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December 16, 2020 | 28 Mins Read

Schneider Electric on The Move to Delivering Outcomes

December 16, 2020 | 28 Mins Read

Schneider Electric on The Move to Delivering Outcomes

Jerome Soltani, Sr. VP of U.S. Services and Alex Gershman, Director of Strategy, Services and Solutions both at Schneider Electric join Sarah to discuss the inflection point service is at, the excitement that holds, and the challenges organizations face in bringing outcomes-based service potential to fruition.

Welcome to The Future of Field Service podcast. I'm your host, Sarah Nicastro. I'm excited to have today on the podcast a couple folks from Schneider Electric, talking about the company's move to delivering outcomes. If we look back over the podcast we've recorded this year, I think it's safe to say a majority of them have been about the path to outcomes based service and to organization. And there is some really good reason for that.

Sarah: I mean, first of all, I think it is the big evolution that companies are working on and toward. And hearing these stories I hope, for you, our listeners, gives you some light bulb moments that you're able to learn from and take back into your own businesses. I think these journeys are complex, as we're about to discuss, and I think sharing them with one another is fantastic because we all have something to learn from each other's stories.

Sarah: So, with that being said, I'm thrilled to welcome to the podcast today, Jerome Soltani, who is the senior vice president of US Services at Schneider Electric, as well as Alex Gershman, director of strategy, services and solutions at Schneider. Jerome and Alex, welcome to the podcast.

Jerome: Thank you. Thank you, Sarah.

Sarah: Thanks for being here. Before we dig in to the topic at hand, why don't you guys tell us a little bit more about yourselves? Jerome, can you start and do an introduction?

Jerome: Yeah. I'm Jerome Soltani. I'm the services leader for Schneider Electric in North America. I'm overseeing the field digital and consulting services for the biggest part of the Schneider Electric portfolio. Schneider, as we know, is the global specialist for NRG management and automation, and I oversee our entering services business, from building the strategy, develop the marketing plan, up to the execution and delivery. Alex, over to you.

Alex: Yeah, and I'm Alex Gershman, and I work on Jerome's team. And I've got the pleasure of working with him on the development of that strategy both over three-year period, as well as building our annual operational executional plans as well.

Sarah: Awesome. Well, thank you both, and excited to have you both here. We connected and I have a number of points I want to get to today, and I think we probably could've split this into three or four podcasts if we wanted to. But we'll do our best. With that being said, to sort of set the stage for the conversation today, I said at the beginning this path to outcomes based services is one that most companies are somewhere along today, right? And it's a journey. Can you share with me and the listeners for context, where would you describe Schneider being on this path, and how does that compare with what you have as the ultimate vision?

Jerome: Yeah, very good question, Sarah. Look, I think as you mentioned already, outcome based services is a journey. We are not yet there, but the good news is that we are strongly anchor the outcomes base value in our three-year strategy as mentioned by Alex. It's something that is completely in the core of our three-year strategy, and if you look back at what Schneider Electric has done, services and software and story and journey probably started probably five, six years ago in Schneider.

Jerome: If you look at this story, we have acquired different key players in the software domain in acquiring data, learning machine tools and so on and so forth, to really develop our capabilities and capacity in software. And services became very top priority for Schneider. If you look at that, this is really, for us, the prerequisite or the precondition to be able to move to outcome based services.

Jerome: So, with services and the digital piece, and now that we are able to have a much more unified approach in our services portfolio, we believe that we can accelerate very much our approach. And the good news as well is that we see the customer now. It was probably impossible a couple of months ago, a couple of years ago and now it's real. I mean, there were people who were asking for that, they are looking for that.

Jerome: To answer directly your question, I think we are at a inflection point where we are able, in some cases, some carrier, to redeliver the outcome based services, and be able to give this expectation or to provide this expectation to our end user.

Sarah: Excellent, excellent. So you're building momentum, which is really cool. So, I want to talk a little bit about we've set the stage for the fact that not only is Schneider on this journey, but a lot of companies are, right? Let's talk about why that is, and what I want to talk about really is what are you witnessing as a business from customers that is driving this demand, that's putting you on this path? So, happy to have you answer that question from a high level, and I know, Alex, you had made the comment that the conversations you have with customers today are far, far different than they were one or two years ago. Let's talk a little bit out what's changed. What's changed in terms of customer's needs, expectations, demands, and how is that really driving the need for Schneider to move this ball forward?

Alex: I think, Sarah, there are a couple of big, we call them mega trends, that we're seeing out in the marketplace that are driving the change in conversation. So first we see and certainly many of them accelerated through the last year, through COVID. Changes in investment shifts that our customers are making from big capital expenditures toward more operating annual kinds of expenditures. And again, through COVID we hear the needs to extend the life of assets, make sure that I don't have necessarily the capital to invest,

Alex: So that kind of CapEx to OpEx shift has certainly changed the nature of conversations that we're having. We're seeing from the customer perspective a couple things. One of my favorite terms of the last six months or so is the silver tsunami, hair color of the customers. We're seeing massive retirements on the part of the skilled labor inside of our customer organizations, meaning they're turning more and more to companies like ours to help them with the services needs that they had that they may have relied on internally previously.

Alex: We're also seeing a lot of pressure that our customers, especially a lot of our bigger strategic customers, that they're having to focus their efforts and attentions on their core business. Our candy makers want to make candy and they don't want to necessarily focus on their infrastructure. So, again, they're turning increasingly more and more to us to do that.

Alex: And then another one of the big ones, obviously the rise of data connected technology, the more that these things actually become real, the more customers are looking to us to help them with making sense of the data that they have, being able to get toward the outcomes that they're looking for with their customers.

Alex: So, all of those big trends have definitely changed the conversation, and I would say it really is in this last year, certainly in the few years previous. Jerome said that the journey started many years ago, concepts like IoT, customers were aware and cognizing and talking and early adapters had started to make investments. But it's really in this last twelve-month period and even in the last few months in particular, that we're really starting to see greater adaption, intense greater adaption.

Alex: I pulled some stats. We just wrapped a voice of customer survey a couple weeks ago, but more than a third of our customers say that they have or will be investing in connected software for their critical facility operations in the next year. Two thirds of them are investing in connectable hardware. So these things are happening, and they're real and very much it changes the dynamic, it changes the conversation that we're having with customers, because now they're looking to take advantage of these, they're looking for the ROI on these kinds of investments.

Alex: And quite frankly we're as well positioned as anybody to help them be able to take advantage to generate the ROI from those connected technology investments.

Sarah: Yeah. What's really interesting to me about what you just said, Alex, and, Jerome, I'm interested to get your take on this, is I actually think not only are you well positioned, but you are the reason that they are ready to take advantage of those things. And what I mean by that is, customers don't buy buzzwords, okay? That's why three, four, five years go you could talk about IoT until you're blue in the face and in most applications nobody cared, and that's because why should they, right?

Sarah: I mean, the organization is trying to sell that solution or recognize that evolution had not yet built the ability to translate those buzzwords into a value proposition. That's the change we've seen within the industry over the last few years, is the capability is of businesses like Schneider to see how do we take these buzzwords, make sense of it all, turn it into a solution that meets pain points of our customers, then they're ready to adapt those things. Of course they want to, because you've done the hard work of making it all make sense and making it valuable to them. Jerome, what are your thoughts on that?

Jerome: I definitely agree with you. I think before COVID we had the feeling to be a little bit in advance. Not being arrogant, but you see when you're a little bit too ahead of the market, you feel a little bit alone to create demand and create this awareness. But, I mean, COVID and the pandemic and the situation, working from home, nobody in the campus, in the university and so on, we saw this awareness and this acknowledgement of coming from our user. It was a big relief for us, and it was great to see that finally the combination of our software portfolio connected product and services would make sense, and would bring a lot of value to our user.

Jerome: I mean, again, there are a lot of things to work on, but we see definitely this resonating much more with our end user now than the past. So definitely now it's become a reality, concrete, and the customer. As mentioned by Alex, we see this trend now completely part of the description with our end user, and really asking them, asking us how can we deliver much more value into our services, our digital services, how can we connect the asset, our service, our connected service of North America. We drive data remotely from the installation, and what is of value and insight that we can bring to them to be more efficient, be more sustainable and really at the end of the day help them to deliver their value to the end users.

Sarah: Right, right. I want to come back to that increased acceptance and that increased awareness in a moment. But before we do, let's go back to the Schneider perspective for just a minute. So this is a path you've been on for a few years, right? It's not brand new because of COVID. But you did mention, Jerome, when we spoke, that there has been an increased recognition even within the business this year, of how service serves as a form of business resilience. Talk a little bit about that.

Jerome: You know, again, services journey has started couple of years ago, but I think it was still at the operation level, at the country level, kind of second thought and not really a top priority. Now it's a good thing that our CEO and our board members were strong believers and have been really promoting the services business for years and have made very structural and transformational investment into this different teams at country level.

Jerome: What we saw this year is that COVID-19 has been really a catalyst to prove that services was highly resilient, and the models that allow us to continue to deliver our very strong ordering tech and profitability to our overall P&L. I mean, when I compare our traditional transactional equipment type of business versus services today, depending on the country, depending on the portfolio, you have a discrepancy between five to 10 points of growth between a services business and a traditional core CapEx driven business.

Jerome: Very outstanding performance and at the end of the day we’re delivering strong profitability, and then contrastingly good. We talk about pandemic, but even the economy. In some area we saw some business struggling because of the situation. But as well oil and gas business beyond COVID was already in trouble. But this business still need to operate. They need to deliver, they need to drill, they need to extract oil, gas. And to do that they still need to maintain the equipment, they still need to be safe and reliable. And this business I'm passionate about. I love this business.

Jerome: But it shows that this business is one of the most strong and reliable business, and resilient business in the economy, in the market.

Sarah: Mm-hmm (affirmative). Yeah, and I think going back to what you said before, Alex, the changing conversations with customers, there's kind of a snowball effect in play to a point, right? Because as businesses become better able to translate the buzzwords into value propositions and to start to articulate those in a way that customers resonate with, then there's kind of a point where customers realize, "Boy, maybe we can rely on this company for more than just X product or X service," right?

Sarah: And I had a the exact same conversation with someone a few weeks ago who's in a different industry but similar situation in the sense of companies that have employed these highly skilled workers to run this equipment for a very long time, these folks are aging out and they're finding it impossible to replace that talent. So how can they turn then to folks like you guys, to help them bare the weight of that burden? What type of automation can you provide or insights can you provide that eases that and helps them maintain their business, right?

Sarah: And then you see how it can build. You bring something to the table, they have this moment of realizing you're bringing more to the table and it can build, you know? We've had a lot of conversations this in particular about COVID being a catalyst for service companies, manufacturing organizations that I'm speaking with, how they're far closer relationships with their customers in terms of really more intimately understanding not just how their customers use their products or services, but how they operate on a bigger scale, and letting that influence the journey forward, right?

Sarah: So, it's pretty cool stuff. And, Jerome, I know when we talked the other day we talked about the openness to change and acknowledgement of this evolution on both sides. On the company side and on the customer side. And I think we shared a bit of a moment where we both realized how passionate we are about the inflection point, as you said, that we're at.

Sarah: So, I do think that while this year has been immensely challenging and certainly wish things were different, one of the very positive impacts is going to be how it drives this evolution forward. You know, what are your thoughts on... How would you describe the impact this year has had and how you think that'll influence what's to come?

Jerome: I believe that we talk about this outcome based services and the value prep that we want to create for our end user, but it's urging a lot of senior as well on our coverage model, on our sales model and on our execution model. There is lot of consequences, implications on the way we want to now connect with our end user, discuss with our end user, which is much more remote. It's not the past model where you need to face to face, facing your customer, have this relationship intimacy and so on and so forth has completely changed.

Jerome: We have a shift in our sales model that we need to manage. Not only the tool that we are using and the capabilities we are using, but as well the DNA, the culture is different. You have to shift that. So yeah. Some people would be able to manage this shift and accompany you on the shift. The rest we will need partly to recruit different people. You need to change that. It cannot work the same way that it was working before.

Jerome: I see as well very strong impact on the execution, and the way you crowdsource, the way you have a much more diffuse market, you need to be able to sell your customer everywhere at every moment of the day and night. Now the connectivity and the remote approach and the data that you have allow you to be much more predictive, but also give you the duty that you need to intervene before anything occur or before anything create trouble on the process of your end user.

Jerome: So, there is definitely a way for execution and the way you manage your population of technician that will oblige you to rethink your setup and to rethink how you drive and you organize your team. Big changes as well on the back end, behind the scene, to deliver that. And we were talking with Alex we are looking this inflection point on the sellers, you cannot do the same thing than you are doing previously. So, you need to cross examine and have this kind of already the adapter or champion that will allow you to embark this new approach and be much more constructive and really... Because for me I believe that the outcomes based is linked to the understanding of, the pinpoint and the expectation of the end user.

Jerome: You are not anymore just troubleshooting or maintaining something, you are anticipating and complying to needs for the customer to continue optimizing his operation or her operation, and the maintenance of his infrastructure or her infrastructure. So you're going to have different people that understand this need and this expectation to deliver the right outcome to our end user.

Sarah: Right.

Alex: I think we're going to look back on 2020 for lots of reasons. But if we think about what's happened in the years before, there have been incremental changes that have happened, connectivity customer demand, our own workforces. But given the intersection of external forces and acceleration of technology from the customer demand perspective from the sales perspective, as Jerome mentioned, from the delivery perspective, we're going to look back at 2020 as a massive inflection point across the industry in the in which services are consumed, delivered as a whole and the value that a services organization is going to bring to customers.

Alex: I fully believe we'll look back when the white papers are being written a few years from now, 2020 is going to be that inflection point.

Sarah: I agree. And so that's the exciting part. But, Jerome, you just did a great job of articulating some of the layers of complexity, right? So while I wholeheartedly agree and I'm equally excited about the fact that I think 2020 is and will be an inflection point, and it's kind of minimized some of the barriers and it's sped some of the understanding and awareness. The reality is the reason that these journeys are journeys is because there's so many layers of things that need to change to really be successful in involving from a provider of X to a facilitator of success really.

Sarah: So, Jerome, to your point, that's what I see the new role as, right? And it's a big difference, right? There's a lot of work that goes into getting from A to Z. So let's dig in to a couple of those things. The first... and I think you've eluded, Jerome, to most of these, so let's just talk in specific about a few.

Sarah: The first is the cultural and mindset shift, and to me this is one of the areas of biggest impact of this year. Because I think it's really forced people to get out of their comfort zone. I think it's really then the push that a lot of companies needed to realize, okay, it's time to do something different here. But it is a big change.

Sarah: I think the deeper, the richer the history. Often times the harder it is to really get everybody on board with this services mindset and all of these things. When we spoke the other day, Alex, you mentioned specifically that Schneider has done a very good job of creating a language around service. How? Because I think that this is an area where a lot of people struggle, right? Because there is pockets or recognition within the organization of why this journey is so important and how it can benefit the company. But to be able to persist that understanding all the way through a business and really change the culture is tough.

Jerome: Yeah.

Sarah: So, having that language and being able to get everyone speaking a common language is a really important step. So what are some of the aspects of that for you guys? How would you summarize the progress and success there?

Alex: I'll go first and let Jerome add. And it's hard, and again, like everything else, it's a journey and by no means what I declare victory. But I think, again, the position that we're in now is markedly better and different than it was 12 months ago. It starts for sure at the top down. Our CEO deserves a lot of credit. Jerome mentioned he's been using this kind of language for the past several years. There was a conversation, I don't know, maybe six months ago where we basically said there are six priorities for the company, services and software, services and software, services and software. That helps, right? When you get that message from the CEO, people start to listen.

Alex: But it's been a very deliberate push from Jerome, myself, our team, out to the rest of the organization, taking advantage of the door being opened for us and making sure that we're doing our best to kick it in. It is repetition on the language that we're using. It's reinforcing the concept that we're talking about. It's painting the vision about why we are where we are, and what, quite frankly, some of the implications are if we don't make some of these changes now.

Alex: I think that repetition and that storytelling about customer successes that we've been having about the kinds of conversations, the things customers are asking for us about what we're trying to do. That repetition, that language, that resonates as you're trying to make change.

Alex: But again, I'd say we're still in the early stages of making that happen.

Sarah: Mm-hmm (affirmative). And this is where it gets tough for me without having a five-hour podcast. This is where we get into there's probably 20 questions I could ask you just one this topic, because yes, you still have a ways to go, I get that part, right? And I think that companies that are really innovating well realize that there is no finish line to this journey, right? You're not all of a sudden going to put your feet up and say, "Ooh, we Servitized. We reached the outcomes based nirvana, right?"

Sarah: It's going to be a continual process, so as such the language will continue to evolve, the culture will continue to evolve, but I may ask to have you back just specifically to talk about what does creating services language within a manufacturing organization look like? Because I think that, that's a cool topic. But we'll leave it there for now, I guess. Jerome, anything you wanted to add to that or can I ask you the next point?

Jerome: Yeah, I like to respond on what Alex said... a little bit. Definitely it's one of the biggest challenge to change this culture and this language. I think as leader you need to drive adoption. And we were discussing that with Alex a couple of weeks ago. I mean, it's a must and not nice to have. And you need to at one point explain and message to our organization and the shift to outcome or the shift services or the shift to digital may not be super beneficial today, but if you don't start to shift your boat or your organization right now, in two or three years you will be completely out of the market.

Jerome: So, this is a difficulty to manage this situation where, I mean, you need to start before it's happening, proactive anticipation. And really I was telling you the story adopters or this champion. You need to have people that get it. You need to have change agents that will allow you in terms of services to show you that, I mean, it makes sense, and successes bring successes. We saw that in some of our customers. They realize that as soon as we provide them with the digital connectivity and the services, they were operating much better than before. And we have some testimony that has been shared across our organization and people realize from bottom to top that, "Wow, yeah." It makes sense and it can deliver a very different shade of added value or value prop to our end user.

Jerome: It’s kind of chicken and egg. You know at one point you see the benefit and so the thing that you have kept messaging, kept communicating, starts to resonate outside and internally and then it's a way you can cross examine in your business. But it's not overnight, and it's a complex shift in the culture of our organization.

Alex: Nothing does a better job... something that Jerome said is nothing does a better job in amplifying and making that message sticky. Again, the CEO can push it, but when customers share that and when we can share that success with all of our people, with our colleagues when our customers come on and do it directly, those are the things that ultimately make the difference in resonating in people's minds.

Sarah: Right, right. That makes sense. Okay, I want to talk next a little bit about some of the operational change that has to take place as well. And again, this is a whole separate topic that we could really dive into. But I want to talk quickly about two things. The first is how do you convince people to evolve when business as usual is working quite well?

Jerome: Again, it's one of biggest difficulty, biggest challenge. I think-

Sarah: I'm only tackling the big, hard ones. I'm not going to ask you any easy questions, Jerome.

Jerome: I see it as being one of my pet peeves, my things that keep me awake at night. I mean, especially... again, as I said earlier, the services business in US was doing well. Your core business is growing, and generating the right level of, the expected level of profitability. Now you need to say to your team you start to shift your focus from 100% of this highly profitable growing into something that takes more time, is more practice, more consultative business.

Jerome: And so you need to educate, you need to convince, and as I said it's becoming mandatory. And we need to, as we discussed with Alex and with our financial partner, with our HR partner, we need to experiment things to see what could work to shift this behavior and this focus.

Jerome: We've changed ourselves. You need change, something different, because it's different quarter, different financial investments. So you need to change about that, because people will not be paying out as it were and you don't see the same return investments. So you need to work on changing your incentive plan and the way people are paid out.

Jerome: You need to change your model. You need to give more time to your sellers that used to phase customer and you need to give them more time to create this pipeline of activity to create opportunities. You need to find a way to manage transactional services business elsewhere, because they cannot anymore spend their time on spare parts business. That's not what we want to drive.

Sarah: Right.

Jerome: So, you need to change your sales model to give to your top guns, highly competent sales guys that understand this approach more time and you need to be probably at the beginning less stringent, less demanding on the return on cost than before, because it's not the same value. It's a different value that you are selling to the end user, and even if the market has changed and the expectation are different, you still need to convince. You have some challenge in terms of we talk about connectivity but you should've talked about cyber security.

Jerome: And so there's some additional complexities that need to be taken into account, and you need to give the right support to this team to be successful. So lot of changes in terms of incentive plan, changing term of sales model and sale setup and rules of engagement to you can really make sure that you can give room for your people to be successful in this new ecosystem.

Sarah: Mm-hmm (affirmative). That makes sense, and it kind of ties in with the second part that I wanted to talk about, is eliminating silos, right? And having a more cohesive strategy and cohesive approach. So what are the thoughts there? How have you made progress on breaking down some of those silos and working more for the greater good of the customer outcome?

Jerome: Yeah. I mean, look, Schneider Electric is a great a company and, as we said, making the right move at the right time for software services, and I think the direction and strategies is very key and relevant. Now it's a complex organization. You have many functions, you have hardware functions, software functions and most of them are working silos still, okay?

Sarah: Mm-hmm (affirmative).

Jerome: And now what the company has done is really try to shift from this profound performance measurement by BU and being much more agnostic in terms of performance tracking and performance monitoring. If the possibility of opportunity for our seller, for our people to be recognized not only on the silo, but be recognized on the overall accountability or responsibility that they have on a larger, wider portfolio.

Jerome: So, you need to break this, you can't still have this BU because you need R&D very specific to each BU, and you need to have some marketing very specific to each BU. But at the country level, you need to have a performance management and performance tool that allow you to break this silo. This is from the hardware and software point of view. On the service side I think it had been clear from the get-go, and we see that with Alex we have expanding our portfolio and we have a national unified approach.

Jerome: I mean, for us, I mean, we talk about digitization, we talk about services. Again, to move to the outcome based services, you need to move from an asset and BU point of view, to a much more system and solution point of view.

Sarah: Right.

Jerome: And you don't bring an outcome-based services if you just monitor the obsolescence of your title. You need to cover a system and a multi BU approach with this decision and with services will allow you to provide this outcome based services. So problem for us, every discussion that I'm having with the different BU leaders is that I will own the outcome based services, and I will generate the outcome based services if the customer or the market is expecting that. But then I will need to provide them the right performance, and allocate the performance that they own and they deserve. But truly as a services team to be able to integrate and blend the different BU to make sure that it's completely transparent for our end user and you manage the complexity behind the scene.

Sarah: Right, right. Yeah, I mean, this is another very common conversation that I end up having, right? Because, as you said, it's another very complex part of the change. So as a product manufacturer you're structured operationally for internal efficiency usually, and if you're trying to be structured instead for customer centricity what you need to be to your point to tie all the pieces together and deliver outcomes, it's a big difference.

Sarah: Okay, I'm stressed out because we're running out of time and I want to make sure we get to two more questions, so bear with me. I want to make sure we talk, again, when we're talking about the different layers to this journey about digitization. So I know this, again, could be an entire topic on its own, but for the sake of giving the Schneider Electric overview today, talk a bit about how digital transformation, the need to be able to collect and deliver data, things like that plays a role into this evolution.

Jerome: I will start and, Alex, you can go on. For me you transform your assets and your products into a smart connectable product and equipment. So digitization for me is going from this dumb equipment and gear to this smart and connectable products that you can connect on the cloud, and then completely leverage all the algorithms, all the abilities to deliver insights and actually insights to our customer, again, to deliver this outcome.

Jerome: So, digitization is key for us, for riding this layer of connectivity to your equipment, to your software to really be able to deliver this apps and this advisor for our customers. So, digitization for me is key as well on the execution. We made a huge transformation on how to schedule and dispatch our technicians who have access to our partners, because they are technicians as well and we are leveraging now our technicians.

Jerome: We’re giving as well to our partner when we connect the end user we are providing insight to our partner as well to connect to their end user. So the digitization for me it's key on the offer and value prop, but it's key as well on the execution piece for crowdsourcing and for making sure that you send the right technician with the right competency, with the right component to deliver the right services. So it's for me forming digitization on both sides.

Sarah: Mm-hmm (affirmative). Alex, anything to add to that?

Alex: Yeah, the only thing I clearly get is the currency that enables the customer value to be driven to enable the efficiency, and it's also that maybe a third layer is the customer experience as well. The bridge between what you're being able to deliver, what your people are doing, the ability to seamlessly on their own get in touch with you, schedule the appointment, whatever it may be.

Alex: I mean, the reality is it's critical to all facets of the transformation. Data is the currency on which all of this is built.

Sarah: Right. I always say making the decision to deliver outcomes is taking on the responsibility of mastering a lot of complexity and making that invisible to your customers. And to do that, obviously, these tools are critically essential.

Sarah: Okay, one last question for each of you, and it can be a quick one. If I were to ask you each to share your biggest lesson learned or your biggest piece of advice for a peer that is listening to this episode, what would it be?

Alex: I'll let Jerome think. I've actually been keeping a bit of a running list of the lessons that we've been learning as we've been going through this, because there are many. So, Sarah, if you'll forgive I'll share. There's four or five of them.

Alex: So, one is look, becoming more outcome based is a process, it's not a switch, right? Don't have any misgivings that this is going be a year's long process that ultimately has no destination, right? And you have to orient yourself that way. The second is that customer selection, especially at the outset really matters. Finding customers or partners who want to work with you, who are willing to accept that things aren't going to be perfect right away, who are going to serve as case studies for you as you make the case internally and externally is hugely, hugely important.

Alex: It also means that segmentation and specialization within vertical segments also matters. You’ve got to be an expert. The way that you handle a healthcare system and the way that you handle an automotive facility, the outcomes they're looking to drive are going to be different and you have to be able to understand that.

Alex: Two others, one is that designing for services is key. So we work in an equipment, historical equipment manufacturing company that makes the best products, and one of the big keys to being able to drive this type of change is having the services team, having a seat at the R&D table, at the offer generation, creation table very, very early on, making sure that services isn't an afterthought. And we've pushed really, really hard for that seat. And I think that, that's been critical for us being able to build the momentum.

Alex: And then the last one is that I will say that internal selling is as important, maybe even or more as external selling. Again, your customers are pulling you along. Customers want this. I mean, this is where they're going this year. And that repetition, that setting the picture, that storytelling I think has been equally, if not more important, for the success we've had so far and enabling us to maintain that momentum. That's in so many was at the heart of sale.

Sarah: Mm-hmm (affirmative). Okay. Jerome?

Jerome: Alex covered that. But for me probably... I mean, I would say that for sure the outcome based services potential is exciting in the coming year. And we look at what is your current portfolio, and as mentioned by Alex, based on what is your market or what is your customer landscape. What is relevant for your customers in terms of services based on this portfolio? Do you need to partner to expand your value prop, because you cannot deliver an outcome by yourself if your portfolio is not enough or do not bring enough coverage.

Sarah: Right. So expanding the value chain?

Jerome: You need to change your value chain or adapt your value chain depending on the outcomes that you want to deliver versus what you have in your portfolio currently. So think about that before moving into this journey. I think it's important strategically. And then you can find the right alliances or partnerships to enrich your portfolio and deliver this outcome. But there's partly some work to do in terms of marketing intel to look at this portfolio versus the outcome based that you want to get.

Sarah: Okay. Good. Jerome, Alex, thank you both so much for being here. Plenty of areas that we could dig into further, so we'd love to have you back at some point if you would be willing. But thank you for coming and sharing your story today.

Jerome: Thank you.

Alex: Thanks for having us, Sarah.

Sarah: Yes. You can learn more about the journey to outcomes based service by visiting us at www.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 service management by visiting www.IFS.com. As always, thank you for listening.

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December 9, 2020 | 28 Mins Read

Tim Baines of Aston Business School’s 2021 Servitization Predictions

December 9, 2020 | 28 Mins Read

Tim Baines of Aston Business School’s 2021 Servitization Predictions

Sarah welcomes back Tim Baines, Professor of Operations Strategy at Aston Business School and Executive Director of the Advanced Services Group to share his insight on what businesses can expect as it relates to the Servitization journey in 2021.

Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Very excited to welcome back to the podcast today, Professor Tim Baines, who is the professor of operations strategy and the executive director of the Advanced Services Group at Aston Business School. Tim, welcome back to the Future of Field Service podcast.

Tim Baines: Thank you, Sarah.

Sarah Nicastro: We had Tim on episode 70 of our podcast. If you have not heard that episode, you may want to go back and check it out after today's discussion. Tim will tell us in a moment a bit about what he does with the Advanced Services Group at Aston, but today, we're going to be hearing Tim's predictions for what will take place in the world of Servitization in 2021. Tim, before we dig into the conversation, for those that may not have heard our first podcast together, can you give them a little bit of background on your role, the Advanced Services Group at Aston, and what it is that you all are doing?

Tim Baines: Okay. Thank you, Sarah, for that. I'm a professor of operations strategy, manufacturing operations. My background is that I've spent all my working career working either for or with manufacturing businesses, helping them with their strategic decisions with regards to their operations.

Tim Baines: I became involved with the Servitization conversation around about 2003, 2004, that type of period. And I did so because we were asked to... Within the U.K., we were asked by the U.K. government. A group of universities were asked to respond to the competitive priorities for manufacturing firms moving into the new millennium. Up until then, our attention had been looking within the factory, had been looking efficiency within the production process and how to be effective, how to exploit digital to make sure that products are made cut, made quickly, made of a good quality, and made cost-effectively.

Tim Baines: This project, this program of Servitization was really about, within manufacturing, within the research community in the U.K., looking beyond the factory gates, looking at the opportunities for manufacturers beyond the factory gates. And that really brought us to get interested in this topic of Servitization or advanced services.

Tim Baines: Since that time, my work has been entirely focused on Servitization. Servitization, very simply, in my mind, is all about helping manufacturing companies to compete through services rather than products alone. Since that time, my work has been entirely focused on this topic. A few years ago now, we titled the whole research center the Advanced Services Group, because we wanted to distinguish between those service-based business models which are truly disruptive and high-value and game-changers in the marketplaces, versus the more traditional view of services inside manufacturing firms, which is about selling spare parts and brake fix. We really wanted to position our work as being about the new business models, the new service-based business models for manufacturing organizations moving forward.

Tim Baines: That's where we are, and that's just a brief overview. The work that we do is a combination of research, which is very much trying to understand and frame what it means for a manufacturing company to compete in this space. We develop research frameworks, such as services staircase, which talk about the different customer value propositions an organization can offer. Transformation roadmap, which describes how organizations have moved into this space. The business model blueprint, which focuses on the core elements of a service business model.

Tim Baines: We do research which is very much about framing the innovation, helping to understand it. We work closely with businesses in the U.K. and around the world to apply the concept, and through the application of the concept of Servitization, advanced services, we learn, it fits back into our research, back into our teaching, back into our publications. And we just keep the virtuous cycle moving, of research, impact upon practice, research, impact upon practice, to move forward the whole knowledge in this area.

Tim Baines: The one thing which galvanizes all our work together is this open ambition to really change the world for the better through these advanced services. It's based upon a motivation that... The business that many manufacturing firms follow hasn't really shifted much since the ideas of Henry Ford in 1910, 1912. A lot of manufacturers are still very much committed to that business model of production, consumption, and dump. And the whole business model of advanced services maintains that route in the products and the IP of the products, but very much looks at gaining value through the services, and is a much more environmentally, economically sustainable business model. And we're very much committed to promoting that business model.

Tim Baines: Sarah, does that help as a form of introduction? Is there anything you think I ought to have covered there, which I've missed or skipped over?

Sarah Nicastro: I think it's perfect. I've said here before that the work you guys are doing is really, really good, well worth everyone checking out. We'll make sure that there's a link to the Advanced Services Group in the notes.

Sarah Nicastro: What struck me is that the research you all do and the work you do, it's very clear when you look at it, when you consume it, that it is very grounded in the voice of the industry. To your point, my passion is helping folks that are on this journey in any way I can through providing them insights and content and connections that can help them, because we know that this path to Servitization is not one that is very simple or happens overnight.

Sarah Nicastro: If you were to go back and listen to the episode Tim and I did, episode 70, we talked about the four forces behind Servitization. It's well worth a listen. But the reality, to set the stage for today's episode, is that I think the vast majority of our audience recognizes those four forces. They recognize the fact that this is the future, this is where we're heading, and they're at varying stages of readying themselves and progressing themselves through this continuum.

Sarah Nicastro: Today, what I want to talk about is what we expect to see next year. 2020 has been an immensely challenging year for all of us personally, professionally, and I have a deep respect for the service leaders that I talk with on a daily basis for the fortitude that they've had to show. Not only progressing forward-thinking goals like this, but dealing with a lot of very complex challenges on top of it. I certainly don't want to minimize that.

Sarah Nicastro: I think one of the things that I've taken heart in this year, one of the silver linings, if you will, of this situation is the impact that it's having on the Servitization journeys, in the sense of really spurring them forth, in my opinion. There's a number of factors that have come into play in this very challenging year that I think really have helped make some significant strides in Servitization efforts. What are your thoughts, Tim?

Tim Baines: It's really interesting to hear you speak, Sarah, because you touched on, when you were introducing the work that we do, about the contribution that an academic makes in this space. And it's very interesting, because my background's a little bit unusual within the context of a business school. I'm actually a professional engineer, I'm a chartered engineer. When we look at what research engineers do, it's very much around materials, products, functional things. Engineers are allowed to invent things, but when you look at a business school and research that's carried out inside the business school, the research inside a business school is very much based upon this world of observing the phenomena. You recognize innovation and you look at the innovation, you try and make sense of the innovation. And a lot of the research which is carried out in business schools is all about trying to make sense of the innovation.

Tim Baines: Now, the innovation that we're talking about here is this notion of Servitization. When you ask me to comment upon the innovation which is taking place inside industry, you're trying to make sense of this innovation. The academic community isn't inventing it, but they're trying to make sense of it, they're trying to clarify what is actually happening.

Tim Baines: One of the frameworks the academic community has come up with to help to understand these innovations is a change management framework, which basically says that change takes place as an interplay of the context within which the organization sits, the management process which take place inside an organization, and ultimately the outcome of the decisions that are played. The machine tool, the management processes, the business context to be all into play.

Tim Baines: What, of course, just happened massively for us over this past year is that the context has shifted. Now, the way in which we tend to think about making strategic decisions inside businesses hasn't necessarily moved. The cultural side of things hasn't shifted in terms of how we run businesses, but the context has shifted. And as a consequence there, the decisions we're making inside businesses, the actual outcome of the decisions has shifted also.

Tim Baines: When you ask me to comment, I'm sitting and I'm thinking about this context, and thinking, "What shifted about the context?" We are in this world when we're thinking about what's going around us at the moment in time. It's a bit like predicting the weather. Of course, we're sifting through the trends in the past and we're trying to reflect upon what we've seen and make predictions as to what the future might be, and of course, it's been a year of tremendous shift and change. But if you accept that a lot of the forces which are shaping industry were there anyway, what also COVID has actually done is to strip away almost the grayness of those forces. If you strip those away, I think COVID has shown us that forces which are shaping industry have almost accelerated the shift.

Tim Baines: This time last year, I wrote a blog, and I was talking about the shift, the forces. And I was saying, to me, in terms of Servitization, the forces which were shaping industry were this desire for productivity, greater outputs for the amount of inputs we're putting, this adoption of digital and accelerating the adoption of digital, and sustainability. And I was talking about environmental sustainability.

Tim Baines: Particularly if you're in Europe, the environmental sustainability agenda is really at the forefront of a lot of people's minds. Sitting where I am in the U.K., you were looking and you were saying, perhaps in the order of digital productivity and sustainability, these were the things which were coming on the agenda. These were the priorities. Now, we still have this bizarre situation where we've got this thing called Brexit, but let's not worry about that, because that'll take us in another direction together.

Tim Baines: And then you've had this year. Of course, we stripped away this grayness about what's shaping industry. And I would argue now, moving forward over this next year, of course, I think recovery and resilience are going to be the two fanfares, almost, at the forefront. But then coming right behind that is I do think the environmental sustainability agenda is going to be very high on people's list of priorities.

Tim Baines: Here's a great example of this. You very kindly helped us with the World Servitization Convention. You did a great job with that. It was excellent, thank you. But a few weeks before it, the BBC published a statement, and it was about Apple computing. The value of Apple was given to be higher than the whole of the FTSE 100. The FTSE 100 is the U.K.'s top 100 share index, and the U.K. share index was declared as having... It was full of dinosaur stocks, it was stocks like British Petroleum, Shell, all these different things. Fossil fuel-based stocks. And Apple was held up as being worth the equivalent of that.

Tim Baines: Coupled with that Apple statement, you had a statement about sustainability. And whereas in the U.K., we have this ambition of being carbon neutral by 2050. Apple was saying, "We're going to be carbon neutral by 2030, and we're going to be carbon negative by 2050." Carbon negative. And then when you look inside Apple and you look at... If you want a second example of Servitization and see how Apple have dematerialized their supply chain, and are really... The Apple iPhone, it's all based around services. The value's coming through services. And you look at that as an exemplar and you look at what's happened, you say, "Absolutely, these are going to be the trends." Industry is responding to public demand for this improvement in sustainability.

Tim Baines: When we look at it, and I take a step back, I say that my prediction, my reflections, is that the forces which will be shaping what we do over the next year will be, of course, responding, resilience, but I do believe that sustainability is going to be evermore at the forefront. And those leading businesses, those businesses which... There are really excellent examples of businesses which are leading the way there and are really making a lot of ground. Does that help, Sarah? Does that resonate with your own thoughts?

Sarah Nicastro: It does. There's a couple areas I want to dig into. You spoke about context and that the context is what has changed a lot this year, and I agree with that. I think that that shift in context... Really, if you break it down, I think that the biggest impact of that is... Like I said at the beginning, we talked on our last podcast about the four forces behind Servitization, and I think that there is a general acknowledgement of those forces and, again, I said this earlier, an awareness that this is the direction we're heading.

Sarah Nicastro: But I think that, for a variety of factors, if you were sitting in January of this year again, there's just still a lot of things that can lead to more of a resistance to really progress as quickly as is possible through that journey. There's some history and some operational things and some cultural things that were holding companies to their roots. And I think that what has happened is, particularly for anyone that was lagging a bit in getting on board this journey, the context of this year has given them a quick shove in the direction of progress.

Sarah Nicastro: And I would argue, though, that that shift in context is, I think, having a cultural impact in companies. I really do believe that... And it's probably what I'm most excited about. I think that there's been so many interviews I've done this year, where people have talked about just very quickly becoming more creative, more innovative, and more quickly adapting to, what do our customers need from us right now? And it's okay if that doesn't look like how we've historically delivered value. We need to shift, we need to pivot, we need to react quickly.

Sarah Nicastro: Companies have had to become accustomed to making far more rapid decisions than they ever have before with, arguably, more complex and quickly changing criteria than they've ever had to deal with before. The use of digital tools and technology. Again, even employees that were resistant to that have a change in thinking, because they see it as a way to persist in doing their work and having a job. I think that there's a lot of challenge to what's happened this year, but the outcome, I do think is on the company culture, and I think there's a lot of positive things that are going to come out of that.

Sarah Nicastro: I want to dig into a bit more of your specific points and some others and talk a little bit about more of those. When I think about the excitement that I have for moving forward, I think that, as we focus on that resilience and move toward recovery, these companies are doing so from such a stronger place because of the experience of this year and how both the context and the culture have changed in a way that can really move them forward in a positive way. Does that make sense?

Tim Baines: It does, Sarah. If I was to reflect upon the situation, I think businesses are at a crossroads, a t-junction crossroads. And we have this, certainly inside the U.K., where there is this... Some businesses will look at what we have been through over this last year, they will look back at what has happened in the past. And you might take this, for example, as the automotive industry. Look in the past, and then they're saying to themselves, "Okay, as soon as we can get back to the old way of doing things, as soon as we can get back to the past, then that's great. We've got to try and move back towards there, we've got to get people back into their offices, we've got to focus on production, get the product out there, get the shops open, et cetera." That's the whole business model Henry Ford made so successful, and was absolutely right for that context. It's not a critique of the business model; it's a critique of the fit of the business model with the context.

Tim Baines: And then you've got the second one that says, "Okay, well, we've come from here, but we're in a situation where we found our people were actually quite ready to change. We're finding that the people are becoming more sensitive. What we have been through over the past year has forced us to make redundancies. We've stripped away people inside the organization." Invariably, these perhaps are people who have been with the organization longer term, or perhaps were custodians of the old business model. Some organizations say, "Well, let's see and move forward with this."

Tim Baines: I'll be honest. The reality is, I am sure that the future direction will be a compromise of both, and that's fine. But there are so many exciting opportunities, to my mind, of embracing what these forces which COVID has made so apparent to us, embracing those through Servitization and advanced services, really capitalizing upon it. So many exciting opportunities.

Tim Baines: To your point initially, Sarah, I am mindful that there's a lot of people who are senior positions inside services businesses who've had a terrible time dealing with what we've been through and having to make the best of it. You and I today, we're talking and we have this very privileged position to be allowed to talk freely about these things without this legacy of having to bring the whole organization with us. That's our responsibility, is to talk a little bit about some of what the future might hold.

Tim Baines: The opportunities, to my mind, are absolutely phenomenal. Let's take some examples. If we take what's happened in terms of these forces which are shaping industry, and we talk about the market pull and the technology push, the market pull has shifted. Go back to the environmental one. If you look at the environmental context, which COVID has made a more apparent to people... In the U.K. particularly, people are spending more time at home, they're spending more time at the gardens, they're looking around them and they're seeing what's happening. They're more aware of their environment, and they're saying, "Hey, we like this. We want to spend more time with this environment, we want to care with it more."

Tim Baines: The environmental pull is becoming more apparent, so how can industry respond to it? Well, you've got all the technology which is required to be put in place and got out there, that manufacturing can provide and get into the marketplace. There are services upon services, whether it's heat pump technology, whether it's hydrogen for house heating, whether it's shift in mobility, all these different technologies which can be got out there through advanced services.

Tim Baines: And then we look at another area. Food has become more of an issue. We live on an island. The food supply, et cetera. Again, advanced services, looking at food, looking at this whole sector, how it can provide a more resilient supply chain, how we can get new technologies, how we can get robots out there. Again, through advanced services. That's another exciting opportunity. And we see the same service here in what I might call assisted living. People living independently and promoting that, without the need to jump in the car and go somewhere. All these different sectors, the opportunities are becoming so exciting for these innovations that we're talking about.

Tim Baines: Really, the biggest challenge, I would say, to a lot of people for this next year, the one challenge is, have you got the vision to actually exploit those things? Can you get the vision there? Or are you going to push this away? Are we going to try and regress? Or have you got the vision for imaging, for thinking about it in manufacturing industry, beyond the idea of producing, consuming, and just dumping it? That's the challenge to my mind.

Sarah Nicastro: Mm-hmm (affirmative). Maybe the conversations I'm having are just a really good sample, but I think that the vast majority of service leaders are really focused on harnessing this momentum and caring forward. I'm not talking to a lot of people that are intent to go back to the way it was.

Sarah Nicastro: I want to dig into a couple specific areas and talk about how the challenges of this year are really going to have a positive impact once we've progressed through them. The one is, we've seen an increased uptake of an openness to technology this year. Obviously, companies have, in parallel, been on their digital transformation journeys. There're still laggards and leaders. I think anything related to innovation, when things are going well, it's easy to deprioritize the need to evolve if you're in a good spot. This year, we've seen companies that have either rapidly expanded their use of technology to persist with business, or have quickly looked to get up to speed in that area. When we think about an increased use of an openness to how technology can play a role in these operations, how do you think that will impact Servitization progress in 2021 and moving forward?

Tim Baines: Okay. If I may, Sarah, I'll just comment very briefly upon what you just said about the service leaders you've interviewed. I would say the same. I very much endorse that, that these service leaders... And maybe it's because people inside of services are naturally more intimate with customers, so they are seeing these trends.

Tim Baines: However, when we think about Servitization inside the context of a broader firm, one of the big inhibitors of progress has always been almost the cultural change, the legacy of the production that's sitting behind. Of course, for the organization to shift, it requires that production environment. When I talk about people who perhaps not embracing the new business models with perhaps as much enthusiasm as you and I are, it's because I am reflecting also upon this traditional legacy lots of organizations have had. But it's really reassuring to hear that the people you've been interviewing are being consistent with ourselves. We're not just a bunch of crazy academics talking about what the future might like.

Tim Baines: Let's talk about digital. If you ask me about the innovations which are likely to have the biggest impact upon manufacturing businesses moving into services, I wouldn't put digital in the top two. I would put the two innovations which I think are most exciting at the moment in time. One is what we've already spoke about, which is the cultural change. I think there's an awful lot to be done there about vision and empowerment and really grasping the opportunity. I think the second opportunity innovation is financial innovations.

Tim Baines: That is not to say that I don't believe that digital has got tremendous opportunity to accelerate. I think that what we're talking about is the confluence of digital, financial, cultural. We're sitting at the center of these three, and we're enabling an acceleration into a new way of doing business which wasn't there previously. Whether it's artificial intelligence, whether it's remote monitoring, whether it's big data, whether it's blockchain. Those are fantastic innovations and they're really enabling what's going on, but the thing which has really come to my attention recently is the financial innovations, because it's the financial innovations which, I think, we need also.

Sarah Nicastro: Tell us more about that.

Tim Baines: Okay. The background to this is, 18 months ago, I went to a conference which was an asset financing conference. It was a big event, it was held in London, and I spoke about Servitization. And I was really surprised to hear about all these financial institutions who were talking about Servitization. We'd never come across this community before. What they're talking about is things that you would be familiar with, Sarah. It starts with subscription charging, which we're familiar with. But then it moves into conversations about asset financing, partnering with a manufacturer. It moves into conversations about ownership, moves into conversations about contracting.

Tim Baines: It's complicated, and I'll be honest. If anybody's listening to this podcast who is from the financial community, please forgive me when I say this. But their understanding of the concept of Servitization is inconsistent with the popular understanding of the concept of Servitization, as is held by the broader scholarly community that looks at it. They're looking at Servitization from an innovation... It's almost what I would call the mechanism for revenue capture. When we talk about Servitization, we're talking about how you're bundling the service offerings together to build a bigger customer value proposition. Basically, this is all about, to me, the shift to an outcome-based society. The subscription charging can go hand-in-hand with that, but it's slightly different things.

Tim Baines: Let's take a practical example. A couple of examples, if I may. I think I spoke about this last time. In the U.K., fossil fuel heating on new-build properties, 2025, you're not going to be allowed to have it. Even retrofitting, fossil fuel heating has been challenged at the moment in time. The alternative technology is technology like heat pump technology. It's expensive, so how do you get that new technology into it? How do you actually get somebody like you and I... If we went out and bought a fossil fuel heating system, it might cost us $2,000. The heat pump system for a house or equivalent property might cost us $20,000. How do we do it? Well, we obviously need financing. And if that financing can be bundled together in terms of a subscription charging, where we don't feel the pain as a big lump investment, but rather, the pain is spread out over multiple, maybe five-year contract. Then, we're going to feel more ready acceptance of the technology.

Tim Baines: We shift and take something alternative. You take food production. In the U.K., aging population, you got food production. A lot of the farmland in the U.K. is held over to dairy. And then as you start to move over from dairy, as people's... We're having a growth in people moving to being vegetarians, being vegan, et cetera. Concerns about climate change. There's pressure on dairy farming, and there's a request to actually exploit the land in different ways, but exploiting the land in different ways requires new technologies to get in there. You start to talk about autonomous vehicles and robots and such like. How are you going to make that happen? Again, you want to shift to an outcome-based contract, and financing can enable that. It's on subscription-based charging with really intelligent ways in which you're financing the asset.

Tim Baines: It's our service world, and it's our move to these advanced services, this outcome-based world, where we're buying the outcomes. But it's the bundling between the cultural organization to offer the services that the product enables, coupled with the technologies which help us to monitor how the product is used and build up intelligence, coupled with the financing which gets those innovations into the marketplace as quickly as we can.

Sarah Nicastro: Yeah. That makes sense.

Tim Baines: Sorry, Sarah. I've gone off into complete tangent there, but hopefully it's relevant.

Sarah Nicastro: No, that makes sense. This is in line with... Historically, one of the challenges that I hear a lot from people, and this is a combination of different factors, but people saying, "How do we bring our customers on board this journey?" While there is a market pull, there's also the real shift in terms of... Now, we're moving from delivering products to delivering service. What does that look like? How does all of that work?

Sarah Nicastro: One of the things I've heard a lot this year echoes what you just said. If you think about a manufacturer of really large equipment, obviously if people are looking to avoid CapEx expenditures and move toward more OpEx options, then they're looking for more of that financial innovation. How do we do this differently? How do we bundle these things together? How do we achieve the outcome we need in a way that looks different than that purchase or revenue model did in the past? That makes sense.

Sarah Nicastro: Generally, again, going back to the positive implications here, I think that the need to get creative this year is breaking down some of the barriers in communication between companies and customers to have discussions around what different models might work. What does this look like in reality? And I think that, again, that's something that will propel companies forth, because rather than avoiding those conversations or struggling through those conversations, they're coming together in a time of need to find outcomes that are mutually beneficial to both parties in a way that hopefully makes progress these folks can build upon. Does that make sense?

Tim Baines: It absolutely does. And this is tough, isn't it? We're asking of ourselves to envision a future which is different to the past. And just like when you started this conversation, you were saying what's our predictions for next year, we're making those predictions by looking at the past and teasing out which we can conclude factors, and we're being effective by our own assumption and prejudices.

Tim Baines: If you can, when you move to our world of these advanced services and you start to think about the opportunities which have been opened up and are opened up by this combination of this digital, this cultural shift to these outcome-based contracts, digital, shift to outcome-based contracts then the financing, they take you home. I'm fortunate enough to have a sensible office in my own home, et cetera, but an awful lot of people were shifted from being based inside the factory or inside the office block, and they now work from home.

Tim Baines: And then you look at it and you're saying, "Okay, well, what do you need to work from home?" And you think about the computers, you think about the printing technologies, you think about your desk, et cetera. How are we expecting people to go out and buy this? Actually, the old model is, go and buy it. The model that we really want is, the outcome I want is a work environment that I can be productive within, that's got all my technologies. It's safe, it's ergonomically sound, et cetera. What a fantastic opportunity for an outcome-based contract.

Tim Baines: It's not about a big asset. It's about that shift, enabling this outcome where I can be productive in my own workspace. And for that to happen, of course, requires the technology, but it requires the digital. I've got a printer over there. If my printer doesn't work, I need somebody to ring me up and tell me how to fix it. I don't want to go into YouTube and have to sift through all the various presentations how to fix my HP printer. I want it fixed, and I want financing in a way which I can afford it. I just want these outcomes.

Tim Baines: This goes back to your initial point about, what does the future look like? Look at this fantastic opportunity for the home working environment. Physical fitness, everybody's saying... In the U.K., we had a big run on people buying bikes and fitness equipment, et cetera. You want this gym at home, you want the outcome of being able to exercise at home. All these different things, all these opportunities.

Tim Baines: The big challenge for us, in my mind, is, is it envisaged that this is forthcoming, or this forthcoming? This is how the future could really look if we really exploited what is happening. The digital, finance, and the shift towards an outcome-based economy.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. We had Peloton on the podcast earlier this year, and boy, are they one that has... The challenges they have are opposite of many of the companies we're speaking with, because their demand has just been through the roof, and it's been immense growth.

Sarah Nicastro: It is a good point. The opportunity here to innovate is not limited to manufacturers of huge equipment. We've talked with service companies that... Again, it's about listening to the needs of the customer and adapting quickly. We've had a lot of different examples of organizations that have just paid very close attention to the outcome desired in January and how that differed to the outcome desired in March of April, and they just moved quickly to be able to meet those needs.

Sarah Nicastro: I think, again, the thing I love about this is it's forcing these companies to flex these muscles of openness and creativity and innovation. As they're doing that by force, they're learning that they're capable, and that the opportunity to continue doing that is immense. That, I guess, is what really excites me about the way that the challenges of this year, I think, are going to pay off immensely in 2021 and beyond. It's really interesting to think about some of the ways that we'll see this come to fruition as we move along.

Tim Baines: Sarah, I... Sorry.

Sarah Nicastro: Yeah, go ahead, Tim.

Tim Baines: No, I was just going to... And your point about the threat side of things is interesting. One of the businesses we work with looks at assisted living inside your home, particularly for disabled or elderly people. They're very conscious of how the technology providers... We saw it this week with Amazon declaring that they're offering the capability to monitor machine tools and report on machine tools' performance. How do you compete against somebody like that? Well, you don't take them head-on in terms of the product. You do something that they can't do. And what they can't do is that services package. We're not talking about just good delivery. We're talking about that services package of assuring somebody can live safely inside their own home.

Tim Baines: Even if you're traditionally rooted in production and products, and you're looking at the future from... Not just the threats of COVID, but what else? For example, what technology vendors are doing, how they might move into your space. Customer intimacy that's demanded to be successful with services, particularly advanced services, is such that it builds that resilience. And it's resilience not just to pandemic, but it's resilience against the technology vendors. And that's good for us. None of us want to live in a world where everything's dominated by one particular business. It's healthy for people to have choice, and that's what services enables. It's a much more resilient business model.

Tim Baines: I should just say, we're certainly fine in the U.K., you have to be careful. Organizations such as Rolls-Royce have been hit very badly. When you look at something like Rolls-Royce, there has been an ambassador for the more advanced services, certainly over the past 10 years. It's very easy to look at them and say, "Oh, is that a reflection upon the service-based business model?" If that is a reflection on the sector... The whole sector of air travel has been so badly hit. Sectoral factors will always play into this, but nevertheless, the level of the individual business, services give resilience. Services provide the platform to respond, to recover, to get innovation out there, and sustainability.

Tim Baines: Big challenge to me, though, is whether organizations and politicians can actually envisage that, can buy into the vision, can see the vision, can understand that this is not about... So many opportunities have been opened up by this pandemic, and let's embrace them.

Sarah Nicastro: Mm-hmm (affirmative). Absolutely. All right, Tim. We've talked about the context and how that's shifted. We've talked about culture, we've talked about financial models, we've talked about sustainability. Any other thoughts? Any other thoughts or words of wisdom to folks as we wrap up 2020 and move into the new year?

Tim Baines: I think one of the challenges, Sarah, is for anybody that is spectating and looking to what's happened, there's a myriad of spectators, et cetera. The only thing I would say is look at the evidence. When we go back and you look at the Apple example that I spoke about shortly, there was evidence of a response and a potential trajectory. And then look at the evidence of other organizations, look at the evidence of data coming out of the World Bank in terms of where gross domestic product is generated, and the fact that services supersedes products and production.

Tim Baines: Look at the evidence, and the classic ways you know to look at the evidence is to find it, recognize what you believe in, form what we call the null hypothesis, which is the opposite view, and go out to prove the opposite view. And when you can't prove the opposite view, then there may well be some truth in the view that you want to believe. And I think if you go out there and you look at the evidence, then you can make your own mind up. I think it's extremely difficult to argue against the adoption of Servitization. That will be my finishing... I can't find the arguments against it.

Sarah Nicastro: I agree 100%. Again, in a year fraught with difficulty, I think we, as individuals and as a community, need to look for, what are the positives? And again, to me, the conversations I've had around... From company to company and individual to individual, how this has opened eyes and created more open-mindedness and spurred more innovation and creativity and agility, it's really heartening to see. And I think that, while we probably all would wish this situation away if we could, it's something that I think is really going to create a lasting positive impact for a lot of these organizations in terms of their ability to be resilient and to persevere and to think differently than they have historically.

Sarah Nicastro: I'm personally really excited to see what 2021 will bring, and certainly hoping it's an easier year for everyone than 2020 has been. But I appreciate you coming and sharing your thoughts and insights, and I know that we'll look forward to having you back next year to discuss how things are going and what we're seeing in terms of these predictions becoming reality.

Tim Baines: Thank you, Sarah. I very much enjoyed today's conversation, and I look forward to speaking to you again on this.

Sarah Nicastro: Me too, Tim. Thank you.

Sarah Nicastro: For those of you that haven't listened to episode 70, go back to futureoffieldservice.com and take a look for that. It's a great discussion. 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 Service Management by visiting www.ifs.com. As always, thank you for listening.

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4 Keys to Recruiting Success at Tetra Pak (And How COVID Has Changed the Game)

Bonnie Anderson, Global Manager of Talent Acquisition and Future Talent at Tetra Pak shares insight with Sarah on how the service world needs to evolve hiring at the strategic and practical levels as well as discusses how COVID has changed the game when it comes to recruiting and hiring.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host Sarah Nicastro. Today we're going to be talking about recruiting and hiring success. So recruiting and hiring in the service industries was already a hot topic and has become even more complicated with COVID being introduced this year. I'm excited to welcome today to the podcast, Bonnie Anderson, who is the Global Manager of Talent Acquisition and Future Talent at Tetra Pak. Bonnie has a lot of experience in the recruiting space and specifically recruiting at Tetra Pak four different roles specific to service delivery. Bonnie, thank you so much for joining us today.

Bonnie Anderson: Thank you so much for having me, Sarah. It's really great to be here.

Sarah Nicastro: I'm excited too to have you, so Bonnie is going to be sharing with us today in our discussion her four keys for recruiting success, that she's learned during and I'm sure even before her time at Tetra Pak. And we're also going to talk about how COVID has changed the game when it comes to recruiting and hiring this year. Bonnie, before we dig in, tell us a little bit about yourself and your background and your role at Tetra Pak.

Bonnie Anderson: Yeah, absolutely. And so today I'm as you mentioned, the Global Manager of Future Talent and Talent Acquisition at Tetra Pak. I took this role at the beginning of 2020 and prior to this role and from 2015, I've been recruiting service engineers at Tetra Pak. I am originally from Australia. I've spent about eight years in the UK, and came to the U.S. in, I think, Oh, 2013 now. But I started my HR career and started in the recruitment space from 2008. So have really enjoyed, I love talent acquisition. It's a real passion of mine and I've found a real nation in recruiting, highly skilled engineering type roles. So really enjoy that piece of my work too.

Sarah Nicastro: Yes. And at Tetra Pak, this is something you're doing on a global level. So it gives you an interesting perspective because you can pick up on these trends and challenges, trends and commonalities or differences from country to country, region to region.

Bonnie Anderson: Yeah. So when I first started at Tetra Pak and up until the end of last year my geographical scope was really U.S. and Canada, recruiting for service engineers with a little bit in Central and South America. But now I do have a global role and work with the teams across the globe in the different regions. And I can tell you that service engineering recruitment is difficult across the world. It's not just specific to our region.

Sarah Nicastro: Right. And that's what I was getting at. You have that perspective of how this is challenging at the global level, not just here specifically.

Bonnie Anderson: Yeah.

Sarah Nicastro: And I'm excited to have you Bonnie, because I shared with you a bit when we connected that this is, it has been a very big topic among our listeners and our readership of our content for quite a while. Right? So as we see a lot of the workforce aging out and needing to be replaced, this is a bigger and bigger challenge, and there's a lot of layers to how the field technician role is evolving and what will that mean for the skills we need going forward? How is technology playing a role in what we may be able to automate? Or how service delivery is changing, et cetera. But the way that we have always discussed this topic on our podcast or within our content, and I've shared that with you, is from the perspective of service leaders, not from the perspective of recruiters and folks responsible for talent acquisition and development.

Sarah Nicastro: So I think it'll be very interesting today to have this conversation with you and interesting for our service leaders, which is a huge portion of our listeners to hear how a huge, huge company, global company like Tetra Pak, is tackling this. So, as I said, we're going to talk today about four key areas that companies need to consider or focus on if they're looking to improve their recruitment and hiring practices. And I want you to walk us through each of those four things, what they mean and what your perspective and advice is. So the first is, to understand that we've moved to a skills-based economy from an experience economy. And this is going to be tricky because some of these terms are also terms used in service content. And we're about something a little different here. So I want to make sure we take the time to explain it. So tell our listeners what this shift from a skills-based economy to an experience economy means in the recruitment world and how it would impact their practices.

Bonnie Anderson: Yeah. And when we talk about the skills based economy, it's really a shift that we started seeing probably about five years ago, maybe a little bit longer, but the trend is really here to stay. And I think it's just going to continue to become more skills oriented as we go through. And the skills are really at the end of the day, what we look for and what we develop in ourselves, to make ourselves more employable, I suppose. And where in the past, we've used qualifications and experience as a proxy for identifying somebody with hard or soft skills, there's been an underlying assumption there that if a candidate has X degree or Y experience, then they have A, B and C skills. Now with I guess, the way that information is available, at the moment skills can be acquired in so many more different ways.

Bonnie Anderson: It's not just about acquiring skills through a degree or through work experience. It can be skills acquired from, I don't know, just throwing it out there, sort of like YouTube, something like a hobby, how somebody has grown up. So skills acquisition can come from just about any direction. And when we look at skills based economy, it's shifting that mindset that a candidate needs to have a certain background to be able to fill a position. And having an experience-based assumption has limited talent pools for employers particularly for in demand and niche skills, that are hard to find.

Bonnie Anderson: So, by flipping that a little bit and saying, "Okay, well, actually, a candidate might get a skill from somewhere else other than from their qualification or from their experience." You can find a whole talent population that might be untapped, or that you've never considered before. So and with that in mind, in today's world with digitalization and technology, we can actually use those tools at our disposal to identify those skills faster and quicker.

Sarah Nicastro: Okay. And so, I want to give a shout out to my friend, Roy Dockery, who from Swisslog Healthcare, he was on our second podcast we ever recorded. And we talked about this topic and I'm going to paraphrase a bit for Roy, but he communicated the same message in a different way. Again, from the service executive perspective, but basically saying, when you hear people say we have a talent gap, his argument is we do not have a talent gap, we have an experience gap. And service organizations have become, I don't know if this was his word, but I'll say it, lazy in defaulting to wanting to hire based on experience, because it's easier in the sense of having that comfort level that they've done the job and minimizing, maybe training and ramp up time, et cetera.

Sarah Nicastro: But the reality is, particularly when we're talking about service, that experience pool is dwindling. And so if I'm understanding what you're saying, service organizations have to understand that continuing to hire based on experience is not a realistic path forward. We need to consider how can you find similar skills and necessary skills to do the job without that specific qualification.

Bonnie Anderson: Yeah. And maybe creative. You have to get creative. Particularly, pre COVID and obviously COVID has had a significant impact on the employment market, but pre COVID, we had, I think, less than 3% unemployment within STEM skills, within STEM fields. And so we had a huge amount of pressure on finding the right skills that we needed in time to support our customers on the field. And we had very long lead times and it took a long time to find those skills. And sometimes we would fail at the last hurdle.

Bonnie Anderson: We thought we had a great candidate, but in the end, because they said they have the experience or on paper they have the experience and the qualifications that we think somebody needs to do this job, at the end of the day, at the final hurdle, they don't have the skills that we're looking for. So that was a real gap that we had and that we had to close quickly. But yeah, when an economy is as tight as it was in 2019, you have to find creative ways to get the talent that you need.

Sarah Nicastro: So let me ask you this question, Bonnie, for an organization that is still reliant on that experience economy, they're still working to hire based on experience, what's the biggest or the first step to shifting to a skills based approach?

Bonnie Anderson: Yeah. I think you have to start by challenging your assumptions and taking... And this is where it comes to, and we've talked about this a little bit around outcomes based recruitment and outcomes based hiring. What was it about that education or experience that is the crux that you know that you need from that experience that is important for your role, and that is the skill that you want. So you need to break it down in essence, to uncover and discover the skills that is coming out of that experience.

Sarah Nicastro: So, you said very nicely. You said, people need to start getting creative. And so again, not trying to sound like a jerk, but I do think there's a parallel here of, companies need to stop being lazy and, or get comfortable having to work harder than they have historically to find this talent by digging into, in that experience that you're used to searching for. What is it actually that you need?

Bonnie Anderson: Yes. Exactly.

Sarah Nicastro: And where else can you find that? Okay, so that's a good point. And it's funny because like I said, when you talk about the experience economy, there's a whole other connotation of that term. That is a positive thing in the service world, in terms of moving toward an experience economy, in terms of how you're servicing customers. So that's why I wanted to make sure we really were clear on why it's a bad thing related to recruiting different in the sense of, you cannot continue to just search for talent based on who has had relevant experience. You need to really dig into what within that experience do you actually need and where else can you find it. Otherwise you're going to run out of options.

Bonnie Anderson: Yeah. And that's a very good point. And to be clear, experience means somebody's background and history, their employment history and their employment experience. The experience of, for example, in talent acquisition, when we talk about candidate experience, so the journey that a candidate goes on through the hiring process, and I know you would have a customer experience and that's something that we're very passionate about at Tetra Pak. They are different things, but just to give you an example of that, a hiring manager might say to me, I need somebody with dairy experience. And that, the dairy industry is a very close network. It's specific to certain areas within the U.S.

Bonnie Anderson: And so, to break that down, you say, "Okay, what is it about the dairy industry that's important for your role? Why do they need to have dairy experience?" Oh, well, they need to know aseptic technology. They need to know fluid dynamics. They need to know, how to separate the milk. And then you start to break that down from something that's broad, like the dairy industry into specific skillsets and that's how you can take it from an experience based to a skills based hiring processes.

Sarah Nicastro: Yeah, that makes sense. Okay. So the second key we're going to talk about also is parallel to another service term. So we're going to go through the same exercise here of clarifying all of this, which is to use an outcomes based approach to recruiting. So obviously in service, we also talk a lot about the trend toward outcomes-based service and delivering specific and often guaranteed outcomes to our customers instead of just time-stamped service delivery. So let's talk about what outcomes based approach means as it relates to recruiting and why it's important.

Bonnie Anderson: Yeah. So, outcomes based could be another way of saying skills-based hiring. But when we talk about outcomes, it could mean so much more as well. So it's not just about the skills. It could also be the potential that you might see in somebody. It might be also their communication. It could also be various conditions around their employment, such as maybe where they're located or their availability to travel, which is super important in the service engineering world. It's not just about skills, but also can encompass a little bit more. So that's why it's important to have that differential because there are additional things that we look for when we look for candidates. But let me put it this way, I guess when we talk about outcomes based, it's about knowing where you're going before starting out.

Bonnie Anderson: And I'm sure you've heard that map analogy many times before, but if I was going to drive from New York to San Francisco, my ultimate outcome is to get to San Francisco. But there's multiple ways that I can get there. Right?

Sarah Nicastro: Mm-hmm (affirmative).

Bonnie Anderson: I can fly, I could take the train, I could drive. And then once you have that ultimate outcome, you can start to feed into other certain parameters that you're looking for. Maybe you have a cousin in Nashville that you want to go and visit while you're on your journey. Maybe you want to go see the Great Lakes, you've always had the Grand Canyon on your bucket list. From that, once you've been able to understand what your outcomes are, then you can start to prioritize. And so maybe it's really important that you go and see your cousin in Nashville because you haven't seen them in 10 years. So that becomes priority number one. Maybe, the Great Lakes is, you have a friend that you can visit while you go and see the Great Lakes. The Grand Canyon might be able to just stay on your bucket list. And that's for another day.

Bonnie Anderson: So, from there, you can determine, okay, maybe I take the South route or the North route via Tennessee. So when it comes to outcome based hiring, then you start to lay out all the skills that you need, work with your recruiters to understand what that might be and then you can prioritize those accordingly. The day of a jack of all trades is really, doesn't exist anymore. So it's, we can't find a person that can do everything. As skills become more niche, more specialist, it's unrealistic to be able to find somebody that can do everything. And so this prioritization of skills I think becomes more and more important. And you can maybe take an 80/20 approach to that and say, "Well, if I can find somebody that has 80% of the skills that I'm looking for, I can compromise on those 20% that are less important or something like that." So yeah, that's how I see outcomes based.

Sarah Nicastro: Okay. So a couple of things I want to ask about. one is, the outcomes though, are really looking at what do we need to deliver to our customers, right? That's where you're defining what the outcome is. So in your example, the fact that you're going to San Francisco is dictated by what the customer need or expectation is, right?

Bonnie Anderson: Absolutely. Yeah.

Sarah Nicastro: And the route you're taking to get there is the process of changing that thinking to the skills-based approach to determine what skills do you need to reach that destination. Am I, is that-

Bonnie Anderson: Yeah. And then another way you can think about it is, if we think about it as a customer, and customer oriented position, perhaps and I'm going to talk more about it in the Tetra Pak world. Perhaps we have a customer, for example, in Philadelphia and they might have a lot of packaging equipment on there that needs servicing. And so we don't have necessarily... It's a new contract, so we need a new service engineer to be able to service that contract. But then we have another customer perhaps in Pittsburgh, where there is already a service engineer. They're more of a processing equipment, the customer. So their equipment is slightly different. The outcomes there is okay, our customers here, one in Pittsburgh, one in Philadelphia, have two different needs.

Bonnie Anderson: Can that engineer in Pittsburgh service that customer in Philadelphia? Well, we need to look at that skills set of that engineer. Maybe they can, but maybe there's some gap in knowledge. So I guess it comes around to resource planning ultimately, and whether the resources that you have can fill the needs of that customer. And if they don't, then what are your other options to servicing that customer? You can recruit somebody in, you can perhaps shift some resource planning around, or you can have somebody that already services at another packaging customer in Texas, for example, fly to Pennsylvania to do that. So really and it's where you start to get creative, where you start to think about, okay, what are the outcomes that I need for this particular customer and how can I fill those needs?

Sarah Nicastro: Yeah. And I think, there's a couple of comments I just want to make related to these first two points, because I think that this is really important insight, but I think it's also, we're at a point where we need to be looking forward. And I think particularly when we talk about taking an outcomes based approach to hiring, part of that is, you need to be thinking about how those outcomes are changing. So Bonnie, you and I were introduced by Sasha at Tetra Pak who runs industry 4.0.

Bonnie Anderson: Yeah.

Sarah Nicastro: And Sasha's role is really around this new way of serving Tetra Pak customers. And so yes, to you guys have been doing that now for a few years, but it's relatively new and it's rapidly evolving, right?

Bonnie Anderson: Yes.

Sarah Nicastro: So, there are outcomes that are new to Tetra Pak needing to meet that didn't exist before. And there are roles that have to be introduced that didn't exist before and therefore skills needed that that weren't needed before. I just think it's interesting, this advice is super applicable to present day. And just, I guess I think of it almost in terms of catching up with the times. For a lot of organizations that are very accustomed to being able to hire based on experience. You have to catch up with the fact that it's not really a good strategy at this point, but it's also important to think about how you take these practices and apply them to the future of this industry, which is really rapidly evolving.

Bonnie Anderson: Absolutely.

Sarah Nicastro: So I just think it's, this idea of looking at not only what are the outcomes we need to deliver to our customers right this moment and how do we work backwards from there and what skills we need, but also what are those outcomes going to look like six months from now, or a year from now? And how do we start planning for that?

Bonnie Anderson: And it's really interesting because, it's a strategy that we at Tetra Pak have had since 2017, when we first launched our graduate development program, Future Talent. And it's not necessarily about future-proofing, because I think that's impossible, but perhaps future preparing. And particularly for skills that haven't been invented yet. We don't know what the future holds. Look at this year, we've been completely derailed because we weren't prepared for it. And we don't know what the future jobs will be. And so it's really important, I think for organizations to have a long-term strategy to make sure we have the talent that can develop those skills, perhaps the new generation will be inventing new technologies and inventing those skills along with it.

Bonnie Anderson: And our future talent program is really pivotal to ensuring that we have what we need to prepare for the future. So yeah it's something that I think keeps a lot of us up at night in terms of what the future might hold and what happens to our own skills and how do we keep developing our own skills to keep up with the new generations. But yeah, I think it's important for them.

Sarah Nicastro: And perhaps I'll have you back on to talk about this, because we didn't even touch on this in our introductory chat you and I, but there is this whole topic too, as the service technicians role changes, how can you re-skill and up-skill some of those folks to these new, maybe almost customer service or human touch, more oriented service positions. So that's an interesting topic too, when you look at this future preparing strategy is not only how do you bring in the new talent, that you'll need, but how do you reshape some of the existing talent you have, whose roles are changing in a way that works for them and the company as well?

Bonnie Anderson: Absolutely. It's so much more than just the hard skills, isn't it?

Sarah Nicastro: That'll be another good topic. Okay. And we are going to get to the Future Talent Program, because I think that's a very important thing, but before we do let's talk about the third key or the third area, which is, ensuring clear expectations and clear communication on all ends of the recruiting and hiring process. So talk a bit about how mismanaged expectations or communication breakdowns can occur and how you can really work on streamlining that.

Bonnie Anderson: Yeah, there came a point in the recruitment of service engineers where we just weren't able to find the right talent. We were taking too long. It was very difficult and clearly something wasn't working or multiple things weren't working. And we actually, I'm sure many of your listeners are familiar with all the types of problem solving methodology that are out there. But we use some within HR at Tetra Pak as well. And so we utilized some problem solving methodology, like 5W2H's fishbone to really get to the root cause of the problems, and working directly with our team leaders, our service engineer team leaders on those problems. And one of the highest occurring root causes was around communication and the relationship that we had between the recruitment teams and the hiring managers.

Bonnie Anderson: And so ultimately what we did is we just laid it all out on the table. And we really went through a storming phase of just putting it all out there. The difficulties that we have both sides of the table, because it's not just one person or one team that has the problem, but both sides. And so we came up with a number of different strategies and it was really exciting because not only were we able to come up with some really great actions, but we came together better as a team. Some of the solutions that we had was from group messaging, group chats, we implemented a WhatsApp group, just starting something simple like that. Having group accountability. So making sure that everybody was accountable for their actions.

Bonnie Anderson: And, at the time, we had in-person assessments that required travel from the candidates because of course the candidates can be anywhere in the U.S. And, our team leaders, which are based all over the U.S. as well. So the logistics of getting everybody in the same room at the same time was quite frankly a nightmare. And so we had to make sure that we had commitment from the business to get everybody in the room. And following that things went a lot more smoothly. Of course it was still difficult to find the talent, but I cannot stress enough how important having an open and transparent communication channel with your recruiter or recruiters with the hiring managers and just being really honest about what's going on and recruiters need to bring their game as well. They need to bring their market knowledge, need to bring their knowledge of what's happening. And so I think, both sides need to take accountability and bring up what they need to. Yeah.

Sarah Nicastro: Well, and as you said earlier, particularly when we talked about this idea of moving to the skills-based economy, it is a big mindset shift and it is a big change in how these service leaders are used to hiring. And so any time you're talking about a significant change in how things are done, you see some resistance to that and you see how important communication is and explaining the why behind, here's why this is necessary and those sorts of things. So that makes perfect sense.

Bonnie Anderson: Yeah.

Sarah Nicastro: Okay, so you talked a little bit earlier about Tetra Pak's, future talent program. And I think this is our fourth key. And it's a very important one because if you're moving away from the experience economy and you're moving to the skills-based economy, when it relates to hiring, how do you take those skills that you know are important and make sure that they're leveraged in the right way and harnessed toward the outcome you're trying to achieve, et cetera? So tell us a bit about the Future Talent Program.

Bonnie Anderson: Yeah, absolutely. As I mentioned, Future Talent is really our graduate development program designed for graduates, brand new graduates coming out of university. And for us to build our long-term strategy in developing that new talent. We essentially have two tracks. We have what we call a leadership track, which tends to be more towards commercial roles or management development type roles. But we also have one thing that we really identified when we were developing the program, was that we do have a skills gap between industry and the skills that we require in the organization. So the technical track is really there to help us close that skills gap.

Bonnie Anderson: And so, we don't really expect those graduates to have the skills that they might need, that we might look for in somebody that does have experience. But we do look for potential, how willing they are to learn, how quick they are to learn. And the program is really then to expedite that learning so they can pick up those skills very, very quickly, particularly specialist skills that we look for. And the service engineering profile, is a huge component of that technical track. So it's really important to us. And like I said earlier, we're future preparing, I suppose, for skills that we don't really know we need yet.

Sarah Nicastro: And I asked you when we spoke last, how common is a program like this? And I think you said that from a leadership perspective, the leadership side of it, it's fairly common from the technician side, more of the engineering side, it's not as common.

Bonnie Anderson: Yeah, that's right. I think somebody had quoted to me at one point that maybe IKEA maybe except four or five graduates per year globally into a leadership type of graduate development program. We're accepting eight to 10 technical track graduates within the U.S. alone. We're investing a lot of time, and were truly committed to this type of program in helping us prepare for the future and that long-term strategy that we need to have. Yeah.

Sarah Nicastro: And it seems to me like this is a path folks need to be taking. It seems to me that when you talk about this idea of getting away from being able to hire on experience, and you talk about evolving customer expectations and how do we meet those? It seems like to be able to nurture the volume of, and level of talent you need to have in a service organization, you have to take a more hands-on approach in making that click, you said, closing that gap.

Bonnie Anderson: Closing the gap. And that's really a big part of what it's about, particularly if you pride yourself of being at the forefront of technology, because you might not necessarily find that talent with your competitor companies. So you really have to invest your time to get the talent that you need to have that competitive advantage. And I think that's really, at the end of the day, what's really, really important for organizations to consider, is how can you use talent to find your competitive edge.

Sarah Nicastro: Right. Right. Okay. So four very important areas and really good insight. And so great. So you've learned these things and you're plugging along and then everything changes because COVID hits. So tell us what impact COVID had on the recruiting and hiring process, how Tetra Pak has adapted and what you think the lasting change of that would be.

Bonnie Anderson: Yeah, yeah. It's interesting. It was never in our mind that we had to stop or halt recruitment. We always had the mindset of, we have to make this work. At the end of the day, our customers need to operate particularly, they're at the forefront of food security, so we need to continue to service it. It would be able to service our customers. So there's never any question that we had to stop or that we couldn't make it happen. We had to continue hiring. And on the service engineer side we'd utilized an in-person assessment. And I touched on earlier, it's something that we had to logistically arrange on a regular basis. And it wasn't something we had considered changing because it really worked. Worked very well. And at the beginning of the pandemic, I think in March, we had something like 200 candidates globally that needed to be assessed, and that were in our pipeline, that needed to go through this assessment, interviews and exercises.

Bonnie Anderson: And so, we had to move really fast, and adjust very quickly to be able for business continuity. And this is where really the outcomes based hiring really came into play, because we were able to take that in-person assessment and those exercises and pull it apart and understand, okay, what is it from this exercise that we're looking to assess? What is it that the candidate needs to have for us to move forward with them as a candidate? I think we came up with something like 65 different outcomes from those exercises alone. Sometimes they were duplicated, sometimes things like problem solving came out time and time. And again, mechanical knowledge, dealing with pressure, working with others, those sort of outcomes were all part of it. So we knew that we needed to somehow assess all of these outcomes in a virtual or digital way.

Bonnie Anderson: And a lot of these exercises, with equipment, candidates are using their hands to solve these problems, it's like, "Well, how do we do that in a digital way?" And so what we ultimately did is we worked with an assessment partner to help us identify those different behaviors or those different competencies and knowledge. And we came up with some digital tools, some psycho metrically valid tools that we were able to use. Again, here we use the 80/20 rule, it was okay that we weren't looking for a perfect solution. We wouldn't be able to always measure 65 different outcomes. The biggest one today is manual dexterity. How do you measure somebody's manual dexterity if you can't actually see them working with their hands? We understood that risk and we're mitigating that risk through stronger onboarding, for example, supporting those new hires.

Bonnie Anderson: And last I counted; I think we're up to something like 65 different new hires through that digital process. And we've been able to continue supporting those, onboarding those new hires across the world. So it was very, very difficult time. We worked with our teams across the world to help us validate those outcomes. And we're still keeping an eye on it to make sure that the outcomes are still valid, that the new hires that we're onboarding are performing as expected. But we're very, very hopeful and think it's working well. So I think it's we challenged the status quo there.

Bonnie Anderson: And we were able to switch into digital tools, which is really cool, where the new normal comes in to play and as the pandemic recedes is about, "Okay, how can we maybe continue with these digital tools, but building back in some of that human touch?" Maybe it's important for the candidate to see where they're going to be working, to meet face to face. And we still recognize that that is a very important part of the candidate experience. And in some parts of the world, well, they have been able to open up some of the sites. And so we've built that back in as a hybrid process, a digital plus in-person process. So, yeah.

Sarah Nicastro: I don't know if this is a fair question, but do you have a sense of the balance, if it was 100% in-person before, do you think going forward, it will be 80% digital, 20% in-person? Or do you think you don't know that yet?

Bonnie Anderson: I think hiring managers are going to get comfortable with the speed of digital, using digital. And I think we've been able to break down and demystify some of that need of meeting in person. But it's not a one size fits all. I don't think, I think it's important that hiring managers continue to challenge some of those assumptions, but at the end of the day, if they do feel that they do need to measure somebody's manual dexterity, if they have questions still around how this person is using their hands, then it's important that we get the hire right.

Bonnie Anderson: And they invite them for an in-person interview to complete that gap in knowledge about that candidate. So some hiring managers might feel 100% comfortable with making a hire using digital tools only, some are not. So it's about striking that balance for that particular case. Of course, in places like the U.S. we just cannot, our sites are closed apart from critical personnel. So we really make sure that our hiring managers are comfortable with the hires and we're exploring as much as we can using interview questions as well. So, it's a blended approach.

Sarah Nicastro: It is safe to say that COVID has definitely forever changed the process and moved it in the digital direction for Tetra Pak?

Bonnie Anderson: Yeah, absolutely. No question.

Sarah Nicastro: Which is again, there's a lot of parallels between this conversation and some of our service delivery conversations. You see companies that have had different levels of resistance to varying technologies that by force, like you said, had to challenge the status quo and adopt, and now it's just that realization of, "Okay, this could work and let's look at how we make it work when we have to make it work and how we incorporate it into some hybrid world, as things return to some level of normal."

Bonnie Anderson: Yeah. You said it just there, you have to make it work. There's no question that you can't make it work.

Sarah Nicastro: Yeah.

Bonnie Anderson: And so, you have to accept imperfection and you have to accept sometimes that you make a call that might be the wrong call, but that's okay.

Sarah Nicastro: Everybody's feeling their way through. Right?

Bonnie Anderson: Yeah. Absolutely.

Sarah Nicastro: And for me, covering the space to me, it's the after that's so interesting because I think I've seen firsthand the resiliency of service organizations across a wide variety of industries that I've talked to and everyone is making it work, in some way to some degree. And I think everyone has set up to that task, but what's really interesting to me is how do things land as recovery ramps up and what will the new mix look like? Because I think the companies that have had been agile and adopted and adapted and are doing things differently by force, now have that comfort level. They're not just going to abandon those tools and go back to an all manual process. So it's just going to be really interesting to see how things net out over time.

Bonnie Anderson: Yeah. And I think one thing that's really important on that is to measure the changes that you've made, related to COVID and measure the differences between pre COVID processes and post COVID. And that's one thing we'll be doing with the recruitment process and we've seen efficiency gains because we're moving to a digital process already. And we're only a few months in, so we continue to keep an eye on it. And we'll be in a position where we can take the best of the best, we can take the best of both worlds at that point. And that's where the hybrid will really come into play.

Sarah Nicastro: Yep. Okay. Any final words of wisdom for our listeners?

Bonnie Anderson: I was thinking about this question and you can really take it down a practical route or take it to a, I don't know, a different type of route, but I think for me the one thing that I think is really important at the moment is to remember that it's a super tough time for candidates right now. It's a tough time for all of us and having that empathy for our candidates and providing a great candidate experience when you're talking to them is really important. Sometimes they might've lost their job.

Bonnie Anderson: They may have lost loved ones. As hiring managers and recruiters, we really need to be mindful that all of us have other things happening in our lives that could be out of our control, but could be impacting our state of mind in a given moment. So having empathy and compassion will also help you really build trust with your candidates and will really help them shine and bring out their best selves in their hiring process. And if there's one thing that I really emphasize is just have that empathy, that top of mind.

Sarah Nicastro: Absolutely. We all need that right now.

Bonnie Anderson: Right.

Sarah Nicastro: All right, Bonnie. Well, thank you so very much for joining today and talking through this, I really appreciate it. And hopefully, like I said, you'll come back at some point and maybe we could have a conversation about up-skilling and re-skilling and what that might look like going forward.

Bonnie Anderson: Yeah. Thank you so much for having me. It's been a wonderful conversation. Always happy to come back.

Sarah Nicastro: Thanks again. I do urge you if you're listening and enjoyed this conversation to go back to futureoffieldservice.com, you could check out the episode I referenced earlier with Roy Dockery of Swisslog Healthcare, it's podcast episode number two, where we had a conversation about this topic from the service leaders perspective. You could also check out some of the coverage we've done on a Tetra Pak's move to outcomes-based service, you can just search under Tetra Pak. So check that out. 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 service management, by visiting us @www.ifs.com. As always, thank you for listening.

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What’s Your Touchless Service Strategy?

November 11, 2020 | 19 Mins Read

What’s Your Touchless Service Strategy?

CEO of Blumberg Advisory Group, joins Sarah to discuss what touchless service will look like in a post-pandemic world.

Sarah Nicastro: Welcome to The Future of Field Service podcast. I'm your host, Sarah Nicastro today. Today, we're going to be talking about one of the hottest topics of the year, touchless service. In other words, remote service, the ability to deliver service remotely. I'm excited to welcome to the podcast today. Michael Blumberg, president and CEO of Blumberg Advisory Group. Michael, welcome to the podcast.

Michael Blumberg: Thank you, Sarah. It's really a pleasure to be here today.

Sarah Nicastro: Thank you for being with us. So today, Michael and I are going to be talking about some of the considerations for a touchless service strategy. So it's been a year of challenges in terms of the typical field service delivery that we're all accustomed to. And as such, we've seen a real spike in the use of tools like remote assistance and other technologies that enable remote service. And I think it's a really interesting trend. What I'm most curious about is what this is going to look like when things begin to normalize. So I'm excited to hear a bit about what Michael has seen and is seeing. And we're going to talk a little bit about some of the things that you'll need to keep in mind as you set your touchless service strategy for the post-pandemic world.

Sarah Nicastro: So as I said, Michael, here at Future of Field Service, we have interviewed a number of companies this year that have really relied on tools like remote assistance for business continuity throughout the pandemic and to really be able to keep their employees safe, to keep their customers safe and to continue providing service when their typical methods were brought to a halt. So tell us a little bit about what you've seen in your interactions over the year and how you've witnessed that trend from your side.

Michael Blumberg: Sure, Sarah. We're really seeing an uptick in the number of companies that are using remote assistance tools, their frequency in which they're used and in the types of applications that they're used. When these tools first came out, most people thought that they would be used in an emergency service environment, like a repair situation, but we're seeing more and more companies are using them to support installations even in a B2C environment, not just in a B2B environment. We're also seeing them for repairs, depot repairs, for site surveys, for application support.

Sarah Nicastro: Okay. So increased frequency and increased breadth of use cases. One of the things that I've had a lot of conversations around this year, Michael, with the folks that I've interviewed, particularly that have deployed tools like augmented reality remote assistance is the idea that... It's not like these tools are brand new, right? They were around before February or March, and certain organizations were already using them in different scenarios. However, I think it's fair to say, at least in what we've seen, that the volume of their use has certainly increased and companies that we've spoke to maybe had them on the roadmap, but were able to really quickly move on that to help them navigate COVID. But one of the themes that's come up in a lot of those conversations is how this situation, in particular, has really opened people to change a bit more than they were historically.

Sarah Nicastro: So, both from when you talk about touchless service and you talk about these technologies, both from the employee side. So employees that maybe in the past would have resisted the introduction of those tools a bit that were happy to have them, because it meant they could continue working and they could continue serving their customers. And then also on the customer side, customers that maybe were pretty comfortable with the status quo and would have resisted the introduction of something different a bit, have been very happy to have alternatives for folks to coming on-site in those old scenarios. Is that something that you've discussed with your contacts, something that you've seen as well?

Michael Blumberg: Yeah. It is something I've seen, and you're absolutely right. There were companies that had plans to do this prior to the pandemic. It was what led them to do it, because many cases they had no other choice, really needed to do it. But I think what's unique about the pandemic, what's the unique... Well, there's many unique things, but one of the things I think it did for changing the way we do things and deploying technologies like this is, we were all looking at what's in it for me? But we all had a reason to do it.

Michael Blumberg: The other part was what's unique is we're also looking out for other people. So one of the reasons why there's a resistance to change and implement new technologies is because people don't know why they're doing this. But there's a very clear reason why, because you couldn't go on-site. You didn't want to spread the germs, and there was a lot of uncertainty. So this was clearly a way to deal with it. It forced us. It pushed us forward.

Sarah Nicastro: Yeah. And I think in this area and in others, I think that little bit of force is something that honestly will be a bit of a silver lining for folks. Because I think that it's going to spur a lot of acceleration and innovation as companies ramp up, because we've gotten a little rid of a bit of that resistance.

Michael Blumberg: Exactly.

Sarah Nicastro: So that makes sense. And as I said at the beginning, we've done quite a bit of coverage on the use of these tools for business continuity efforts. And I am very cognizant of the fact that some listeners are still in the midst of business continuity, and others are seeing things really take a turn for the better and focusing a bit on recovery and ramping back up. So I respect the fact that listeners are at different phases on this journey. But I do think what I'd like to center our conversation around today is what will come beyond the use of these tools for business continuity? As we look forward, what will the best strategy for touchless service be post-COVID? So when we are able to return to business as usual, but we have these new tools in place and we have these new methods of doing things, what strategy can we set to provide the right type of service in the right way at the right time for our ourselves?

Michael Blumberg: Sure, Sarah. That's a great question. And I've given some thought to that prior to this interview. I think for every service organization, they need to have a touchless strategy, a touchless service strategy. They can't go about business and say, "I'm not going to deal with this. It's not important." It is important. I think touchless service will become table stakes for all service organizations. Just like you can't think of a field service organization that doesn't have a mobility solution. I think that's what touchless is going to be. And while the pandemic created this buzz word, a touchless service, because the technology was always there, it really has a lot of benefits to a service organization and the customer. In my opinion, I think one of the biggest benefits is it eliminates friction, and friction is caused when there's a lot of touches or a lot of steps or a lot of additional time involved in completing a task or process.

Michael Blumberg: So, we do this with touchless. We don't have to send a technician in a car or truck and drive to a customer site. They can do it remotely, and therefore, complete more calls per day. And the customer gets a service completed faster. So it has a lot of benefits. So this will continue. Companies need to consider it. It's got to be part of their offering. It's got to be part of their service delivery. And the name may change. It may not be touchless service when we're post-pandemic, but the concept will still be there.

Sarah Nicastro: Mm-hmm (affirmative). So what is your advice for folks on how to set the right strategy for their business when it comes to touchless service? They need to have one, but what should it look like?

Michael Blumberg: Yeah. I think the strategy may differ a little bit by industry or vertical, but some of the things you should consider is what is the complexity of the equipment being supported? What's the level of mission criticality of that equipment and what are the safety issues? So you can almost think of a grid, like a two-by-two grid or four quadrants where you look at the complexity of the equipment and is it mission critical? Is it high voltage? Is it dangerous? And then also what's the skill set of the customer? Because remember when we talk about touchless service, we're talking about supporting the customer. So if you're in an environment where it's not very complex, maybe the customer has some limited skill sets, you can use touchless service. I think it's a good solution to also deal with some of the shortages in labor right now. But in a more complex environments when it's highly complex equipment, maybe high voltage, and there's nobody on site that's qualified or certified to support high voltage equipment, then I think definitely on-site.

Sarah Nicastro: Right.

Michael Blumberg: And then there's another part of this is I think it should be part of an offering. So you've got, maybe it's a basic service, and maybe basic service will be remote assistance. Again, depending on the product. And in other cases, he might charge you a premium. It's a value-added service for the touchless service, if it's a more complex piece of equipment.

Sarah Nicastro: Mm-hmm (affirmative). Okay. All right. So when folks are thinking through how they're going to set their strategy, what criteria would you use to determine what to do remote and what to do in-person?

Michael Blumberg: Well, I was trying to answer that previously. So think of maybe... One example is cable TV. A customer has to install a set top box. It's pretty simple to do, may be hard to get a technician out there, or they may have to wait a long time. You could give them an option of the remote assistance. We'll make this feature available to you to help you install your set top box. While we can describe it over the phone, you may not know what we're referring to. We might not be able to see what you're pointing to or what you're looking at. We can use remote assistance to observe, to see what's going on. Where we might be on-site is maybe it's a transformer, an electrical distribution transformer in a power plant.

Michael Blumberg: I don't know that that's something that we can do through remote assistance. If it goes down, you might have to bring a technician out there on-site, particularly if there's nobody on-site in the customer organization that can support that technology.

Sarah Nicastro: Right. Yeah. Those are good points. And I think that they're really good food for thought. I think that what this... I think this is going to be one of the toughest things for folks to sort through once things normalize is, what is the protocol? What is the process for how this fits into service delivery as a whole. So I think the points you brought up are really good ones. What's the complexity? What's the safety scenario? What's the possibility for danger? What's the customer's skillset and ability? I think there's also this element of... And it's maybe a little bit softer, but I also think there's this element of where does an in-person video or in-person visit add value in the sense of just needing to have that human connection.

Sarah Nicastro: So maybe that's something where it's more of a frustration or an escalation or maybe that's an initial install where that person is a part of the brand experience. But I think that one of the things that I believe about the future of remote assistance and touchless service is that I think it will become a really good frontline and first wave of service delivery. I think it'll be really good in terms of triaging issues and figuring out what's going on. Possibly completing simpler repairs remotely and things like that, so that the field technician's role can evolve into being almost more of a customer service type role than just a break-fix type role. So I think that's an important and interesting part of the conversation.

Michael Blumberg: Yeah. I think that makes sense, Sarah. I think if there's a role for the technician to play when he's at the customer site, besides just fixing something. Like being an ambassador or asking additional questions, you might want to do it on-site. And then I also think we'll likely see remote assistance tools as being part of the technician's toolkit. So before they think they might have to go on-site, but let's try to do it remotely. Let's see if we can troubleshoot and triage and diagnose, as you said, before we make the commitment to travel on-site.

Sarah Nicastro: Yeah. It's an important tool to put companies in a position of power in terms of what they're capable of and being strategic in making the decision of how and when they opt to provide service in a touchless way or in a on-site way. So when we talk about touchless service, I think my mind just naturally defaults to augmented reality remote assistance, because that's what I've discussed the most this year. But there are certainly other tools that folks need to be aware of. So what other touchless tools should companies be considering as a part of their strategy or toolbox?

Michael Blumberg: Yeah. Great question. So, I think it's any tool that is going to enable self-service or take the touch requirement to be an in-person on-site out of the equation. So yeah, we could think of things like just a basic telephone call, right? That's the remote assistance, although that's not what we're talking about. We could do go to use video conferencing as a tool. You talked about virtual existence and augmented reality, but we can also talk about look at full-blown augmented reality solutions. They make use of CAD drawings and digital twins as part of the solution. Connected to an IOT platform, that would allow a company to deliver touchless service. We can also consider a self-service tools like knowledge basis.

Michael Blumberg: I think I just described the gamut from a simple telephone call to a solution where you've got IOT platform with sensors, and it's running an AR algorithm to determine whether you should dispatch a technician or notify the customer that support is required. And then perhaps using an AR session to deliver the service to the customer without dispatching a technician.

Sarah Nicastro: Mm-hmm (affirmative). Okay. Yeah. There's a lot of options, which is exciting. So the other topic that I think is probably... So to me, the most interesting parts of this discussion are what's the strategy in terms of how do companies operationalize touchless service in a way that works cohesively with the ability to go on-site if and when it's needed? So that's what we just spoke about. The other aspect of this that I know is really top of mind for the industry is looking beyond COVID. So again, there's companies that are right now relying on touchless service a lot or entirely to deliver service in the midst of this situation.

Sarah Nicastro: But after the fact, one of the biggest considerations for folks is, how do we monetize remote service as a part of the service offering? Okay. So I actually just... I knew we were recording this today, and I just had a conversation this morning where this came up and it's a huge, huge, huge consideration. So what are your thoughts or advice for people on how do you make this a part of the service offering in a way that ideally it drives revenue?

Michael Blumberg: Yes, Sarah. That's a great question. And it's a topic that's near and dear to my heart, because I love to help companies monetize service offerings and grow their top-line service revenue, and use tools and technology to achieve that outcome. I think monetizing is going to really depend on the product and the industry. I think there's some times where a manufacturer might find, or even a service provider, like an independent service provider, that it might be in their best interest to not charge for the touchless service. But there's other times where they might find there's definitely a value proposition to do that in the use case. But to get there, to get to the monetization, there's a couple of steps I think the company needs to consider or take into account.

Michael Blumberg: First, I think they really need to gain clarity about the value in the use of the tool. They really need to be able to clearly articulate to the customer what it will do. What's the benefit it will do? Why should they use it? What advice will they get? Not advice, what value will they get out of it? Will it save time? Will it improve productivity? Will it increase uptime? So they've got to be able to talk about it in those terms, because without those terms, there's no value. If there's no value, nobody's going to pay for it. You can't monetize it.

Michael Blumberg: The second thing is, I think it's really important that they conduct market research to validate there's a value in use, and customers are willing to pay for the solution. But we don't want to force things on customers. It'll fall flat on our face. Anyone who does will fall flat on their face, and likely what's going to happen is they're going to say, "Yeah, we tried it. There's no value. We can't charge for it." No. They just didn't do their proper due diligence. So conduct the market research to validate the value in use that there's a level of interest in it, and they're willing to pay.

Michael Blumberg: Third step is construct offerings, different offerings at different price points. And determine what kind of customers are going to buy, based on those offerings and price points. So there's some research upfront, and then some research after you develop the offerings. I would suggest anyone who's considering doing the research, they should do focus groups as well as surveys. So maybe focus groups to get the customers involved. Get their feedback qualitatively, what do they think about it? How much are they willing to pay? Get some ideas, and then validate that through large scale research efforts, like a telephone survey or email survey. But then when you have all that knowledge about what it is you're going to offer, and the customers want it and they're willing to pay for it, you got an idea of the price point. And then, of course, you want to conduct your market sizing and forecast on the market that there's a market. How big is it? How fast is it growing? How much of that you can penetrate?

Michael Blumberg: And then the last step, of course, is your go-to-market plan. How do you take it to market? Are you going to pilot-test it first? Do you have some beta customers or are you going to roll it out full-scale all at once? Probably the best thing is a pilot, but each company has to make their own decision until they do it.

Sarah Nicastro: Sure. Sure. Yeah. I like the point you made about... The way I took it was speaking their language, right? So this is a mistake that I see companies make time and time again, is using internal terms to describe an external value proposition. Right?

Michael Blumberg: Mm-hmm (affirmative).

Sarah Nicastro: So, "Hey, we're now we're doing touchless service." Well, touchless service might not sound appealing to a customer that likes to consider themselves high touch. Do you know what I mean?

Michael Blumberg: Right.

Sarah Nicastro: So remote resolution might be a better way to put it or, "We can solve your problems faster," or, "We can guarantee X result for you," or what have you. I think it's something that oftentimes doesn't even necessarily change the tools used, the steps taken, or the execution of what's being discussed, but has an incredibly important impact on the outcome of the project's success in terms of how it's received by the end customer. I think it's a really important point to have people remember that there is most often a difference between how you talk about this and sell this and plan for this internally, and the vernacular you need to use with your customers and how you need to sell it externally.

Michael Blumberg: Yeah. I agree 100%, Sarah. You point to two things. One is what I call the difference between having a production orientation versus a market orientation or customer orientation. Companies that don't do a good job at monetizing their service or selling offerings is they're talking to the customer in terms of what works for them. You call that internal. I call that production they're talking about. How difficult is it for us to deliver service? So we've introduced this new tool to make it easier for us. That's taking production internal orientation to the extreme. Versus the market orientation is, "Look at what this can do for you."

Sarah Nicastro: Right. Okay.

Michael Blumberg: And I think the other thing is that too many companies use buzzwords. They pick an industry term and say that's what it is. In the research that I've done recently on touchless service, I find the companies that are really getting their customers to embrace it and adopt it and use it and engage it have branded it themselves. They're not saying, it's a AR solution from this company, it's they've given it their own brand name. I think that makes a difference.

Sarah Nicastro: Mm-hmm (affirmative). Absolutely. So how would you describe or summarize the opportunity for touchless service in a post-pandemic world?

Michael Blumberg: Well, I think it provides a trifecta of value in this post-product pandemic world. It dramatically improves customer experience. We're finding that the end customer likes this ability to get touchless service, to get service fast, to have somebody walk them through the solution. I know I had that occur to me when I had a problem with my cable TV. We had a touchless service experience. It optimizes service delivery, so you can do more with less, because you don't have to necessarily send the technician on-site. You could do it remotely. You can also be more productive and efficient, because you're doing the triage. You're doing the troubleshooting remotely and you get a better chance of knowing exactly what's going on. Because you could see and observe it.

Michael Blumberg: In the past, you had to do it based on somebody's description of it. And maybe there is some language issues, or what have you. Or just they weren't describing it in a way that the expert on the other end knew what they're talking about and vice versa. And then the third benefit is, we just talked about it, generates a new source of revenue for companies.

Sarah Nicastro: Yeah. Yeah. I think it's going to be really cool to see this evolve and to see companies navigate some of these things we're talking about, in terms of how to incorporate this into their operation and how to monetize it and how to evolve those relationships with their customers and things like that. We talked a little bit earlier about this increased openness to change that we have both recognized this year with what's going on. What advice would you give folks on how to make the most of that attitude that exists right now? How could they capitalize on the fact that people are a little bit more open-minded right now than they maybe were before this situation?

Michael Blumberg: Yeah, sure. Yeah. As we discussed earlier that while the pandemic was putting these external pressures on us, that external pressure led us collectively to look at how do we make sure everyone's safe? How do we make sure we still get the job done? How do we make sure we still serve the customer? And most importantly, how do we look after one another? I think in the most simplest terms, it's how do we look after each other? How do we make sure we don't spread germs to somebody, we don't spread the virus to somebody? So part of it is like, "Let's protect ourselves. Let's look at what's in for us," but also how do we help the other person? So we could learn from that and look at applying that idea, that concept to any new technology or any new desire for change. It ultimately gets down to really being clear about the why we're doing something and answering for us and for others, what's in it for us all, collectively?

Sarah Nicastro: That's a good point. And like we talked about just in the question before, that answer is going to be different depending on which stakeholder you're looking at, right?

Michael Blumberg: Exactly. What you're getting into.

Sarah Nicastro: So going back to, in terms of... Yes, exactly. In their own language. Yes.

Michael Blumberg: Exactly. Yeah.

Sarah Nicastro: Good. All right, Michael. Any final comments, thoughts, advice, words of wisdom that you would want to share with our audience?

Michael Blumberg: Yeah. Yeah. I'm happy to do that. So when I talk to companies who have really powered through the pandemic, and even during the darkest periods, they seem to be doing okay. They're getting by. They had customers. They were delivering service. Versus other companies that were struggling and even still struggling today. Now some of them, it might be because they're in industries that are just unfortunately not doing well. But I saw other companies and spoke to other companies where the same industry, one company is doing really well through this, has customers, delivering service, generating revenue, making profit, and others are stalled. And I think what it comes down to is those companies that were stalled, were stalled all the time. It's just as they say, "High tides raise all boats." And so low tides prevent the boats from going out in the ocean.

Michael Blumberg: That's what was happening. Companies that, and that's what had happened. And so companies that are doing well were agile. They're agile companies. They had contingency plans. They were anticipating the change may happen. It was just a matter of when. Those who weren't, quite the opposite. So I think that's the takeaway is, do your best to be agile, have contingency plans, be ready for change, expect change to happen.

Sarah Nicastro: Mm-hmm (affirmative). Yep. Very good. All right. Well, thank you for that, Michael. And thank you for being with us today. I really appreciate it.

Michael Blumberg: Sure. It's my pleasure, Sarah. Thank you.

Sarah Nicastro: You can find more on how companies have been navigating COVID-19 complexity and how they're preparing for the post-pandemic world by visiting us at FutureofFieldService.com. You can also find us on LinkedIn as well as Twitter at The future of FS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS service management by visiting www.ifs.com. As always, thank you for listening.

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November 4, 2020 | 27 Mins Read

Making Mental Health a Focus in Service Leadership

November 4, 2020 | 27 Mins Read

Making Mental Health a Focus in Service Leadership

Linda Tucci, Global Sr. Director of the Technical Solutions Center at Ortho Clinical Diagnostics, talks with Sarah about why – particularly this year – it is critical to make mental health a priority in service leadership and how she’s done so, for herself and her team.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be tackling a topic that is near and dear to my heart, which is the topic of mental health. We're going to be talking about why making mental health is so important of a focus in service leadership. I'm excited to welcome to the podcast today, Linda Tucci, senior global director for the Technical Solutions Center at Ortho Clinical Diagnostics. Linda, welcome to the Future of Field Service podcast.

Linda Tucci: Great to be here with you today.

Sarah Nicastro: I'm excited to have you. Linda and I have talked quite a bit about this topic, and I'm thrilled that she's here, because she's willing to be very open and very honest about a topic that sometimes can be a little personal, a little uncomfortable for people to speak freely about. But I think it's very important that we do, so thank you, Linda, for being willing to get personal with us and share with us. Before we start our conversation and dig into the topic, why don't you just tell our listeners a bit about yourself, a bit about Ortho, and your role there?

Linda Tucci: Sure thing. Well, I started my career as a medical technologist and worked in multiple hospitals in Boston, New York City. Basically, when you go to the doctor and give blood, I was one of the med techs that processed the blood samples to generate the diagnostic results. And I really enjoyed being a med tech, and I see them as unsung heroes within our medical system. Later, I moved to the medical device industry, working for the manufacturers of those analyzers, and had various roles, I would say, over the past 20-plus years now, primarily in service management, whether in field service or in a contact center environment providing technical support.

Linda Tucci: My role here at Ortho Clinical Diagnostics, I've been here now for five years. I'm the global director for the Technical Solutions Center. At Ortho, we manufacture products and equipment for blood testing that include both diagnostic analysis and also blood transfusion compatibility. My team provides technical phone support to the operators of the analyzers, medical technologists in hospital and reference labs. And we also provide escalation support to our field personnel. I've enjoyed being in service roles. That's basically what I do, and I serve our customers best by taking great care of the people that I serve at Ortho.

Sarah Nicastro: Absolutely. I think that this topic is one that has been more important than the attention it gets for quite a long time, but I think particularly this year, the topic of mental health is just critical. It's been a heavy year for just about everyone in some way, but especially for you. Tell us about that, and then we will get into how that matters and what that means when you are in a service leadership role.

Linda Tucci: Sure. Well, I would say my story is my mom passed back in March, just shy of her 96th birthday. She had increasing challenges in the last year of her life, but had a rapid decline, and passed away just as COVID was blowing up. We had the wake and the funeral just as social distancing mandates were being enforced.

Linda Tucci: And when I came back to work, I found myself in a very fragile, and I would even say hypersensitive, state. And on my first day back, I had the following thought, and that was that I really needed compassion shown to me, and I needed to have the courage to tell people what I needed, and to do so with clarity. And being an introspective person by nature, I really thought more about the topic of those three words: compassion, courage, and clarity.

Linda Tucci: With compassion, I clearly knew that I needed compassion shown to me, but I asked myself if I was really demonstrating compassion to others. In the midst of the past few months, with people working remote and having all of the pressure, in light of the environment of COVID, it was vital. And especially, you're at home, dog's barking, caring for children, aging parents. I really asked myself, was I truly being compassionate in an impactful way? Was I encouraging people to have the conversations that really were important? Especially for people that it doesn't come easy or natural, was I creating that environment? Especially, was I being very clear? Not wishy-washy, but being very direct.

Linda Tucci: I questioned, as someone who aspires to be experienced as a leader, was I making space for the conversations that were important? And in reality, the response wasn't what I exactly would've wanted to have told myself. And it wasn't that I wasn't doing it, but I questioned if I was doing it consistently, and that's something I really am trying to model now. Does that make sense?

Sarah Nicastro: That does make sense. And I think that it's... There's a lot of layers to this, right? You had this major, major loss, and I'm so sorry for that.

Linda Tucci: Thank you.

Sarah Nicastro: And then that's combined with the start of this global pandemic, which is something that... In March, I know, myself, I could've never imagined what we've been up for this year and how it would impact my own mental health. I think, for me, I have really quite significant anxiety, and I've battled with depression off and on, and so I'm aware of those things and I work to manage them and take care of myself.

Sarah Nicastro: And I think when this all first started, I actually went into this crisis response, which I do quite well in a crisis. I'm like, "Oh, this is fine. Everything's fine. We're going to isolate, the kids are going to be home, but it'll be totally fine. We've got this." And then, around May or so, it just all of a sudden came... It hit me like a ton of bricks, because it's like, "Okay, wait. This was supposed to be this short thing that we had to deal with, and I thought it was going to be fine, but I can't do this forever." It has been a tumultuous year, and I think it's so important to figure out how to find your best balance between staying as mentally healthy as you can and continuing to show up in your role and be there, for you, for your people.

Sarah Nicastro: I want to talk about specifically some of the traits that you had to look internally on and say, "Okay, this is something that I need to ask for and exhibit." The first is vulnerability, and that's something that is not easy. But I think that, as a leader, if you can lead by example in being vulnerable, that is a huge gift, particularly this year, for people to know that it's okay if they're not okay. Tell us a little bit about your experience with knowing you needed to be vulnerable and how you've done that in a way that empowers your team to do the same.

Linda Tucci: Mm-hmm (affirmative). Well, I would say, when I talk about compassion, it's clear that it's equally important to demonstrate compassion for others and also have self-compassion, and that's been a major lesson for me. If we don't stop to refuel and recharge ourselves, then we've got nothing to give the other, whether at work or within our families.

Linda Tucci: For me personally, taking time for me, which always isn't in the forefront of my mind, was something I made myself do, because I recognized how important it was. On top of everything else, I had an emergency appendectomy in July, just another gift of 2020. And then, over August and September, moved to a new home. I would say 2020 has just been a blur. Making time for me, just to relax. Walk the dogs, more prep time for work so that I felt ready to be present at work. But most important that I was focusing on what mattered most, and a lesson for me is to also to know what to let go, to do my best to be present in each moment and not get overwhelmed with all the other things that needed to get done, not get overwhelmed with all the external noise due to the state of the world.

Linda Tucci: And for my team, I felt it very important that I shared my story, my struggles, and how I responded to it. When I did my midyear global updates, a series of town halls, as a check-in, I shared openly how I'd used our employee assistance program at work and how beneficial I found that experience. And I invited everyone, if they were struggling in any way, to find someone to talk to, it didn't need to be their manager, to know of the great tools that we have here at Ortho for them.

Linda Tucci: I received heartfelt responses from individuals around the world, and a few even told me that it gave them the courage to open up to have conversations that they were struggling. And I've encouraged my managers to do the same with their teams, to make sure that they're caring for their people in the context of their present state. It was important for me that I modeled that behavior.

Sarah Nicastro: Tell me what you mean by that, the context of their present state.

Linda Tucci: Well, I believe that we have to meet people where they are, based on their emotional state, their needs, their concerns. For me, it's really important to foster connection, collaboration, and alignment. We have to personalize how we respond to people. Some people love direct feedback, some people want a two-by-four. They don't want the sugar coating. Some people need to hear feedback in a more sensitive way, and it's important that we react to where the other person is. I believe seek first to understand, then to be understood.

Linda Tucci: And maybe what had worked historically in a past relationship... Like my story. I came back to work. The work was there, it was coming, guns a-blazing. Do you know what I mean? And yes, of course, people had known that my mom had passed and were sensitive to that, but unless I spoke about it, they would not know that I really felt fragile, that I needed something more.

Sarah Nicastro: And something different.

Linda Tucci: Yes.

Sarah Nicastro: Yeah. I think that's a really good point, and I think that there can be this stigma around being vulnerable at work, and particularly as a leader. And I think that stigma is only really going to be minimized or erased by folks like you leading by example, being comfortable talking about your current reality. And also, showing that, despite what was going on in your life and despite the state you were in mentally and how you might have needed to interact and engage differently, you were still showing up. You were still showing up, you still found ways to contribute and to be effective and impactful. It just looked different than it had before. How would you summarize why vulnerability is so important in leadership, particularly this year?

Linda Tucci: Mm-hmm (affirmative). Well, you've touched upon it already. Just look around. All the data says that depression, suicide, anxiety rates are up. And it's unfortunate, even with my own team, there's been family members who have committed suicide. People are suffering. 2020 is throwing the kitchen sink at us, between the lockdowns, job loss, wildfires, hurricanes, stress, polarization. I would say that we have to ask ourselves, how do we manage, how do we lead in these times? If we want to be experienced as leaders, we have to demonstrate both empathy and compassion. People connect with people.

Linda Tucci: And being vulnerable is not a weakness; it's an act of courage. There's evidence that leaders who are prepared to show their vulnerability more easily gain the trust of others and are believed to be more effective leaders, and I believe in that statement. Brené Brown says, endearing greatly, that, "Vulnerability is the core, the heart, the center of human experience." And I believe in that.

Linda Tucci: A couple months back, I shared a quote with my management team attributed to Eleanor Roosevelt, and that's, "A good leader inspires people to have confidence in their leader. A great leader inspires people to have confidence in themselves." And I hope to exemplify that and enable others to do so as well.

Sarah Nicastro: Absolutely. I love that. And one of the things that I've had a few conversations around this year that is particularly challenging in our virtual world, is picking up on cues that are easier to pick up on in person. When someone doesn't feel empowered to speak up, or they're uncomfortable sharing in an office environment or in an in-person environment, you might be able to just notice they're a little bit withdrawn or notice that something's wrong, and decide how to handle that. Maybe you address it directly, maybe you just subtly let them know, "Hey, I'm here if you need to talk," or, "Is everything okay?" Whatever that is.

Sarah Nicastro: And in this virtual world, I think one of the reasons we're seeing increases in depression and anxiety and all of those things is, it is easy to disconnect. It's not the same as it is in person. Your employee can be going through something significant and not share. I think that creating a safe place and showing that... Not saying, "Hey, it's okay," but showing that by being the one that is saying, "Hey, I'm not okay, and here's how I need you to help me." I mean, there's no more powerful gift in letting them know that they can do the same. I just think that's a really, really important point.

Sarah Nicastro: The other aspect of this, though, beyond getting comfortable being vulnerable. Some people are naturally okay with it, and others are not at all. This is going to be a real test for some folks. But besides getting comfortable being vulnerable, you need to be able to have courageous, and sometimes really hard, conversations. What is your advice on being able to do that well, both as it relates to yourself and as it relates to the folks that you're leading?

Linda Tucci: Mm-hmm (affirmative). Well, I would say introspection is key. Self-awareness is so important. I'm someone who wears my heart on the sleeve. If you ask me how I'm doing, I'm going to tell you. But everyone's not wired that way. And to your point, moving virtual and not having these face-to-face interactions or doing it over webcams, we have to give space for those safe conversations.

Linda Tucci: I have found that, when I share my experience, and I don't mean coming from a place to make it about me, but to make connection. And when I ask the question of saying, "Hey, I'm really struggling with this," whatever the this is. "How are you managing it?" Really demonstrating active listening, but asking those open-ended questions. Leave it for the other, whether they want to respond or not. But if you have a reporting relationship or any working relationship with the other, you'll notice those cues. You'll notice if the behavior is different. But you need to keep it safe for the other.

Linda Tucci: I said already, come from the space of seek first to understand, then to be understood. But if it's not your strength, and especially being in a role as a leader, you have an obligation to get help from your HR department or others, because the people that we serve deserve to get the feedback that's required, deserve to have a leader who is sensitive to their needs. To hold back on not giving feedback or shying away from the tough conversation is not living up to our obligation.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. And we had Mita Mallick on a few months ago, and we had a... She was with Unilever at the time and has since changed into a different role, but we had a great conversation around how to have hard conversations around race. And it was, I thought, a really great conversation. But one of the things that we talked about, and I think it's also very relevant here, is you might not do this right every time. I mean, you may falter, you may say the wrong thing, you may overstep, you may under-share. But I think that if you are being authentic, if you are coming from a place of genuinely caring about those that you're leading, and genuinely communicating your needs because it's important to you, I think that's okay. And I think that this fear of saying or doing the wrong thing often paralyzes people from saying or doing anything. I think it's okay to mess up if we're coming from a good place. That authenticity shines through. Good.

Sarah Nicastro: All right. Another thing I wanted to talk about is resilience and making the choice to lead and to show up, even when we might not want to. How did you do this?

Linda Tucci: And I will also add to your comments. Vulnerability is key. This all goes back to being open to being vulnerable, because let me tell you, I don't get it right a lot of the time. I would just add that.

Sarah Nicastro: In practice. I mean, if it's something... Like you said, you're an open book. So am I. I identify 100%. I mean, someone says, "How are you, Sarah?" And then 30 minutes later, they know every ridiculous detail of what's going on. I'm definitely an over-sharer. But if you're not, that's okay, but it's an important muscle to flex and practice working. Yeah.

Linda Tucci: Agreed. I've been saying this year that now's the time we truly choose to lead. The world continues to change at an increasingly rapid pace, and we all know the human condition when it comes to change. But we've got an obligation to make sure that we don't lose sight of the big picture. For me, the resilience, I still have a job to do. I have a role, I need to fulfill that commitment. And over the past few months here at Ortho, we've had some reorganization. I have a new boss. For me, very practically speaking, to make sure that we're aligned and understanding priorities, what's most important for the business, being open with her about my need to demonstrate self-compassion.

Linda Tucci: But I would even say to myself that I needed to give myself the grace of knowing that I may not be able to get everything done to the level that I would like to, and be okay with it, that as long as I was aligned with my boss, that it was okay. That, to me, also helped with my resilience, that, "Hey, here's the level I'm working at. Let me communicate it to you," and really continue to engage in that dialogue. I have found that the more effective I am at communicating at work that it makes it easier to bounce back, because others know where I'm coming from. And that's worked for me. Now's not the time to clam up, from my perspective, especially if you find yourself struggling. I have found that I just focus on the day. It's just today. What am I doing today? Do you know what I mean?

Sarah Nicastro: I do.

Linda Tucci: That has helped me with my resilience. And if that's overwhelming, I would say focus on the hour, focus on the moment. When I find the anxiety bubbling, I'll just take a couple of minutes, take a few deep breaths, refocus, say a quick prayer. That's helped me just to stay on top. I'm not worried about all the stuff that's coming down the pike, the more I can be present in the moment. Right now, it's all about me and you, having this conversation. I don't need to worry about everything else. When I focus and feel centered in the moment, and to slow down enough to make connection in that moment, that's when I feel most resilient.

Sarah Nicastro: Mm-hmm (affirmative). Absolutely. And I think, again, people react differently. I know that there are some folks that, in turbulent times, work is how they cope. You may just pour yourself into it. And that can be unhealthy, too. To your earlier point, needing to prioritize self-care. You may find some comfort in just obsessing and over-focusing, but eventually, that will catch up with you. You have to make sure that you are... I work from home, and I worked from pre-COVID, but it's a totally different ballgame, because I can't go sit at a coffee shop and work now like I could then, and I don't get out of the house as much, and my kids are home. It does feel suffocating. And sometimes, you have to schedule, "Okay, I'm going to take a walk at lunchtime today," because if you don't, I find myself sitting at this desk from 7:00 AM until 8:00 PM.

Linda Tucci: That's easy.

Sarah Nicastro: It is. But on the flip side, I think your point is a very good point. There's exceptions, but I think most people are good people, and I think most employers that have good employees are very, very likely to want to meet their needs. And I think if you can simply articulate, "Hey, I have this going on, here's how I'm feeling, here's what I need from you." If you can have the courage to be vulnerable and communicate those needs, I think if you have a good employer, they're going to probably be pretty thankful for that open communication and pretty willing to say, "Okay. Here's what we still need to get done, but do what you need to do." I think getting comfortable making those asks is a really good point.

Sarah Nicastro: And I was nodding and smiling when you were talking about one day, one hour, one minute at a time, because that is my life's motto. And I think probably for a lot of folks that suffer with anxiety, that anxiety creeps in when you look too far, too big. I'm really big on daily to-do lists. I have daily to-do lists, both work and personal, and they're set up in terms of order of importance. Eat that frog, get to the most important thing first, and then just keep on trucking. It really helps, like you said, to just stay present and stay focused on what needs to happen right now.

Sarah Nicastro: Along those lines, you've had these significant challenges this year, and you've had to prioritize your mental health, but you've also been really busy at work. It's not like you've had the luxury to sit back and kick your feet up and focus solely on yourself. You've had multiple projects happening, and you've had to deal with COVID and how that's impacted operations, and be agile. How have you struck the right balance between prioritizing yourself and your mental health, and also wanting to prioritize the mental health of those you lead, and also continuing to drive performance and results?

Linda Tucci: Well, it's a journey, and we're learning all the time. For me, resilience and agility are critical this year. When I have the opportunities to connect with the frontline teams, and actually, I'm speaking to myself that I'm overdue for the next go-around, it's equally important to convey the state of the business and also what to expect moving forward. I think people are stressed out enough. They don't need any additional surprises. I think the clearer that we've been, because we have gotten some curve balls this year, which only creates more anxiety, which is antithetical to what we want to do, and you're cracked.

Linda Tucci: We've had a few critical projects in play, and it's important that the frontline teams, especially, know what's coming down the pike, what's in front of them. And does this impact any expectations in their performance? In light of this world of COVID, we've had lots of changes, and so we've tried to be very clear about how we serve the business at Ortho. And in some of our projects, we've had some areas of conflict with some of the high-profile projects. They have resulted in very dynamic discussions that ultimately have led us to modify some expectations moving forward that I believe will lead to a better outcome.

Linda Tucci: And this doesn't happen if you have a culture that's conflict-avoidant. But I would say, because we have a culture of customer focus and also connection with the other, it's much easier to hash things out. For me, it's also what type of culture am I building within my organization? Are we making it easy? And goes back to creating the space for those safe conversations. And as I talk to our managers, we are very focused, and we say we take care of the people who take care of our customers, are we really helping them, whether...

Linda Tucci: I'll give you an example. I mentioned earlier that one of our team members had a suicide within their family, and coming back to work, and that's because this is our culture, and she was like, "I want to come back. I need to come back, I need to do something, but I don't know if I can handle everything." It's working with that individual, and that's a gift. "I want to come back, this is what I can do, this is the state I'm in," and as a business, responding to that. And that is an act of compassion. Everyone wants to feel valued, so coming back to work to make it safe for them so that they can also feel the bounce-back and coming back in a way that's safe and best for the other. I'm not even sure... Did I answer your question?

Sarah Nicastro: Yeah, I think so. The question is just around striking that balance of promoting mental health and continuing to drive performance and results. And I think that it's a question because, and what we're going to get to next is, again, for some folks that incline toward this, I think it happens fairly intuitively. I think for someone like yourself, and I don't mean to say that in the sense that it doesn't take practice or intention, but is it in line with who you are as a human being. Those muscles might be a little bit easier for you to exercise than some folks that this is very uncomfortable for.

Sarah Nicastro: But I think, for you, you're focused on both your people as people, and your people in terms of how the team is performing. And those things are not mutually exclusive; they're very much aligned. When you have these connection points with your team, you're focusing both on, "Here's what's going on in the business, here's what that means for you and your role and us and our team, and how are you?" It's a natural fit for you. I think that makes sense.

Sarah Nicastro: What I want to talk about next, though, is... I think you and I are on the same page, but I am respectful of the fact that there are probably people listening to this podcast that are like, "Okay, this feels really uncomfortable," or, "This very woo-woo," or, "I don't know about talking about mental health," or what have you. What I'd like to do is ask you... Let's start with three reasons that normalizing this and having a focus on mental health within leadership is important.

Linda Tucci: Mm-hmm (affirmative). Well, I'd echo what we stated already, and the first reason is that research indicates that the situation we find ourselves right now is leading to increased depression, suicide, and anxiety, and that in itself should tell us that we need to respond to that, because it's a fact.

Linda Tucci: Secondly, it's proven that high levels of employee engagement are clearly linked to business results. And yes, we're running a business, and we have an obligation to drive results, so it's important that we focus on employee engagement, and that means focusing on people's mental health. And third, we've said that people connect with people on a human level for me. If we want to be experienced as leaders, then we want to help people be their best selves at work, at home. And if we give others ourselves, then we help people in their own lives.

Linda Tucci: I've seen many times the impact of shadow of a leader. What behaviors, practices are you displaying in your workplace? If people see you as a leader, they will follow your behavior, so I think it's time that we're very sensitive to how we're leading the way.

Sarah Nicastro: Mm-hmm (affirmative), absolutely. I remember reading an article a few months ago about the idea that, pre-COVID, particularly for women in leadership, but I think everyone, kindness could be seen as weakness. And now, it's the ultimate strength, and I think that's so true of this year. I think that we do see this humanity, this human connection being prioritized from person to person, from leader to employee, from company to customer, and it's heartening to see how we can all come together. And I think, to your point, there is this big need for leaders to recognize their responsibility to step up and serve differently. And I think if we can do that by force right now, it'll be a good thing for going forward.

Sarah Nicastro: Okay. Those were three reasons why this is important. Let's talk about... Could you provide three practical actions for making this focus a reality in practice for someone that maybe doesn't naturally incline to this?

Linda Tucci: Mm-hmm (affirmative). I think, first, and this really is sparked from my own experience, I would say, starting at making the assumption that everyone is looking at their employee assistance program. I'm assuming that they are because of everything that's happening. And are you communicating to your frontline? What services are available?

Linda Tucci: I will tell you, in my own experience by taking advantage of our EAP program at Ortho, I found out even more services that I wasn't even aware of, and then I could then communicate to others. I would say, know what's available within your own organization, ask yourselves if you're doing enough. And if you don't have a program, how can you fill that gap? I think that is, to me, the number one critical action.

Linda Tucci: Secondly, for me, it goes back to the communication. How are you communicating with your direct reports, the broader team, making yourself available? Ensure effective feedback loops, different avenues of how people can provide feedback. Whether or not they use it, it's up to them, but make sure that people have mechanisms to relay concerns, questions, and that it's really bidirectional. It goes back to making sure that your team knows what's coming down the pike next. Don't allow surprises to hit them from a business perspective. To be candid, and it's okay if you don't know all the answers, but communicate what you do know.

Linda Tucci: And then third for me is around tools, and I would say two different aspects, tools that you're providing because we've moved to this virtual world. For our frontline teams, we're looking at what tools support the virtual connection across our organization, both internally and with our customers. Make it easy for your people as they function remote.

Linda Tucci: But I would say, specifically, for our management team, my team, the majority of our team had been on-site at locations. The minority of our staff were remote pre-COVID. Our management team was used to going into the office, having face-to-face connections with the people. We've had a series of sessions specifically with the management team and key leaders in the organization, that we call Leading the Ortho Way, that focus on tools for them to help them be comfortable to have these conversations, for them to understand the importance of mental health in our world today, and to really make sure that the management team have the skills and tools to navigate our virtual world so that they can properly serve their teams. It's really just part of our culture.

Sarah Nicastro: Mm-hmm (affirmative). Those are really good points. And the only thing I would add is just, particularly for someone that this sounds a little awkward to, is practice flexing that vulnerability muscle. I think about a one-on-one, and if you're the type of leader that you get on a video chat and say, "Hey, how's it going? Good? Good. Okay, anyway." Just asking, "How are you," probably is not enough to elicit an honest response.

Sarah Nicastro: As you said earlier, it's leading by example. I'm not saying make things up, but I'm saying practice flexing that muscle by being honest about your own journey. "Hey, how's it going? Good. Yeah, I've been struggling with X," or, "I've found myself feeling a little bit down this week," or, "I need to make sure that I'm doing a better job of taking a breather in the middle of the day." Just share a little bit so that you're teaching your employees it's okay to do the same, because they may be very hesitant of doing that if you're not doing that. And I know you made that point earlier. I's just an important one to come back to, because I think you can't expect vulnerability and transparency and clear communication and courageous conversations from employees that you are not willing and actively giving that to. Yeah.

Linda Tucci: Yeah, and I would add, and I think you said before, authenticity is key. It can't be forced. If it's hard for you, say, "Hey, this is hard for me, but I really want to make sure that you're okay. Is everything going okay for you? I know that I usually don't engage in this type of conversation, but I really want to know." As long as you're making it authentic.

Linda Tucci: I had a manager once who had a quick personality change. It was overnight. I was like, "Who are you? I don't trust this." Do you know what I mean? It can't be choppy, it needs to be natural. And I believe if people are sincere and come from the heart, then people experience it that way.

Sarah Nicastro: Absolutely. Oh, Linda. I could talk to you for days. Yes. Okay, so that being said, I've reached the end of my questions, although I could come up with so many more. But I really, really do thank you for joining and for sharing, because this is a different topic, but it's such an important one, and it's something that's relevant, really, across industry, across business, across role function. This is just something that we all need to get more comfortable discussing and being open about, and I'm so thankful for the opportunity to do that with you.

Linda Tucci: Thank you.

Sarah Nicastro: Any final thoughts or comments in closing for our folks today?

Linda Tucci: I would add, 2020 for me is a personal experience, and I've said already that we all have our own story. But when we're on a plane, in the case of an emergency, put on your oxygen mask before you put on the other, and I think that's really wise counsel for us in life right now. I would just say self-care, it's really critically important. Make sure that you're caring.

Linda Tucci: We could even say that a lot of this is common sense. But my perspective is, we have to take the time, and I feel that time is increasingly precious. And if we truly want to be experienced as leaders, then I think we have to ask ourselves, and I would consider it a personal question, what do I need to do differently to meet people where they are, and then we have to act on that insight.

Linda Tucci: My last comment would be referencing Patrick Lencioni. I'm a huge Lencioni fan, my favorite book being The Advantage. But he states that, "The strongest people in life are the ones that are comfortable saying, 'I don't know,'" that vulnerability is not at all soft. It's the key to building great teams, and I would just end, isn't that what we want to do?

Sarah Nicastro: Absolutely. Yeah. I'm a mom of two young kids, and they are mostly home, and I am working here. The idea of self-care can be challenging, and it can feel like a burden on its own. You really do have to figure out how to make it a realistic priority for you. For me, I get up early in the morning before anyone else is up and I work out, because that might be my only alone time for the whole day, and I need that. I am in a better mood, and I am more clear and focused and positive if I have that time to myself early on. That looks different for everyone, but it is absolutely right. You can't just give and give and give and not fill up your own cup. You have to figure out, even if it seems impossible, and it can right now, how to make it happen.

Sarah Nicastro: Well, Linda, thank you again. I really appreciate it. I would love to have you back sometime. This was a great chat, and I appreciate you being so open and honest with us.

Linda Tucci: Well, I thank you for your time. It's always a privilege to talk to you, Sarah. I appreciate it.

Sarah Nicastro: Thank you. You can find more by visiting us at futureoffieldservice.com. You can also find us on LinkedIn and Twitter @theFutureofFS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS Service Management by visiting www.ifs.com. As always, thank you for listening.

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ANDRITZ Shares Digital Transformation Lessons Learned

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ANDRITZ Shares Digital Transformation Lessons Learned

Klaus Glatz, Chief Digital Officer at ANDRITZ, talks with Sarah about customer needs driving digital transformation and service evolution as well as shares his biggest digital transformation lessons learned.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking about digital transformation lessons learned. We know that digital transformation journeys can be fraught with complexity, and I think it's incredibly valuable to hear from folks lessons learned when they are willing to share those. So I'm excited to welcome to the podcast today Klaus Glatz, Chief Digital Officer at ANDRITZ. Klaus, welcome to the Future of Field Service podcast.

Klaus Glatz: Hello. Nice to be here.

Sarah Nicastro: Thank you for being here. Before we dig into to ANDRITZ digital transformation journey and some of what you've been leading for the organization. Let's first just share a bit about yourself, your role, what ANDRITZ business does for anyone that might not be familiar and we'll start there.

Klaus Glatz: Yeah, you're welcome. First staring with ANDRITZ. ANDRITZ is a global acting machine and plant engineering company. We deliver big machines and big plants for different businesses. Our biggest area is pulp and paper, where we deliver from unit machine, single machines up to big mills. The second one is hydro. Hydro power plants starting from hydropower plants to small pumps, everything related to water and energy production. The third one is metals where we do metals processing and metals forming. So we're doing big presses for them, mainly for the automotive industry and do all forms of transformation of different steels and metal products. And then we have a fourth one, which is separation, where we do liquid and solid separation. It's large sludge dissolving. So mainly from municipalities. So it's a broad range of separation of different materials.

Sarah Nicastro: Okay.

Klaus Glatz: As you said, my name is Klaus Glatz. I'm chief digital officer at ANDRITZ, being responsible for developing IoT, as well as the whole digitalization activities, which we call here smart services. Where also field service management is part of. We are delivering new services, new products, thinking about different business models, what we can offer to our customers. The ultimate goal for sure is to help our customers to be more efficient, to be more productive, to eliminate downtimes or unplanned downtimes as much as possible. And the field service management for us is a key topic here. We call the field service technicians out in the field, and we need to better optimize what they're doing, how we schedule them, how we can support them with material documentation, and also how we show up the whole reporting part, but also I guess the whole cashflow part. So to say, how long does it take for us to create invoices to send it to our customers because this has an impact on our cash flow.

Sarah Nicastro: Absolutely.

Klaus Glatz: So I guess a digitalization for us is on one hand internal digitalization. So I guess optimizing processes, delivering also new solutions, in order to help our people to really focus on what they should do and not, I guess, losing time in having bad products or better applications or whatever.

And then the secondhand, I guess we are doing to digitalization for our customers, creating additional revenue, implementing new models, like performance based contracts, revenue sharing models, up to equipment as a service. So we have different ideas here, how we can help our customers to better use our products. But also I guess, at the end of the day, gets to create more revenue in what they're doing.

Sarah Nicastro: Mm-hmm (affirmative). Okay. And so when you and I spoke last, we had a whole conversation around the fact that, evolving customer demands and what your customers are looking to ANDRITZ for is what's driving your digital transformation efforts, whether that's internally to be able to serve them better or externally in new offerings. So, we talked about a few trends that you've noticed recently with how customers are changing in what they want or how they want to work with you. So, I want to talk about a few of those.

Sarah Nicastro: So, the first we talked about is in your industry, you explained to me that historically customers have wanted to maintain a pretty high level of self service and that they are now wanting to relinquish some of that control and move to more of a full service partnership with ANDRITZ so that they can focus on their core competencies. So, tell us a little bit what you've seen in that regard, because I think that that's something that would be a shared observation across a number of different industries.

Klaus Glatz: I think that the whole cooperation relationship is getting more integrated. So I guess it's not just we deliver something, and then I guess we hand it over to the customer, and then tell them have fun, and if you need service, I guess, just call us. Our intention here is to help them to create more output by that using, which is relevant for us, energy, energy consumption, chemicals, all of this stuff. We learn what customers are doing, how they operate our machines and plants. And this is what we use here based on data to help them to optimize how they’re running our equipment; and that's why, I guess it's urgently, or it's really needed, that we work together, we cooperate and help each other.

Klaus Glatz: We help the customers, I guess, to be more efficient, and the customer helps us to better understand our machines and products and further optimize them. So, it's a win-win situation for both. And this is definitely what we're striving for, and I guess the real thing, typically what happens to customers now, industries, if they've unplanned downtimes. So, if a machine is failing, I guess this creates huge losses because each of these machines is needed to produce something. So it's in our interest, but also the interest of the customer, to avoid as much as possible unplanned down times.

Klaus Glatz: And also, I guess from an integration perspective, we see a tendency that we are heading more in other things like paper use or machine as a service, or I guess it is output based on a contract.

Maybe really I guess, make sure that we are responsible here from starting from delivering a machine to the phase where we fade the machine out, and still, I guess we help him with our service beeper, with our predictive maintenance solutions to understand what's going on and to better plan or better forecast what's going to happen.

Klaus Glatz: It's always easier that if we know that a machine needs maintenance or service in two months, then we can properly plan it. I guess if the machine is failing today, it's nearly impossible to help a customer. So it's, bad for both sides, and the wide integration between a customer and the supplier is getting deeper, and is getting more and more intense in business. I think beneficial for both sides because also our interest is to have happy customers. And that's why now like as I said before, we need to avoid unplanned down times as much as possible.

Sarah Nicastro: Right. That makes sense. And so, as a part of this evolution, customers are looking to you now, not just to provide service, but to provide a lot of insights. So, insights on how they can optimize the use of your equipment insights on, common patterns of failure points and how you can, like you said, use predictive analytics to work ahead of those, and as a way to avoid that unplanned downtime. I guess that's the other big trend is you're not just in the product or service business, you're in the insight and information business as well, right?

Klaus Glatz: Yeah, absolutely. Because if you've seen the evolution here, we used to provide our machines and now I guess we are talking a lot about sensors, collecting data, converting data into information, information into knowledge. We are experts in our domain what we're doing. We understand our purposes, but I guess with having this data available, collecting dozens of different sensory information also puts us into a position that we still learn how we can further optimize or improve our machines. If you see as an example, at a big mill today, we have 125,000 possible errors, which you need to understand in order to produce the optimal output. I guess, for people working 30, 35, 40 years in Jacksonville, they understand how to operate such a mill. The issue for the customer is that, because of demographics, the people are somehow retiring your integration services, how to capture the knowledge and how to convert the knowledge into data.

Klaus Glatz: And it's all about data. And because data helps us to understand our internal processes in our mills, hydropower plants, whatever, and help us really to do better decisions. And division here for us for sure is that at some point in time, we go more and more towards autonomy or autonomous solutions, because I guess, if you have seen such a mill operating 365 days, 24 hours, using typically three shifts, I guess it's not fine to work in such environments, and that's why I guess the more we can help our customers to guide the operators, to do autonomous decisions, the better. So, the less people you need in order to operate that.

Klaus Glatz: At the end of the day, it's a very dangerous environment. It's an unhealthy environment, and that's why it's also an interesting possibility for us, but also for the customers that with having digital solutions in place, this would first optimize what they are doing. We would guide them which decision they need to take based on historical data based on algorithm, based on forecasting, to really produce what the customer of our customers wants to have.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. I want to just pause for a minute and go back to a point that you made that I think is a really powerful, and I'm kind of paraphrasing what you said a bit, but I think that one of the points you made is made me think about, to be successful as a service provider, historically, you had to be the expert of your industry, right? You had to be the expert of your business and the solutions you're providing. I think, to be successful in today's landscape and going forward, you need to not only be an expert about your business, but you need to be an expert about your customers businesses.

Sarah Nicastro: The more you can learn about the ins and outs of how they operate and what that actually looks like, the more you're able to craft services and solutions that help meet those needs, so it's I guess, more work maybe than it has been in the past, but also a lot more opportunity. Right?

Sarah Nicastro: So, I want to talk about, thus far, how have these trends both in, customer expectations and needs as well as what's possible with the technology that we have today, how have these trends changed ANDRITZ service offerings thus far, and how do you see that evolving in the coming years?

Klaus Glatz: Yeah, technology gives a lot of opportunity with this year, starting from, I said I guess, using modern solutions to better guide and dispatch our field service technicians, giving them with AR virtual reality, mixed reality, the possibility to visualize things, but also getting in contact very easily with real experts. And technology, I guess, offers here a lot of possibilities here still. We also are still in the learning phase. Even though we’ve done already a lot, the integration between customers and companies is getting more intense, which creates some challenges but also it gives a lot of opportunities. And we are really focusing on opportunities here and making sure that also, I guess, seeing how ANDRITZ is developing all the job profiles in place that we didn't have five years ago.

Klaus Glatz: It's everything, data analytics, algorithms. So this is something where we will have an own team now working on that, which hasn't been existing, I guess, five years back. Still, we are a very engineering-intense company. We are field service company. But there are additional competences and skills that will also be needed in the future. We will add a bunch of different other capabilities and jobs or job profiles to complement in what we are doing.

Klaus Glatz: I still think that we are at the beginning, even we are doing a lot, but I guess the knowledge, it gives us so much more possibilities here, which we still in the phase of learning and understanding how we can use them. Specifically, the whole thing and on AI machine learning, anomaly detection, which are key topics also for us to further improve our machines and plants. I guess we just started, and this is what for sure will be further explored how we can use these technologies here in further optimizing in what we are doing.

Sarah Nicastro: Yeah. I think that mindset of continuous learning is what drives companies to be successful. I think when you start to feel like you have it all figured out, that's when you stop making a lot of progress; because I think when you realize that the capabilities are as significant as they are, then you know, that you can keep evolving and keep changing and expanding what you're doing.

Sarah Nicastro: So, I know that you mentioned within your customer base, with the retirement and turnover of some of the skillsets that have traditionally run these plants, those customers are looking more to ANDRITZ to fill some of those gaps with your expertise. And then ultimately your goal is to provide, an autonomous solution to your customers. So that you've taken the need for those historical skillsets out. Is that I guess an accurate description?

Klaus Glatz: Yeah. I guess it's exactly what's happening. It's not just for us by us because this is, as I said before, this is demographics, and to find real experts in those areas is not easy. You need to educate them. You need to train them. It takes really years and years to be able to run those big mills, because the issue is that you do something now and which has an impact eight hours later.

Klaus Glatz: So it's not that you immediately see, I guess then they decide. It's a time series and if you produce eight hours of the wrong thing you lose a lot of money. So it's a very now intense, intense area. And that's why I guess customers are fully open here, whatever we can provide to help them to better understand what's going on to better assist them and guide them in order to avoid that they're producing eight hours the wrong part. So to say, this is definitely something they're looking for.

Klaus Glatz: Selling those solutions was challenging also because our sales force wasn't used to sell digital solutions or services, but they're more used to that now than three, four years back. I guess it's not easy to sell those solutions because if you used to sell a product, the machine, you can talk intelligently about the mechanics. But to explain now how we're going to use data, algorithm, machine learning, artificial intelligence, to further optimize what you're doing, is not easy. And this is something we also needed to learn, which competencies do we need specifically in sales in order to convince our customers that what we are doing makes sense?

Sarah Nicastro: Right. Yeah. That's a very good point, and you had mentioned a few minutes ago, the idea, and this is one of the most exciting topics to me in this space, is looking at how service businesses are evolving and what that means in terms of how current roles are changing, but also the new skill sets that are going to be needed within businesses. I think it's really interesting and really a lot of exciting things will happen over the coming years as we kind of see that play out, and a lot of good opportunity for folks. Obviously the role of the frontline field service worker has changed. To your point, these customers no longer just want them to show up and fix something that's broken. They want them to be a trusted advisor type of relationship. So, what has that been like for the frontline workers of ANDRITZ?

Klaus Glatz: Yeah. It's also for them, selling as the trusted advisors, and still also they need to develop themselves. Because you need your field service technicians, they still need to fix something. They have the tools with them, but a lot has changed. Now they’re using digital tools too, and you need a lot of experience. So if you have a junior elevate the need and send the junior and the senior together to a job site, because the senior was training junior how to do things, what we’ve seen here is with using remote assistance towards augmented reality and electronic documentation, it's not always needed that there's always a junior and a senior going together to the job site.

Klaus Glatz: So, typically we send the junior wearing HoloLens or whatever product. And the senior is sitting in his office at headquarters and still helps him to get his job done. And the cool thing is that the senior could now act as a multiplier because he can now instruct 10, 15, 20 different people and not having the need to travel that much. And this is also something, we have learned, if you're at the job site and need to do things on your own, someone remotely can instruct someone to do things correctly. Now people need to learn how to use these tools, how their role is changing, how they will be the one guiding other people.

Klaus Glatz: There we have seen some changes and our predictive solutions. We also have a performance center where we can see how different machines are performing and target finding the need for suggesting maintenance work and field service activities before something is happening.

Klaus Glatz: This is also a change because typically they were used as firefighters. Emergencies would come popping up and they were flying fully rolled like hell and today it's much more controlled. We understand our machines much better. We see, if the place needs a service in one month and then you can proactively suggest it to the customer. You can dispatch a service technician. It's not the big surprise. The technician doesn't get a call on Saturday or Sunday that you need to get onto the plane and fly to wherever in order to get things fixed. It's much more controlled. It's not saying that now emergencies are gone 100%, not at all, but it's a completely different working environment, which is absolutely beneficial for the people, but also for the customers, because customers also can better plan work which needs to be done here in order to keep this environment up and running.

Sarah Nicastro: Absolutely. Okay, so you've talked about a few, but I just want to recap real quick before we run through a few lessons. In terms of ANDRITZ digital transformation efforts thus far, talk to us a little bit about what some of the key pillars of that strategy are. So I know you mentioned FSM. I know you're using IOT and predictive analytics. Talk to us a little bit about what some of those core components are.

Klaus Glatz: Yeah. So say, I guess for the whole field service environment, it's our field service management solution, which we're using globally, or we are in the phase of rolling it out globally. On the IoT side via using videos and standard components and standard products. We are also, once it comes to our IOT offerings, I guess we are not working with one specifically because I guess customers typically have their preferences, which we need to respect so to say.

Klaus Glatz: We're very focused on internal development team where we're developed a lot of things on our own, because what we have learned is that to develop a good algorithm, requires a deep domain expertise in what you're doing. And that's why, I guess we are doing those things

Klaus Glatz: I guess still customers would like to have the solutions on premise, which creates some issues in data exchange. They are heading more and more towards cloud, but there's still a way to go. And we even start to develop our own sensors specifically for our needs together with universities and other companies, for sure. But I guess we also in the position to offer our own sensors. And that's why, I guess it's not that they're using this five building blocks or the five standard products. We do it mainly use-case based on a need pace, because the requirements or the environment in the m is differillent than in a hydropower plant. That's why we also need to use different components and different solutions for that. And we are not set, we do it selectively where we think we could get the most out of it.

Sarah Nicastro: Okay. All right. So let's talk through a couple of the lessons learned. So the first comment you made is how important it is to think big, but act small. So tell folks what you mean by that.

Klaus Glatz: Yes. That's what I said, I guess, our mission was and still is, I guess we want to develop an autonomous whatever. I guess if it starts from zero, it's very ambitious. In time, all of the things should run autonomous. That's why you need to have a very clear plan, which steps you need today in order to get there. And we also started very small, very easy, took a very simple product and started to understand how we are. We need to develop our competencies and our skills in order to be able to develop those things. For sure. I guess it's important still. Things like you need a budget and you need to have a project sponsor and you need to have someone who has a vision, where I want to develop to, from a product solution perspective.

Klaus Glatz: It's easier from a business model change. It's much, much more complex from things like equipment as a service. It's also different complexity, but we started really with a set. Weak things, easy things and style to get all these models that we're developing together. And those are now today, a very strong development team. We also have distributed development with people in India, with people in Croatia, with people in Australia, with people in Finland. And as I said, you need to really see how to break a big thing into small pieces and then be quick in the delivery. We also now integrate customers in our discussions. So once we are doing a proof of value for something, we typically have already 10, 15 customers willing to test, willing to use it, and we also expand our reach. So say our chain also, including customers, and once we did with a tour cause we have a catalog.

Klaus Glatz: We had 15 customers, which we used in order to cost-check and to challenge things. But we think customer needs is really required or requested by a customer. So I think you need to open up your channels, your partnering, your collaboration, and really understand what are the needs of the customers. What he really needs and for which parts he is willing to pay it, because at the end of the day, our interest is to increase our revenue side. And that's why it's important not to work two years in your protected environment, go out to the customers and learn you’re off. Failing is also okay. This is also what we need to learn and it's think big and start small.

Sarah Nicastro: Good. The next area of importance is understanding how critical clean data is. So tell us what you've learned around the importance of clean data.

Klaus Glatz: This is the absolute key area. If you're working with bad data, you can have the best solution and the most fancy thing in place and it will not work. And also in our case, data intake with the correctness of data is a huge topic. Data is key and of utmost importance. You cannot make good decisions with bad data. And this is something I guess, which is painful and which you need to understand in which creates huge efforts in cleaning data. But you have no other alternative than they just start picking up the data, make sure data is still valid. It's correct, it's updated, because otherwise I guess, you will fail with whatever you are doing.

Sarah Nicastro: Yeah, very good point. And then the third point is that process harmonization is equally important and an area that often gets rushed. So tell us a little bit about process harmonization.

Klaus Glatz: It's also key. I guess if we see that there were elements of topics, process harmonization is also very important, because to support different process variance, different process situations, with one tool always creates a lot of complexity. So, you need to have slim and easy processes in place, and then also it helps when implementing the tool. If you have 15 different deviations with 45 different process variances to support that with one thing, the solution is a mess of complexity. Not working as expected either it's low, or equating the wrong output, or doesn't integrate with anything. So both this harmonization and standardization is also really, really important because otherwise you create too much complexity.

Sarah Nicastro: Mm-hmm (affirmative). Makes sense. So those are really good points and good food for thought. And I think it's a really interesting journey that you're on. And I look forward to following you along and talking more, as you guys progress toward the world of autonomous solutions. Klaus, any other lessons learned or closing thoughts that you would want to share?

Klaus Glatz: I think that the whole change management aspect is also still a huge topic here, because change always creates some fear, so to say. It's also important that you communicate, you get the people on board, you get a lot of visibility and transparency in what you're doing. This is also what we had to learn that maybe, I guess we missed out on change management at the beginning a little bit too much so to say. So, that's why I guess we also see this is very, very important. Two sided within the company, but also when cooperating with customers.

Sarah Nicastro: Yeah.

Klaus Glatz: Customers need to know we don't want to steal your data. We don't want to misuse your data. We just want to learn from experience what we can improve, and this is a joint journey with our customers. And still who is owning which data and who is allowed to access data is still sometimes a topic, but I will say that the whole change management aspect is also something which is key here to be successful. And if you lose some profiles, you win some others, but still it's being transparent, being also accessible for people to explain what you're doing is also key here.

Sarah Nicastro: Absolutely. I agree. A hundred percent. We'll Klaus, thank you so much for being here and for sharing your journey and your perspective with us. I really appreciate it and hope you'll come back and join us again some time.

Klaus Glatz: You're welcome. Whenever it's needed.

Sarah Nicastro: Thank you. You can find more content by visiting us at futureoffieldservice.com. You can also find us on LinkedIn and Twitter at TheFutureOfFS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS service management by visiting www.ifs.com. As always, thanks for listening.

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