Author: sarah.nicastro@ifs.com

September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

Russell Masters, Director of IT and Analytics at DHU, a provider to the UK National Health Service, who formerly spent significant time at Rolls-Royce involved in digital innovation efforts, talks with Sarah about the call for leaders to become more digitally adept. They discuss what this does and doesn’t mean, some of the key changes necessary, and what the future holds for leaders in the digital age.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about the increasing demand for business leaders to be digitally adept. We know we are living in a digital world and what that demands of leadership has changed, is changing and will continue to change. Very excited to have with me today to discuss this topic, Russell Masters, who's the director of IT and analytics at DHU, a provider to the UK National Health Service. Russell, thanks for joining me today.

Russell Masters: Hi Sarah, thanks for havin0g me. It's lovely to be here.

Sarah Nicastro: Lovely to have you. That was a mouthful. Russell has been so kind to join me today on what is a bank holiday for him, so that's very nice of you to give me some of your time, appreciate it. Before we begin our conversation Russell, tell our listeners a little bit about yourself, your background, your current role and kind of how we got to be here today to talk about what we're going to talk about.

Russell Masters: Yeah, sure. It's fantastic to be here. Know it's a bank holiday, but it's loads of fun talking about this kind of stuff and I love to take the time out to do it. So my career really I've been kind of in industry for 20 years, and pretty much all have that has been in services, either physical or digital somehow, hence my interest in this and my passion for this subject area. And the vast majority of my career was in fact in aviation, and so I've been fortunate to work in a couple airline organizations and the majority of that time also working at Rolls-Royce where I was responsible for a whole range of business transformation and digital services. And that's brought me after quite a long time in aviation to a big career change, so now I'm in healthcare. And I work DHU, which is a community interest company. We support the UK National Health Service in providing urgent and emergency care services, a big part of which is the digital content required to make those services work. And whilst on the face of it, it would seem that moving from planes to people is a big shift, actually there's a whole load of stuff that's very similar. And notwithstanding, the huge amount of digital content and digital technology required to make all of those services work.

Sarah Nicastro: Interesting. So yeah, I've been covering this space for a little bit less than 20 years, but a similar amount of time. And it's interesting to witness and experience how digital has evolved and what that means as it relates to the topic that we're talking about today. So you, through your experiences in industry and services and in different spaces, aviation, healthcare, the reality is no matter what industry we're talking about, the digital imperative is real and it's an area where all organizations have been forced to not only adapt and embrace but to really transform and innovate. And what that takes at the leadership level is really, really interesting. I think that we've asked our workforce to really do a 180 in how business is done and what value propositions we're providing from 20 years ago. And it's not an easy feat, and the way that companies lead is critically important in the success or failure of this initiatives. So I'm curious Russell, in your 20 years of experience, so I know a big chunk of that was at Rolls-Royce and Rolls-Royce is obviously seen as a leader in that industry with a lot of these things. How have you witnessed digital leadership evolve?

Russell Masters: I think, obviously I've seen this all the way through my career and I've been really fortunate in that I've been both a part of delivery of physical services and digital services. And if you like, I've had kind of the dream set of experiences because I've been able to do some of the doing, do some of the building of new things, and also lead some of the more modern cutting edge digital technology projects and services that you could ever want. And I think I consider myself kind of really lucky in that I was born with a personal computer, probably the first generation to have a PC appear in their life. And yet for me, it's still really, really challenging and really difficult as you take forward the blending of IT technology with the real world and go through what has effectively been a transition from IT and big IT and the way that that technology appeared in our life to the more ubiquitous version of that which is digital. And every aspect of our life now is touched by some form of digital technology. And I would suggest that probably the generation of business leaders that we have now are right at the forefront of being the first to take those big digital tools and technologies and deploy them into their companies, into their businesses and their teams at any real scale.

Russell Masters: And so much of that is exciting, but so much of it is very scary. And what I think it's prompting is a wholesale change in the way that we lead and the way that we support our teams, the way that we approach projects and challenges. If I think back to maybe 10 or 15 years ago when we were firmly in the IT age, IT was by definition very technology heavy, it was kind of quite expensive, it was quite time consuming and quite a lot of effort to deploy these technology into companies, despite the huge value that they delivered. And now we fly forward 15, 20 years and those technologies are becoming cheaper, they're becoming easier to deploy, and they're becoming so great to democratize, there's so much more democratization those technologies into our daily lives. And it makes the challenge of taking those and making something useful out of them, both in one way much, much easier because the cost of doing so and the speed at which you can do so is much less, but also much, much riskier because you can get yourself into a whole load of hot water by deploying digital tools and technologies into your organization on scale and on mass.

Russell Masters: And I think I'm probably part of one of the first generations of leaders who've really had to get their head round how do you take these digital tools and technologies and how do you deploy them successfully into your organization? And it's a really complicated story and it's to do with people and it's to do with technology and it's to do with culture and it's to do with philosophy. And I think what I've seen, the predominant trend over the last 20 years as you say has just been this complete democratization of those technologies and the availability of those technologies and leaders wrestling with how do they make something really successful out of something that they probably haven't had a lot of chance to understand but know is incredibly important and being used by everyone everywhere to make their businesses better and more effective.

Sarah Nicastro: Yeah. It's funny, I was smiling because the article that we published today, actually, is called, the headline is Actually, Technology's the Easy Part. And one of the things that I mentioned in that article is what you just said, which is the democratization of these tools in some ways makes things easier, the barrier to entry is lower, the affordability is greater, the accessibility and availability, all of those things. But on the flip side, when I was writing about these things, we'll say 15 years ago, just embracing technology was a competitive advantage. And that is no longer the case, and so from that perspective it is more complex because relating it to the topic we're discussing today, the understanding has to be far deeper. You could get away with, at one point, the understanding being, "Okay, we need to go digital." And that was a feat but it was a journey that was pretty easy to conceptualize and outline and embark on. And what comes next in the further iterations and generations of that strategy is more complex and it requires a lot more expertise and understanding and all of those things. So I think that's a very good point. And like you said, both exciting in some ways and scary for leaders to know that they have some work to do.

Sarah Nicastro: I recently quoted an Accenture report that said all companies are now technology companies. So what are your thoughts on that statement and how does that underpin the importance of leaders becoming more digitally competent?

Russell Masters: Yeah, I completely agree with that. I think there aren't any companies now from the smallest kind of mom and pop shop retailer to the largest multinational that doesn't use technology in some ways as part of either their employee experience or their customer experience and the product and service that they provide. And so yeah, pretty much every company is a technology company today. And building upon the point you were making in response to the beginning of the conversation, I think historically in times gone past it was about how do you fit the people to the technology. The technology would show up and it would do something and you needed to fit the people to the technology to make that work. Increasingly, it's now about how do you take the technology and fit it to the people because pretty much every successful company, every organization that exists today that has any kind of future, has any kind of purpose, has people at the center of it. Whether it's the employees who deliver the end experience to the customer or whether it's the customer themselves or it's a whole network of stakeholders and providers and vendors and other people. It's always people at the core.

Russell Masters: And so I think the big challenge for leaders today is, how do you take something that is inherently very sophisticated, very technology based, and how do you make that really super simple and really super compatible with people so that you can get the best of both? And I think pretty much anyone who's been in my position leading digital products or in and around technology will say that it's the people part that's the really hard part and it's the part that can make a project really successful or an endeavor really successful or not. And I think as we're talking about what the leaders need to do to be successful in this area and how does digital leadership show up in a big organization, it is increasingly helping to enable people but with a background of technology and technological change. And I think that is one of the most difficult subjects for any leader to start getting their head around, and frankly not one that you're prepared for when you've come through maybe a University system 20 years ago or have entered the world of work at that time. So that's the challenge for all of us, is how do we get good at making the technology fit the people?

Sarah Nicastro: Mm-hmm (affirmative). What would you say are the biggest barriers to this happening? So if leaders need to become more digitally adept, what are the challenges in that happening?

Russell Masters: Well, there's all sorts of things we could talk about, but there's probably a couple that spring to mind. I think first and foremost, like any big change in business or in society, there's a level of understanding and knowledge required to get started. And I think the subject of digital and IT technology and digital technology starts, first and foremost, with some pretty super sophisticated content. And that can be really daunting when you're starting to contemplate how do you take digital tools and technologies forward. And there's always a sense and a concern that really maybe you have to actually be a developer yourself to be able to be effective in these areas, maybe actually have to understand architecture or maybe you have to understand the latest technologies in order to be successful. And I think that is a very real but not necessarily, it's a boundary, it's a barrier that can get in the way of a lot of leaders when they're starting to take these projects forward.

Russell Masters: And I was actually having a discussion with a colleague of mine who was moving into a government role in and around technology and she was really concerned, "What do I need to know about the cloud? What do I need to know about the latest coding language?" And I think her situation is mirrored across many, many organizations. And the truth is, actually you do need to know something about the technology and you do need to find a way of interacting with the many, many professional people that you'll meet, professional developers, enterprise architects and digital experts. But it's less about understanding what they're doing from a technical perspective, and it's more about having a common language set and some empathy and understanding so that you can both work collaboratively as a team to take forward whatever you're working on.

Russell Masters: And so I think the first challenge for serious lead if you want to be more digitally enabled, is to understand the subject matter a bit more but not to be too worried about knowing it to the Nth degree. And that can be as simple as networking, building up contacts and relationships with people in and around these areas. It can be taking the time to get to know your support team, developer team, IT team, understanding their problems, understanding how the technology works, and as well self-educating. So I think that's the first barrier, if you like, the first action to take if you're going to get serious about becoming a leader in a digital age is to inform yourself.

Russell Masters: But I think then the really value added bit in all of this is there are hundreds, thousands, millions of really well qualified, very professional technology experts out in the world. And it's probably the case that if you're as a senior leader involved in any of these projects, you're not there because you know the technology, you're there to build a team or to work with a team to take them forward and deliver some sort of outcome an some sort of end result. And I think one of the hardest things as a leader of a technological business is to get yourself away from the how are we going to do it more to the what are we going to do and why are we going to do it? And to start getting away from maybe some of the older, safer methods for managing projects and managing organizations where it's about being prescriptive about what happens and why and moving to a more collaborative culture where we start to talk about, "Well, what is the outcome? What is the thing that we're going to achieve?"

Russell Masters: And that's something that I've noticed has been really important in all the world that I've done, both in my previous roles and my current roles, is how is this going to show up in the face of the customer? And that could have been in the face of the end use of the service, or in my case now in the end patient. So the second big challenge for, I think, digital leaders is to start to get better at working towards outcomes and enabling your team to understand those outcomes. And then thirdly, really supporting them, moving away from a culture where you're the one making all the decisions and you're the one driving all the actions to the one where you're more making the team accountable for the outcome that you'll need to deliver and fostering a culture where we all work together to achieve an end result.

Russell Masters: And those are very different cultural approaches, those are very different management philosophies and ways of working and not ones that are necessarily well understood or well practiced everywhere. And so certainly that's been one of the big challenges of the experiences I've been through, both in previous roles and certainly in my current role, is how do you help organizations move away from action to outcome and how do you build the right team and create the right culture an collaborative spirit where you can run at those things together?

Sarah Nicastro: Mm-hmm (affirmative), okay. All right, those are good bits of insight into some of the challenges. So let's then talk next about some of the what not to do. So I think a couple things I want to touch on that I'm taking out of what you just said, I think number one in my mind is that leaders can't completely offload the responsibility to become more digitally competent or adept. So there's a certain degree here of, "Okay, well if I'm not an expert here then I'll just hire someone to do it." So let's talk about the idea of not trying to cop out of growing your own perspective and knowledge and understanding.

Russell Masters: Yeah, I certainly think you've got to decide when you are going to participate or when you're going to be responsible for a new digital product or service or some sort of transformation journey. You still have to make a conscious decision about how are you going to show up and how are you going to participate in that project. And I guess there's various ways that you can do it. And sometimes it's just about not treading on the toes of the experts, if you know what I mean. And so first and foremost, your first focus should be building a great team. And having built that great team, you've got to trust that that team can do the task that you put them together for. Now, by the same account, you still have to be there and show up every day and show interest and drive the energy. As a leader, your job really in a number of ways is to just pour constant amounts of energy into those projects. And so there is a tension there between wanting to participate, wanting to roll your sleeves up and get involved, but also getting in the way.

Russell Masters: And I think I've seen and I've been myself part, and any experience I've gained here has been through a combination of dumb luck and mistakes and slips and trips. And it is really difficult when you're leading a big project to understand how far do you go in demonstrating that you're committed and care about it and you're willing to take action and participate and how do you make sure you don't go too far and stifle the creativity and the enthusiasm and the ownership of the team around you? And so that's a difficult path to tread and one that you need to take a lot of care. But you certainly can't just throw it over the fence.

Russell Masters: And I think the other thing that you've got to do is just always remain focused on what is the outcome and I think a big learning point for me has been, historically as a project manager of projects or more junior roles, I always felt it was more necessary to drive for the most ambitious goal possible because that felt like really good work. And it's taken me many years really and probably the most number of mistakes and is probably the area where I continue to challenge myself to actually manage these things in a more agile method and not in kind of, to use the fashionable version of the world agile where it's kind of just constantly changing, what I really mean is to be properly agile where focusing on what's the smallest thing that we can do today? What can we deliver in a week? What can we do really quickly and be really efficient with? And again, that is a big challenge for leaders coming into these projects. You might be used to delivering in a more conventional way with more [inaudible 00:21:24] and culture. So both of those things really are the big challenge of what not to do, by all means participate, but don't over participate. And you absolutely have to have control but only the way that helps the team take it forward in the most agile sense.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, so there's a lot of areas here that are a delicate balance. So that being said, I think just a couple key points to reiterate for folks, number one is as a leader you can't, to your point, just throw it over the fence. This can't be a facet of your scope of responsibility that you just say, "Well, you know what? This isn't my area of expertise, so I won't worry about it." There has to be a greater desire to learn and grow and expand in the sense of that understanding, not necessarily in the sense, to your earlier point, of becoming an expert yourself. Number two is this idea of if you know that this is an area that you need to increase your knowledge of but you are not going to be the expert then you do need to hire a team of experts that you can trust, and then you need to allow them the culture and environment in which to do what they do and carry out the mission that that you're setting forth. And to your point, that is often going to look different than maybe projects have in the past, so understanding that there needs to be some morphing of workflows and culture and expectations to be more outcome based versus action based.

Sarah Nicastro: So all kind of areas of finding the right balance for yourself, your company, your team, your project that you're working on. But I think those are some really good points in terms of what not to do.

Russell Masters: Yeah, I think you've just got to show up. You've almost got to be there when the problems are there and show up when the problems are there. So trust that your team will take this thing forward, but recognize that they'll get stuck at times. How can you support them and take responsibility for the problems and then just kind of fade away then it's all working. But all the while, demonstrating that you really care and that you're bothered. And I've certainly tried to only ever associate myself with projects that I'm really passionate about and I care about. And I think that, again, is another side to this more modern leadership style has needed to be, it's a much more feeling, much more empathetic approach, and to what are effectively very technological and kind of scientific problems.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, I think that's a good point. And that point traverses this topic into other areas of conversation related though to innovation, which is as our businesses continue to evolve and transform in ways that are new and different, you mentioned earlier the idea of a more collaborative working environment. The more we all have to own our areas of expertise but also work well with people that have different strengths. That's how this all continues to advance. We had a conversation on here not too long ago about the fact that when you look at the topic of digital transformation, it's this very fragmented and siloed approach that is really killing business's opportunity to get a return on their investment. And so this idea of whether it's digital transformation or digital products and services, this idea of greater collaboration, better teamwork, more agility is super, super important. So let's talk a little bit more about what that means though. So I want to talk about three areas of what we should focus on doing. And number one is creating a digitally native culture. So talk a little bit about what that means and, not that you can give anyone a blueprint for doing it, but maybe some thoughts on what it means and how to consider advancing that culture within a business.

Russell Masters: Well, I think you've got to, coming back to my previous point about people and this being so people centric, I think it wouldn't be unbelievable in a lot of companies and people who work for companies you might be listening to, the digital projects, IT related projects, they don't always have the best reputation. They can be expensive, they can take time, they can be impersonal. And I sort of think the key to having a digital culture, if you like, is both to completely dispel the fear of these kind of activities and make them as accessible as possible. And that requires you to talk about them frequently, express them simply, make the language as simple and practical and real as possible. And there can be some resistance to that, because it can sometimes be the case that you have your experts and you have people who are very invested in maybe the previous ways of working, and so suddenly talking about it in maybe less technologically accurate terms or in a simpler way can be counter to the current culture. But it's essential that you make everybody feel like they can have some part of these initiatives and that digital capability and digital content can mean something to them.

Russell Masters: And then I think you've really got to start with either the customer or your workforce or both tell you and you've got to make whatever you're working on as relevant to the problems and challenges you've got at any particular time as possible. And the more that you can talk about outcome, the more that you can talk less about the technology and what you're going to implement and more about the change it'll make within everybody's daily lives and the more belief that you can have. And that can be hard, especially if you're leading an organization where maybe there's a bit of legacy, there's a bit of history or maybe you're sort of a bit earlier in your journey. But showing up every day, being really positive about it, is massively important. And you'll suddenly find almost you reach critical mass where this stuff starts to move. And then before you know it, your whole organization is behind this and seeing what's in it for them. And that's when this stuff is both at its most fun and its best because then you can capitalize on that energy and use that to drive forward and whatever the right strategies for your organization and move more towards a digital first culture.

Sarah Nicastro: Mm-hmm (affirmative). I was just thinking, we talked earlier about how technology itself has become democratized and it's almost this idea of now next we need to democratize the interest and responsibility throughout the organization. So the technology is there, the capability is there, it's the people part of it, the culture part of it, and weaving it into everyone's scope of work and everyone's language and all of that. It makes sense.

Russell Masters: And investing in everybody who's involved in that change because whether you're moving from working on a certain application or providing a service in a certain way or maybe just gaining information or using information to gain an outcome, it is just so important that everybody, from the most senior person to the most junior and everyone in between, is involved in that. Because otherwise you run the risk of it becoming a particular person, a particular area or particular department's job. And much the same as historically, the other productivity tools that we each organization came to know and love became ubiquitous. It's the same here, it's just got to be consistently delivered, everybody engaged, and made relevant for as many people as possible.

Sarah Nicastro: Mm-hmm (affirmative), okay. All right, there's a lot of other questions I could ask you there. And I think we could certainly have you back and talk a bit about the how to in some more granular detail with some of these things. But for the sake of today's conversation, area number two in terms of becoming more digitally adept is improving digital acumen. So let's talk about how leaders need to be able to talk the talk when it comes to digital.

Russell Masters: Yeah, and I think this is another area where there's the potential to get caught out or trip yourself up.

Sarah Nicastro: Overdo it.

Russell Masters: And I think first and foremost, you have to just be realistic with yourself. I've over the course of a 20 year career have found myself involved in increasingly digital technologies, increasingly digital projects, and over the course of that time I've made a point and I've made it a specific ambition to learn more about these technologies, learn more about the approaches and learn more about the best ways to take these forward. It's about learning enough of the language so that you can converse and learning enough of it so that you can engage with the team that you build around you and the team that you work with to take this forward. So you do need to know enough about the technology to make yourself educated and informed, but you don't have to be the expert.

Russell Masters: And I think learning to ask intelligent questions and learning to pick out the areas where maybe it's worth digging into a big deeper or checking your understanding, is probably a far more valuable skill than, for example, taking yourself back to night school and learning all about cloud architecture and everything else. Primarily because you just won't do it justice, and the standard in industry now is so high and the level of education is so high and the quality of individuals that you can attract to these teams is so high. And so if you find yourself, and you should, involved in these increasingly digital projects, your job should be to become familiar and converse in the broad language and be able to know who to speak to about which challenge and which issue, and to learn how to bring those people together in a way that drives towards a common goal.

Russell Masters: And I would definitely advise against trying to become a very deep domain expert, unless you want to retrain on something else, but an executive level I think it's about, "How do I understand enough of this to actually bring together the parts to make something whole?" Much the same as if you're building a house, you wouldn't lecture our architect on where to put the beams and how deep the footings would be, you trust that they know how to do their job. But you'd certainly have an opinion on what the outcome looked like, how many bedrooms and what it would look like.

Sarah Nicastro: Yeah, that's a good point. And I think one of the key things here is pride and don't let pride get in the way of making impacts that matter here. So this isn't about pretending you know more than you do or you know everything. You don't need to know everything, you need to know enough to be able to understand where the business needs to go and understand what the end goals are and to be able to, like you said, pour energy into the team and motivate them. But I think the world we live in today, there's no way for leaders to be a master of all and no need for. I think that the more you can, like you said, ask good questions and own the areas where you don't know what's being discussed. Because if you can just own that and you can let your team, the experts that you've hired to execute here, let them educate you because that lets them see that they're valued. There's nothing wrong with just admitting that, "I know this much, you know this much, so what do you think and what do you think we need to do next?" And like you said, trust the people that you have put in place to do these things and just know enough to talk with them about what's happening and where it's going.

Sarah Nicastro: I think that there's this element for leaders of just the whole pride and power area that we really need to set aside and just focus more on the people and team building and the outcomes.

Russell Masters: Yeah, and I think this isn't a digital challenge, as much as we're seeing a technological step change within industry, we're also seeing a step change in the philosophies that managers and leaders are using to motivate people, to bring teams forward. And we hear a lot about what's the purpose and the vision and maybe historically those could be treated as quite perfunctory kind of things that we just do because that's what appears in the corporate report or something else. But increasingly those are really important areas. And I think the other thing is, to your point on pride, I don't think it's necessarily about, there's nothing wrong with pride, I think that's a good thing. But maybe accepting or tuning into the fact that actually creating the compelling vision for a team of super enabled, super capable people is actually something to be very proud of and is actually tremendously valuable within an organization. Bringing together all of the right disciplines, lining them up in the right way, especially as most organizations today and most teams are multidisciplinary. We no longer exist in organizations where individual departments do their thing because we know that real truly game changing outcomes come from combining lots of different elements together in a certain way.

Russell Masters: And so I think it's not just a digital challenge, it's a modern leadership challenge, it's how do we create organizations with purpose and mission and vision? And how do we get super positive and proud of that as opposed to maybe knowing what the right answer is at any point in time? And ultimately far more satisfying, I think, than always being the person who makes the decision and directs traffic.

Sarah Nicastro: For sure. Okay. And then the third area, what is your best advice for building confidence, competence, and capability?

Russell Masters: Well I think it's just built upon the conversation that we've had before. I think being very, very curious about every project that you're going into. Certainly something I've had to watch for myself is to jump too quickly to a conclusion or an answer and to try and encourage myself to be more open minded. And the more open minded you can be and the more flexible, the more adaptable you can be, and the more opportunities you can see and the more opportunities you explore, the more you learn. I definitely think this is an area where learning by doing is a really important part of this. This, like any kind of new subject area or discipline, there's so much information out there that you can almost paralyze yourself by trying to know enough to get started. And so I think you've got to start. But I think very much building upon your point, it's about taking forward whatever you're working on with the confidence that you have the right team around you and the humility to engage those team members no matter how small or big the question. And then use that and relying upon your leadership belief and your skills and experience to bring all those elements together.

Russell Masters: And things will go wrong, and I've had many things go wrong in my career. But if you are attacking things with positivity, if you're always doing it for the thing, then my experience you always get the support of your team and your organization and the best thing to do is to embrace that and use that as one big learning experience. And I think that confidence comes from knowing it won't actually be that bad if things go wrong and embracing the fact that if you are working in small steps, your last mistake probably wasn't a big one.

Sarah Nicastro: Right. And I think when you talk about, maybe not digitally native culture, but just the type of culture we need to be fostering today period. This idea of a fail safe environment is very important. Companies aren't getting ahead by playing it safe and embracing the status quo. And part of being able to promote creativity and innovation is people not being terrified to make a mistake or to fail. And so I think that's a good point. Building confidence comes from making some of those missteps and recovering from them and what you learn in doing that, and that's okay and that's important.

Russell Masters: And I think it's the learning the lesson is the most important thing. I would be disappointed in myself to repeat the same mistake again and again and I think that's a really reasonable expectation in the teams that you create and the organization that you work within is, "Well, let's make this mistake and if we make it once well let's not make it again." And I think that's the most important and seeing how you can build upon that is in itself incredibly enabling. And I think maybe just learning to trust your team and trust people is maybe actually one of the things that will have come out of the current circumstances, obviously we've all moved to remote working and a huge number of organizations that would have previously maybe been concerned about that or maybe worried about letting people work from home. I've actually seen it's worked really well and it's a really good proof point of it's not so much about worrying about a mistake, it's maybe trusting that your teams and you will actually make less of them than you might think and might actually achieve more and leveraging the power of people, as with all these things, whether it's management or digital, it's all about the people.

Sarah Nicastro: Yeah, for sure. Okay. So Russell, last question, what is your best advice for leaders that know that they need to become more digitally adept in terms of, we've talked about some of the, "Here's what not to do, here's what to do," what about specific actions? Whether that's resources or just, "Hey, maybe try this." What type of tactical advice do you have for folks?

Russell Masters: Yeah, and I can't confess that I knew all this when I started and in some of the roles, this is definitely the result not the starting point in terms of my experience, but I think a good discipline to get into, whether it's a digital project or something else, is focusing on the outcome. And that can sound really easy, but it's actually quite difficult to train yourself to think, "What is the outcome I want to achieve?" And it's not, "I want these tasks done by this date," it's, "Well I want my customer to now see these things," or, "I want my employees to now be able to do this." So that is a really good discipline. And I think start would be the other piece of advice. You will learn far more by doing and getting involved than by not and waiting. And it's like any big life event, you're never quite ready. And so again, I will just say start. And network, network within your team, network without your team, and have the humility as you do that to be really open about your experience and not worry too much that maybe this is your first foray into this kind of world or maybe don't forget that as much as you've done 10 or 20 projects you've still got a tremendous amount to learn.

Russell Masters: So just have that continuous asking questions, networking, learning mindset. And with those three things, you won't go wrong. And I'm sure you'll have some slips and trips, but that is by far I think the best way to start.

Sarah Nicastro: Cool. Awesome. Well Russell, thank you so much for joining us and sharing this advice. I think there's some areas here we could definitely dig into, so I'd love to have you back and have some more conversations. But appreciate you coming today on a holiday and sharing with us and our listeners. So thank you.

Russell Masters: Sarah, it's been fantastic to be with you and thank you so much for asking me. It's been a great experience, thank you.

Sarah Nicastro: We'll do it again soon. You can learn more by visiting us at futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter @thefutureoffs. The Future of Field Service podcast is published in partnership with IFS, you can learn more at ifs.com. As always, thank you for listening.

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Sarah welcomes back to the podcast Dr. Andreas Schroeder, Digital Lead of the Advanced Services Group, for a discussion around how Servitization and sustainability are inextricably linked and what that means for the future of businesses differentiating through service.

Note: As referenced in this discussion, you can view the agenda and register for Servitization Live at https://www.servitizationlive.com/.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about the intersection between servitization and sustainability. I'm thrilled to welcome back to the podcast today, Dr. Andreas Schroeder, who is the digital lead of the Advanced Services Group at Aston Business School. Dr. Andreas Schroeder has allowed me to call him Andy, so I will do that from now on.

Sarah Nicastro: Andy, welcome back to the Future of Field Service podcast.

Dr. Andreas Schroeder: Yeah. Thank you very much, Sarah, for having me back.

Sarah Nicastro: Thank you for being here. I'm excited to chat with you again. Andy was on a previous episode of the podcast, episode 100. We had a really good conversation about how we need to leverage data, and how we need to think about data related to driving servitization. Today, we're going to talk about a completely different topic, but one that is top of mind for a lot of folks right now, which is sustainability. We're going to be talking about how servitization really fuels sustainability, and vice versa, in some different ways.

Sarah Nicastro: So Andy, the Advanced Services Group is gearing up for Servitization Live, which is an event that you all are hosting at the beginning of October. Sustainability, or climate change, is one of the three mega-trends that you all have defined, that you will be talking about at the event. Before we dig into our conversation for today, why don't you tell our listeners just a little bit about those mega-trends are, was Servitization Live is about, and how they can check that out of they're interested in getting some good insights.

Dr. Andreas Schroeder: Yeah, of course. The three mega-trends that we're looking at in the context of servitization, and we'll talk about servitization itself in a minute, we see servitization as a very innovative business model that had dire implications, not just for the companies engaging with it, but wider societal implications. The specific ones that we've been looking at is its contributions to topics like aging population. There's just no going away, as a population we are aging, and there are technologies and ways of interaction that can help to manage this situation. Servitization plays a role in this.

Dr. Andreas Schroeder: There's food and food security, is another mega-trend. As the population grows, food is an important resource, more important than ever. Again, servitization has a role to play in bringing in technologies and different partners of food-supply chain. Making sure that food security and efficiency of food can be managed.

Dr. Andreas Schroeder: The one that we will be talking about today, and looking at the intersection, is sustainability in the wider context. So, we're looking at climate change, resource utilization, and so on, and so on. These are the three trends, so sustainability is the one that we're focusing on in the podcast here.

Dr. Andreas Schroeder: The event that we're gearing up, and thank you for pointing this out, there is a big executive conference that we are mounting. You find this under the title Servitization Live. It is a mixture, it is a hybrid event. It is from the fourth to the sixth of October, including, and taking place physically in Birmingham, UK, but will be streamed worldwide in real-time, of course. We will have a number of very interesting guest speakers coming from industry. The names that will be represented, and will be presenting, is Goodyear, Schneider Electric, Baxi Boilers, and Emuron Technologies. These are some of the names. They will be discussing, from their point of view, how servitization activities already help their business, what their future plans are, and what their contribution for their companies are to their sustainability goals through this business model.

Dr. Andreas Schroeder: It's an event, please visit the website. If it's of interest, please register. It will be a very good event. We are expecting around 600 people to attend. We did this last year, and I hope we exceed this this year.

Sarah Nicastro: Excellent.

Dr. Andreas Schroeder: Thank you.

Sarah Nicastro: Yeah, absolutely. Those of you that have been listening to the podcast, or following the content on Future of Field Service, you know that I'm a big fan of what the Advanced Services Group does. I participated in the event they held last fall, and I'll be participating in Servitization Live as well. Certainly don't come because of me, there are many wonderful guests that will be speaking and sharing, and talking about how these mega-trends are in their minds and in their strategies, and how that trickles down into their individual businesses. We'll make sure to put the link to check out the event in the show notes.

Sarah Nicastro: For now, let's dive into our chat for today. As Andy mentioned, the trend or theme that we're focusing on today is sustainability. I think that what I like about how you all have planned Servitization Live is to really urge people to think about these mega-trends. I think it's very natural for business leaders to get very focused on their day-to-day, their views, and their world. It's important to do that, but it's also important to take a look at the bigger picture of what's happening, and how that all plays in.

Sarah Nicastro: Today we're going to talk about this intersection between servitization and sustainability. The first thing I want to talk about, Andy, is the differences in perception of products, between traditional product delivery or production models, and servitized models. Can we talk a little bit about what the difference is, and how that relates to this intersection between servitization and sustainability?

Dr. Andreas Schroeder: Okay. Yeah, I think this is a good starting point. Maybe before we go into the detail, the way I understand sustainability, there are societal obligations towards sustainability, and then, of course, companies have their own strategies, and so on. What I argue is that these are not contradictive to each other. A good-run business, or specifically a business that tries to move into the Advanced Services space, naturally needs, and I will show this in my explanation, naturally needs and contributes to sustainability objectives. These are not two diverging interests that need to be balanced out. The interesting thing is that these are very well, and very nicely, aligned. The speakers at the conference will map this out for us as well.

Dr. Andreas Schroeder: When we talk about Advanced Services, for us this is a move away. Largely we focus on manufactures, and we support around 300 manufacturers in their move from only focusing on their products, designing, developing, and manufacturing the products, and then selling it on to the customer, to a situation where a manufacturer designs, produces, the product, but instead of selling it on to the customer, the manufacturer retains ownership and responsibility for the product. It often becomes a pay-per-use scenario. The classic example is the Rolls-Royce-era engine example, where Rolls-Royce bought a large number of engines, still stays responsible for the functioning and performance of the engines, and the airlines are paying by the amount of thrust they take out of these engines. This is a significant shift for manufacturers, from being producer of products to provider of services on the basis of their product.

Sarah Nicastro: Services, and, in a lot of cases, outcomes. They're really selling that outcome in a lot of instances, so kind of a step beyond selling it as pay-per-use or pay-per-service and selling it as pay-for-an-outcome. Maybe not in every situation, but in many. That makes sense. In the conversation related to sustainability, let's talk about then how the difference in model, of produce to sell and offload versus produce to own, maintain, and deliver outcomes on, contributes to the topic of sustainability.

Dr. Andreas Schroeder: Yeah, yeah. I think this is the angle to understand this. In a traditional business model, and we generalize here, of course there are differences in companies so we look at generic business models of produce to sell, the objective is to make a profit margin, of course. The objective for design is not necessarily to look at the full life-cycle of the product. The objective of design and production of the product is to make it attractive for purchase. There will be a lot of innovations that companies would have in their drawers that would not meet the price point that they've identified for their customers, so these will not be developed. Or, they make the product a bit more expensive, probably a bit less attractive for an initial capital investment, but maybe there's a long-term benefit to it that they failed to communicate, or they're unsure that they can communicate in a sale of a product situation.

Dr. Andreas Schroeder: A traditional business model, that limits a company. How much innovation they can introduce in their product, and also what is the cost of product they are prepared to invest in and sell. When we look at a change of business model, from a product to a servitization context, a lot of these changes... We are in a situation where the objective is not to sell for an immediate price point, or to design for an immediate price point and sell, but to be able to deliver services on the back of a product for a longer period of time. The contracts we're looking at are 10-year contracts, servitization contract. This is a company that designs a product, and knows that they are responsible for it, for the use, and service, and outcome, and possibly efficiency of the product for a ten-year period, will naturally design the product in a different way. We see this with companies like Rolls-Royce. When they design an aero-engine for service, that is a very different aero-engine, there are very different design principles, than if they would design an engine just for the immediate sell and not for continuous ownership.

Sarah Nicastro: Just to clarify a couple of points for my mind, and for listeners, this is not to say that manufacturers in a traditional business model are producing garbage, or intentionally producing products that are not good. But, by the nature of staying in business, they are producing products that the market will bear. They are producing products to the degree that the market will bear in the sense of selling that product under a traditional, capital-based sales model. So in that, when you mentioned innovation, there are certain restrictions on innovation. Some of the things that could potentially be done to, let's say, maybe put higher quality materials into that product, or to design it and produce it with the ultimate duration of life in mind, versus having to stay at a certain price point. That's where we're talking about there's differences in how these things could be produced if the goal was not to produce what the market can bare for a capital expenditure.

Sarah Nicastro: If you look at it now moving to the servitization model, the manufacturer is retaining ownership of the product, and they're responsible for delivering the outcome, so then it makes sense to invest more in the production of the product to extend that life cycle, because ultimately, they are benefiting from that longer-term view. That will help them in terms of their ultimate profits by innovating in the way that the market won't bare on a capital-expenditure model.

Sarah Nicastro: Let's talk about this just a little bit, to make sure folks are understanding. When you are going to build a product to be longer lasting, there's more expense to that. This is where looking at servitization or the shift to a pay-per-use, or as-a-service model, comes into play. Let's talk about why and how that is.

Dr. Andreas Schroeder: Longer lasting is one aspect, but, for example, serviceability. A lot of products are not designed to be easy to service, in the sense of easy to exchange parts that deteriorate in order to be able to maintain that entire product and give it a longer life. We know this. Again, thank you for pointing this out, this is not talking down companies and their design objective. If you are competing on price, and a lot of companies it doesn't matter in which price point they are there is a price element in the way they can position themselves in the market, there are restrictions of what they can innovate and what prices they can ask for. That limits it. The beauty of the change of the business model is that it takes away some of these limitations, and allow companies that are innovative to actually use their innovation to develop products that they would otherwise not be able to.

Dr. Andreas Schroeder: What we have is longer lasting. When we look at developing products in a servitized context, or as a part of Advanced Services, we have products that are longer lasting. There is no interest in companies having to replace products repeatedly, selling another one, just preparing for the next sale. There is no interest in that. The interest there is efficiently, in an optimized way, maintaining this product in use, because they benefit from products in use, not products in sale. The other part is, again, every service, every repair, is to the detriment of the manufacturer. It's a cost to the manufacturer, so they will design in a way that things naturally are easier to service, if it has to be replaced, then it would otherwise be. A lot of these Advances Services contacts also have efficiency clause in there. It is up to the manufacturer who provides the service to ensure a certain energy efficiency, or even cost-down commitments. Sometimes there are clauses in there that requires a manufacturer to ensure that there's, I don't know, a 3% energy efficiency benefit every year as part of the service, so cost-down commitments from the side of the manufacturer.

Dr. Andreas Schroeder: These very much change how a product is being designed, that's the design and production phase, but also it changes how the product is being in the use phase. When the product is being managed by somebody who has designed the product for longer lasting, who has penalties around inefficiencies, there will a lot of focus on maintaining, making sure, that the product runs on maximum efficiency. That's where the digital part comes in, a lot of monitoring along the side to ensure that this is in place.

Dr. Andreas Schroeder: Also, there is significant opportunities to look at the end of life of a product. Again, traditionally when we have a product-for-sale model, these products are being sold off after a while. There's a primary use, and then a pump or a machine is sold out over to a secondary-use, and possibly internationally gets distributed. There is very little chance for a manufacturer to be systematic about remanufacturing some of the products that are being taken out of use. They disappear somewhere and reduce efficiency, and cannot be traced back. When we have a situation like we're describing in a servitized context, where the manufacturer retains ownership of the products, has to monitor these products, be responsible for them, for them it's a natural, easy process to actually remanufacture these products, and take these products back and put them into a remanufacturing, recycling context.

Dr. Andreas Schroeder: This is some of sustainability benefits of Advanced Services that are part of the business model. They are not an extra, kind of an ethical or moral obligation, this is to optimize the business of the manufacturers in Advanced Services context.

Sarah Nicastro: Yes, that makes sense. We're talking about the difference between products being optimized for sale versus being optimized for use. I want to emphasize the point you just made, because this is a conversation you and I had when we first talked about this topic, which is there are people for whom sustainability is a very, very important topic when it comes to their personal beliefs, and objectives, and how they want to contribute to the environment in a positive way, and all of those things. We see that reflected in a lot of, like you said at the very beginning, there's the personal obligation side of this, and there's the corporate obligation side of this. You see some correlation there, but I want to go back to the point you just made, which is nothing we've talked about so far is something that is important simply to benefit the environment. It does, and that intersection is fantastic in the sense that these servitization objectives and journeys have that impact, but what we're talking about here is really just good business. That's all we've talked about so far, is if you are on a servitization journey it benefits you from an efficiency standpoint, a financial standpoint, to put these measures in place that also improve sustainability.

Sarah Nicastro: Let's talk about that a little bit more, because I think that there is a, again we're generalizing for the sake of a podcast discussion, but there is a group of people that care deeply about the topic of sustainability and want to altruistically take measure to have a positive impact there. There are people that maybe care less. Not to sound negative, but there are people for whom it isn't as big of a personal objective. The point is, whichever side of that lens you're looking at this from, the benefit is the same. If you're looking at it from the sustainability lens, there's benefit. If you're just looking at it from the value of servitization and how to maximize that value, there's benefit. Can you talk about that a little bit?

Dr. Andreas Schroeder: Yeah, yeah. There's another dimension that will come in. In the future, just as an example, in the UK we have now, a new legislation has come out, that by 2025 no gas boilers can be installed in new houses. For a manufacturer of gas boilers that means if they don't change technology, they have no business. Forget about the moral obligation and the environment constraints of gas boilers, from the legislative point of view they do not have a business within four years' time. They need to innovate technologies in order to be in business, and customers need heat. They are now looking at technologies, for example heat pumps, which is more advanced technology than that traditional heating boilers. But, these technologies are more expensive, they are more difficult to manage. They require more collaboration, more looking after, than traditional gas boilers.

Dr. Andreas Schroeder: They are now into the trap that we described where they have to innovate. The technologies are largely there, but they don't match the traditional price point of a gas boiler, around, I don't know, £4,000, £5,000. They are now working, and all of them do this, at saying, "Okay, the legislation doesn't allow us to go for traditional technology." The legislation is based on sustainability goals from the government, but even if the company doesn't subscribe to them they will not have business if they do not meet these goals. They are now looking at finding new business models around Advanced Services to make sure that their higher-value technology, that is more expensive and probably out of reach for a couple of new homeowners, can still be put into market, they have a business, and that technology can be provided, and their expertise can be of use in providing heat.

Dr. Andreas Schroeder: This is on our side of the pond. The Americans, you have similar sustainability goals that means 50% reduction by 2030. This is nine years' time, 50% reduction of CO2 emissions. There will be, if there are yet, significant legislation coming out there, for private citizens, for companies. There will be a lot of new technologies coming on the market to meet these goals. It will happen. If the goals are met or not, but legislation will be there, incentives will be there, and the penalties will be there. Again, we are in the space where new technologies, as I described with the gas boilers, come onto market, possibly at a different price point, requiring new business models for these businesses to have a business, a viable business.

Sarah Nicastro: That's a good point. What we're really talking about is disruption, and where that's coming from. You and I have known each other a while, and we both talk with companies regularly who are embracing the journey to servitization. Many of them have begun that journey because they saw the opportunity to do so. They saw the opportunity to differentiate their business, to provide different value to their customers, to embrace a business model that would really transform their value proposition and their company, and how they operate and everything. Those folks maybe have a bit of a head start, in the sense that if some of those companies are then impacted by this legislation, they kind of have a start toward that transition. However, even those that haven't yet embraced the journey sheerly based on the opportunity they see, now they're being nudged to do so because of this legislation. The disruption is coming in the terms of a threat, not an opportunity. Regardless of how that's coming, it's just the reality.

Sarah Nicastro: The opportunity to servitize, and the opportunity that exists to change the business model, so that they can develop the products they need to develop in the way the need to develop them to meet those legislative restrictions is really pretty awesome, that that opportunity exists. However you're kind of coming into the journey, it's a really exciting journey to be able to embark on. I think you make a really good point about the US, and it's probably safer for me to say this than you, because I live in the US, but we do lag a bit in a lot of areas on this topic, related to some other countries and regions. You make a very good point, which is the objectives are there and the legislation comes next. It is going to come, so there's an opportunity here for those organizations here to get ahead of that a bit. Rather than waiting for that to be looming, and to be trying to race through this, there's an opportunity to look ahead a little bit and to sort of see what's coming, and to get ahead of that. That's a really interesting point.

Sarah Nicastro: I think we talked a bit about, for you all and the organizations you work with, what have you seen related to the catalyst? Is there differences in the catalyst for why companies are embarking on this journey? Have you seen that reflected in when companies come to you and they say, "Hey, we want to servitize, and here's why"? Are those stories different today than they were a few years ago? Or, how do you see that evolving?

Dr. Andreas Schroeder: Yeah. There are different kinds of motivations, and they always show up in different ways in these companies. The buckets that I would put out there to group these, quite a number of them come from the digital angle. They're saying, "Okay, we have now digitized our products, have a good understanding. What are the business models that help us to get more value out of our investment in digital?" We discussed it in the first podcast, Advanced Services is one of the business models, I would even argue the business model, for digitalized products.

Dr. Andreas Schroeder: The other bucket is certainly companies that, and often quite successful company, that are saying, "Okay, the competition is creeping up. We believe that we have an edge in terms of product, innovation, and so on, and so on, but we are getting squeezed on price. Let's look at a new business model where we can make use of our innovation and our expertise, and not have to compete on price with the competition." Now, we see also, in the case of the boiler for example, or other companies we're interacting with, where companies literally see the absolute need... the constraints that the traditional business models puts on the way they can interact with customers.

Dr. Andreas Schroeder: Just as another example, again in London, I'm not sure what year it kicks in, but it's to become a low-pollution... entire London, city of London, not just the city, the environment, the metropolis of London, a low-pollution environment. Manufacturers producing, or even products being used... We talk about trucks, we talk about cranes, we talk about diggers, we talk about everything, will have to meet this requirement.

Dr. Andreas Schroeder: All the alternative technologies are electronic-based, will be more expensive, more difficult to maintain, require different kinds of care, do not fit traditional models. Companies coming to us and saying, "We see how the market is being constrained for us", for the right reasons, they don't even blame legislators for it. They see that this is a game change for them, now we have to respond to this. Again, coming not from altruistic motives, but somebody as a leader of a business that needs to make sure that they have a business in 15 years' time.

Dr. Andreas Schroeder: Also, sometimes it's based on legislation, sometimes their customers. Their customers, if it's a progressive company, their customers want to have certain commitments and certain energy efficiency benefits. Seeing from their supplier, because it becomes part of their own energy balance. If I run a production line, I'm responsible for all the energy emissions that are being created as part of the production line. If some of the machines are not owned by me, I'm still responsible, it still shows up on my balance sheet, so I want to make sure that my suppliers of products helps me to achieve these emission targets that might be there because of law, or because of strategy, or ambitions. There's a cascading effect now also, where companies hold each other accountable, and enforce each other's business model, therefore.

Sarah Nicastro: Mm-hmm (affirmative). This is probably a really unfair question, because I don't think there's any real way to answer it. I know that you're going to want to give me a concrete answer, but when would you say that the traditional business model is just going to become largely obsolete?

Dr. Andreas Schroeder: Yeah, I can give you a precise answer, and the precise answer is the innovative companies will start... We already see it, not will start, they are starting to change the business model. But even a company like Rolls-Royce, aero-engine, will still have a market for selling some of the products from the traditional way. I would hazard a guess that the more innovated companies will, of course, embark on it further, but even the most innovate companies will still have a business related to traditional products. What we see, and the benefit of having this Advanced Service in place is the innovations that come out of designing products differently, and looking after a product differently. They seep over into the design of the products that are for the for-sale market. Any kind efficiency, and kind of improvements, will not just be isolated to one part of the business.

Dr. Andreas Schroeder: I don't think there will be a world where traditional business model is totally phased out, but definitely the Advanced Services business model takes over. As always, there are some companies spearheading. Some regions are spearheading. Scandinavia is very much ahead of most of the rest of the world. Europe is catching up. The US is actually involved, and it will involve further, and further regions of the world. And, so it goes.

Sarah Nicastro: Like I said, that was unfair, and probably poorly stated. Maybe obsolete isn't the right word, but you just think about... There's a point at which the lag just becomes insurmountable. The companies that are innovating, and the companies that are not, I think there will reach a point where that gap is very hard to close. I do think that, while the traditional model won't become entirely obsolete, the demand to embrace this reality is immense. I don't think that a company can just say, "Oh, we'll just keep doing it this way and we'll continue to be successful." It just seems that that is virtually impossible. Okay, I'm trying to think of-

Dr. Andreas Schroeder: Let me just get to it with another... You're saying it's virtually impossible. We have examples of companies that... I don't know what the proper word is, that didn't pick up a trend. Polaroid, Kodak, Blockbuster. There are examples of companies who missed the trend, and some can catch up, some cannot. It depends on the set-up. Innovative companies miss trends, so it can always happen. Information is out there. So that's one thing, the other interesting thing that we've seen over the years, I started with the example of Rolls-Royce, these are high-value, very high-value, items. I'm not sure the price point of an aero-engine, but let's assume we're talking about millions. The price point of products that are becoming attractive for Advanced Service models are now on the level of boilers, which are around a couple of thousand pounds. The change over the last 10 years, in what is possible and what is feasible, is dramatic. Largely related to building up expertise, opening up to the business model, but also the connectivity part.

Sarah Nicastro: You're saying the two servitized, so the potential... Yeah, it's almost like... I wrote an article, it was years ago, I don't even remember the exact angle, but it was talking about the trickle-down effect. It's the same concept. This originated as a business model that seemed feasible or a good opportunity for a company like Rolls-Royce that produces products that are millions of dollars, but it's now becoming an opportunity that is equally viable to a company that produces boilers that are a couple of thousand pounds. There's-

Dr. Andreas Schroeder: Just one point to it. If we take the same mindset, as a service, and we wind back 10 years ago and we looked at software as a service coming around the corner. Of course, this started with very innovated companies, but now if you develop a piece of innovative software and you don't have it as a service proposition, you probably don't have a business. If you expect that everybody will host themselves any version of your software you don't have a business. A lot of companies will still offer this. It is getting wound down. Sometimes you cannot host it yourself. Try to host Gmail yourself, it's a tricky proposition. This is the way I see it with Advanced Services as well, that it starts with the innovative companies, it starts with the bigger companies with a high-value product, it trickles down into smaller-value products.

Dr. Andreas Schroeder: Just for our conversation, I looked up, just to close the loop, the energy efficiency of software as a service, or cloud services, versus hosting yourself is around 90%. If you would use the same software, hosting yourself as an SME, versus going into the cloud and using some of the cloud space available, you reduce your energy consumption by 90%, CO2 creation by 90%, by going into the cloud. Not the same numbers in our, as a service proposition, because we talk about products, physical products, that need to be shipped, that need to be produced, but we talk also about significant potential in energy and CO2 emission reduction based on the same principles.

Sarah Nicastro: Yeah. And product waste, in the sense of what we talked about initially, which is these products being intentionally developed and manufactured to last as long as they can. Yeah, it's really-

Dr. Andreas Schroeder: And be recycled at the end. So lasting, and the recycling loop. Which again, is big chunk of what needs to be done by companies for their own efficiency's sake, and which has the added benefit for sustainability aspects.

Sarah Nicastro: Yeah. I love this topic. I think it's so interesting. We have a podcast coming up with Tetra Pak, and it's a whole sort of extension of this conversation, which is looking at the opportunity for... beyond their own products, but looking at the opportunity to offer sustainability efforts as a service, and to help other organizations improve their own sustainability efforts. It's really interesting. I consider them a leader, and industry leader, and one of the more innovative companies, but those are the best to learn from in the sense of what we talked about with the trickle down. To listen those stories, and to think, "Hmm, how could that apply to my own business?", I think is just really cool. There's a ton of potential here. There's so many layers to this topic. I really enjoyed talking with you today, and having this conversation. I'm sure you'll come back. Is there any other comments, or words of wisdom, that you would like to close with? Any other thoughts?

Dr. Andreas Schroeder: Everybody who's interested in this topic should definitely attend, register and attend, our Servitization Live conference. Again, I outlined the speakers, but what you will hear is innovative companies, for example, who are in the heating or cooling business that, again, servitize. They will also map out their servitization journey, their strategy, their objective, their motivations, but also show how they are under significant scrutiny in terms of sustainability and climate change. Cooling and heating is one of the major sources. They use this new business model to make significant headway in standing up to the scrutiny, and innovate in the way that benefits their business, as well as meeting governmental targets. If anybody is interested, and you should be, then please join Servitization Live.

Sarah Nicastro: Awesome. Yes, I definitely urge you to do so. Just to reiterate what we talked about today, the two objectives are inextricably linked. That's the really exciting thing there, is that this intersection is real, and as organizations embark on their servitization journeys they're going to improve sustainability, and as companies focus more on sustainability their going to turn to servitization. That's a really cool thing, and it'll give us a lot more to talk about. We will be sure to put the link to the event in the show notes, so that you can all go and register. I urge you to do that.

Sarah Nicastro: Andy, that you so much for joining me again today. I appreciate it.

Dr. Andreas Schroeder: Thank you very much for having me. It was a pleasure.

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

Capability	What it does	What defines best-in-class
Service ticket management	Catalogs all active and closed tickets and ticket history across the service business.	Leaders unify this process across all channels of service delivery and provide external services like performance dashboards, as well as automatic ticketing and closing.
Pricing and billing	Provide point-of-sale functionality, purchase order, and account functionality to field workers.	The maturity of these systems means that all should have the ability to process purchase orders and credit transactions, build tabulated account views, and appropriately automate communication for late payments.
SLA management	Incorporate and outline various contract requirements in the system and use them to inform and prioritize service delivery.	Automate SLA requirements into planning, scheduling, and routing; subdivide SLA requirements by region, business use case, or technician, and provide all necessary tools for outcomes-based service delivery.
Warranty management	Catalog and maintain records of product warranties and expectations.	Automate renewal cadence, build complex repair-or-replace options for technicians to provide to customers.
Performance management	Log, analyze, and present technician performance across a variety of metrics that are prioritized by the firm.	Consolidate data from not just the service practice, but across the serviceable assets and backoffice to provide a concise view of the business with minimal customization.
Knowledge management	Deliver on-site information to service technicians to ensure an understanding of repair processes, customer requirements, and business functionality.	Provide opportunities for shared view and augmented reality. Additionally, use IoT and appointment data to prepopulate the necessary instructions and guidelines automatically.
Repair management	Log, route, and notate all instances of on and off-site repairs, and benchmark that history against any client requirements.	Track repair process in real-time across channels, both internally, through dealers, as well as external partners.
Asset management	Review output and health of serviceable assets in the field.	Predict service interruptions and automate service appointments before an asset breaks down based on historical sensor data.
Mobile field service	Access to service management capabilities on a job site via mobile device, rugged device, or tablet.	1:1 mobile and desktop functionality for all systems, including knowledge management, parts management, and all aspects of service delivery.
Planning tools	Building long-term headcount and capacity plans for back office and field workers.	AI-powered optimization allowing for multi-time horizon planning that extends past days, to weeks, months, and years, allowing businesses to set projected capacity and make decisions in advance.
Parts management	Inventory, location, and stock level tracking.	Ability to track across warehouses, technician vehicles, depot, and any other location that parts many be found to ensure quickest turnaround. Part allocation recommendations built into the scheduling tool based on appointment data.
Reverse logistics	Tracking, managing, and optimizing returns and repairs.	Multi-channel visibility across internal and external depots and warehouses. Ability to evaluate repair efficacy for customers in real-time to help facilitate informed decisions.
Driver routing	Maximizing efficient appointment delivery by reviewing appointment locations.	AI-powered utilities to identify bottlenecks and inefficiencies in technician behaviors, ability to set business rules and prioritize appointments and benchmarks and route technicians to maximize performance along those criteria.
Scheduling	Prioritizing customer appointments alongside service needs.	AI-powered scheduling optimization that automates scheduling with respect to all SLA, regional, and incidental requirements and restrictions.
Simulations	Field "what if?" scenarios and their impact on headcount, profitability, and other metrics.	This capability itself is typically a hallmark of best-in-class planning and scheduling optimization.
Enterprise resource management	Management of internal business capabilities outside the direct delivery of service.	Comprehensive lifecycle, performance and investment planning across all business functions in a unified platform environment.
Omni-channel contact center	Provide multiple ways for customers to interact with the business after the sale has completed.	Unified call logs and chat histories are automatically applied to customer information; Channels include phone, online, MMS, and app-based messaging, enhanced by AI.
Chatbots and virtual assistants	AI-driven utilities for customer communications.	Automated escalation and sophisticated voice recognition, ability to provide zero-touch appointment scheduling without the intercession of a human.
Customer service CRM	Customer profile and interaction management at the firm, business unit, and individual level.	Automated functionality for routine service booking and marketing utilities.
Unified desktop support	Consolidated back office functionality in a single application.	End-to-end compatibility with all utilities in your service stack.
Customer self-service	Self-resolution options for customers.	Multiple channels of delivery, including phone, online, and mobile, enhanced through emerging tech where appropriate. Built-in triggers to transfer to technicians for more complex service needs.
Remote assistance	Resolve service issues without dispatching a technician where possible.	AR-enabled shared view that goes beyond telestration to actual collaboration. The best of the best are further enhanced by IoT functionality.

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