When BINGO meets servitization
By Cindy Elliott
As I dive back into the wonderful world of servitization, in the past two weeks I was able to attend three strategic industry events - Field Service Medical (Berlin),Product Innovation (Munich) and World Chief Services Officer Summit (London) - that were attended by Product and Service Leaders from global manufacturers. These conferences were supported by very distinct personalities – individual professionals from field service, product development / R&D and service supply chain respectively.
At each meeting, Professor Tim Baines, and I conducted a common workshop spanning more than 150 individuals and more than 100 manufacturing organizations. And without giving away any secrets – starting with a “Bingo Card” we asked participants a series of questions to indicate their strategic focus TODAY, in summary 50% of responses indicated a PRODUCT or OPERATIONAL EXCELLENCE focus today. But when responding to a second series of questions, thinking ahead in 3 to 5 years time, those same participants responded 99% that their strategy is to offer the BEST CUSTOMER SOLUTION (leveraging advanced services).
This services-centric strategy is not surprising. In fact, it’s nearly the exact same finding as in-depth research published in 2014 from Oxford Economics and PTC,Proving the Service Continuum. Those results showed that 30% of 300+ global manufacturers surveyed were assigned at the beginning of service transformation TODAY (then 2013), but when asked about their 3 year strategy (by 2016) a full 95% forecasted themselves as being in an advanced state.
So, time is up – those three years have come and gone – and we’re not making nearly the progress we expected in that research, and which was proven recently with our Bingo results.
Why is that? I’m sure that there are several reasons – but is lack of clear, consistent leadership at the top of the list?
During these recent meetings, despite similar ambitions around helping transform their companies – it’s apparent that these leaders are approaching servitization from their own silo’d organization and cultures – Field Service, Product Development (R&D) and Service Supply Chain. Each of them are attempting to deliver new customer offers on their own based on their distinct experience with customers or other market influences. Offering a very fragmented customer experience.
Unfortunately, what this demonstrates is a challenge that I’ve referenced before, that despite the ambition of industry executives, the opportunity for servitization is still clustering around the starting line.
In my opinion, until firms truly understand and adopt a cross-functional customer-centric strategy and appoint dedicated leadership who can execute a forward thinking advanced services business model – this clustering at the starting line will continue – limiting the transformational value of servitization.