is, the first thing is that orchestrating this capability across an organization, I said earlier, customers, assets, your employees is incredibly hard.

Darren Roos: What's happened in the IT industry over the last decade, particularly, is a massive fragmentation of that IT landscape. If you go back further than 10 years ago, we had quite large monolithic systems that were integrated single data model, single UX, and that in some ways, while it was clunky and it was slow move, it was integrated at least. At least you have the idea of a single view of those three elements, customers, assets, people was potentially possible. With the advent of cloud and the fragmentation of the IT landscape, nobody's solving that, there's no standards, which means that the complexity of integration falls to customers and that is incredibly difficult to do. The first thing is that IFS cloud is one single solution and it supports this idea that we can provide a single view of our customers, single view of service, and enable customers to orchestrate these reports. However, we recognize that not every customer is going to start from scratch.

Darren Roos: Not every customer wants everything from IFS, and therefore we approach it from a very integration centric, API centric approach supporting the idea of a composable enterprise, but whereas, idealistically, you want to be able to do that with 50 disparate applications, one for HR, one for procurement, one for travel and expense management, one for service, one for finance, you can carry on forever. That's not really practical unless you're in an enormous company and you have thousands and thousands of people in it. What we give customers the ability to do, and this is the most common use case for us is that they will run a chunk of their business on IFS that might be asset management and field service management, it might be ERP and field service management and ITSM, it might be ITSMs and service management, but at least we give them the ability to have this platform on which they can then add on other things. So, that single solution is incredibly important.

Darren Roos: Next thing, and I touched on the role of innovative new technologies, digital twins, low code development environments, embedded analytics, artificial intelligence, all of these are capabilities that we bring to the customer natively in the platform. This is newer technologies that many customers that perhaps are a little bit less sophisticated are saying, "You know, how do I leverage artificial intelligence or machine learning or IOT or digital twins in my business when I don't have a thousand people in it. And I don't have a budget of billions to go and do a massive POC." We bring that capability in a very pragmatic way to our customers today. So, single platform innovation embedded, not attached, embedded. And then the third thing is choice where we offer customers the ability to deploy either on premise or in the cloud. We offer them choice around who deploys.

Darren Roos: It could be us; it could be one of many partners, and we've worked very hard across those elements to provide customers choice, not being overly prescriptive, not saying you're going to have it in the cloud, you can't configure this application beyond the very tight parameters that we've given you and you're going to take an upgrade every year or plus a year, et cetera, et cetera. That's not the way we think about it. We offer them choice because we recognize the complexity of that heterogeneous IT landscape and we're not saying we're going to be overly prescriptive. I think those are the three big things, choice, innovation embedded and single platform to reduce that complexity of integration.

Sarah Nicastro: It's interesting. Our customers are all very heavily focused on improving their customer experience, and so when I think about the fragmentation you described, the first thing I think about is all of the failure points that that surfaces for areas where they are likely to drop the ball on their customer experience. This idea of more cohesiveness and simplification, elimination of unnecessary failure points, all of those things are so, so important and I just want to urge listeners, I don't know the number off the top of my head, but I did a podcast interview with Pekka from Cimcorp who is leveraging IFS Cloud and the insights he had on their more modern IT strategy were just spot on, I think, in where people need to head to. I certainly would recommend anyone go listen to that. Darren, I have two more questions and I know we're almost out of time, so we'll try and keep them really brief. Six years and running as a leader in the Gartner Magic Quadrant for Field Service Management, what is going to be the key for us maintaining that status?

Darren Roos: Look, I think I'm actually going to go back to something that you said now and answer a question that I'd rather answer here than that one because maintaining that status actually for me, is not an objective. Making sure that our customer is happy is an objective that I'd want to maintain, but you touched on this voice of customer and the customer satisfaction, and how do they make sure that their customers are happy. Actually, I think it's a pretty simple equation. For me, and I'll use IFS as an example as a company. We run IFS. We also run a host of other applications because IFS doesn't do everything. We run a very heterogeneous application suite. Everything's in the cloud, everything's integrated. The way we think about it is that we offer moments of service to our customers and we've identified, I think it's seven or eight different areas where we provide and we endeavor to provide an outstanding moment of service to our customer.

Darren Roos: That could be, if we just think about our business, during the sales cycle, it could be when we respond to a request for some work, when we're in the implementation phase, when we go live, et cetera. There are these moments of service and what are the critical things that we've done is that we've leveraged Customerville, which we now acquired, but prior to acquiring Customerville to listen to our customer's feedback at those moments of service, and now we know whether we're doing well. I think it's a much simpler equation. I think, just going back to your question of this complexity is that every business leader goes, what are the moments of service that I provide and am I listening to my customers at that moment of service to know whether I'm doing a good job or not?

Darren Roos: If I'm not, let's get real-time feedback so I can fix it. And then, we have the capability to orchestrate the bits of the business that I need to fix it. Not as complicated as many people would make it out to be. I think we provide that capability, but I think technology aside that for me is got to be the aspiration. That only anyone's going to argue that whether you're building carports or whether you're a pest control company killing bugs, or whether you're a mining company, you all have a customer and every one of them is trying to delight their customer. If they offer their customer outstanding moments of service, then they will get more customers.

Sarah Nicastro: Yeah, absolutely. All right. Last question, Darren is, in this wild, challenging, but also exciting last year, what's the biggest lesson that you as a leader have learned?

Darren Roos: We touched earlier on the communication and I think, historically, I've relied a lot on my ability to get out and see people face to face and meet them and get to know them, and all of a sudden that luxury wasn't there. I think that it became incredibly important for me to be able to make it clear where are we today, where are we headed and how is each person expected to help us get there. There's a few different dimensions to this. There's clarity for everyone and where we are, there's clarity for everyone on how we get there. Everybody has different roles though. It starts to become quite difficult on how do you make sure that you're communicating effectively across the various functions of the business, how somebody makes a contribution. But, we did a lot of this. We did a lot of talking. I think we've got to the point where I was pretty sure people were tired of hearing from me, but it was very important to me that we over communicated and that everybody understood the role that they would play in taking IFS to where we were going.

Darren Roos: In the feedback that I've had, it's proven to be more important because people were suffering with mental health issues, people were struggling with the fact that they couldn't get out there, almost caged, and the fact that they had a sense of importance, that they understood the role that they would play, that there was a bigger cause underpinned by this job security topic that I spoke about right at the beginning really made a difference. Frankly, I was just trying to figure out how to do it. There was no genius involved. I think I got lucky. I had a great leadership team that, together, we coached each other through it.

Darren Roos: One thing I would add, and I'm not just saying this for effect, but I learned more from our customer CEOs than anybody else. I continue to talk to our customers. Many of them shared fantastic ideas of how they were responding to the crisis. In fact, our initial actions when we responded and what we did right out of the gate was based on a customer that I spoke to and some guidance that they offered me on what they were doing. So, really appreciative to everyone who shared their ideas with me. That was the big thing, super communicate, over communicate, make it clear where we're going, have people understand where they are now and how they can individually contribute.

Sarah Nicastro: Yeah. I love that illustration of the power of community, and how you're connecting with them and taking just as much from those interactions as you're trying to give. I think that's really cool. Darren, thank you so much for your time. I really appreciate it. Thanks for being on. You can find more on all things service at www.futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter @thefutureoffs. The Future of Field Service podcast is, of course, published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

September 27, 2021 | 3 Mins Read

It’s Time for a Mental Health Check

September 27, 2021 | 3 Mins Read

It’s Time for a Mental Health Check

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By Sarah Nicastro, Creator, Future of Field Service

Let me start by admitting a few things. I’ve been struggling lately – not every day, but a good amount of the time. I feel overwhelmed by inputs and decisions and stresses and underwhelmed at my options for turning any of it “off.” I feel a bit numb, almost like I’m watching myself do all of these things from a distance. Don’t get me wrong, I am not unhappy – I love my family, I love my work, and I have so much to be grateful for. But after two-under-two followed by a child diagnosed at age three with Type 1 diabetes followed by a global pandemic, I am more than a bit burnt out.

And here’s the thing, I think we all are. Yet it’s becoming harder to talk about mental health in the context of our current landscape because, well, what the hell do we say? The check-ins we all had early on in the pandemic were sprinkled with statements that perhaps we then believed, like “We can get through this!” or “The silver lining is…” or “When this is over…” No one wants to hear it anymore, myself included. Because eighteen months into this, platitudes are nothing but frustrating. But we’re still struggling, in fact many of us are struggling more. Chronic stress for a year and a half will do that.

Silence Isn’t the Answer

This is a major challenge when it comes to talking about mental health – we often don’t know what to say, so we don’t say anything. But silence is not the answer, and it is time for a mental health check. How are your work-from-home employees feeling? How are your frontline workers holding up? How are your peers faring? How are YOU? You don’t have to have a perfect response to ask a genuine question – in fact, you don’t have to have a response at all. Just listening helps. Alternatively, you don’t have to be asking any questions – you can simply share. Being honest about your own feelings encourages others to do the same.

I was talking with a connection last week and when we got onto Teams and exchanged “how are you’s?” we both sort of just shrugged. Once we got talking, we each opened up about how we’re feeling. How we are struggling at times, but then feel guilty verbalizing any of that struggle because we know many are struggling more. How we feel like we have to maintain an image of strength, for our families and our colleagues, even when we really need a break from being “tough.” It was an honest, vulnerable conversation – and it felt so good. It was the catalyst for writing this because I think that as the pandemic has gone on, we’ve become less communicative about this critically important topic.

So, I urge you, speak up and speak out. Talk to your people, check in on them with sincerity. Don’t worry about knowing how to respond, just focus on being present. If you aren’t comfortable asking the big questions and aren’t getting any more than a surface-level response with “how are you?” try to incorporate some small talk into your interactions to allow folks to feel more comfortable getting personal so that they can open up if they need to. And if it’s you that need to talk, don’t underestimate how much it might help both you and those around you to be the one to share. Please also know that I will always gladly make myself available for connection, camaraderie, and solidarity – reach out anytime.

September is National Suicide Prevention Month in the U.S. Please find resources and help here: https://suicidepreventionlifeline.org/

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September 24, 2021 | 3 Mins Read

The State of the Service Workforce

September 24, 2021 | 3 Mins Read

The State of the Service Workforce

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By Tom Paquin

This is part of an ongoing series of articles about the current State of Service going into 2022, along with the contributing elements that have and will continue to impact the industry in the years ahead. Read this to get caught up:

The service workforce has been a fraught topic since years before the pandemic. Even back in 2018, service employee turnover was nearly 50%, meaning new training, aging employees, and job vacancies that sometimes remained unfilled for years.

And COVID-19 has certainly not improved situations, with an estimated 1 million more jobs than job seekers today. We’ve felt the impact of this in every sector, and service is by no means immune to these challenges. Taking manufacturing alone as a benchmark, the US Bureau of Labor Statistics estimates that job vacancies have more than doubled. We knew that this ramp-up was coming, but I don’t know that we were prepared for the secondary effects that COVID would have on the labor market.

Hiring for technical trades was already a challenge, but today, the challenge is doubly exacerbated by retraining, changing employee wants and expectations, and shifting business priorities. Businesses are increasingly closing the windows on their ability to hire their way out of labor shortages, as apprenticeships and other incentives can’t keep up with the pace of churn.

Because of this, businesses are rightly rethinking service from top to bottom, to support their current employees, attract more talent, and do more with less, sometimes next to nothing.

Doing Something with Nothing

Remote Assistance is now well-tread ground around here, so there’s not much of a surprise that RA utilities can do quite a bit to paper over an overextended staff, and permit less seasoned workers in the field tap resources in the backoffice in real-time.

An alternative to that is the inverse—put less tensured employees in front of a computer where they have their full reference library, and have them work through step-by-step repairs with on-site customers to resolve issues. Individuals are much more amenable to managing their own destiny, so in many respects, as little as a skeleton crew with minimal training can get a service brand through lean times. Yes that might seem like an extreme scenario, but for manufacturers, it might end up being a more viable option as organizations move away from repairs altogether.

The Death of Repair

We know that, on top of workplace challenges, businesses have an incentive to maximize the remittance of materials to their original point of origin. Here’s how I described it in the linked article:

So—if manufacturers are incentivized to invest in the circular economy, that means a couple of things:

  • Manufacturers are going to want parts to be reasonably intact upon extraction from a product
  • Manufacturers are going to want parts and products back as much as possible
  • The act of repair will, in many circumstances, be eclipsed by the act of remanufacturing goods into wholly new items

The first point here hinges upon a simple premise: Manufacturers are going to focus on increasing not only quality control, in order to mitigate repairs, but part modularity, in order to make the act of repair itself a different type of process. If, for example, you need to replace a shock absorber in your washing machine, rather than 3,200 proprietary screws, if the part’s locking mechanism is self-contained, it can easily be removed and replaced.

Making parts easier to replace also means less actual service appointments. Why? Because easier parts means easier on-site service. When things break, manufacturers can ship parts to customers, and provide the packaging to allow the broken part to be shipped back to the manufacturer, thus keeping it in the circular manufacturing loop. Add in tools like remote assistance and even moderately complex jobs can be completed without a truck roll or a local tech.

This reflects yet another avenue for organizations to consider when grappling with a reduced workforce, one that has the added benefit of lowering overhead costs for manufacturing, and allowing businesses to recoup resources from themselves, thus changing the nature of new, and building a more sustainable world. A real win-win.

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September 22, 2021 | 27 Mins Read

Bureau Veritas Takes Charge of the Future of Work

September 22, 2021 | 27 Mins Read

Bureau Veritas Takes Charge of the Future of Work

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Sarah Nicastro: Welcome, to The Future of Field Service podcast. I'm your host Sarah Nicastro. Today, we are going to be taking a look into Bureau Veritas's take charge approach to the future of work. I feel like every second or third headline you read in the news today is talking about what the future of work is going to look like and it's a conversation that is top of mind for many of our listeners. I'm excited to welcome to the podcast today, Maggie Laureano, who's the Vice President of Human Resources Americas at Bureau Veritas. Maggie, welcome to The Future of Field Service podcast.

Maggie Laureano: Thank you so much, Sarah, and I am really delighted to be here. Thanks for the invite.

Sarah Nicastro: Yeah, thanks for being here. Okay, so before we dig into the topic at hand, tell our listeners a bit about yourself, your background, and your role at Bureau Veritas.

Maggie Laureano: Great, I'm happy to do that. So Sarah, I'm going to go back a little bit in time and so while I'm a resident of Florida now and have been for a number of years, I'm originally from New York, New York City. And went to college at Fordham University where I fully expected that I was going to, beyond my undergraduate in psychology, I fully expected that I was going to continue into a masters and potentially a PhD and be a psychologist or at the very least a therapist. And after I got my undergrad in psych, I decided to take a year off and get some experience under my belt, and then go back to school. Well, P.S., I won't tell you how many years later, but I did not go back to school and my first job out of college was as an HR Assistant at a bank. As you know, New York City is ripe with all kinds of financial service organizations so that's kind of where my career started.

Maggie Laureano: Unlike most people coming out of college where typically you spend just a few years in your first job, I actually spent about eight years at that Hearst organization and the reason I did so was because I was given an incredible amount of opportunities to learn, and grow within in HR, and do different things. And so within that eight year span, I started as an HR Assistant, I moved into benefits administration, I worked in payroll, I did recruiting, I did employee relations, I did training facilitation, and so really I got a really, really good foundation. And I think part of that, Sarah, was I was very inquisitive and so I would ask a lot of questions, I wanted to know about what that area did, what the other area did, and so I think my manager at the time was really impressed with that intellectual curiosity and I was given lots of opportunities.

Maggie Laureano: But after that, I evolved into or I moved into other roles in HR at other financial institutions also in New York and then I transferred to Florida. Throughout my career, in financial services in particular, I was really a generalist most of the time, but I did have stints where I was in a recruiting function or in an employee relations function and I managed those two functions as well in different companies. And then in 2006, I transitioned to logistics. I worked with DHL for a couple of years and then after that I moved into aviation with Embraer and I was with that company for 11 years. And then in 2018, I came to Bureau Veritas and the one thing about human resources that I have found is that it's a very transferrable skill and you can learn the industry, you can learn your internal customers, and the business that you support because really the skills that go into HR you can apply in any industry.

Maggie Laureano: And the other thing that I love about being at Bureau Veritas is the ability to really help transform the HR function, which I'm happy to go into a little bit, a little bit later.

Sarah Nicastro: Mm-hmm (affirmative). Cool.

Maggie Laureano: But that's a little bit about me and my career.

Sarah Nicastro: I love it. Okay, and real quick before we go on, for listeners that maybe aren't familiar with Bureau Veritas can you talk a little bit about the organization? You guys have a very cool video that I've come across and I'm going to see if I can find the link to it to put in the show notes because it talks about how many interactions with Bureau Veritas happen in a day, but people maybe don't recognize the brand by name. So can you give folks a sense of what the company does? [ view video here: https://www.youtube.com/watch?v=s9Sq4YvXnO8]

Maggie Laureano: Absolutely, and you make a great point and I'm happy to just talk about that video a little bit more because I love it. So Bureau Veritas is about a 200 year old company that started Europe. It is actually headquartered out of Paris and it started in the marine industry. And over the years, it has expanded to much more and we are a leader in testing, inspection, and certification services. And so when you talk about that video, Sarah, that's one of the things that I loved when I was going through the interview process with Bureau Veritas, watching that video and it was so eye opening because it takes a gentleman through the entire day from the time he wakes up, to taking his daughter to school, driving to work, picking up his coffee, going into his office, and then on, and on until he returns home in the evening and you have these pop ups throughout the video that show all the different touchpoints.

Maggie Laureano: And so Bureau Veritas inspects food, it inspects toys, so think in a McDonald's Happy Meal for your kid, as a matter of fact, I use extra virgin olive oil and when I was interviewing for BV I saw that it was inspected by Bureau Veritas. But we also do a lot in the infrastructure space, so for example here in North America we have contracts with municipalities, with different cities where we certify that their building codes are up to par, where we certify and inspect bridges, we do elevator inspections. We're into the energy sector now and of course, oil and gas is a big part of our business. Yeah, it's really... We are the company that, especially in North America we're not very well known, but a company that really touches all of our lives without even us realizing it.

Maggie Laureano: And we're built on safety and that is one of our absolutes, safety and ethics, which are critically important because we provide services to our customers that they must rely on our expertise that we provide, and safety and ethics are clearly very, very important in what we do.

Sarah Nicastro: Mm-hmm (affirmative). Now, to give people a context for the size of the organization, how many employees do you have either globally or specific to North America?

Maggie Laureano: Yeah, so I'll give you both, Sarah. So about 75,000 globally and in North America we have about 6,300 and that is primarily in Canada and the U.S., but we also have operations in Mexico and in the Caribbean.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, so you might not know the Bureau Veritas name, but you have undoubtedly interacted with something the company has inspected or something along the way, so I'll see if I can find that video and put it in the show notes.

Sarah Nicastro: Okay, so in researching for this episode, Maggie, what stood out to me is that you get stuff done. I think that's likely the New Yorker in you, but the other thing that I want... So what I wanted to kind of talk about is, you get things done, right? But sometimes taking real action isn't about what's fast or what's easy to tackle, but digging deep and understanding how to make the biggest impact. So we're going to talk a little bit about when you joined BV and you realized sort of the talent shortage and some of the things that are facing not only your company, but the industry at large. We're going to talk about that, we're going to talk about some of the steps that you all have taken to address that challenge, but before we get into sort of the tactical conversation I'd like to just talk for a moment about this balance of depth, and speed, and why taking shortcuts often doesn't pay off.

Maggie Laureano: Yeah, sure and it was a really interesting experience for me, Sarah, because having come into this role with a million years of experience, I don't even want to think about how long it's been, but I've been in HR for a long time and I have seen what works and what doesn't work. And so I came in with my own preconceived notions of how I would have wanted to set up the HR organization and the types of things that we could do to impact the employee experience and that sort of thing. But one of the most important things, I think, for any HR professional is to really get to understand your company, and your internal customers, and their business, and how do they make money, and what's important to them, and that sort of thing, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: And so in doing that what I realized was that I couldn't just jump in and make the changes that I thought would be impactful and important. I really had to step back and listen to my customers because they were in different places. One of things about BV that is kind of neat, it's a very entrepreneurial organization and so it's not the kind of place where one size fits all and where you can dictate okay, this is what we're going to do and every business is going to do it. And so for me, that digging deep and spending time meeting with my internal customers, getting to understand their business, getting to understand their needs, helped to inform how I was going to make changes because whereas at other organization where I've worked I had the ability to make kind of a blanket change for all, at Bureau Veritas it just did not work that way. And had I done that, I would have failed miserably.

Maggie Laureano: And so I think my lesson there was you need to listen, you need to understand, and even though you may come to the table with expertise and experience that you can offer, but it needs to fit I guess is the best way I can say it. It needs to fit. So I've been at Bureau Veritas now for almost three years and the things that we do, what I like to do is provide a framework for my internal customers that kind of an umbrella approach, right? So these are the minimum things that we will do, but certainly each business leader has the ability to customize it further to fit their needs.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, that makes sense and I think that's really good advice not specifically to anything to do with HR, but just for leaders in general that are seeking to make change within a business, right? And what I liked about how you described it, and this is where you can tell that you took that time and you did that digging with the right intention, because you said you used what you learned to inform your strategy and your plan not to pacify people for whom you were going to change something, right? And so I think when you start to talk about leading through change and the need to understand internal stakeholders, I think one of the mistakes that gets made is really related to intent, so some people kind of take certain actions, listening, getting feedback, talking to check a box rather than to actually consume that perspective and let it, like you said, influence what the plan is going to be. Does that make sense?

Maggie Laureano: Yeah, it makes absolute sense and if I had taken that approach of listening just to check the box, like I said, it would not have been successful. And as I said, the business, we're a very entrepreneurial organization and it just would never have passed muster, if you will.

Sarah Nicastro: Mm-hmm (affirmative). So there's a couple themes that I want to talk about before we get into the specifics of the talent shortage and what you have done about that. The first is kind of what I just mentioned, which is this authenticity, right? And so in some of the articles that you've been a part of that I read prior to our interview, you talk about the importance of communication, which everyone talks about, but there is this level of emphasis on honesty and authenticity that you have. And I'm hoping you can just speak for a moment about how that helps you build trust, how that helps you make connections with your workforce that have a big impact when it comes to engagement and retention, which is part of the equation of this talent shortage, right?

Maggie Laureano: Absolutely. And Sarah, to me, communication in the workplace and with our employees is no different than communication in a person relationship, right? It needs to be honest, it needs to be genuine, it needs to be transparent, it needs to be two way, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: And so I bring that same kind of philosophy to the work place and my brand, if you will, my personal brand is important to me and I don't ever want that to be tarnished by someone thinking that I've lied, or I've led them astray in any way, or that I'm hiding information. Now, to be clear, there are things organizationally that you just cannot disclose to employees, confidential information or what have you, but short of that I think open and honest communication is critical. And as an example, and I'll come to Bureau Veritas in just a minute, but in my prior organization I used to host town halls probably on a quarterly basis and it was my CEO and myself that would kind of partner to do the town halls. And over time, I mean I was there for 10 years, and over time the respect and the trust that I had from employees and the things that they would come to me with absolutely astounding and it was because they knew that I was going to tell it like it is, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: They knew that I wasn't sugar coating the message, I was going to be very direct and honest with them. And I've brought that same approach to Bureau Veritas and the pandemic, 2020 was a perfect example and not just myself, but also our CEO, Natalia, and some of our other leaders we hosted town halls with pretty difficult messages to the employees and we were always very honest about the message. There was hope in the message despite some negativity that might have been included, but there was hope and then there was always follow up, right?

Maggie Laureano: And making sure that if we were taking an action we would then follow up and talk about how it was going and if we were going to change directions. And the other piece is getting feedback from the employees is really important, how are they feeling, what are they thinking, what's important to them, so again, Sarah, I go back to it's no different than a personal relationship. If it's going to work, it's got to be authentic, honest, transparent, and really it's got to come from a good place.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. I think that's an important point and the other point before we talk a bit about how to bring in new talent is... The other point that I wanted to talk to you a little bit about is the importance of empowerment, right? And so you mentioned the culture at BV is very entrepreneurial and so in that type of environment the role of empowerment is important and probably in some ways expected. But I think that empowerment is something that is underutilized in a lot of businesses as it relates to looking at ways to foster greater employee engagement and satisfaction, right? We bring these people in because they're talented and then we don't want to trust or empower them to do what we've brought them in to do, right? So can you talk a little bit about the importance of empowerment?

Maggie Laureano: Yeah, absolutely and it reminds me of many, many years ago I remember being a training class and it was all about empowering employees and so forth. And I remember the facilitator said, "You don't want to have empowerment with a leash." Right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: And so pretend empowerment essentially, yeah, yeah, yeah you can do that, but then if you make a mistake, boom, you're pulled back and you're penalized in some way. So one of the philosophies of our CEO is fail fast and you don't have to have all the information you need in order to make a decision. And so in her mind, 75-80% of the information needed to take a decision is fine and then if that doesn't work okay, that's great, we can course correct, and come back, and make it better. And I think that's a really important message for all of our employees because if you've got the skills, you've got the experience, and the know-how, as a new employee obviously you've got to learn the ropes, you've got to learn the company, the way we do things, and things like that, but we hired you for a reason, right?

Maggie Laureano: And so it's important to be able to give employees the opportunity to show what they have, what they've done, what they can do and it's okay to make mistakes. And I think that's what I really love about BV, that making a mistake is not catastrophic, making a mistake is a way to learn, it's a way to improve, and it's like a child, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: You can't put your arms around a child and not allow them to explore their surroundings because they just won't know what to do when you release them, right? So it's similar to employees, right? You've got to let them go, you've got to let them do, and I think an empowered workforce is a much more productive workforce and a more satisfied workforce overall and we certainly encourage that here.

Sarah Nicastro: Yeah. No, I think it's very, very important for companies to start digging into the, I'm going to call it the retention side of this equation, but it's not just retention, it's also engagement and satisfaction. And it's if this talent shortage is real, and it is, then part of it is where does the new talent come from, but a big part of it also needs to be how do you treat the talent you have and are you maximizing their potential, which is where I think the idea of empowerment really comes into play.

Maggie Laureano: Mm-hmm (affirmative). And Sarah, we do a lot of... We're very focused on our talent, on their development, on giving them opportunities to grow, to develop within the company. I mean, it's one thing, yes of course we can hire externally, and we do of course, but yes, with the talent shortage it's become even more critical for companies and for us to look internally and see. I mean, in North America we've got about 6,300 employees. Let's develop them, let's understand what their desires are in terms of their career, and what we can do and work together to help them get there. We may have a diamond in the rough buried somewhere in our organization that we need to uncover and we need to help grow, and nurture, and support them in their development. And so that's one of the things that we've been doing for several years is a very deep dive into our talent looking at who we've got, assessing them, working on individual development plans. So growing our own, if you will, has kind of been one of our missions in the last couple of years.

Sarah Nicastro: Okay. Good. All right, so let's shift gears a little bit and talk about... Okay, so you joined Bureau Veritas, you started taking a look and digging into okay, what's the state of things, what needs addressed, what are the challenges, what are the opportunities, and your recognition of the talent shortage was one of the big things that came out of that work. So let's talk about some of the actions you've taken to help address that challenge.

Maggie Laureano: Yeah, so early on when we saw the market start getting really, really competitive, and even before that, we've got pockets in our organization where historically it's been very difficult to find talent. And so we started exploring could we create internships, could we create apprenticeships because some of our positions require certain certifications and you need to be overseen by an experienced professional in that particular area, and so we started to explore how can we again, grow our own, right? So hire more entry level junior people and help them grow, and get certified, and get the experience that they need. So we worked on that, we partnered with a number of different schools to do that.

Maggie Laureano: We also started tapping into very niche kind of publications and organizations for some of these positions and we became active with them. Well, let me before I go into it, I was going to talk about a management training program that we started, but even before that, so we started to take steps to see how we could build up our talent pool. But it became very clear that we needed really much more attention in that area and so to that end I hired an experienced talent acquisition leader and he joined us in January of this year. And Sarah, the transformation has been absolutely incredible and it's come in a number of different ways. So his philosophy is he's got a very unique way and methodology in which he and his team recruit. There's a lot of data and analytics attached to it and so at any given moment you could see where the different candidates are in the process.

Maggie Laureano: Are they all residing with the recruiters being sourced? Or have the moved on to the hiring manager? Or are they in final interview stage or in offer stage? And on a daily basis you could see that graph moving. We have introduced artificial intelligence in order to do a lot of the sourcing for us and also, to provide us with market intelligence for different geographies and for different positions. And that has really been a game changer with our leaders because now, the recruiters have become more consultative with them. And so if we are hiring for someone at, I'm just going to make this up, at $18.00 an hour and the market is telling us with the data that we have that market rate is $22.00 an hour, and therefore we're not really able attract talent, we need to pivot. We need to do something different.

Maggie Laureano: And that is exactly what has happened with us internally, our recruiters have become much more consultative because of the analytics that they have and we have been able to make some decisions internally about increasing starting salaries, increasing the salaries of our incumbents to become more competitive in the market. That's been another way in which we've addressed this talent shortage is by bringing in some additional talent on the talent acquisition team that has really shifted the paradigm with regards to how even our leaders are looking the talent acquisition process. Now, we are much more partners and everybody has skin in the game, the hiring managers, the recruiters, everyone, and so we're in it together.

Maggie Laureano: As I said, we've created a management training program. We're partnering with the military to recruit from their databases. We're focusing on a lot more on diversity, equity, and inclusion, and we've got some KPIs associated with that, and we're also creating our own kind of a ready talent pool for different types of positions in different geographies, so kind of hiring folks into this pool that we will tap into when the need arises. So a lot that we've done and I've rambled on for way too long on it, but I think it's really helped us to turn the corner and I don't know that we're necessarily ahead of the curve, but we're certainly not completely behind it. And a lot of the things that we've put into place are not necessarily going to bear fruit today or tomorrow, but they're setting us up for success in the future.

Sarah Nicastro: Yeah. Well, and I think this challenge is one where you have to take a long game approach and I think that's part of the lesson folks are learning is in instances where you maybe used to be able to have success hiring based off of we want X years of experience doing this work, if those folks aren't available then to your point, how do you get creative when it comes to growing your own experienced workforce? Right? So how can you look for certain skills, aptitudes, characteristics, et cetera that you can bring in and provide with the training and experience that will get them to the level that maybe you were able to hire at before, right? And I think a lot of organizations are just struggling with coming to grips with the amount of work that they have to do to grow talent that they maybe used to be able to get in easier ways.

Sarah Nicastro: So I think the grow your own philosophy is a very important one to embrace and take action on, and the sooner that you do that, the better your long term results are going to be. And I think that you'll probably see that you are ahead of the curve when it comes to making those investments and how they pay off. But I also think the points you made about investing in talent acquisition resources and skills is important, as well as the technology piece, right? Because if you can leverage that technology to get actionable data both on where are we succeeding and why, and where are we struggling and why, that allows you the business intelligence to either replicate success or avoid those challenges and have better overall results. So I think those are all really good points.

Sarah Nicastro: The other thing I wanted to talk with you about is the program that BV has created, the Bureau Veritas Stem Scholars Program. So let's talk a little bit about what that program is, what its intention is, and what role that plays in all of this.

Maggie Laureano: Yeah. Well, thanks for bringing that up. We're really excited about that program. So we started that with an organization in New York City where a group of students were selected to go through a program to learn more about BV, what we do. So a lot of our leaders were involved in getting in front of those students and sharing all about our business, but then they were also given a project to work on. And it was incredible the level of engagement, of excitement, and really the outcome of the projects, right? So we're excited about that. We are going to be expanding it into our other markets probably in Houston because that's where we have a large presence as well, and so we're working toward that. But Sarah, I mean, stem overall, as you know, not enough kids are going into those fields, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: In college. And our company, Bureau Veritas is essentially at its core an engineering company and so it's important. Yes, it's selfish for us specifically, but I think overall for our country, if I might be so bold as to say that, we really need more students going into these fields and helping. We talked about recruiting and looking at the long term, same thing with this. We need to be a part of, BV needs to be a part of encouraging students going into stem careers and helping them in any way that we can. We've given these kids scholarships and we will do that with the next group when we expand this to Houston. It's important that we lead the way in encouraging students to look at these careers and supporting them. And so I think our leaders having been so involved in the program and really demonstrating to them okay, so academically this is what you learn, but practically this is how it can be used in the workplace. And I think that connection to how it translates into real life is really important.

Sarah Nicastro: Yeah. Now, just to clarify, if I understood this program correctly, you award these students a scholarship, but they do not have to use it to come to BV. Right? I mean, is there a tie for them to come and do anything in exchange?

Maggie Laureano: No, there are no strings attached.

Sarah Nicastro: No, so that was my understanding and I think that it is a long term strategy, right? But it's an unselfish way to increase the awareness of some of the different career paths that might not be readily presented, right? And so we talked at the beginning of the conversation about how BV is a brand, the services and the outcomes of the organization are everywhere, but the name might not be known, right? And so how does that translate to recruiting if it's a company that potential candidates are saying, what's Bureau Veritas? And that's a similar challenge for a lot of organizations, right?

Sarah Nicastro: And so I think this idea of how do we do different creative things to invest not only in our own bench of talent, but in increasing the overall awareness of career opportunities in this space, I think is a really important and really smart thing to do. And perhaps, more impactful because there isn't a direct payoff necessarily or a selfish interest, it's you're helping young people with their career, and you're increasing awareness, and those are really good things. I just think that's a really, really cool initiative and something else that folks could take something from.

Maggie Laureano: Yep. Absolutely. And the other thing, you talk about brand recognition, you're absolutely right. BV in Europe is very well known, but in North America much less so. And so we've tried... Not tried, we are actively working on our brand recognition throughout North America through social media and not just through our own internal marketing department, but even our talent acquisition team putting a lot of content out there in social media, videos, and just commenting, and being thought leaders in terms of what they put out there. And so trying in every way that we can to heighten the awareness of Bureau Veritas and as you said, through programs such as stem and we're also very committed to corporate social responsibility, and so putting our name out there as well through programs linked to that.

Sarah Nicastro: Yeah. Yeah, very cool. So I know we talked about the fact that this is a long game, but what would you say about what you've found from these efforts thus far and sort of what you see on the horizon?

Maggie Laureano: So far what we are... We're seeing a turnaround, as I said, with regards to our talent acquisition and partly because of the data that we have and the artificial intelligence that we've invested in, so that is really paying off. In addition, we're making it easier, Sarah, for candidates to engage with us. So we've automated a lot of our processes for candidates and then new hires, so it's not cumbersome and it's not very time consuming to apply, to once their hired to go through the process, and so we're trying to make it easier and more user friendly on the candidate side. And then internally, talk about growing our own and imagine the retention hopefully that we will have, right?

Sarah Nicastro: Mm-hmm (affirmative).

Maggie Laureano: Because we're investing in our people, because we're giving them opportunities, because we're listening to them to understand what it is that makes them tick and where they want to go in the organization, and so we're seeing all of that beginning to bear fruit for us.

Sarah Nicastro: Yeah. Yeah. Okay, so I want to do kind of a rapid fire of words of wisdom. So some of these I think will be maybe summarizing or recapping points we've touched on, but we'll just go through. So your advice on different areas of future of work, so number one is, how do we modernize recruiting? So what comes to mind as advice for steps to take to modernize that process?

Maggie Laureano: You know what? I think, and this is pretty selfish because of what we've done at BV, but having the right people in those roles. My head of talent acquisition is absolutely amazing. He is a thought leader, he is assertive. Data analytics has been critical for us, being consultative with our clients has been critical, and providing that market intelligence. So I think that all of those aspects of transforming your recruiting function, I think all of that is very, very important. And in a few short months that he has been here we have seen a change in the tide not just in improvement in our results, but also improvement in the collaboration with our hiring managers, and so it's absolutely critical.

Sarah Nicastro: Mm-hmm (affirmative). Okay. Are there new roles that are imperative for folks to be considering for today's landscape?

Maggie Laureano: I mean, I think going back to talent and what we just discussed, I think data scientists would be really, and I would love to have an intern data scientist on my team for a period of time, because business is driven by data and they make decisions based on data. And so the more that we are able to provide that, the more credible we will be, and the better we can make our case. So I think analytics in general is really important.

Sarah Nicastro: Yeah. I agree. Okay, what's your best piece of advice around retention of today's workforce and particularly the younger generation?

Maggie Laureano: I think having a sense of purpose. I think the younger generation is really driven by not just the work, but doing good overall. And so I think all of our, for example, our corporate social responsibility efforts, and programs, and what we stand for as a company, I mean, BV as a company stands for, as I said, safety, and ethics, and providing that to our customers and so I think that sense of purpose. But in addition to that, right now, and actually as the pandemic continues to unfold, flexibility. Flexibility in the way in which they work and where they work I think is really, really important. We are finding more and more that when we're making offers remote work is really important to people, not having to drive in to an office, or not even having to relocate for an opportunity. Obviously, that is not possible for every position, right?

Sarah Nicastro: Right.

Maggie Laureano: But where it is possible, companies really ought to consider offering that to their candidates, to their new hires, and even to incumbent employees because that is a real differentiator between somebody choosing your company over another. And at Bureau Veritas we have become quite open and flexible in that regard.

Sarah Nicastro: Okay. What would be your number one piece of advice for improving employee engagement and satisfaction?

Maggie Laureano: Sarah, there are many. There are very many, but I will tell you the one lever that I would pull with regards to that is assuming that we've got other things that contribute to employee engagement and satisfaction or the overall employee experience, but I would say the leaders. Leaders are the ones that... When an employee talks about the company that they work for, they're really talking about their leader. They're talking about the environment and the culture, if you will, that that leader is creating for their team and that could be very, very positive or very, very negative. And so I think having strong leadership, strong leaders that have been trained, that have strong EQ, that understand how they impact their employees, there's so much that goes into it, but I would say that is the number one thing, in my opinion, that helps to drive a positive employee experience.

Sarah Nicastro: I agree. Okay, what is your top prediction around the future of work over the next five years?

Maggie Laureano: Oh my goodness, I don't know. I don't have a crystal ball. But I do think... I do think certainly going back to the issue of flexibility, I mean if that trend is to continue, being flexible in where and how we do work. And then that creates the challenge of measuring work, and performance, and all of that, but we're facing that today. But I don't know, Sarah, that would be my best guest.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. Yeah. It will be interesting to see what happens and five years is a good chunk of time when you're talking about these types of things.

Maggie Laureano: It sure is.

Sarah Nicastro: Okay. All right, Maggie, last question for today, what is your proudest accomplishment thus far in your time at BV?

Maggie Laureano: Well, I think that we've done so many things to help improve the employee experience, which is, in my opinion, kind of the life's mission of HR no matter where you are in HR. But I think my proudest achievement has been to assemble a team of HR professionals that really are helping to drive the value that HR can bring and working very, very closely, very collaboratively with our internal customers to really again, understand their needs and be flexible in the way that we deliver our services. But I couldn't do it without the strong team that I have behind me and I think that for me that is probably the greatest accomplishment. I've got a great team of people, we're all moving in the same direction, rowing the boat in the same direction, and we've got the same objective that we're all striving for.

Sarah Nicastro: Yep. That makes a big difference. Well, thank you so much, Maggie. I was impressed in my research in all that you've accomplished in less than three years’ time and I appreciate you coming on and sharing some of your lessons learned and actions taken with our listeners.

Maggie Laureano: It's my pleasure, Sarah. Thank you so much for having me.

Sarah Nicastro: Absolutely. You can find more by visiting us at futureoffieldservice.com. You can also find us on LinkedIn and Twitter @thefutureoffs. The Future of Field Service podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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September 20, 2021 | 5 Mins Read

Key Observations from The Service Council Smarter Services Symposium 2021

September 20, 2021 | 5 Mins Read

Key Observations from The Service Council Smarter Services Symposium 2021

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By Sarah Nicastro, Creator, Future of Field Service

Last week I boarded a flight to Chicago for my first in-person conference in more than 18 months. When I walked into the Smarter Services Symposium at the Loew’s Hotel, it was quite honestly surreal at first. Greeting others with masks and the uncertainty of whether or not to shake hands or bump elbows felt awkward and almost had me wishing for the home-office comfort zone of my leggings and Teams meetings. Almost. It didn’t take long for me to reacclimate and realize just how good it felt to be reunited with friendly faces and to meet some new.

The energy and excitement around being back together in person was palpable – there were proper precautions in place, and for those who did decide to attend the event in person, any initial awkwardness was quickly replaced with an appreciation for the reunion of the community. In-person attendance, which was lighter than pre-Covid events, was bolstered with video cameos and attendees viewing the livestream.

The three-day event was more than just warm-fuzzies and cocktails, though there was plenty of both. Sessions featured insights from members of The Service Council’s board and then some, and many were led by the energetic team of the Nour Group. Topics included the theme “Service is Humanity” as well as discussions on all of the major trends you’d assume be incorporated: customer centricity, employee engagement, diversity, innovation, digital transformation, the talent gap, the future of work, as-a-Service models, and more.

While these are all topics we cover regularly here at Future of Field Service, I didn’t spend the three days bored. As I find is typically the case at these events, even if what’s being discussed at a high level are key trends you’re familiar with, there’s always a new perspective, point, or nugget of insight to walk away with. That said, here are what stood out to me as my key observations from the event.

#1: Innovation Demands Accountability

I hosted a 90-minute workshop at the event alongside Joni Chapas, VP of Field Operations at Brinks Home. You may remember Joni from her podcast on how Brinks Home is fueling innovation, and this session was a more in-depth discussion around this topic. We shared some of each of our stories, and then opened it up for an interactive talk around what’s driving innovation within service, what key areas of strategy are essential for successful innovation, how is innovation most effectively tackled, and what are some lessons learned.

One of the most important takeaways from this session is that innovation demands accountability. At Brinks Home, Joni’s team was created to work alongside operations to collaboratively drive innovation. The company recognizes that the operational leaders need to focus on operational excellence, but that innovation is still imperative – so the team was created to extract insight from those leaders on what innovation is needed, but to work solely on driving that innovation and strategic alignment surrounding it.

Whether accountability at your organization is achieved through a dedicated team like what Brinks Home has done or in another way, the point is that we can’t expect to innovate at the pace we need to by simply expecting the leaders already responsible for so much to just add it on top and “get to it when they can.” It’s unfair to place the burden for your company’s future entirely on the shoulders of those who are already overtaxed trying to maintain its present.

#2: Pressing Pause is Better Than Racing Recklessly

Eduardo Bonefont, VP of Life Sciences Technical Services at BD, spoke on day one about the Future of Service and how the company’s people, processes, and tools play a role. He had some excellent points around the importance of manager accountability, creating a speak-up culture, and how to prioritize various projects and objectives.

Part of Eduardo’s discussion that I found especially impactful was him relaying how BD took a “pause year” of introducing new tools to gather feedback, clarify areas of priority, and create a cohesive strategy. While the idea of a pause year may sound challenging for some, the reality is that undoing the negative impact of racing ahead when you truly aren’t ready or aligned is far harder. I loved this idea of pressing pause long enough to examine, reassess, and align.

#3: Your Customers Don’t Want Service

To kick off day two, Mike Adams, SVP of Services Delivery at NCR Corporation, spoke about Servitization. One of the first sentences of his presentation is my favorite quote of the entire event: “Our customers don’t want service; they just want their equipment to work – all the time.” To me, understanding the significance of this statement – and the action it requires from service businesses – is the core of Servitization success.

Your customers don’t want your service – they want results, outcomes, peace of mind. They want guarantees, they want less stress. This doesn’t mean, of course, that they don’t need your service – but it changes the game in terms of what the value proposition is, how service needs to be delivered, and what will achieve customer loyalty. Mike went on to deliver far more gold in his session that illustrated the depth of his experience, but this was by far my favorite point.

#4: Disruption is Inevitable, By Force or By Choice

In a panel discussion on innovation, James Mylett, SVP of Digital Buildings at Schneider Electric, said of his company, “You have to dare to disrupt. Innovation is our middle name – we think fact and act faster.” This attitude alone takes energy and effort, not to mention the cultural, procedural, and technological steps necessary to make fast action a reality. But James is 100% right – you do have to dare to disrupt. Because if you don’t, the disruption will come anyway – by force. And it is far harder to come back from that type of disruption than it is to proactively master the art of disrupting by choice.

#5: The Story is More Important Than the Strategy

Karin Hamel, VP of Services for U.S. Digital Buildings at Schneider Electric, did a session on day three with David Nour and Lin Wilson of the Nour Group to discuss – and show – how she’s worked to visualize strategy to create employee buy-in. Karin spoke to how much unnecessary complexity and corporate speak are put into communications with the frontline workforce that work against the mission of clarity and authenticity.

By simplifying and illustrating key points, Schneider Electric has been able to create a message that resonates far better with its workforce. The focus is on the story, not the detailed strategy, which helps employees connect more and understand better the key aspects that are important and matter most to them. Obviously, there’s strategy here, too, but Karin’s point – and it’s a great one – is that the story is more important and often overlooked. Leading with story gets people to listen and care, which makes the strategy part far smoother.

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September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

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Russell Masters, Director of IT and Analytics at DHU, a provider to the UK National Health Service, who formerly spent significant time at Rolls-Royce involved in digital innovation efforts, talks with Sarah about the call for leaders to become more digitally adept. They discuss what this does and doesn’t mean, some of the key changes necessary, and what the future holds for leaders in the digital age.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about the increasing demand for business leaders to be digitally adept. We know we are living in a digital world and what that demands of leadership has changed, is changing and will continue to change. Very excited to have with me today to discuss this topic, Russell Masters, who's the director of IT and analytics at DHU, a provider to the UK National Health Service. Russell, thanks for joining me today.

Russell Masters: Hi Sarah, thanks for havin0g me. It's lovely to be here.

Sarah Nicastro: Lovely to have you. That was a mouthful. Russell has been so kind to join me today on what is a bank holiday for him, so that's very nice of you to give me some of your time, appreciate it. Before we begin our conversation Russell, tell our listeners a little bit about yourself, your background, your current role and kind of how we got to be here today to talk about what we're going to talk about.

Russell Masters: Yeah, sure. It's fantastic to be here. Know it's a bank holiday, but it's loads of fun talking about this kind of stuff and I love to take the time out to do it. So my career really I've been kind of in industry for 20 years, and pretty much all have that has been in services, either physical or digital somehow, hence my interest in this and my passion for this subject area. And the vast majority of my career was in fact in aviation, and so I've been fortunate to work in a couple airline organizations and the majority of that time also working at Rolls-Royce where I was responsible for a whole range of business transformation and digital services. And that's brought me after quite a long time in aviation to a big career change, so now I'm in healthcare. And I work DHU, which is a community interest company. We support the UK National Health Service in providing urgent and emergency care services, a big part of which is the digital content required to make those services work. And whilst on the face of it, it would seem that moving from planes to people is a big shift, actually there's a whole load of stuff that's very similar. And notwithstanding, the huge amount of digital content and digital technology required to make all of those services work.

Sarah Nicastro: Interesting. So yeah, I've been covering this space for a little bit less than 20 years, but a similar amount of time. And it's interesting to witness and experience how digital has evolved and what that means as it relates to the topic that we're talking about today. So you, through your experiences in industry and services and in different spaces, aviation, healthcare, the reality is no matter what industry we're talking about, the digital imperative is real and it's an area where all organizations have been forced to not only adapt and embrace but to really transform and innovate. And what that takes at the leadership level is really, really interesting. I think that we've asked our workforce to really do a 180 in how business is done and what value propositions we're providing from 20 years ago. And it's not an easy feat, and the way that companies lead is critically important in the success or failure of this initiatives. So I'm curious Russell, in your 20 years of experience, so I know a big chunk of that was at Rolls-Royce and Rolls-Royce is obviously seen as a leader in that industry with a lot of these things. How have you witnessed digital leadership evolve?

Russell Masters: I think, obviously I've seen this all the way through my career and I've been really fortunate in that I've been both a part of delivery of physical services and digital services. And if you like, I've had kind of the dream set of experiences because I've been able to do some of the doing, do some of the building of new things, and also lead some of the more modern cutting edge digital technology projects and services that you could ever want. And I think I consider myself kind of really lucky in that I was born with a personal computer, probably the first generation to have a PC appear in their life. And yet for me, it's still really, really challenging and really difficult as you take forward the blending of IT technology with the real world and go through what has effectively been a transition from IT and big IT and the way that that technology appeared in our life to the more ubiquitous version of that which is digital. And every aspect of our life now is touched by some form of digital technology. And I would suggest that probably the generation of business leaders that we have now are right at the forefront of being the first to take those big digital tools and technologies and deploy them into their companies, into their businesses and their teams at any real scale.

Russell Masters: And so much of that is exciting, but so much of it is very scary. And what I think it's prompting is a wholesale change in the way that we lead and the way that we support our teams, the way that we approach projects and challenges. If I think back to maybe 10 or 15 years ago when we were firmly in the IT age, IT was by definition very technology heavy, it was kind of quite expensive, it was quite time consuming and quite a lot of effort to deploy these technology into companies, despite the huge value that they delivered. And now we fly forward 15, 20 years and those technologies are becoming cheaper, they're becoming easier to deploy, and they're becoming so great to democratize, there's so much more democratization those technologies into our daily lives. And it makes the challenge of taking those and making something useful out of them, both in one way much, much easier because the cost of doing so and the speed at which you can do so is much less, but also much, much riskier because you can get yourself into a whole load of hot water by deploying digital tools and technologies into your organization on scale and on mass.

Russell Masters: And I think I'm probably part of one of the first generations of leaders who've really had to get their head round how do you take these digital tools and technologies and how do you deploy them successfully into your organization? And it's a really complicated story and it's to do with people and it's to do with technology and it's to do with culture and it's to do with philosophy. And I think what I've seen, the predominant trend over the last 20 years as you say has just been this complete democratization of those technologies and the availability of those technologies and leaders wrestling with how do they make something really successful out of something that they probably haven't had a lot of chance to understand but know is incredibly important and being used by everyone everywhere to make their businesses better and more effective.

Sarah Nicastro: Yeah. It's funny, I was smiling because the article that we published today, actually, is called, the headline is Actually, Technology's the Easy Part. And one of the things that I mentioned in that article is what you just said, which is the democratization of these tools in some ways makes things easier, the barrier to entry is lower, the affordability is greater, the accessibility and availability, all of those things. But on the flip side, when I was writing about these things, we'll say 15 years ago, just embracing technology was a competitive advantage. And that is no longer the case, and so from that perspective it is more complex because relating it to the topic we're discussing today, the understanding has to be far deeper. You could get away with, at one point, the understanding being, "Okay, we need to go digital." And that was a feat but it was a journey that was pretty easy to conceptualize and outline and embark on. And what comes next in the further iterations and generations of that strategy is more complex and it requires a lot more expertise and understanding and all of those things. So I think that's a very good point. And like you said, both exciting in some ways and scary for leaders to know that they have some work to do.

Sarah Nicastro: I recently quoted an Accenture report that said all companies are now technology companies. So what are your thoughts on that statement and how does that underpin the importance of leaders becoming more digitally competent?

Russell Masters: Yeah, I completely agree with that. I think there aren't any companies now from the smallest kind of mom and pop shop retailer to the largest multinational that doesn't use technology in some ways as part of either their employee experience or their customer experience and the product and service that they provide. And so yeah, pretty much every company is a technology company today. And building upon the point you were making in response to the beginning of the conversation, I think historically in times gone past it was about how do you fit the people to the technology. The technology would show up and it would do something and you needed to fit the people to the technology to make that work. Increasingly, it's now about how do you take the technology and fit it to the people because pretty much every successful company, every organization that exists today that has any kind of future, has any kind of purpose, has people at the center of it. Whether it's the employees who deliver the end experience to the customer or whether it's the customer themselves or it's a whole network of stakeholders and providers and vendors and other people. It's always people at the core.

Russell Masters: And so I think the big challenge for leaders today is, how do you take something that is inherently very sophisticated, very technology based, and how do you make that really super simple and really super compatible with people so that you can get the best of both? And I think pretty much anyone who's been in my position leading digital products or in and around technology will say that it's the people part that's the really hard part and it's the part that can make a project really successful or an endeavor really successful or not. And I think as we're talking about what the leaders need to do to be successful in this area and how does digital leadership show up in a big organization, it is increasingly helping to enable people but with a background of technology and technological change. And I think that is one of the most difficult subjects for any leader to start getting their head around, and frankly not one that you're prepared for when you've come through maybe a University system 20 years ago or have entered the world of work at that time. So that's the challenge for all of us, is how do we get good at making the technology fit the people?

Sarah Nicastro: Mm-hmm (affirmative). What would you say are the biggest barriers to this happening? So if leaders need to become more digitally adept, what are the challenges in that happening?

Russell Masters: Well, there's all sorts of things we could talk about, but there's probably a couple that spring to mind. I think first and foremost, like any big change in business or in society, there's a level of understanding and knowledge required to get started. And I think the subject of digital and IT technology and digital technology starts, first and foremost, with some pretty super sophisticated content. And that can be really daunting when you're starting to contemplate how do you take digital tools and technologies forward. And there's always a sense and a concern that really maybe you have to actually be a developer yourself to be able to be effective in these areas, maybe actually have to understand architecture or maybe you have to understand the latest technologies in order to be successful. And I think that is a very real but not necessarily, it's a boundary, it's a barrier that can get in the way of a lot of leaders when they're starting to take these projects forward.

Russell Masters: And I was actually having a discussion with a colleague of mine who was moving into a government role in and around technology and she was really concerned, "What do I need to know about the cloud? What do I need to know about the latest coding language?" And I think her situation is mirrored across many, many organizations. And the truth is, actually you do need to know something about the technology and you do need to find a way of interacting with the many, many professional people that you'll meet, professional developers, enterprise architects and digital experts. But it's less about understanding what they're doing from a technical perspective, and it's more about having a common language set and some empathy and understanding so that you can both work collaboratively as a team to take forward whatever you're working on.

Russell Masters: And so I think the first challenge for serious lead if you want to be more digitally enabled, is to understand the subject matter a bit more but not to be too worried about knowing it to the Nth degree. And that can be as simple as networking, building up contacts and relationships with people in and around these areas. It can be taking the time to get to know your support team, developer team, IT team, understanding their problems, understanding how the technology works, and as well self-educating. So I think that's the first barrier, if you like, the first action to take if you're going to get serious about becoming a leader in a digital age is to inform yourself.

Russell Masters: But I think then the really value added bit in all of this is there are hundreds, thousands, millions of really well qualified, very professional technology experts out in the world. And it's probably the case that if you're as a senior leader involved in any of these projects, you're not there because you know the technology, you're there to build a team or to work with a team to take them forward and deliver some sort of outcome an some sort of end result. And I think one of the hardest things as a leader of a technological business is to get yourself away from the how are we going to do it more to the what are we going to do and why are we going to do it? And to start getting away from maybe some of the older, safer methods for managing projects and managing organizations where it's about being prescriptive about what happens and why and moving to a more collaborative culture where we start to talk about, "Well, what is the outcome? What is the thing that we're going to achieve?"

Russell Masters: And that's something that I've noticed has been really important in all the world that I've done, both in my previous roles and my current roles, is how is this going to show up in the face of the customer? And that could have been in the face of the end use of the service, or in my case now in the end patient. So the second big challenge for, I think, digital leaders is to start to get better at working towards outcomes and enabling your team to understand those outcomes. And then thirdly, really supporting them, moving away from a culture where you're the one making all the decisions and you're the one driving all the actions to the one where you're more making the team accountable for the outcome that you'll need to deliver and fostering a culture where we all work together to achieve an end result.

Russell Masters: And those are very different cultural approaches, those are very different management philosophies and ways of working and not ones that are necessarily well understood or well practiced everywhere. And so certainly that's been one of the big challenges of the experiences I've been through, both in previous roles and certainly in my current role, is how do you help organizations move away from action to outcome and how do you build the right team and create the right culture an collaborative spirit where you can run at those things together?

Sarah Nicastro: Mm-hmm (affirmative), okay. All right, those are good bits of insight into some of the challenges. So let's then talk next about some of the what not to do. So I think a couple things I want to touch on that I'm taking out of what you just said, I think number one in my mind is that leaders can't completely offload the responsibility to become more digitally competent or adept. So there's a certain degree here of, "Okay, well if I'm not an expert here then I'll just hire someone to do it." So let's talk about the idea of not trying to cop out of growing your own perspective and knowledge and understanding.

Russell Masters: Yeah, I certainly think you've got to decide when you are going to participate or when you're going to be responsible for a new digital product or service or some sort of transformation journey. You still have to make a conscious decision about how are you going to show up and how are you going to participate in that project. And I guess there's various ways that you can do it. And sometimes it's just about not treading on the toes of the experts, if you know what I mean. And so first and foremost, your first focus should be building a great team. And having built that great team, you've got to trust that that team can do the task that you put them together for. Now, by the same account, you still have to be there and show up every day and show interest and drive the energy. As a leader, your job really in a number of ways is to just pour constant amounts of energy into those projects. And so there is a tension there between wanting to participate, wanting to roll your sleeves up and get involved, but also getting in the way.

Russell Masters: And I think I've seen and I've been myself part, and any experience I've gained here has been through a combination of dumb luck and mistakes and slips and trips. And it is really difficult when you're leading a big project to understand how far do you go in demonstrating that you're committed and care about it and you're willing to take action and participate and how do you make sure you don't go too far and stifle the creativity and the enthusiasm and the ownership of the team around you? And so that's a difficult path to tread and one that you need to take a lot of care. But you certainly can't just throw it over the fence.

Russell Masters: And I think the other thing that you've got to do is just always remain focused on what is the outcome and I think a big learning point for me has been, historically as a project manager of projects or more junior roles, I always felt it was more necessary to drive for the most ambitious goal possible because that felt like really good work. And it's taken me many years really and probably the most number of mistakes and is probably the area where I continue to challenge myself to actually manage these things in a more agile method and not in kind of, to use the fashionable version of the world agile where it's kind of just constantly changing, what I really mean is to be properly agile where focusing on what's the smallest thing that we can do today? What can we deliver in a week? What can we do really quickly and be really efficient with? And again, that is a big challenge for leaders coming into these projects. You might be used to delivering in a more conventional way with more [inaudible 00:21:24] and culture. So both of those things really are the big challenge of what not to do, by all means participate, but don't over participate. And you absolutely have to have control but only the way that helps the team take it forward in the most agile sense.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, so there's a lot of areas here that are a delicate balance. So that being said, I think just a couple key points to reiterate for folks, number one is as a leader you can't, to your point, just throw it over the fence. This can't be a facet of your scope of responsibility that you just say, "Well, you know what? This isn't my area of expertise, so I won't worry about it." There has to be a greater desire to learn and grow and expand in the sense of that understanding, not necessarily in the sense, to your earlier point, of becoming an expert yourself. Number two is this idea of if you know that this is an area that you need to increase your knowledge of but you are not going to be the expert then you do need to hire a team of experts that you can trust, and then you need to allow them the culture and environment in which to do what they do and carry out the mission that that you're setting forth. And to your point, that is often going to look different than maybe projects have in the past, so understanding that there needs to be some morphing of workflows and culture and expectations to be more outcome based versus action based.

Sarah Nicastro: So all kind of areas of finding the right balance for yourself, your company, your team, your project that you're working on. But I think those are some really good points in terms of what not to do.

Russell Masters: Yeah, I think you've just got to show up. You've almost got to be there when the problems are there and show up when the problems are there. So trust that your team will take this thing forward, but recognize that they'll get stuck at times. How can you support them and take responsibility for the problems and then just kind of fade away then it's all working. But all the while, demonstrating that you really care and that you're bothered. And I've certainly tried to only ever associate myself with projects that I'm really passionate about and I care about. And I think that, again, is another side to this more modern leadership style has needed to be, it's a much more feeling, much more empathetic approach, and to what are effectively very technological and kind of scientific problems.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, I think that's a good point. And that point traverses this topic into other areas of conversation related though to innovation, which is as our businesses continue to evolve and transform in ways that are new and different, you mentioned earlier the idea of a more collaborative working environment. The more we all have to own our areas of expertise but also work well with people that have different strengths. That's how this all continues to advance. We had a conversation on here not too long ago about the fact that when you look at the topic of digital transformation, it's this very fragmented and siloed approach that is really killing business's opportunity to get a return on their investment. And so this idea of whether it's digital transformation or digital products and services, this idea of greater collaboration, better teamwork, more agility is super, super important. So let's talk a little bit more about what that means though. So I want to talk about three areas of what we should focus on doing. And number one is creating a digitally native culture. So talk a little bit about what that means and, not that you can give anyone a blueprint for doing it, but maybe some thoughts on what it means and how to consider advancing that culture within a business.

Russell Masters: Well, I think you've got to, coming back to my previous point about people and this being so people centric, I think it wouldn't be unbelievable in a lot of companies and people who work for companies you might be listening to, the digital projects, IT related projects, they don't always have the best reputation. They can be expensive, they can take time, they can be impersonal. And I sort of think the key to having a digital culture, if you like, is both to completely dispel the fear of these kind of activities and make them as accessible as possible. And that requires you to talk about them frequently, express them simply, make the language as simple and practical and real as possible. And there can be some resistance to that, because it can sometimes be the case that you have your experts and you have people who are very invested in maybe the previous ways of working, and so suddenly talking about it in maybe less technologically accurate terms or in a simpler way can be counter to the current culture. But it's essential that you make everybody feel like they can have some part of these initiatives and that digital capability and digital content can mean something to them.

Russell Masters: And then I think you've really got to start with either the customer or your workforce or both tell you and you've got to make whatever you're working on as relevant to the problems and challenges you've got at any particular time as possible. And the more that you can talk about outcome, the more that you can talk less about the technology and what you're going to implement and more about the change it'll make within everybody's daily lives and the more belief that you can have. And that can be hard, especially if you're leading an organization where maybe there's a bit of legacy, there's a bit of history or maybe you're sort of a bit earlier in your journey. But showing up every day, being really positive about it, is massively important. And you'll suddenly find almost you reach critical mass where this stuff starts to move. And then before you know it, your whole organization is behind this and seeing what's in it for them. And that's when this stuff is both at its most fun and its best because then you can capitalize on that energy and use that to drive forward and whatever the right strategies for your organization and move more towards a digital first culture.

Sarah Nicastro: Mm-hmm (affirmative). I was just thinking, we talked earlier about how technology itself has become democratized and it's almost this idea of now next we need to democratize the interest and responsibility throughout the organization. So the technology is there, the capability is there, it's the people part of it, the culture part of it, and weaving it into everyone's scope of work and everyone's language and all of that. It makes sense.

Russell Masters: And investing in everybody who's involved in that change because whether you're moving from working on a certain application or providing a service in a certain way or maybe just gaining information or using information to gain an outcome, it is just so important that everybody, from the most senior person to the most junior and everyone in between, is involved in that. Because otherwise you run the risk of it becoming a particular person, a particular area or particular department's job. And much the same as historically, the other productivity tools that we each organization came to know and love became ubiquitous. It's the same here, it's just got to be consistently delivered, everybody engaged, and made relevant for as many people as possible.

Sarah Nicastro: Mm-hmm (affirmative), okay. All right, there's a lot of other questions I could ask you there. And I think we could certainly have you back and talk a bit about the how to in some more granular detail with some of these things. But for the sake of today's conversation, area number two in terms of becoming more digitally adept is improving digital acumen. So let's talk about how leaders need to be able to talk the talk when it comes to digital.

Russell Masters: Yeah, and I think this is another area where there's the potential to get caught out or trip yourself up.

Sarah Nicastro: Overdo it.

Russell Masters: And I think first and foremost, you have to just be realistic with yourself. I've over the course of a 20 year career have found myself involved in increasingly digital technologies, increasingly digital projects, and over the course of that time I've made a point and I've made it a specific ambition to learn more about these technologies, learn more about the approaches and learn more about the best ways to take these forward. It's about learning enough of the language so that you can converse and learning enough of it so that you can engage with the team that you build around you and the team that you work with to take this forward. So you do need to know enough about the technology to make yourself educated and informed, but you don't have to be the expert.

Russell Masters: And I think learning to ask intelligent questions and learning to pick out the areas where maybe it's worth digging into a big deeper or checking your understanding, is probably a far more valuable skill than, for example, taking yourself back to night school and learning all about cloud architecture and everything else. Primarily because you just won't do it justice, and the standard in industry now is so high and the level of education is so high and the quality of individuals that you can attract to these teams is so high. And so if you find yourself, and you should, involved in these increasingly digital projects, your job should be to become familiar and converse in the broad language and be able to know who to speak to about which challenge and which issue, and to learn how to bring those people together in a way that drives towards a common goal.

Russell Masters: And I would definitely advise against trying to become a very deep domain expert, unless you want to retrain on something else, but an executive level I think it's about, "How do I understand enough of this to actually bring together the parts to make something whole?" Much the same as if you're building a house, you wouldn't lecture our architect on where to put the beams and how deep the footings would be, you trust that they know how to do their job. But you'd certainly have an opinion on what the outcome looked like, how many bedrooms and what it would look like.

Sarah Nicastro: Yeah, that's a good point. And I think one of the key things here is pride and don't let pride get in the way of making impacts that matter here. So this isn't about pretending you know more than you do or you know everything. You don't need to know everything, you need to know enough to be able to understand where the business needs to go and understand what the end goals are and to be able to, like you said, pour energy into the team and motivate them. But I think the world we live in today, there's no way for leaders to be a master of all and no need for. I think that the more you can, like you said, ask good questions and own the areas where you don't know what's being discussed. Because if you can just own that and you can let your team, the experts that you've hired to execute here, let them educate you because that lets them see that they're valued. There's nothing wrong with just admitting that, "I know this much, you know this much, so what do you think and what do you think we need to do next?" And like you said, trust the people that you have put in place to do these things and just know enough to talk with them about what's happening and where it's going.

Sarah Nicastro: I think that there's this element for leaders of just the whole pride and power area that we really need to set aside and just focus more on the people and team building and the outcomes.

Russell Masters: Yeah, and I think this isn't a digital challenge, as much as we're seeing a technological step change within industry, we're also seeing a step change in the philosophies that managers and leaders are using to motivate people, to bring teams forward. And we hear a lot about what's the purpose and the vision and maybe historically those could be treated as quite perfunctory kind of things that we just do because that's what appears in the corporate report or something else. But increasingly those are really important areas. And I think the other thing is, to your point on pride, I don't think it's necessarily about, there's nothing wrong with pride, I think that's a good thing. But maybe accepting or tuning into the fact that actually creating the compelling vision for a team of super enabled, super capable people is actually something to be very proud of and is actually tremendously valuable within an organization. Bringing together all of the right disciplines, lining them up in the right way, especially as most organizations today and most teams are multidisciplinary. We no longer exist in organizations where individual departments do their thing because we know that real truly game changing outcomes come from combining lots of different elements together in a certain way.

Russell Masters: And so I think it's not just a digital challenge, it's a modern leadership challenge, it's how do we create organizations with purpose and mission and vision? And how do we get super positive and proud of that as opposed to maybe knowing what the right answer is at any point in time? And ultimately far more satisfying, I think, than always being the person who makes the decision and directs traffic.

Sarah Nicastro: For sure. Okay. And then the third area, what is your best advice for building confidence, competence, and capability?

Russell Masters: Well I think it's just built upon the conversation that we've had before. I think being very, very curious about every project that you're going into. Certainly something I've had to watch for myself is to jump too quickly to a conclusion or an answer and to try and encourage myself to be more open minded. And the more open minded you can be and the more flexible, the more adaptable you can be, and the more opportunities you can see and the more opportunities you explore, the more you learn. I definitely think this is an area where learning by doing is a really important part of this. This, like any kind of new subject area or discipline, there's so much information out there that you can almost paralyze yourself by trying to know enough to get started. And so I think you've got to start. But I think very much building upon your point, it's about taking forward whatever you're working on with the confidence that you have the right team around you and the humility to engage those team members no matter how small or big the question. And then use that and relying upon your leadership belief and your skills and experience to bring all those elements together.

Russell Masters: And things will go wrong, and I've had many things go wrong in my career. But if you are attacking things with positivity, if you're always doing it for the thing, then my experience you always get the support of your team and your organization and the best thing to do is to embrace that and use that as one big learning experience. And I think that confidence comes from knowing it won't actually be that bad if things go wrong and embracing the fact that if you are working in small steps, your last mistake probably wasn't a big one.

Sarah Nicastro: Right. And I think when you talk about, maybe not digitally native culture, but just the type of culture we need to be fostering today period. This idea of a fail safe environment is very important. Companies aren't getting ahead by playing it safe and embracing the status quo. And part of being able to promote creativity and innovation is people not being terrified to make a mistake or to fail. And so I think that's a good point. Building confidence comes from making some of those missteps and recovering from them and what you learn in doing that, and that's okay and that's important.

Russell Masters: And I think it's the learning the lesson is the most important thing. I would be disappointed in myself to repeat the same mistake again and again and I think that's a really reasonable expectation in the teams that you create and the organization that you work within is, "Well, let's make this mistake and if we make it once well let's not make it again." And I think that's the most important and seeing how you can build upon that is in itself incredibly enabling. And I think maybe just learning to trust your team and trust people is maybe actually one of the things that will have come out of the current circumstances, obviously we've all moved to remote working and a huge number of organizations that would have previously maybe been concerned about that or maybe worried about letting people work from home. I've actually seen it's worked really well and it's a really good proof point of it's not so much about worrying about a mistake, it's maybe trusting that your teams and you will actually make less of them than you might think and might actually achieve more and leveraging the power of people, as with all these things, whether it's management or digital, it's all about the people.

Sarah Nicastro: Yeah, for sure. Okay. So Russell, last question, what is your best advice for leaders that know that they need to become more digitally adept in terms of, we've talked about some of the, "Here's what not to do, here's what to do," what about specific actions? Whether that's resources or just, "Hey, maybe try this." What type of tactical advice do you have for folks?

Russell Masters: Yeah, and I can't confess that I knew all this when I started and in some of the roles, this is definitely the result not the starting point in terms of my experience, but I think a good discipline to get into, whether it's a digital project or something else, is focusing on the outcome. And that can sound really easy, but it's actually quite difficult to train yourself to think, "What is the outcome I want to achieve?" And it's not, "I want these tasks done by this date," it's, "Well I want my customer to now see these things," or, "I want my employees to now be able to do this." So that is a really good discipline. And I think start would be the other piece of advice. You will learn far more by doing and getting involved than by not and waiting. And it's like any big life event, you're never quite ready. And so again, I will just say start. And network, network within your team, network without your team, and have the humility as you do that to be really open about your experience and not worry too much that maybe this is your first foray into this kind of world or maybe don't forget that as much as you've done 10 or 20 projects you've still got a tremendous amount to learn.

Russell Masters: So just have that continuous asking questions, networking, learning mindset. And with those three things, you won't go wrong. And I'm sure you'll have some slips and trips, but that is by far I think the best way to start.

Sarah Nicastro: Cool. Awesome. Well Russell, thank you so much for joining us and sharing this advice. I think there's some areas here we could definitely dig into, so I'd love to have you back and have some more conversations. But appreciate you coming today on a holiday and sharing with us and our listeners. So thank you.

Russell Masters: Sarah, it's been fantastic to be with you and thank you so much for asking me. It's been a great experience, thank you.

Sarah Nicastro: We'll do it again soon. You can learn more 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 at ifs.com. As always, thank you for listening.

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September 13, 2021 | 6 Mins Read

5 Musts for Leaders to Increase Digital Proficiency

September 13, 2021 | 6 Mins Read

5 Musts for Leaders to Increase Digital Proficiency

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By Sarah Nicastro, Creator, Future of Field Service

I wrote an article not long ago on the need to build your digital “dream team,” but what exactly is the responsibility of leaders in our digital age? I spoke with Russell Masters, director of IT and analytics at DHU, a provider to the UK National Health Service, for this week’s podcast about the degree to which all leaders must develop digital capabilities. Does everyone need to be a digital expert? No, but all leaders need to reach a level of digital proficiency in some key areas.

Here's what Russell, who has worked in services for more than 20 years having notably been a part of helping build digital services at Rolls-Royce before joining DHU, has to say about the demand of leaders today to become more digitally adept: “It’s really challenging to take forward the blending of IT technology with the real world and go through what has effectively been a transition big IT to the more ubiquitous version of that which is digital. Every aspect of our life now is touched by some form of digital technology. And I would suggest that the generation of business leaders we have now are right at the forefront of being the first to take those big digital tools and technologies and deploy them into their companies, into their businesses and their teams at any real scale.”

While the digital era doesn’t require all leaders to be technical experts, it does require an effort to build more digital understanding and acumen and to think a bit differently about how you build, motivate, and measure teams who do have the technical digital skillsets you lack. Here are five key areas of focus when it comes to stepping up your leadership to be more digitally proficient.

#1: Acknowledge the Necessity

There’s no denying that digital is a front-and-center focus of every organization today. But there are leaders who feel they can leave this all “to the experts,” and this is a major misstep. It is necessary for all leaders to build a better understanding of digital so that they are able to see the opportunities it offers the company, set a strategy to digitally transform and evolve, and drive continual progress. It’s simply too critical an area of the business not to become more adept in.

“I'm probably part of one of the first generations of leaders who've really had to get their head round how do you take these digital tools and technologies and how do you deploy them successfully into your organization? With the complete democratization of those technologies, leaders are wrestling with how to make something really successful out of something that they probably haven't had a lot of chance to understand but know is incredibly important and being used by everyone everywhere to make their businesses better and more effective,” says Russell.

We’re talking about making sophisticated technology very simple for both employees and customers, and this requires immense knowledge and skill. While you don’t need to hold all of that knowledge and skill yourself, you certainly can’t opt out of educating yourself and improving your competence in such an important area.

#2: Know Your Role

While it is essential to put effort into building digital proficiency, that does not mean you need to become a technical expert. You need to find a balance of having ample understanding and capability, enough so that you can make important decisions and effectively lead a team, but not getting buried in a rabbit hole of feeling you need to become the #1 digital expert in your business. What’s the right balance for you between passing the buck (not acceptable) and feeling you must become a deep technical expert (likely not reasonable OR necessary)?

“I think the subject of digital technology starts, first and foremost, with some pretty super sophisticated content. And that can be really daunting when you're starting to contemplate how do you take digital forward,” says Russell. “And there's always a sense and a concern that really maybe you have to actually be a developer yourself to be able to be effective in these areas, maybe actually have to understand architecture. This concern is a barrier that can get in the way for a lot of leaders. The truth is, you do need to know something about the technology, and you do need to find a way of interacting with the many, many technical people that you'll meet. To be more digitally enabled, you need to understand the subject matter a bit more but not to be too worried about knowing it to the Nth degree.”

#3: Learn (and Respect) the Language

This means that the path to building digital proficiency for most leaders has a lot to do with increasing your digital acumen and focusing on creating a common language around digital within your organization to ensure everyone stays aligned. Growing your understanding and building this common language is what allows you to participate at a productive level in all key decisions and progress without needing to get lost in the weeds of the deep details.

“You do need to know enough about the technology to make yourself educated and informed, but you don't have to be the expert,” says Russell. “This comes from learning to ask intelligent questions and learning to pick out the areas where maybe it's worth digging into a big deeper. This is a far more valuable skill than, for example, taking yourself back to night school and learning all about cloud architecture. Your job is to become familiar and converse in the broad language and be able to know who to speak to about which challenge and which issue, and to learn how to bring those people together in a way that drives towards a common goal. Much the same as if you're building a house, you wouldn't lecture your architect on where to put the beams and how deep the footings would be, you trust that they know how to do their job. But you'd certainly have an opinion on what the outcome should look like.”

#4: Build a Team You Trust (and Trusts You)

While you should not shirk your responsibility to grow your digital understanding and abilities, you need to use that understanding to build strength in the technical layers that are beyond what your role requires. Good leaders know enough to define the digital strengths needed and focus on hiring a team that delivers these skills that they can trust. This trust is important, because you won’t know all of the details they do – so you need to trust their abilities and make them feel empowered to accomplish the objectives, and they need to trust your leadership and feel adequately valued.

“Your first focus should be building a great team,” says Russell. “Having built that great team, you've got to trust that that team can do the task that you put them together for. Now, by the same account, you still have to be there and show up every day and show interest and drive the energy. As a leader, your job in a number of ways is to just pour constant amounts of energy into those projects. It can be really difficult when you're leading a big project to understand how far do you go in demonstrating that you're committed and care about it and you're willing to take action and participate and how do you make sure you don't go too far and stifle the creativity and the enthusiasm and the ownership of the team around you?” This is where you use your knowledge to guide, motivate, and empower versus control or micromanage.

#5: Measure Outcomes

Russell was adamant that one of the biggest changes in digital leadership is adjusting to a different way of measuring contribution, where you’re focusing more on outcomes and less on tasks. “Digital leaders must get better at working towards outcomes. This starts with enabling the team to understand those outcomes and then really supporting and empowering them, moving away from a culture where you're the one making all the decisions and you're the one driving all the actions to the one where you're more making the team accountable for the outcome that you'll need to deliver and fostering a culture where we all work together to achieve an end result,” he explains.

This can require a shift in management philosophy and even company culture but is far more aligned to making progress the way you need to with digital projects and digital talent. “These ways of working are not necessarily well understood or well-practiced everywhere but moving away from action to outcome and focusing on creating the right culture and collaborative spirit with the right team is what leads to success in this digital age.”

Stay tuned for far more insights on this week’s podcast.

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September 10, 2021 | 2 Mins Read

The State of Connected Assets

September 10, 2021 | 2 Mins Read

The State of Connected Assets

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By Tom Paquin

This is part of an ongoing series of articles about the current State of Service going into 2022, along with the contributing elements that have and will continue to impact the industry in the years ahead. Read this to get caught up:

A few years back at Field Service USA, a group of service professionals were discussing how comparatively subdued talk of IoT was, that year. This was the first indication in a long time that the concept of connected assets was finally moving from buzzword to ubiquitous component of service delivery. Comparatively mundane. But that is not to say that the story of IoT has ended, nor that we’ve reached a fully saturated market. It merely represents how our perspective has moved away from “let’s connect everything” to “What can I connect to be more successful?”

And that defines the current state of connected IoT—practicality trumps novelty for connected assets. Organizations are making informed decisions about what to connect to—not going to market with app-enabled coffee mugs.

Oh wait they’re still doing that? Never mind. BUT—in industrial applications, IoT adoption now is engineered around a few core capabilities. Let’s discuss some of them.

True Predictive
We often talk in abstractions about how predictive systems work with connected assets: If you see one weed on your lawn, we can extrapolate that in a week, you’ll have a dozen weeds. But what does that actually measure? The reality is that for most industrial assets, the amount of data generated by any one device is far too much to manage. So how do you extrapolate from that data what normal processes look like, build benchmarks and contingencies for repair, and make the right decisions for your customers?

At the very base level, you need to ensure that your assets are accurately measuring data. Once that has been established, you need a way to clean that data fast and actionalize it without it sitting, untouched, in a data lake. The solution for that is of course thoughtful AI processing, which, when given the opportunity to study practical business processes can cleanse data and form a complex web of conditional guidelines that can, in turn, automate job assignment, or inform remote repairs.

Augmented Augmented Reality
With those systems effectively in place, calibrated to understand your processes, you now have a new channel of service resolution that goes a step beyond basic remote assistance and telestration. By combining visuals for repair with back-end conditions, you have the ability to show someone how to resolve issues while understanding, on the back-end, what isn’t working, how to get it up and running, and what it’ll look like when it’s working. There are a myriad of business efficiencies that are inherently derived from this. Leveraging them will allow an organization to offer more value to their customers while simultaneously improving margins.

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September 8, 2021 | 24 Mins Read

The Intersection of Servitization and Sustainability

September 8, 2021 | 24 Mins Read

The Intersection of Servitization and Sustainability

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Sarah welcomes back to the podcast Dr. Andreas Schroeder, Digital Lead of the Advanced Services Group, for a discussion around how Servitization and sustainability are inextricably linked and what that means for the future of businesses differentiating through service.

Note: As referenced in this discussion, you can view the agenda and register for Servitization Live at https://www.servitizationlive.com/.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about the intersection between servitization and sustainability. I'm thrilled to welcome back to the podcast today, Dr. Andreas Schroeder, who is the digital lead of the Advanced Services Group at Aston Business School. Dr. Andreas Schroeder has allowed me to call him Andy, so I will do that from now on.

Sarah Nicastro: Andy, welcome back to the Future of Field Service podcast.

Dr. Andreas Schroeder: Yeah. Thank you very much, Sarah, for having me back.

Sarah Nicastro: Thank you for being here. I'm excited to chat with you again. Andy was on a previous episode of the podcast, episode 100. We had a really good conversation about how we need to leverage data, and how we need to think about data related to driving servitization. Today, we're going to talk about a completely different topic, but one that is top of mind for a lot of folks right now, which is sustainability. We're going to be talking about how servitization really fuels sustainability, and vice versa, in some different ways.

Sarah Nicastro: So Andy, the Advanced Services Group is gearing up for Servitization Live, which is an event that you all are hosting at the beginning of October. Sustainability, or climate change, is one of the three mega-trends that you all have defined, that you will be talking about at the event. Before we dig into our conversation for today, why don't you tell our listeners just a little bit about those mega-trends are, was Servitization Live is about, and how they can check that out of they're interested in getting some good insights.

Dr. Andreas Schroeder: Yeah, of course. The three mega-trends that we're looking at in the context of servitization, and we'll talk about servitization itself in a minute, we see servitization as a very innovative business model that had dire implications, not just for the companies engaging with it, but wider societal implications. The specific ones that we've been looking at is its contributions to topics like aging population. There's just no going away, as a population we are aging, and there are technologies and ways of interaction that can help to manage this situation. Servitization plays a role in this.

Dr. Andreas Schroeder: There's food and food security, is another mega-trend. As the population grows, food is an important resource, more important than ever. Again, servitization has a role to play in bringing in technologies and different partners of food-supply chain. Making sure that food security and efficiency of food can be managed.

Dr. Andreas Schroeder: The one that we will be talking about today, and looking at the intersection, is sustainability in the wider context. So, we're looking at climate change, resource utilization, and so on, and so on. These are the three trends, so sustainability is the one that we're focusing on in the podcast here.

Dr. Andreas Schroeder: The event that we're gearing up, and thank you for pointing this out, there is a big executive conference that we are mounting. You find this under the title Servitization Live. It is a mixture, it is a hybrid event. It is from the fourth to the sixth of October, including, and taking place physically in Birmingham, UK, but will be streamed worldwide in real-time, of course. We will have a number of very interesting guest speakers coming from industry. The names that will be represented, and will be presenting, is Goodyear, Schneider Electric, Baxi Boilers, and Emuron Technologies. These are some of the names. They will be discussing, from their point of view, how servitization activities already help their business, what their future plans are, and what their contribution for their companies are to their sustainability goals through this business model.

Dr. Andreas Schroeder: It's an event, please visit the website. If it's of interest, please register. It will be a very good event. We are expecting around 600 people to attend. We did this last year, and I hope we exceed this this year.

Sarah Nicastro: Excellent.

Dr. Andreas Schroeder: Thank you.

Sarah Nicastro: Yeah, absolutely. Those of you that have been listening to the podcast, or following the content on Future of Field Service, you know that I'm a big fan of what the Advanced Services Group does. I participated in the event they held last fall, and I'll be participating in Servitization Live as well. Certainly don't come because of me, there are many wonderful guests that will be speaking and sharing, and talking about how these mega-trends are in their minds and in their strategies, and how that trickles down into their individual businesses. We'll make sure to put the link to check out the event in the show notes.

Sarah Nicastro: For now, let's dive into our chat for today. As Andy mentioned, the trend or theme that we're focusing on today is sustainability. I think that what I like about how you all have planned Servitization Live is to really urge people to think about these mega-trends. I think it's very natural for business leaders to get very focused on their day-to-day, their views, and their world. It's important to do that, but it's also important to take a look at the bigger picture of what's happening, and how that all plays in.

Sarah Nicastro: Today we're going to talk about this intersection between servitization and sustainability. The first thing I want to talk about, Andy, is the differences in perception of products, between traditional product delivery or production models, and servitized models. Can we talk a little bit about what the difference is, and how that relates to this intersection between servitization and sustainability?

Dr. Andreas Schroeder: Okay. Yeah, I think this is a good starting point. Maybe before we go into the detail, the way I understand sustainability, there are societal obligations towards sustainability, and then, of course, companies have their own strategies, and so on. What I argue is that these are not contradictive to each other. A good-run business, or specifically a business that tries to move into the Advanced Services space, naturally needs, and I will show this in my explanation, naturally needs and contributes to sustainability objectives. These are not two diverging interests that need to be balanced out. The interesting thing is that these are very well, and very nicely, aligned. The speakers at the conference will map this out for us as well.

Dr. Andreas Schroeder: When we talk about Advanced Services, for us this is a move away. Largely we focus on manufactures, and we support around 300 manufacturers in their move from only focusing on their products, designing, developing, and manufacturing the products, and then selling it on to the customer, to a situation where a manufacturer designs, produces, the product, but instead of selling it on to the customer, the manufacturer retains ownership and responsibility for the product. It often becomes a pay-per-use scenario. The classic example is the Rolls-Royce-era engine example, where Rolls-Royce bought a large number of engines, still stays responsible for the functioning and performance of the engines, and the airlines are paying by the amount of thrust they take out of these engines. This is a significant shift for manufacturers, from being producer of products to provider of services on the basis of their product.

Sarah Nicastro: Services, and, in a lot of cases, outcomes. They're really selling that outcome in a lot of instances, so kind of a step beyond selling it as pay-per-use or pay-per-service and selling it as pay-for-an-outcome. Maybe not in every situation, but in many. That makes sense. In the conversation related to sustainability, let's talk about then how the difference in model, of produce to sell and offload versus produce to own, maintain, and deliver outcomes on, contributes to the topic of sustainability.

Dr. Andreas Schroeder: Yeah, yeah. I think this is the angle to understand this. In a traditional business model, and we generalize here, of course there are differences in companies so we look at generic business models of produce to sell, the objective is to make a profit margin, of course. The objective for design is not necessarily to look at the full life-cycle of the product. The objective of design and production of the product is to make it attractive for purchase. There will be a lot of innovations that companies would have in their drawers that would not meet the price point that they've identified for their customers, so these will not be developed. Or, they make the product a bit more expensive, probably a bit less attractive for an initial capital investment, but maybe there's a long-term benefit to it that they failed to communicate, or they're unsure that they can communicate in a sale of a product situation.

Dr. Andreas Schroeder: A traditional business model, that limits a company. How much innovation they can introduce in their product, and also what is the cost of product they are prepared to invest in and sell. When we look at a change of business model, from a product to a servitization context, a lot of these changes... We are in a situation where the objective is not to sell for an immediate price point, or to design for an immediate price point and sell, but to be able to deliver services on the back of a product for a longer period of time. The contracts we're looking at are 10-year contracts, servitization contract. This is a company that designs a product, and knows that they are responsible for it, for the use, and service, and outcome, and possibly efficiency of the product for a ten-year period, will naturally design the product in a different way. We see this with companies like Rolls-Royce. When they design an aero-engine for service, that is a very different aero-engine, there are very different design principles, than if they would design an engine just for the immediate sell and not for continuous ownership.

Sarah Nicastro: Just to clarify a couple of points for my mind, and for listeners, this is not to say that manufacturers in a traditional business model are producing garbage, or intentionally producing products that are not good. But, by the nature of staying in business, they are producing products that the market will bear. They are producing products to the degree that the market will bear in the sense of selling that product under a traditional, capital-based sales model. So in that, when you mentioned innovation, there are certain restrictions on innovation. Some of the things that could potentially be done to, let's say, maybe put higher quality materials into that product, or to design it and produce it with the ultimate duration of life in mind, versus having to stay at a certain price point. That's where we're talking about there's differences in how these things could be produced if the goal was not to produce what the market can bare for a capital expenditure.

Sarah Nicastro: If you look at it now moving to the servitization model, the manufacturer is retaining ownership of the product, and they're responsible for delivering the outcome, so then it makes sense to invest more in the production of the product to extend that life cycle, because ultimately, they are benefiting from that longer-term view. That will help them in terms of their ultimate profits by innovating in the way that the market won't bare on a capital-expenditure model.

Sarah Nicastro: Let's talk about this just a little bit, to make sure folks are understanding. When you are going to build a product to be longer lasting, there's more expense to that. This is where looking at servitization or the shift to a pay-per-use, or as-a-service model, comes into play. Let's talk about why and how that is.

Dr. Andreas Schroeder: Longer lasting is one aspect, but, for example, serviceability. A lot of products are not designed to be easy to service, in the sense of easy to exchange parts that deteriorate in order to be able to maintain that entire product and give it a longer life. We know this. Again, thank you for pointing this out, this is not talking down companies and their design objective. If you are competing on price, and a lot of companies it doesn't matter in which price point they are there is a price element in the way they can position themselves in the market, there are restrictions of what they can innovate and what prices they can ask for. That limits it. The beauty of the change of the business model is that it takes away some of these limitations, and allow companies that are innovative to actually use their innovation to develop products that they would otherwise not be able to.

Dr. Andreas Schroeder: What we have is longer lasting. When we look at developing products in a servitized context, or as a part of Advanced Services, we have products that are longer lasting. There is no interest in companies having to replace products repeatedly, selling another one, just preparing for the next sale. There is no interest in that. The interest there is efficiently, in an optimized way, maintaining this product in use, because they benefit from products in use, not products in sale. The other part is, again, every service, every repair, is to the detriment of the manufacturer. It's a cost to the manufacturer, so they will design in a way that things naturally are easier to service, if it has to be replaced, then it would otherwise be. A lot of these Advances Services contacts also have efficiency clause in there. It is up to the manufacturer who provides the service to ensure a certain energy efficiency, or even cost-down commitments. Sometimes there are clauses in there that requires a manufacturer to ensure that there's, I don't know, a 3% energy efficiency benefit every year as part of the service, so cost-down commitments from the side of the manufacturer.

Dr. Andreas Schroeder: These very much change how a product is being designed, that's the design and production phase, but also it changes how the product is being in the use phase. When the product is being managed by somebody who has designed the product for longer lasting, who has penalties around inefficiencies, there will a lot of focus on maintaining, making sure, that the product runs on maximum efficiency. That's where the digital part comes in, a lot of monitoring along the side to ensure that this is in place.

Dr. Andreas Schroeder: Also, there is significant opportunities to look at the end of life of a product. Again, traditionally when we have a product-for-sale model, these products are being sold off after a while. There's a primary use, and then a pump or a machine is sold out over to a secondary-use, and possibly internationally gets distributed. There is very little chance for a manufacturer to be systematic about remanufacturing some of the products that are being taken out of use. They disappear somewhere and reduce efficiency, and cannot be traced back. When we have a situation like we're describing in a servitized context, where the manufacturer retains ownership of the products, has to monitor these products, be responsible for them, for them it's a natural, easy process to actually remanufacture these products, and take these products back and put them into a remanufacturing, recycling context.

Dr. Andreas Schroeder: This is some of sustainability benefits of Advanced Services that are part of the business model. They are not an extra, kind of an ethical or moral obligation, this is to optimize the business of the manufacturers in Advanced Services context.

Sarah Nicastro: Yes, that makes sense. We're talking about the difference between products being optimized for sale versus being optimized for use. I want to emphasize the point you just made, because this is a conversation you and I had when we first talked about this topic, which is there are people for whom sustainability is a very, very important topic when it comes to their personal beliefs, and objectives, and how they want to contribute to the environment in a positive way, and all of those things. We see that reflected in a lot of, like you said at the very beginning, there's the personal obligation side of this, and there's the corporate obligation side of this. You see some correlation there, but I want to go back to the point you just made, which is nothing we've talked about so far is something that is important simply to benefit the environment. It does, and that intersection is fantastic in the sense that these servitization objectives and journeys have that impact, but what we're talking about here is really just good business. That's all we've talked about so far, is if you are on a servitization journey it benefits you from an efficiency standpoint, a financial standpoint, to put these measures in place that also improve sustainability.

Sarah Nicastro: Let's talk about that a little bit more, because I think that there is a, again we're generalizing for the sake of a podcast discussion, but there is a group of people that care deeply about the topic of sustainability and want to altruistically take measure to have a positive impact there. There are people that maybe care less. Not to sound negative, but there are people for whom it isn't as big of a personal objective. The point is, whichever side of that lens you're looking at this from, the benefit is the same. If you're looking at it from the sustainability lens, there's benefit. If you're just looking at it from the value of servitization and how to maximize that value, there's benefit. Can you talk about that a little bit?

Dr. Andreas Schroeder: Yeah, yeah. There's another dimension that will come in. In the future, just as an example, in the UK we have now, a new legislation has come out, that by 2025 no gas boilers can be installed in new houses. For a manufacturer of gas boilers that means if they don't change technology, they have no business. Forget about the moral obligation and the environment constraints of gas boilers, from the legislative point of view they do not have a business within four years' time. They need to innovate technologies in order to be in business, and customers need heat. They are now looking at technologies, for example heat pumps, which is more advanced technology than that traditional heating boilers. But, these technologies are more expensive, they are more difficult to manage. They require more collaboration, more looking after, than traditional gas boilers.

Dr. Andreas Schroeder: They are now into the trap that we described where they have to innovate. The technologies are largely there, but they don't match the traditional price point of a gas boiler, around, I don't know, £4,000, £5,000. They are now working, and all of them do this, at saying, "Okay, the legislation doesn't allow us to go for traditional technology." The legislation is based on sustainability goals from the government, but even if the company doesn't subscribe to them they will not have business if they do not meet these goals. They are now looking at finding new business models around Advanced Services to make sure that their higher-value technology, that is more expensive and probably out of reach for a couple of new homeowners, can still be put into market, they have a business, and that technology can be provided, and their expertise can be of use in providing heat.

Dr. Andreas Schroeder: This is on our side of the pond. The Americans, you have similar sustainability goals that means 50% reduction by 2030. This is nine years' time, 50% reduction of CO2 emissions. There will be, if there are yet, significant legislation coming out there, for private citizens, for companies. There will be a lot of new technologies coming on the market to meet these goals. It will happen. If the goals are met or not, but legislation will be there, incentives will be there, and the penalties will be there. Again, we are in the space where new technologies, as I described with the gas boilers, come onto market, possibly at a different price point, requiring new business models for these businesses to have a business, a viable business.

Sarah Nicastro: That's a good point. What we're really talking about is disruption, and where that's coming from. You and I have known each other a while, and we both talk with companies regularly who are embracing the journey to servitization. Many of them have begun that journey because they saw the opportunity to do so. They saw the opportunity to differentiate their business, to provide different value to their customers, to embrace a business model that would really transform their value proposition and their company, and how they operate and everything. Those folks maybe have a bit of a head start, in the sense that if some of those companies are then impacted by this legislation, they kind of have a start toward that transition. However, even those that haven't yet embraced the journey sheerly based on the opportunity they see, now they're being nudged to do so because of this legislation. The disruption is coming in the terms of a threat, not an opportunity. Regardless of how that's coming, it's just the reality.

Sarah Nicastro: The opportunity to servitize, and the opportunity that exists to change the business model, so that they can develop the products they need to develop in the way the need to develop them to meet those legislative restrictions is really pretty awesome, that that opportunity exists. However you're kind of coming into the journey, it's a really exciting journey to be able to embark on. I think you make a really good point about the US, and it's probably safer for me to say this than you, because I live in the US, but we do lag a bit in a lot of areas on this topic, related to some other countries and regions. You make a very good point, which is the objectives are there and the legislation comes next. It is going to come, so there's an opportunity here for those organizations here to get ahead of that a bit. Rather than waiting for that to be looming, and to be trying to race through this, there's an opportunity to look ahead a little bit and to sort of see what's coming, and to get ahead of that. That's a really interesting point.

Sarah Nicastro: I think we talked a bit about, for you all and the organizations you work with, what have you seen related to the catalyst? Is there differences in the catalyst for why companies are embarking on this journey? Have you seen that reflected in when companies come to you and they say, "Hey, we want to servitize, and here's why"? Are those stories different today than they were a few years ago? Or, how do you see that evolving?

Dr. Andreas Schroeder: Yeah. There are different kinds of motivations, and they always show up in different ways in these companies. The buckets that I would put out there to group these, quite a number of them come from the digital angle. They're saying, "Okay, we have now digitized our products, have a good understanding. What are the business models that help us to get more value out of our investment in digital?" We discussed it in the first podcast, Advanced Services is one of the business models, I would even argue the business model, for digitalized products.

Dr. Andreas Schroeder: The other bucket is certainly companies that, and often quite successful company, that are saying, "Okay, the competition is creeping up. We believe that we have an edge in terms of product, innovation, and so on, and so on, but we are getting squeezed on price. Let's look at a new business model where we can make use of our innovation and our expertise, and not have to compete on price with the competition." Now, we see also, in the case of the boiler for example, or other companies we're interacting with, where companies literally see the absolute need... the constraints that the traditional business models puts on the way they can interact with customers.

Dr. Andreas Schroeder: Just as another example, again in London, I'm not sure what year it kicks in, but it's to become a low-pollution... entire London, city of London, not just the city, the environment, the metropolis of London, a low-pollution environment. Manufacturers producing, or even products being used... We talk about trucks, we talk about cranes, we talk about diggers, we talk about everything, will have to meet this requirement.

Dr. Andreas Schroeder: All the alternative technologies are electronic-based, will be more expensive, more difficult to maintain, require different kinds of care, do not fit traditional models. Companies coming to us and saying, "We see how the market is being constrained for us", for the right reasons, they don't even blame legislators for it. They see that this is a game change for them, now we have to respond to this. Again, coming not from altruistic motives, but somebody as a leader of a business that needs to make sure that they have a business in 15 years' time.

Dr. Andreas Schroeder: Also, sometimes it's based on legislation, sometimes their customers. Their customers, if it's a progressive company, their customers want to have certain commitments and certain energy efficiency benefits. Seeing from their supplier, because it becomes part of their own energy balance. If I run a production line, I'm responsible for all the energy emissions that are being created as part of the production line. If some of the machines are not owned by me, I'm still responsible, it still shows up on my balance sheet, so I want to make sure that my suppliers of products helps me to achieve these emission targets that might be there because of law, or because of strategy, or ambitions. There's a cascading effect now also, where companies hold each other accountable, and enforce each other's business model, therefore.

Sarah Nicastro: Mm-hmm (affirmative). This is probably a really unfair question, because I don't think there's any real way to answer it. I know that you're going to want to give me a concrete answer, but when would you say that the traditional business model is just going to become largely obsolete?

Dr. Andreas Schroeder: Yeah, I can give you a precise answer, and the precise answer is the innovative companies will start... We already see it, not will start, they are starting to change the business model. But even a company like Rolls-Royce, aero-engine, will still have a market for selling some of the products from the traditional way. I would hazard a guess that the more innovated companies will, of course, embark on it further, but even the most innovate companies will still have a business related to traditional products. What we see, and the benefit of having this Advanced Service in place is the innovations that come out of designing products differently, and looking after a product differently. They seep over into the design of the products that are for the for-sale market. Any kind efficiency, and kind of improvements, will not just be isolated to one part of the business.

Dr. Andreas Schroeder: I don't think there will be a world where traditional business model is totally phased out, but definitely the Advanced Services business model takes over. As always, there are some companies spearheading. Some regions are spearheading. Scandinavia is very much ahead of most of the rest of the world. Europe is catching up. The US is actually involved, and it will involve further, and further regions of the world. And, so it goes.

Sarah Nicastro: Like I said, that was unfair, and probably poorly stated. Maybe obsolete isn't the right word, but you just think about... There's a point at which the lag just becomes insurmountable. The companies that are innovating, and the companies that are not, I think there will reach a point where that gap is very hard to close. I do think that, while the traditional model won't become entirely obsolete, the demand to embrace this reality is immense. I don't think that a company can just say, "Oh, we'll just keep doing it this way and we'll continue to be successful." It just seems that that is virtually impossible. Okay, I'm trying to think of-

Dr. Andreas Schroeder: Let me just get to it with another... You're saying it's virtually impossible. We have examples of companies that... I don't know what the proper word is, that didn't pick up a trend. Polaroid, Kodak, Blockbuster. There are examples of companies who missed the trend, and some can catch up, some cannot. It depends on the set-up. Innovative companies miss trends, so it can always happen. Information is out there. So that's one thing, the other interesting thing that we've seen over the years, I started with the example of Rolls-Royce, these are high-value, very high-value, items. I'm not sure the price point of an aero-engine, but let's assume we're talking about millions. The price point of products that are becoming attractive for Advanced Service models are now on the level of boilers, which are around a couple of thousand pounds. The change over the last 10 years, in what is possible and what is feasible, is dramatic. Largely related to building up expertise, opening up to the business model, but also the connectivity part.

Sarah Nicastro: You're saying the two servitized, so the potential... Yeah, it's almost like... I wrote an article, it was years ago, I don't even remember the exact angle, but it was talking about the trickle-down effect. It's the same concept. This originated as a business model that seemed feasible or a good opportunity for a company like Rolls-Royce that produces products that are millions of dollars, but it's now becoming an opportunity that is equally viable to a company that produces boilers that are a couple of thousand pounds. There's-

Dr. Andreas Schroeder: Just one point to it. If we take the same mindset, as a service, and we wind back 10 years ago and we looked at software as a service coming around the corner. Of course, this started with very innovated companies, but now if you develop a piece of innovative software and you don't have it as a service proposition, you probably don't have a business. If you expect that everybody will host themselves any version of your software you don't have a business. A lot of companies will still offer this. It is getting wound down. Sometimes you cannot host it yourself. Try to host Gmail yourself, it's a tricky proposition. This is the way I see it with Advanced Services as well, that it starts with the innovative companies, it starts with the bigger companies with a high-value product, it trickles down into smaller-value products.

Dr. Andreas Schroeder: Just for our conversation, I looked up, just to close the loop, the energy efficiency of software as a service, or cloud services, versus hosting yourself is around 90%. If you would use the same software, hosting yourself as an SME, versus going into the cloud and using some of the cloud space available, you reduce your energy consumption by 90%, CO2 creation by 90%, by going into the cloud. Not the same numbers in our, as a service proposition, because we talk about products, physical products, that need to be shipped, that need to be produced, but we talk also about significant potential in energy and CO2 emission reduction based on the same principles.

Sarah Nicastro: Yeah. And product waste, in the sense of what we talked about initially, which is these products being intentionally developed and manufactured to last as long as they can. Yeah, it's really-

Dr. Andreas Schroeder: And be recycled at the end. So lasting, and the recycling loop. Which again, is big chunk of what needs to be done by companies for their own efficiency's sake, and which has the added benefit for sustainability aspects.

Sarah Nicastro: Yeah. I love this topic. I think it's so interesting. We have a podcast coming up with Tetra Pak, and it's a whole sort of extension of this conversation, which is looking at the opportunity for... beyond their own products, but looking at the opportunity to offer sustainability efforts as a service, and to help other organizations improve their own sustainability efforts. It's really interesting. I consider them a leader, and industry leader, and one of the more innovative companies, but those are the best to learn from in the sense of what we talked about with the trickle down. To listen those stories, and to think, "Hmm, how could that apply to my own business?", I think is just really cool. There's a ton of potential here. There's so many layers to this topic. I really enjoyed talking with you today, and having this conversation. I'm sure you'll come back. Is there any other comments, or words of wisdom, that you would like to close with? Any other thoughts?

Dr. Andreas Schroeder: Everybody who's interested in this topic should definitely attend, register and attend, our Servitization Live conference. Again, I outlined the speakers, but what you will hear is innovative companies, for example, who are in the heating or cooling business that, again, servitize. They will also map out their servitization journey, their strategy, their objective, their motivations, but also show how they are under significant scrutiny in terms of sustainability and climate change. Cooling and heating is one of the major sources. They use this new business model to make significant headway in standing up to the scrutiny, and innovate in the way that benefits their business, as well as meeting governmental targets. If anybody is interested, and you should be, then please join Servitization Live.

Sarah Nicastro: Awesome. Yes, I definitely urge you to do so. Just to reiterate what we talked about today, the two objectives are inextricably linked. That's the really exciting thing there, is that this intersection is real, and as organizations embark on their servitization journeys they're going to improve sustainability, and as companies focus more on sustainability their going to turn to servitization. That's a really cool thing, and it'll give us a lot more to talk about. We will be sure to put the link to the event in the show notes, so that you can all go and register. I urge you to do that.

Sarah Nicastro: Andy, that you so much for joining me again today. I appreciate it.

Dr. Andreas Schroeder: Thank you very much for having me. It was a pleasure.

Sarah Nicastro: Yes. You can find more 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, thank you for listening.

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September 6, 2021 | 6 Mins Read

Where Servitization and Sustainability Converge

September 6, 2021 | 6 Mins Read

Where Servitization and Sustainability Converge

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By Sarah Nicastro, Creator, Future of Field Service

On this week’s podcast, I welcome Dr. Andreas Schroeder, Digital Lead of The Advanced Services Group at Aston Business School back to discuss the ways in which Servitization and sustainability are linked. The Advanced Services Group is preparing for its Servitization Live event, which runs October 4-6 in a hybrid format, and sustainability is one of the major themes being covered.

According to Dr. Schroeder, sustainability and Servitization are closely linked and companies with interest in either area should understand the connection. “The way I understand sustainability, there are societal obligations, and then, of course, companies have their own strategies,” he ways. “What I argue is that these are not contradictive to each other. A good-run business, or specifically a business that tries to move into the advanced services space, naturally needs and contributes to sustainability objectives. These are not two diverging interests that need to be balanced out. The interesting thing is that these are very well, and very nicely, aligned.”

The Advanced Services Group has seen an increase in Servitization efforts driven by sustainability-related motivation. “There are different kinds of motivations driving Servitization,” says Dr. Schroeder. “Quite a number of them come from the digital angle – companies that have digitized products and are looking for business models that help drive more value out of the investment in digital. The other bucket is companies that have an edge in product innovation but are feeling competition creep up and are getting squeezed on price, so they look to Servitization to make use of innovation and expertise without having to compete on price. Now, though, we see also where companies literally see the absolute need – the constraints that the traditional business models put on the way they can interact with customers.”

In London, for instance, there are a number of industries being impacted by sustainability-driven legislation that need to completely reimagine their business to comply. “Every manufacturer will have to meet these new requirements and all the alternative technologies are electronic-based. They will be more expensive, more difficult to maintain, require different kinds of care, and do not fit traditional models. This means companies coming to us and saying, ‘We see how the market is being constrained for us,’ for the right reasons, they don't even blame legislators for it. Again, coming not from altruistic motives, but somebody as a leader of a business that needs to make sure that they have a business in 15 years' time,” describes Dr. Schroeder.

Exploring the Intersection Points

Whether you’re feeling the pressures of legislative change related to sustainability initiatives, or simply have a commitment to making a positive impact, Servitization is a lever to explore. However, even if sustainability isn’t a key driver for you at the moment, understanding how Servitization based strictly on the business decision will have an impact on sustainability is interesting to explore and, I’d argue, important to understand. So, let’s examine some of the intersection points.

First, products developed with the goal of Servitization and delivering outcomes in mind will be more sustainable than those developed with the restriction of prioritizing acquisition cost. In a traditional model, products are designed and manufactured to the degree that the market will bear in the sense of selling that product under a traditional, capital-based sales model. This naturally puts certain restrictions on innovation because it would take the product beyond its tolerated price point.

But in the Servitization model, where the manufacturer is retaining ownership of the product and responsible for delivering the outcome, it often makes sense to invest more in the production of the product to extend its lifecycle, because ultimately, they are now benefiting from that longer-term view. Innovation now will help them in terms of their ultimate profits in the way that the market won't bare on a capital-expenditure model.

“In a traditional business model, the objective is to make a profit margin, of course. The objective for design is not necessarily to look at the full lifecycle of the product. The objective of design and production of the product is to make it attractive for purchase. There will be a lot of innovations that companies would have in their drawers that would not meet the price point that they've identified for their customers, so these will not be developed,” explains Dr. Schroeder. “When we look at a change of business model, from a product to a Servitization context, a lot changes. The objective is not to design to sell for an immediate price point, but to be able to deliver services on the back of a product for a longer period of time. The Servitization contracts we're looking at are 10-year contracts where the company designs a product, and knows that they are responsible for its use, and service, and outcome, and possibly efficiency for a ten-year period. They will naturally design the product in a different way.”

The freedom to design differently results in longer lasting and easier-to-use products. “When we look at developing products in a Servitized context, there is no interest in companies having to replace products repeatedly, there is no interest in that. The interest there is efficiently, in an optimized way, maintaining this product in use, because they benefit from products in use, not products in sale,” says Dr. Schroeder. “The other part is, again, every service, every repair, is now to the detriment of the manufacturer. It's a cost to the manufacturer, so they will design in a way that things naturally are easier to service.”

But the impact isn’t just on product design and production, it is also on product use. “When the product is being managed by somebody who has designed the product to be longer lasting, who has penalties around inefficiencies, there will be more focus on maintaining and making sure the product runs on maximum efficiency. That's where the digital part comes in, a lot of monitoring along the side to ensure that this is in place,” explains Dr. Schroeder. “These are some of sustainability benefits of Servitization that are part of the business model. They are not an extra, kind of an ethical or moral obligation, this is to optimize the business of the manufacturers in advanced services context.”

While for many Servitization’s impact on sustainability may be a happenstance of a financially versus environmentally driven business decision, the reality is that sustainability will inevitably become more of a driver. Some companies are already feeling this pressure, or proactively taking these steps, but for those that aren’t this is an opportunity to be proactive versus reactive and to give yourself some headway to make necessary changes. “This dimension will expand. As an example, in the UK we now have legislation that by 2025 no gas boilers can be installed in new houses. For a manufacturer of gas boilers that means if they don't change technology, they have no business. Forget about the moral obligation and the environment constraints of gas boilers, from the legislative point of view they do not have a business within four years' time. They are looking at more advanced technology, but these options are more expensive, more difficult to manage, and require more looking after than traditional gas boilers,” explains Dr. Schroeder. “They are now turning to advanced services to make sure that their higher-value technology can still be put into market. Americans have similar sustainability goals – in nine years' time, 50% reduction of CO2 emissions. There will be, if there aren’t yet, significant legislation coming out and new technologies coming on the market to meet these goals. If the goals are met or not, the legislation will be there, incentives will be there, and the penalties will be there. Again, we are in the space where new technologies, as I described with the gas boilers, come onto market, possibly at a different price point, requiring new business models for these companies to remain viable.”

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