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October 31, 2022 | 5 Mins Read

You Get the Results You Deserve: Wise Words from Michael Phelps at IFS UNLEASHED

October 31, 2022 | 5 Mins Read

You Get the Results You Deserve: Wise Words from Michael Phelps at IFS UNLEASHED

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By Sarah Nicastro, Creator, Future of Field Service

At IFS UNLEASED in Miami a couple of weeks ago, I had the opportunity to hear from the most successful and most decorated Olympian of all time with a total of 28 medals, Michael Phelps. While I’m not a swimmer and have never followed the sport, I was very interested to hear from a household name like Michael and understand more about the person behind the achievements. His session did not disappoint!

I’ve talked often about how much I value authenticity. It’s a trait that I always aim for and appreciate when others do the same – it’s also a trait I believe is in high demand from leaders today. Michael oozed authenticity – he showed up with no false pretenses, no ego, no need to be anything but 100% himself. I respected and enjoyed that so much and believe the entire audience benefited from his willingness to be open and transparent. 

As he shared stories from the span of his career, he retold experiences through a lens of self-reflection that not only illustrated how much he’s grown and evolved as a person but also made his journey relatable even for those of us who will never take part in an Olympics. 

I wanted to share with you all a few of the points from Michael’s session that really resonated with me and reflect on how they relate to some of the topics that are top of mind within service today:

  • Whether you fail or succeed, keep right on going. Michael said, “The day after I set the World Record, I got right back in the water to train.” He didn’t take time off, whether he was working to improve or working to maintain success. This is the idea of continuous improvement, and with the pace of change in service today, we must keep on swimming – whether we have far to go or are working to maintain a competitive pace. 
  • You get the results you deserve. “I got the results I deserved every single Olympics,” Michael said. Facing nerves at his first Olympics, he took it as a learning experience to help prepare for the next race. He discussed how you cannot expect to get the results you want if you are not willing to do what is needed to prepare – and I think this parallels the concept I wrote about here that some companies claim to want the benefits of transformation but aren’t willing to do the work it takes to achieve those benefits. Your results are reflective of your effort. 
  • The small things matter. Michael shared a couple of stories about how much the details come into play in races as close as an Olympic swim. In one story, he discussed how his goggles filled with water during a race which made it impossible for him to see. If he’d have taken even the briefest pause to clear his goggles, he’d have lost – but with the amount of preparation he’d put in and the level of detail he included in that preparation, he knew exactly how many strokes it took him to get from one end of the pool to the next. So, without being able to see, he was able to win by counting his strokes. “The small things matter, and they show up in the most pressured situations when they matter the very most,” Michael said. “I’d spent six straight years of every single day in the pool, so I had more feel for the water than anyone and relied on that when I needed.” This is a great example of the power of details and a great reminder that sometimes the smallest things can present the biggest challenges – make sure as you plan for change or growth, you consider what small things will play a big role. 
  • We must break the stigma around mental health. Michael asked for a show of hands from the audience of who had struggled with feelings of loneliness during the pandemic, and a sea of hands raised with mumbles of appreciation for such an honest question. He shared a personal story of being a young child struggling with ADHD who was told by a teacher he’d never amount to anything because he couldn’t sit still, and of battling thoughts of ending his life after his DUI. Michael had the strength to ask for help and to learn how to live with his ADHD, depression, an anxiety and urges others to do the same. He began the Michael Phelps Foundation to help children avoid some of the struggles he faced. “I feel lucky every day waking up to make a difference in people’s mental health,” he says. “Communication is the key to breaking the stigma around mental health.” We know that better addressing mental health in the workplace is a huge area of concern and focus – it was great to see someone with the fame of Michael speaking about the topic so openly on stage. 
  • The importance of communication can’t be overemphasized. Michael talked about how since his career started in childhood and was maintained into adulthood, communication with his coach was imperative – what he needed at the beginning of their relationship was far different than what he needed later in his life. In any form of change, we need to remember the critical importance communication plays – it is one of those seemingly “small” things that can truly make or break the relationship you have with your employees (or customers) and their engagement and satisfaction.
  • Goals motivate people. “What are you directed towards? Goals motivate me,” said Phelps. “If you’re not challenging yourself, you’re cheating yourself.” It’s hard for most people to harness motivation if they don’t have something specific to direct it toward. This is important to remember in terms of considering how you motivate the different personality and skill types within your workforce – the goals they have will be different, but no one thrives in ambiguity and having something specific and agreed to work toward will help your teams achieve more. 
  • The great do things the good won’t. “No one feels 100% every day, some days you have to fight through that,” acknowledged Michael. “But if your goal matters to you, you get up and go. The different between being great and good is that great do things the good won’t – they’re ok getting uncomfortable.” While you can’t expect all your talent to fall into the “great” category, this point does beg the question of how you will work to acknowledge, appreciate, and reward those who are willing to go above and beyond. 

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October 24, 2022 | 3 Mins Read

A Winning Service Strategy: Think Rings, Not Trophies 

October 24, 2022 | 3 Mins Read

A Winning Service Strategy: Think Rings, Not Trophies 

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By Sarah Nicastro, Creator, Future of Field Service 

When I talk with leaders about what stands in the way of achieving success with their service transformation, their business transformation, or their digital transformation, one very common response is organizational siloes. When it comes to providing standout service, these siloes are detrimental to the customer experience. Customers seek seamlessness, ease, and outcomes – the disjointedness that even very individually successful but disconnected functions causes in the customer journey simply does not meet today’s expectations. 

On this week’s podcast, I talk with Bob Feiner, SVP of DELL Technologies Services about how the company’s service organization has overhauled its strategy, structure, communications, and technology use to be more customer centric by creating an end-to-end approach. There’s a lot to glean from the conversation, because what Bob and the DELL team have undertaken is a lot of hard work – but work that in my opinion is very necessary to achieve the level of customer centricity they’re aiming for.

One of the points that Bob made that stands out in my mind most is how he’s articulated the shift in mindset that is required to undertake such a significant change. “My mantra has become, ‘Focus on winning rings, not trophies,’” he says. “I'm a big sports guy, in particular team sports. When you think about team sports, if somebody has a great year and they win the MVP or whatever it may be, they receive a trophy. But when you win a World Championship, no matter what the sport is, the Super Bowl or the World Series or Stanley Cup, every member of that team gets a ring. Because they played together to win that championship, to achieve the common goal.”

Motivating Teams Toward a Shared Goal

In many ways, this analogy has served as a guiding philosophy as Bob has led his teams through a significant reorientation toward the customer experience. “I just think about leading teams that way. What I often tell my teams are, we're actually playing for a World Championship every day. Our Super Bowl is every day. Our World Series final is every day. Our World Cup final is every day,” he says. “That's the mindset we need to have. I think this has helped people look at it from a team perspective and not just, okay, I got this great trophy that I can put on my desk somewhere, or a badge I can show virtually. It's really about getting that ring and continuing to get those rings, as a team. And if you look at folks who were great, even individual athletes, what they care most about are rings. They don't care about the trophies. And they'll say that time and time again.”

If you’ve managed through change, you know that often the mindset – overcoming the human inclination toward what’s comfortable and known – is the hardest part. This is why Bob’s analogy and how he’s used it to reinforce the principle of why DELL needs to evolve its approach stands out to me – it’s a concept teams can understand and get behind. 

Sometimes we rush past explaining the “why” and right on to tackling the how, and this can leave workers feeling confused and frustrated which is never a great basis for acceptance of change. Not only has Bob prioritized starting with the “why,” but he’s found a way to articulate that why that is relatable and a theme he can keep revisiting to reinforce the teamwork and cohesiveness that is crucial to DELL achieving its overall objectives of creating an end-to-end approach. 

Stay tuned to hear more from Bob this Wednesday on the podcast about how he built off of this mindset shift and has made great progress in eliminating siloes within DELL to improve the customer experience. 

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October 17, 2022 | 3 Mins Read

Lessons from a Run Last Week in Miami

October 17, 2022 | 3 Mins Read

Lessons from a Run Last Week in Miami

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By Sarah Nicastro, Creator, Future of Field Service

Last weekend, along with 1,500-plus others, I landed in Miami for IFS Unleashed in South Beach. My suitcase included workout gear for every day of the trip – clothing that once would have been packed with good intentions but returned home untouched. Since the beginning of this year, I’ve lost 35 pounds and have re-committed myself to daily movement, so the clothes were put to good use (Ok, maybe the morning after the beach parties I didn’t make it). 

I’ve shared before that I am a Peloton subscriber and enjoy the company’s instructors. They’ve recently teamed up with actor Ashton Kutcher, who is preparing or a marathon to benefit his charity, to create a series of runs based on his training. They recently had a session where Peloton instructor Adrian Mills (one of my personal favs) and Ashton were joined by psychologist and bestselling author Adam Grant to talk about why and how we as humans are motivated. On a rainy morning in Miami, I decided to take this run in the hotel gym and really enjoyed not only the workout but the discussion. 

Knowing not everyone in our audience is a fellow Peloton subscriber, I thought I would share some of the points from their discussion that stood out me:

  • There’s more than one kind of workaholic. In a discussion around work ethic and how they each perceive productivity, Adam shares that there are two types of workaholics – engaged and compulsive. Engaged workaholics work a lot because they genuinely enjoy what they do and want to do it, whereas compulsive workaholics work a lot because they feel pressure and a sense of obligation. I really appreciated this distinction because I realized I’m the engaged type and gave some more context to what that means. However, it also reminded me that while he pointed out that the engaged workaholic is a healthier type, it’s still important to maintain balance and set boundaries. 
  • Altruism is rarely just that. As the group explored what was behind Ashton’s frustration with himself for falling short of a goal, Adam questioned if he’s running the marathon solely for his foundation – or if there are some personal motivations woven in. In doing so, he made the point that altruism is rarely just altruism alone – and that it is OK to enjoy and even love the ways that you can change the world. This stood out to me as well, because it highlights one of the many “either/or” ways of thinking we often have – if it’s doing good, it won’t be enjoyable – and if it’s enjoyable, it isn’t doing good. It can be both! We can give of ourselves in ways that have a positive impact and that we enjoy. 
  • The basement holds up the house. This part of the discussion was all around building a strong foundation for yourself, in whatever ways work for you. This can be everything from rest to nutrition to movement to therapy to meditation to hobbies, and beyond. But the point is that everything we do builds upon our own foundation, so we must make sure that foundation is strong. I use this analogy a lot when discussion digital transformation, too, because often companies try to race to the flashier, more exciting layers without first putting in place that strong foundation – and it’s like building a house of cards. 

In our fast-paced world where burnout is a major challenge and how leaders must motivate teams is evolving, I thought these points were universally helpful to consider. If you do happen to use Peloton, I strongly urge you to look up this ride and take it – it’s a good one. 

As for IFS Unleashed, what a week! Stay tuned for this week’s podcast on Wednesday recapping the highlights for those who weren’t with us in person. 

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October 10, 2022 | 4 Mins Read

How Does Servitization Enable the Democratization of Innovation?

October 10, 2022 | 4 Mins Read

How Does Servitization Enable the Democratization of Innovation?

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By Sarah Nicastro, Creator, Future of Field Service 

Coming up on this week’s podcast, I talk with the Managing Director of Koolmill Systems, Alec Anderson. Now, I learned a lot from Alec during our discussion – and I don’t want to give that all away here because, well, then you won’t go listen for yourself when the episode comes out on Wednesday. But I do want to share some thoughts on one of the pieces of our conversation that stuck out to me, which is thinking about how Servitization allows for the democratization of innovation. 

To give a little background with minimal spoilers, it is important for you to know that Koolmill Systems is a company that has created a disruptive machine for milling rice. I will admit to you that when I first heard what Koolmill does, I had a preconception that hearing the ins and outs of rice milling from Alec may be a little boring – and I couldn’t have been more wrong. It’s actually very fascinating! 

Learning a bit about the rice industry wasn’t the only aspect of the conversation that was fascinating. What’s also interesting is Koolmill’s decision to go to market with an As-a-Service business model, which is also disruptive for its industry. There were a number of angles for Alec and I to discuss there, too, such as exploring the similarities and differences of a new market entrant selling As-a-Service versus the transition of a legacy business to the model. Understanding how the decision impacts Koolmill, its customers, and the environment certainly had my attention – but then Alec brought up how he views the decision to go to market As-a-Service as a way to level the playing field between huge players and the small businesses, as well as what he refers to as create a “virtuous cycle,” and I was intrigued.

The Competitive Landscape Shifts with Move from CapEx to OpEx

In rice milling, the significant capital expense of modern machinery is prohibitive to many businesses. “The current state of the art in the industry, that's probably around about 50,000 large millers globally, and they're very highly capital intensive. Not necessarily digitalized, but quite automated in many instances. But to run that kind of operation, you need a lot of money to buy the equipment in the first place. You need a lot of rice to keep it running, and you need a huge amount of infrastructure and power to support it,” Alec explains. “Now, there are around one and a half million SME processors globally who don't have access to those three requirements. So, they're kind of locked in to using antiquated and wasteful equipment. In fact, we were in Nigeria earlier this year, and they were running machines that were made in the 1870s, still driven by diesel. They're locked into what they have, or if they do replace, they replace like with like, because they don't have access to this high performance, state of the art, modern equipment, and we aim to try and change that.” 

With pay-as-you-mill, Koolmill’s cutting-edge machinery becomes attainable for each of those SMEs. “Offering these small operators cost certainty is an enabler, an empowerment,” says Alec. “It empowers these small producers now to compete on pricing and quality with the large producers.”

With modern milling technology now within the grasp of SMEs within their grasp thanks to Servitization, significant opportunity is created. “We see the opportunity for a virtuous cycle in three pillars: economic, social, and environmental,” says Alec. “In terms of building the social capabilities, we call it rural industrialization. This is where we can use that small rice mill, now equipped with cutting-edge machinery, as a focal point, as an employment generator, as a means of creating and retaining value at a local community. With pay-as-you-mill, we have the opportunity to transform their livelihoods.”

This angle on the impact of Servitization hasn’t come up in my previous conversations, and I admire Alec for wanting to make sure that as he creates a successful business, he is also helping others along the way. It isn’t uncommon for companies to get so narrowed in on their financial viability that they overlook the ways in which they can perhaps achieve monetary success and have an impact – it doesn’t always have to be either/or. This conversation with Alec about how Koolmill’s decision to go to market with their innovative technology in an As-a-Service approach is leveling the playing field in the rice milling industry has had me thinking about all of the other areas that Servitization could democratize innovation as well. I think this angle is one that is intriguing to explore. What do you think? I’d love to hear!

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What Can We Learn from Amazon’s Investment in Its Frontline Workforce?

October 3, 2022 | 4 Mins Read

What Can We Learn from Amazon’s Investment in Its Frontline Workforce?

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By Sarah Nicastro, Creator, Future of Field Service

On Wednesday of last week, Amazon announced a new investment of nearly $1 billion over the next year in its frontline workforce. The company is increasing the average hourly rates of its fulfillment and transportation workers and has also introduced a new benefit that gives employees greater flexibility around when they collect their pay. The announcement also includes an expansion of career advancement and development opportunities for its frontline workforce. 

The press release states that, “Amazon employees around the world team up to meet the needs of customers every day. Employees are the cornerstone of the company, facilitating the journey of an Amazon package … To ensure customer orders are picked, packed, and shipped on time every single day, Amazon continues to invest in our employees, technology, supply chain planning, transportation, and delivery teams in an effort to get customers what they want, when they want it, wherever they are.”

You may read of Amazon’s investment and think – well, sure, but not every company has Amazon money. Here’s what I want to emphasize – it isn’t as much about the money as it is about the recognition that the frontline workers are powering Amazon’s customer satisfaction. That’s the part of the announcement that stands out to me far beyond the dollars and cents. 

Companies across industries and geographies are struggling with filling roles and finding talent. These challenges often take the conversation to how do we better attract, recruit, and hire – and those are all important things, but I want to urge you to think critically about what you are doing to invest in your current workforce. We’ve all heard the saying that it is far harder to find a new customer than it is to keep an existing one happy, and this is true for the workforce as well. We will exacerbate the talent problem by focusing so specifically on brining in the new that we overlook the need to nurture the existing.

Not Every Investment in Your Workforce Has to Be Dollars

The goal isn’t to replicate exactly what Amazon is doing, but to consider some of the points surfaced in the announcement and reflect upon whether you’re doing what you can to engage and retain your existing workforce while you seek that new talent. Here are a few points that come to mind:

  • Recognition costs nothing and goes far. Yes, Amazon is investing $1 billion – but as I said, while the number is significant, what stood out to me most when reading the news release was the respect and acknowledgement of the critical role the frontline workforce plays in the company’s success. Your employees want to feel that they matter, they want to hear their hard work acknowledged, and they want to be respected for the value they bring to the business. There are very simple (and free) ways to recognize your frontline workers for their contributions that will make a real difference.
  • Pay must be fair. With financial pressures top of mind, it can be difficult to prioritize investing in your resources. What you want to be careful of is making sure you are being fair to your existing workforce when you bring new talent on board. I’ve had people ask how to handle situations where new workers are demanding far more than existing workers are paid – and while there’s no easy answer, I think the right thing to do is to make sure your workers are all fairly paid. 
  • Flexibility is hugely desired today. In Amazon’s example they are addressing flexibility by giving employees greater control over when they get paid. But the takeaway here, to me, is that flexibility in general is very important to today’s workers. In some frontline roles you are constricted in what ways you can offer flexibility, but you should be getting creative in how to do so.
  • Complacency is a thing of the past. Amazon’s commitment to upskilling its workers and offering ample career advancement and development opportunities is one to model. Many companies haven’t moved beyond the memories of being able to hire a frontline worker who was happy to show up and do the same job, every day, for 20 or 30 years. Those days have past and to not only attract new talent, but to retain the knowledgeable workers you already have, you must think of how to offer development and growth opportunities. 
  • Purpose matters to people. In the press release it says, “Amazon workers around the world ‘team up’ to meet the needs of customers.” Now I recognize these are only words, but they are words that can get you thinking in the right direction – which is that a sense of purpose, and a sense of belonging, matter. Does your company have a “team” culture? Is there a camaraderie of working toward a common goal and celebrating wins together?

I’d love to hear how your company is investing in its workforce. If you have thoughts or a story to share, email me!

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Key Themes from the 2022 Service Council Symposium

September 26, 2022 | 6 Mins Read

Key Themes from the 2022 Service Council Symposium

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By Sarah Nicastro, Creator, Future of Field Service

At last week’s Service Council Symposium in Chicago, much of the conversation centered around people. Whether discussing how to better attract and empower talent, how to address and alleviate burnout, or how to give customers the connection they’re seeking, the Service Council’s Service is Humanity focus took center stage. 

This isn’t to say there weren’t ample informative conversations on digital transformation and opportunities to engage with those providing the industry’s modern solutions, but simply that the conversation broadened into some of the very important but often less clearcut topics companies are grappling with. I think this is important because, as I’ve often said, technological sophistication isn’t what is holding companies back from achieving their objectives around innovation – the layers of change and complexity involved are. And while no one attendee at events like this has all the answers, collectively as a community we can inspire, inform, and uplift one another to go back to the day-to-day reinvigorated to solve challenges and keep the ball moving forward. 

With that said, and in no particular order, I wanted to share some of the moments and insights that stood out to me at the event:

Elizabeth Dixon, former Principal Lead of Strategy, Hospitality and Service Design at Chic-Fil-A delivered a keynote based on her new book, The Power of Customer Experience: 5 Elements to Make an Impact. Elizabeth said during her session, “We have to remember that Customer Experience is nothing more than the overflow of our Employee Experience.” This is a reality I think many in our industry are reconciling currently. After many years of being very focused on cutting costs, we began to see the potential of service as a profit center – which shifted our focus to the customer. Now we’re realizing that we can’t deliver the customer outcomes we want, to drive the profits that are possible, without a frontline workforce that is engaged and satisfied. When you couple this with the shifts we’ve seen in the workforce and the challenges organizations have recruiting and retaining talent, it is clear that getting employee experience right is absolutely critical for service success in the coming years. 

Customer Centricity Can Require Organizational Change

Bob Feiner, SVP of Global Services and Jason MacIver, VP of Services Procurement at DELL Technologies delivered a great presentation on what happened at DELL when the company began focusing on Customer Experience. They learned that their siloed approach, where support, field service, and parts management all worked toward individual objectives and measurements of success, although effective historically, didn’t stand up to the needs of a customer-centric business. They shared how DELL worked through the complexities of organizational change and invested in technology to ensure that each function of the business is unified in strategic vision, approach, and measurement of success. 

Recognizing how imperative the employee experience is – and sharing stories of how disruptive change can be – leads us to the conversations around humanity. How are company cultures shifting to fit the needs of today’s workforce? In what ways do both organizations and leaders need to evolve to embrace the need to nurture and empower versus drive and demand? 

Stefano Folli, EVP and Head of Global Services & Solutions at Philips shared some of the ways Philips is working toward a human-centric company culture, but he also shared how he as an individual leader has had to self-reflect and grow. I really appreciated the way he surfaced the importance of individual leaders not only being willing to “change with the times,” but putting in the work to do so. He drove his points home with some specific examples of issues within his team where he realized he needed to shift his thinking or augment his skills. He also discussed how he practices reverse mentoring, because he realizes he has as much to learn from those he mentors as they do from him.

The Role of Leadership in Human Centricity

I would argue that the role of leadership in human centricity is even more important than a company’s commitment to any sort of programmatic approach. This point surfaced in the workshop I moderated on Monday afternoon on Workplace Mental Health & Wellness. I was joined by Emma Jellen, Interim Director of the Center for Workplace Mental Health; Chris Westlake, Director - Service Process and Digital Transformation at Generac Power Systems; and Sasha Ilyukhin, SVP of Customer Service Operations at Tetra Pak. We had an outline of prepared points to center the discussion around, but as soon as we introduced ourselves, questions from the audience started flooding in:

  • How do we make this more than a check-box exercise?
  • What is a leader supposed to do when they notice an employee is struggling – how do you handle those conversations?
  • What if a leader is “old school” and feels that being personal has no place at work?

The questions were excellent and prompted a very lively discussion around the fact that while a company focus on this is needed, and most evidenced in its culture, the role of the individual leaders is most important. Emma shared some excellent advice on what goes in to building programs, training managers to handle tough conversations, and alleviating burnout. All of the free resources she referenced in our session are available at www.workplacementalhealth.org. 

We know that one important facet of employee engagement is for employees to feel valued, appreciated, and heard. Karin Hamel, VP of Services, US Digital Buildings at Schneider Electric, demonstrated her commitment to improving employee engagement among the company’s frontline workforce at least year’s event by sharing about her creation of the Service Hero award. At last week’s event, Karin shared how she’s continued looking for ways to not only keep the field workforce engaged, but also to create an outlet for their valuable insight, and this past year has created a Field Service Advisory Committee to ensure the field service teams at Schneider can share their input, ideas, and feedback. 

Another element of employee engagement that was discussed repeatedly at the event is having a sense of purpose. Sasha Ilyukhin of Tetra Pak, who won this years’ Service Council Humanity in Service Award, gave a presentation that tied in another very important area of focus in service: Sustainability. Sustainability gives companies, employees, and customers a sense of purpose and, as Sasha expressed, has become a license to operate. For Tetra Pak, this is a significant area of focus both in how the company itself continues to focus on its environmental impact, but also how it helps its customers do the same. As such, Sasha spoke to how sustainability is such an area of opportunity in service. 

Technology Streamlines Complexity to Allow People Focus

These are just a few of the excellent points that were surfaced during last week’s event. At the close of day three, the Advisory Board answered a few questions around lessons learned, what they’re excited about, and what their top areas of concern are. Many of the members responded that their biggest concerns surround talent. Laura Mather, VP and GM, Global Services at STERIS Corporation made such a good point – she said, “Service is becoming ever more complex. If we want to have the capacity to focus on humanity, we must embrace the technology available to us.”

I could not agree with her more – the sophisticated technology at our disposal today can simplify some of that complexity. If you can leverage it in a way that gives you clear insights, automates menial tasks, and increases efficiency, it augments your ability to pour more time and effort into your people – which is a clear imperative for the industry. 

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September 19, 2022 | 9 Mins Read

8 Facts About Mental Health at Work to Expand Awareness and Prompt Action

September 19, 2022 | 9 Mins Read

8 Facts About Mental Health at Work to Expand Awareness and Prompt Action

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By Sarah Nicastro, Creator, Future of Field Service

If you’ve been following Future of Field Service for any amount of time, hopefully you know I am passionate about the discussion around mental health. It’s such an important topic, one that impacts me personally, and thankfully one that is beginning to get more attention – and action – in the workplace. 

However, while I’m among the ranks that are thankful greater attention is being given to the need for better mental health support at work, there’s still much to be done. Many stigmas still exist, many organizations lag far behind what’s acceptable in accepting the need for more focus on mental health, and many individuals are still struggling without the resources and support they need and deserve. And therefore, the quest to talk about this topic in an actionable way continues!

To that end, this week, I am thrilled to welcome to the podcast Darcy Gruttadaro, Director of the Center for Workplace Mental Health, part of the APA Foundation. Our podcast episode is on six ways to address employee burnout and it’s a must-listen coming Wednesday. In the meantime, I wanted to share from my conversation with Darcy eight facts around mental health that I feel we all need to better understand and urge action on.

#1: We All Have Mental Health

This is such an important point to start with – that we all have mental health, and we all deserve for our mental health to be supported at work. “We all have mental health and mental health exists along a continuum,” explains Darcy. “So, our mental health may be in a really solid, healthy place even if we live with a mental health condition like anxiety, depression or another one. Or it may be slipping, and it may be that it's really not doing well at all. Mental health exists along a continuum.”

Whether you have an employee that is generally healthy but going through a hard time or has a mental health condition that is very well-managed, it’s important for them to feel supported in the workplace. It’s also important for employers and leaders to understand that many incredibly high performers achieve all they do while managing a mental health condition. “We know that people living with mental health conditions exist along the continuum from frontline healthcare workers to the C-suite,” says Darcy. “Having a mental health condition does not limit your ability to perform at an exceptionally high level.”

#2: We All Share Responsibility Around Mental Health at Work

Second, we all must accept that we have a personal responsibility around mental health at work. While companies should absolutely be prioritizing an investment in creating and expanding mental health programs, a lot of the foundational work begins with individuals. “There are myths and stereotypes that persist around mental health, that it's this dark scary condition that makes people act in ways that any of us would be sort of ashamed of in a sense, but that's all changing because more and more people are being upfront about the fact that they're feeling anxious, depressed, or they're struggling with the substance use issue,” explains Darcy. “The more people talk about it, the more others are willing to come out and say, you're not alone. I'm experiencing this too.”

Being open about struggles and needs is one way the conversation takes hold and reduces or eliminates those long-standing stigmas, but even if you have no current personal mental health challenges to speak of, you should be contributing to creating a supportive workplace for those who may. “It’s important to remember that the workplace is what we make it and that all of us have a contribution to make in creating a caring culture,” Darcy emphasizes. “Whether you are brand new to the organization and at an entry level or are at a C-level, you can make a difference. It really is about caring for each other and asking, ‘Are you okay? You don't seem like yourself. I'm just checking in to make sure everything's good.’ And the more we do that, the more we create that caring culture that people want to be part of. It’s important to remember every little bit counts.”

#3: Improving Mental Health at Work is Key to Your Talent Strategy

Are you aware there is a greater expectation among younger talent that companies have structured mental health programs and ample support in place? Putting effort into a mental health program will not only help you to ensure your existing talent is engaged, supported, and healthier, but it is becoming a facet of recruiting new talent as well. 

“We know from surveys that younger generations are more comfortable talking about this. They have an expectation that the workplace will address these issues,” says Darcy. “They're looking for programs when they're making decisions about careers and where they want to work. The expectations are growing that organizations will provide mental health services and support. That it will be visible, that it will be talked about. They are really looking for that. And because we know 4 million people left their jobs during the pandemic, we are in a very competitive work environment and candidates have choice. So, you want to be the place people want to go to and be part of every day.”

It's understood that high performers can have mental health conditions, so for companies looking to attract and retain high performing talent, having support in place can help these employees stay ahead of any issues and take care of their needs. “Right now, employers are really looking for high performing individuals in the service industry, in the tech industry, in the finance industry. And we know that people who are high performers may have mental health conditions,” says Darcy. “So, companies recognize the increased need for services and support.”

Finally, employers should understand there is a connection between mental health support and employee engagement. “If you're an employee in an organization that shows they care about you, not just your physical health, but your mental health too, you're going to go to work every day and feel much better about the fact that your organization cares about you. In turn, you will be more likely to be a high performer, whether you live with a condition or not,” says Darcy. “Employees in the field, they are representing the brand of the organization. And the more they feel good about what they're doing because they're being treated well and they're in a culture that cares about them, the more they're going to project a positive image for the brand.”

#4: Male Dominated Industries Lag in Addressing Mental Health 

When you consider that much of our audience is comprised of industries that are still male-dominated, it’s important to acknowledge the reality that these industries tend to lag in normalizing mental health and creating at-work support. “Stigma is associated with mental health conditions in many industries. I think industries that tend to be male dominated, like many that have people who work out in the field, there can be perceptions that you should be tough. Just stick it out, suck it up,” explains Darcy. “There’s this tendency to want to send the message that they're strong and they're tough and that somehow mental health can be linked with weakness. We still all must work at breaking down some of those stereotypes and breaking down the stigma.”

How do we do this? There’s no quick or easy way but recognizing the impact of opening up personally and being willing to engage in conversation is an important start. “There's a real opportunity, but we have to chip away. It's not like we're going to wake up one day and the stigma will be gone. We all have some responsibility, like we're doing here, to have conversations about it and to say it's not a matter of weakness. It could be really a matter of strength to seek help when you need it,” says Darcy.

#5: Mental Health Initiatives Don’t Need Require a Huge Investment

I find this point to be so very important, which is mental health initiatives do not need to be based on a big budget or huge investment. This could be a barrier for organizations in taking action, so I appreciated Darcy pointing out that companies of any size, scale, and financial status can take steps to have a positive impact. 

“A focus on mental health is not a massive investment. This is recognizing human nature and reminding employees they're appreciated and rewarding them when the time is right,” explains Darcy. “I mean, one simple piece of advice is for managers and leaders to ask themselves, is this an organization that I feel good about being part of on a daily basis? And if it's not, what minor changes can we make to make it more so?”

Just starting there is starting – and that matters far more than feeling you must have a perfectly planned formal program to “begin.” Darcy also suggests asking your employees for their input. “Think about surveying your employees because they have really good ideas,” she says. “Believe it or not, it's often not about a lot of frivol that'll cost a lot of money. It's sometimes just simple policy changes that are very workable that can make all the difference in the world. And this all hits the bottom line when it comes to retention and recruitment and really meeting the organizational goals.”

#6: Leadership Sets the Tone on Mental Health at Work

While it is important to ensure your company is taking a programmatic approach to prioritizing mental health and providing employees support, it’s also important to remember that authenticity and a personal touch can be the difference in how that program feels to your employees. “A check-the-box approach does not work well. If you do one training and say, we did a mental health training, we are good, that is not going to make a big change for your organization. And leadership sets the culture,” cautions Darcy. “So, the more leadership is visible in talking about mental health, the more it's happening at a leadership level and operational and managerial level.”

We all get busy, and often leaders are juggling immense responsibility. But making a human connection with your team a priority is well worth the effort. “It's really important to recognize we all get busy and sometimes we forget,” says Darcy. “Create simple reminders around I'm part of the culture, I need to be real about making it a mentally healthy culture, and so on.”

#7: Burnout Isn’t an Individual Issue

As I mentioned, the podcast with Darcy that will publish on Wednesday is discussing six ways employers can alleviate burnout. I won’t give too many spoilers here, but I will say that Darcy expressed that we must recognize that burnout isn’t simply and individual issue – and that it was becoming a major issue even before the pandemic. “Burnout became an issue of major concern in 2019 when the World Health Organization announced a new definition. It is not a product of COVID-19,” explains Darcy. “It's important to know that because we were already heading into concerns with occupational burnout and that has obviously been intensified.”

While every individual has a responsibility to take care of themselves and speak up if they need support from their employer, Darcy stresses the fact that we cannot blame burnout solely on individuals or expect the issue to resolve without the shared ownership of employers. “I think when people think of burnout, they think individuals should just get over it. More exercise, more sleep, better diet, don't take stress so seriously,” she describes. “What the research shows is that, yes, we have individual responsibility when it comes to burnout, but there's a huge amount of responsibility that comes from organizational change, operational change.”

#8: There Are Ample Resources to Support Businesses Making Mental Health a Priority

Before I was introduced to Darcy for the podcast, I wasn’t familiar with the Center for Workplace Mental Health or the resources it provides – free of cost. So, if you are struggling with where or how to start or feel your employer is lacking in their efforts around mental health, know that there are resources to help increase awareness, provide information, and assist in creating impactful programs. Learn more at www.workplacementalhealth.org.   

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September 12, 2022 | 10 Mins Read

The Role of the Modern CSM in Delivering Outcomes for the IIoT

September 12, 2022 | 10 Mins Read

The Role of the Modern CSM in Delivering Outcomes for the IIoT

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By Sarah Nicastro, Creator, Future of Field Service

I recently talked with Scott Weller, Partner of Mossrake Group, after reading an article he’d written on LinkedIn that caught my eye. In his article, he touches on some of the intricacies that come into play when a company moves toward guaranteeing outcomes on connected digital assets. You may remember Scott from the podcast, he joined me for episode 122 where we talked about what it takes to bring the As-a-Service opportunity to life. 

Scott has extensive experience in the industry, having served in leadership roles at Xerox, IBM, HP and HPE prior to co-founding Mossrake Group to aid companies on the As-a-Service journey. Reflecting on how things have evolved over his career, we discussed that, in the age of the IIoT, companies must take terms that have existed for ages – like “outcomes” and “CSM” – and redefine them to fit today’s realities. In the following Q&A, I ask Scott to share his perspective on key considerations for companies aiming to succeed at an outcomes-based approach in the IIoT era.

Sarah Nicastro: When we talk about delivering outcomes, can you share your perspective on what that means today and why it's so important?

Scott Weller: It seems everywhere you look these days, there's evidence of a secular trend away from asset ownership economy to outcomes economy. Whether you're talking about air conditioning or jet engines, or IT, sports cars, and so on, it's everywhere. It demonstrates that people, both consumers and businesses, are starting to really calibrate around what matters most to them.

For businesses, it's understanding what's core to what they do versus perhaps critical assets or capabilities beyond the business they're in. Defining what it is they don’t want to focus on; they don't want to be famous for. And in those cases, really thinking more in terms of what the outcome is they want and to get that from a partner versus working to assemble themselves all the things required to achieve that outcome. They decide to give that to somebody else to worry about.

Sarah Nicastro: So ultimately customers want more peace of mind?

Scott Weller: Yeah, I think that ties in with the CSM discussion. So, let's say you've signed up to receive a certain outcome. The way that gets delivered to you is both the tangible features or capabilities, but also the experience. And ultimately things do go wrong. Things happen, particularly if there's an asset underneath. What you really want to know is, everything is being handled and will be okay.

Particularly if it falls into that category of things you don't want to be famous for – just tell me everything's fine, and if it's not, tell me what you're doing to bring it back to all good. So yes, I completely agree. Peace of mind doesn’t feel like a technical term, doesn't feel like anything that a business would promise, but in the end, that's what we're talking about. Peace of mind on those things that I don't want to be famous for, so I can get on with my business and focus on the things I do want to be famous for.

Sarah Nicastro: So, if the idea of delivering outcomes has been around for a long time, what is different about doing so with connected assets?

Scott Weller: In the end there are a few aspects to this. One is the expectations of the outcome, not in terms of day to day, am I receiving the outcome I want? But how is my supplier looking at this relationship? In the digital world, it is no longer possible for the outcome to be just a transaction. First, you have enablement for a much richer experience, but also the expectation that you're on top of things. You're watching things, you're ahead of the game, you're doing predictive analysis, you’re doing everything you can so that the outcome isn't disrupted in any way. So, I think it's both on the demand and supply side that things do change given a digital environment.

We talk a lot about the value of data, but the smart suppliers know the value isn’t data in its raw form. In fact, a lot of times what the customer needs to know isn't even in the raw data that they're seeing. It must be formulated, it must be developed, and it has to be communicated back in a very simple conversation to the customer. This is part of the expert advisor role that a CSM should play.

Sarah Nicastro: What is your synopsis of what the CSM role should be in this scenario and how is that maybe different than what some people's perception of that role would be historically?

Scott Weller: I wouldn't want to claim that we have the perfect design, but over many clients what we see are, some customer success managers are essentially a little more than brand ambassadors, after-sales brand ambassadors. And I think that's probably okay in some domains. The most common kind of CSM role description leads to them being very reactive. I call it the wailing wall. Every problem that a customer has, whether it's germane or not, goes to the CSM community for them to resolve. 

What’s different about the CSM we’re talking about here is that they aren’t just a “nice to have.” But a requirement in delivering outcomes, particularly on digital assets. This is someone who's quite proactive, someone who speaks the language of the customer's business, not just the technology that they're using to deliver the outcome. They tend to have a good “bedside manner.” They are viewed as an expert advisor – someone the customer has total confidence in, ideally, and trusts in their ability to address issues and deliver the outcomes. We see the CSM as being the point person for the supplier in delivering the outcome. It's their responsibility to make sure it gets done.

Sarah Nicastro: So, we talked about an important point that today's customers expect a lot more than just an individual that is passing along data, right? How would you say that this modern CSM needs to be enabled to be effective for role they should be serving today?

Scott Weller: Customers often have access to the raw data themselves. To interpret that into either everything's okay or we think there may be an issue in the future and we're going to do this or that about it, that's the real value that a CSM can provide and is often baked into an outcome solution.

And so, the data set is part of the enablement for modern CSM. But they have to do smart things with it, turn it into a proactive operation. Predictive analytics should be interpreted directly by the CSM and conveyed in simple insights. Some will have a lot of experience, but as we all know, skill shortages drive us to trying to codify some of this institutionalized knowledge into analytics that can be shared with others. So, enablement is a combination of really great tools; the underlying products being digital themselves, so that they're talking about themselves in real time; and doing that in a centralized data lake way. And then the other analytics that can be done on top of that. That's all key to supporting a great conversation between the CSM and the end customer.

Sarah Nicastro: When you hear a company say, "We want to be a trusted advisor,” what are they trying to accomplish?

Scott Weller: Well, the cynical response would be that this is a term that every sales team wants to use. But at the end of the day, there's definitely truth in it. Customers ultimately want to trust their suppliers, not only to give them fair pricing, but also to do what they say they're going to do

Cynicism aside, it is something that every supplier should aspire to because it leads to all good things. It's better for the customer, it's better for the supplier. But this is where trust is one of those things that's earned. And I think a supplier that does what they say they're going to do is proactive, does interpret the data into the language of the customer's business. These are all things that build that trust.

Sarah Nicastro: It’s almost a status that you can claim, but you really only achieve if your customers view you that way, right? Whether or not your customers would describe you as a trusted advisor is the real indicator of whether you're providing the type of value you should be providing in the outcomes economy.

Scott Weller: What we see within an outcomes-based solution is the ability for that CSM to become part a route to market. Because they're known not to be sales folks. They're focused on ensuring the customer gets the value, receives the outcomes that they've contracted for. When there are issues, the CSM demonstrates high integrity and getting those resolved timely. That all leads to a natural conversation of, "Hey, I've got another site that I want this outcome delivered to," or "I want more help here," or "I'm going to tell my colleagues in the industry."

It's the notion of what we call "land and expand." Once you've established that trust and you've established the solution, it's not long before customers do see that, "Wow, this is great, and I just want this everywhere." And we're even having clients ask us, "So how do I get my other suppliers to do what you guys are doing for us?"

And that's why I say this is a secular trend that will snowball going forward. It's unstoppable now. But of course, it all comes back to, is the person, is the company delivering what they said they were going to do? Delivering outcomes is, I would say, an advanced topic for a lot of companies still. And that's where we spend a lot of our time, helping them get there.

Sarah Nicastro: When you think about your clients that are using CSMs in a modern and impactful way, are there best practices people should be thinking about?

Scott Weller: I'm not sure we've landed on a training guide for CSMs. We are in fact working on one for one of our clients, but I think recognizing that this is a different kind of individual or perhaps a different experience, that is key. One of the clients we worked with really struggled with the role, because the typical source for these individuals was out of the service delivery organization and the pay scales for the kind of individuals we needed were above what anybody there was getting paid. 

It was almost like we were looking for director level people, and it was just unheard of that you'd have director level people in a CSM role. This is an example of a standard that needs to be recalibrated to really be successful in today’s landscape. But I do think it's like any profession, there are people who are just naturals at it and others you have to cultivate and the real question for most of our clients is, "Well, what do we do if this new As-a-Service offer really takes off? Where are we going to source all these people?"

I've been talking about what I call a CSM university. How do you get these people through a program where you can take high potentials put them through a program like this? Typically, you’d find them in traditional services, but it could be from anywhere actually, if they have the technical knowledge and the other attributes, they can be successful. I think it is a new profession.

Sarah Nicastro:  If you were to look ahead three or five years and anticipate what the role of the CSM will look like in delivering outcomes, what are your thoughts?

Scott Weller: I think we'll see a lot more people in the profession as we've sort of defined the new version of the classic role. I think we will see some formalizing around maybe not a CSM university, but some sort of training programs that reorient people, maybe who've done a CSM role in the past or not. But to orient or reorient people to what we've been talking about, having to learn the customer's business language. Learning how to have that bedside manner, how to summarize data and insights to, ideally, being able to say, "Everything's fine." When there’s an issue, here's what we're doing to address it. Understanding that peace of mind is key. Otherwise, you really haven't achieved what you promised because now the customer thinks they've bought something that lets them focus elsewhere, but they're still caught up in the drama of owning a bunch of assets. And that's the last thing that they want to have.

We will have to hire more senior level or be willing to promote into more senior level people to these positions, because what doesn't work is if the CSM goes into a situation and the customer’s first reaction is, "We want to talk to your boss." You shouldn’t get to that point often at all if you have the right kind of person in front of the customer who can assuage these situations and have the confidence of the customer to do what they said they're going to do. And that's a confidence or trust that's built over time.

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August 29, 2022 | 9 Mins Read

10 Reasons Service Innovation Fails: Part Two

August 29, 2022 | 9 Mins Read

10 Reasons Service Innovation Fails: Part Two

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By Sarah Nicastro, Creator, Future of Field Service 

This is part two of a two-part article discussing some of the reasons that service innovation fails. No, it isn’t meant to be depressing – but to give some food for thought on common missteps and roadblocks so you can avoid them. If you haven’t yet read part one, do so here.

(If you refuse to read part one first, just know that the insights featured in this article are from innovation thought leaders Frank Mattes, author, advisor & founder and CEO of Lean Scaleup and Dan Toma, award-winning author of the Corporate Startup and Innovation Accounting, and co-founder of innovation advisory firm OUTCOME.)

#6: Companies Believe Innovation Will Detract from the Core Business

There’s no denying the fact that juggling the demands of today’s business while planning for the business of the future is complex. But in today’s competitive landscape, it is also necessary. What companies sometimes overlook is that, if structured well, it is possible to focus on innovation without detracting from the performance of the core business. “If you look at the broad scale, companies are investing 70% in keeping their existing products and services relevant. Modernizing them, integrating speech interfaces and touch screens. Adding in one more functionality,” explains Mattes. “That’s perfectly fine, right? But the point is that it still locks the company inside the box. If the box changes, then it becomes hard. Therefore, we need to think wisely about where and how to spend the 10% innovation budget. That’s the average for innovation that is aiming at changing the order of things.”

These metrics clarify that innovation doesn’t have to detract from the core business in terms of budget, but it also doesn’t have to detract from the core business in terms of talent. In fact, Mattes has found with many of the organizations he worked with in writing the Lean Scaleup that for a company to innovate well, it only needs a small percentage of its workforce that are geared toward innovation. “Three of my clients said, ‘Well, Frank, we don’t need 100% of our staff to be really innovative. It’s only 4%, 6%, and 12%.,’” he says. “That’s what those three companies said. Four percent was an automotive company, six percent was a bank and 12 percent was a telecommunications company. You only need a fraction of people who understand innovative ideas and how they could be translated into the machine of the day-to-day business.”

Finally, we’ve seen in companies we’ve interviewed for the Future of Field Service podcast that even when more innovative offerings are introduced – say As-a-Service – you don’t have to rush in moving away from how you serve customers with your core business. In Kaer’s story, for instance, Dave Mackerness discusses the slow transition from core business to the As-a-Service concept to transitioning entirely to Cooling-as-a-Service. 

#7: Companies Fail to Scale Innovation

“It turns out, it’s quite easy to drum out ideas and do some small-scale experiments,” says Mattes. “But, when it comes to really making it big, this is where seven out of eight of big ambitions fail.” What Mattes has centered his focus on is helping companies to scale innovation because he’s found that the majority of the challenge isn’t in developing innovative ideas, but in making them work at scale within a traditional business. 

“These companies have built their organization as a machine, executing the same processes over and over again. Over the years, they have fine-tuned what they need to do, doing that flawlessly and most efficiently. There’s a lot of expertise in there, creating, delivering value at scale, and earning the margins,” he describes. “The problem is, when these companies set up their innovation ambitions, they found an innovation center or a digital lab, or an incubator, accelerator, or a corporate venture builder – there are several concepts and terminologies out there. But, for the sake of simplicity, let’s say there’s a little garden where smart people can think about the future. Then you have two systems. On the one side you have your day-to-day operations. Where customers log in their orders, which are then processed. The supply chain does its work, and the stuff is being shipped and serviced out in the field, et cetera. That’s a day-to-day business. And on the other side, you get those crazy ideas. There’s no problem in that. The problem arises when you try to make those bold ideas that should change the order of things big.”

When I talk with our audience in manufacturing who see the potential in Servitization, I think many would agree with the feeling of fighting against a “machine.” And this barrier to innovation isn’t anyone’s fault – that machine is what has led the company to its success thus far. However, staying stuck within the machine can also be what keeps a company too deeply rooted in its legacy to see what’s needed to continue its success into the future. 

The changes that need to be made to allow for Servitization to grow from concept to reality often fight against the nature of a proven business, which is typically very short-term numbers driven. “The management system that you have, that you need for that day-to-day business is about efficiency, productivity, short term views and no risk. Risk is not a good thing if you want to have those processes,” says Mattes. “Now the people who have been playing out in that innovation playground come and say, ‘Let’s make this big. Let’s build a factory. Let’s build processes. Let’s recruit new people to sell that new stuff.’ This really conflicts with the management system that you have for the day-to-day business.”

Hope is not lost, however. Many companies are determining how to take those innovative ideas and integrate them in a way that they can scale – and mindset can’t be underemphasized. “When you want to achieve scale, you need to have a different thinking. The thinking rooted towards the running day-to-day businesses with a monthly, quarterly, annual horizon needs to shift to look at how you leverage all the good things that you’ve built up in the last 30, 40, 100 years of your corporate history. If you look at it, there’s so much there of corporate assets and corporate capabilities that could be the foundation of that future. With new value pools and new revenue streams,” says Mattes. “Innovation isn’t a conflict about people, but a conflict about systems. You need to establish a collaboration model. You need to define what is to be done in that transitional phase. It is a phase, when the ‘blue shirt’ innovators gradually hand over the responsibility for scaling up, and then actually running it at scale to the ‘red shirts.’

#8: Leaders Lack Courage

If you think about the layers of change that adopting not only a new mindset but a shift in systems and collaborative processes means for an organization to become adept at true innovation, you begin to understand the critical role leadership plays. To lead a company through innovation, especially if it is a company that has is working to modernize beyond its legacy business, takes courage. And not only courage, but tenacity. Not every leader is willing to take on what is necessary to succeed at innovation and this is another reason we see companies lag. 

“Apart from the right thinking, tools, culture, and management systems, it takes courage to leave a little sheet of ice where the company lived comfortably over the last 30, 40, 50, maybe even 100 years, and venture out into the wild. Into the unknown, because some leaders recognize that the little sheet of ice is based is getting smaller and smaller by the year,” says Mattes. 

But today’s leaders have a choice. “If you don’t take your future into your own hands and future-proof the company, the forces of the market will determine your future. In many cases this will not be the better option,” cautions Mattes. “Leadership plays an essential role in here. You can have the best process with all the jumps in between, all the validation, all the technology, you might even have a set up a collaboration model. But once leadership doesn’t support it, it all cracks. If you look on our website, leanscaleup.com, there’s a visual where we say out of the many cog wheels that run in the day-to-day business, leadership is that cog wheel that takes it out and creates that environment for the unfair advantage. It’s a leadership task, and in my view, it’s THE leadership task, to answer the question, how can we win today? How can we win the now? While at the same time, future-proofing the company, creating the NEW. Everything else delineates from there.”

In my conversation with Howard Bowland of Schneider Electric, we talked a lot about the traits leaders need to spark and sustain innovation as well as the traits of those who make for a strong team to spearhead innovation in a legacy business. 

#9: Short Sightedness is Fueled by Unrealistic Expectations

We discussed that the core business is structured to focus largely on the short-term. In his latest book, Innovation Accounting, Dan Toma discusses why innovation and standard accounting don’t go well together. “In innovation, we are essentially trying to build things that are not that heavy on assets and financial accounting, looking at the value of a company or value of an idea through the number of assets it employs. With innovation, we’re doing the exact opposite,” he says. And this can be a hurdle that is hard for companies to overcome, because when they seek to measure the success or failure of innovation based on their standard accounting practices, they aren’t allowing the room companies need for innovation to develop from idea to concept to value. 

Toma, who has led numerous start-ups, relays what businesses looking to innovate must learn from the start-up mentality. “We sought to build a complimentary system to financial accounting, that’s able to account for early-stage innovation. If we started a startup tomorrow, we are probably not going to be profitable for the next quarter or for the next two years,” he explains. “So, we need to have a system that allows us to say, ‘Yes, this idea is going to be successful, but in the future, not now, let’s not discontinue it.’”

A measurement system for innovation that takes these points into consideration helps leaders who are supporters of innovation protect the company’s investment of time, money, and resources into seeing the process through. “Otherwise, we might fall into the classical corporate trap where we value everything through the lens of financial accounting, and guess what we’re going to do?” asks Toma. “We’re always going to prioritize the core business and investment in the core business. And we are going to do that by always putting on the back burner innovation until we actually need them. And when we need them, we’re going to be sitting there and looking at our ourselves and say, ‘Okay, so where’s the innovation that should have saved us now?’ Well, it’s nowhere to be found. Why? Because we just used the wrong metrics whenever we had to take investment decisions.”

I am not an accounting expert by any far stretch of the imagination, so I expected Toma’s book to be a struggle for me to read. However, I was pleasantly surprised by the book’s readability, due in part to the analogies and anecdotes used. “I always give this simple example: if we take our kids to a swimming competition, they have their own benchmarks for their age bracket. We are never going to evaluate a 10-year-old swimmer or a 15-year-old swimmer for the performance of somebody that just won a medal in the Olympics, because it’s just impossible for a 10-year-old to compete with a 20-year-old and be able to hit the same benchmark,” Toma describes. “So, if we do that in sports, why don’t we do it with businesses, with innovation? Why do we compare an idea that was essentially founded three months ago or three weeks ago, or three days ago with a core business that we’ve had for a hundred years? We should never do that because we’re going to be super disappointed by what we have in front of us, what we’ve learned. And because of that, we’re just going to invest in the core business.”

#10: Companies Ignore the Reality that Innovation is Iterative 

Finally, we need to fight the urge toward complacency and learn to never rest on our laurels. In the digital age everything moves faster, including the need to innovate – which means companies need to build an innovative mindset, culture, and system that can work iteratively over the long term. Not every innovation will be of the disruptive sort but focusing on creating a machine that fosters creativity versus nurtures the legacy is an investment in your future. 

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August 18, 2022 | 13 Mins Read

10 Reasons Service Innovation Fails: Part One

August 18, 2022 | 13 Mins Read

10 Reasons Service Innovation Fails: Part One

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By Sarah Nicastro, Creator, Future of Field Service

It’s exciting when we see the success of service organizations who are embracing the opportunity to innovate and seeing the impact of their efforts. Take, for example, the stories of how companies like Baxi, Kaer, and Schneider Electric have introduced As-a-Service offerings to replace their historical transactional models. 

But while there’s inspiration and wisdom to be gained from triumphs like these, there’s also value in understanding the trials – what is preventing companies from succeeding? 

It helps to understand the complexity that exists around service innovation. When we’re talking about bigger-picture, disruptive innovation we’re typically referring to a company that has a long history with a particular business model looking to completely reinvent the way it goes to market, sells, and services. It’s not only an identity shift but also a process that in many ways goes against the momentum of the “machine.”

I’ve recently had the pleasure of connecting with two innovation thought leaders that I’ve learned so much from – Frank Mattes, author, advisor & founder and CEO of Lean Scaleup and Dan Toma, award-winning author of the Corporate Startup and Innovation Accounting, and co-founder of innovation advisory firm OUTCOME. Frank and Dan both cover different perspectives and have so much knowledge to explore – they are both worth a follow.

From my handful of conversations with them, I have put together a list of 10 reasons that service innovation fails. This isn’t an exhaustive list, by any means, but it gives you some cautionary points to be aware of and consider. 

#1: Companies Ambiguously Define Innovation

“Innovation is the creation of new value,” says Toma. “Digital transformation is around keeping existing business models and processes valuable in the digital age, which improves customer satisfaction and lowers operational costs. Confusion comes in because companies think innovation is a one size fits all type of word, but one of the big lessons learned for us is that when you want to start doing innovation, the first thing you need to do is to define what innovation means for your organization.”

There are different ways to define innovation, but one thing that tends to happen is that a company wants the benefits of bigger, more disruptive innovation from the efforts of more incremental improvement. Digital transformation is one example of more incremental improvement – it, in and of itself, isn’t changing the core business, but rather improving upon it. Yet companies expect that once they’ve invested in digital transformation, they’ll see the results of bigger innovation – which is only possible if that investment is used to drive further change in the business, aka disruptive innovation.

“Innovation is a game that you play three to five years in advance,” says Mattes. “I define innovation as capturing the value from meaningful insights via new offerings that change the order of things. It’s not about ‘new stuff’ – it’s about value, and value is defined by the customer. It’s also about capturing the value or collecting the dollars and the cents of that value. The last point, new offerings that change the order of things, means new business models, new go-to-market strategies, etc. We are talking about big steps here. Changing the order of things, thinking outside of the box, if you will. If it’s in the box, if it doesn’t change the order of things, and then we have incremental innovation.”

#2: Companies Fail to Realize Service Innovation = Business Transformation

Within our audience specifically, one of the issues we see is that companies think they can innovate within service as a silo. While this is possible, incrementally, in the form of service transformation, if the company desires the more disruptive innovation of a shift like Servitization or moving to an As-a-Service model, the conversation changes. At this point, it becomes critical to reconcile the fact that what we’re really talking about is business innovation – not service innovation. This means that it’s a journey for the entire organization, not for service alone.

What today’s customers are demanding from companies are outcomes, guarantees, peace of mind – and that is a different way of doing business than transactional service. This is prompting companies to examine the layers of business transformation needed to evolve fully to a new value proposition. Aspects like go-to-market, financing and revenue recognition, sales and marketing, customer success, and many more arise as a part of bigger-picture service innovation. 

#3: Companies Expect Operational Talent to Lead Innovation

I’ve seen pressure on service leaders to juggle both the needs of the day-to-day business while creating a strategy for innovation. Not only is this an impossibly tall order, but it also often isn’t realistic to ask your operational talent to think as creatively as necessary for true innovation. 

“The skill that you need for digital transformation, the capabilities you need for digital transformation are not going to be sufficient once you’re trying to innovate. Let alone the talent. If you are trying to hire somebody and that particular person has an amazing track record of helping organizations digitally transform, they’re not going to be the right person for disruptive innovation. You need different skillset, different personalities. This is another reason it is important to make the distinction before you start investing,” says Toma.

Mattes explains the importance of each type of talent, as well as the degree to which overlap is needed, by segmenting into “red shirts” and “blue shirts.” This terminology was born of the book Blue Ocean Strategy, published in 2004 and written by W. Chan Kim and Renée Mauborgne, which describes a new market with little competition versus the “red ocean” of cutthroat competition. “As we consider innovation, it’s helpful to say the day-to-day operations are the people working in the red oceans or what I call the ‘red shirts.’ Those working to find new value pools, they are the ‘blue shirts.’ You need both. You need to own the business NOW and in the future in the NEW,” explains Mattes. “One is not good and the other bad, they are both important. They are living in different systems that were designed for different purposes. So, we come to that million-dollar question in the truest sense of the word: how do we make them work together?”

#4: Companies Narrow Their View of What’s Possible 

Another stumbling block of innovation is that companies unintentionally, even subconsciously, limit their perspective of what is possible. This can be habitual, rooted in legacy, a factor of long-term talent, sticking with examples only within one’s industry, or a variety of other reasons. To embrace disruptive innovation, we must be more comfortable thinking out of the box – often this can be prompted by expanding your perspective and seeking inspiration beyond your own industry. 

“I think of some work I’ve done with a 150-year-old insurance company out of Germany where the head of the innovation lab was tasked to think beyond core and to build the insurance of the future,” retells Toma. “The problem for him was that despite the new lab that he had, the new processes that he used, all the thought leadership that he brought in, HR was only hiring people that had insurance written on their CVs. People that worked with other insurers in the region, sometimes even brought them from abroad. And he said, ‘I can’t innovate with these people, because these people can only think insurance in the way that insurance has been for the last 100 years. I need to have people that come from automotive. I need to have that come from the music industry, from entertainment, from travel, people that think differently about insurance, because they don’t have that legacy.’”

If your objective is disruptive innovation, often fresh perspective is incredibly important. 

#5: Companies Attempt to Define Value (Versus Accepting that Value is Defined by the Customer)

If you aren’t innovating from the outside-in, you’re taking incredible risk in missing the mark. Your customers’ needs should dictate where you focus your efforts. This doesn’t mean your customers know exactly what they want or need five years from now – it usually isn’t as easy as simply asking. You will need to be creative and determine what value will hit the mark in three or five- or ten-years’ time – but the point is, it should all be centered around their challenges, opportunities, and needs. 

“So many organizations are building it backwards from what we were used to doing in the outside world, in the startup scene,” says Toma. “Essentially, they were starting from a business plan. Financing the whole thing based on this plan and then after six months, they would put a prototype in the hands of a customer only to learn that it doesn’t work.”

This type of inside-out innovation is costly and can deter a company from future innovation because rather than the particular approach being deemed a failure, the overall effort is categorized as such.

Stay tuned next week for part two!

By Sarah Nicastro, Creator, Future of Field Service

It’s exciting when we see the success of service organizations who are embracing the opportunity to innovate and seeing the impact of their efforts. Take, for example, the stories of how companies like Baxi, Kaer, and Schneider Electric have introduced As-a-Service offerings to replace their historical transactional models. 

But while there’s inspiration and wisdom to be gained from triumphs like these, there’s also value in understanding the trials – what is preventing companies from succeeding? 

It helps to understand the complexity that exists around service innovation. When we’re talking about bigger-picture, disruptive innovation we’re typically referring to a company that has a long history with a particular business model looking to completely reinvent the way it goes to market, sells, and services. It’s not only an identity shift but also a process that in many ways goes against the momentum of the “machine.”

I’ve recently had the pleasure of connecting with two innovation thought leaders that I’ve learned so much from – Frank Mattes, author, advisor & founder and CEO of Lean Scaleup and Dan Toma, award-winning author of the Corporate Startup and Innovation Accounting, and co-founder of innovation advisory firm OUTCOME. Frank and Dan both cover different perspectives and have so much knowledge to explore – they are both worth a follow.

From my handful of conversations with them, I have put together a list of 10 reasons that service innovation fails. This isn’t an exhaustive list, by any means, but it gives you some cautionary points to be aware of and consider. 

#1: Companies Ambiguously Define Innovation

“Innovation is the creation of new value,” says Toma. “Digital transformation is around keeping existing business models and processes valuable in the digital age, which improves customer satisfaction and lowers operational costs. Confusion comes in because companies think innovation is a one size fits all type of word, but one of the big lessons learned for us is that when you want to start doing innovation, the first thing you need to do is to define what innovation means for your organization.”

There are different ways to define innovation, but one thing that tends to happen is that a company wants the benefits of bigger, more disruptive innovation from the efforts of more incremental improvement. Digital transformation is one example of more incremental improvement – it, in and of itself, isn’t changing the core business, but rather improving upon it. Yet companies expect that once they’ve invested in digital transformation, they’ll see the results of bigger innovation – which is only possible if that investment is used to drive further change in the business, aka disruptive innovation.

“Innovation is a game that you play three to five years in advance,” says Mattes. “I define innovation as capturing the value from meaningful insights via new offerings that change the order of things. It’s not about ‘new stuff’ – it’s about value, and value is defined by the customer. It’s also about capturing the value or collecting the dollars and the cents of that value. The last point, new offerings that change the order of things, means new business models, new go-to-market strategies, etc. We are talking about big steps here. Changing the order of things, thinking outside of the box, if you will. If it’s in the box, if it doesn’t change the order of things, and then we have incremental innovation.”

#2: Companies Fail to Realize Service Innovation = Business Transformation

Within our audience specifically, one of the issues we see is that companies think they can innovate within service as a silo. While this is possible, incrementally, in the form of service transformation, if the company desires the more disruptive innovation of a shift like Servitization or moving to an As-a-Service model, the conversation changes. At this point, it becomes critical to reconcile the fact that what we’re really talking about is business innovation – not service innovation. This means that it’s a journey for the entire organization, not for service alone.

What today’s customers are demanding from companies are outcomes, guarantees, peace of mind – and that is a different way of doing business than transactional service. This is prompting companies to examine the layers of business transformation needed to evolve fully to a new value proposition. Aspects like go-to-market, financing and revenue recognition, sales and marketing, customer success, and many more arise as a part of bigger-picture service innovation. 

#3: Companies Expect Operational Talent to Lead Innovation

I’ve seen pressure on service leaders to juggle both the needs of the day-to-day business while creating a strategy for innovation. Not only is this an impossibly tall order, but it also often isn’t realistic to ask your operational talent to think as creatively as necessary for true innovation. 

“The skill that you need for digital transformation, the capabilities you need for digital transformation are not going to be sufficient once you’re trying to innovate. Let alone the talent. If you are trying to hire somebody and that particular person has an amazing track record of helping organizations digitally transform, they’re not going to be the right person for disruptive innovation. You need different skillset, different personalities. This is another reason it is important to make the distinction before you start investing,” says Toma.

Mattes explains the importance of each type of talent, as well as the degree to which overlap is needed, by segmenting into “red shirts” and “blue shirts.” This terminology was born of the book Blue Ocean Strategy, published in 2004 and written by W. Chan Kim and Renée Mauborgne, which describes a new market with little competition versus the “red ocean” of cutthroat competition. “As we consider innovation, it’s helpful to say the day-to-day operations are the people working in the red oceans or what I call the ‘red shirts.’ Those working to find new value pools, they are the ‘blue shirts.’ You need both. You need to own the business NOW and in the future in the NEW,” explains Mattes. “One is not good and the other bad, they are both important. They are living in different systems that were designed for different purposes. So, we come to that million-dollar question in the truest sense of the word: how do we make them work together?”

#4: Companies Narrow Their View of What’s Possible 

Another stumbling block of innovation is that companies unintentionally, even subconsciously, limit their perspective of what is possible. This can be habitual, rooted in legacy, a factor of long-term talent, sticking with examples only within one’s industry, or a variety of other reasons. To embrace disruptive innovation, we must be more comfortable thinking out of the box – often this can be prompted by expanding your perspective and seeking inspiration beyond your own industry. 

“I think of some work I’ve done with a 150-year-old insurance company out of Germany where the head of the innovation lab was tasked to think beyond core and to build the insurance of the future,” retells Toma. “The problem for him was that despite the new lab that he had, the new processes that he used, all the thought leadership that he brought in, HR was only hiring people that had insurance written on their CVs. People that worked with other insurers in the region, sometimes even brought them from abroad. And he said, ‘I can’t innovate with these people, because these people can only think insurance in the way that insurance has been for the last 100 years. I need to have people that come from automotive. I need to have that come from the music industry, from entertainment, from travel, people that think differently about insurance, because they don’t have that legacy.’”

If your objective is disruptive innovation, often fresh perspective is incredibly important. 

#5: Companies Attempt to Define Value (Versus Accepting that Value is Defined by the Customer)

If you aren’t innovating from the outside-in, you’re taking incredible risk in missing the mark. Your customers’ needs should dictate where you focus your efforts. This doesn’t mean your customers know exactly what they want or need five years from now – it usually isn’t as easy as simply asking. You will need to be creative and determine what value will hit the mark in three or five- or ten-years’ time – but the point is, it should all be centered around their challenges, opportunities, and needs. 

“So many organizations are building it backwards from what we were used to doing in the outside world, in the startup scene,” says Toma. “Essentially, they were starting from a business plan. Financing the whole thing based on this plan and then after six months, they would put a prototype in the hands of a customer only to learn that it doesn’t work.”

This type of inside-out innovation is costly and can deter a company from future innovation because rather than the particular approach being deemed a failure, the overall effort is categorized as such.

Stay tuned next week for part two!

Stay Connected

Related Content

As AI Unlocks the Promise of IoT, It’s Time to Double Down on Service Innovation

From IoT to GenAI and Beyond: Advice for Building Intelligent Connected Solutions

What Does It Take to Thrive Vs. Merely Survive in the Experience Economy?

Most Recent

The “Fail Fast” Mantra: Empowering or Anxiety-Inducing?

The Untold Truths of Service Leadership: Part One – Navigating Business Complexities 

What Role Do AI Agents Play in Your Field Service Talent Strategy?