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Building Mental Strength as a Leader

May 29, 2024 | 34 Mins Read

Building Mental Strength as a Leader

Episode 267

In this episode of the Unscripted podcast, host Sarah Nicastro welcomes Scott Mautz, author of The Mentally Strong Leader and founder and CEO of Profound Performance, a keynote, training, and coaching company. Scott is a former Procter & Gamble executive who successfully ran four of the company’s largest multi-billion dollar businesses. He has been named a "CEO Thought-leader" by The Chief Executives Guild and a "Top 50 Leadership Innovator" by Inc.com.

Scott shares his strategies for building mental strength and overcoming challenges as a leader. He also explores topics such as self-regulation, the "static trap," self-doubt, imposter syndrome, navigating stress, as well as the importance of creating habits that support mental strength, providing tools and frameworks for building resilience.

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Full Show Notes

Scott: When you have a title like the mentally strong leader, I've found that people hear the combination of the words mentally and strongly like, oh, that's interesting. I haven't heard that combination of words. What does that mean? What exactly does mental strength mean? Well, here's what it means. Mental strength is the ability to regulate your emotions, your thoughts, and your behaviors productively. Despite circumstances, even in the face of adversity. As I like to say, it's how you manage internally, Sarah, so that you can lead externally. And here's the thing. I think your listeners would intuitively understand that if they want to succeed at work and in life, you have to be able to self-regulate emotions and thoughts and behaviors, productive outcomes. We know that, but the thing is, Sarah, it's really hard to do that. It's really hard to do that. But if you can build the habits that increase your mental strength, which we're going to talk more about, I have learned over time that it's actually how you train your brain for achievement.

Sarah: Hello, welcome to the Unscripted Podcast, where you'll find discussions on what matters most in service, leadership, and business transformation. I'm your host, Sarah Nicastro. Let's jump in. Welcome to the Unscripted Podcast. I'm your host, Sarah Nicastro. Today, we are going to be talking about building mental strength as a leader. May, as you probably know, is Mental Health Awareness Month, and I'm excited for this conversation today and to be talking about such an important topic. I'm thrilled to welcome to the podcast Scott Mautz, who is the author of The Mentally Strong Leader. Scott is the founder and CEO of Profound Performance, a keynote training and coaching company. He is a former Procter & Gamble executive who successfully ran four of the company's largest multi-billion dollar businesses. Also the multiple award-winning author of three other books, it looks like, and has been named CEO Thought Leader by the Chief Executives Guild and a top 50 leadership innovator by Inc.com. That's a mouthful, Scott. Welcome to the podcast.

Scott: Glad to be here. That guy sounds kind of cool. I can't wait to meet him.

Sarah: Yeah, I'm looking forward to talking with him. Wonderful. So that was obviously quite the bio. But before we dig into today's topic, Scott, just tell everyone a little bit more about yourself in your own words.

Scott: Yeah, sure. I grew up in corporate America, spent over three decades there. And it was the constant study of me watching what makes great leaders great and why achievers achieve that led me to talk about what we're going to have a nice chat about today that really led me to say, you know, I really have to share what I've learned with the world. And even so much so that I ultimately decided to take the leap of faith and leave the corporate world to, you know, broaden my platform for making a difference with the written and the spoken word and to become a researcher and author. And it's kind of led me to where I am today at the pinnacle of being able to talk to you here today.

Sarah: Yeah, well, that's excellent. Okay, so you say that mentally strong leader pushes their team and themselves to something exceptional, through something challenging in a way that makes everyone feel something special and that mental strength is the leadership superpower of our time. So can you talk a bit about those statements and how that thinking prompted you to write this new book?

Scott: Yeah, I will. I'll even dip a little bit into some research behind the book too, briefly, if that'll be of service to you, Sarah, and your listeners. So I'll start just, you know, with a really crisp definition, if you will. You know, when you have a title like The Mentally Strong Leader, I found that people hear the combination of the words mentally and strongly like, oh, that's interesting. I haven't heard that combination of words. What does that mean? What exactly does mental strength mean? Well, here's what it means. Mental strength is the ability to regulate your emotions, your thoughts, and your behaviors productively, despite circumstances, even in the face of adversity. As I like to say, it's how you manage internally, Sarah, so that you can lead externally. And here's the thing. I think your listeners would intuitively understand that if they want to succeed at work and in life, you have to be able to self-regulate emotions and thoughts and behaviors, productive outcomes. We know that, but the thing is, Sarah, it's really hard to do that. It's really hard to do that. But if you can build the habits that increase your mental strength, which we're going to talk more about, I have learned over time that it's actually how you train your brain for achievement. And I'll explain with a quick piece of research and tell you how that leads to the superpower statement you're asking about. I've been doing research on this for a very, very long time. One piece of research that really stuck out that I conducted, I asked over 3,000 executives, Sarah, one central question in one particular study. Thinking of the highest achieving organizations you've ever been a part of that overcame the most obstacles, what were the attributes of the key leader in that organization at that time? And over 91% of respondents, 91.3, I think it was, to be precise, all had the same response, Sarah. They described, even though they didn't know that they were describing this at the time. They described mentally strong leaders that flex six mental muscles in particular, fortitude, confidence, boldness, decision-making, goal-focusing, the ability to stay, you know, focused on your goals, and the ability to message positively to the troops, not getting drawn down into negative garble and keeping a presence to your intent and quality and integrity to being in the moment. And I really started to understand, Sarah, looking back myself on all the organizations, that I was in that achieved the most despite all the obstacles we went through, it really became clear to me that, wow, mental strength is the differentiator. It's the secret sauce. It's the cheat code to achievement. It's what led me to really believe that, especially in today's chaotic work world, where there's so much opportunity to be distracted and to have doubt creep into your life. It's what makes me believe right down to the core of my fiber that mental strength is the leadership superpower of our time.

Sarah: Mm-hmm. Okay. All right. I'm excited to hear more. Now, there's a term that I saw that I'm hoping you can explain to everyone and talk a little bit about why it's important to avoid, which is the static trap.

Scott: Ah, yes. The static trap, it has to do with the fortitude muscle, right? And I think if you and I sat down, Sarah, and brainstormed all the things you need to do and the habits you need to build to be able to build up your fortitude muscle, we could come up with a lot of pretty obvious things. One thing that's not so obvious that's in the book, The Mentally Strong Leader, a tool that you can build, is to avoid the static trap, which is this. It has to do with problem-solving. And if you think about it, you have to be able to solve problems really well. It's inherent in being resilient because the very nature of having to be resilient, you have to overcome problems. But there's a big problem in problem-solving called the static trap, which is this. Our research has shown us that people can tend to be static, first of all, meaning they deny that a problem exists. They push it off on someone else. They do nothing about it. They say, oh, that's not really an issue. Until what? Until the problem can no longer be ignored. Then they move from being static to creating static around the problem, denying even then that, okay, but it's not really that big of an issue. I didn't really cause it. Making excuses for why the problem exists, and pointing fingers at other people. So even though they've admitted the problem exists, they move to the third phase of the trap, which is they were being static, then they're creating static around the problem. Now they remain static by not doing still, not moving fast enough, and getting into action mode to take action and do something about the problem that exists. And you overcome that, of course, by being able to recognize the signs of problem denial and moving quickly to admission in action mode instead. And I go into depth in The Mentally Strong Leader about how exactly to do that. But avoiding the static trap is not something that we often think of or even know that it exists, but it's very, very real. And it gets in the way of us building our fortitude muscle.

Sarah: Now, what do you think it is that causes that initial static?

Scott: Yeah, I think it's, we are so busy, we're so inundated. And as I say, I think it's not just that I think, you know, I have the data that shows us there's more and more opportunity than ever, Sarah, for us to feel distracted. And, you know, ever since the invention of devices, that doesn't help any, right? And then all the chaos that's happening in the world and the amount of self-doubt that creeps into our lives now and into our work world, into our personal world, it creates this paralysis in us where sometimes it's easier to default to being static than to actually tackle the problem from the beginning. And psychology shows us, we make the incorrect conclusion that our resilience will increase by ignoring a problem. Because we don't have to face it. The energy doesn't go to trying to face it. So we're going to reserve that energy for when things get really bad. But of course, what happens, the problem gets blown out of proportion. And by the time you move past being static about it, the amount of energy you actually have to put into addressing it has exponentially increased. And it actually rapidly decreases your fortitude and resilience. I think that's really why we remain static for far too long.

Sarah: Yeah. I wonder too, if part of it is fear.

Scott: Oh, sure.

Sarah: Yeah. That's interesting. Now let's talk about, you know, you mentioned self-doubt.

Scott: Yeah.

Sarah: Can we talk about how leaders can work on eliminating negative self-talk or that inner chatter and the need for approval-seeking?

Scott: Yeah, let's talk about that on a couple of fronts. In The Mentally Strong Leader, there's a whole chapter on building your confidence muscle, remembering that you know, the six mental muscles of mental strength are fortitude, confidence, boldness, decision-making, goal-focusing, and the ability to positively message to the troops. And in the chapter, I go deep on the confidence muscle. And I talk about two really important tools, two things we need to do, which are, first of all, monitor your relationship with doubt, and then also monitor your relationship with yourself. And I'll explain both of those because they get to what you're talking about, Sarah. Think about those words for a second. I'm asking the listener to monitor their relationship with doubt. That assumes that a relationship must exist. And I can guarantee you, regardless of the listener out there, Sarah, it does exist. The definition of confidence is not the absence of doubt. We all have doubt in our heads. And even the most confident people that I interviewed for this book could tell me... It's not that doubt doesn't exist. They've just gotten very good at managing their relationship with doubt. And I talk in the book about the doubt continuum, how you can go all the way from actually being overconfident on one end of the continuum, which isn't great, all the way over to being paralyzed by fear, to your point earlier, Sarah, which isn't great. And in between, the truth lies in trying to, you know, really try to be perfectly confident or at least embrace healthy doubt along the way by knowing that you're never going to know everything. And that you have to believe in your ability to figure things out along the way as you go. Now, as you must also monitor your relationship with doubt, you have to monitor your relationship with yourself. There's also a tool in The Mentally Strong Leader called the self-acceptance scale. It goes all the way from being self-accepting completely, self-love, self-worth, and self-appreciation, all the way to the other side, which is imposter syndrome, which isn't good. And then there are all kinds of variations in between where our confidence slowly wanes as our self-regulation of our emotions, thoughts, and behaviors wanes and our confidence starts to decrease. So we start from a place of, you know, self-accepting, and then we can start to seek approval, chasing approval instead of authenticity. Then it gets a little bit worse. Then we start comparing to others, forgetting that the only comparison that matters is to who we were yesterday, whether or not we're becoming a better version of ourselves. Slowly, self-regulation breaks down more. We move farther to the right of the scale, where our self-acceptance just collides even more. And we're starting to engage in negative inner chatter, which I'll come back to in just a second. It gets even worse. Then we could start to move along that scale towards where we actually believe we're not enough. And I want to ensure your listeners, if you're watching this anywhere on YouTube, or if you're just listening, I want you to look into the camera right now and hear me when I say this. You are enough. You don't have to take on everything by yourself. And we can continue to move along that self-accepted scale in the negative side all the way to imposter syndrome. And to your question, where I find in that scale, you know, we want to be self-accepting. That's the idea. Self-regulate our emotions, thoughts, and behaviors and stop the degradation of our confidence along that scale. Where a lot of people sit happens to be right in the middle, which is negative inner chatter. And you're asking about that. I always encourage people, and I talk about this as one of the over 50 plus tools in the book, The Mentally Strong Leader, to help you build habits to become mentally stronger. I talk about one tool called taking a self-compassion break tool, which is simply this. It's three steps with a pre-step. When you find yourself beating yourself up, first of all, you have to get better at catching yourself in the moment when you're doing that, which is something I still work on. You know, I teach this stuff, Sarah, and I still have to work at catching myself when I'm beating myself up. Then you go into step one, which is just in that moment you catch yourself doing it, stop beating yourself up for beating yourself up. Step two. Instead, in that moment, talk to yourself like a friend in need. If a friend came up to you and clearly needed compassion and was telling you a story where they're clearly looking for compassion, you wouldn't interrupt them five minutes in and say, hey, I've heard your story and I've come to the conclusion that you're a complete loser, right? You wouldn't talk to your friend in need that way. So how would you talk to yourself that way? And then the third step in that self-compassion break is to remember the 90-10 rule, which is simply this. 90-10 is a ratio, a formula for how you should value yourself, which should be 90% based on self-worth, self-appreciation, self-love, 10% on assigned worth, and what other people think of you. And people often say to me, but Scott, you'd be teaching the 100-0 rule, that 100% of how you value yourself should be based only on what you think and never on what anyone else thinks. I think that's an interesting theory, but in concept, it doesn't really work. We all need that occasional slice, Sarah, of external validation to tell us that we're worthy and worthwhile, valued and valuable. The problem arises when we allow that 10% to become 70, 80, 90, 100% of how we value ourselves. The problem arises when we begin to chase approval instead of authenticity when we focus on winning love rather than giving love.

Sarah: So you mentioned on that continuum, the far end is imposter syndrome.

Scott: Yes.

Sarah: So can you talk about, you know, we know that's real and can be really tough. Can you talk about what can be done when someone's at that extreme to kind of, you know, get out of that thinking and, you know, shift the focus back to somewhere more positive?

Scott: Yeah, imposter syndrome, so we're all on the same page, Sarah. It's when you downplay your accomplishments and your worth, you doubt your intellect and your skills, and you can even discount, totally, your expertise and your experience. And in The Mentally Strong Leader, one of the 50 tools I talk about there helps you to stop imposter syndrome with multiple steps. And I'll share very quickly a few of the key steps. One, one of the most important things is you first have to, and this is the obvious one, you have to own your accomplishments. You really have to ask yourself, where am I underestimating and underappreciating myself? Where, if I'm honest, am I assigning too much credit to other things, to luck, to external factors? You can play defense attorney here, meaning imagine you were on trial to defend why you are where you are today. What would your lawyer say in defense of you of how you got there? That's what you have to do in this first step, you know, is really own your accomplishments. You know, I've learned over the years studying this, though, that that could still produce the yeah, but the response, right? Yeah, yeah, yeah.

Sarah: It can also be really hard.

Scott: It could be.

Sarah: I mean, I'm really bad at this.

Scott: Yes.

Sarah: I'm not even sure. I mean, you know, I have some ideas, right? But we won't get into all of that. But I find that very difficult for myself. I find it difficult to be objective. I find it difficult to articulate.

Scott: Yes.

Sarah: You know, even when there are areas I can identify like it's really challenging for me to kind of, you know, put those into proper thoughts, words, et cetera.

Scott: Yes. And that's why it doesn't stop at step one, because you're absolutely right, sir. That difficulty leads you to say quite often, yeah, but. Yeah, yeah, yeah. Okay. Yes. I did accomplish this, but fill in the blank with a thousand other reasons why we might convince ourselves we don't deserve what we're getting. So you can also move to step two, which is to be open to imposter discomfort, but absolutely closed to imposter thoughts. And here's what I mean by that. It's called acceptance in psychology circles. It's the best way I can put it is to say like, so let's say you're about to take on, you're going to lead a team. You've just been promoted and you're going to lead a team now, you know, somewhere within the service business. You know, you've been blessed with the opportunity to lead a new service team. You're brand new in the role. And you're starting to feel imposter syndrome kicking in. Well, rather than having doubts about whether or not you can really lead the team, you have to be okay with just letting that doubt sit in the background, allowing you to focus on how to do that job best, not if you can do that job. And at the same time, so that's that imposter discomfort. You learn to be okay with letting it sit there because it's okay. It all happens to all of us. But the difference is you don't let imposter thoughts take over. Discomfort is one thing. Thoughts is another thing. You think of them almost as a detached bubble from your brain sitting out there and you know that. You can imagine they came from somebody else, an unfair critic. And you know that those thoughts are not trying to help you in your life. So why would you take them seriously? This takes you into the third step where you can think of your value and your values rather than your valuation. And here's what I mean. First of all, especially when you're struggling, Sarah, with owning your accomplishments, it's really helpful sometimes to reach out and talk to people and find out what am I really good at. What value do I really bring to the earth? And they can be a confirming source for you. And even for you to say really, truly. What unique skills, strengths, perspectives, and values do I bring to the earth? Number one, and not focus on valuation. What other people are thinking that you bring to the pile? Then the second part, half of that, also goes back to your values. What do you stand for? What's important to you? Are you living those values every day? And if you're not, can you increase that? And the important part about that is when impostor feelings are booing you from the cheap seats, your values are sitting right in the front row cheering you on in your life, reminding you that no matter what anyone thinks about what you've accomplished including yourself. If you're staying true to your values you're living true to what matters to you and that's an accomplishment that is really worth something. And I've found that that can also help people get past the very, very difficult thing called imposter syndrome.

Sarah: Yeah. Now, I don't have any research on this handy, but I feel like there is research that indicates that imposter syndrome is more common in women than men.

Scott: Yeah.

Sarah: Do you know if that's true?

Scott: It is.

Sarah: Yeah.

Scott: That is true.

Sarah: So it's interesting because obviously I said, you know, I've struggled with that myself. But what's interesting is when I interview leaders on the podcast, it's become very apparent to me that men are more likely to take credit for their accomplishments openly, and there's nothing wrong with that. I'm not saying they shouldn't. But when I ask women about their accomplishments, their career progression, et cetera. Almost, always, they will point to something outside of themselves, some external luck.

Scott: Yes.

Sarah: I've been fortunate. I had a really good support system. I owe it all to, you know, this person who saw something in me, et cetera. And it's been very interesting to observe that. I bring this up because I think that it's something it would be helpful for everyone to be aware of that man or woman. I mean, it doesn't matter. I'm just pointing out the fact that I see it more on women. You know, when you notice someone doing that, don't underestimate the importance of stopping them and saying, well, yeah, you know, I'm sure that your boss was really supportive, but I think you're doing yourself a discredit by not owning what it took for you to do X or Y or Z. It's actually been really interesting because I've started framing the question when I ask women. And instead of saying, what do you think helped get you from here to here or helped you do this thing? I will say what internal characteristics helped you, and what external factors helped you. Then it forces them to reflect and own, you know, that. And so, you know, I think it's just really interesting that those thought processes exist and can be stronger in some people than others. But also to think about, just as human beings, how we can help one another, you know, focus on, like you said, not our valuation. It's not me saying what I think of what you've done, but how can we encourage people to reflect on their value and, you know, what they bring into the world?

Scott: Yeah, that's a fantastic point, Sarah. And I want to build on it very briefly if I can. I do something similar as well, the kind of internal-external thing. I phrased that question a little bit differently, but I do the same type of spirit, not only with women but with anybody that I know is disproportionately suffering from imposter syndrome. And to the spirit of what you're saying, another question that I use as a prompt when I spot someone doing that to themselves, really distancing themselves from what they've really done. I found a very powerful question, and I encourage you to try it and see how it works when you challenge other people. I'll stop them and I'll say, hold on, I want you to really think about this hard. What simply would not have happened if it were not for you? And you really force them to separate what they're imagining in their mind their success came from. And what's helpful about that foil is if they imagine the absence of their existence, if they had to be truthful, it becomes easier to say, well, I know if I wasn't here that that wouldn't happen. And then it becomes easier to draw a tie to the unique value that they brought to the table and it starts to get them out of the mode of assigning credit for everything that happened to external factors. So try that as well. That might be of service to you. I found that to be very helpful.

Sarah: Yeah, I like that. All right. Let's talk about limiting beliefs. So how do these factor into mental strength and how can leaders reframe limiting beliefs?

Scott: Yes. And of course, you know, in The Mentally Strong Leader, one of the core muscles that we've learned exists as part of mental strength is the boldness muscle. And one of the things that holds us back from being bold, of course, is limiting beliefs that pop up that we grab onto. And they can be deadly, right? Because when you have a limiting belief, they soon become truths, which affects our emotions, our thoughts, and our behaviors. Those behaviors become actions. Those actions become beliefs. Those principles, you know, those beliefs become principles that we act on every day. So you have to break the cycle. And, you know, I encourage people in The Mentally Strong Leader to conduct what I call a belief exchange, where you first of all have to uncover the beliefs holding you back. You know, what resistance are you feeling inside when you think about achieving a goal that you're going after that's important to you? And why do you think that goal is too difficult? You know, uncover the beliefs. You know, what global assumptions are you making? You know, I... I am... Life is... People are... Things like this... What are the global assumptions that you're making that are converting into limiting beliefs? What stories are you telling yourself? What labels are you applying to yourself that aren't true? And I encourage people to just spend some reflective time with those prompts, those questions, and list out their limiting beliefs, and then create an exchange. Then you have to just replace the beliefs holding you back. You know, how did I form this limiting belief once you've identified it? Would people who know you question the validity of that limiting belief? Would super achievers question the validity of your belief, the thing that's holding you back? Was there a time when you didn't believe that limiting belief? You know, what are the consequences if you stick with that limiting belief? These are all prompt questions that can help you to then do an exchange. And it sounds simple, Sarah, but I can't even tell you, I've done workshops where I've seen people being brought to tears by the simple exercise of writing down, using the prompt questions I was just talking about, and I talk about The Mentally Strong Leader, uncovering their limiting beliefs, and then being forced to exchange those beliefs and then write them down on the same index card, draw an arrow and say, I'm no longer going to use that belief. I'm going to exchange it for this empowering belief. And I've seen people brought to tears with just the power of self-awareness and moving closer to self-acceptance when they do that.

Sarah: Yeah, you know, I was second-guessing myself on bringing this up, but see if you can follow me here. And when you started describing that and you said, you know, I am...., life is... that led me to think about internal locus of control versus external locus of control.

Scott: Yes.

Sarah: Which I have to imagine plays a part here in the sense of the mentally strong leader, right? Because in a lot of ways, we're talking about perspective, right? And we've talked some on this podcast about how perspective is the only real difference of whether you're looking at a problem or an opportunity, right? And so, you know, I'm just thinking about people that get stuck in the habit of the external locus of control. You know, this is happening to me.

Scott: Yes.

Sarah: I'm trying to lead change, but I'm in an environment that just, you know, it feels like a lost cause, you know, versus, you know, I can't control all of my external environment, but I can control this. I am able to do this. So is there a sort of a correlation there?

Scott: I think they're 100% is. And just to show, just to build on the specific example you're talking about, Sarah, in one of my keynotes, I do quite a bit of work in the change management space. And one of the most powerful moments in the keynote is when I stop and, you know, we're talking about change and the process of change and why it's so difficult for us. And I stop and I pause and I ask the audience, you know, you have what's called The Change Choice to Make. Are you going to choose to see change as happening to you or for you? And then I have them do an exercise where they list out, when you're acting like change is happening to you, what does that look like? What do those behaviors look like? Okay, great. Well, when I act like that, I catastrophize how bad it's going to be. I worry about how I'll lose part of myself with a change. Okay, now, what happens when change happens to you? And the transformation you see in behaviors and outlook is the epitome of a shift from an external focus to this thing happening to me to an internal lens where it's like, oh, wait a minute. I own how I'm going to think and feel about change. And wouldn't it be so much easier to lead change and thrive with change and live with change if I switched gears to that internal locus? That is a huge part of mental strength, Sarah. So excellent point and an excellent question, especially if mental strength is regulating your emotions, your thoughts, and behaviors to produce productive outcomes. You cannot do that by giving all power to the external factor. It's the opposite in the definition of mental strength.

Sarah: Yeah, that makes sense.

Scott: Excellent point. Excellent point.

Sarah: Thank you. Okay, so I'm going to ask this question from two different perspectives. So, you know, we're talking about these muscles, right, that you cover in the book. And, you know, this idea of building mental strength and navigating negative emotions, maintaining a positive outlook, etc. My first version of the question here is, you know, I understand the importance. There's also a lot, like you mentioned at the beginning, a lot going on in today's landscape, right? So these leaders have, you know, obviously, they have personal lives and there can be any number of things happening there. But even just from the landscape of the work world, you know, there's a ton of change, you know, there's competing priorities, there's demands on demands on demands, et. cetera. So what is your advice on, you know, working on this mental strength in the face of a lot of stress and, you know, competing priorities, et. cetera?

Scott: Yes, there's a tool in The Mentally Strong Leader in the messaging chapter, the messaging muscle, which again is your ability as a leader to not get drawn into negativity, not get sucked into negative environments, and let your temper run away with you or your emotions run away so that you send the wrong negative message to troops. It's about maintaining positivity because people are always watching you as a leader. It's absolutely essential if you want to be mentally strong that you can control that flow of emotions. There's a tool in the book that gets at what you were talking about, Sarah. I call it the redirect rhythm. It really works because it's simple. It's based on a core psychological philosophy of how to control emotions in negative moments. Here's how it works. It's four steps, but once you start to practice it, Sarah, it happens instantaneously. It has to be because this is a tool to help you navigate negative emotions in the moment. Here's how it works, four super easy steps. First, you have to create space and this is what I think most of us intuitively know. It's the old adage of you have to step back and take a breath. We all know that, but here's the psychology of why that's so important because when you step back and take a breath in that moment, when you can feel your heat rising and you say, all right, give me a second to cool down, you take a breath. Psychologically, what happens is you're creating distance from the intensity of that emotion. You're breaking the gravitation pull of that emotion that's dragging you somewhere that you do not want to be. That's why we take a breath. Then when you take a breath, you quickly move into the next step, which is to name the emotion. Ask yourself, what am I feeling right now? When you can name it, you begin to distance yourself from that emotion. It's not you. It's that thing you're feeling, and it begins to lose its hold over you. So for example, let's say you and I are having a discussion, Sarah, and I'm getting very angry with you, although I can't imagine. You see such a lovely person, but I'm getting angry. I don't know because you don't agree with me. And I step back and I say, oh, okay, take a breath. What am I feeling right now? I'm feeling anger. You go to the next, the final two steps where you reassess and you redirect. You reassess. Okay, I'm feeling angry, but what's really happening? What's really happening is that Sarah just has a different point of view than me. She's not right. I'm not right. I need to back off being so passionate about my point of view, and I'm going to redirect. That's the final stage. What's next? What am I going to do about what I'm feeling and how I'm about to react to Sarah? What happens is over time, it becomes automatic. You create space. You name the emotion. You reassess. You redirect quickly, and it becomes a very powerful self-regulation tool to keep you from losing your cool in pretty negative moments.

Sarah: Yeah. Okay. So here's the piece I'm struggling a little bit with if I'm being honest. Okay. So I've been pretty open in my content on the podcast, et cetera, about my own mental health journey. So I have complex PTSD, which can surface in depression, anxiety, ADHD, et cetera. So, you know, there's these principles, applying these principles within, you know, the challenges of, we'll say, normal stress, right?

Scott: Yes, sure.

Sarah: But then, you know, how does this content apply for people that have, you know, some mental health challenges that could make the application of these things more challenging?

Scott: Yeah, here's what I think can help. And, you know, I do want to, you know, state up front that by no means am I, you know, a mental health certified expert. You know, I focus on mental strike. For folks that are really, really, you know, struggling, they should go get the help, need, care, and attention that they deserve and that they need. But I do want to point out that what I know can help anybody who's struggling in any sense of this is it comes back to the fact that it's often the habits that we can create that make some of these behaviors more automatic for us so we don't have to think about it and struggle with it. And I'll give you a few examples. In the book, there's a reason why the subtitle is what it is. And for those of you that can see at home here, you know, it's build the habits to productively regulate your emotions, thoughts, and behaviors. In The Mentally Strong Leader, I build habit-building science for the exact reason you're talking about, Sarah, to help make it for people who are really struggling with a variety of mental strength issues. And I build habit-building science in three ways. First of all, you have to understand, and everybody knows this intuitively, that to build a habit, you need repetitions, right? Repetitions come from systems and frameworks that once you ingrain them, it helps make the helpful behavior, you don't have to think about it as much. It becomes more automatic if you will. And that's why all the tools in the book are built on systems or frameworks. Habit-building science rule number one. Rule number two is we often don't start the habits that we really need to help ourselves from a mental strength perspective because we don't know the first small step to take. So for every of the 50 tools in The Mentally Strong Leader, there's a section titled Your First Small Step, as well as a section that gets to the third point of habit-building science, which is what do you do in moments of weakness? So especially for folks who are really having a hard time with some of the aspects of mental strength, there are sections for each tool that tell you when you can feel, for example, your confidence breaking down, or your confidence muscle weakening. You may generally be confident, but you get out of that meeting with a boss and you just don't feel good about yourself because of something they said. What do you do in moments of weakness to get back on track? There's a section for every tool built-in on that as well. So that's a long way to answer your question, which I think could come back to the more you can habitualize behaviors that are really going to help and that you don't have to think about it. They become part of your daily routine. I think it's going to give you a greater and greater chance to truly become mentally stronger.

Sarah: Yeah, no, that makes sense. And I wanted to ask that question, just because I think it's important to acknowledge that, you know, practices that might be pretty straightforward and simple for some folks could be a lot more challenging for others. But I think part of it too, is, you know, the goal is progress, not perfection, right? So to your point, you know, not only what do you do in a moment of weakness, but, you know, there might be periods where someone's struggling. And, you know, some of the steps or, you know, the advice just feels too much at the moment, and that's fine, but you can come back to it, right? It doesn't have to be an all-or-nothing mentality. It could be something that, you know, you're able to focus on when you can and take a break from, you know if you have a period where it's too challenging. But, you know, to your point, it sounds like so many of the concepts here are really, really helpful. And so I think they could apply to anyone. It's just, that I wanted to be respectful of bringing up the fact that, you know, sometimes there are other factors that could make it harder for people to apply certain principles than others.

Scott: Yeah. And I want to build on that in two ways very quickly, because it's a very important point, Sarah, and thank you for bringing it up, which is I do want your listeners to understand that the opposite of mentally strong is not mentally weak. We all have a baseline of mental strength to work from. We all do. In fact, in the Mentally Strong Leader, there's even a mental strength self-assessment that you take to determine, okay, what's my overall mental strength score? And then you also get a score by muscle, which is your fortitude, confidence, confidence, boldness, decision-making, goal focus, and messaging scores. And then it also helps you to figure out, okay, well, which muscles are right for you to work on? Which tools in the book will help you to work on those muscles? And I think that's important, Sarah because it helps you create a customized mental strength training program that's right for you. So you don't have to feel overwhelmed with, wait a minute, is this guy telling me that I got to go in and work on six muscles all the time?

Sarah: And all 50 tools at once.

Scott: All, like absolutely not. You know, when you go to the gym to work on your muscles, I don't think you're going to be able to go in with a plan every day, Sarah, to say, okay, today we got to hit every muscle in the body. I'm going to be here for 12 hours. Wednesday is back day, and Thursday is leg day. So you can create your own customized mental strength training program to pull the levers that are right for you that you need to work on. And again, to remember that the opposite of mentally strong is not mentally weak. We all have a baseline that we can build from.

Sarah: Yeah. And I would imagine too, there could also be, you know, scenarios, situations, circumstances where you might come back and need to focus on a different area, you know, because you're dealing with this certain situation or, you know, maybe you're leading a certain kind of person that is making you feel more challenged with a specific muscle than another, you know? So when you get the book and you look at your baseline, you know, that gives you some context, but you might find yourself in situations where it could be helpful to come back to a different piece and dig into one of the other muscles or some of the other tools.

Scott: Yeah, that's right. It's a menu of options. And I say right up front in the book, there's no expectation you use all the over 50 plus habit muscle-building tools in here. That would be ridiculous. You create your own program. And my dream is to see people, you know, I see them in the airport reading my book and I see about a thousand different stickies coming out the side pages of the parts that are most important to them. And I think that's what you'll be able to do.

Sarah: Yeah. Well, I think it's great that you're passionate about this. I think it's great you've created this resource. You know, we have had different folks come on the podcast and talk about burnout and talk about some of the struggles, right? And I think that to your point, mental strength is not only important but a superpower, right? And I think, you know, to me, I think about not only can it help you be more effective, but I think it's really important to consider the impact that it can have on a work-life blend, right? And being able to get better at navigating these things so that you're not taking it home, or you're not burdened by some unnecessary emotional weight, you know, that you could work on not carrying, right? Because it's more so, you know, just building those muscles and being more confident. So I think any tool that people can leverage to help them feel more confident and feel more adept at navigating these different circumstances it takes ultimately stress away, right? It helps them feel more productive, not just in their impact, but in how they conduct themselves. You know, I like the point you said, it's not about the valuation. It's not about getting good at this so you can give more to the company that you are impacting the bottom line for. It's the value, right? Get good at this so that, you know, being a leader is less taxing on you as a human being, I think that is a good way to look at it.

Scott: Very well said, Sarah. And, you know, I really do believe this. I mean, I really do believe this from the bottom of my heart. All the years I've spent studying mental strength, all the studies that I've done, I could have just put advice in a book and then said, okay, follow the advice and you'll be fine. But I recognize how difficult becoming mentally stronger can be. And it's why I spent the same amount of time understanding how we build habits. And that is the secret sauce in the book, I believe, because if you can habitualize the behaviors that you know in your mind are like, yeah, that makes sense. I should do that. But I don't. If you know how to create those habits, it's like your buddy, your partner right on your side with his or her arm around you, helping you along the way.

Sarah: Absolutely. Scott, can you let folks know where they can find the book so that they can check it out and learn more?

Scott: You can go to scottmautz.com, S-C-O-T-T-M-A-U-T-Z.com to learn about the book, my workshop that goes with it, the keynotes that I give, and all that. And also, I put together a gift for your listeners today, Sarah. If they go to scottmautz.com/mentallystronggift, they can download a free 60-page PDF that includes that mental strength self-assessment that I was talking about. If they want to get started on that, determine the baseline, remembering that we all have a healthy baseline to start from. But you can get that along with a whole bunch of questions and prompts that help you get the most out of the book. You can get that again at scottmautz.com/mentallystronggift, your free 60-page PDF.

Sarah: Excellent. Well, thank you, Scott. We'll make sure that we link both of those things in the show notes so everyone can easily find them. Really appreciate you coming and having this conversation. Enjoyed it and appreciate your insight. Thank you.

Scott: Thank you. Thank you so much. And thanks for your great questions and insight is very helpful for me too. Thank you.

Sarah: Thank you, Scott. You can learn more by visiting the home of the UNSCRIPTED podcast at futureoffieldservice.com. The podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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Innovating Advanced Services & Delivering on Servitization

Episode 266

In this episode of the Unscripted podcast, host Sarah Nicastro welcomes Dr. Kawal Kapoor, Research Manager at the Advanced Services Group of Aston Business School and Co-Author of the new book and related Playbook, Servitization Strategy: Delivering Customer-Centric Outcomes Through Business-Model Innovation to share her insights on the state of Servitization, the potential that still exists, and what resources companies can expect from the new book and Playbook.

Kawal oversees research for the Advanced Services Partnership, focusing on publishing in top peer-reviewed journals and creating executive workshops and mini-guides on servitization. Her expertise includes service-oriented value networks, platform ecosystems, force field analysis, service business models, and the diffusion of product and service innovations. In her book, Servitization Strategy, Kawal explores outcome-based business models, known as Advanced Services Business Models, offering practical guidance on how firms can innovate these services through servitization.

If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts or Spotify.

The Show Notes

Kawal: The key is customers are more interested in why a service matters, not just how it works. So if you hear firms saying, we offer condition monitoring or we offer digital services, well, it's technical to a customer. It's not to say that they don't understand. They obviously do because, you know, their function, their business is in this space. But it's still not really clear what is it from that condition monitoring or from those digital services. What is the benefit that they are getting? And we've always said servitization is about putting customers first, right? So if you think of it in a way, you wouldn't buy a product unless it made your life easier, right?

Sarah: Hello, welcome to the UNSCRIPTED Podcast, where you'll find discussions on what matters most in service, leadership, and business transformation. I'm your host, Sarah Nicastro. Let's jump in. Welcome to the UNSCRIPTED Podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking about innovating advanced services and delivering on the promise of servitization. I'm excited to welcome to the podcast today, Dr. Kawal Kapoor, who is the Research Manager of the Advanced Services Group at Aston Business School and the co-author of the new book, Servitization Strategy: Delivering Customer-Centric Outcomes Through Business Model Innovation. Kawal, welcome to the Unscripted Podcast.

Kawal: Thank you very much, Sarah. Happy to be here today.

Sarah: Happy to have you. So some of you that have been following the podcast back when it was even called Future Field Service Podcast, which I almost just said, which is why I paused, you may remember Professor Tim Baines has been on the podcast. Andreas Schroeder has been on the podcast. And I think a few other folks from the Advanced Services Group. So if you've been a long-time listener, you are familiar with the Advanced Services Group, but we are a big fan of the work that they do around servitization. And so I'm excited to talk with you today about the work you do in part of that organization and the new book and the playbook that comes along with it. So we're going to get into a lot. But before we do that, just tell everyone a little bit more about yourself. And for those who may not already be familiar with the Advanced Services Group, can you also just give an overview of the work that you do?

Kawal: Yeah, yeah, happy to. So as you said, I'm the research manager for the Advanced Services Group. And we are a specialist research-based group focused on servitization. And I take on the responsibility of developing and maintaining our research IP, basically, and also managing our research activities. So I'm out there making sure all of our research is rigorous, it's ethical, it's of the highest standards. And as a group, if I have to tell you more, we work closely with manufacturing organizations, so various manufacturing organizations. We work with established multinationals, but we also work with SMEs and innovative SMEs. And we're always trying to understand the unique challenges and the opportunities that they face when it comes to the adoption of services. And as a group, we all share this mission to directly increase the adoption of servitization within industry. And over the years, we've worked to bring together an international research community from leading businesses around this very challenge, how to increase the adoption of servitization. So if I have to explain it on the one end, we have all our learnings and these are being continuously informed by, you know, cutting edge research that we conduct, that others are doing, all the new research that's emerging on the topic. And on the other end, we are receiving all of these rich insights from working with practitioners. So, you know, people in the trenches who are facing these servitization wars on a daily basis and they're coming out stronger. So what we do is we bring these two worlds together. So research and practice together. And with all of our learning, we are helping manufacturing firms. Transform their business model and develop service-led strategies. That makes sense.

Sarah: Yeah, absolutely. And, you know, one of the reasons that I've been such a big fan of the work that ASG does is because of that blend of academic and practitioner-led, you know, strategy. We obviously are, I'm engaging mostly with practitioners, right? Leaders within manufacturing organizations, and service-based businesses. And, you know, sometimes there can be a scepticism of pure research organizations because they just don't get it, right? So it's, you know, all of these theories and the practitioners can say, but in the real world, right? And the thing that's great about the work you do is you are blending those worlds. So you're doing the research, you're providing these people with really valuable insights, but you're also, you know, understanding what that does look like, in the real world, right? So it's really good blend. Now, you and your co-authors recently released the book. So again, Servitization Strategy: Delivering Customer-Centric Outcomes Through Business Model Innovation. And that can be paired with the playbook, which is what we're going to talk a bit about today. So before we get into some of those specifics, can you just share a bit, sort of the catalyst for creating these resources, and maybe talk about how they fit together?

Kawal: We're very exciting times. So both the book and the servitization playbook are now released. And I have both of them here on my desk. So, you know, really good feeling. So here's the playbook. In terms of the catalysts, I think there have been multiple things that are out. So which have really led to the development of both of these resources. I think first off, it was Tim's earlier book on servitization. So Tim Baines is the lead author of the book. And his book, Made to Serve, that was released 10, 11 years ago now. And that described servitization. It explained advanced services. And it picked out some of the key practices and technologies. And what happened or what has happened over the past decade is just we've accumulated tremendous amounts of knowledge and insights from working with manufacturers. And even the research on the topic has significantly evolved. And we were just ready for the next book. Another catalyst was the fact that there are just tons of articles and research that will all tell you about the benefits of servitization from a service provider's perspective, you know, why it works out for them. And there's really very little on how to actually make it work. It sometimes just felt like most of the research in this space. Many of the articles were more or less saying the same thing, but nobody was answering the real questions. What lies behind a successful servitization strategy? What have businesses that have had, you know, some success or even much success with servitization, what have they done within their firms? And. To me, these were very exciting questions. And then Tim comes along. And he goes, should we write a book to address these questions? And then there was just no looking back.

Sarah: The rest is history.

Kawal: Yeah, the rest is history. I've got it right here. And there's just so much, so much evidence. We couldn't overlook all of the evidence that was telling us that the time is now to look at all things services, servitization, and service innovation, so many compelling statistics for suggesting servitization is the new revenue stream for manufacturers. Services are a significant part of the world economy. I'm talking stats like... Services are generating two-thirds of the world's GDP. That's significant. Or stats that were saying that come 2040, services will make up for nearly one-third of the world's trade. That's big. And you look at all of these... Big firms, you look at Rolls-Royce, GE Power, and their annual reports. They were all reporting increased revenues from services, increased productivity, to some extent, increased profitability. And we were receiving a lot of evidence from different sites telling us that this would be a good time to create a book from the playbook. And you asked about how the two fit together. Well, the playbook, it's a guide. It's specifically designed with executives in industrial firms in mind. And these executives who are well into the servitization thinking and they want to execute a servitization program. So, you know, it's something that executives can pick, flick through it, get a sense of it, and almost immediately apply within their organization with a certain degree of confidence. Because this is not something that's been pulled out of a hat. It doesn't solely rely on research, as you were saying. There are some sceptics' around us. This is coming from experience in the real world. This is coming or is informed by what's happened with firms in the real world. It's a perfect complement to the book in the sense that the book describes, amongst many other things, what a successful servitization strategy looks like. So it's descriptive, the book. But the playbook, it's highly prescriptive. It tells you what to do when. It will also tell you what not to. And why you shouldn't. But, you know, it doesn't go into the details. What we do in the playbook is we break down the servitization program into tasks. We specify when to do these tasks, and what you're trying to achieve with these tasks. There are many tips and tricks involved. We recommend different tools at different stages of the book. So it has concise steps, and we don't justify any of these steps in the playbook. It's one, two, three, four. We don't explain any of the underpinning research we've done with the world-leading companies. For that, you go back to the book. So that's how they sit next to each other.

Sarah: Yeah. And I think just, you know, thinking about basically interviewing people in this space for the last 15, 16 years, right? Like thinking about 11 years ago when Tim wrote Made to Serve, it was very much why? Why is this relevant? Why does this matter? Why would a company think about differentiation through service or think about, you know, this sort of path? And, you know, I think by and large, just thinking about, you know, attending so many conferences, having so many conversations with service leaders, you know, there's a very wide degree of acceptance of the why at this point, but there still remains a lot of ambiguity on, okay, but how, right? So that's kind of where you are now is let's take the insights that we've gleaned both from the research and also from the companies that have sort of, led the way in doing this over the last decade-plus, and let's help people figure out how to do this, right? So I think that's really exciting. Okay, so there are, we're not going to go through this in detail, but there are five sections in the playbook. So can you just kind of walk us through how it's formatted? And then I'll get into some of my specific questions that come up in some of the sections.

Kawal: Sure. Yeah, it's a 50-pager. I like this thing. Very, very concise. Yeah, in the first part of the book, we cover the basics. So it's a bit of a crash course, if you like, of all of the critical terminologies and concepts, all in about two to three pages. Then in the second part of the book, we look at five absolutely key enablers of servitization. So, you know, it's just a page each for each enabler and it's explaining what each enabler means for servitization or how these will help a firm, a servitizing firm. And it also gets into what to do if a firm doesn't have access to, you know, these enablers. How can you, it's perhaps a new firm, but it's, you know, not as strong. So what can you do to build these enablers and so on and so forth? In the third part of the playbook, we give practitioners, and readers, an overview of the process to follow, and an overview of how will you implement servitization within your firm. And we've been able to capture the how to apply part of this entire process. As a one-page guide. And it's called the Servitization Route Plan, a guide in the playbook. Personally, very fond of this illustration. It's sharp, it's concise, it cleverly packs everything in one place. So basically everything that you're telling you, you know, split across 50 pages in the playbook, you can see it coming to life in that one page. The fourth part, which is I think the heart of this playbook, is where we go through this process in detail. This is where we break up the servitization process into four tasks and we go when, you know, is the right time to get on a specific task? Why or what should you expect when you are performing this task when the firm is getting into it? And when will the firm know that that task is actually complete so they can move on to the next one? So, you know, it's those specifics. Then when we get to part five, that's, you know, far end of the book, we point the readers to other learning resources that, maybe helpful for them. So these are some of the mini guides that ASG has developed. But at the same time, we also point out, you know, some of the other existing resources that may be useful, that, you know, firms might find useful when on that transformation journey. Another thing that we've done is throughout the playbook, at different points, we set out simple games, you know, just to test readers' understanding, because these are like really quick pages, right? You get from one through to the next. So it's just like a simple test and the questions and the answers, all you have to do is, you know, match the answers to the questions. There are obviously answers at the back of the book as well, but it's just to get our readers into the whole testing process. So yeah, that's what we've done in the playbook.

Sarah: Okay, great. So on the terminology piece, my first question is, what aspect around the terminology of servitization do you feel gets misconstrued or confuses people most often?

Kawal: Yeah, that's a really, really nice question. And if it's okay, I'm going to answer it slightly from a slightly different perspective. So many of the executives, right, they are not yet fluent with the language and the concepts of servitization. So what happens is they struggle to describe or articulate their product service offering, for instance. And what tends to happen is you'll see a disconnect between how a firm is describing its servitized offerings and how it would truly resonate with a customer, you, me, you know. But in this instance, because, you know, the book is around manufacturing firms, obviously, how would it resonate with a B2B customer? So often the focus gets muddled in the details of how the service is being delivered, perhaps, or the revenue model is being used in that particular instance, or maybe the technical approach they're taking. So a lot happens. But really, the key is customers are more interested in why are service matters, not just how it works. So you hear firms saying, we offer condition monitoring, or we offer digital services. And it's technical to a customer. It's not to say that they don't understand. They obviously do because, you know, their function, their business is in this space. But it's still not really clear what is it from that condition monitoring or from those digital services, what is the benefit that they are getting? And you've always said servitization is about putting customers first, right? So if you think of it in a way, you wouldn't buy a product unless it made your life easier, right? And the same goes for servitized offerings. Customers need to understand that value proposition, that very clear benefit they are going to receive. So for example, instead of saying, we offer condition monitoring, a better way of articulating the value proposition would be, we'll monitor your machine's health and we'll alert you if there are any potential issues because, at this point, we want to prevent breakdowns for you, the customer, and we want your operations running smoothly. So now the focus is on the customer's game. You know, it's avoiding that downtime. It's ensuring that their operations run smoothly and so on and so forth. But what you see, and the other way of doing this is, you know, They get fixated on revenue models. You'll see companies going, we offer pay-as-you-go services. Everyone's heard that. And here's where you get the revenue model mixed up with value to customer. But this separation is important. If you look at revenue models like pay-as-you-go, they're important for the business, but they're not a selling point for the customer. It's a revenue model is not a service offering. Condition monitoring, it isn't an offering either. It's a technical approach. So the true offering is the customer benefit. And in this case, it's the expert advice on the machine's health, preventing costly breakdowns. That's the value proposition. And if we get firms to a point where it's basic, right? For anybody listening, it might just seem like, oh, this is so basic. But this is where a lot of firms don't get it right. And it's so important to clearly communicate the value proposition because then you can avoid customer confusion. Because if the customer is confused, you'll slow down the sale for yourself. Right. You want to accelerate the sale. And it's important to remember that it's about solving customers' problems, not just describing the technical details or explaining the revenue model. It's on clearly articulating the value proposition. So I think that this is where I see a lot of mix-up in terminology and things not being used clearly.

Sarah: I was smiling because I just wrote an article last week about, I think it was six common missteps in storytelling, right? Me, storytelling is a big piece of selling the value, right? But this is one of the things I wrote about. It's using outside-in terminology instead of inside-out terminology. Like you're using the technical terms or sometimes even the internal value of what you're offering externally, rather than speaking in the language of the person that you are communicating with. To your point, it sounds super simple, but I think you are absolutely spot on that. This is one of the biggest stumbling blocks for people because they live in their own universe. So they don't, it's not intuitive that they're not speaking a language that is going to resonate best with the customer and getting in that mindset of, you know, like you said, customer first. But also speaking the customer's language is so important for success. So it's just interesting that that's what you point to because I've seen that time and time again. Okay. So in the next section, you're talking about enablers. So my question here is what enabler is most often a barrier for companies? Like, is there one that is causing the most challenge?

Kawal: Yeah, so just to give our listeners a bit of context, right? In the playbook, we talk about five enablers, like you've said. So one's leadership empathy for services. And it's simple. It's about having the support of just a few senior executives who are going to be open-minded about the idea of services who see it as a competitive business model. The other is the benefits of having a service function and partners. So you know where some form of service is already being offered in the firm in some capacity. So a level of affinity towards services already exists in the firm. And this is always helpful for market intelligence and all such. Then we've got customer relationships and intelligence. It's unanimous, isn't it? It's about knowing and understanding your customer and their business environments. But you run deep into this with serviceization. Then we brought proficiency in digital innovations. And that's... A level of understanding of technical innovations and how they're going to be relevant for services and what opportunities they're going to bring for services. And then we have the enabler of capacity for innovation. So this is about having sufficient resources, and reliable business platforms for service innovation. Of all of them, I think the one that trips companies up the most and my extended team might think differently, but to me, I think it is the capacity for innovation. If you think about it, manufacturing firms are used to doing things a certain way. They've always built their success around selling products and servitization is asking them to flip the script. It's telling them to focus on services, to build new relationships with customers and also to look into investing in some new technology. So it's a big ask. It's a big change and it's a challenging one. And it's, how do I say it? It's a mind-shift marathon, you know, moving from sell the product to now solve the customer's problem through services. This requires a whole new way of thinking across the company. Your marketing team needs to understand the customer needs differently. Your sales team, they're required to pitch the value propositions instead of, they're so used to talking about product features and they can't do that anymore. They have to talk about value propositions. If you look at the operation side of things, they'll have to adapt themselves for the delivery of, you know, services. So it's a full-blown marathon, not a sprint to, you know, get everybody on board with this new strategy. And... It's a big reality check in terms of resources. Any innovation, it's often going to come with a price tag. There's no two ways about it. Especially with servitization, you need new technology to monitor equipment, to deliver services remotely. With all of these new digital technologies for your firm to be able to leverage them properly, there might be some additional training required for the staff. So there are costs associated with that. And service expertise is not inherent to a manufacturing organization. So you need new skills, which would mean hiring new people. So there's that. And let's say a company is already stretched thin, then finding these resources to invest in servitization will be a real, real barrier. And I think while we're at the topic, we should also touch upon the internal hurdles with, you know. With this conversation, if you're being entirely honest, sometimes, most times, change is met with resistance. And we've witnessed this across most of the firms that we've worked with. People in established departments are very comfortable doing what they do and how they do it. And with services. There's this fear of the unknown or concern that servitization will take them away from their existing roles. And really addressing these concerns and getting everyone aligned with that new services vision of the firm is absolutely critical for any success in this servitization context. So I think while all the five enablers are important capacity for innovation, in my mind, is often the bigger hurdle. It takes a strong commitment from leadership. It's, you know, the willingness to invest. You need a plan. The firm needs a plan put in place to navigate any form of internal resistance. But if a company can overcome these challenges, then the rewards of servitization can be quite significant.

Sarah: I think it's interesting in the way you described all of that, the distinction between capacity for innovation versus capability for innovation, because I think there's a big difference, right? Like firms are capable of it. It's more so, you know, the capacity, I think, like not to minimize any of the real considerations. But a lot of it is the mindset shift. Like. It's the belief in the vision. It's the belief in it being the right fit for the organization. I think that's the hurdle. I think if the decision is made and then the commitment is made, companies are capable of this. It's the capacity that comes in like, are you ready and willing to imagine a different future for the organization versus its history? And to your point, it's a huge thing. It's a huge thing. It's multi-layered. It's complex. And so, you know, it makes sense why that would be, you know, the biggest hurdle. But I think it's, you know, I just want to kind of clarify that. You know, it isn't, it's definitely possible. You know, you have plenty of examples of that, right? So it's about really the decision and the commitment versus, you know, the capability. So very interesting. Now, when you get to the execution piece, it's broken into explore, engage, exploit, and expand. So my question here, again, is your take on what is sort of the hardest phase for companies and why?

Kawal: Yeah, I think, yeah, if you spoke to different people at ASG, they'll all have different answers. But I think we'll all be converging at one point. I'll get to it. So, again, to add a bit of context, right, to the listeners, in the playbook, we split the implementation of servitization into four tasks. So the first task is the explore task. As the name goes, you... Build the case for servitization, you work towards securing the resources. The second is the engage task, is where you focus on understanding your customers' needs. You co-create with them. You work on developing service offerings that would be of value to them. Then we've got the third task, which is the expand task. And this is where the firm develops the capabilities to deliver services commercially. And then we've got the fourth task, that's the exploit. And here the firm has basically made a decision about its future with services. So it's all being well. It will work towards integrating those services with the existing business model portfolio that they have, how they should be adjusting the resources, how they can optimize for success. So all of that happens in the exploit task. And if we have to speak about the hardest phase or task, I think it's very unique to a film. It's... Really depends how ready or embracing they are of the idea of servitization. Because if they're not, then we've seen firms which even find the very first stage of explore extremely challenging. And to the extent that in cases, even just maintaining momentum with a select few members within the firm, it can get really difficult for firms. Having said that, and I think most of my team would agree, I think the expand phase, task number three, is really hard for firms. Because if you think of it, you've designed this fantastic new service, you've hypothesized value propositions, you've tested these value propositions, but now we get unreal. We're not talking about... Ideas anymore. We are not talking about hypotheses anymore. We are looking at resources and most of the resources that would be needed to take this new service offering to the market will have to be drawn from the firm. So you're looking at big investments. You're looking at big financial commitments from the firm. And there might be disagreements within the company about how much to spend. And this is where we've seen business cases being challenged, priorities being challenged. And this is task number three, and you might just end up going back to square one. So that's the level of challenge. Things get really political. And new service models, they often require changes to processes, any existing process. They call for changes. And some people might resist these changes because by this point in your servitization journey, it's no longer about just innovating the business model. You'll see challenges around organizational change. So imagine a team used to selling, like we were just talking a minute ago, they're used to selling products and suddenly they have to learn about how to deliver services. So there's tensions, there's pushback, not everything goes according to plan. So usually when we look at this space, we see the person that's championing the servitization initiative in the firm, they have to make the toughest choices, very difficult decisions to the extent that they might be looking at even scaling the service spring momentarily. Or adapting it based on real world experience. So it can be really, really frustrating for the team, especially... The initial team that we call the coalition that's come around championing the service idea in the first instance. Worst case scenario, we see people leave firms. Team members, it's just not getting out of the servitization initiative. They've left the company. But then again, despite these challenges, like you iterated on earlier, a firm can successfully navigate through these hurdles. And once it does, it'll be well on its way to integrating services with the existing model. And then you're looking at achieving that long-term success that we've always said comes with servitization.

Sarah: No, that makes perfect sense. Now, you've been with Advanced Services Group since 2018, leading the research. And I'm curious, you know, in your time in this space, what have you found most surprising about the world of servitization?

Kawal: So, okay, one surprising thing about the world of servitization is how embedded the idea of ownership is in our minds. I can't get over it. We, you know, it's, I don't know how it's with you, but, you know, we often think I need to buy this product. But really, you need to buy the product because you're after the benefit that that product offers, right? And that need to buy the product, that's what servitization is challenging. It's challenging that assumption. And as consumers, what we're really interested in is the use of the product, the value it brings to our lives. So, you know, it's that experience of a fresh cup of coffee from a fancy, fresh machine, all the better, or a perfectly organized workspace, you know, with the right furniture for my home office. But I'm not necessarily after owning that machine or, you know, having owning this furniture itself, although I would like to own that machine. But, you know, you know where I'm getting. The shift in thinking for me is really amusing. We get so attached to the idea of ownership, especially for certain products. And there's an emotional connection sometimes, and I completely understand that. But for the majority of the things, and especially if you're talking about B2B level of, you know, offerings, where the cost of ownership of an equipment is so high. Or costs of breakdown are so high. Servitization makes, you know, it makes complete sense. So for most of the things, the benefit truly comes from the use and the outcome it delivers. And servitization is allowing firms to tap into that desire for value and outcomes rather than just selling the physical product. But I think the irony here is it's all a bit amusing to me. In a lot of cases, consumers and our mindset around ownership, we stand in our own way. We are the hurdle to be getting more value from a product because we are so, you know, we just cling to the idea of ownership. But servitization offers a different way to access what we truly want. You know, the benefit of using something and not necessarily. The burden of owning it. So, you know, there we are. What's it for you, Sarah? Do you think you brought that mindset shift with you or is it still ownership matters?

Sarah: Yeah, no, that's a really good question. I mean, I was thinking about that. So what came to mind is, you know, for a very long time, I bought cars, and then eventually I ended up leasing, right? So similar idea, you know, and it just made sense at the time, because it, it was the easier path, but it was a mental hurdle to overcome of, you know, I was just kind of taught that that was a waste of money, you know, to pay for the outcome versus to acquire a thing, right? But I think it's interesting, like, I do think there's a shift in that mentality, you know, of people wanting, feeling less tied to obtaining things, right? And more willing, maybe to reflect on what does it matter? And where does the value come from? So but it definitely, you know, we've, I've interviewed people that you've worked with, you know, like, I think of Alec from Koolmill, you know, and him talking about, like, working in such a historical, traditional industry where, you know, those beliefs are very set. So it's, I think, it is really interesting to me, all of the mindset shift around it. And going back to the point that we touched on earlier, the narrative, like, how do you not only understand, because when companies do this right, like the mutual benefit is just so impressive, right? But getting that balance right can be challenging. So understanding it, but then being able to articulate it well on both sides, I just think is super interesting because it, you know, that really factors in all of that mindset shift. Like you have to understand all of the complexity of change to get to the point where you can articulate well, the benefits of the customer, the benefit to the organization in a way that gets people on board. So it is super interesting. Okay, so I asked you ahead of time if it was okay to ask a personal question, which is, you know, this came to mind when we were speaking, you know, because you have two male co-authors on this book, you are in servitization, which is a space that is, you know, very male dominated. Today, I've had my own experiences. I mean, it's shifted a bit, but still, you know, showing up in places where I'm one of very few women. And I'm just curious if you could share a bit, you know, what that experience has been like for you, because I think people, you know, hearing folks stories and understanding what that's like is just a great way to expand awareness and ultimately continue to drive positive change.

Kawal: Yeah, absolutely. Absolutely. I agree with you. I'm happy to talk about it. Yeah. So this thing, this question, I hadn't really considered too much of this before I started working with ASG, if I have to be completely honest with you. Coming from an academic background, it wasn't something that was always at the forefront of my mind. You don't think of gender or any inequality or any such thing. It just wasn't pre-ASG, I think. But being heavily involved in manufacturing space, it's undeniable the gender imbalance. It's quite obvious, having said that, there are so many layers to this. And it's been fascinating to experience them all. So if I have to start with my own team, right, I'm incredibly fortunate. I have to say that we value each other's expertise and experiences and not gender. And I'm not saying this because I'm going to upset people back at work. Not at all. They're all lovely. But the book has been a journey. And I think for me, just this book, it's been a testament to that. My co-authors... I'm the third author on the book, right? I'm here. But my, timidly they've never treated me any differently, and the order of authorship hasn't mattered and the credit for the book is shared equally, and it's a true collaboration. And this positive dynamic is really important to me, however outside of our immediate circle, righ? There are moments, I'm not going to lie about it, there are moments where I can feel the bias, and I want to believe that it's an unconscious bias. Maybe something I say doesn't have the same impact as a male colleague. It's a societal hurdle we still face, you know, there's no two ways about it And I think. All you can do is at that point is to navigate that situation gracefully, understanding that it's not a personal attack on you. And it's definitely not unique to me. You and I have spoken about it. Many women in manufacturing, I know, share similar experiences, you know, feeling a bit like. Minority or subtle, unintentional, unconscious biases exist, you know, being interrupted or having ideas dismissed. But I don't want to just look at one side of the coin. There's also been a lot of positive change happening. We're seeing more women in leadership roles. And it's just so, it's a feel-good feeling, isn't it? It's just by openly discussing these issues like we're doing now by, we are exposing these biases and conversations like this one, plant seeds. Maybe someone who hadn't considered it before will now become aware and that fairness can lead to change, or at least that's the hope. I do see a lot of women now climbing up positions within manufacturing. We're not there, but we're getting there. It's inspiring for me. It's inspiring for future generations. And all of these women, or most of these women, they're lovely and they've said that the important thing is to focus on the skills and expertise and let your work speak for itself. And I fully agree. It's what matters the most. But there's, and I was thinking about it, you know, because you told me earlier that we'd speak about this during our podcast. And, you know, there's another interesting layer I've recently become more aware of. Something I noticed happened just the other day. So, you know, with the rise of all women empowerment movements, there's a lot of focus on the topic and that's fantastic. But it also needs introspection, I think. Could an occasional setback at work be because your ideas were just not good enough in the room that day or, you know, and it had nothing to do with gender, you know? Maybe there was just a natural dynamic in the room, a more senior person whose experience is just more valued than yours. Is it always about gender? Are there other factors, you know, at play? I think what I'm getting at with this is because we are so exposed now more than ever to the gender conversation. Do we perhaps sometimes conveniently use it to cover our own shortcomings at times? And without realizing, because, you know, now our brains just link everything that's happening to gender. So I think it's important to be mindful of that nuance as well. Overall, and there's no other way to say this, it is a complex issue. But by being open, sharing experiences, and, you know, fostering some sort of awareness, we are moving that needle towards a more inclusive future, like you said, you know, for everyone. And I'm so very glad to be a part of it. So thank you for asking me about this today.

Sarah: Yeah, you're welcome. And thank you for sharing. I think the point about self-awareness is really good. And I think, you know, trying to be honest with ourselves and then, you know, looking for the opportunities to speak about these things is important because I think that, you know, to your point, hopefully, a lot of it is unconscious. And I think one of the challenges is, you know, there are people that are in groups, this sort of thing doesn't happen to that maybe think like it's 2024, we're well beyond this. So that's why I think it's important to talk about it because we aren't, you know, to your point, there's progress, but it does still happen. So I think it's important to talk about that, but also important to own, you know, like you said, the self-awareness of, okay, well, was it or wasn't it right? If it wasn't, maybe I need to accept that if it was, you know, is there a way for me to speak up or speak out in an appropriate manner to help? You know, create that awareness. So you're right. It's definitely complex, but I appreciate you sharing. And I know we're just about out of time. I want, before we go, I want you to let listeners know where they can find the book and the playbook.

Kawal: Yeah. So if you do a quick Google search, so Servitization Strategy, that's the name of the book, and SpringerLink, that's the publisher. So it will take you directly to the book's page. We also have a dedicated website, so you could alternatively just head to servitizationstrategy.com. You'll find links to purchase both the book and the playbook. It's also available on Amazon. If you'd rather have an eBook version, then it's on Amazon's Kindle store, Google Play, Kobo.com. We also have the digital version of the playbook. Again, if you go to servitizationstrategy.com, and scroll right to the bottom, it'll take you to the ASG shop where you can find the link to buy the copy of the playbook. And for those in the UK, the book is also available at Waterstones and WHSmith locations.

Sarah: Okay, wonderful. And we'll make sure we link in the show notes as well. So.

Kawal: Lovely. Thank you.

Sarah: Kawal, well, thank you so much for joining me today. I really appreciate it.

Kawal: Thank you. It was lovely speaking with you, Sarah.

Sarah: You too. You can find more by visiting the home of UNSCRIPTED at futureoffieldservice.com. The podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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Why Mental Health Matters So Much in Service – And Some Expert Advice on What to Do About It

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Why Mental Health Matters So Much in Service – And Some Expert Advice on What to Do About It

I hear time and time again at conferences that, “Service is, and always will be, a people business.” In service, our people are our greatest asset.

May is Mental Health Awareness Month and the 2024 theme is “Take the Moment.” According to the National Alliance on Mental Illness, the Take the Moment campaign is intended to “encourage us to foster open dialogues, cultivate empathy and understanding and to share resources to support individuals and families on their journey towards mental wellness.”

We’re “taking the moment” to discuss this topic today because it is one that is important to me, personally, and important to you – our audience – because it’s an issue that is demanding attention in the workplace today. No longer can discussions around mental health be avoided at work, no longer can employee wellbeing be seen as “soft,” and no longer can leaders be successful without deploying empathy, compassion, and vulnerability.

I look at the progress we’ve made in destigmatizing mental health with deep appreciation but look at how much work there is left to do to eliminate bias and truly support teams and am eager to watch the leaders, individuals, companies, and organizations that will step up to lead the charge. As someone who navigates various challenges such as anxiety and depression that stem from C-PTSD, I am thankful that the world is becoming one in which you can show up as you are in regard to mental health and not fear the same judgement or backlash that was once guaranteed. I’m also thankful that the workplace is becoming somewhere where mental health journeys can be normalized and wellbeing prioritized.

When I consider the work left to be done, I find myself drawn back to the power of storytelling. In a recent podcast with Marco Hugo Gutierrez of Tetra Pak, we discussed how the company is putting the focus on employee wellbeing that it deserves. Marco shared that when Tetra Pak looked into the engagement of its field workforce, isolation was one of the biggest challenges they faced.

Isolation being an issue for a field engineer who rarely visits an office or engages face-to-face with teams makes sense. But the reality is, we can all face periods of isolation at work – some due to remote work arrangements, and others when they feel they can’t share openly or be themselves in a work setting.

Last week, we featured the story of Rob Stephenson, TEDx Speaker, Mental Health Campaigner, Keynote Speaker, CEO of FormScore®, and Founder of the InsideOut LeaderBoard® on the UNSCRIPTED podcast. Rob lives with bipolar disorder and based on his own life experience was motivated to make a career out of campaigning for mental health and helping organizations take action in an area that can still bring with it some apprehension, sensitivity, confusion, and even skepticism.

If you yourself do or have struggled with your mental health, I hope you will take from this that you are not alone and that there are people who care and are willing to listen – me being one of them. I also hope that maybe if you’re in a position that you’re able, you will consider the power of sharing your own story. If you have team members you want to be able to do a better job of helping, I hope you’ll find value in some of the advice Rob shares. If you’re reading this and question why Future of Field Service is covering this topic, I hope you question that response and really dig into what’s behind it.

Words of Advice from a Mental Health Advocate

Let’s start by ensuring an understanding of why smashing mental health stigma matters so much. “I think the reason that it's so important to smash the stigma and challenge these misconceptions is at the most extreme end, it's costing lives. People are not getting the help and support they need. They're not comfortable asking for help. And we're losing lives to suicide,” explains Rob. “But also, if we can start to receive help and understand what is driving mental ill health and start to manage that, whether that's with medication or whether it's with exercise, via social connections, whatever it might be, we can then just tap into those strengths that come with being human.”

It’s helpful to consider that stigmas are rooted in fear, because that allows action through education. “We want workplaces where teams can thrive, but we can't thrive if we don't feel comfortable talking about a challenge. Stigma itself comes from fear, and fears are often countered by knowledge. So, the idea of educating ourselves about these conditions is really important. I think much of this comes from the way mental illness has been portrayed over the years. It's Jack Nicholson, One Flew Over the Cuckoo's Nest, the Lunatic Asylum, all of these words that have come into common vernacular. We've got to break all of that down. We're human. We're all individuals. We're all unique. We're all on a continuum of something, whether it's neurodiversity, whether it's mental health, whether it's well-being, whether it's opportunity, whether it's privilege. And some of us are just more extreme. That's not wrong. It's just human. And I think as we accept the differences in society, then that comes with understanding. Understanding comes with education and awareness.”

Beyond stigma, people can often freeze because they are afraid that if someone opens up to them about a struggle they’re having, they must know how to help. Rob dispels that myth, “The question I often get asked by people is, what about if someone says that they are struggling to me? What should I do? We're fearful of that as well, because as humans, particularly in the workplace, our jobs are generally to fix things, right? You can't fix someone who comes and says, I'm experiencing depression, anxiety, PTSD, or whatever. There are professionals that can help to do that over time to manage and to come to terms with. But as a friend, a boss, or a loved one, you can't immediately solve that problem, and nor should you try. And I often say that we're not qualified to fix people, but we are qualified to listen as a human being. And sometimes knowing that person is there to listen unconditionally, and you can be yourself with that person, that's a huge benefit when we're struggling. And it's these little simple things that make the burden easier to carry.”

Rob observes that companies are at varying points in not only accepting the importance of mental health as a workplace focus but in taking action to make progress. “We're seeing another sort of continuum there of organizations that are not doing anything, organizations that are ticking or checking a box, and then organizations that truly value the well-being of employees,” he says. “It’s okay that we're all at different stages; what I don't like to see are organizations that are understanding for their employer brand that we've got to do something about well-being. So, we'll get an employee assistance program. We'll maybe have a few awareness sessions. We'll have some benefits, and that's well-being: done! The organizations that get it understand that well-being is not just a benefits issue; something to offer people when they're struggling. Organizations that really understand the work that needs to be done here understand that actually it's about ways of working. It's about fairness. It's about belonging. It's about inclusion. It's about unrealistic work demands. It's about psychological safety.”

This distinction is tied to whether a company is truly taking a people-first approach, or simply checking a box of what they feel they need to do to “contribute” to such an important topic. “Most people-oriented organizations, somewhere in their marketing materials, you'll see people are our greatest asset. So why do we invest more time servicing the photocopier in certain cases, right? It's about thinking, what is the objective of our organization? Now, most organizations, again, will have some objective around the creation of shareholder value, which is right because that's how these organizations are owned. But what about the creation of value for employees beyond the financial? Is coming to that workplace a life-enhancing experience? If not, why not? Because it should be. And if we get this right, those employees will be higher performing. There's a whole bunch of research coming out of Oxford University and other organizations that categorically show that a well-engaged workforce will perform better. It leads to higher personal performance, team performance, even company and stock market performance. So, if we get it right, the other performance aspects will follow. But we've got to choose to get it right for the right reasons that we want employees to have that experience, not just to check a box to say we've done well-being.”

Solidly agree on the importance of the issue, but unsure where to start? “Talk to your employees and really understand what's going on for them,” suggests Rob. “Because we can often sit at the center in large organizations and make assumptions with what will work for their well-being without asking the people that we're trying to help. Psychological safety, as championed by Amy Edmondson of Harvard, talks about the belief you won't be held back, punished for speaking out, admitting a mistake, or coming up with an idea. But, where our well-being is concerned, I think it's really interesting to understand whether employees feel comfortable in saying, my work demands are negatively affecting my health right now. What can we do about it? And I think if we can get to a culture where that is seen as safe in doing so, I think that's a really good starting point.”

The role of the leader in creating that psychological safety is imperative and depends significantly on the willingness to be vulnerable. “Can the leader talk about, it doesn't need to be a mental health challenge, can the leader talk about a time when they've needed to prioritize their own well-being at work? What have they done to do that? Can the leader talk about their well-being non-negotiables? What are the two or three things each week they need to do to stay well?” asks Rob. “If we start doing that at the team level and asking others what their non-negotiables are, then you're normalizing the well-being conversation. You're giving people permission. Leaders influence work and work culture, but it takes time to do so.”

Know that, as a leader, you don’t have to have mental health struggles to apply vulnerability and move the needle in this area. “We all have mental health. We all exist on a continuum. Some of us will experience a mental health challenge or a diagnosable mental illness. Everybody will experience mental ill health from time to time, excess stress or difficulty sleeping or whatever it might be. And then we all have well-being, and we can all prioritize our well-being. Mental health would be one aspect of our well-being alongside physical well-being, spiritual well-being, et cetera,” explains Rob. “So often the conversation, particularly with leaders is well, I don't feel comfortable talking about my mental health. Well, that's fine. But recognize that you will do things as a leader to maintain good mental health or positive well-being. You'll prioritize sleep. You'll maybe exercise. You might think about your nutrition. You might socialize with friends. You have time with family. All these things nourish us, right? So, for the leaders that might be a bit uncertain about even speaking out on this topic, you're actually doing it already, but by talking about it, it normalizes it in the teams. So, then we're not asking people to share back how they're feeling about any mental health challenge. We're saying, what do you need to do to stay well? Is it taking your lunch away from your desk? Is it putting a micro break in the day? Is it going to the gym? Is it that soccer match? Is it book club? Whatever. We all do different things to look after ourselves, but if we can get people talking about this, then that sends a strong message in the team that it's not only, you don't have permission, but you are encouraged to go and do this.”

However, if you do have a mental health challenge, sharing some aspects of it – if you’re willing – can be powerful. “I'm generalizing here, but most people wouldn't feel too uncomfortable putting a doctor's appointment on their schedule. Many more people would feel less comfortable putting therapy on their schedule. And again, if you see a leader putting therapy in their diary, in an open diary, that sends a strong message,” says Rob. “And I love to hear CEOs talk about going to therapy.” This is an example of how you can illustrate the acceptance of prioritizing mental health without getting into details.

Rob reinforces the importance of looking at wellbeing not through the lens of benefits or perks, but in really assessing if the ways of working in your organization are healthy and sustainable. “Often we'll see huge investment in well-being programs and benefits that are then underutilized and often will be underutilized because of poor communication, but mainly because people feel they don't have the time or the permission or the psychological safety to do so,” he cautions. “And you see a lot of memes out there, you can't meditate your way out of burnout or a 16-hour day, which is true. Benefits have their role, but you've got to start with ways of working. Are we putting people under appropriate amounts of pressure? Do we have appropriate resources for this job in hand or for this particular team? Do people feel safe in their workplace? Do they feel like they've got a sense of belonging? Can they be themselves? Are we creating an environment that creates a social connection with our workplaces, particularly if we're doing more stuff over Zoom or we've got people on the road? Let's start the hard work, which is looking at culture, looking at teams, looking at psychological safety, looking at what's really going on for people.”

If you’re still not convinced now is the time to act, or take further action, to normalize mental health and promote employee wellbeing, the proof is in the stats. “Some organizations still feel that well-being is a soft issue,” says Rob. “For the cynics, I'd point them to the research. So Indeed, the jobs board, have a happiness index run by Oxford University and they've collected basically about 20 million data points of people ranking their companies on well-being. They’ve taken that data and mapped it against the stock market and for the top 100 companies on well-being, they significantly outperform the markets. Now, in a market where there is a war for talent and employees, ignore well-being at your peril. So, if you don't believe it's morally the right thing to do and you have a duty of care to create a culture conducive to wellness, understand that you’re missing a really big performance opportunity by ignoring well-being.”

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Smashing Stigma Around Mental Health & Prioritizing Well-Being at Work

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Smashing Stigma Around Mental Health & Prioritizing Well-Being at Work

Episode 265

In this episode of the Unscripted podcast, host Sarah Nicastro is joined by Rob Stephenson, TEDx Speaker, Mental Health Campaigner, Keynote Speaker, CEO of FormScore®, and Founder of the InsideOut LeaderBoard® for an important conversation during Mental Health Awareness month.

Rob shares his motivation for evangelizing mental well-being and gives advice on how companies can make progress in normalizing mental health topics and promoting well-being at work. Trigger Warning: this episode includes a range of mental illness-related topics that may be sensitive for some listeners, including suicide.

Rob is deeply committed to mental health awareness and actively participates in efforts to eliminate the stigma surrounding mental ill-health in the workplace. He has managed bipolar disorder throughout his personal and professional life and shares his experiences and strategies for change through public speaking engagements.

If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts or Spotify.

Rob: You've articulated the number one point very well there, which is listen. It's talk to your employees and really understand what's going on for them. Because we can often sit at the center in large organizations and make assumptions about what will work for our well-being without asking the people that we're trying to help. So I think ask your employees what's going on at the team level and gathering that information is really important. I think if you would take this seriously, there's a concept of psychological safety that I think is really important to think about. And psychological safety, as championed by Amy Edmondson of Harvard, talks about the belief you won't be held back, punished for speaking out, and missing a mistake. Or coming up with an idea.

Sarah: Hello, welcome to the UNSCRIPTED Podcast, where you'll find discussions on what matters most in service, leadership, and business transformation. I'm your host, Sarah Nicastro. Let's jump in. Welcome to the UNSCRIPTED Podcast. I'm your host, Sarah Nicastro. Today, we're going to be having an important discussion around smashing stigma around mental health and prioritizing well-being at work. May is Mental Health Awareness Month. This is a topic that is important to me personally, and I think important for all of our podcast listeners in thinking about how they prioritize their own mental health and support their teams in doing the same. So I'm thrilled to welcome today Rob Stephenson, who is a TEDx speaker, mental health campaigner, keynote speaker, CEO of FormScore, and Founder of The InsideOut Leaderboard. Rob, welcome to the podcast.

Rob: Sarah, thank you for having me. Excited to be here.

Sarah: Thank you for being here. I'm excited as well. I found Rob on LinkedIn, and it was clear that this is a big part of your life. And I'm so excited to hear what you have to share with us today. So before we get into the conversation, we're going to talk about what FormScore is. We're going to talk about what the Inside Out Leaderboard is. We're going to talk about a lot of other things. But before we get into that, just tell everyone a little bit more about yourself, your journey, and what you do.

Rob: Sure. Sarah, thank you for that very kind introduction. I'd describe my mission as helping to inspire the creation of mentally healthy workplaces. And this mission really came out of me coming to terms with my personal challenges of living and working with bipolar disorder. And for those that don't know, bipolar is a mood disorder and is characterized by extremes of mood. So I will experience periods of hypomania, where I can take risks, make bad financial decisions, and spend money compulsively. And then I'll also experience periods of depression. And actually, I'm just coming out the other side of a pretty dark period of depression over the last few weeks for me. But I also experience kind of everything in between and periods of creativity, a drive, an ability to challenge the status quo. And I think it's important to recognize that if we can manage some of the challenges we experience with our mental health, we can then enjoy the strengths and the positives of our mental differences. So for the last eight years, I've been on this mission of trying to make change in the workplace by public speaking with the various other things that I do. Prior to that, I've been a CPA, and a chartered accountant. I have been a head hunter in the recruitment sector. And I've also been a long-time DJ and bar owner in my 30s. So I've had quite a varied career, but I actually think that as a campaigner, I've really found my purpose and my mission to help change how we perceive mental health.

Sarah: Yeah. It's such an important topic. And I think I still remember, I will never forget, there was a time when none of this was discussed, right? Openly in any way, right? And it's just, so we've already come a long way in the stigma. There's a long way left to go. All right. But I just want to say, I remember when, boy, I don't remember how many years ago this was, maybe 15 or so. Before social media as well, there were so many downsides of social media. But one of the things that I really like about it for me personally, like I follow on Instagram a lot of content related to complex PTSD because I have that. And. It's such a great, it can be such a great way to understand these topics better, to connect with other people, other content creators who have gone through this, and to feel less alone in that journey. Before social media, though, and in a time where this wasn't discussed as much, there’s a woman, Glennon Doyle, who wrote a book called Carry On, Warrior. And I remember finishing that book on a flight to California and just sobbing. But in a way where I just, words had been put to so many things I had felt for so long that like, I truly did not know there were other people that felt those things. So having these discussions, and doing the work you do is so incredibly important, just for people, for humans, right? But then obviously thinking about how much time we all spend at work and how we bring that humanity into the workplace and really think about how do we allow people to be themselves and help them be their best selves instead of that isolation of feeling like maybe I'm the only one that struggles with this thing or what have you. So such an important thing. And like I said, we've come a long way, but there is still so much stigma to smash. And so can you talk about why that's so important to you and just to the broader world, really?

Rob: Yeah, really happy to do so. And I think linked to that. What you were just saying resonates for me as well. When we experience a challenge to our mental health, because of the stigma, because it's not that widely talked about in society, and certainly a few years ago, it wasn't talked about at all. We feel we're alone. We feel that this really strange stuff that we don't even understand until we start to seek medical help we don't even have a label for, and we feel that this is a problem with us. And I had a similar experience. Somebody gave me a book, I think it was by Elizabeth Wurtzel, if I remember correctly, but it was her experiences with depression. I'm like, wow, there's somebody else out there that experiences this, that I'm struggling to even come to terms with a name. And I think the reason that it's so important to smash the stigma and challenge these misconceptions is at the most extreme end, it's costing lives. People are not getting the help and support they need. They're not comfortable asking for help. And we're losing lives to suicide. But I think, actually, as I mentioned, if we can start to receive help and understand what is driving mental ill health and start to manage that, whether that's with medication or whether it's with exercise, via social connections, whatever it might be, we can then just tap into those strengths that come with being human. But I think if we feel that we can't seek help and we can't talk about this stuff, many of us then spend unnecessary years where we're lost effectively because we're not moving forward. We're stuck and defined by our mental illness. I've made so many questionable decisions in my kind of 20s and 30s that if I'd have come to terms with my mental health challenge earlier, I might have made better decisions. And I think that is changing. We are seeing people being more open. The generations coming through are much more open about their mental health. You're right. Social media is a platform in many cases to spread awareness. We mentioned Mental Health Awareness Month, and that's great for, again, getting people talking. But you're right in that there's so much work still to do. And I think it's a good question to ask employees, do you feel confident in discussing a mental health challenge with your line manager? And that is still an overwhelming no for many people in the workplace. And I like to draw examples with something like cancer. And cancer used to be very much more stigmatized than it is. People would talk about the big C in hushed tones. Whereas now people feel much more comfortable talking about that diagnosis if they're experiencing that terrible condition. They receive the help that they need. They get help as quickly as possible. And they are supported by people. Now we're not there with mental ill health yet, which is why conversations like this, Mental Health Awareness Month, and activities in workplaces are so important. Because ultimately, what is the goal here? It's to help humans thrive as much as possible. And we can't thrive if we don't feel comfortable talking about a challenge.

Sarah: Yeah. You know, the other thing I'm thinking about, so obviously the name of the show is UNSCRIPTED, so here I go. But now that we're talking, right? And I hope you don't mind me saying this, but I think the other thing to think about when it comes to stigma is there's a, I think, a continuum of accepted topics, okay? And so like I this is just my observation. I think anxiety has become a pretty accepted topic of mental health. Maybe depression is slightly less so, but pretty normal, okay? I think bipolar, you're inching further into that continuum where people may react differently to that. And then I was just listening yesterday to my personal favorite podcast other than my own Armchair Expert with Dax Shepard. And he had on someone who is diagnosed sociopath. And she is a PhD. She does a lot of work around sociopathy and understanding it better and to the degree, but that's sort of then further along, right? And it was eye-opening to me because considering myself someone who's very open-minded and accepting, it was just interesting to hear her speak about the journey of being a child who had sociopathy, didn't know it at the time, but like what it was like to grapple with that. And then what the response has been to that in the world and think, wow. That it is something where you need to constantly be learning and understanding and challenging your own perceptions and biases as well. So what are your thoughts on there's almost like a stigma continuum that we have to work through?

Rob: I 100% agree. And if you start talking about more stigmatized conditions or challenges, schizophrenia would be another one. And I think... Yeah, depression and anxiety are probably easier for people to get their heads around. And even then, unless you've experienced them, you don't know what they're like. But people would equate anxiety to being overly worried about stuff. People would equate depression to feeling low or sad. For those that experience this stuff regularly, it's much more serious. But it's also much more common. And people are talking much more openly. There's a stat that over a billion people experience anxiety. But I think stigma itself comes from fear. It comes from a fear of what would I do if someone said to me, I'm schizophrenic or I've got a borderline personality disorder. And fears are often countered by knowledge. So the idea of educating ourselves about these conditions is really important. And I think people immediately talk about, if you say mental ill health or mental illness, it's depression and anxiety that this scene is more acceptable. So you're absolutely right. I think this all comes from, though, the way mental illness has been portrayed over the years. It's Jack Nicholson, One Flew Over the Cuckoo's Nest, the Lunatic Asylum, all of these words that have come into common vernacular. And we've got to break all of that down. Yeah, we're human, right? We're human. We're all individuals. We're all unique. We're all on a continuum of something, whether it's neurodiversity, whether it's mental health, whether it's well-being, whether it's opportunity, whether it's privilege. And some of us are just more extreme. That's not wrong. It's just human. And I think as we accept the differences in society, then that comes with understanding. Understanding comes with education and awareness.

Sarah: Yeah, absolutely. That's such a good point about how things have been portrayed. And when you start to shift your perspective to think about, what we've all probably encountered in our daily lives, if we're not someone who struggles with this ourselves, we've encountered someone who does, that you wouldn't know. They're showing up in life in a way that a lot of times. So yeah, really interesting.

Rob: I think that's really good because it's an invisible illness, right? I did a panel facilitation. The topic was financial well-being. It was a few days ago. And I looked like I do now. I was a confident man. I was asking good questions. I'm quite good at facilitation. I've done a lot of it. But I made a point to the audience that actually I was experiencing pretty bad depression. And I like to make that point when I am because we never know what's going on behind the scenes because we all put this mask on. And for me as a campaigner, that's one very nice way of challenging those perceptions of people. Because in the workplace, you have to put a mask on. We need to change that. But at the moment, you have to put a mask on because it's still not completely acceptable to be 100% yourself, particularly about your mental health.

Sarah: It's a really good point. My older son has type 1 diabetes, and he was diagnosed when he was three and a half. And if he has his insulin pump and his CGM somewhere that you can't see them, it's also very much invisible. People see him as a healthy, energetic, happy boy. And he is, right? But at any given moment, there's a completely different side of that that people don't understand. And I think I've shared about that before as well. And that's why I think it's so important to be open and honest the way you said you were that day because that's how we help people understand, right? We don't, we're not helping people understand by just hiding behind that mask and pretending we're okay when we're not okay.

Rob: For sure. And I think there's another important point to this as well, that the weight of pretending to be something you're not is a heavy one. It's heavier when that's something you're pretending to be as well as buoyant when you're experiencing something like depression. And what I've found since I've been more open in the last kind of eight, 10 years is actually that if we can lift that weight by being ourselves. So me being able to be open in that situation actually meant the weight I was carrying was lower because even though it was virtual, I was still connected with people and I knew that they knew where I'm at right now. I'm not trying to carry this pressure of being something I'm not. And I think back to the workplace. That's what we want. We want people to be themselves. And we can't do that if people are fearful of being themselves in any environment.

Sarah: Yeah. What you're saying makes me think of when Robin Williams committed suicide, the response to that, because he was someone who was so charismatic and seemingly so happy. And the way people reacted to that was almost amplified because that was his persona, and people that say, I just I can't imagine. And it's well, that's really good that you can't imagine, right? A lot of people can. And I think, you know, to your point, having to pretend that you're not experiencing something like that is a lot of a burden, right? So if you can ease that part, that gives people the space to allow themselves to get the help they need to feel better.

Rob: Yeah, I think that's right, you know. The question I often get asked by people is, what about if someone says that they are struggling to me? What should I do? The loved one, a colleague. And we're fearful of that as well, because as humans, particularly in the workplace, our jobs are generally to fix things, right? You can't fix someone who comes and says, I'm experiencing depression, anxiety, PTSD, or whatever. There are professionals that can help to do that over time to manage and to come to terms with. But as a friend, a boss, or a loved one, you can't immediately solve that problem, and nor should you try. And I often say that we're not qualified to fix people, but we are qualified to listen as a human being. And sometimes knowing that person is there to listen unconditionally and you can be yourself with that person, that's a huge benefit when we're struggling. And it's these little simple things that make the burden easier to carry.

Sarah: Yeah. You think about someone who is, you know, in an executive position, and I know we're going to talk about the InsideOut LeaderBoard, but there is a weight of that as well, of the more prominent you are in the business, the more responsibility you hold, the more people you lead. Let's talk about, you do a lot of work with organizations on making mental health and well-being a priority and helping them understand why and how, etc. So we're going to talk about some of those things. But what do you see in terms of the differences among company cultures that are doing work in this area versus those who are avoiding it or refuse to believe that it's relevant for them to take on or aren't for some reason?

Rob: It's a good question. And I think we're seeing another sort of continuum there of organizations that are not doing anything, organizations that are ticking or checking a box. And then organizations that truly value the well-being of employees. So I like to visualize companies being on a kind of journey through the foothills, and we've got Mount Everest up there. And I think the most forward-thinking organizations are probably just starting to climb the mountain. Some haven't started the trek. Most are somewhere trekking through the foothills, approaching base camp. And I think that's okay that we're all at different stages. What I don't like to see are organizations that are understanding for their employer brand that we've got to do something about well-being. So we'll get an employee assistance program. We'll maybe have a few awareness sessions. We'll have some benefits, and that's well-being done. I think the difference between organizations that are doing that and those that truly get it, the organizations that get it really understand that well-being is not just a benefits issue. It's not just something to offer people when they're struggling. Let's work everybody to the bone, but it's okay because we've got some well-being resources we can give to people. So I think organizations that really understand the work that needs to be done here understand that actually it's about ways of working. It's about fairness. It's about belonging. It's about inclusion. It's about unrealistic work demands. It's about psychological safety. All of these things are not going to get fixed by a gym membership, an app, or anything else. Now, all of those things are useful as part of a wider strategy. But most people-oriented organizations, somewhere in their marketing materials, you'll see people are our greatest asset. So why do we invest more time servicing the photocopier in certain cases, right? It's about thinking, what is the objective of our organization? Now, most organizations, again, will have some objective around the creation of shareholder value, which is right because that's how these organizations are owned. But what about the creation of value for employees beyond the financial? Is coming to that workplace a life-enhancing experience? If not, why not? Because it should be. And this isn't just me preaching and being very woo-woo about things. If we get this right, then those employees will be higher performing. There's a whole bunch of research coming out of Oxford University and other organizations that categorically show that a well-engaged workforce will perform better. It leads to higher personal performance, team performance, even company and stock market performance. So if we get it right, the other performance aspects will follow. But we've got to choose to get it right for the right reasons that we want employees to have that experience, not just to check a box to say we've done well-being.

Sarah: Yeah. I'm thinking of an interview that I did recently with Marco Hugo Gutierrez from Tetra Pak on well-being. Now, he leads a field force, a group of field technicians, I think about 1,100 of them in Europe and around different regions. And they undertook a big effort not too long ago to really try and understand where their field technician engagement was at and where they needed to improve. And they asked, I thought, some really great questions like, what makes you happy at work? What makes you feel proud? What's your biggest struggle? Those sorts of things. And the number one thing that came out of it was isolation. These are employees who are out doing work at customer sites. They're not connected to their colleagues on a regular basis, etc. And they took some really practical steps to change that. So one of the things that they did was take an effort to free up the manager's time to spend more time with those employees. They focused on looking at how they could communicate differently the way those employees' efforts tied into the company's objectives to make sure it was clear to them how they were contributing to the purpose. They worked on reward and recognition to make sure that those employees felt valued, those sorts of things. And it was such a good example of obviously understanding that it mattered and wanting to do that for the right reasons, but also some really practical steps, at least related to our audience, that had an impact. So can you talk a little bit about, let's say you have someone who's beginning the track. They do understand the importance, but they're really unsure on how to go about it. So what's important? What works? Those sorts of things.

Rob: Yeah, sure. And I think you've articulated the number one point very well there, which is, listen, it's talk to your employees and really understand what's going on for them. Because we can often sit at the center in large organizations and make assumptions with what will work for their well-being without asking the people that we're trying to help. So I think asking your employees what's going on at the team level and gathering that information is really important. I think if you really want to take this seriously, there's a concept of psychological safety that I think is really important to think about. Psychological safety, as championed by Amy Edmondson of Harvard, talks about the belief you won't be held back, punished for speaking out, admitting a mistake, or coming up with an idea. But actually, where our well-being is concerned, I think it's really interesting to understand whether employees feel comfortable in saying, my work demands are negatively affecting my health right now. What can we do about it? And I think if we can get to a culture where that is seen as safe in doing so, I think that's a really good starting point. And the way we create psychological safety is actually by the leader of that team being a little bit vulnerable. Can the leader talk about, it doesn't need to be a mental health challenge, can the leader talk about a time when they've needed to prioritize their own well-being at work? What have they done to do that? Can the leader talk about their well-being non-negotiables? What are the two or three things each week they need to do to stay well? If we start doing that at the team level and asking others what are their non-negotiables, then you're normalizing the well-being conversation. You're giving people permission. You can tell that some of my first bits of listening, getting involved at the team level and creating a culture that is conducive to well-being before we even start thinking about what benefits are required and what solutions are there. Because I think mostly the ways of working and work itself will be the big detractors of well-being within FormScore, which we'll talk about. We ask people what their well-being is with a score out of 10, but we ask what's driving it. The common themes is the negative drivers, workload, work stress, and distractions. The workload and work stress. That's never going to go away. We can talk about resourcing and properly staffing up teams. But so it's ways of working that generally mean people don't take breaks of the day or exercise or have proper family time. Might even skip their vacations or be under pressure to work through the weekend, whatever it might be. These are the things that we can actually influence as leaders and as workplaces, much more so than the genetic makeup as a person and whether they have a particular mental health challenge or not. We can influence work and work culture. But it takes a long time to do so. It's not like a two-year project to change the culture of an organization. So for me, it's starting that process at the team level to understand what's going on, create psychological safety, and bring a culture of permission and well-being into the teams.

Sarah: Yeah, I like the point you made about it. It's it takes time because I wanted to say when you shared those examples about a leader starting to get comfortable, being more vulnerable, talking more openly about how they're prioritizing their own well-being. What I wanted to say is just a reminder that particularly if it's new to your culture, don't expect to share once and a floodgate to open of people sharing back, right? You need to make that a regular practice and give people time to understand that it's genuine, that you're being authentic, that you're open, and it can take time for people to feel safe to share back, right? But. Yeah.

Rob: Yeah. But I think there's also a distinction we really need to make here between well-being, and mental health, okay? So we all have mental health. We all exist on a continuum. Some of us will experience a mental health challenge or a diagnosable mental illness. Everybody will experience mental ill health from time to time, excess stress or difficulty sleeping or whatever it might be. And then we all have well-being and we can all prioritise our well-being. So well-being is a subset of our mental health. So, and again, mental health would be one aspect of our well-being alongside physical well-being, spiritual well-being, et cetera. So often the conversation, particularly with leaders is well, I don't feel comfortable talking about my mental health. Well, that's fine. But recognize that you will do things as a leader to maintain good mental health or positive well-being. You'll prioritize sleep. You'll maybe exercise. You might think about your nutrition. You might socialize with friends. You have time with family. All of these things nourish us, right? So for the leaders that might be a bit uncertain about even speaking out on this topic, you're actually doing it already, but by talking about it, it normalizes it in the teams. So then we're not asking people to share back how they're feeling about any mental health challenge. We're saying, what do you need to do to stay well? Which is why we use the word form at form school, or rather mental health or well-being. Is it taking your lunch away from your desk? Is it putting a micro break in the day? Is it going to the gym? Is it that soccer match? Is it book club? Whatever. We all do different things to look after ourselves, but if we can get people talking about this, then that sends a strong message in the team that it's not only, you don't have permission, but you are encouraged to go and do this.

Sarah: Yeah. I'm also thinking this is a specific thing that comes to mind for me, but I go to therapy once a week for an hour and it's over my lunch break, but I'm driving. And so it's a break in the day. And obviously, you get into different roles, different schedules, et cetera, but even allowing people the time to do things like that as well. Right. And making that normalized is something that can help with reducing stigma and just giving people the space they need to take care of themselves in the ways that they need to take care of themselves.

Rob: Yeah. And look, most people wouldn't, I'm generalizing here, but most people wouldn't feel too uncomfortable putting a doctor's appointment on their schedule. Many more people would feel less comfortable putting therapy on their schedule. And again, if you see a leader putting therapy in their diary, in an open diary, that sends a strong message. And I love to hear CEOs talk about using a therapist, and going to therapy. Because I go to therapy once a week as well, and it's just a wonderful time where you've got somebody that is a qualified, non-judgmental listener who will give you space to work stuff out. And for me, therapy, I don't talk about bipolar too much in my therapy these days. It's more about how I'm showing up in the world as a parent or a business challenge I might be facing or whatever. It's a space for me to talk about what's on my mind, and I think everyone should do therapy.

Sarah: And exactly. And that's what I was going to say is it's not something that is only helpful in a time of well, with mental illness or in a time of mental health challenge. It's it can be a proactive way to prioritize your mental well-being, right? Especially when you're someone that has a lot of pressure, that's busy, that oftentimes, it's the only time I have to process my feelings about things that have happened because I don't slow down enough, you know, in a day to day to do that. So I need that space to think like, okay, well, yeah, I probably didn't react as well to that as I could. Or now that we're talking about it, I should think about things this way or what have you. So absolutely, that's I think an important example of something that to your point, seeing CEOs and executives do that sends a really strong message.

Rob: You used the word space there, right? And I think that's important because we've got to a way of working with very little space for reflection, space for thinking, space for creativity, space for well-being, space for hobbies. And I think the pandemic, whilst has created more flexibility in hybrid working, has also created a more transactional way of working. We'll jump on a Zoom, you're straight into an agenda, you're onto the next Zoom, limited breaks of the day. When we were in the office previously, at least we had to go to a client premises or walk between a meeting room. We're now super intense in the way that we're working. And so therefore, I think as humans, we need to be intentional about grabbing that space back. And therapy is obviously a protected hour in both of our diaries that we have each week. But I think in the day we can do the same. We can build in time for thinking, for reflection, for even just reviewing how things are going. But if we don't be intentional about it, our diaries tend to get filled up for us.

Sarah: For sure. I think that's a good point. And I think for those leaders within our audience, that's probably realistic. I am also conscious that a lot of people are thinking about how to improve well-being for teams that are on really specific schedules because they're providing service. There are a couple examples of that as well. And I've shared this one before, but there's a gentleman that spoke at a conference that we held last year in Birmingham from Bosch. And, I'm sorry, it was from Mighty. And he talked about how they've implemented IFS's planning and scheduling optimization, which just improves the automation of scheduling. So there's a company benefit to that, of course. But what they did was give back to the employees by allowing them, because it will auto-schedule everything, to set their own start and end time every day. And so some people wanted to do school drop-offs, so they wanted to start later. They want to get done earlier, et cetera. So it was a nice way to give back some autonomy to the workforce and allow them a little bit better balance. So I think my point is just there are certain roles where there's a lot more constriction. But I think if companies are committed to this, there's always ways to get creative to make some positive change that works within those constrictions.

Rob: Yeah, I think you're right. And I think there'll be more opportunities as technology plays a role. My hope is that we don't just fill the time with the human.

Sarah: Exactly.

Rob: There's another point. I did a keynote yesterday for one of the world's leading law firms. So a super demanding, high-performance workplace. And I was talking about resilience. But I think a lot of the misconception about well-being is we need to allocate huge chunks of time to receive the benefits. We don't need to go to exercise for an hour to receive benefits from exercise. We can do a 10-minute walk or some squats while we're boiling the kettle. That has a great benefit on our minds and our mood. Similarly, a five-minute break between stressful events, whatever that might be. I've seen brain scans, total relaxation of the autonomic nervous system. So it doesn't need to be big, grand gestures. It can be little micro steps that have a huge benefit on well-being. And those can always be built in if there is a will.

Sarah: Yeah. You mentioned resilience. So I want to touch on that briefly because I loved what you said about resilience, that people misperceive resilience as strength. So talk about why that's a misperception.

Rob: Yeah. So people think that to be resilient, it's strength, it's pulling the all-nighter, it's working 24-7, it's skipping vacations. It's not. And it's whilst some of us will have more innate resilience capacity than others, resilience is, I like to think of it more as a reserve. So the actual definition is flexibility or the ability to bounce back or forward after a challenge that work or life is throwing at us. So again, if we use my law firm as an example. Lawyers will have to work on transactions, and they could work pretty onerous hours through those transactions that will tap into their reserves and they will use their resilience to get through that. But then their kind of reserves will be depleted. Now, after that transaction, there needs to be some time to build up those reserves again. So then when the next busy piece of work comes, there again, they've got the energy and the capacity to handle that. If we go from one back-to-back transaction to the next, that's where we're getting the problem of burnout. So resilience isn't your ability to withstand that transaction. Resilience is actually how you've built up your reserves to be able to do so. And how do we do that? It's by prioritizing our well-being. It's doing the things that nourish us. It's exercise. It's sleep. It's good nutrition. It's social connections. It's stress management. So if we can do all of this, then we've got a reserve. So think of your battery being topped up. Then when that busy period comes, we're eating into that battery. We're then going to top it up again. And then if we do that regularly, actually what we can do is build a bigger battery. So we've got more resilience capacity. We can handle more stress without overload, exhaustion, and burnout. But people think it's toughness, right? And that's why I think burnout is on the rise globally in many industries. Because people, we're trying to do more with less. We're pushing employees. People are responding, but actually they're left with little in the tank and no opportunity to rebuild that resilience. Flexibility, bounce back ability. But it's something for me that we've got to feed and nourish to give us those reserves to then have them when we need them.

Sarah: Yeah, I like that point. So going back to companies that are prioritizing this. So that's in and of itself a great thing. What would you say to those who have the right commitment to this? They're genuine in their commitment. What's the biggest misstep people are making?

Rob: I think treating well-being as a benefits issue is probably the wrong place to start. And I think doing that from the center without that listening I was mentioning earlier. Often we'll see huge investment in well-being programs and benefits that are then underutilized and often will be underutilized because of poor communication, but mainly because people feel they don't have the time or the permission or the psychological safety to do so. And you see a lot of memes out there, you can't meditate your way out of burnout or a 16-hour day, which is true. Benefits have their role, but I think you've actually got to start with ways of working. They're really looking at, are we putting people under appropriate amounts of pressure? Do we have appropriate resources for this job in hand or for this particular team? Do people feel safe in their workplace? Do they feel like they've got a sense of belonging? Can they be themselves? Are we creating an environment that creates a social connection with our workplaces, particularly if we're doing more stuff over Zoom or we've got people on the road, right? Your example was beautiful because you've got to work hard in certain job types to give people that social connection. So I think just treat it like a benefits issue and a discretionary benefit that we can cut when times are tough is probably the biggest mistake I see. Let's start the hard work, which is looking at culture, looking at teams, looking at psychological safety, looking at what's really going on for people.

Sarah: Yeah. Now, I know we said most companies have started the trek, but for those who remain sceptical, cynical, are ignoring the importance of this, what would you say to those folks?

Rob: So it's interesting, isn't it? I think that some organizations still feel that well-being is a soft issue. And they feel that it's something to focus on only when people become ill. I think for the cynics, I'd point them to the research. So indeed, the jobs board have got a great study going on. They've got a happiness index. It's run by Oxford University and they've collected basically about 20 million data points of people ranking their companies on well-being. And what Oxford University have done is taken that data and mapped that against the stock market. And for the top 100 companies on well-being, they significantly outperform the markets, whether it's a ball bear or volatile market. So I think for the real cynics out there, understand that the data will tell you that if you get well-being right, you will outperform your peers at the stock market level. For our big telecom, British Telecom company over here, it's been causally shown that well-being and performance are linked by looking at their call centers, where you can obviously measure output and you can measure well-being. Call centers with higher well-being on average were 13% more efficient, more productive. So all the data will tell you that well-being isn't a soft and fluffy benefits issue. It is an essential component of performance, and it is certainly an essential component of sustainable performance. Now, in a market where there is a war for talent and employees, certainly good markets, will walk on their feet, ignore well-being at your peril. So if you don't believe it's morally the right thing to do and you have a duty of care to create a culture conducive to wellness, understand that actually you're missing a really big performance opportunity by ignoring well-being.

Sarah: Yeah, that's such a powerful message. And I think ignoring that evidence brings us back to stigma, like feeling that it's soft or that it's not everyone's responsibility is faulty thinking. Okay, can you talk a little bit about FormScore and InsideOut?

Rob: Yeah, sure. So the InsideOut LeaderBoard is a not-for-profit that I developed here in the UK. Its mission of smashing the stigma in the workplace. And we do that by showcasing business leaders who are open about the fact they have a mental health challenge. So we've published with over 400 executives and leaders who are publicly open about the fact they've got a challenge. You mentioned Robin Williams. We've got Robin's son, Zach, on there, who's a fantastic campaigner. But we've got CFOs, CEOs, partners in the professions. And the mechanism there is to say, look, if our leaders are talking about this stuff, there's a ripple effect within the organization and in broader society to say it is okay to speak out when we're struggling and therefore seek help. And I'm very proud of that because that was my contribution to get the ball rolling in smashing stigma. We've got a number of US leaders on there as well. It's had a contribution in smashing stigma for sure.

Sarah: Absolutely. So powerful.

Rob: Yeah. And look, our leaders are our role models, right? So if you've got your CEO talking about the fact that they might have had a challenge, then actually you'll feel a little bit safer in disclosing your own. FormScore is a tool that we've developed from a concept given to me by a therapist many years ago who suggested that I track my well-being using a score out of 10 and then just note down what were the things driving it. So today I'm probably a 7 out of 10. I'm coming out of this low period where I've been a 4, 5, and 6 with depression. And for me, what's the positive? Well, I'm feeling a strong sense of purpose. I'm feeling motivated. Music is certainly fuelling my creativity right now. I've got a physical health challenge in long COVID that I'm managing. And I've got a few family relationship issues to sort out, particularly with my children. Nothing serious, but just trying to be a better father. So that's probably pulling me down a little bit. And I could probably do with a little bit better sleep than I had last night. So we've evolved that into a tool that gives line managers an ability to get that information anonymously, very quickly in a survey that we aggregate at the company level. So the team will do a check-in. The manager will understand what's going on for their team and will then, aggregate that up to the work.

Sarah: Yeah, and it's such an interesting tool. I know you have your number on LinkedIn, I think in your email signature. And I was just thinking, what a wonderful way to know when you're about to get into a meeting with someone. If you see a certain number, just to think, oh, yes, we should always be being kind and we should always be giving people grace. But sometimes you don't think about that. You just get into it and it's boom, right? But just taking that beat or seeing an eight or a nine and thinking, all right, let's get shit done today. You know what I mean? I love the idea of that visual and just the way that it could help people remember that we are all human. We all have things going on outside of work. And some days we need to honor ourselves more than we do our productivity. And other days, the circumstances are great, for us to go full steam ahead. So I absolutely love that.

Rob: Yeah. And that's what we find in practice that with companies using this at the team level, they end up talking about it verbally. And I'm a seven today, I'm an eight. Why is that? And then you can often have a very different discussion if someone is struggling. I mean, it opens the door to a bit of peer support or at least a bit of understanding. So it's a simple concept that's very powerful in practice.

Sarah: I love it. Rob, is there any one thing we haven't touched on yet today that you feel is important for people to understand, keep in mind, etc.?

Rob: The other thing that I focus a lot of my time on is the intersection between music and our mental health. As a DJ and music producer in my spare time, I've really started to look into the impact of music on cognitive function, ability to sleep, exercise performance, and ability to manage pain. There's lots of good stuff in the research about how music can impact our brains. And I think music's a really interesting way to engage with our well-being a little bit because we all tend to have a relationship with music. And I think if we can start to use music a little bit more intentionally. What are the tracks that get you going when you're feeling a little bit lethargic? What are the tracks that help you calm if you're feeling a little bit stressed or anxious? What are the tracks that can help you sleep before going to bed? We start using music in this way. It's a beautiful way of engaging in our well-being from a different perspective. So I've got a show that I take into workplaces where it combines public speaking, live DJing, audience interaction. It gets people thinking differently about their well-being through music. So I'd encourage people to think about their relationship with music in respect of different moods.

Sarah: I love that. Rob, thank you so, so much for spending time with me today. I truly appreciate it. It's been an honor to have you on and to have this discussion with you. I love all of the work you're doing. We will go through and link things in the show notes so people can find the resources and find you as well. And I hope you'll come back again at some point.

Rob: Absolutely. I've really enjoyed our time. Thank you for having me.

Sarah: Thank you. You can find more by visiting the home of UNSCRIPTED at futureoffieldservice.com. The podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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Field Service Palm Springs 2024: Event Highlights

Last week I landed in sunny Palm Springs for my umpteenth WBR Field Service event (truly, I’ve lost count). This event is a pleasure each year – there are so many friendly faces that it’s wonderful to see, and new faces join in each year as the industry grows and evolves.

This writeup isn’t meant to be a formal review or a complete synopsis of the event, rather a summary of what stood out to me as someone who covers the space weekly and has attended the event over more than a decade. There was a much wider variety of topics covered than what I’ll touch on here, and some points on which I plan to expand in upcoming articles.

Now going into the event, I fully expected ample AI coverage – more like aggressive if I’m being honest. And I wasn’t wrong; AI was one of the cornerstone topics of the event. As it should be, given the exciting advancements in technology and the real-world applications driving value for service organizations. What pleasantly surprised me, however, was how well-balanced the AI discussions were with points about the criticality of employee engagement, empowerment, and effective leadership.

AI Everywhere

While some of the sessions seemed to force the AI narrative, there were plenty of actionable discussions and practical advice. One of my favorite statements around the topic was, “there’s no killer app, only a killer use case.” When it comes to AI and all of its buzz, this is important to remember – the reason to invest in the technology isn’t because it’s all the rage but because it solves a challenge within your business.

Moreover, investing in AI doesn’t demand a revolutionary approach – it can be an evolution of how you further derive value from systems in place. In a panel on Best (and Worst) Use Cases for AI, examples of this were shared such as improving chat bot functionality in customer service or adding ease and automation to a technician’s knowledge resources while on site with a customer. During this panel the speakers, Haroon Abbu of Bell & Howell and Jessica Murillo of IBM, also worked to dispel myths about AI. These included easing concerns that AI is meant to replace people, remembering that AI isn’t always right and false trust is risky, and pointing out that AI isn’t only for large companies; it’s accessible to all.

Practical advice was shared across that panel discussion and others: understanding there’s real work around data readiness underneath all the hype and ignoring this keeps initiatives from fruition. Focus early efforts on identifying where techs are being bogged down or spending a lot of time and looking for ways to – in bite size chunks – apply AI to create ease. Words of caution reminding attendees that, if you aren’t pushing the envelope – you’ll fail. And emphasizing the absolute criticality of diversity – in data and in talent – when looking to make use of today’s AI capabilities.

People at the Center

As I stated, I was expecting major AI buzz. But what I wasn’t expecting was just how many sessions were leaders speaking about how important our focus on people is (and I couldn’t agree more). In the opening keynote, Alban Cambournac of Schneider Electric set the stage by discussing how employee engagement drives customer satisfaction. His message was echoed and reinforced over the next three days.

This included acknowledgement of cultural differences and discussion around how best to navigate this. Joe Lang of Comfort Systems spoke about the difference between technology adoption (implementation of a good idea) versus utilization (following orders) and why that difference matters so much.

Adam Gloss of McKinstry delivered a wonderful keynote on day two of the event, showcasing the differences between a people-first culture and one that isn’t. He spoke about how trust, teamwork, and inclusion increase a workforce’s capacity for change, and how that capacity for change spurs companies ahead of the competition.

There was a panel of young talent speaking about what the industry needs to consider as it develops future leaders, which the moderator summarized by saying that building the next generation of leaders “doesn’t require new tricks but requires a mindful approach that’s curated to the individual. That’s always been the right thing, but it hasn’t always been crucial to do.”

Corrie Prunuske and Roy Dockery gave a keynote double-header on diversity and inclusion, in which Corrie shared a lot of her personal journey and lessons learned and Roy shed light on some of the shortcomings in how companies recruit today that are holding them back from true diversity among their teams.

I was thrilled that the focus on humanity was just as strong as the focus on AI. The question was raised after one session that, “The systems are transforming – becoming more sophisticated. Are we?” I think this is an important question for both companies and leaders to be asking themselves, in relation to not only the customer value proposition and technology use, but also in what surrounds our people – engagement and empowerment, leadership, true diversity, and inclusive culture. Those that can’t strike the balance between both worlds, like the event did between these topics, will struggle.

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Episode 264

“I can have a level four technical expert from the factory online with you in minutes. Or if you wait a week, I can have them at your site. So they're taking it on and depending on their sense of urgency, yeah, they'd love to have the person at the site. But if they're losing a million dollars an hour with oil barrels not rolling off the production line, they're very happy to have someone online and guiding them as well.”

Join host Sarah Nicastro in an unscripted podcast conversation with Stuart Thompson, President of Electrification service division at ABB, as they discuss how ABB is using augmented reality and artificial intelligence to revolutionize field service and enhance the customer experience. Discover how ABB adapted to the challenges of the COVID-19 pandemic, improved their AR and AI tools based on feedback, and their vision for the future of field service.

If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts or Spotify.

Watch the podcast video here:

[00:00:06] Sarah: Welcome to the unscripted podcast. I'm your host, Sarah Nicastro. Today we are going to get an inside look at how a BB is using augmented reality and artificial intelligence to modernise field service and transform the customer experience. I'm excited to welcome to the podcast today, Stuart Thompson, who is the president for the Electrification service division at a BB Stewart, Welcome to the future of Field Service podcast.

[00:00:36] Stuart: Hey, Sarah. Nice to be here. Thank you.

[00:00:38] Sarah: Thanks for coming. So before we get into our topic for today, can you just tell everyone a little bit more about yourself? Your role? A BB? Anything you want to share?

[00:00:48] Stuart: Sure. Well, uh, you know, I'm AAA family man with, uh, with four kids, but, uh, at the same time, I lead electrification service for a BB. Uh, I've worked across four major, uh, global companies in the electrification industry. Um, probably the largest three were Alstom in France and the UK, uh, with GE. I was here in Australia, uh, China for quite a while and in the US. And for the last five years, I've been with a BB, um, electrification service. Uh, it's a a global organisation. we have nearly 3000 field engineers spread across 50 countries. Uh, we look after all kinds of electrification infrastructure from residential up to power plant. Um, from a customer segment standpoint, um, utilities and oil and gas are the largest customer group that we look after. We have the infrastructure also around mining, um, other critical infrastructures, data centres, and food and beverages growing quite quickly for us from a service perspective, Um, for a BB, uh, we're a large engineering firm. Uh, that looks after, you know, four key areas of business in electrification and automation. Uh, it's divided into four business areas of robotics. We're we're well known for robotics. Uh, we're known in the process automation industries in what we call motion, which is motors and drives primarily. And electrification is about half of a BB, uh, which is where we reside and and look after.

[00:02:28] Sarah: Hey. Excellent. You mentioned being a family man. Um, and that made me think I should share, uh, in case it becomes relevant that because of our time difference, it is evening here, which means my Children are home. So if any listeners hear any, um, you know, little boy energy in the background. I apologise in advance. Um so great, Stuart. So we're going to talk about, um, some of the ways that a BB is leveraging modern technology to really evolve service delivery, continue to modernise the customer, experience those sorts of things. But before we talk about how you're doing that, can you just sort of set the stage with a little bit of why you are doing that? So the factors that have led you to the point of, you know, the the journey that you're on today?

[00:03:21] Stuart: Yeah, Well, um, for us, everything really starts with the customer and the need around our customers in the field. Uh, I think we all experience that, uh, with digitization. There's a growing demand of instant support and faster support and, um, being closer to their sites and their assets, and in many cases, physically, that that's almost impossible. Um, so that that was one aspect. But the second aspect was I think many firms around the world are finding a labour shortage and and skills shortage, particularly in the electrical industry. With all this modernization of, um, electrification around the world, the growth in electrical industry versus oil and gas and others is significant, Um, especially as companies are trying to, uh, drive a more sustainable outcome. So you're seeing big movements in electrification. You're seeing extra demands in EV charging and other things around infrastructure, renewables, growth. So all of that is driving pressure on the industry and the growth in, um, you know, human power and capability to go and work in these areas. So customers are demanding more from us, but industry providing less and less workforce capability to go and serve that. So we had to look for alternatives A to help our workforce progress and grow, um, but also meet the needs and the expectations of customers. So they were the main two drivers, I would say that have helped us evolve and deploy our investments where we feel can achieve those results for us and our customers going for

[00:05:09] Sarah: Yeah, you know, it's an interesting, um, sort of dynamic of you have increased demand, but along with that, it's like you said, also increased expectations. You know, it's faster. It's more knowledge. It's, you know, all of these things, right? All while companies are struggling with, um, you know, finding talent but also the the redefining of what those roles look like, right. And in today's landscape. And, um, so, you know, fortunately, the technology is is, um you know, uh, sophisticated. Um, enough today to really play play a role here, but that's not to minimise. Um, the effort that comes in with, you know, changing the business processes accordingly, and and the offerings and then managing change and all of those things as well, which I'm sure we'll get into some of that. So you've sort of set the stage for, um What? Some of the the key variables are in where you are today. Can you tell us a little bit about you know, how you are turning to technologies like augmented reality and artificial intelligence to, you know, transform how you deliver a service?

[00:06:36] Stuart: Yeah, well, let me let me maybe go back a few years to a a time where, um covid was impacting a lot of the world, right? And we run a a global network of field service engineers. And one of the immediate challenges we had were getting people home as borders, closed flights, reduced et cetera, Uh, the first thing was the safety of our employees and getting them back home. But then the same challenge was happening for our customers that they need a global support. Some of these are multinational firms with facilities in the US, China and Europe, and they needed that support on a daily basis. Today we have about 100 engineers in the sky at any moment flying. Um, a lot of the work is domestically done, but we have international experts that travel in for very specialised application. And some of that challenge is keeping that know-how and knowledge, but also having a good work life balance for those field engineers. So they do get to spend time with their families at home. But we can also take that knowledge and scale that knowledge around the world. So during the times of covid, um, we had to a protect our people and get them home. Um, but they continue that service level to customers, and we've been working on augmented reality for a period of time. Uh, particularly in Europe, we've been doing design work. We've been doing factory acceptance tests of devices and products, uh, for customers which couldn't fly in internationally. Well, you had time constraints around visas and flight times and and travel. Um, so we've been doing it in a in a, um, in a in a safe sort of manufacturing environment. But not in the in the field. And we had a very large customer with a big commissioning project taking place in China. And obviously, that was one of the last countries people wanted to travel to during covid. Um, but also within China, there were a lot of restrictions as well. Um, so we took what was, uh, uh a a safe environment. And we deployed that to the field, and we went out to numerous vendors to find wearable devices and that that were applicable for field engineers to to wear that didn't get in the way, freed up their hands and their visual capabilities, but could also provide them with support and real time data and information at the site. Um, because there's a lot of pressure on that field engineer that the customer's demanding action. Um, and there's a lot of variabilities, but to have a team around you and supporting you while you're on that site, uh, was super important. Um, so we couldn't bring a lot of people in. We could ship assets and equipment. And so we were able to ship that in this case to China, and the Chinese engineers were already trained in basic electrical infrastructure and systems. However, they might not have had the deep domain expertise on the particular piece of equipment they were working on. And when they went in, we could then through, um, wearable devices, we could project onto the equipment and we could have engineers sitting in the US, in this case guiding them verbally and visually on the priorities and what to do and what not to do. Um, and they were able to communicate in English and that then the tools were translating into Chinese for the field engineers. So we weren't getting things also lost in interpretation and language. So we've been working on this for several years, but the acceleration that did for so many things even like the tools we're using today, um, it really gave us opportunity in the field. So we took that opportunity from the field and said, OK, could we use this more? And we ended up with another case with a mine down in Chile within a month after that exercise, and we were able to deploy it there. But this time it was between Germany and and, uh, Santiago that were doing that work. So we found a lot of functionality. People were open to using it because they had no other choice at that point in time. And we usually find in times of crisis like this, technology can move extremely quickly and people become much more open and adapt to using it. And customers become more friendly to the to the choice of the application. Because there was there was no other choice at that point. And as your infrastructure's down and not operating and you're losing millions of dollars a day in the chilly mine case, um, it was it was just absolutely essential to get it running but taken in by the customer and then even deployed by the customer later on with their own people, uh, to connect into us so that that was sort of around the evolution of it, where it came about. And then we've been evolving that over time because you get a lot of feed. I've got hundreds of engineers trying these tools and systems what they like, what they don't like. And like you said, the culture of change, there's there's less urgency for it now. Um, but some people have drifted back to traditional models, but there are a lot of advantages for us to use these tools and provide support in the field. Yeah,

[00:12:10] Sarah: so it's interesting. So you were sort of tiptoeing into it Covid happened and gave you the opportunity to dive in. Um, and it is interesting what you say. Um, because it it echoes some of what other people have said. But I read this article, Um, not too too long ago, and I'm not gonna remember where it came from or what exactly the the headline was that hooked me in. But essentially, you know, what they were saying is, um, the impact that covid had on companies in terms of them, you know, really recognising what they're capable of in leveraging these tools and in changing, um as quickly as they need to or being more agile. Or you know, all of the things that that companies had to do when things settle back down. Companies have gone in one of two directions. They have either let that fuel them and make them more passionate about what they're capable of. And they're innovating faster than ever before because it proved that they could do more than they thought was possible. Or they have fallen back into the warm embrace of complacency and then very happy that things went back to, you know, not having that urgency. And so, you know, some of the points you brought up, you know, without those restrictions and without the necessity of it, I've heard a lot of companies say, you know, yeah, we were using augmented reality. But, you know, our technicians just don't really want to do it anymore. Um, or our customers were open to different measures when it was the only option. But now they just really want someone on site. So I'm just curious how you've navigated those things. I think they're very real, um, challenges to expect. But also I think the companies that just concede and say, Oh, yeah, it's just too hard for them or our customers just don't want it, um, are going to fall behind the companies that push harder to keep on the journey. If that makes sense, And so I'm just curious. You know, how you've sort of helped keep things moving along, even if it isn't at the run pace. It had to be during covid.

[00:14:44] Stuart: Yeah, so an interesting point. So, behind the scenes, I would say, um, a a few years ago, our R and D spending in service activity, uh, was about half where it is today. And we're working on things that we'll deploy to the field in 2 to 3 years time. What? We got a lot of feedback on in the field during the crisis, Let's say, were certain features or functions that field engineers didn't like about it, you know, it was too cumbersome. Uh, you know, there was too much information. Oh, I couldn't get internet connection. You know, things were customers didn't had a cybersecurity risk on their site. So we've taken all of that feedback, and then we've doubled our R and D expenditure. We've now created entire lines of R and D expenditure in this place, um, in developing with third parties to make sure that the wearables are wearable and not something too cumbersome to start with. We've also looked at practical tools that help the engineer, Probably more from a safety perspective, because every engineer wants to be safe. All right, um and so we looked at those kind of aspects that help, um, drive adoption and, um, let's say easing the engineers into things like augmented reality. So I'll I'll comment a bit more on that in a minute. But we we've doubled down, right? Um, and and one of it is the front end tool. The others are the backend tools and the data. A lot of our data in Legacy services are on devices that were built 1020 30 years ago that field engineers are working on, and all that data is sitting on paper or if I show my age, microfiche or or other things in in datas and warehouses and things. So we're digitising a lot of that data and information today to make it more usable and usable friendly. So a field engineer could call up a drawing that typically sat in a factory archive somewhere, but it's readily available, and they can call it up. So the and functionality in the augmented reality is, uh, is realised if you like, and it wasn't back then um so there's a There's a back end of cleaning all the data and the information up to make it more usable at the front end. But there's also the aspect of, um, barriers to entry to the market and people wanting to use it and trying basic things. Most companies accept the safety aspect, right? And so wearable devices are the most basic kind. Um, could be like a watch that they're wearing, and it's detecting voltage. So as the person moves towards it, I Is it safe? Is it switched off? No, it's not. And I'd say a lot of electrical incidents are in place where people haven't done the right thing in switching things off and checking and double checking. So having it sort of like as a a safety reminder, like you're sensing in your car when you reverse it and the building you wearing it. And some of the most experienced people still forget to do stuff, and it will vibrate, and they're like, Oh, wow, it saved my life. So then they're more open to let's try something else and let's add something else. So you're not just trying to change the way I do my work. You're trying to make it better for me. So there's a personal factor in there and for customers as well. They don't want a safety issue or risk on their side, so they tend to adopt it. So last month we launched an augmented reality tool that actually shows you your arc incident level as you're walking towards the equipment and a little thing pops up on the goggle or on the glasses and it shows the person, Hey, you should have this safety equipment on before you get to the device and it's just a reminder it's held them. It's not changing what they do, but it be instead of the way they work. It supports them in their work, so we've done developments in that space. But, Sarah, we've we've gone that that double down. But a lot of it is in the background, developing the right products that we can then test in the field with the engineers and then deploy on cybersecurity. Um, we've also worked on, um, tools and systems just to create separation from from site localization of data and information. Um, so we've listened. We've taken the feedback, and then we've invested the money to find that, uh, softest route I would say to adoption.

[00:19:32] Sarah: Yeah, that makes sense. And I mean, there's a couple of points you made that I think are important. And the biggest is that you listened, right? I think that's something, too, that you know, the first generation of something that you, you know, put in place in the middle of a pandemic where it's absolutely critical to being able to conduct business might not be the perfect iteration, right? So being open to the fact of OK, so what do you like? What don't you like what works, what doesn't work and then continuing to evolve that The other thing, though, is you know, you mentioned at one point like, um the you know, I have to imagine there's certain pockets that have far more acceptance than others. For instance, I'm thinking of those international experts that, you know, if you're now able to give them the option to not be on that aeroplane all the time, because they can do this this way, right? That has to add tremendous value to them. And so I think another thing for companies is, you know, maybe try to not get stuck on the pockets of resistance. And instead look for the use cases or the applications within the business where you are getting positive. Traction focus there first, while the other pieces of it sort of come along and mature. You know, I think that's the other thing. Sometimes you know, at the first inclination of challenge or resistance. You know, it's just well, this isn't working, you know, and and maybe just, um, looking at it a bit differently.

[00:21:10] Stuart: Yeah, I think if you think about your field engineering, work it, it's hard work, right. There's a lot of travel. There's a lot of heavy equipment that you're lifting and out in the field. But some of the best field engineers we've got are nearing retirement, right, and so travel becomes more difficult. But the knowledge is there, and for them to be able to impart and share that knowledge with 20 people in a day instead of one when they're travelling to a site is much more attractive, right? And as the tools have become more intuitive that you can just talk instead of typing, You know, if I look at a 64 year old field engineer. They're usually not the best computer literate type is necessarily depending on their background. Um, but for them just to have conversation and talk like we are and the computer or the device in the background taking care of everything else, um, it becomes a lot more natural for them and helps them out. But from a customer's viewpoint as well, I can have, Um Well, we we have different levels of service support. I can have a level four technical, uh, expert from the factory online with you in minutes. Or if you wait a week, I can have them at your site. So they're taking it on. And depending on their sense of urgency, Yeah, they'd love to have the person at the site, but if they're losing a million dollars an hour with oil barrels, not rolling off the production line, very happy to have someone online and guiding them as well. And the other aspect here too. Sarah is, um, the companies themselves helping themselves so us giving them tools so they don't even need to wait for the ab engineer to get there. That, in the case of, um of the the chile mine that they they had technicians that knew that their site and knew their equipment. They could provide them with guided support and get themselves back up. And, yes, we could then schedule in a week or two, the ADB expert to be there. But we also knew a lot more before we got to the site so we could come more prepared. We could have the right equipment there. We weren't going into the unknown we were entering and becoming much more. Um, so as we gave those examples and we share those types of stories with other customers, they become more open. Um, but again, we have to be scalable. Um, some people don't want any data leaving a site. They worried, especially our data centre customers. They're extremely conservative. Even though they provide all this capability, them themselves are conservative. So we had to address that the wearability because back in 2019, these devices were like gaming devices. You know something? A kid would sit in a bedroom with, um, like my eldest son and, you know, and and play on computer games. They were too big, too cumbersome. But now We've got devices that are friendly. They're wearable. They're industrialised. They have features on them with a button instead of, you know, little tiny buttons to to operate. So some vendors have got some really good versatile products to go and work with. And we've had to adapt around them. Yeah.

[00:24:35] Sarah: Can you expand a bit on the artificial intelligence piece and how that weaves into this conversation?

[00:24:43] Stuart: Yeah. Um, so for me there there's really two types of artificial intelligence, and I think artificial intelligence today, uh, is getting a AAA mixed wrap in the market and in communications. Um, there was an article in Wall Street Journal that I commented on a couple of weeks ago, um, around artificial intelligence and how much energy it's consuming in Data centre, right? There's a lot of potential, you know, consumption of power that's going on. But at the same time, it can be a huge productivity material, uh, device for customers and for companies, uh, in the field. Um, so for us, there's there's two types of artificial intelligence. There's generative A I and, um, you know, there's, uh, around data and statistical a right using huge amounts of data to make decisions where we're using artificial intelligence on the generative side is helping pull together reports and information from the field for a customer again. That is in a, uh, a good format for the customer. And we can store the data and the information once we've done a site visit so the wearable device could be taking images or video of what's actually happened. Um, the report can be written the A. I can help write that report. The field engineer ticks some certain items. The A. I also looks into the user manuals and the application that we're applying it to and can also act as a safety device or as a quality inspection. So it's reminding the field engineer Oh, did you check this? Did you check that because you didn't check it off in your in your inspection report? Um, so it follows them up as well, and then it writes the report for the customer based on what the field engineer puts in it checks if they've left something out and then it stores and logs the data and information, whether it's the photos, the videos, the technical, uh, recording information that we do uh, the performance of the asset that we've been working on and then logs that information into the service database. So both we and the customer can pull that information up in the future. Um, but the A I can take care of that and help facilitate that. We looked at it for our fleet of field engineers alone and for field engineers. We were saving between 2 to 3 hours a week of report writing and systems. So just for us alone, that was $30 million a year, right?

[00:27:23] Sarah: And then it's probably something they hated doing. Or at least most people you know. It's like the number one complaint is the paperwork

[00:27:32] Stuart: When you're reporting when you travel, Um, the last thing you want to do when you leave the site at eight o'clock at night is you want to get home with your family or get back to the hotel and rest. And it became also an aspect of work life balance for people, right? So I could either monetize that in, um, savings for the company, or I could give that time back to the field engineer to do something else or training or you know, even even having downtime and and time off instead of working overtime, right? So it it gave us options around productivity. The other area around a I, um, is around self-service and support for the customer. So some of us have seen those annoying, you know, phone support systems, and, you know, uh, chat bots and stuff, but the the technology is getting much better. Um, and the amount of times our field engineers get called out for the most basic thing, and and we're charging the customers hundreds of dollars an hour. We drive all that way and just find it simple switch or something like that. So we're using a I now to do a self guided support for the customer, but then also enable the customer to upgrade that support to things like augmented reality, an online support person, a call out or a service rate to come to the site. So the A I manages that in the background it helps guide them. The third area we're using it through is for optimisation, so we have field engineers that are very well trained across the globe. You might have one in America and one in Europe and one in Asia, all working on the same types of equipment. Um, we have standard operating processes, but maybe the the person in Europe's found a different way of doing something on the person in the US is using a better tool. The A. I can sit in the background and monitor that from, uh, the augmented reality and then help us try to optimise and give us feedback and say, Hey, this may be a better way of doing it and we can optimise our processes going through so it makes the environment interactive, but it also has a learning aspect. Do it in the background, and it's not just the machine that's learning. It's the processes that we use. The last area of A I is around predictability around assets. So as we do the service on the on the asset, it's starting to predict when the next service needs to be done, because when we design a product and put it to the field, it's it's in a what I would consider a laboratory type environment. But if it's in a humid environment or a dry climate or environment, low temperature, high temperature, the behaviour of those assets varies quite a bit. So we're able to help model that with the different service. And we can that the greasing of the years needs to be done more in one environment versus another. And over multiple years we're creating models and algorithms to then go back to customers and provide them service recommendations and based on real data and not on theoretical data. So a I for us has been busy since, uh, 2014. We've been working on it, but we're applying it in many different areas across services.

[00:31:03] Sarah: Yeah, you know it. It's really useful to hear those specific, um, examples because I think, you know, you mentioned the article you contributed to and the energy consumption, uh, within the data centres that you know a I is is causing. I think there's also a mental energy expenditure that is happening because of all of the buzz that it's getting. And I think you know, there's this challenge of separating out what's buzz from what is a good business case? And I think companies sometimes get really caught up in OK, well, it's in all of these headlines or it's everywhere so we need to be doing all of it when in reality, you know, you have to really look at you know, some of those specific points you, me, you mentioned, um, you know, are just surfaced by really examining the processes and thinking about, you know, not Can we get rid of all of our technicians with a I But what can we offload from their plates? That is, you know, monotonous. That is, You know, um, duplicative, et cetera, et cetera. And, you know, leverage the technology to really free them up to, um, like you said, have more time, have better work, life balance, have less stress, you know, whatever the the things are, Um, and then in turn, the benefit that brings the business. But I think there's a lot of distraction. Um, that is coming with with all of the buzz as well that people need to be conscious of.

[00:32:43] Stuart: Yeah, I think, um, a I is used in a very broad term. Um, a lot of people, um, tack a I on to everything that they talk about, whether it is real or not. And I also feel that with a I, um, it's a little bit of the unknown at the moment, so people are apprehensive. They're scared. What is this going to do? But the way that we've approached it, like you said, is look at things that are our pain points, things that we have trouble resolving or fulfilling. And we do these engagement surveys with our field engineers every year there. There's two things we do for our field engineers. Every year we have an engagement survey, so we hear from them around. What's their challenge at site and what's going on? I couldn't hire three more people this year. I. I don't have enough capacity. How do we get more capacity? So that's a common one, and the the one is the safety stand downs we do every January. We bring all our field that we train them. But that training's changed now that training has gone into different directions to help them understand that, Yeah, you can talk to it instead of typing to it, and we did the same with electric vehicles. You can drive the or drive the standard combustion engine and you can see what's going on, and we can apply these, you know, greener options in some areas, Um, but because they are viable now, but we we can't apply it in every area for sure. But we have to be practical and pragmatic about it. And I think with a I, um it's a a conscious investment, and I think data and managing our data and information has been a, uh I would say within the industry has been a poor thing. A lot of things were on paper and, you know, handwrit and stuff. And now we're collecting that to make better decisions and provide better outcomes for customers at the end of the day. So we have to embrace it.

[00:34:43] Sarah: And to your point about all that background work that you're doing with the data piece, you know, that isn't the the sexy part that gets the headlines. But you can't do any of those bits without doing that work right. And I and I think that's another misconception. Companies think that somehow it's magic or somehow they can skip that, and you're absolutely right. I don't You know, I don't think there's, um you know, many companies that have their data, you know, cleaned and structured in a way that they could just, you know, get to it, right? There's this arduous process of, um, you know, getting things, uh, put together in a way that allows you to do, you know, the things that you're doing. So that's another kind of real side to it that doesn't get discussed enough. Yeah,

[00:35:37] Stuart: there's a huge amount of money spent on doing that and maintaining that and having it in a usable format. And we've seen companies like Google and Amazon just live off data and data management and leverage it extremely hard. Traditional industrial firms didn't manage it very well, and, uh, we we are not perfect. Do not get me wrong. We are spending a lot of time and a lot of money, but a lot of these people are. The true heroes are putting this data in the right format because when you're in the field, to be able to access that information very quickly and have that before you walk in is very powerful for both the individual at the site, but all so to the customer that we can talk because no longer can you just have a field engineer sitting there 24 7 out of sight working at the same site. We don't have enough people to do all of that for the growth in the industry, but to empower them and enable them, they have the confidence. They know what they're getting into. They can be prepared for it. And the customer sees that value. So that investment is a long term investment for us. Yeah,

[00:36:47] Sarah: absolutely. So, um, I'm curious. You know what you envision when you think about where this will be in 3 to 5 years. So all of the work you have done, you are doing, you know, you mentioned that you are are working now to develop, uh, you know, the tools that will be in place in 2 to 3 years, et cetera. So, you know, what do you envision in 3 to 5 years when it comes to how a BB will be leveraging these tools and potentially others?

[00:37:24] Stuart: Yeah, I think in in in 3 to 5 years, the, um, it'll be a real interactive process with the field engineer. The field engineer will be at site, uh, with a whole network of people behind them. Um, in the factories in the offices, um, providing them support. Um, I think in 3 to 5 years, a lot of the field service work, um, will be divided between an interactive approach with the customer doing work and us doing work as well. The most basic work will be done by the customer, and we'll empower and enable them to do that. Um, and we will be able to provide that higher level of support. I expect that things like breakdown call outs and that will be reduced dramatically. I expect longer term service agreements and contracts to be the norm. Um, and people will buy, uh, various levels of service support. Um, and they will be using, you know, handheld devices to call people in and do it from an A BB perspective. I think we are pushing towards predictability. Um, a lot more around predictability people using the term predictability for years now. Um, but I would say 90% of companies are either time based maintenance, support or or breakdown type support. Um, going forward and true benefits of this will come with data and information about the assets on the site. And so I think we'll be more proactively going to customers with real examples and information to support it to say, Hey, your equipment can keep running. We don't need to have a service intervention for another 2 to 3 years. Now, um, keep it going. Um, And then we will then be providing you support when it is needed or in reverse. Uh, we only had a shutdown two months ago, but we're already seeing issues, and we can be more so a much more proactive and interactive approach with customers, uh, going forward. I think, for the field engineer themselves, um, there'll be a lot more wearable devices that they will wear. You know, we've seen, um, you know, even in, uh, police forces people wearing body cams and stuff like that, I think for field engineers, similar type things will be available. Um, but again, I think people will be a lot more open to these devices as they become, uh, supporting them and and supporting their environment to make them better. I think things will be a lot more verbal and communicated verbally and then documented, uh, in in database systems. So we're excited about it. I think, um uh, we're hiring a a real good young generation of engineers we're trying to take, uh, the knowledge and the know how of those truly experienced engineers into account as well and trying to keep the balance in their in the life cycle of a field engineer, uh, into into support as well. So, um, the technology is wonderful. Um, it's how do we apply it? How do we make it easy and again, you're still gonna have some parts of the industry that will be very traditional, But we will learn from those that aren't. And I think probably the last thing is sustainability is going to become a much stronger push. You know, between the the leading cases around the Paris Climate agreement, the European directives, the Inflation Reduction Act in the US is driving huge investment. I think companies are gonna look for their service support to have a lower carbon footprint. But service is also gonna be called in to help transition sites and upgrade facilities so that they have that greener footprint and in five years time, that is gonna be a huge driver rather than just keeping operations running. How do you keep it running longer? How do you greeny that operations? How do you integrate new things into that operations going forward. And all of that's gonna give you more data and more information that can then help the field engineer or help the company deploy things

[00:41:52] Sarah: better. Yeah, absolutely. It is exciting. Um, my last question, Stuart is Do you have any words of wisdom for anyone listening that, you know, maybe has had their fits and starts? Or has, you know, been struggling to determine where and how some of these more advanced capabilities fit into their business? Any words of wisdom on you know how to look at it, how to get started? Um, mindset approach. You know anything there?

[00:42:26] Stuart: OK, so first thing is, it's It's a long journey, right? It's not something you and it will be up and running. Um, second thing is, find your early adopters. Um, there are companies out there that are willing to try things and do things, and it's usually based on their pain points. So those that are struggling for support or those that don't have enough of their own resources to do the work are probably more open. Talk to the person on the site and get their buy in It's not just the C suite, and sometimes the C suite have their objectives. Um, but it it goes against the the the site manager or the person at the site, and you need to help bridge that relationship going forward. So it it is long term. Find your early adopters, look at customer pain points and start implementing their to those early adopters, um, and then start that journey going forward. But as you also mentioned Sarah, it's not just about the front end tool if you don't have the tools to feed the front end tool, so you need to do both right. There's no point in putting in a halo lens at the front. If you've got no data in the background, um, it becomes a toy, um, so build it and then focus it in a particular area in a particular industry, a particular customer base and a particular problem and then build. From there. Our focus point started from covid right and and we had a problem. We moved on. We listened, we took it, and then we moved forward from there. So I think, um, yeah, it's, uh, it's an interesting journey. Um, there's a lot of different opportunities out there. There's still very traditional customers that we want to look after. Um, but a lot of young talent that we have coming in are super interested in these technologies, and it helps us attract people to the industry as well trying out these new

[00:44:22] Sarah: things. Yeah. No, it is interesting. Sort of this in between, you know, people that are more traditional, more resistant people that are, um, you know, talent and customers who are more innovative, who want to try these different things. And I think, you know, there will be this period of time where you need to serve both, uh, parties and keep working toward you know, where things are heading. Um, and so really appreciate you coming and and sharing all of your insights, Uh, enjoyed the conversation. And it's been wonderful information. So thank you, Stuart.

[00:44:59] Stuart: Yeah. Thank you for having me, Sarah. It's been great.

[00:45:02] Sarah: You can find more by visiting the home of unscripted at future of Field service.com. The podcast is published in partnership with IFS. You can learn more at Ifs.com, as always. Thank you for listening.

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Sage Advice for Selling the Value of Outcomes-Based Services

May 7, 2024 | 10 Mins Read

Sage Advice for Selling the Value of Outcomes-Based Services

Not too long ago, in my discussions for the podcast or at industry events there was a lot of talk around the relevance of outcomes versus products (or solely services). Leaders would share stories about what customers really want – peace of mind – to evangelize thinking beyond the traditional products + services equation. At this point, it seems the value of outcomes-based service is understood, and the talk has shifted to: How?

If you missed last week’s podcast with Alastair Winner, partner and co-founder of Mossrake Group, a consulting firm that helps organizations bring advanced services solutions to market, I’d encourage you to go back and have a listen. We cover a lot, and his advice is spot on, and born of years of experience both as a provider and a consultant.

For those of you that prefer reading to listening, let me recap some of the important points that I think are relevant for anyone and everyone on the outcomes-based journey, whether truly at the beginning or along the path of brining the vision to life.

Defining Outcomes

First and foremost, it’s important to clearly define what you mean when you’re saying “outcomes-based” service. As Alastair points out, this topic has been subject of a lot of buzz and is subject to many loose interpretations.

“It's one of those buzzwords that tend to get used a lot. But when but when you scratch beneath the surface, very often you'll find quite different experiences and solutions,” he says. “We define what we meant by outcomes in four key steps. Firstly, it's this combination of products and services that are presented to the customer as a service. Secondly, the value of that outcome is described in a language that the customer really understands. The third point is that we need to measure the outcome with an outcomes KPI that describes the outcome in a way that both the service provider and the customer agrees is applicable. And the fourth point is that the service provider is responsible for ensuring that the outcome is delivered over the time specified in the service contract. What we have seen very often is that product companies will take their traditional products and services, combine them together in a similar way, but present that through some sort of leasing mechanism. Which certainly has some value but, in the end, still has all of the operational overheads and risks that you would associate with any other purchasing model.”

As outcomes-based services become more widely used, the savviness of customers is rising – making it important for providers to understand the rules of engagement and what savvy customers will be seeking (and avoiding). While savvy customers are on the rise, the majority aren’t yet, which is also important to note as it gives the provider an opportunity to help lead the way, build trust, and be seen as the knowledgeable and capable party a customer will want to purchase outcomes from.

Understanding the Outcomes Personas

Who you sell outcomes to will be different from who you’ve sold traditional products or services to, and developing your understanding of the personas involved in an outcomes agreement is key to successfully selling. “Most of the work that we've done is introducing this as a new business model, a new concept, which will require you to talk to more people than you would have otherwise,” explains Alastair.

He gives a synopsis of the five personas commonly involved in outcomes:

The operational owner – historically has taken responsibility for the technology domain or area that your service is going to address. They'll be overseeing the operation, doing lifecycle management activities, coordination of all that work. They'll be the primary contact and most likely the entry point most service providers will have to the customer because you have a relationship there.
Operational owner’s leadership – because it’s something new, they're going to be likely engaged in the dialogue. And part of the value of these services is to liberate resources. So rather than having your own employees focused on doing some of these activities, the service provider is going to be doing that work. And that releases capacity that can be reused and that manager is likely to benefit from that. They’ll also be trying to demonstrate a level of stability.
Finance – again, any sort of financial change is going to require finance review. This is one of the stakeholder groups that you really need to get to early because their opinion will matter significantly as to whether or not a company is going to accept this shift from CapEx to OpEx. We've had some experience where you've gone all the way through the sales cycle, got very excited, only to put it in front of finance and they've said, no, we're not doing that.
Procurement – sort of on the more periphery, if a company has a procurement team they’ll be involved in any buying. This will likely be something quite new, so you need to spend some time recalibrating.
Legal – again, sort of more periphery, but legal is likely to have a new set of terms and conditions, a new scope of work. Legal departments will have templates typically that they like to use with their suppliers, and this is likely not to fit with any of the templates that they have today. So, procurement and legal will likely be involved in the negotiation and crafting the final terms and conditions.

Shared Risk

Providers of outcomes must accept that risk is inherent in the business model. “That's one of the big differences between this model and a traditional model. When you sell a customer a product, the accountability and the risk for the value that that product creates immediately transfers to the customer. In an outcomes-based model, there is an onus on the service provider to deliver that value,” says Alastair.

With risk comes potential reward, so it’s important to understand the benefits and risk on both sides of the agreement. “From a customer perspective, some of the risks that they're going to be thinking about are the fact that this is likely going to be a long-term services commitment – this can make them feel locked in. They're going to be handing over operational control and that itself can cause apprehension. They may ask, what happens if the business needs change over that long period of time? Can I get out? Can I adapt? Can I change the service?” explains Alastair. “The benefit to the customer, of course, is that they'll get this agreed outcome. It'll liberate some capacity for them. They'll get to work ideally with a trusted brand who are providing this curated experience at a predictable cost. It really simplifies their operation, allows them to go focus on their core activities while the service provider deals with this sort of critical non-core type of work.”

Then there’s the appeal and apprehension side for the provider. “If I look at it from a service provider perspective, they're likely to have to make some sort of upfront investment in technology, hardware, or software. And probably, they're going to have to think about putting capacity ahead of demand, especially if they're able to provide some level of flexibility to the customer. So, the customer is not making an upfront investment, but the service provider is. So that's a risk. And of course, then they've got to think about all the lifecycle activities to sustain the service and deliver the outcome over the contractual period, which could be up to 10 years. When you think about all of the updates and changes and recalibrations and replacements that have to go on over that period, you've really got to be thinking about what that looks like and costing it accordingly,” says Alastair. “The benefits for the service provider are they get a long-term annuity stream with almost certainly a higher rate of return. Over that contractual period, they're going to get service on everything over a very long time, and they're going to end up with a very loyal customer.”

Three Levers to Balance Risk

While accepting risk is critical, Alastair does share three levers providers can use to help balance the risk and reward to ensure its achieved and both parties feel like they end up in a good place. “In our experience, there are three elements that service providers will typically use. One will be simply the initial contract term. How long are you going to lock a customer in for? And does that give you enough time to recover the upfront investment that you've made?” explains Alastair. “Then there's what we call minimum commitments – the service provider and customer will agree a minimum number of units or services that are going to be consumed over that initial contractual period that will provide the service provider with a guaranteed income. And there is a premium for flexibility. The final one is exit fees. In the event that a customer chooses to leave the agreement early, you can build in this concept of a balloon payment at the end, should they decide to leave. Ideally, and in most cases, if the service is well designed, they'll just continue and the balloon payment risk will disappear over time.”

Alastair also points out that a provider must be cognizant of the dependencies on the customer that will exist in order for the provider to ultimately deliver the agreed outcomes. “Dependencies must be understood and called out in the contract,” he says. “There can also be a danger that a service provider can get pushed into a KPI where they really don't have ultimate control. As a provider, you need to ensure that you can deliver the outcome that you're agreeing to and that dependencies are well defined.”

Anticipating Common Objections

When it comes to selling outcomes, knowing what issues may arise during the sales cycle will help you prepare in advance and respond adeptly. Each of the involved personals may bring up different questions, issues, or objections. “From an operations perspective, I think one of the big objections and things to watch out for is the fact that very often it's the individual that you're talking to or their team who is going to be disrupted by the introduction of the service. So, you could be very eloquently talking about the value proposition of your outcomes-based service to a guy or gal who is thinking, well, this is going to take away my job. You have to be very conscious of who it is you're talking to and the implications of what it is you're proposing to the individual that you're dealing with. You need to reframe that to point out the unique opportunity of outcomes to free up the team to focus on something that's core to the business. It's going to deliver far more business value,” shares Alastair.

The management team will likely want more detail on this same angle – what other activities will an outcomes agreement enable them to have time for? What does this add to their bottom line?

“From a finance perspective they’ll be looking at how the spend will change in moving from CapEx to OpEx and determining if that is acceptable and beneficial for the company. Again, we’ve had some experience of getting to very late stages of trying to position a deal only for the finance team to say, well, this simply won't work because actually, there's some advantage for us holding capital on our balance sheet. It makes our company valuation look more positive. I wouldn't second guess the objections that might emerge from finance. The key is to get it in front of finance as early as you can to seek an opinion,” urges Alastair.

Building in lead time to navigate conversations with procurement and legal is advised. “Often when procurement is presented with an outcomes-based model, they'll find it hard to find alternatives in the market to do their typical comparison, which can look very confusing and can create an objection. The objection there is, well, I can't really follow my process. I haven't got three suppliers that are delivering this. You guys are the only people in the market that are offering it right now. What do I do? That could be challenging,” Alastair explains. “The legal team will have some templates and every company will have a scope of work that they've agreed, which is how they would like to buy. We’d encourage a service provider to create their own scope of work terms and conditions, so it's on the supplier paper, not the customer paper. Be very clear which of the different sections and clauses are likely to be ones that are in the domain of legal. Based on the familiarity with the business model and the savviness of the legal representative you might be working with, you just need to be prepared to spend quite a bit of time there and expect there to be some back and forth as the contract ends up taking shape.”

Getting Started (If You Haven’t Already)

Does this all sound daunting? It can, but the potential is vast and worth exploring. If you find yourself more in the assessment phase or early stages versus well along the journey, Alastair offers some advice: “Do some collaboration, co-creation work with some trusted customers, especially in the early stages of service development to really understand how the customer is thinking about the value of the service, how KPIs might emerge from that work that align with their business. Also think about what we would term a system of record, because outcomes KPI needs to be reliably measured and there needs to be a single point where both the customer and the service provider can view in a consistent way. Finally, don’t try and impose this on a customer. Use your starting point to help them understand the concept and then refine for the customer to meet their needs. It takes time. The selling process for a solution like this is going to be longer than a traditional product sale. Spend the time to get this right and to ensure that the customer really understands.”

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What Are Savvy Consumers of Outcomes-Based Services Seeking?

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What Are Savvy Consumers of Outcomes-Based Services Seeking?

Episode 263

In this episode of the Unscripted podcast, host Sarah Nicastro welcomes Alastair Winner, Partner and Co-Founder of Mossrake Group, for an in-depth conversation about what service providers need to consider in successfully positioning outcomes-based services.

Alastair is an entrepreneur, consultant, and business leader with vast experience in enhancing management across the service value chain. Skilled in leveraging best practices, Alastair effectively drives business outcomes through services, digital technology, and strategic management in sales, marketing, and communications.

If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts, Spotify, and Google Podcasts.

Watch the Podcast Video here:

Alastair: It's in the service provider's interest to go in with a starting point. And to think also about what we would term a system of record, because typically the outcomes of KPI needs to be reliably measured. And there needs to be a single point where both the customer and the service provider can go to to say, well, we agree that this is actually the outcome and we've measured it in a consistent way. So it's not just about coming up with the outcome KPI itself. It's also about how you're going to measure it.

Sarah: Hello, welcome to the UNSCRIPTED Podcast, where you'll find discussions on what matters most in service, leadership, and business transformation. I'm your host, Sarah Nicastro. Let's jump in. Welcome to the UNSCRIPTED Podcast. I'm your host, Sarah Nicastro. Today, we're going to have a conversation around what savvy consumers of outcomes-based services are seeking. I'm excited to welcome to the podcast today, Alastair Winner, who is the partner and co-founder of Mossrake Group, which is a consulting firm that helps organizations bring advanced services solutions to market. Alastair thank you for joining us today.

Alastair: My pleasure, Sarah. Glad to be with you.

Sarah: Yeah, so before we get into our conversation of the day, just tell everyone a little bit more about yourself.

Alastair: Sure, I'd be glad to. You did a great introduction from a business perspective. Mossrake has been around for six or so years now, and we've had the opportunity to help a number of product technology companies really think about their services business and evolve their thinking around as a service and outcome. So that's really where our specialism lies and where we spend most of our time. Prior to Mossrake, I worked at Hewlett Packard and Hewlett Packard Enterprise, and I had the great opportunity to do a number of roles there at a country, a regional, and a global level, both in technical roles and in management roles. And the role that I ended up doing there was actually services product management at a global level. I spent nine years working in Houston, Texas, doing that. And as part of that journey, we developed a very significant outcomes-based business for HPE, which is now known as HPE GreenLake. So that was a fantastic milestone in my career. And I've really enjoyed being able to take what we've learned from that and apply it to other technology disciplines. So yeah, I'm based in the UK and really looking forward to the discussion.

Sarah: You don't want to stay in Houston.

Alastair: I would have loved to have stayed in Houston, actually. We really enjoyed our time there. We actually went for two years and ended up staying for nine. And we became grandparents. So that was the reason that we came back. It was personal, but we loved the American lifestyle or the Texas lifestyle. It was great.

Sarah: Okay, good. All right. So for the sake of the conversation we're going to have today, can you just share with everyone how you define outcomes-based service?

Alastair: Yes, of course. Thank you for the opportunity to do that. What I would say is this term outcomes or as a service, it's a very popular term that you see cropping up a lot. It's one of those buzzwords that tend to get used a lot. But when but when you actually sort of scratch beneath the surface, very often you'll find quite different experiences and solutions. And in Trudeau consulting style, we decided to define what we meant by outcomes. And that's really the grounding that we give our customers. So there are four really key steps to how we would see outcomes defined. So firstly, it's this combination of products and services that are presented to the customer as a service. That's first and foremost. Secondly, where the value of that outcome is described in a language that the customer really understands. Typically, in technology, there's a technical language that gets used. And that may be something that the customer is very familiar with, and that's fine. Or it may be in business terms, in business language. The third point is that we need to measure the outcome. And there we need what we call an outcomes KPI, something that really describes the outcome in a way that both the service provider and the customer agrees is applicable. And the fourth point is that the service provider is responsible for ensuring that the outcome is delivered over the time specified in the service contract. So essentially, the customer is able to take their hands off the wheel and enable the service provider to essentially manage the how the other service is being provided. And they can focus on maximizing the value, which is ultimately the outcome. So that's how we think about it. Yeah, what we have seen very often is that product companies will sort of take their traditional products and services, combine them together in a similar way, but present that through some sort of leasing mechanism. Which certainly has some value for sure. But in the end, it still has all of the operational overheads and risks that you would associate with any other purchasing model.

Sarah: And I think we could probably have five or 10 different discussions today, you know, about some of the things you just mentioned. And perhaps we'll have another in the future, but... what we're going to kind of focus on today, and I think we'll come back to some of the points you just made, is talking about what savvy consumers of outcomes-based services are looking for. Now... we chatted about this question of, well, how savvy are today's consumers of outcomes-based services? And what has that progression looked like? I have some thoughts, but before I get to those, how would you describe where we are today with the savviness of buyers and what does that mean for our service providers?

Alastair: It's a great question. So, of course, I mean, first and foremost, you'll find varying levels of knowledge and experience in any business domain. And really, this is no different. You have to sort of distil it down to the individual. And what I would say, actually, is that in my experience, it's very often easier for a service provider to work at the extremes of savviness. So either with someone that really has no experience of this at all or someone that has a great deal of experience. With someone with little experience, you can educate and coach them and really inform them around the way that you think about outcomes. And for someone that's got a lot of experience, you can really get down to the details really quickly and shorten the sales cycle. It's the people that are somewhere in the middle who sort of think they know about it, but really don't, that can be the hardest to move. And you have to do some level of recalibration there, which... can be somewhat of a challenge. What I would say is that, and what we do observe, is that different segments are more savvy than others. So maybe I'll give you a couple of examples there. So really this concept of as a service emerged from IT. And in that domain, in that technology domain, this is pervasive really through the introduction of cloud. You know, that business model is very familiar. And IT went through all of the sort of gestation cycles that we would typically expect to see. So infrastructure as a service, platform as a service, software as a service, and ultimately to true and full outcomes. So anybody that operates in that technology domain is very likely to be savvy, to be more on the savvy scale. Other technology segments really haven't moved as fast. And I think that's possibly to do with the technology lifecycle that you see. In IT, things are changing constantly. You buy a server, it's out of date by the time it's delivered. It moves very, very quick. Many other technology sectors don't move as fast. So they've been slower to move, basically. And I've had the opportunity to work with... Secure power and cooling companies, tester measurement companies, and companies that are supplying products into the operational technology space, the OT space. And it's nascent. They're all very early into this concept. And of course, because they're not really adopting, there's people that are much less aware and less savvy. But what we have seen is as these sort of technology sectors converge and certainly IT and OT, we've seen that a lot. You start to get people that are crossing over and companies that are becoming far more curious about this as a concept, how they could apply IT to the solutions that they're using. So if you encounter someone that's maybe come from an IT background that's now working, and they're much more likely to be.

Sarah: I was going to bring that up as a point to be aware of. You see more and more cross-pollination of IT used to be someone started in an industry and pretty much focused on growing their career in that industry. But in services, because these themes and these trends are, you know, becoming more applicable across the board, you have companies that are in all sorts of different manufacturing type environments that will seek service leadership from. The IT space that has more experience with this to bring in to help them on this journey. So you have to kind of also keep in mind the background of whomever IT is you're dealing with as well. So that makes sense. So I think for the purpose of today's conversation, you know, we want to keep in mind that As outcomes-based service takes hold across more and more industries, that savviness is progressing, right? But we're going to kind of talk about these things today from the perspective of if you're working with a savvy customer. Here's what to bear in mind. However, if you're working with someone who isn't, we want to kind of call attention to the opportunity that exists then for service providers to be well-versed and adapt at helping them navigate that journey. Because obviously, doing that well can be a competitive advantage, right? So let's talk first about personas. So what personas are typically part of an outcomes-based service? Purchase. And is there one or that are more likely to be savvy personas versus some that might be more likely to be less so.

Alastair: Yeah, sure. So let me address the second question first. And that is really, in my experience, there isn't really a persona or a stakeholder group that's any more or less savvy than others. Again, it's really based on sort of the individual's level of experience and exposure to the business model. It's really based on the company that you're dealing with and their level of experience, too, as to who you're likely to encounter. I would say most of the work that we've done is where we're introducing this as sort of a new business model, a new concept. And wherever you're introducing something new into a customer. It's going to require you to talk to more people than you would have typically otherwise have done if you were continuing to sell in a more traditional way. And there are five personas that we would typically engage with. And those would be the operational owner, someone that historically has taken responsibility for the technology domain or area that your service is going to address. They'll be overseeing the operation, doing lifecycle management activities, coordination of all that work. So they'll be the primary, I would say, and probably most likely the entry point that most service providers will have to the customer because you have a relationship there. It's a more ongoing type relationship. That would be the first one. Second would be the manager of that individual or manager's manager of that individual. Because again, it's something new, they're going to be likely engaged in the dialogue. And part of the value of these services is to liberate resources. So rather than having your own employees focused on doing some of these activities, the service provider is going to be doing that work. And that releases capacity that can be reused and that manager is likely to benefit from that. And also trying to demonstrate a level of stability. It's going to be a reliable service and the financials are highly predictable too. So that's the second group that you're likely to engage in. Third would be finance. So again, any sort of financial change is going to require finance review. And this is absolutely no different. And in fact, I'm sure as we'll go on to explore. This is one of the stakeholder groups that you really need to get to early because their opinion will matter significantly as to whether or not a company is going to accept this sort of natural shift from CapEx to OpEx. And we've had some experience there where you've gone all the way through the sales cycle, got very excited. You put it in front of finance and they've said, no, we're not doing that. That's the third group. And then sort of on the more periphery, you'd find procurement and legal. Any buying, if a company has a procurement team, they're going to be involved. This will likely be something quite new, so you need to spend some time recalibrating. That group. And legal, of course, this is likely to have a new set of terms and conditions, a new scope of work. Legal departments will have templates typically that they like to use with their suppliers. And I can guarantee that this is likely not to fit with any of the templates that they have today. So procurement and legal will likely be involved in the negotiation and crafting the final terms and conditions. They're the five personas that we would typically encounter in a as a service or outcomes-based deal.

Sarah: Okay, good. So the next thing I want to talk about is if you're dealing with savvy customers, they are going to know that a true outcomes-based service structure is going to require risk sharing. So what should this prompt a service provider to consider and prepare for?

Alastair: It's a great question. And that's what I guess that's one of the big differences between this model and a traditional model. You know, when you sell a customer a product. The accountability and the risk for the value that that product creates immediately transfers to the customer. And in this model, there is an onus on the service provider to deliver that value. So it's probably worthwhile me spending a minute just recapping on the perceived risks and benefits of this model for both parties, because that sort of underpins some of the thinking that we'll go on to explore. So if I think about this from a customer perspective. Some of the risks that they're going to be thinking about are the fact that this is likely going to be a long-term services commitment. So they're going to be signing up to something that's multiple years. They're going to be handing over operational control and that in itself can be quite, people can be quite apprehensive about doing that. And also, because it's a long service agreement, they could feel like they're locked in. And what happens if the business needs change over that long period of time? Can I get out? Can I adapt? Can I change the service? So, then there's sort of the risk things that a customer is likely to be considering. The benefit, of course. Is that they'll get this agreed outcome. It'll liberate some capacity for them. They'll get to work ideally with a trusted brand who are providing this curated experience at a predictable cost. It really simplifies their operation, allows them to go focus on their core activities while the service provider deals with this sort of critical non-core type of work. If I look at it from a service provider perspective, they're likely to have to make some sort of upfront investment in technology, hardware, or software. And probably, they're going to have to think about putting capacity ahead of demand, especially if they're able to provide some level of flexibility to the customer. So the customer is not making an upfront investment, but the service provider is. So that's a risk. And of course, then they've got to think about all of the lifecycle activities to sustain the service and deliver the outcome over the contractual period, which could be many, many years, up to 10 years. So when you think about all of the updates and changes and recalibrations and replacements that have to go on over that period, you've really got to be thinking about what does that look like and costing it accordingly. And of course, the benefits for the service provider are they get a long-term annuity stream with almost certainly a higher rate of return. Over that contractual period, I mean, they're going to get service on everything over a very long time, and they're going to end up with a very loyal customer. So when we think about risks, sort of risk and reward, those are the things that are going through both the customer and the supplier's mind. In terms of preparing for this sort of discussion, really the service provider needs to go into these discussions with... a number of levers that they can use to help balance the risk and reward to ensure it's achieved and both parties feel like they end up in a good place. And in our experience, there are three elements that service providers will typically use. So one will be simply the initial contract term. And so how long are you going to lock a customer in for? And does that give you enough time to recover the upfront investment that you've made? So there's a sort of initial term. There's what we call minimum commitments. So there's the service provider and customer will agree, is there a minimum number of units or services that are going to be consumed over that initial contractual period that will provide the service provider with a guaranteed income? And that's very important. I mean, we have encountered customers who basically would like to be able to flex this outcome-based service to nothing. So if the business ends, I'd like to flex it to nothing. Which is really nice in theory, but doesn't really work in practice. It creates a huge risk to the service provider. And there is a premium. I mean, we always say there's a premium for flexibility. So that would be the building in a minimum commitment. That's an important lever. And then the final one is exit fees. So in the event that a customer chooses to leave the agreement early, or even at the point at which the initial contract term ends, you can build in this concept of... exit fees, which lowers the monthly fee, but leaves the customer with like a balloon payment at the end, should they decide to leave. And ideally, and in most cases, if the service is well designed, they'll just continue, you know, so the balloon payment risk will disappear, will dissipate over time. So those are three key levers I think a service provider needs to consider. I'd also say that one of the other things to consider is the as-is state inside the customer. So it's very, very rare that you're going to encounter a customer which is a complete greenfield. They're going to have some sort of technology either from yourselves or from a competitor that exists today that's somewhere in the lifecycle. And you need to think about how can you ensure the customer maximizes the value from what they've already invested in, because they'll see that as a risk. And if you sort of roll in and say, well, we need to replace everything, everything's going to move to this model. It's likely to create quite a negative reaction. Service providers need to really think about how this is going to be perceived by the customer. Have some levers that you can adjust and tune, some dials that you can tune to ensure the risk reward ends up in. A good place. And I think the other thing is just know your limits. At the end of the day, there will be a point where this won't work for a service. But you need to know where that is, because you do not want to be stuck in a bad deal. If you sign up for a customer for 10 years, and it's 10 years of a bad deal, that's not a good thing.

Sarah: Yeah, those are really good points and a really good sort of analysis of the risk topic. Again, this is an area we could get off into some side conversations and we don't have time. But I think, you know, just to point out a couple of things. You know, we're talking today about navigating these topics with customers, right? So that's operating under the assumption that the company has already decided to offer outcomes-based service, right? But I do want to make sure we call attention to the fact that this topic of sharing risk. Is really the crux between truly offering outcomes-based services and repackaging things in a way that you are saying you are offering outcomes-based services, but it's not true to the model. And so to your point. Maybe that's okay, right? Companies have to make their own decisions. But this is just, I bring this up like there's a huge conversation and decision-making process ahead of anything you're doing externally that has to happen. And this, I think, is the point. That a lot of companies get hung up on, right? Because they panic when they get to the risk sharing piece and then they kind of want to go into outcomes-based services without taking on risk. And it's just not that in its true form. And so I also want to point out, for listeners that are newer to the podcast, we've done some really great episodes with companies that have truly embraced this. And. We've had conversations specifically about why they felt the risk was worth it and how they balanced the risk and how it's paid off. Kaer, K-A-E-R is one, Koolmill, K-O-O-L-M-I-L-L is another, and there are some others. I would go back and listen to those episodes to dive a bit more into this piece. If you are a listener who's still reconciling internally, what does this look like for us? So tied to the risk sharing piece is the development then of the outcomes-based KPIs. So... You mentioned this a bit in your shaping how you define outcomes-based services. But a savvy buyer is going to expect these KPIs be geared toward their business challenges and really developed in their business language, right? So what do they need to consider to create these KPIs well? Because to your point, a lot of companies get stuck in their internal language. And that can be a barrier when you're working with customers who are expecting to create this in their business language.

Alastair: Very often this is one of the hardest. Topics to reconcile both as a service provider trying to come to terms with how do you present what we deliver as an outcome and also actually for a customer to really think about what is it I really do want as an outcome. It can take quite some effort and time. And I think one of the things that's really important, I think, for a service provider is to develop a starting point. At least do some collaboration, co-creation work with some trusted customers, especially in the early stages of service development to really understand. How the customer is thinking about the value of the service, how Key Performance Indicator might emerge from that. As I said in my sort of intro around outcomes, this can very often be described actually in technology language. Many customers are very familiar with and comfortable actually continuing to use technology language. So the unit of measure is in some sort of technology terms, but others are really looking for something that truly aligns with their business. But the point is, it's in the service provider's interest to go in with a starting point. And to think also about what we would term a system of record, because typically the outcomes KPI needs to be reliably measured and there needs to be a single point where both the customer and the service provider can go to to say, well, we agree that this is actually the outcome and we've measured it in a consistent way. So it's not just about coming up with the outcome KPI itself, it's also about how you're going to measure it. And we've done a lot of work to build solutions that enable there to be a single system of record, because then that's almost certainly going to connect in with things like billing, SLAs and billing. So you have a starting point, which is being developed with your early adopter or pilot customers. And then it's really important for that to be the starting point for a discussion. You shouldn't try and impose that on a customer. It's really, in many ways, just an example to get their cogs going. So don't impose it. Use it as a means to help them understand and then refine for the customer to meet their needs. So that would really be my advice. It takes time. And I mean, the whole selling process for a solution like this is going to be longer than a traditional product sale. And this is one of the areas where you're likely to spend maybe a little bit more time than you would typically to get this right. And to ensure that the customer really understands. I think the other thing I would say is that almost in every case, there will be dependencies on the customer in order for the service provider to ultimately deliver. So it's very important that those are understood and called out in the contract. So that's extremely important. And also there is a danger that a service provider can get sort of get pushed into a KPI where they really don't have. Ultimate control. So as a provider, you really need to ensure that you can deliver the outcome that you're agreeing to and that some of these dependencies are so far out of your control that you have no chance of delivering and you can get dinged for something that really wasn't your fault. We've seen this actually in a number of examples, again, in the OT space where the KPIs can be quite advanced and the customer is trying to push the provider to take on some accountability and some liability even and to take on risk that. Really outside the scope of the service that's being provided. So there's a big red flag there. It's great to have the discussion, but again, you've got to know your limits. And it's about managing and balancing risk.

Sarah: That's a good point, kind of coming back to the risk conversation to understand that Shared risk is fundamental to the business model. However, that doesn't mean just signing up for anything and everything that the customer demands. It doesn't mean going beyond your limits. It means finding that mutually beneficial. Balance that everyone can agree is a win-win. And going back to the examples I mentioned, when Companies can reach that point, it really is mutually beneficial. There is risk on both sides, but there is reward on both sides. And you can see that prove out, right? But as you have artfully outlined in our conversation thus far, there's a lot of points where this can go awry and that mutual benefit can get thrown off, right? So these are all things to be aware of. Okay, so can we talk about some of the common objections? That a service provider should be prepared for. And if there are, you know, if these originate with a certain persona, let us know. But basically, when you think about objections in the sales cycle, what comes to mind?

Alastair: Yeah, absolutely. In fact, I would sort of think about this from a persona perspective, because each persona or stakeholder will have a slightly different view of the value and risk for the service, and they'll have their own, typically their own objections. I'd highlight, and sort of going back to that list of five personas that we talked about earlier in our discussion. From an operations perspective, I think one of the big objections and things to watch out for is the fact that very often it's the individual that you're talking to or their team who is going to be disrupted by the introduction of the service. So you could be very eloquently talking about the value proposition of your outcomes-based service to a guy or gal who is thinking, well, this is going to take away my job. So you have to be very conscious of who it is you're talking to and the implications of what it is you're proposing to the individual that you're dealing with. So, you know, pitching it at the right level is often, you know, a good way to avoid that. But ultimately, I would say, look, you just need to reframe that and say, look, this is going to create a unique opportunity for you and your team to go focus on something that's core to the business. It's going to deliver far more business value. That's really the way that you can overcome that. But be very sensitive to what are the implications for the team that you're pitching to, especially operations who are likely to be in some way displaced. I think linked to that, the management team are going to be really trying to understand, help me quantify what this, how many cycles are going to be created? What else can I go focus on? So those two things are somewhat linked. From a finance perspective they're just going to be looking, how is the spend going to change? How do we move potentially from CapEx to OpEx? And is that something that is acceptable and beneficial for the company? As I sort of indicated earlier, we have had some experience of getting to very late stages of trying to position a deal only for the finance team to say, well, this simply won't work because actually, there's some advantage for us holding capital on our balance sheet. It makes our company valuation look more positive. I wouldn't second guess the objections that might emerge from finance. The key is to get it in front of finance as early as you can to seek an opinion. And don't leave it till the last minute because that can be very painful. From a procurement perspective, very often when they're presented with an outcomes-based model, they'll find it hard actually to find alternatives in the market to do their typical comparison, three suppliers, do an RFI, RFP, especially if early into the adoption or positioning of outcomes, this is going to look very confusing and throw the procurement team off, which can create an objection. What I would say there is that it makes sense to build in some headroom for a commercial negotiation, either some level of discount that will pacify procurement, allow them to demonstrate value back to their business and allow you to move on. So that could be a bit of a stumbling block. And the objection there is, well, I can't really follow my process. I haven't got three suppliers that are delivering this. You guys are the only people in the market that are offering it right now. What do I do? That could be challenging. And then as I sort of indicated earlier around legal, the legal team will have some templates and every company will have a scope of work that they've agreed, which is how they would like to buy. Hardware, software, and services, all of the elements typically that you'll find in an outcomes-based model of the bill of materials. Level and they don't work. Well, we've attempted to modify these things to get them to a place where they might work in an outcomes-based model. And there's so much rework that has to be done. It's too hard. So as a service provider, we would encourage them to create their own terms and conditions, scope of work terms and conditions. So it's on the supplier paper, not the customer paper. And just be very clear which of the different sections and clauses are likely to be ones that are in the domain of legal. And again, it's about knowing your limits. To ensure that you end up in a good place as regards to risk and reward. All I'd say is, again, based on the familiarity with the business model and the savviness of the legal representative you might be working with, you just need to be prepared to spend quite a bit of time there and expect there to be some back and forth as the contract ends up taking shape. So those are the sort of the key things I would highlight, Sarah, based on my experience.

Sarah: Yeah. Okay. Okay. So Alastair this has been wonderful. I just want to reiterate for folks in certain industries, in certain situations, you know, you are going to encounter people that have had experience with outcomes that know what they're looking for and you need to be prepared to respond adequately. But for those of you who are in industries where this is newer and you're really helping them navigate these conversations and this journey for the first time, understanding some of these intricacies and doing your homework and preparing for those conversations can really help put you in a position where you're building trust and you're building that relationship because you're helping them work through this and you're being perceived as a knowledgeable partner. So Alastair, any final comments that you would add to the conversation before we conclude?

Alastair: No, I mean, I've really enjoyed the discussion, Sarah. Appreciate the opportunity. I think to summarize, I'd say, look, find a stakeholder in the customer that understands the concept and is prepared to advocate this business model internally. You've got to be prepared to present the solution multiple times before it sticks. So you're going to have to rinse and repeat. Finally, what I would say is that you can invest a lot of time doing this positioning. And in the end, the customer will still decide to buy in a traditional way. And I think that's okay. Don't be disheartened. Talking about this, if you've got the right solution, is always a positive experience. And it will deliver results in the end. That's basically what I'd close with.

Sarah: Very good. Well, I appreciate it. This was a great conversation and really, really, really good insights. So anyone that would like to, you can find Alastair Winner on LinkedIn. And if you have questions or want to connect, you can do so there. You can find more information on outcomes-based service and all sorts of other things by visiting the home of the UNSCRIPTED podcast at futureoffieldservice.com. You can also find UNSCRIPTED on your favorite podcast platform. The podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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4 Critical Factors to Consider While AI Legislation Continues to Develop

Earlier this year, the European Union adopted new rules around how artificial intelligence (AI) can be used by both public and private organizations. While legislation is still developing in the U.S., service organizations that want to leverage AI in their operations should be paying attention to these emerging laws.

The rules adopted by the European Parliament address privacy concerns (such as using images scraped from the Internet to create facial recognition databases), while also requiring certain types of AI systems to reduce risks and ensure human oversight. Those systems include things like vocational training, law enforcement, border management and others.

A key element is transparency of the models and data these AI systems are based on, reflecting a concern that a lot more people have about these AI platforms – knowing what data the algorithms are sampling.

This is important for potential new use cases of AI, because the quality of the data being fed to AI solutions counts. Without getting too deep in the weeds, the types of AI solutions based on ChatGPT are not really thinking so much as analyzing data and providing a synopsis, an answer, or an output based on previously existing material.

For general purpose AI, content providers are already pushing back against the use of copyrighted materials – like the contents of the New York Times – that are being ingested by these systems. The types of AI solutions being used or proposed in field service are less prone to copyright violations, but they still need human-created content – technical manuals, repair data, customer service scripts, and more. Eventually, though, the supply of original content can run dry and that's when AI models can go sideways.

AI Hiccups

One widely documented phenomenon is chatbot hallucination. If you pressure a generative AI system long enough, it may provide confident-sounding results that are, in fact, complete fabrications (this may be the most human-like quality of AI, come to think of it.) These hallucinations can be the result of model complexity, inaccurate source data, or training data bias.

While AI solution providers are working to fix this problem, some researchers have declared it an unsolvable part of AI – their take is that these models are making guesses and cannot really separate fact from fiction. In more creative pursuits, these hallucinations can be funny or, in some cases, inspiring. In more technical applications, they can be disastrous. AI models can also be vulnerable to cyberattacks, with third parties deliberately tweaking input data to induce hallucinations.

Another issue is called AI model collapse, which occurs when the AI solution starts using other AI-generated content, essentially causing the solution to eat its own tail, figuratively speaking. Once enough of this so-called synthetic data is fed into the model, the results become increasingly nonsensical.

In fact, in one study an AI large language model (LLM) was fed synthetic test data to generate text about English architecture until its responses became strange and curiously focused on jackrabbits. AI image generators trained on AI art have also been shown to create increasingly indecipherable results.

So, for service organizations evaluating AI solutions that can help guide technicians through a repair, help build better routes, or help improve maintenance scheduling based on equipment performance, there are four critical factors to consider:

What do you want the AI platform to do? In service, the best current scenario given the maturity of technology, is to have it operate in a co-pilot mode, helping team members make decisions where there are a lot of variables in play – things like routing, scheduling, troubleshooting, predicting future maintenance or part needs, etc.
What data is being used to train the AI platform? That information, whether it is from public/shared sources (like maps) or company-specific information, should be clean and accurate and, critically, created or vetted by actual people. AI models built on other AI-generated models will degrade results over time.
Is the AI platform in compliance with existing privacy and intellectual property regulations? This will vary by region (and in the U.S., at least, things are somewhat in flux). The key is to make sure you are not violating the privacy of your clients, and that the AI solution is not creating models based on proprietary information that belongs to someone else without their permission.
How will AI outputs be used by team members? AI solutions do not really make decisions, per se; they make very educated guesses based on ingesting a lot more data than a person could ever hope to consume. In service, the best-case scenario now is that the software makes recommendations, and a team member evaluates those recommendations based on their own experience and observations of actual conditions to make what is (hopefully) a better, faster decision.

I have written before about how AI can be used in field service here, here, and here. If you have thoughts on how AI can be used (or not!) in service, I would love to hear from you.

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