Tim and I traveled to Ohio last week to join our colleague Cindy for the induction programme of the North American chapter of the Advanced Services Partnership.
I blogged in April about the Spring Roundtable of the European chapter. It brings together like-minded senior executives from non-competing businesses who are seeking to explore and accelerate the adoption of advanced services. We’re taking advantage of the fact that Cindy is based in the USA to follow this model and form the North American chapter.
We were fortunate to be hosted by Goodyear for our two-day programme, spending the first day at the blimp hangar where we were lucky enough to get a tour.
The agenda for the two-day programme focused on providing an introduction to the partnership, inspiring a vision within participants’ minds about how advanced services might look for their business, and giving opportunities to network with, and learn from, other partners.
In addition to sharing some of the leading insight from academia and industrial practice around competitive strategies for advanced services, we ran hands-on exercises where the partners had a chance to look in-depth about how advanced services might benefit their company, and what these services might look like in terms of a value proposition to the customer, each receiving one-on-one support from one of our team of experts to guide them. Everyone went away with a video capturing their servitization story so far, and where they plan to go with it.
A key highlight of the programme was the contribution of partnership co-chair Jim Euchner, Goodyear’s VP for Global Innovation. Jim shared some personal experiences of championing the development of advanced services offerings within Goodyear over the past five years. Some of the key lessons learnt that I took away from his experience were:
The process of developing new value propositions has to start with understanding customer need, and the customer may not be able to articulate this themselves. You have to spend a significant amount of time observing your customer’s environment and operations, in order to get beyond what they think they need, and identify opportunities to add value that are worth exploring.
Jim and his team at Goodyear have found that business experiments are the best way to reduce risk and test out their ideas for services offerings, to find out whether assumptions they had made about things like customer appetite for an offering, or the ease of implementing technology to support the offering, were correct. These experiments have to be as close to conditions in the real world as possible, and done with real customers or potential customers.
The new offering can’t be brought straight to marker at full scale. Goodyear employs small-scale ‘incubation’ to demonstrate profitability and scalability and build a strategy and a case for full roll-out in the business.
New offerings often challenge the existing business model and operating structures of the core (e.g. when a manufacturer with a strong heritage in product design and quality starts to explore advanced services models). Situating the the initiative to develop and test new offerings within the business-as-usual core of the company, and subjecting it to the established performance engine, can stifle progress entirely. Goodyear has found success in establishing separate divisions with their own staff to incubate new businesses- and is, of course, fortunate enough to have the resources to do so.
If you are interested in finding out how you can join the Advanced Services Partnership to take advantage of access to thought leaders and practitioners in services for manufacturing companies, please get in touch: North American chapter or European chapter