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August 3, 2022 | 25 Mins Read

Baxi’s Path to Heat-as-a-Service

August 3, 2022 | 25 Mins Read

Baxi’s Path to Heat-as-a-Service


James Galloway, Head of Product Marketing - Commercial, UK & Ireland at BDR Thermea Group, talks with Sarah about why and how Baxi (one of BDR Thermea’s brands) has introduced Heat-as-a-Service and shares his thoughts on what makes this business model transformation both challenging and worthwhile. 

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking about what it takes to bring the as-a-service vision to life. I'm joined today by James Galloway, who is the Head of Product Marketing for Commercial, UK and Ireland, at Baxi Heating. James, welcome to the Future of Field Service podcast.

James Galloway: Thank you very much. Thanks for having me.

Sarah Nicastro: That was a mouthful. Okay.

Sarah Nicastro: Baxi is on the journey to bring heat-as-a-service to its customer base. Today we're going to talk a little bit about James's experience and Baxi's experience in terms of why we're on this journey or you're on this journey, what some of the drivers for that are, what some of the reasons or ways are that you think it will benefit the various stakeholders, and then just some of what you've experienced thus far. Before we get into all of that, tell everyone a little bit more about yourself. Anything you want to share about yourself, your role, and then for those that are not UK, just a little bit about Baxi's business.

James Galloway: Cool. My name is James Galloway. I'm the Head of Product Marketing for UK and Ireland business. Now, that's with Baxi Heating, one of the major brands for BDR Thermea Group. BDR Thermea Group is the owning company. We operate worldwide in more than 100 countries with turnover of just over 2.1 billion euros, so quite a sizable company, market leader in commercial heating, and also in a major company in residential heating as well, we also do cooling. So it is really about HVAC heating ventilation and air conditioning is our sole focus as a company. Now, in the UK, we've been present for a long time, more than 150 years now. We've got the long legacy through merchant acquisition as well. We've grown, but we've got a lot of experience. Really we're a manufacturing company. That's what we are as an organization. We're extremely good at making millions of products exactly the same high quality and selling them as a transactional sale. That's our business model. We employ almost 9,000 people across the world, largely within Europe, but a global presence.

Sarah Nicastro: Good. Okay. We're embarking on the journey of transitioning from selling these products to delivering them as a service. How would you describe where Baxi is on that journey today?

James Galloway: It is a journey. We've got a roadmap which we've developed together with some of the academic partners and industry partners as part of a servitization project, which we can talk a little bit about later, but it describes this journey towards servitization. And in very simplistic terms, I think we're on step maybe one and a half or two out of three in super simple terms. We've got a product, we offer servicing, we service, we have a service level agreement where we go and fix maintenance issues of our heating products typically within 24 hours, typically much faster than that actually, mostly ourselves, but also with service partners. We're doing that really well today. What we are not doing is we're just starting to explore leasing, so finance models, which we can combine with the servicing to offer products on finance and also almost guarantee the heating.

James Galloway: So almost guaranteeing because if it's a failure, we're not yet able to predict that. We're pretty close with predictive maintenance and preventive maintenance. We're just starting to do remote diagnostics one-way and two-way. Now, heat-as-a-service, it's all of that and more. It's actually being able to share the usage of heating, which is controlled by the consumer. And then we guarantee the delivery of whatever the consumer is asking for typically through an app or some kind of control interface depending on the customer type. That's quite a big leap actually from steps one and two where we're offering the products on a transactional basis, but also the maintenance side. It is quite a big step largely through... Well, we can talk about it in more detail, but largely because of that, the systems that you need to have to actually make all of that work, millions of data points simultaneously being analyzed to make sure that you can respond or predictively and proactively prevent a maintenance issue from coming up to guarantee that heat outcome.

James Galloway: But it's a really exciting point because it's the hockey stick moment. I'd say we're just on the cusp of that hockey stick moment, very close to being able to actually feasibly and viably demonstrate heat-as-a-service in its full form.

Sarah Nicastro: Yeah. That's really exciting. Let's talk a little bit about some of the drivers for this journey. If we take a step back from where you are, let's talk about what were the reasons that Baxi decided to go this route?

James Galloway: There were lots of strategic risks that we're following, but this one specifically, it's on our strategy and we've invested in it because it solves a really important customer dilemma. And one is largely because it's about affordability of specific technology types that help to decarbonize. Now, Baxi and BDR Thermea predominantly customers buy gas-heated products, gas-fueled products from us. We also manufacture heat pumps, direct electric heating. We're investing a lot in hydrogen heating as well with live perception and demonstrations in the field. But our customers, they are buying gas products from us most of the time, because it's the cheapest. And a lot of our customers, they really want to install lower carbon forms of heating. Let's take heat pumps as an example, they are however much more expensive. The hardware is more expensive, much lower volume. So the cost of manufacturers is higher.

James Galloway: There's a dilemma for a customer who wants to decarbonize, but they can't afford it. And that's where heat-as-a-service can really help with that. What's different from heat-as-a-service from a finance model, because a finance model also solves that dilemma. A finance model, you can amortize that the upfront capital cost of a contract that term, and so you also solve that issue. But heat-as-a-service specifically puts the control in the hands of the consumer. And that is the key bit is because that... Especially today's world, recently we've seen global events, geopolitical events, which have really increased the cost of fuel. And so we've got the cost, especially in the UK, the cost of living crisis, which is in the news all the time.

James Galloway: It's exacerbated this customer problem of A, wanting to decarbonize and reduce dependency on gas, but B, have it affordable. And then there's a third point. C, you're having control of that. And being able to decide, okay, do I need to... What's more important for me, save money or have more heating comfort? Or even better choose when you really need the heating and hot water comfort. In a household context, that would be, well, maybe you don't need to heat your study or your back bedroom or something all days of the week. You can really choose and select how you economically heat your home, or if your commercial business, how you heat and provide hot water for your premises. For example, a hotel might not, depending on your occupancy rates, you economically heat and provide hot water for your property. It's the dilemma, but also improved control and improved usage. It's been quite clever about how we provide and use heat and hot water.

Sarah Nicastro: Ultimately, the primary driver or drivers are really around how heating is evolving based on environmental factors and the fact that that makes the product itself more expensive. So we need to look for different business models to make the new products affordable for customers to be able to leverage.

James Galloway: That's right. Yeah. On a very simplistic level, we exist as a company to solve problems for our customers. And heat-as-a-service, an outcome-based service business model in general, it's simply a solution to fix a problem. There are other solutions which fix that problem, but we feel that specifically, heat-as-a-service is one of the best solutions for A, helping to reduce that upfront cost, and B, put better control in. It's just a solution. If we can do it really well and it satisfies that problem, of course, as an organization, we will prosper from that as well.

Sarah Nicastro: Right. And it's a good point. You said there are other solutions and that's almost always the case, but I think one of the big benefits of as-a-service is the simplicity. Rather than the idea of, okay, well, we could finance your product, then you could pay for this service, it becomes more effort for customers to understand and track, et cetera, when it's just, you need X, we provide X, and you pay Y. It's a simpler customer experience really.

James Galloway: Right. And we're really used to that now. Look at Uber, for example, I suppose it's a good example. It's done exactly that. They formed, when is it, about 10 years ago now? And they're really taking advantage of technologies, which are now, everyone has got a mobile phone now. You've got that ability to use technologies. And also you've got customers who are familiar with it so that there's a level of readiness to adopt a new way of doing things. It's making it simpler. It's about using the technology around us to do what we've done before but in a simpler way. I think you're right with that.

Sarah Nicastro: Yeah. And I think in some areas it's not only a readiness but a demand. That varies industry to industry, but I think the message at least for us, for service organizations, is, hey, this is the path that we're on. We used to say, "Well, customers don't care about products. They just want service," meaning the experience. And I think now it's customers don't really care about products or service. They just want the outcome. Right?

James Galloway: Yeah.

Sarah Nicastro: Obviously, both are imperative to the outcome. But they don't care about the details. They just want to be able to trust that whatever you do is going to work how they need it when they need it. Period. And the onus is on companies like Baxi to figure out, okay, if this is the demand, how do we meet it? And that almost always means doing things differently. Yeah.

James Galloway: I was just going to say that most consumers don't know or care about their heating product. You've always got technically oriented consumers and you've always got people who do have genuine interest in what the heating product and technology is, not just at the point of purchase or coming up to the point of purchase, but through the lifetime, but the majority don't. You're exactly right. It's just, what's the outcome? That's what people care about. You know?

Sarah Nicastro: For sure. Okay. We talked a bit about how this as-a-service model, benefits Baxi's customers. It allows them to move toward a perhaps cost-restrictive environment, more environmentally friendly option, and it allows them to have better control over their usage and ultimately, what they're purchasing from Baxi. Let's talk a little bit about how you feel it will benefit Baxi as an organization.

James Galloway: Well, we're really trying to sell more heat pumps. And by the way, heat-as-a-service, it's not just for heat pumps, it's for all technologies that provide heat and hot water. Heat-as-a-service applies to all of them, but it's specifically useful as a solution for heat pumps because they are more expensive. And we want to sell more of them. It actually helps us to sell more because our cost of operations goes down, our fixed costs reduce. We can do that better. But until we can help customers to overcome those cost barriers which they're currently encountering, the uptake is going to be restricted. It helps us as an organization because we can increase the uptake of the product. And that helps us.

James Galloway: It helps finance our projects. You know, you have to have strong commercial viability in any project, new development when you're looking to invest, so if you can demonstrate a higher uptake, that ultimately helps us, not just with our current what we're doing, but also future strategic choices, investments, things like that. As a business model to introduce that, it will help us to accelerate the investment in that new technology type. And that's something that as an organization we must respond to. There's another side of that in the form of legislation. In the UK as a total government, we have a government that have set out a target to be net-zero by 2050 and a 78% reduction in CO2 by 2035.

James Galloway: In terms of product technology, legislative effects, or impacts for commercial buildings, you will not be able to put in gas-heated products from 2030 onwards for a residential new build, that's from 2025. So really near-term legislative significant impacts. That's also really significant for the organization. By introducing a new business model, which helps the uptake of heat pumps specifically and other zero or low carbon technologies, it helps us to be on track and ready for these legislative timelines that are coming up pretty quickly.

Sarah Nicastro: Yeah. And if we think about the reason those legislation regulatory things exist, it's because we know that we all need to be doing more to protect the environment. The third benefit is also to the environment itself. First, you're taking a technology that's cost prohibitive and finding a way to make it affordable for people to put in place to replace some of the less environmentally friendly options. Two, you're allowing customers to have more control over usage, which obviously has an impact as well. And then the other thing that we see in the trend of servitization in terms of how it impacts the environment is it gives companies more freedom over putting measures in place to provide service more efficiently because you're providing the outcome versus billable hours. There's the more latitude to say, "Okay, well, let's look at remote diagnostics, let's look at remote service. Let's do these things," without customers saying, "Well, we're not going to pay for that because you're not on site." It doesn't matter because they're paying for the outcome.

Sarah Nicastro: Then you have an opportunity to become more efficient, both environmentally and then also cost-wise for the organization in how you deliver service. It is a really interesting conversation. James Galloway: And those are the big building blocks that underpin the offering of that service, the effective offering of that service. Heat-as-a-service sounds great. And also, by the way, what does heat-as-a-service mean? Sounds great in the strategy document. We should talk about how you get through to consumers into really what it means. I don't think a lot of consumers when you say heat-as-a-service, they know exactly what it means, but let's come to that in a moment. But the building blocks are actually effectively offering that. Like you said actually it's about remote diagnostics, it's about preventive diagnostics, and the next step of remote diagnostics. It's about taking all that data and having a really slick and effective and efficient field of operations, especially in the context of maintenance. Today we have hundreds of field engineers, all in vans, stocked with components every hour going to visit customers in the UK.

James Galloway: That just, if you can imagine, it’s  improved scheduling and going to site, not twice, because you go once to investigate and go back a second time with the right part. But just going once, that's a huge saving on fuel, you increase your utilization of the team. That's a cost saving for us, and it's an improved experience for the customer as well. But all of those operational ingredients are necessary before you can even get to that effective offering of heat-as-a-service. Those are really, really important parts to being able to offer that service.

Sarah Nicastro: Yeah. And just reflecting on what you said, I think we talk about that part quite a bit. Some of the things that underpin the ability to deliver this model, but it makes me... There's two things I want to ask you about specifically. One is going back to the point you just made, which is how do you articulate the offering to customers in a way that they understand and find valuable?

James Galloway: We did a trial in 2019 together with the Energy Systems Catapult, the UK government organization, which is designed to help private companies to trial innovations. We did this trial with them in 2019. And part of that research and project was that we changed the naming to Warmth Hours. Warmth Hours is something that is tangibly understandable away from heat-as-a-service, which is it's not what it says and that means something to us, but it doesn't mean something to the typical customer. So Warmth Hours was something, and there were lots of different names that were discussed, but Warmth Hours, it really neatly said in a simple way that's understandable. And by doing that, we found that we had better engagement from customers because they knew what it was really about.

James Galloway: When they were using the app, which is something new and different, then they were able to understand, okay, I'm selecting the Warmth Hours that I want in that room as a schedule, almost a bit like an alarm clock on your phone. You've set the times. It's very similar, but for heating it and setting the temperature. That was a really important insight that we got from that project about how we enhance that awareness and engagement with the consumers. Yeah, that was good.

Sarah Nicastro: That makes sense. And I think it's a really important point because it's one of the struggles I see companies having, which is for an organization that has a deep, rich history, this level of change can be challenging. So you do all of this work to understand it, to communicate internally, to get everyone on the same page, to set a strategy, et cetera, and then take all of that internal talk and just send it out. And then wonder, well, wait, why isn't this resonating? It is really important to understand that the way we talk about this as an industry, as a business is not necessarily the same way our customers will want to hear the value proposition.

Sarah Nicastro: And that doesn't mean you're starting over; it's just reframing it into what matters to them. I always point to this example, I had a conversation once with a gentleman who was super frustrated because he was saying, "We've invested in IoT, and I don't understand why none of our customers want to buy it." And it's because they don't care. It doesn't mean that having IoT isn't important to whatever the value is they were trying to deliver. It's just that you're talking about it in terms that your customers don't connect with. I think that's a really important aspect.

James Galloway: A really great metaphor I heard once was and an easy one to think about is you design the key for the lock, not the other way around. And heat-as-a-service, certainly for BDR Thermea, it is a business model transformation. It's different to how things have been, are being done today, and how have been done in the past. That's effort. It's not like it was just the easiest thing for us to do and we're looking for customers. It's the other way around. And that's so important to have customer-led problem statements that you're thinking, okay, well, how do I solve that? And then challenging your assumptions and going and seeking that insight and really being thorough with that, to then frame your proposition and how you build a solution around that real genuine insight and take on the challenges and challenge your preconceptions is so important.

James Galloway: And it's taken us... 2019 is already now three years ago and that was already when we did the project. It was already thought about before that quite a long time, but I think it's really important to take the time to understand, take a step back, redesign, move forward. Yeah, absolutely customer first, really think about the problem statements that you want to solve, and then what's the right way of doing it.

Sarah Nicastro: Yeah. The other thing I wanted to ask you about, James, is related to the revenue model. Because this is another aspect of moving toward as-a-service or true servitization that I think companies get hung up on, manufacturers. It's one thing if you're a service organization or service business that is just transitioning from a contract or billable hours to a subscription model. That's a bit simpler. When we're talking about a product manufacturer who traditionally has operated on a CapEx model and recognized revenue that way, reconciled revenue that way, planned, et cetera, it's a far bigger leap. I just am wondering if there's anything you can say. And I know you're not a hundred percent there yet, but obviously, as a business, you understand what that means, what it will change, et cetera. Can you talk a little bit about that aspect of things and how you wrap your heads around what needs to change internally to be able to provide that?

James Galloway: It's a good question. I think there are a number of different aspects to that. First of all, how do we manage the finance risk, and what kind of finance partners are the right ones to work with? Going from 100% upfront revenue margin to potentially zero upfront, those are choices. And I think that depends on the customer type. We segment our customers and all customers have a certain level of credit risk. There are decisions there regarding how much risk are you willing to take on. Or if not yourselves and the business, the finance partners, what does that risk profile look like?

James Galloway: I think what's interesting is to think about not just the segmentation, but also how you go about getting the finance. Within the UK, we're well regulated, we've got Financial Conduct Authority, FCA that's very well regulated. And there are ways about getting financed for projects within the UK. I was speaking with the account services group, we just launched a project, actually, a UK government-funded project through Innovate UK for heat-as-a-service demonstration. We call the project Digital Servitization Demonstrator, and it's an all-sector demonstrator of outcome-oriented services. It's not just for heating-as-a-service, but first, that's what it was about. And one of our partners in that project, Koolmill, a really great company check them out if you're interested to look at what really progressive as-a-service looks like, it's K-O-O-L-M-I-L-L. They're a rice milling company.

James Galloway: They are looking at cross-border finance. They manufacture in the UK, but they're selling outside of the UK. One of their challenges is how do they find finance for cross-border trade? And it's unregulated. It's not regulated. There are no frameworks in place to really support that in the right way. Those are challenges as well. It's because it's so new, this business model it's not yet well established, and so that's a challenge. I think when you're looking at how to handle that, those are real issues in terms of a scale-up of a model when you're looking at expanding your business model into other markets. Unless you're willing to set up an organization within a country so that you can operate strictly within that country, that seems to be hard at the moment. I think there's work to do in terms of governments introducing the right legal frameworks around finance for cross-border. And that's what Koolmill are looking at now or facing at the moment. There's some work for us to do there as well, I think, within industry to understand what's the best method for that. That's another aspect.

James Galloway: I think one important aspect regarding organizational business decisions or choices is also cost of finance. Finding the right finance partner is important, but a consideration currently is that if you are looking for finance, which meets certain ESG criteria, sustainability criteria, then you will get better interest rates. One of our customers that we were speaking to recently, they were telling us, or one I'm trying to partner with, telling us that actually they can get finance half a percentage cheaper or more if they're able to show certain sustainability benefits. That's in an environment where interest rates are increasing, the cost of finance is increasing. There are significant benefits from being able to actually use a different business model that requires finance, but decarbonized or improves sustainability. I think there's a new perspective that this is this all new. Finance has been very cheap recently but as that changes, how will that change the decision-making of finance directors?

James Galloway: I think a lot is happening. It's happening, it's all now. I think it's the environment for scaled-up as-a-service. It's a bit harder because of some of those legal frameworks that are not yet in place, but absolutely is possible within a country. And in fact, it's incentivized. You can get a better interest rate. That's really great. We're starting to see banks really take that very seriously. It's quite a big question. It's a really good question. And it's a big unknown. For a company which is a manufacturing organization familiar with transactional sales, it is a bit of an unknown, but that's the role of partners. We see significant importance in collaborating to help us filling in some of those maybe strategic gaps that we have.

Sarah Nicastro: Yeah. No, it's a good point. And I think it's also worth mentioning that it is an unknown, but it hasn't stopped you from moving forward because the recognition of the need to evolve to this model is stronger than the fear of the unknown or the potential, whatever, hurdles of the unknown. That's I think a good point because sometimes companies try to answer every unknown before they start and that presents some really big challenges as well.

James Galloway: That's true. And I should add, on reflection, look at Rolls Royce. Power by the Hour, that was done in the seventies half a century ago. It's new for us. That's actually a better way of framing it.

Sarah Nicastro: Yeah.

James Galloway: And that's one of the real significant, I think, barriers to internal uptake of a new business model is familiarizing with the unknown, which is risk. There's a lot of uncertainty in that. And that's a key, that's why this project that we've recently done, the Digital Servitization Demonstrator project, it's really important because it means by having a physical environment that's basic to go and see working examples of digitized service of hardware, show the business models, and then discuss the steps and challenges. It's there, it's right in front of you. You can have that discussion. And that's really important to talk out those challenges from every functional perspective, from an internal stakeholder buy-in perspective, and collaboration from all the different functional perspectives, that's really important.

James Galloway: We've just launched that, so it's really new for us, but we've already seen a lot of benefits just in a month already of having that space available to actually go and challenge internal preconceptions and then try and solve some of those internal issues.

Sarah Nicastro: Yeah. We've talked about quite a few of the challenges that Baxi has faced, that companies can expect to face. Are there any we haven't touched on that we should talk about?

James Galloway: I think it's worth talking about collaboration and partnerships, an acknowledgment that if you do want to scale up, but your organization isn't big enough for the opportunity. If I look at heat-as-a-service, there's 28 million households in the UK, residential dwellings, we cannot do maintenance on 28 million households at the same time to serve maintenance issues. There's a reliance on third parties there. And one of our research partners, Donaldson Engines, really, they're also looking at this. They're also a great company really worth looking into and they've gotten very progressive with what they're doing. They were telling us how they go about finding the right partners. And they've got a really interesting model, which is pay-as-you-go, or we will fix it for you, or we will work with someone who will fix it.

James Galloway: And just the way that they've split up their business model, or take to market approach specifically, was really on the back of understanding their liability. When you're working with third parties, how do you ensure the quality of the work being done? Because ultimately, you have financial liability for the outcome. I think that's almost like thinking out upfront what is your contractual liability that you want to build into a contract? How do you go about safeguarding yourself as an organization, through training, through auditing? Finding the right partnerships where you already haven't established a way of working together. There's that cultural fit. All those aspects are really important. Again, it's new for us, but in a way, it's intuitive because it's a human thing, but there has to be that legal contractual side of things as well.

James Galloway: I'm expecting that I want to go and make... I don't want to make mistakes, but I'm expecting to see them, but they're learnings and that's okay when you're going... and especially in the scale-up side of things, you can think in advance for what you're likely to encounter and build it in upfront to try and avoid that, but you expect the unexpected. I'm expecting to see little niggles of things that don't quite go right. So finding the right partner who's also prepared for that so that you can resolve those issues together, that's the key bit. My real point is when you've got that partnership model and you might have multiple partners, are you ready to fix issues together as you explore something new? I think that's a real crucial point, especially for the scale-up side of things.

Sarah Nicastro: That makes sense. What would you say, James, is your biggest lesson learned in all of this?

James Galloway: Oh, good question. A, that it takes time. Probably the biggest lesson learned is that we started with one customer segment because it seemed the most obvious to us. And we took a pause to reflect, look at what we've learned, and then we reassessed. And then now we're actually focusing on a different customer segment because of, well, some built-in assumptions that we had early on, largely about, well, some unknowns such as contract liability, loads of things. But we changed the customer segment group as our key target group. And it's a totally different segment. That was a big lesson learned that I wouldn't have expected, what didn't seem to be the obvious customer segment initially, but it was quite refreshing. It's a genuine, it's an authentic lesson that you learn by doing this.

James Galloway: I think really that came out of testing, trying it. Start small, test, learn. I use the word learn as an exchangeable term with fail and learn, but it's learn, you don't usually fail. But you learn, but do start small and take on those learnings and build it and step by step because also with a significant transformational change, a business model change, you need to get that internal senior stakeholder buy-in. Especially when there's a lot of risk or an uncertainty, it can be you don't want to inhibit the internal uptake of that new business model if there are too big mistakes that get made, especially once that impacts your planned image and the loyalty that we have with customers. I would say that we had some lessons learned, but the root cause best learning was just keep trying, small steady steps, and that will, will be the path to being successful. I would say that's the best thing that I could advocate to others who are looking to do as-a-service.

Sarah Nicastro: Now, you mentioned earlier that you are at step one and a half or two. What comes next? What's next on this journey for Baxi?

James Galloway: Well, like I said, we took a pause moment to reflect. We're looking at a different target customer group. The next is run trials in this customer segment. The real next step, the strategic one is okay, upscale operations, and that's... With some of your blogs you've done in the past and your research and work, you've talked about talent acquisition, recruitment, internal culture. That's a really interesting one because, okay, within a strategic timeframe, if the business model, like as-a-service, is it going to become a dominant business model to work with? What does that look like from your organization? And by the way, three steps is too simplistic. There are many steps, but effective step three, is your organization ready to run with it?

James Galloway: It's about the systems. You have all your data lakes and cloud infrastructure in place. Are you turning data into insight? Do you know how to work with the insight? Is that true CRM experience internally? And can you do something to satisfy the customer expectations? Like the customers, are you able to do that? Can you meet the operational demands at scale? Do we have the right talent coming in? What's the next step? How do you ensure that you've got market differentiation going forward? What AI experts, or what are we doing with AR or VR to ever improve that experience both from the operational side, but also from the customer experience perspective.

James Galloway: I think the real next step is operationalizing it and being efficient and managing that because otherwise there's a real risk that we get too big, too quickly without having that infrastructure in place. And suddenly, your business as usual gets harder to do because so much time is taken up right with this. I think there's probably an understanding or acknowledgement of that around boundary conditions about, okay, how big are we willing to get at this point in time, and synchronizing with our organization and capabilities. That's the next step for us as an organization is preparing ourselves for a potential real scale-up.

Sarah Nicastro: Yeah. Whew. The journey carries on.

James Galloway: No, yeah. That's a strategic thing. It's not going to happen every night.

Sarah Nicastro: Get it though. That's the thing. It's like you said bit by bit lesson by lesson, and you just keep forging ahead. And I think that's for sure the right approach. It takes courage, it takes patience, it takes perseverance, persistence, so good for you for spearheading a lot of that, and good for Baxi for recognizing the need to innovate and working hard to make that a reality.

James Galloway: Yeah. Thank you. I'm lucky to work for a company like BDR because they're in a good place. They've got really strong, progressive sustainability targets built into our culture. We've recently done a culture rollout across the whole organization with three core values, one team, sustainable feature, customer focus. Those are simple and it's really relevant. There's already that environment to do all that stuff. By no means am I doing this by myself. I'm surrounded by some wonderful people to make it happen. That's a really key point to hold that vision. And there's a lot of values and ethical values that are deep on this mission to decarbonize for a more sustainable future. It's easy to get traction with that.

Sarah Nicastro: Yeah. It gives you something to dig into. All right, James, well, thank you so much for coming and spending some time with me-

James Galloway: For sure.

Sarah Nicastro: ... and sharing with our audience today. I appreciate it.

James Galloway: A pleasure, an absolute pleasure. Thank you very much.

Sarah Nicastro: Thanks. You can find more by visiting us at You can also find us on LinkedIn as well as Twitter at The Future of FS. The Future of Field Service podcast is published in partnership with IFS. You can learn more at As always, thank you for listening.