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October 28, 2019 | 4 Mins Read

4 Observations of Innovation in Practice Among Today’s Service Organizations

October 28, 2019 | 4 Mins Read

4 Observations of Innovation in Practice Among Today’s Service Organizations


By Sarah Nicastro, Creator, Future of Field Service

Last week I was invited to give a keynote presentation at DHL’s The Future of The Services Supply Chain event at the company’s brand-new Americas Innovation Center in Chicago. The 28,000-square foot facility featuring hands-on displays of cutting-edge technologies such as robotics, 3D printing, augmented and virtual reality, and many more was quite impressive. DHL put together a great lineup of speakers for a day full of learning, networking, and experiencing the interactive displaces the Innovation Center has to offer.

As I listened in to the other speakers, including DHL customers that provide critical services in a variety of industries, I was able to pick up on some themes around how these companies are fostering, embracing, and harnessing innovation within their businesses today. Here are four key observations:

#1: Innovation Begins With Aligning Company Culture

The way service-based businesses have traditionally operated versus how you need to operate in an innovation-driven world are in many ways at odds with one another. Operational excellence is important, but the leadership and thinking of an operationally-driven business is different than that of an innovative one. In order to successfully innovate, you need to determine how to strike an appropriate balance between these two aspects and look at what adjustments might need to be made within your culture to promote more innovation. If your workforce is accustomed to being measured based on optimal efficiency and lowest cost, they aren’t likely to focus on innovating. This doesn’t mean you stop focusing on efficiency and costs, it just means that you need to examine how to empower your employees to think outside of the box and be a part of the company’s innovation – because innovation is an everyone job. “We focus on having a broad stakeholder community, and promoting a collaborative culture,” Roger Perry, Senior Manager of Digitalization Strategy at Cisco said at the event.

#2: Innovation Must Be Outside-In

Some companies make the mistake of innovating inside-out, meaning focusing on their products or services and brainstorming about how to do things better or differently. This is the wrong approach, because it is the voice of your customers that matter most. Therefore, you need to focus on innovating outside-in. This means seeking input from your customers on what it is they want, need, value, and find important- not just related to the service you provide today, but even beyond (so that you get ideas not only on how to improve on your present-day business, but also to think about what your future may look like). Joe Beck, VP of Global Supply Chain at Medtronic, shared a heartwarming presentation on how the company approaches innovation, which is always with the customer in mind. “Our customers are the lens through which we view every decision we make at Medtronic,” he said.

#3: Advanced Technology Is Ready For You

We’ve written quite a bit on Future of Field Service about how you need to have a strong technological foundation from which to build on more advanced applications. But for those of you with a good foundation in place, those advanced technologies are available for the taking and have some very impressive business cases. The tour of the Innovation Center was eye-opening for me because it showcased technologies like robotics, AI, 3D printing, and AR in real-world business scenarios that DHL has developed with its customers. It’s one thing to see these technologies showcased in a vendor’s fictional sales demo, but to see the tangible applications that DHL has built to provide value to its customers was really interesting and brought to mind for me how prime-time ready these tools really are for the businesses that are ready to adopt them. The companies in attendance that are innovating have trained themselves to become accustomed to a more fluid, agile way of experimenting with new technologies. “We’ve developed a see/decide/act methodology and have migrated to more methodical releases versus big-bang,” said Perry. At Lenovo, innovation is spurred by the willingness and ability to try new things. “We run many small pilots to test out new ideas, concepts, and tools – if they work, we quickly scale,” said Julio Pineta Ortiz, Director of LAS Services at Lenovo. The idea – and action – of constantly experimenting and scaling what works is again a fundamental shift for many companies, but one that is key to successful innovation.

#4: Innovation Is Data-Centric

“The next growth engine is digitalization,” said Gina Chung, Head of Innovation Americas at DHL, as she kicked off the morning sessions. We know that data is our most powerful tool today and will only become increasingly important in the future. Data is critical not only when it comes to measuring our own innovation efforts to determine success and learn from failures, but also in terms of looking at how we will use data as an asset for our customers. “You can’t manage what you don’t measure,” said Ortiz. “We focus 80% measurement on strategic KPIs, and 20% on tactical.” For most organizations, making data-driven business decisions isn’t new – but for many it is still very reactive. In order to keep pace with the industry, we need to focus heavily on getting ahead of the data to be able to use it more proactively. “The goal is to move from using data in hindsight to using data as foresight,” says Jaime Hooker, VP Americans Service Logistics at DHL.