Audio

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

September 30, 2020 | 22 Mins Read

7 Keys to Software Upgrade Success

September 30, 2020 | 22 Mins Read

7 Keys to Software Upgrade Success

Katie Hunt, Service Operations Leader at APi Group, shares with Sarah insights gleaned and lessons learned during the company’s recent field service software upgrade.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today, we are going to be talking to you about seven keys to software upgrade success. If you have ever been in the midst of a software upgrade project, you know that it is no easy feat, and there are plenty of lessons to be learned along the way.

I'm excited to welcome today Katie Hunt, service operations leader at APi Group. Katie, welcome to the Future of Field Service Podcast.

Katie Hunt: Thanks. It's great to be here.

Sarah Nicastro: So before we dig into these seven keys to success, which I'm excited to share, tell us a little bit about APi Group and your role. And I know that this is a topic that is very fresh for you because you had just come off of a major project. So fill us in.

Katie Hunt: Yes. So I'll start with APi Group. APi Group is a family of companies that provides business solutions for safety, specialty, and industrial services. We have over 15,000 employees and are in 200 locations in the US, Canada, the UK. And what's really unique is that our purpose is building great leaders, which for a construction company is sometimes looked on as unique. And so while we focus on that project delivery and great customer service, we also want to grow our individuals, grow our teams ,and make sure we can share knowledge, best practices, and just push each other to the next level.

Katie Hunt: So myself, I joined APi Group after going through the leader development program. I joined after I was in the military, and that was just a very unique opportunity to learn the industry and kind of develop some skills there. And I had the opportunity to join an operating company and then lead this project, which eventually led to leading the full-time service operations team at APi group.

Sarah Nicastro: Awesome. So you are fresh, very fresh off of a major upgrade of your Alliance service software platform. So, I've talked with you a few times along the way, and I think it's an excellent opportunity to share these seven keys or seven lessons today because it did just happen. So inevitably, you go through a big project like this, and you learn some lessons along the way, but time just kind of washes them away and kind of just makes them not so clear in your mind. So I'm excited to talk about seven aspects that you have uncovered that you feel are particularly critical to having a smooth upgrade and to having a successful project.

Sarah Nicastro: So the first key or the first tip is to be clear on your why. So explain what this means and why it is so important.

Katie Hunt: So ultimately, I would say that the why equates to the vision of a project. Identifying the why is so important because it not only lets stakeholders know why we're doing this project, but then it also serves as a benchmark for project efforts. So you can avoid that scope creep, and you can make sure you're staying on task. So once you create that vision, like we did, of standardizing processes, moving to a hosted environment for those benefits, or just setting the groundwork so that you can truly scale your business, you can then communicate effectively throughout the organization and really just maintain that focus and discipline and ultimately compare all of those decisions back to that strategic vision and keep the project on track.

Katie Hunt: I also wanted to call out, it's so important to know that the whys might be different for different cohort groups. We have a very large organization, and when I'm communicating, and my teams communicating to executives, it's a different message sometimes than the end user or the branch level professionals, which is fine. But ultimately, they all need to tie back to that strategic vision, so that they're all in alignment.

Sarah Nicastro: Okay. That makes sense. So, tell us a bit about APi Group's whys with the recent upgrade. So what were the major strategic drivers that kind of led you through this project?

Katie Hunt: Sure. So APi Group was recently acquired and by J2, and we've now become a public company, in that one of the main driving factors for that purchase, and it's been mentioned by their leadership, is just our ability to perform a service and inspection operations because it's that reoccurring revenue, as we all know through hard times lately. And it's just very important. And so they are really pushing us to grow and scale that side of our business. And as such, we have over 20 companies that conduct service work, along with all the subsidiary companies. And a key factor of that is standardizing processes. So getting everyone on the same system, that was one of our key factors.

Katie Hunt: And another one was simply starting this movement to a hosted environment, to have that higher-level support, greater performance and stability, and really just setting the stage to grow the business and move to that next level.

Sarah Nicastro: Perfect. Okay. So you have these pillars that are leading you through the project, and you need to, as you said, have these in place, so that as things ramp up, as things get stressful, as things get hectic, as opportunities arise to kind of go off path, you can stay focused on what it is that you have set out to achieve. So that's the first key.

Sarah Nicastro: The second is defining the team that will be responsible for leading the project. So tell us what you learned here, in terms of this point.

Katie Hunt: Right. So this project was unique, in that we really relied on the operating companies to provide insight and guidance and decision making across the board. We had the core team, which was very lean, including myself and about four other key team members, but we did learn that we could have used a couple more people, not only a dedicated project manager to delineate the project management from business decisions, but also just having an extra set of eyes for different perspective. So that was a lesson learned.

Katie Hunt: But one thing I think we did extremely well was rely on the operating companies to provide feedback. We had a unique structure with a service steering committee, where we had one representative from each company. They came together, and they really made the agreement upfront that this would be the decision making body. Even if everybody didn't agree, we would move forward with the decision of that committee, so that we could standardize processes. And so although we had great discussions and sometimes people didn't agree, we were able to make those decisions, move forward. And it really took the ownership off of APi Group to push this initiative, and it put that on the companies to drive this change forward, which was phenomenal for our team and just a big success overall. So we definitely recommended that for future projects.

Sarah Nicastro: Yeah. I think that's a really good point because if you're going to have issues up for discussion or perhaps discrepancies in opinion, all of those things, if you're doing it by committee, it gives the sense of being far more fair. So if you handle those things on a case by case basis, it's easier to have someone be upset about decision that was made. Whereas if it's just an understanding of we're going to discuss, we're going to vote by committee, and whatever the outcome is, the outcome is, that would alleviate a lot of frustration, I would imagine.

Katie Hunt: Right. And I think it gets buy-in, too, from the committee.

Sarah Nicastro: Yeah, absolutely. All right. So number three, key number three is to develop guiding principles, so that as the inevitable ebbs and flows of the project occur, you know exactly what to stay focused on. So, tell us about what APi's guiding principles were, and if you have any examples of kind of how and when they came into play.

Katie Hunt: Sure. We had four that we outlined. We actually did a full vision with guiding principles, some goals, and that kind of thing, just so everyone was aligned. And the first one that we focused on was maintaining focus on end user needs. We didn't want to have a holistic technology solution that didn't meet what the end user needs from the field professionals to those office leaders that are really the ones executing the work.

Katie Hunt: Our second one was being open to changing processes. Change is hard, but we know that we all agreed, hey, we might have to change our processes. We're doing this for the betterment of the group. And that was just an agreement up front.

Katie Hunt: The third one was leveraging the ideas and suggestions of the service steering committee, which we've already discussed, which worked very well.

Katie Hunt: And then the last one was valuing time over process changes. And this one was a little bit unique that I'll expand on because we really, when we were conducting the project, had a couple constraints, including time, the scope of work, and the budget. And what we were saying with this is, our go live date needs to be met, despite all the process changes being fully complete.

Katie Hunt: And so an example of that was where, as we grew closer to go live, we had a list of items that had not yet been implemented. And we prioritized, made sure we hit those really key items, brought them forward before go live. And we're still working in sprints after go live, to continue to refine the system. So we wanted to view go live not as a stopping point, but really as something we could continue and use as a springboard to keep developing our processes, systems, et cetera.

Sarah Nicastro: Okay. So these four guiding principles are what really kept you focused on those four aspects that you felt were most important for the success of the project. Do you have any other examples of... Within the project, where one of these came into play and kind of steered you back on track, if you will?

Katie Hunt: Yes. So one good example, I would say, is the focus on the end user need. It's very easy when you see the bright, shiny object, and you want to go make this cool change, but then during the actual testing and training, the end user gives us feedback that, hey, this is really not what we want. And so what we really tried to do is, during our testing and training, we utilized a Microsoft team session and page, and it was open forum session. Anyone can provide feedback. We documented everything, to make sure that they had feedback. They were heard. I think at one point we had 480 responses or something.

Katie Hunt: But you're just going through these and really trying to make sure that the end user knows that, one, they could speak up. There was no ramifications. They were being listened to. And then we understood that their needs were very high priority. So we had to take a step back a couple of times on some enhancements we thought would be beneficial and really look at it from their perspective. And so we did that as much as possible.

Sarah Nicastro: That makes sense. And I think what you said is a really good point of not only for the project team, but for everyone involved, to make sure it's communicated to look at the go live as just the starting point. So that people understand if there's feedback they've given that can't make it for that go live cutoff, it doesn't mean you're not listening, and it doesn't mean that it's not going to get incorporated. That there's going to be opportunities to continue to evolve what you're doing, but being able to use those principles to keep you on track with not just continuing to brainstorm and never actually getting the result out. That makes sense.

Sarah Nicastro: Okay. So key number four is the importance of testing. So talk to us about all things testing.

Katie Hunt: Oh, goodness. Okay. So testing, we love it and we hate it because there's never enough time for testing, but there's so many different methods of testing. And it's just so crucial. I would say one thing I learned that I did not know going into this project, was how many different methods and different types of testing you could do, from the load testing to the off-road testing, to the scripted testing, to automated, there's just a whole gamut of how you can test the system.

Katie Hunt: And I think going into it, one, just having a really, really solid plan. Before I came on board, the team already had an excellent script of testing items and what we needed to do. So we had a really good baseline that we could springboard off of and really develop and test. And then we just wanted to make sure that we put the system through the paces and tested as if we were conducting real-world operations.

Katie Hunt: And that was the key thing, was rehearse like you want to actually execute. And it's like a military thing, I've learned, you want to rehearse, rehearse, rehearse. So I would say that's one thing that we did well, especially with rehearsing the actual cut-over, but also with testing.

Katie Hunt: One thing that I would suggest that had been used at APi Group before I was on board was the testing matrix and really just holding the companies accountable and checking in and asking the question of not only who has tested, but when and what. Because if you have a whole group that focuses just on one end of the testing and you miss the portion where you need to invoice the work order, rather than just create it, you have a gap in the testing. So by spreading it out and having the end users do the testing and staggering it correctly, I think it's very, very beneficial. And that's one of the most crucial phases that we possibly could have gone through.

Sarah Nicastro: Okay. So you said at the beginning of this question, there's never enough time for testing. Okay. So that makes me wonder, how do you strike the right balance of testing enough without, again, holding yourself back from ever crossing the finish line?

Katie Hunt: So this goes back to our initial constraint of time, that being just a key factor. We almost had a point where we were testing and continuing some configuration and development at the same time. So this is a lesson learned for us, is making sure that you have the schedule outlined, where you have the users in the system soon enough to catch any bugs or issues or concerns, but having them in late enough so the development is done, so they can have a good testing experience.

Katie Hunt: So really, I think we did a really good job of having a test phase and then almost a recovery phase to address those issues, and then have a second testing cycle. But one thing I would say that we could have probably done a little bit better job on is clearly annotating, during those testing cycles, specific items to test as well as specific items not to test that were still in development. And that way, it's just very clear. But at some point you have to go live, and I think it's one of those things, it's a judgment call of what are priority one items, what are priority two, and what can we live without until after go live. And that depends on the company and system.

Sarah Nicastro: Right. That makes sense. Okay, good. All right. So key number five is providing ample and effective training. So tell us how you tackled training and any advice you have for folks here.

Katie Hunt: Okay. So I will say training is one item, I am extremely proud of our team on this. We receive some very positive feedback, and we're continuing to use some of these items as we move forward. We really tackled it by... We created videos within our LMS system with APi Group. And we kept them short, no more than five minutes, because attention span of most people is not more than that when watching the training videos. And then we also made cheat sheets. We made quick reference guides that folks can print off on a one pager for key topics, put it in a little folder, or guys can throw it in their trucks, as they're out on site, and just references as needed. And then lastly, we did make those user manuals that are very in depth. They have screenshots, they answer those tough questions, deep dive, and really, people can search them and use the PDF and that kind of thing if needed.

Katie Hunt: The other item we did is we had weekly live trainings. This was a suggestion by one of our steering committee members, and we essentially dedicated a topic each week, and we opened it up on teams where people could just ask questions. They chatted questions. We had the live stream. And basically, we had really good participation. I think week after week, about 150 people would log in, ask questions, and share ideas. And I think having that service community through our team's page has just been a really good benefit, but we are going to continue to take those trainings and use them for onboarding new users and then refine them, probably quarterly as we move forward, just as a continued resource. Okay.

Sarah Nicastro: So when you're doing these trainings through the teams page, and you're having these interactions, are you able to capture... Obviously, you had your testing phase, and you captured feedback, and then you incorporated it into the system. As you're training, so obviously this wouldn't be feedback that isn't necessary for go live by any means, but as you are training folks, and there's something that they think of that's just a good idea, so it's something that maybe you didn't think of during the critical phase of the project, but now that it's out, it makes sense to incorporate, are you capturing those insights and able to have access to that information and decide how and what to work on?

Katie Hunt: Yes. So we did push the training ownership on the companies. That's one thing I failed to mention is that, although we're developing all these resources and the weekly trainings, we are asking the companies to do that as well. But in that, if they were to find something that they wanted to add, let's say a change request or something that's a configuration change, we are essentially conducting two weeks sprints, and we're still ongoing in that phase right now, where they can submit that request through our ticketing system or on teams and let us know that they think they want this idea, provide the justification. And then what our team can do is test it out, research it, run it by the steering committee still. And if we think it's something we want to implement, then we will bundle that together in our bulk migration of code every two weeks or three weeks, as those changes become ready.

Sarah Nicastro: Okay. That makes sense. Okay. So key number six, one of my favorites, is prioritizing the need to manage change. So I think when you and I initially talked about doing this podcast, I maybe suggested putting training and change management together, and you very rightly said, "No, no, no, those are two totally different things." And you're right. You're right. That's actually a representation of, I think, some of the mistakes that often gets made in the industry, is this tendency to kind of de-prioritize or under focus on the criticality of change management.

Sarah Nicastro: So tell us, from your perspective, why it is so important and what your experience was, what you think you did well, what you would maybe do differently, how you tackled this.

Katie Hunt: Sure. So, the first thing is, change is never easy. And I really think, even though this is a very intangible part of the project, it's one of the most important, just because it often gets pushed to the side when the budget gets tight, or you're short on time, and you don't have time to effectively communicate. So I would just encourage, this is definitely something we did not want to lose focus on. And we did have times where we slipped. Everyone does. But at the same time, I think we did a pretty good job of circling back and making sure that we communicated this effectively.

Katie Hunt: Our strategy overall was not to push this on the companies, but to really have the companies take ownership. We are 100% there to support, assist developing these training tools, develop the testing, outline the plan. But for a three person, four person team, it's not feasible to train and really manage that change for 20 companies, 3000 users. It's just not feasible. I don't have enough hours in the day for that.

Katie Hunt: But so really, we pushed the ownership on the companies, but we did everything in our power to explain the why behind these changes. And if they had pushback, if they had feedback, we would listen. And there were times where we didn't make a change, or we've switched the processes, but we did that in a standardized manner to make sure that everyone was in alignment. And so really, I think we just constantly tried to solicit feedback, really tried to over-communicate whenever possible, and focus on what I think is the most important resource of the project, is the people. No matter the technology, no matter the system, if the people don't support it, and the people don't understand why, and they aren't getting what they need to conduct their work and be successful, the project's ultimately going to fail. So we didn't want to lose focus on the people. We wanted to maintain communication and really just make sure that people understood the why of the changes and how it helped them personally, not just the company overall.

Sarah Nicastro: Right. That makes sense. I'm curious, you said there was a couple of times you slipped, and everyone does. I don't know if it's too much to ask. Is there an example you can share? I just think it would be helpful for someone to hear, in reality, what that looks like and how you circled back to kind of work on something that is an inevitable. No one's perfect. So you're not always going... No matter how critical you know it is, you're not always going to do things perfectly.

Katie Hunt: Sure. I think one of the best examples, especially during testing, when it's very high paced, and especially how we manage the reporting of different questions, issues, process changes, et cetera, it was fast and furious on teams with people reporting, emailing, calling, having so much feedback. And we were trying so hard to document everything and capture it and respond and execute. And I think sometimes, I know me personally, I would get caught up responding to tickets and responding and solutioning the symptoms and making sure we got these tickets closed, rather than looking at the root cause of why someone is asking this question. Is it a lack of understanding of training, or is it maybe the process isn't correct, or the system does have a bug. And so really just taking a step back, kind of soliciting some advice from our core team and then the steering committee and say, "Hey, can you guys test this out? Am I off base here?"

Katie Hunt: And really, it takes time, and it's harder than just responding to tickets or responding to people with the first answer you can come up with. But I think in the long run, knowing that we're taking the time to really deep dive into these issues and find a good solution and good process change helps in the long run, rather than just that quick, "Oh, we got your ticket closed. You're good to go." So, it is hard and it does take time, but I think as long as we circled back to maintaining the focus on the why and the people, it worked out.

Sarah Nicastro: Yeah, no, that is a really good example because you're going fast, you're in problem solving mode.

Katie Hunt: Exactly.

Sarah Nicastro: So you get this issue, and it's like, great. I can fix this. Boom. Without thinking, I wonder why they're asking this question. Maybe they don't totally get this part of the objective or what have you. I think that's a really good point.

Sarah Nicastro: And it sounds like... I tend to think one of the most important aspects of change management is making sure people feel heard. And there's a difference between people feeling heard, and you always agreeing or acting on feedback. So they're not the same thing. You can let people know that they're heard and that you value their input, even if you're not using it.

Sarah Nicastro: And so I think that it's important to understand that because I remember one of the companies, I'm not going to remember which company it was, but a number of years ago, we were talking about change management, and they said every single piece of feedback, they made sure it got followed up on. If they had a meeting, they would write it all down. And even if that was saying, thanks for your idea, but we didn't use it. But they still wanted people to know that they were listening, so that they would continue giving that feedback and stay engaged and feel a part of the process. So good stuff.

Sarah Nicastro: Okay. So our final key, number seven, is to set KPIs from which to measure progress and determine the project success. So talk with us about KPIs.

Katie Hunt: So I would say this is one thing we definitely could have done better. And I think it circles back to our team structure. And that was just an aspect of, we had individuals filling multiple roles. We had one individual that was the project manager, as well as the business process lead. So they're not only managing logistics, resourcing, budget, but they're also doing the process analysis, business decisions, and architecture. And having that, something's going to slip through the cracks. So I think that was a lack that we've identified for future projects.

Katie Hunt: And what the downstream effect of that was, is we did not really have project KPIs. Our BI and metrics team has done a phenomenal job of creating operational performance metrics. But in terms of the actual project itself and key milestones, making sure vendors are on track, making sure our other work streams are on track, that the operating companies... I think we could have done a better job measuring those milestones and KPIs and actually having other KPIs rather than just on time and on budget, which is what most people focus on. We could have been more granular and had more holistic KPIs.

Katie Hunt: But I think it's very important because it really keeps that project on track, in scope, on budget, and on time. And so I don't have much on this topic because it is an area we can improve, but I would say it's important just to make sure that you have somebody dedicated to that aspect of the project.

Sarah Nicastro: Yeah, that makes sense. Okay, Katie, I have two bonus questions for you.

Katie Hunt: Oh, gosh.

Sarah Nicastro: So the first is I know you come from a military background, and I'm curious what military learning you found to be most helpful for you within this process. So what's something from that part of your history that proved to be very useful in this project?

Katie Hunt: So I would say that one of the biggest one is rehearsals. Before any mission, any military exercise, anything, you always rehearse. You run through the motions until you can't forget them. And specifically with this project, the cut-over and that cut-over weekend, we rehearsed, I think it ended up being four times, and the original scope had only one rehearsal. And so we added those on, simply because it wasn't right when we did it the first time, and we kept doing until we got as close to go live as possible.

Katie Hunt: I think also just testing the capabilities and making sure you put both the people and the systems through their paces. Similar to rehearsals, you want to push those things to the limit when you're practicing, so that when you're actually executing and lives are on the line, you can execute how you need to. So I would say those are the big ones. That's a tough question. There's so many things I learned in the military. It's hard to kind of go through them all.

Sarah Nicastro: I bet. Okay. Last question is... I know this was a different experience for you. It was a new challenge for you in your career. What do you feel you, as an individual, what was the biggest lesson you as a person learned throughout this project?

Katie Hunt: I've actually had this conversation with my team a little bit, and really, it goes back to your point of listening to everyone's feedback. But ultimately, it's okay to say no, and it's okay to push back a little bit and make sure that you look at all the perspectives, you hear everyone's input, but ultimately, you can say no, and you can push back a little bit, in terms of what your final decision is. And you're never going to make everyone happy. I think with a project this large, that was a tough lesson because I love for everyone to get along and work well together and collaborate. And there were people upset at different points in the project. And it's not personal. It's really just what's best for the business and what's best for the organization overall. But yeah, just it's been a challenging experience, but at the same time it's been pretty rewarding. And I would just say the people I've gotten to work with and the team has been phenomenal. So I'm just grateful for all their work that they've put in.

Sarah Nicastro: That's really cool. I think it's awesome. I'm sure it's been challenging, but it is always rewarding to push yourself out of your comfort zone, and to really do different things and learn different things. So I'm really excited for you. I really appreciate you joining us today and sharing these seven keys to success, and I look forward to connecting again soon.

Katie Hunt: Well, thank you very much for your time. I appreciate you having me on.

Sarah Nicastro: Thanks, Katie. You can check out more of our content by visiting us at futureoffieldserviceref.ifs.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, thanks for listening.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

September 23, 2020 | 38 Mins Read

3 Themes Driving the Future of Service

September 23, 2020 | 38 Mins Read

3 Themes Driving the Future of Service

Sarah shares a recent keynote she delivered for Aston Business School’s World Servitization Convention, which includes her presentation of three key themes she feels have surfaced as a result of COVID and will impact the future of service across industries as well as a discussion with Larry Blue, CEO of Bell and Howell; Kevin Starr, Global Program Manager, Advanced Services at ABB; and Robin Butler, Group Field Service Director at WaterLogic about how these themes have presented in their companies and what they feel the future holds.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're sharing with you a keynote session that I recently delivered at Aston Business Schools Advanced Services Group World Servitization Convention. Say that three times fast! I was asked by Aston to join the event and deliver a session discussing some of the key themes that I've found in my conversations with service leaders this year that I think are a result of COVID, but things that will ultimately drive some significant progress forward for the industry. So in this session I am presenting those themes and then welcoming a panel to join me and talk through their thoughts on the themes, what they've witnessed in their businesses, and what they think the future of service will hold. I think it's a great discussion. I hope you enjoy it. If you haven't checked out the research the Advanced Services Group is doing, it's well worth the time to do so. So have a listen and enjoy.

Sarah Nicastro: Hello everyone. I am so excited to be here with you all today. My name is Sarah Nicastro. I am creator of Future of Field Service and Field Service Evangelist. I am going to go ahead and share my screen so I can share some slides with you all, and we will get started. So very, very excited to be here with you all today. Want to talk a little bit about some of the themes that I've picked up on that I think are going to drive the future of service forward.

Before I do that, let me tell you a little bit about me. So as I said, Sarah Nicastro, Field Service Evangelist, creator of Future of Field service. I live in Erie Pennsylvania, right on Lake Erie. It's a beautiful place this time of year, but we pay for it significantly in the winter months with some serious snow. Today is actually my wedding anniversary. I've been married to my husband, Eric, for seven years today, and we have two young boys. Evan, who turned five in June, and Ellis, who will be four in October. So they keep me very, very busy, that and work. But in my free time, when I do have some, I love to read nonfiction books. I love to travel when travel is possible and I love to spend time outside.

So, as I said, my role is running an industry resource called Future of Field Service. So Future of Field Service is published in partnership with IFS. I was asked to join the IFS family just about two years ago. Prior to that I was the publisher and editor in chief of a North American publication called Field Technologies. I had been there for about 11 years, and joined IFS late 2018 to launch Future of Field Service, which came to fruition in January of 2019.

So, what is Future of Field Service? Future of Field Service is an educational platform for any business across industries with a service focus. So even though it says field service it really is service as a whole. Our editorial philosophy, if you will, is heavily focused on sharing the voice of the community. So the vast majority of our content is derived from interviews with service leaders themselves, talking about the projects they're working on, the initiatives they're driving within their companies, the transformations they have underway, their paths to Servitization. We feel that sharing those insights from peer to peer is one of the most valuable ways for folks within the community to learn from one another.

Aston invited me here today to talk with you all about some of the macro trends that I've picked up on in my conversations with those service leaders this year. We all know that this year has been a particularly different and very challenging year for us all in a variety of ways. The way that businesses have been reacting to COVID challenges, the way that businesses have seen themselves evolving as a result of what's happening, there are some commonalities. While it is a very unfortunate situation, I do think that these three trends in particular are sort of a positive outcome of a negative situation in the sense that as we recover I think these themes are going to really drive significant progress in the industry and on the path to Servitization.

I am going to talk with you about some of the trends, three trends in particular, that I've noticed this year as I'm interviewing service leaders. I will present them at, like I said, a macro level. I'm going to share with you some quotes from some of the interviews that we've done and talk with you about some of the folks that I've had the good fortune to speak with this year. Then I'm going to invite on a panel of some of my friends who I've talked with that are service leaders themselves. I'm going to ask them to weigh in on these three themes, what they've noticed, and most importantly, how we see them driving things forward.

Let's go ahead and get started. So the first theme that I want to talk about is the theme of openness to change. So each of these themes I'm going to talk with you about today is something that could be on a continuum, okay? So some organizations were already really quite good at these things, and they've just gotten better under pressure. Other organizations that were lagging have had more of a gap to fill.

So, openness to change. So we know that change is very hard, and honestly, I would say in my 13 or so years speaking with service leaders and discussing transformation in service industries, I think that resistance to change, mismanagement of change, managing change and not prioritizing change management is one of the biggest areas that prohibits a company from transforming in the ways they would like to.

Change is hard, personally, professionally, it can be very challenging, right? And it's natural for folks to want to do things a way that they're comfortable with, that they're familiar with, right? But what we've seen as a result of COVID is far more openness to change, out of necessity really, right? So companies can't continue to do business the way they were doing business in December of last year. They need to do business differently. Employees can't continue to work the way they were working December of last year, they have to work differently. So that force has really, really opened people's minds and hearts to doing things differently than we've done. I think that while that is a challenging process, it is one that I think will have a long-term impact as businesses recover from this. So let's take a look at a couple examples.

So the first is Reihaneh Irani-Famili from National Grid, and I like what she said. So a situation like this is helping leaders across industries to build those change readiness muscles. So if we think of it as a muscle that we need to exercise, and build, and flex, that's what this situation has done for organizations and individuals alike. Companies are finding ways to be more creative than they've ever been, more agile than they've ever been, and really getting some necessary practice at doing that.

You see a quote here from Reeve Bunn, who is the president of DSL. Again, I like what he says. You get to early March, and all of a sudden you have to be laser focused. The speed at which you start to do things is quite amazing. It reminds you of what you're truly capable of. You can move a mountain pretty fast when you have to, far faster than we probably thought we could back in January. So I think this is a really good summary of what I mean here. Each of the companies that I've spoken with that I feel are reacting well to this circumstance have looked at this situation and the need to change and they've jumped at it, whether it was comfortable or not. I think that there will be a long-term effect of this as we go forward, because some of that resistance to change has diminished, because people realize they can do it, they have done it, and they can do it in different ways we need to as things continue to improve.

So that's the first theme. Moving on to the second is closeness with customers. So again, I don't say this in the sense that companies were not close with their customers before. Some were very, very good at that, particularly when we talk about Servitization. If you look at the Advanced Services Group's forces for Servitization, one of those is market pressure. It's what your customers are demanding from you. So to be good at evolving on that Servitization journey, you have to be in tune with what those customer needs are. So some folks were already really good at this, and some weren't. Some were, again, stuck doing things the way they had always done, or getting by out of a need to just get by. But this situation has really forced organizations to become closer than ever with their customers. Again, it's a time of great change, right? So what your customers needed from you late last year or early this year is completely different from what they need from you today, and the only way to stay on top of what those needs are and be able to react in an agile manner and a creative manner to meet them is to be close with those customers.

Let's take a look at a couple of quotes here. So Nicola Buckley is the executive vice president of Park Place Technologies, which is an IT services firm. She talked, we had her on the podcast, she talked a lot about how quickly and with great flexibility the company reacted to what their customers need. So this has been a difficult situation for folks from a financial perspective, and a lot of decisions have been put on hold or decisions are different than they looked a while back. Park Place Technologies has done a great job of reacting very fast to taking that into consideration and looking at from a services standpoint the contracts that they were offering. How could they change? So they introduced shorter contracts, they introduced more flexible terms. They really listened to the challenges their customers are having and they reacted quickly. She said to me that in this situation they feel that reacting in a way that puts their customers' needs first is a great way for them to build long-term loyalty and long-term relationships, which will ultimately pay off.

The next quote is we had Jamie Beck from Peloton on. They're one of the organizations, one of the industries that has actually been busier as a result of COVID. Everyone wants to move to home workouts. They have turned to field operations actually as a way to, as he says, put a strategic moat around what they're doing as a business. So they're looking at what those customer needs are. They recognize that with more bikes and more treadmills deployed in the field, they'll have a greater need for a service force. They wanted to provide that service themselves rather than relying on third-party providers. So they're, again, getting close to what those customer needs are and finding ways to scale up, in this case quickly and react adeptly.

I think that the other thing that's interesting when you talk to manufacturers is a lot of them have seen a spike in interest in service agreements. Companies wanting to do their best to extend the life of their equipment that they have because they aren't at a point where they want to make large capital investments right now. So, in a sense it's also opening customers' minds to the idea of Servitization and what service can do to benefit them. So, that's the second theme.

The final theme is recognition of the digital imperative. So again, if you think of this as a continuum there are obviously organizations as we came into this situation that were well on their digital transformation journeys and there were those that were lagging behind. I've talked with folks on both end of that spectrum, and those that were already making a lot of progress when it comes to digital transformation and embracing digital tools were A, very thankful that they had been, and B, able to build on that foundation very quickly to react to changing circumstances and how work needs to be done. Those that were lagging are working to play catch-up. They're realizing that this is something that they need to prioritize and they need to get up to speed on, because not only do they need to react to this situation, but they need to be ready to react to the next situation.

If you look at this quote here, this is from Jens at Alfa Laval. Alfa Laval had been looking into remote assistance, pre-COVID. This is another theme we hear, this acceleration of digital transformation, right? So this is something that was on Alfa Laval's radar, and it was sped up significantly as COVID hit, because the company realized that it's something that could help them immediately. But as Jens says, as this situation evolves and we begin recovery, this is a tool that will take them from business continuity to business transformation. So it's something that the organization has been able to derive immediate value from in being able to keep service consistency in this situation, but it's something that they'll evolve the use of and build on as things improve.

Similar story here from Roel at Munters. I like what he says, is one of the greatest benefits of technology is how it will equip Munters to bring its vision for Servitization to reality. So he says here, "I'm thankful for how the technology is helping us address today's challenges and excited for what the future holds." I think that is a good synopsis of how folks feel about the digital imperative. They're thankful for how it is allowing them to navigate through this crazy time, but also excited about the potential that it will bring to organizations as recovery ramps up, particularly knowing that there is that greater openness to change that I spoke about first.

So, these are the themes we're noticing, these are the macro trends that we have seen time and time again, conversation and conversation again. But what is going to come next? So I want to invite on three friends of mine who I have talked with at different points about this situation and their journeys, and I want to get their thoughts on these themes and what they've noticed related to each theme, and most importantly, what we think the future will hold.

Sarah Nicastro: So Kevin, Robin, and Larry, can you please turn your cameras on and join me now? There we go. All right, fabulous. So I'm excited for the-

Larry Blue: Hey, Sarah.

Sarah Nicastro: Hello, hello. Thank you all for being here. I'm excited to have you.

Robin Butler: Hi, Sarah.

Sarah Nicastro: Okay, so to start I'm going to ask each of you to introduce yourselves. Say a bit about our organization and what the business does and your role. So Larry, I'll let you go first.

Larry Blue: All right. Great. Thanks, Sarah. My name is Larry Blue, I'm the chief executive officer for Bell and Howell. Bell and Howell is a North American automation equipment service business and value added distributor. So we do sell some equipment for some of our partners, some of our customers, and we service that equipment. So it feeds into our service business. So Sarah, thanks for having me.

Sarah Nicastro: Thank you for being here, Larry. Robin, can you go next?

Robin Butler: Sure. Good morning and afternoon. I'm Robin Butler. As of last week I am the group field service director for WaterLogic. We're a global business with direct representation in about 19 countries. We provide point of use water dispenser in office environments largely. We do have a very small consumer element too. Each of the units are relatively independent businesses with their own independent operating models. Really my role is to come in and start to create some career best practice and standardization process operations.

Robin Butler: My background though, as I said, I've only been in WaterLogic for seven days. My background is actually in the telco market, and I imagine Sarah will be talking a lot about that at least as much, if not more, than my six days experience in WaterLogic.

Sarah Nicastro: All right. Great, and Kevin.

Kevin Starr: Hi, I'm Kevin Starr. I've been with ABB 33 years. It's a automation industrial supplier of all kinds of products and services. I work in the process industry section, where we deal with paper, pulp, minerals, mining, metals, cement, food and beverage, and now data centers. So I've been involved with service, and I'm being brought in to help usher us into the digital age of service.

Sarah Nicastro: Okay. Excellent. Well, thank you all for being here. I'm really excited to have you with me and to have this conversation. So before we talk about the themes, I do want to bring up the Advanced Services Group's services staircase. So this is ... I know each of you had taken a look at this because I sent it to you, and hopefully most of the folks on have as well. But this is their staircase, and I'm hoping that for context for the discussion we're about to have each of you can kind of talk a little bit about where you think your organization falls on this staircase. So Kevin, can you weigh in here first?

Kevin Starr: Yeah, sure. Actually, this falls in line very, very well with what we call our industry care service agreements, where there's four components to start. Well, we do sell parts and products, and that's a big component of our business globally. Then we get into the break and fix, we call that rapid response. When it breaks, somebody has to be there. Then we get into the performance improvement, or the lifecycle management, which is sort of in the middle tier there, where you're doing better preventive maintenance to make sure a problem doesn't happen.

Kevin Starr: Then we get into performance improvement, where we're trying to be faster at reducing first time fix. Then we get into operational excellence, where we do forecasting and predictions. We're finding that typically your digital alignment, you can do more things remotely as you get further up the ladder there.

Sarah Nicastro: That makes sense.

Kevin Starr: We're in all of those different areas.

Sarah Nicastro: Good. Larry.

Larry Blue: Thanks, Sarah. In looking at this, a lot of what Kevin just said is pretty much the same for Bell and Howell. However, I think we're more toward the guaranteeing the outcomes from our products, and we're investing right now pretty heavily into data analytics to move up to being able to guarantee the outcomes of business practices and business processes. We're not quite there yet. We're kind of spotty. We service equipment from about 60 different manufacturers who've outsourced their service requirements. So some of the machines tend to be very legacy machines, and it's a little harder to instrument them, a little harder to connect them to the internet, and therefore be able to get the kinds of remote data that you need to be able to guarantee business processes. We are doing that in some cases, where we're taking sensors, putting it onto different types of equipment and starting to move in that direction. But I would say that's where we are.

Larry Blue: We've been doing remote monitoring and repair on some of the newer types, more intelligent types of equipment for about the last four years now. So we're trying now to use that data that we're getting and being able to start looking at the business processes for our customers.

Sarah Nicastro: Excellent. Okay, and Robin.

Robin Butler: Yeah. I would say we're kind of a mix, much like the other two. I mean, essentially we're a product business. So the orange is a big part of our revenue stream, and in fact we sell indirect too. So that element of the business is solely product. The core of the business I would then say is sat in the middle with the assured maintenance. So most of our units are sold with a service contract. In many of the markets they can only be sold with a service contract, and is very much assured maintenance. So we are trying to maintain about every six months, depending on the machine, to prevent any breaks.

Robin Butler: But actually we do have one or two much higher value offerings, where the product itself is more orientated towards specific outcomes, particularly in the hotel and catering sector. I would say we're probably moving into the customer asset capability area there. So that first tier, the blue. There is talk about whether some of the markets weren't climbing up that value chain into the capability sector as well, but that is certainly a couple of steps for us on a majority of our machines.

Sarah Nicastro: Okay, good. All right, so that gives everyone a little bit of context for where each of you are at. So now I want to revisit the themes that I walked us through at the beginning of the presentation, and I really just want to have an open discussion and get each of your thoughts on what have you observed within your organization and in the industry as a whole related to each of these themes. And mostly importantly, how do we feel these themes are going to impact the future of service? So, how are they going to carry us forward as this situation evolves? So we can keep this open, but I will prompt us along. So the first obviously is, as I discussed, is openness to change. So Kevin, can you start and just talk to us about how you've witness this theme and what you think that long-term impact of this will be?

Kevin Starr: Ooh, yeah. This has been a ... Well, this year especially, I think that accelerated. We've been expecting the digital revolution to hit for several years actually, and COVID really sped that up. I kind of think about this a lot, is the fear of change is sort of inversely proportional to the risk of staying. When folks could hit their targets by not changing, why would they? COVID stopped that. So the industrial revolution 4.0 is upon us. The information that's available, the assets. As Larry mentioned, we also have legacy equipment, 30, 40 year old stuff and new stuff. So the amount of information that our customers have to be able to understand is staggering. So when they used to be able to call us, say, "Hey, my system is down." Now that could mean 20 different things, which could be 20 different skillsets. So if we send in the wrong person at the wrong time with the wrong solution, it makes everybody mad. So we're realizing customers are like, "We cannot stay where we're at. Please, help us." So we're being asked to do ... I've done more digital webinars, we've introduced more digital, more remote. We've had more remote connections than we've ever had, because we can't get people to site.

Kevin Starr: We've used technology where the remote insights, where you can see through the lens, HoloLenses and all that. I mean, it's some of the stuff that we were dreaming of, even at the different conventions is actually being we have to have it now. So if you're not open to change right now, you're probably going to have a hard time staying in business.

Sarah Nicastro: Yeah. I think one of the things that I maybe didn't mention about this theme is how it is permeating businesses from top leadership all the way down to the frontline worker. So I've talked with I mentioned Alfa Laval, Munters, are a few organizations that I've interviewed since COVID hit that have deployed remote assistants, right? Remote assistants is a tool that when I was interviewing folks about it last year they were excited about it at the leadership level, but at the frontline workforce level it was a lot of, but we're not sure how to get them excited about it. They just want to keep doing things the way they've always done, right? So even at the frontline level I think this situation has ... If you can't go on site and you need a way to continue working, it's really pushed these folks to be open to these tools that a lot of times at the leadership level companies have been excited about for a while.

Larry Blue: Sarah, just to comment on that. I think the willingness to adopt these tools I also think is a generational thing. I think if you look at our workforce, we've brought in probably two, 300 new field technicians in the last three, four years. That group seems to be very open to adopting the new tools, in fact, they kind of expect it. Some of the guys that have been here a long time, and we are pretty bifurcated in our workforce, they were a little less accepting, but as they saw the power of the tools, particularly in the last six months, we've seen good uptake from that group as well.

Sarah Nicastro: Yeah. That makes sense. Robin, what are your thoughts on this first theme?

Robin Butler: Yeah. I got two really, I think, to pick up really directly on the points Larry and you just made. You know I talk a lot about the case for change, right? You're going to land change successfully, you've got to create a compelling case. That is often difficult with the frontline in particular, but I guess what we've got now is we've got such stark choices, and many businesses are facing this horrible decision of change or disappear, and that's a threat what would've felt really distant and perhaps improbable to many people on the frontline. I think that is a much easier narrative to tell. It really is the case for many organizations, and the people on the frontline will know and believe it, and therefore be much more willing to accept those cases for change.

Robin Butler: So, I think you're right. Right to the organization there is much more openness to change. Of course because it's driving change, successful change drives a greater appetite for change. So because people are doing it and doing it quickly and landing change, that will create more kind of enthusiasm and support for change.

Robin Butler: I do wonder though whether this is a lasting change, a lasting trend, or whether it is simply a consequence of the situation we find ourselves in today. Ultimately-

Sarah Nicastro: And we'll get comfortable again.

Robin Butler: Yeah. I mean, human beings, we're kind of resistant to change, right?

Sarah Nicastro: Mm-hmm (affirmative).

Robin Butler: So that's millions of years of evolution have led us to this point. Is a global pandemic and this rapid disruption going to change that longer term, or as you say, once we get comfortable again with these new things we've adopted, the change imperative disappears, unless there are structural changes within an organization over how it makes decisions, then I'm not sure how lasting the change will be. If it fundamentally changes the appetite for risk and how they go about making decisions, that's going to make a lasting change.

Larry Blue: Robin, just to comment on that. One of the areas that we've seen in terms of how is this going to impact the future of service is we have implemented as a result of COVID a lot more virtual training. As I mentioned earlier, we service about 60 different manufacturers' equipment and we're bringing new ones on board pretty regularly. As you bring those new pieces of equipment on board, you need to train your field staff. We had started down that path prior to the pandemic, but we have moved very quickly and pretty successfully into virtual training on many types of equipment that we're now servicing. The interesting part of that and the thing that I think will make it a standard way for us to do training is the fact that it actually increased the rate at which we could derive revenue.

Larry Blue: We recently signed a new digital printer company to a service contract, and we had to train on their equipment. We made a comparison to a prior customer in terms of the amount of time, the ramp to revenue, and we were six months faster in getting to revenue with the new customer than we were with the old customer, as a result of being able to train the field faster because we were doing it virtually.

Robin Butler: Actually, it's a good example, Larry, I think of ... I like it because it's not a direct customer orientated change, but it's a change on how you do change, and so that's likely to lead, sorry to overuse the word, lasting change for how you do change, right?

Larry Blue: Yeah.

Robin Butler: Yeah.

Larry Blue: It certainly will. It's become in fact, we're going through our budget process right now, and honestly the budget per training is changing significantly as the result of this process and this practice.

Robin Butler: Great.

Sarah Nicastro: So Robin, I think it's a really great point that you brought up. One of the things I was going to say is, I think where there is change being operationalized, I think it will be a lasting change. Where it's this sense of openness to change out of necessity, particularly at the frontline level, that I think will diminish. But one of the aspects of this that has come up in conversation after conversation that is more on the operational side is more rapid decision making, right? So organizations that used to meet on a monthly basis or a quarterly basis, they're now having to meet and make decisions weekly, daily, right? So they're putting steps in place to make that possible, obviously to have the right data that they need to have those meetings, to make those decisions. But in that, operationally, they're not only getting comfortable changing more quickly and being more agile, but they're putting systems in place to make that a longstanding impact.

Sarah Nicastro: So I think it's a good point, though. I think that there are areas of it that as we reach this next normal and people get comfortable again I think will diminish, and then there are areas that I think will stick. Go ahead.

Larry Blue: We're seeing some of that, Sarah, already. It gets to one of the other areas that became kind of interesting, and that is at our customers' sites, people are ... Here in the US masks have become a political weapon.

Larry Blue: We have a number of situations where at our customers' sites they're not mandating the wearing of masks. Part of our job as leadership of service companies is to keep our employees safe. So we've given our techs the freedom to say, "Look, I'm not going in there because I don't feel safe." So they have the ability to do that. Because people have started to believe that okay, COVID is going away in certain areas, people aren't wearing masks. So we are reverting back to that comfort factor there, but it still represents an issue for us in management to make sure that our folks understand they have the authority to walk away from a job because it's not safe. I think that part will stick. I think the masks and everything we're already starting to see what Robin was mentioning.

Sarah Nicastro: Right, yeah. There is certainly more empowerment of the workforce as well. So I want to keep progressing along, and I think actually when you talk about the first theme, openness to change, it ties in very well with the next theme, because not only are we as organizations more open to change, but customers in a lot of ways are more open to change than they have been as well, right? So again, out of necessity customers who maybe were kind of stuck with well, I don't want to change our service agreement because this is just what we've always done, or I don't want to talk about outcomes based service or Servitization because we just have this comfortable thing. There are a lot of situations that are forcing customers to think differently, want to do business differently, to view the value of service differently. So I think that first theme ties in with the second theme.

Sarah Nicastro: So let's talk a bit about what have your organizations witnessed in terms of your relationships with customers. Again, how do you think having to be closer and more creative in this time will have an impact on the future? So I don't know. Kevin, do you want to start?

Kevin Starr: Sure. Why not. I think part of the closeness is customers, and I guess to Robin's point about will it stick or not is I've always found that value sticks and cool sometimes doesn't. So how do you know if you're hitting the mark if you don't know your customer? So at the end of the day, if they don't make money, we don't make money. So we have a lot of effort going into the value of services rendered. So what if this machine doesn't start back up? Or what if it does start back up? And the difference is it's kind of amazing with all the different industries that I get to work in is with uptime or downtime avoidance, or to be able to predict a problem before we even walk into it, from do we have the right spares mix. All of that stuff has a lot to do with our customer's bottom line, and if we don't know what our customer is doing, that's very, very challenging. So our closeness with customers is that we know their process. We've been in their industries, we know the equipment, and we can help them reach their goals.

Kevin Starr: There's been a lot of that right now as their goals change this year. So we've been with them to ... Our contracts, they ask us for terms and condition adjustments, for how we change our cashflow, how we work with them on everything. But that's part of sticking with our, they're our colleagues. We're here to help them, and if they don't make money, they don't need us. So we're in this together, and feel that when we have that trusted advisor status where they know that hey, we're calling ABB, they'll help us. We're going to come out of this and we're going to even be stronger than ever. So that's that relationship, that bond with the trusted advisor and that we are genuinely interested in helping them meet or exceed their value requirements. That's becoming a bigger topic. I guess on the top end of our staircase there is more of a consultant maybe at one point, but still part of our operational excellence. It's not just enough if the equipment is on. Is it on and driving performance?

Sarah Nicastro: Right.

Kevin Starr: That's where analytics come in and all that fun stuff.

Sarah Nicastro: Yeah. They want more than just uptime, right.

Kevin Starr: Yeah.

Sarah Nicastro: Now, Kevin, you, ABB has seen an increase in service interest during this time, right?

Kevin Starr: Yes, yes.

Sarah Nicastro: Yes. I think that that is in line with a lot of the folks I've talked to. They've either really ramped up on the services side, because again, as I mentioned earlier, a lot of companies aren't in a position to make capital investments. So they want to look at how can we work with you to extend the life of our equipment? How can we work with you on these different service related things? A lot of organizations have even introduced new service offerings, right? I've talked with HVAC organization that are doing air checks, and more quality stuff. I've talked with companies that have introduced safety services and things like that. So it's been an opportunity for folks that might be not doing as well on the product side to really ramp up those service offerings.

Kevin Starr: I would even say the staircase is almost is very traditional starting with a widget or an asset, or something that you can touch and then you grow into service. This year that's almost flipped upside down as we start with service, and oh, by the way, we make some good products. It's almost the opposite. Is they're looking for the long-term service provider that has a variety of solutions that can be tailored to fit, and then we also make equipment that they can continue to invest in their process.

Sarah Nicastro: Right. Larry, Robin, what are your thoughts on this theme?

Larry Blue: I agree with a lot of what Kevin said. I mean, we're finding that our customers have a more positive, I would say a more positive opinion of the services that we provide, because guys are showing up in the middle of a pandemic. We're continuing to meet our service level agreements, we're continuing to do the preventive maintenance stuff. We're moving to predictive and then to I think that consultative kind of level with what we call a prescriptive maintenance, and that requires a lot of this data that we were talking about earlier. But I think Kevin's point about service coming first, making sure that you can in fact get all the equipment, that you've got highly skilled employees that can fix it quickly, because let's face it, the cost of a lot of this new equipment is such that it's a critical piece of gear, and it's not redundant. There are no extra systems laying around for folks to get back up and running and run those particular tasks. So having that equipment as a single point of failure makes a rapid response, and with the right kind of response. Again, to Kevin's point, you got to have the right people with the right skills there at the right time. I think we're seeing that more so with our customers today because of the environment, because of COVID.

Larry Blue: Whether that's one of those temporal changes that Robin was talking about, we'll see. But certainly during this period we are seeing that.

Sarah Nicastro: Okay. And Robin.

Robin Butler: Well, I think first of all this is more likely to be a lasting change than the openness to change one is, because ultimately we are social animals, right? It's in our nature generally, maybe not as individuals, but as a species to interact and be social, and want to understand each other. We're inquisitive beings. I think, I mean, specifically on closeness to customer, I've got a huge amount to add on top of what Kevin and Larry have said. I kind of agree with it all, but I would almost expand it slightly and say it's actually it's been a great time to be in field service, because it's going a bit beyond closeness with customers and probably a bit more like closeness with society as a whole. We're seeing society as a customer. We're seeing lots of people step up and start to produce products to help fight the pandemic, even though that's miles outside their core, but they've got facilities to do it. Many of us will have people who are classified as key worker status, which anyone from the UK will understand what that means. The telco and IT sector, where I've come from, that stepped up and played a key role in building these enormous kind of super hospitals and delivering the infrastructure that is helping the planet fight the pandemic.

Robin Butler: I think it's driven much more appreciation of people who do these types of jobs. The people like, I think as Larry said, you still get up every day and go into sites, while everyone else is sat working from home, sort of shielding themselves from the virus, out they are. They're out there, making sure the infrastructure works. I think that's driven personal pride of the individuals doing it, but also kind of pride from society. I think it has driven that closeness, and I certainly hope that's something that lasts and we'll start to see some benefits through kind of retention rates and the ease with which we recruit.

Sarah Nicastro: Mm-hmm (affirmative). Yeah, that's a really good point. I think there is not a theme in here around sort of the humanity of this all, but it has been something that's come up in conversation after conversation, both in how folks are relating to their employees and how they're relating to their customers. Just this idea that how you treat people right now is something that they're going to remember for a very long time. So from a customer perspective what that looks like, again, is to Kevin's point, if we give them what they need right now we're building a loyalty, we're building a relationship, and that's a long-term investment that will pay off. I think that companies for the most part have been very, very good at that.

Sarah Nicastro: I think related to the topic we're here to talk about today in terms of Servitization, I do think that this change in customer relationship and sort of change in how customers view service is something that I think will have a impact on the journey to Servitization going forward. Because just as simple as someone saying, "No, I'd rather buy the equipment." To, "No, I'd rather pay a monthly fee to use the equipment." I mean, just differences in that mentality right now are huge, and the realization of how important service is and the role it plays, and that trusted advisor status, and those true business partnerships. I think that that will really kind of spur this journey forward.

Robin Butler: It's really exposed the interdependencies I think between organizations and the ecosystems they exist in.

Sarah Nicastro: Yes, exactly. I think that it's going to make it so that it's not a company trying to drive a Servitization journey, versus a company meeting its customers with what they need and having it be a mutually beneficial outcome.

Larry Blue: We got a quick question here about how all of this, closeness with customers was going to impact the future of service. Speaking from a Bell and Howell perspective, we've had a lot more customers be willing to allow us to gather more data on their machines, because we can say, "Look, we may not be able to get a tech in there because of safety concerns, et cetera, but if you allow us to connect to the equipment to be able to monitor the health of that equipment, we can provide a similar level of uptime." Or lack of downtime to Kevin's point, with remote kinds of services, remote assistance. I think that has helped tremendously because if you're close to the customer and you're open with the customer, you develop that trust that Robin was talking about. As you develop that trust, they know you're not going to misuse the data. I think that's an important aspect, and certainly we're seeing that openness with certain customers that we currently have.

Sarah Nicastro: Yeah. That's a very good point. Okay, so I forgot to say this guys earlier, but we are going to try and take some questions from the audience. I do see that there are some. So let's get through this third theme and then we'll try and save a few minutes to answer some of the audience questions that we have. If you have one and you're listening, please go ahead and type it in now. We will get to as many as we can and I'm sure that all four of us would be happy to follow up after the session today as well.

Sarah Nicastro: So last theme, recognition of the digital imperative. So digital tools have helped us to persist through this situation and to have business continuity, and they are also what will enable a lot of the long-standing change that we're talking about. So customers want more data, customers need more solution advisor and consultative relationships, and data is how we deliver on that.

Sarah Nicastro: So let's talk about what you each have recognized in terms of the digital imperative and what we think will happen going forward.

Kevin Starr: I guess to me we're in the midst of a digital revolution. That's why they call it digital revolution 4.0. I mean, that was before COVID was coming. Sometimes you have to sit back. So, what does that mean? That means there's a paradigm shift. The way you think in the old paradigm won't work in the new paradigm, and that's where people get scared. In the old paradigm of service we could train a person to be a subject matter expert and they could handle pretty much an entire class of assets. Today, the amount of assets, functions, and processes that are in the industrial sector that our people have to know has grown exponentially. It's actually grown beyond point of singularities, going beyond what a person can know. So there's always sort of the whack-a-mole kind of in today's world is well, what's going to get hit today? And if I'm an expert on a transformer, I'm not an expert on a drive. If I'm an expert on a drive, I'm not an expert on the control system, or in HMI, or data space, or a control.

Kevin Starr: So what we're seeing is we are having cybersecurity, and IT, and OT. There's specialties now that require tremendous levels of knowledge, but they don't all break at the same time, but they all interact. That's what we're seeing, is customers are frustrated. They don't know who to hire. Well, if I hire a control guy, I don't have a cyber guy. Then we don't know if we hire a subject matter expert but they're not a generalist, that's the imperative that we're in. We've recognized that and we've shifted to a connected engineer by sort of like we call it the project Iron Man, is how do we put a platform in place that a person can plug into and automatically kind of like The Matrix, and okay, now I'm an expert on this. That can't happen with the technology that's available today. We're trying to leverage the expertise that we have globally and then bring it to the point of contact, which is our field service organization that comes in contact with the customer so that they can have that trust, and that sort of like, hey, what's your problem? I can fix it, doesn't matter what it is. You know?

Sarah Nicastro: Right.

Kevin Starr: That's what we are seeing. Is if you think you can hire one person who knows everything, you're thinking in an old manner and that's not going to work. You're going to hurt the person, you're going to hurt morale, and you're going to stagnate. So you have to think different, and this digital imperative is, what I'm seeing is if you don't think different, you're going to hurt yourself or hurt your business.

Sarah Nicastro: Absolutely. Larry.

Larry Blue: Yeah. I was just scribbling some notes here. I mean, one of the things that ... Kevin is absolutely right. You can't hire a MacGyver that can fix everything.

Kevin Starr: That's good.

Larry Blue: Right? You just can't do it. What you have to do is you have to give your guys in the field access to those SMEs, right? The way you give them access is through artificial reality, virtual reality, the Google Glasses, those kinds of things so that you can have the SME looking over your shoulder when you're working on something that you haven't seen before, right? Or if you've seen it, you saw it in training six months ago, a year ago, or whatever, and you need a refresher.

Larry Blue: All of that is now possible with today's technology. We've implemented some of it. We've got a lot more to do.

Larry Blue: But the reality is you now have tools that are available to you, and you have bandwidth available to you and connectivity that you didn't have before to be able to create the network of experts that then can virtually parachute in to a problem. I think that's a really important way to look at this and to be able to provide the level of support customers need, right?

Sarah Nicastro: Absolutely. Robin, what would you add?

Robin Butler: I think the digital imperative has been there a long time, like Larry and Kevin have already said. Your terminology is spot on here. It's really COVID has emphasized and it's created recognition of both the opportunity and in fact the imperative, because I think what we've already started to see in the telecoms and technology sector in particular is, IT sector, is some organizations have already fallen behind the curve on it, and it can be very capital intensive to make the change. If they don't do it soon enough, if they do it in a reactionary way, they won't perhaps have the funding to be able to make the change, and then they're on a hiding to nowhere.

Robin Butler: I think it's important though, when this big kind of shock we've gone through, it would've driven certain types of digital adoption. I won't say innovation, because I don't think we've innovated very much, we've just adopted, which is really kind of the first point we discussed. So I think it would've changed the business case behind the adoption of some of these elements. I always talk about three threads to digitalization. One is digitizing the product that the customer interacts with, actually their product. The second is the way they interact with a service organization, things like WhatsApp or chat. Then the infrastructure that your own employees work upon. That can be digitized too, ERPs and CRMs. I think it's really important that people out there push forward on all three of those journeys in a coordinated and cohesive way. Don't just suddenly grab the product element and say, "We need to make that change now because of COVID." And forget that you can and should be making the other two at the same time, because actually I suspect you'll end up with a fragmented approach and you'll end up trying to replace an ERP many years after you introduced many of the functionalities that would've benefited from a coordinated cloud based ERP.

Robin Butler: So yeah, I think that's probably what I would add on it.

Sarah Nicastro: Awesome. Okay, so let's see if we can just move through. So these are just some key takeaways. Remember that all of this is still a "people thing," right? So people are always first, whether that's employees or customers. I think companies right now are doing a good job keeping that in mind. We talked about operationalizing, faster decision-making, and really taking this digital imperative seriously and working to either build upon the success you've achieved or catch up.

Sarah Nicastro: I'm going to hop over and see if we have time for just one or two questions. Before I do that, I just want to invite you to, if you aren't already familiar, check out what we're doing at Future of Field Service. I am very, very passionate about what I do, and giving this community a platform to learn, and connect, and collaborate, and I would love to have you check it out. So let's see if we can squeeze in just a question or two.

Sarah Nicastro: So this one, first one I'm reading is for Larry. If I understand correctly, your company services equipment from many different manufacturers. How do you get access to digital monitoring data and present that to your field technicians?

Larry Blue: Great question. I was just typing out the answer because I didn't know whether we were going to get time or not. We price our services assuming that the remote monitoring ... Again, as I mentioned earlier, and I'm getting a little ahead of myself, it does vary depending on the intelligence of the equipment. Some of the equipment just isn't connected, some of the equipment just isn't all that intelligent because it's 40 years old. The more intelligent equipment, we price our services assuming remote monitoring and remote repair, so the customer gets a better deal. We're also able then to provide some of that consultative capability so that we're able to actually make the equipment run better and save them run time. So we offer that as part of it, and generally they'll run an ROI, and as long as that you're not looking at any PII, because we all understand cybersecurity and those issues, that you're only looking at machine data. Then we're able to justify the ROI typically with the savings they get on their service as well as the additional uptime they get from the prescriptive maintenance offerings.

Sarah Nicastro: Okay. All right. Sadly, we are out of time. It bums me out because I could talk with Robin, Larry and Kevin for at least another hour or two. We didn't get to all of your questions, but rest assured we will follow up with you. Gentlemen, I appreciate you being here with me very, very much. So thank you for your time this morning and for sharing so openly your insights with myself and with our audience. To everyone that tuned in, thank you so much for spending some time with me as well. It was my pleasure, and I hope to talk with you all again soon.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

September 16, 2020 | 30 Mins Read

Cisco Adapts to CX Trends

September 16, 2020 | 30 Mins Read

Cisco Adapts to CX Trends

Sae Kwon, VP of Customer Experience at Cisco, talks with Sarah about the changes in customer expectations he’s taken note of across his 24 years at Cisco and how the company has adapted to meet some of the most recent needs to deliver an exceptional customer experience.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. I'm excited to welcome to the podcast today, Sae Kwon, Vice President of Customer Experience at Cisco. Today, we're going to be talking a bit about some of the trends that Sae has recognized related to customer experience and how he and his team at Cisco are adapting to meet and exceed with the new and evolving circumstances. Sae, welcome to the podcast. Thanks so much for being here.

Sae Kwon: Hi Sarah, thanks for the opportunity to be here with you.

Sarah Nicastro: Happy to have you. It is my Thursday night and Sae's Friday morning, so I was just telling him before we went live that I'm jealous that he's a little bit closer to the weekend than I am. So, Sae before-

Sae Kwon: Happy Friday.

Sarah Nicastro: Happy Friday, Yeah. All right. So before we dig into the topic, tell us first a little bit about yourself and your history with Cisco.

Sae Kwon: Okay. So I grew up in Sydney, Australia, and I went to The University of Sydney and studied computer science there. And I joined another company before Cisco as a programmer, software programmer, spent a few years there and then I joined Cisco. When I joined Cisco, it was 1996 as a call center agent in the technical assistance center. And when I joined, I thought about what can I do to get ahead in a company like Cisco? And I looked around and there was a certification called CCIE, Cisco Certified Internetworking Expert. And I did that and then I became an engineer in the technical assistance center and then I had the most amazing career in Cisco over the 24 years, which I can go into more detail if you want.

Sarah Nicastro: Yeah. And you and I when we spoke before, we talked about how great it's been for you having been with the company for that long but never having gotten bored or feeling really the need to go anywhere else, because you've been able to do a lot of different things and continue learning and growing and expanding your skillset and having a lot of new experiences. Feel free to tell us a bit more, I would love to hear it.

Sae Kwon: Yeah. So I'll give a short summary first and then I'll go into a bit more detail, but in a short summary, 24 years, I probably didn't have the same role for more than two or three years at a time, so every two or three years my role was changing, also I had the opportunity to work across four different countries in roles that were country leadership role or regional leadership role. So it's just been really exciting, a lot of opportunities were there, whether it's moving to another country or doing a different role. One of the first big opportunity I had was in year 2000. That's when Korea was going through an internet boom at that time. The government was really encouraging the service providers there to roll out high speed internet in Korea, so our business was doing very well over there and we needed to set up a Korean Technical Assistance Center in Korea.

Sae Kwon: So Cisco asked me to go to Korea and set that up, and that was a huge opportunity for me because until then I was an engineer. That's when I had the opportunity to build a business. It sort of felt like a venture within a company, venture company within a company because I had the opportunity to build a business plan, put the processes in, hire people and set up the Technical Assistance Center in Korea. So I did that and I spent about four years in Korea just making sure that the whole Technical Assistance Center was settled in and then I passed it on to a local manager and came back to Sydney.

Sae Kwon: Then spent six years in Sydney doing various regional roles, like Focused Technical Support which is a premium service for the top customers where we have dedicated engineers and operations managers to support them. And then 2010, I had the opportunity to go to Japan and lead the technical services in Japan, which was another huge opportunity, I never imagined I'd work in Japan because I don't speak Japanese, I don't have any ties or any background there, but went there, had a great time. Really big business in Japan as you can imagine, and the people there were fantastic, so I spent about two and a half years there, excuse me, really enjoyed working there, helped grow the business, was involved with some of the recovery efforts during the big Japan earthquake as well, which was really good to give back. And then, came back to Sydney.

Sae Kwon: At that time I did something called service enablement, which is sort of like a business development role, but really focused on new services. So whenever we would launch a new service, this team would go in there, build a plan on how do we enable sales? How do we accelerate? And just get the ball rolling and then once the business is up and running, then the sales teams take over.

Sae Kwon: And then I had the opportunity to lead the Technical Services for APJC, that's when I moved to Singapore about three years ago. And then about two years ago we went through a huge transformation in Cisco, from Cisco Services to Customer Experience. That's when we realized that we can't just have reactive services, we needed to be thinking about the whole life cycle of the customer's journey, right from the presales to design implementation, onboarding adopt, and to support and then to renewal as well, because we wanted to make sure that we were helping the customer all along their life cycle as they used their solutions. That's where I am now. But it's been a really exciting 24 years.

Sarah Nicastro: Yeah. I think it's really cool that you've been able to spend that much time with Cisco and always feel challenged and feel satisfied and fulfilled, I mean, it speaks to when you have a good gig, right? Just hang onto it and keep having those great experiences, I also always think it's interesting when I speak with someone who's in a customer experience role that has had a long tenure with a company, because I think it gives you a unique perspective of how customer needs and expectations have evolved over time. And for someone like yourself who has worked in different regions of the business, different areas of the business, it gives you a unique perspective on some of the ideas of how Cisco can adapt to meet those needs. So, very cool.

Sarah Nicastro: So let's talk a little bit about that. When you and I connected previously, we talked about Cisco's journey toward being a more solution centric business, right? Which is a journey that a vast majority of companies are somewhere on. And you mentioned the customer journey, so I know, we talked a bit about how you at Cisco over the last little while have noticed some areas in the customer journey that you needed to evolve to meet some new demands. So I know that you've kind of restructured the business a bit to meet those, tell our listeners a little bit about the evolution of what the customers are needing from you and how you're adapting to meet those needs.

Sae Kwon: Yeah. So, if I go back to when I started with Cisco, 24 years ago, we were basically selling hardware boxes, right? With software on there, but it was being sold as a hardware product on its own, and services attached to that. And then we realized that customers were not buying just that box, they were buying a solution essentially, it's many boxes connected together, but it's a solution. So, I can't remember the exact time, but it was in the 2000s, that's when we introduced what we called Solution Support, because we had many different types of products that made up a solution, and the customers sometimes were getting very confused in terms of, okay, where is the problem lying when they had an issue, right?

Sae Kwon: So we introduced Solution Support where we said, Hey, Mr. Customer, you don't have to worry about where the problem is, just call us when you see the problem, we will do that searching for you and find out where it is and hide that complexity for you. So that's one of the evolutions we had in the early stages.

Sae Kwon: The other one was, I talked about the focus technical support before, the premium level services where we have dedicated engineers and operations managers. That's another one that we introduced in the 2000s because we realized again, that when the customer calls us, we spend a lot of time just trying to understand the customer's network environment, the IT environment, but when you have a dedicated engineer and operations manager that already understands the customer's environment, when a problem occurs that troubleshooting and finding that root cause and the resolution becomes so much faster.

Sae Kwon: So that's another one and also I'm going to talk about it a bit more later, but services, although it's about technology, at the end of the day it's all about people, and having dedicated people that not only knows your infrastructure but has a relationship with you as a person, is also really good. Because when you don't know the person and you're in a network down situation, you're under pressure, I'm talking from a customer perspective, under pressure from your bosses, things can get really heated. But when you have someone you can trust in Cisco that you know that, He knows my environment, that's when you can have a much much more productive and constructive discussions and troubleshooting so that you can find the resolution faster.

Sae Kwon: So I think that was a really good service that the customers liked. So that was in the early stages, and then we looked at all the intellectual property that we had collected over the few decades of service that we were providing to our customers. And we realized that a lot of the basic questions were repeated over and over again. So we put that online and made it possible for the customers to do self service, that made it possible for us to focus engineers onto the most complex issues, for the simpler repeatable issues, customers can come in and just get the answers through self service online, and which it allows us to provide a more cost effective service, but also allowed us to focus our top engineers onto the complex issues that the customers really needed the attention on.

Sae Kwon: So that's the other evolution that we did, and then we also looked at analyzing and using those intellectual property and using analytics to start to see how we can predict issues from reccurring, because we realized that there were patterns, there's certain patterns in the network were occurring before an issue would occur. So using those patterns, we used to call them digital signatures, using those patterns we could start to tell the customers that, "Hey, Mr. Customer, if you see these patterns in your network, you may be hitting this problem. So let's take an action to avoid that." So we can start to help our customers to avoid problems from occurring because fast troubleshooting is good but when the trouble doesn't occur it's even better.

Sae Kwon: So that was the other thing that we were doing. So we were going through that evolution and then the most recent transformation that we did that I talked about two years ago, is when we thought, okay, it's not just about the problem, it's not just about troubleshooting or avoiding the problem. We have to start right from when the customer purchases a solution. We have to help them design it well and we had professional services team that did the design.

Sae Kwon: We already had that, but we didn't have anyone that really helped the customers to onboard the solution into their business and build a plan on how to adopt and consume that within their business. These customers would have had a business requirement and that's the reason why they bought our solution for a certain outcome that they were thinking about, but we were not in there helping them, we were leaving it to the customers.

Sae Kwon: And that's the transformation that we did two years ago when we moved from Cisco Services to customer experience, was to bring professional services and technical services, which we already had but they were in siloed departments, bring them together and then create what we call customer success, where we had the onboarding and adoption capabilities.

Sae Kwon: And we're starting to see some really good outcomes and customers are starting to give us some really good feedback both verbally as well as from a business standpoint as well, so we can see some really good early signs.

Sarah Nicastro: Yeah. And I think it's such an important thing to talk about in terms of a few aspects, I mean, one is examining that customer journey often enough and carefully enough to recognize where those gaps exist. I think it sounds very simple but companies get just in the day to day and they don't always think to do that or take the time or resources to do that and to your point, you have the professional services team on the front end and you had technical services there to help them in a later stage, but there was this big gap in between that was a fantastic opportunity for Cisco as a business to tackle and then also a fantastic opportunity for you to endear yourself to your customers because you're fulfilling a very valid need that they have.

Sarah Nicastro: The other point that I think is important to touch on is, as you mentioned, the need, when you look at the customer journey and when you look at customer experience, to break down some of those silos. I mean I'm sure the professional service team was doing a fantastic job and I'm sure the technical services team was doing a fantastic job, but if you don't have a function looking at that bigger picture and really looking at it from that customer perspective of where those gaps are and how to fill them, you can have a siloed operation where everyone's doing a great job, but it's still not creating a consistent, seamless customer experience. So, I think that's really interesting.

Sarah Nicastro: So as you've been on this journey, in identifying these needs and working as a business to pivot and adapt to restructure to be able to meet them, are there any lessons you've learned or tips you would share for other organizations that are kind of doing this work of exploring the customer journey, looking for opportunities to provide new and different services, that sort of thing.

Sae Kwon: Yeah, definitely. I think one of the things that come to my mind is timing, because we had professional services and technical services and they were both very successful businesses on their own. It was a separate organization, but very successful businesses, but we could see in the longer term that we needed that customer success function as well and we needed to bring the teams together. It was a very difficult decision but we needed to make it at the time and we couldn't afford to wait until these businesses started to slow down. So, but as you can imagine at that time, when you have three successful large businesses, it's hard to make that decision to disrupt, because you're disrupting a lot of people, a lot of organizations and I think I once described it as, we put everything into a box, shook it, turned it upside down and then put it down and then we started from there, it sort of felt that way at the time.

Sae Kwon: But having that courage to disrupt early on, I think is really important. It can be very risky and scary, but if you do that, then you have a really strong business sort of slowing down, plateauing but if you make that transformation at the right time, then you can go through that growth curve again, I think. So the timing is so important, and having the courage to disrupt earlier is really important. And then it's all about people, you change management, because in a services businesses our most important asset in a services business is people.

Sae Kwon: So we want to make sure that we talk about the why, why are we doing this? So that people will buy into it. And it takes time, some people buy into it faster, some people buy into it later, but it takes time and we need to take everyone through the change journey, and then bring them along through that journey. So I think those two are probably the main things, there's a lot of other things that you've got to be thinking about, Timing and change management, just making sure that you bring the people along.

Sarah Nicastro: Yeah, I think the timing point, I really like, because I often say you can't just stay with the status quo. Right. But I think that sometimes there's an interpretation of status quo as average. Right. And in this case, the status quo was really good. Right, and the status quo was going very well. So to your point, it becomes even more difficult to decide to disrupt that status quo because it's working well. Right. But if you recognize this opportunity for it to work even better, to your point, you need to move when the time is right, to realize the full value from doing that. So I think that's a really important point. So as you've been on this journey of the last few years with the new customer success function and your role with customer experience, there's a number of trends that have surfaced that you've realized and are working around.

Sarah Nicastro: The first is, we had a discussion and it relates to the introduction of customer success because it's basically the idea of customers wanting outcomes, they don't necessarily want a product or a service, they want peace of mind, they want business partners, solution providers. So, tell us a little bit more about what you've seen as it relates to customers, demanding outcomes.

Sae Kwon: Yeah. We've seen a trend where we... I think probably about up to about 10 years ago, we were talking mainly to IT departments and selling to them. So we were mainly doing technology selling faster, easier to use, easier to operate technology selling. But the trend we saw since that is the business owners, so that business function is not the IT departments, business functions and business owners were looking for solutions, whether to adopt within the organization or to adopt the technology solution that could help them to differentiate against their competitors. Right.

Sae Kwon: So, banking is a great example. I think banking has gone through, during the last decade, they've gone through a huge transformation, right? Where in the past they used to have branches with people everywhere, a lot of the banks have many less branches now, and it's a lot of online banking and they enhancing that all the time, right? Even the branches have become very digitized, usually when you walk into the branches. So you can see that sort of transformation, so we're now starting to talk to people that are not necessarily IT people they're business people.

Sae Kwon: So they look for a certain outcome or a business solution, and we have to package our solutions in that way for them. Yeah. So that's from a product and services perspective and then... hardware and software perspective. And then from a services perspective, we have to do the same because the company is moving in that direction, solution selling, so that's why we have to introduce solution support and make sure that we're not leaving the customers to go through the complexity, we want to hide the complexity, let the customers, allow them to focus on their business.

Sae Kwon: So that's one area, and then the other area that we see in terms of changing how the customers want to work with us is how they want to buy? In the past they wanted to buy and own, but we're seeing more and more customers not wanting to buy and own it, but they want to buy and pay as they go, or pay as they use. So that's the other model that we call a subscription model, and that's the other model that we see becoming more and more popular amongst the customers, because they have budget constraints, they don't want to spend a large amount of capital upfront, they want to be able to stagger that. So that's the other trend that we've seen in terms of change?

Sarah Nicastro: Yeah, I think that makes sense. And I often say, I mean, the future of service, I think, is learning how to master all of this complexity to present simplicity. I mean, that's what customers want, and I think that there is so much complexity on the backend for a company to deliver seamless, simple service and customer experience. But getting good at that is really, you know what needs to happen.

Sae Kwon: So if I can jump in, I mean, in terms of outcomes and solutions, I think last nine months has been really interesting, because of COVID-19, and those required some solutions that we never thought about before, like remote workforce, working from home solutions, yeah, secure connectivity, and now the solutions that customers asking for is returned to the office solutions. So those type of solutions. So, it's not technology solutions anymore, I mean, it's made up of technology, but solutions are real business outcomes that the customers are looking for now.

Sarah Nicastro: Yes. Yes. And I think that's another good point, I was talking to a company a couple of months ago and he was kind of venting and saying I'm just really frustrated, because we've deployed IOT and no one's buying it. And I said, well, I mean, have you thought about that because your customers don't care if you're using IOT. I mean, that doesn't matter to them, they care about what pain of theirs that can solve, so it's interesting when you really dig into how this world is evolving, and the level of complexity companies have to take on to evolve and be successful, because it isn't just technology, it's how you sell, it's how you market, it's how you're operationally structured. You know what I mean?

Sarah Nicastro: There's so many different aspects of it, I find it really interesting and exciting, which is why I love what I do, but it's a lot of hard work to keep up with the way things are changing and what customers are demanding. So you've mentioned a couple of times since we've been speaking today, that one of probably arguably the most important ingredient to all of this is people, right? So to your point, you can have this great vision, if you don't have change management, it's going nowhere, you can have the best technology, if people aren't on board, it's not going to help, right? So, we know that people are absolutely imperative to companies accomplishing this mission and being able to deliver the customer experience you want.

Sarah Nicastro: And one of the questions that comes up a lot right now is around the issue of recruiting and hiring and retaining good talent, because not only is it important, but it's increasingly difficult to come by. So tell us a bit about your thoughts on people as it relates to customer experience and how Cisco is tackling the whole hiring, developing, and retaining of good talent.

Sae Kwon: Yeah. So I start with hiring, I think our hiring processes have evolved over time as well, and at the moment, really focusing on making sure that we bring in, we tap into the diverse diversity, because let's look at gender diversity for example, we don't have that many female IT engineers, they are very few, which means we're missing out on half the world's talent, right? So it's just making sure that we tap into and can bring in the whole talent, whether it's gender diversity or whether it's cultural diversity. So what we're doing at the moment is trying something called blind interviews, right. Just not knowing what the background or any of the other, just looking at the skills and experience and so forth, and that's working out really well and that's helping for us to hire and tap into the much more diverse workforce and then bring them in which has been working really well.

Sae Kwon: And then I think once we bring people into the company, I think what we need to do is we need to create an environment where you're not working like a robot, because one of the challenges that we had in that 10, 15 years ago in the early times when I joined is technical assistance center can easily be seen as a call center. But engineers don't like working in a call center, they want to be innovating, they want to be troubleshooting, they want to be creative, they want to be empowered.

Sae Kwon: So trying to create that environment where the engineers feel like they're coming in, they're growing, they're innovating, that's really important, but they still need to pick up the phone and talk to the customer and help the customer, but in an environment where it doesn't feel like a call center, it feels like a place where they're innovating and they're really empowered to make decisions. So that's the other area that we try to really create, so that technical assistants and the engineers don't feel like a call center agent and working off scripts, but they're really empowered to support the customers. Of course there are processes and tools and trainings that we provide to our engineers because we also need to make sure that the experience that our customers have with their technical assistance center is consistent.

Sae Kwon: We can't have inconsistent levels of, in the early days we used to have that customer would talk to engineer A, have a great experience, talk to engineer B, not so great experience. So we wanted to make sure that we sort of make that more consistent through trainings, and soft skills trainings and things like that. But you can still provide a consistent experience but also provide an environment where engineers are feeling like they innovating and they empowered.

Sae Kwon: And then the other one is I think, fun, I think just making sure that people are having fun as they come in is also important. I mean, some people may say it doesn't work, doesn't have to be fun, you can have fun outside. But if work can be fun, it's so much more better. So creating that environment where people can come in and enjoy each other's company, work hard but also have fun I think that's so important. So creating that sort of environment through, it's not always just fun events. I think it's the culture that the company creates, the culture that the managers creates for their teams. It's also really important for the engineers to come in and feel like they're being valued and they're enjoying, when they come in.

Sae Kwon: And then the other one is just creating a lot of different growth opportunities, like I've personally gone through. Making sure that if you want it, there are many different opportunities there. And Cisco is one of the companies that's a global company, luckily we can provide a lot of different opportunities, whether it's a different function, different city, different country, depending on what people want to do, what they want to work towards, of course you don't just get it, you have to work towards it, but if you want to work towards it, there are many opportunities to do other things. So I think all of those things come together to provide that environment where once people come in, they don't necessarily want to leave because everything is provided here.

Sarah Nicastro: Yeah. I think that's a really good point and like you've said, you're a good testament of Cisco's ability to create that environment that people want to stay in. So I think that's really good. I've written a few articles in my time talking about the correlation between employee engagement and employee satisfaction and the customer experience. So it's, I think sometimes when companies go down the customer experience path, they can do so at the cost of also focusing on the the employee experience and what do their employees need, and it is really important to consider how big of a piece of the puzzle it is because you can't rely on disconnected unhappy people to deliver this amazing experience to your customers-

Sae Kwon: I think that's a really good point because when I was working in the technical assistance center and managing the team there, you sometimes think that customers, because you're on the phone, you're not seeing each other, customers may not know how that engineer is feeling, but they know. If their engineer is empowered, is passionate, he's happy, they know. If their engineer is not happy, they know as well. So making sure that engineers are really motivated, really empowered, happy is so important.

Sarah Nicastro: And to your point, yes, that comes through. If you can create an environment, like you said, yes, you want to have standards and you want to have expectations, but then give these people the freedom to be themselves a bit and to be engaged and that's what makes them committed and into what they're doing and that 1000% comes through. So I think that's a really good point. I want to talk a little bit about some of the trends you've seen related to how different technologies play a role in the customer experience. So we've touched on a few, but let's go back through and just talk a bit. So we talked about an increase in acceptance of remote support as well as self service.

Sarah Nicastro: So tell us a little bit what you're seeing related to maybe a change in perception from the customer side of the value of those tools and how it can benefit them.

Sae Kwon: Yeah. So the benefit of self service is you don't have to wait in the phone queue, you can just go in, search for solutions and the solutions are there. And I think as the younger generations' coming to the workforce, they're more used to that type of online activity, so I think that that really suits them really well. So self service is becoming bigger and bigger and that really helps us to run a much much more efficient operations, because we can solve a bulk of the customer queries through self service, online self service. Remote delivery, that's also really important because in the past everyone wanted to do things face to face. Everyone said, Come on site, meet me face to face. But with some of the tools that we have, in Cisco we have our Cisco WebEx tool, which is a similar one to what we're using now and we use that to have meetings with our customers, discussion, whiteboarding, troubleshooting, sharing information, all of that can occur through there.

Sae Kwon: And especially during the COVID-19 situation, when no one could travel, this has become a huge opportunity for us to demonstrate the capabilities of these tools that we had. And again, it allows us to be more efficient, provide a better ROI to the customer as well. And the other thing that it does is also if you focus on onsite and face-to-face delivery, or face-to-face engagements, you can only tap into your local resources. But Cisco being a global company, we have experts all over the place, and when we have the remote capability, now we can start to bring in the best talent from all around the world for that customer. So I think that's the other opportunity that this brings up. You can tap into the top talent everywhere, anywhere.

Sae Kwon: Of course you have to watch the time zones, but that's the other big advantage that it opens up that I see.

Sarah Nicastro: Yeah. I'm a people person and I really miss face-to-face events and all of that, but I do absolutely agree that this situation has kind of forced folks to realize how much can be done remotely, and so there's certainly a time and place for seeing people in person and all of that, but it is interesting how there's a little, well, not a little bit, a lot more openness to some of these things than there was just a very short time ago.

Sae Kwon: I don't think technology, no matter how good the video conferencing technology is, I don't think will ever a 100% replace face-to-face, I think humans need that human interaction. That's always going to be there, but I think, like the self service has played a role in making us more efficient, I think this will do that as well. And we will be able to provide a much better service using these tools, but it will never replace 100% face-to-face.

Sarah Nicastro: When you were talking about self service, I was thinking, it's such a delicate balance to get right, I mean the role you're in and just the jobs that play a part in that customer experience. You want to make them feel empowered to solve problems on their own when they want to, but boy, when they want to talk to someone, someone needs to, I mean it's just I'm thinking of, I don't want to name any names because that's not nice, but I'm thinking of a service experience I had not too long ago where I had an issue and no matter how frustrated you are, you can't get someone on the phone. And while I would rather do self service, if it gets to that point and then you don't have the help you need, it's just incredibly frustrating. So it's a big puzzle of making sure that, whatever your customer wants, however they want to interact and whatever those preferences are, you're there to meet those needs.

Sae Kwon: Yeah, I think the key is giving customers a choice on how they want to interact with us, and whatever method they choose, we need to be there ready. Just because we have self service option, it doesn't mean that we can start to neglect the phone calls, right? We need to make sure that if the customer want to call us, we're there picking up the phones quickly and we are responding back to them quickly. We need to make sure, and we continue to look at time to pick up and time to respond, stats, so that we can ensure that we have enough people there to support those customers, but they need to call us as well. So, that's the balance that... So important that balance.

Sarah Nicastro: Like you said, it's taking on all of that complexity so that when a customer wants to self serve or they want to call or whatever, someone's there. But when you think about what's going on in the back end, it's pretty impressive. So I also wanted to talk a little bit about... You had talked about Cisco's move toward predictive service, and all of the data you have at this point and being able to notice those patterns and start to work with customers to predict some of the issues you know will likely arise. How do you see your use of artificial intelligence, machine learning, big data? How do you see that expanding in the coming couple of years?

Sae Kwon: I think that's going to... I think the word I would use would be that's going to explode. I think that's going to be a huge opportunity to leverage AI and intellectual property and the data that we have and combined that together, it's going to be so powerful. And it's again similar to self service and remote, this is going to be another tool that's going to help us to provide our customers with much, much better solution, much, much more consistent, data-based support that our customers are looking for, reliable support that our customers are looking for.

Sae Kwon: Similar to self service and remote support, I don't think AI will ever 100% displace people, because people are always going to be at the core, because once the automation or AI comes in and comes up with a solution, there's got to be some people that sort of goes through that and analyzes that and makes that relevant for their customer because, every customer is a little bit different, the environment depending on what country they're in, what business vertical they're in and what market their customer bases are, they're all very different. So there's always got to be the people there. And customers always want to have the choice of being able talk to people as well as we just talked about so... But I think AI part is going to explode it and it's going to be a huge opportunity for us and for our customers as well.

Sarah Nicastro: Yeah, when you start thinking about... When you draw the parallels between outcomes based service and predictive analytics, I mean, there is no better outcome than a customer just having peace of mind that their systems are going to continue working. Right? So, I mean, it's sort of the ultimate outcome, so the more capable companies can get in leveraging that data they have to really analyze where those failure points often are and really get ahead of those things. It's making strides and delivering the best possible outcomes that people are going to be willing to pay for.

Sae Kwon: Yeah. And it's going to be so much more important because, technology is becoming more and more complex, although, on the surface, when you use it, it's making life so much easier or making businesses so much more competitive, they can differentiate but, at the back end, how the technology comes together is so complex. And you need to make sure that you have the right people to be able to put that together but, having AI, having all the different tools to help go through the complexity is going to be really important as well. Because these days, when you look at one solution, it's not just one technology, there could be the network that needs to be put together, and then there's got to be security and then there's got to be some data center ability and then there's got to be virtualization ability and then there's got to be collaboration, video conferencing, they need to come together to form a solution that provides that business outcome for the customer, right?

Sae Kwon: And it's going to get even more complex as we go, because these things will probably, even the customer solutions will have things like AI and automation that come in and start to bring all these different technologies together. So, I sometimes feel a little bit sorry for our engineers because, when we go to... When I used to troubleshoot, there were maybe two or three products in a solution. Now when an engineer's going to troubleshoot there's many, many different products, and they need to understand that. And it's not easy for one or two engineers to understand everything. So they need to work together, and when you can have things like AI and automation tools come in and help our engineers, it makes it so much better. So, complexity is another reason why AI is going to be so important and automation is going to be so important.

Sarah Nicastro: Yeah. To your point, it frees them up to work on the things that... If you can automate some of the more simple things, it frees them up to work on the things that their expertise really is needed for. So last question Sae is, what's the biggest lesson you as a customer experience leader have learned, that you think others could benefit from hearing?

Sae Kwon: The first one is listening to customers. That's where everything starts from, right? We need to continue to talk to customers and listen to them because things are always changing, the requirements are always changing and you need to be able to move with that, that will be the number one thing. And then number two would be look after your people, make sure that you hire the best people, train them and retain them and help them to grow within the company, because motivated employees will look after your customers, right? So that's so important. And then third one would be, continue to disrupt, and it's not always easy, especially when you have a very successful business. Right? But you have to continue to disrupt, especially in the technology area that I work in.

Sarah Nicastro: Yeah. I love that. I love that you spoke earlier about timing and having the courage to take those chances, I think that's a really good message for folks. And certainly, I think there's a lot of organizations that have really good intentions on customer experience, but they start to go down these paths on a lot of assumptions, versus actually talking to the customers and not only talking to them, but listening and really hearing what they're saying. So it sounds like customer experience, listen to your customers, it should automatically go together, but unfortunately that is not always the case and it is imperative, and of course we talked about how critically important people are in making this all happen. So very good advice, very good insights Sae, I really appreciate you being here with us today.

Sae Kwon: Thank you. I really enjoyed the conversation.

Sarah Nicastro: It was great, thank you. For more content, be sure to check us out at www.futureoffieldserviceref.ifs.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.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

September 9, 2020 | 22 Mins Read

New Metrics for a New World of Service Delivery

September 9, 2020 | 22 Mins Read

New Metrics for a New World of Service Delivery

Bill Pollock, President and Principal Consulting Analyst at Strategies for Growth, weighs in on how he feels organizations need to evolve how they measure progress and success in today’s service landscape.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking about new metrics for a new world of service delivery. We've talked a lot lately about how many things are changing for service organizations. And another thing that needs to change is the way that you're measuring your progress and success. I'm excited to welcome back to the podcast today Bill Pollock, president and principal consulting analyst at Strategies For Growth. Bill, welcome back to the podcast.

Bill Pollock: Thanks for having me back. I appreciate it.

Sarah Nicastro: Absolutely, absolutely. Glad to have you. So you are doing a lot of research in this space, and you and I have known each other a long time and we've both seen this evolution that's taking place in service and witnessed some of the trends that are occurring. Before we dig into to how KPIs and metrics and measurement need to change based on those trends and the evolution, let's first talk a little bit about the history of how service success or failure has been measured. And then we'll talk about why we need to evolve from there.

Bill Pollock: Sure. That's a really great way to start off this session. The way that success has been measured over the years depends really on how sophisticated or knowledgeable or how vulnerable a services organization is. For example, there've been many cases over the years where I've seen companies that have been doing fairly well and they figure, "Well, we really don't need to measure our success because we're successful all the time." And the problem with that is that whether it's self-inflicted or an existential like COVID-19 or an economic meltdown, even those that are doing well year after year after year ultimately hit a point where they're not doing well. And if they haven't been measuring things on a regular basis, then they don't know at the outset, "Why did we just tank? What happened that made us not satisfy our customers anymore?"

Bill Pollock: So the thing is that what I believe is that if you're not doing well or you're always on the cusp and you always are striving to do better, then you really do need to measure things and see how your performance is trending over the years. The paradox though, is that if you're doing well and you're making some money and you have a high profit margin, you may not be tempted to measure as much, but that's the time when you really should measure, because you've got the resources, you've got the cash in hand to do some measurement. I don't believe there's a single organization out there that can say, "Regardless of how we're doing right now, there's absolutely no improvement that we can make. We're doing the best that anyone can. No improvements are possible." That's not possible. Traditionally, what we've seen is things all over the place.

Bill Pollock: For example, one of the first field service management surveys that we did at Strategies For Growth over a decade ago, we asked questions, "What do you measure?" We had a laundry list. "Do you mentioned this and the other thing?" And one of the questions was, of course, "Do you measure customer satisfaction?" And at that time, and again, this is like 15 years ago, the response was something only like 47%, less than half. And then another question was, "Do you measure customer retention?" And 65% said, "Yes, we measure customer retention." And my question is, how can you measure customer retention if you're not measuring satisfaction? And it leads me to believe... I did a workshop for one of the trade associations once years ago and I said, "What is the quickest way to improve your customer satisfaction performance?" And everyone started raising their hand. "Pay more attention to customers, listen to the voice of the customer, do some market research."

Bill Pollock: And I said, "Well, this is tongue in cheek, but the best way to improve your customer satisfaction overnight is notify all your customers who are not giving you a perfect score that you're no longer customers." All you have left are customers that are giving you a perfect score. Well, of course that's nonsensical, but there are many organizations, one organization, for example, said to me, "We're doing about 85% customer satisfaction now. How much money can we save if we did only 82% customer satisfaction?" I was an economics major in college, I understand the elasticity and sensitivity of numbers crossmatched against each other, but that's not the way to manage a business. So, really, and as far as customer retention is concerned, at the end of the career of the business, just before the business closes, if you still have every customer you ever had and they're still buying things from you and they're still relatively satisfied, then you had a nice career and that business and had a good reputation.

Bill Pollock: But you can't wait until the very end to measure something. You have to measure it all along. So really, the history of service success measurement is, some people will say, if you're measuring more than six KPIs, that's too many. Others will say, if you're not measuring 20 or 24, that's not enough. The rule of thumb is wherever you're not doing well and you know it, or you may not be doing as well as you could, but you're not sure can, any areas where you believe you're vulnerable because of what you're doing and about to do or what one of your competitors is about to do, or there's a merger or acquisition in the competitive landscape, they're the things that you have to measure.

Bill Pollock: Some people make the mistake of measuring only things that will ultimately impact their merit reviews and their bonuses. And that's good for you, but it's not good for the company, it's not good for the customers. So it's been all over the place. It long enough has passed that it's time to rethink and reengineer the way you measure things, and COVID-19 has made it even more critical to do it now instead of tomorrow or next year.

Sarah Nicastro: Right. So a couple of themes that you just brought up are obviously the variability, which makes sense. Every company is going to be a bit different in how they view this, how they approach it, what KPIs they use, et cetera. So certainly understand that there's no uniform approach or advice. The other theme is you're saying that companies have a tendency to want to measure more when they are struggling. I would argue that a third thing that's important to talk about though is that customers today are demanding more visibility than they ever have before. So that is, I think, another reason that organizations need to expand and evolve the metrics that they're using and how they're tracking their progress and success.

Sarah Nicastro: Because I've heard a lot of feedback from folks that customers used to be happy if it was just, "Hey, you showed up, you got the job done. Great." And now they want to know all of the details on what that looks like. And so having that data becomes important from that perspective as well. So knowing, Bill, that there's no singular answer to this question, can you give me a couple of examples of metrics that have maybe been historically used that are becoming a little bit ineffective or obsolete in today's environment?

Bill Pollock: And getting back to a point I just made before, everything needed to change anyway and COVID-19 said, "You got to do it now." But even before the COVID pandemic, the transformation of the industry from an analog world to a digital world and from an onsite fix to a remote fix or prevention made it such that in trending your performance data from year over year over year, it's not only not apples and oranges, it's apples and vegetables to try and make those comparisons. Like in department stores, they always measure one week's sales this year compared to the same week's sales last year. Well, it doesn't make sense for them to do that now, just as it doesn't make sense for us to, as an industry, look at our performance this year compared to last yeah. It's almost like there's a need to have two sets of books.

Bill Pollock: As we move from analog to digital and onsite to remote, things just don't mean the same anymore. Like for example, and forgive me for looking down at some of the notes I have here, in our 2020 field service management survey that we conduct every year at Strategies For Growth, the top five or six KPIs that are being used by a service organization, number one has always been number one in every one of the surveys we've done, customer satisfaction. And it's always in the 70 to 77, 78% say, "This is one metric that we use."

Bill Pollock: The second one has always been total service revenue. And you're running a service organization, you want to generate revenue. What we did is we compared our notes from 2020 to 2011, which is basically 10 years earlier, to see what kind of differences there were. We did not differentiate between service revenue and service profitability 10 years ago, but we do it now. So the number three factor, if we standardized the two surveys and those two years would be looking at total service profitability. But it's almost pointless to say which is second, which is third, or third or fourth because they're pretty much the same. You're looking at revenue and you're looking at profitability.

Bill Pollock: But then we see some differences. 10 years ago, the next three factors were field technician utilization, which is basically the time that a field tech spends performing a repair divided by the total time that he or she is working that day for the company. And then total service cost, onsite response time, and the percent of total service revenue under contract. So 10 years ago, they were the top five or six factors that we were seeing. Fast forward to this year, first time fixed rate pops way up from seventh or eighth place into third place.

Bill Pollock: So what customers are looking forward to is they don't want to jerk around with having to make repeat calls on their half to the service company or to the service company say, "Hey, it didn't work. We got a signal from your system. We have to come back and do something else." They wanted to fix the first time. The beauty of it is that many customers don't really realize that something's broken or about to break because it's fixed remotely before it breaks. So the first time fix rate I believe is going to diminish in its important because you're really looking for a first time prevention/ fix rate where a failure is prevented rather than fixed right the first time. But there's a whole series of other things like meantime between failures. That used to be along with meantime to repair, two of the biggest metrics 10 years ago, 15, 20, 30 years ago.

Bill Pollock: But equipment and systems don't fail as often anymore. And even when they're about to fail, they can be prevented from failing remotely. So when I said two sets of books, maybe you used to measure meantime between failures. Maybe now is the time to start measuring meantime between prevented failures. There are some cases where the equipment is just as likely to break down after 18 months today as it was after 18 months last year or 10 years ago. The thing is last year and 10 years ago, it would break down every 18 months. This year, it doesn't break down here every 18 months because it's being fixed before it breaks remotely. So the whole concept of break-fix, I believe is transforming into break-prevention. So what happens is the old metrics and the new metrics might coincide in terms of when the equipment is likely to fail, but it's not going to fail because you're doing something remotely.

Bill Pollock: And this is the whole concept between the old break-fix model and the, newer, it's not so new anymore, servitization model or the outcomes-based model. So we're seeing the transformation based on going digital, adapting to a civilization model and employing the use of remote diagnostics and remote fixes more and more over time.

Sarah Nicastro: So that all makes sense. So this new world of service, and if we look at the root cause of why measurement of progress and success needs to evolve, it's really related to the evolution toward predictive service, outcomes-based service servitization and looking for ways to measure and reflect success in those new terms. So, as you said, some of the metrics that would be more related to the traditional break-fix models are things that over time maybe become obsolete. So the other thing that comes up a lot when I talk with folks about this topic is it's not only that the KPIs a company may need to use are changing, but it's also the speed at which that data is being reviewed and communicated needs to become faster as well as. Is that correct? What are your thoughts on that?

Bill Pollock: That is correct. I've written a couple or a few pieces over the years, and many other writers have about the problems with data collection. And [inaudible 00:16:42] data lakes are out there and you're catching titles in some of these articles, you don't want to drown into data lake, but you need water to survive. And the thing is that many organizations now have the tools they never had before to collect as much data as possible, whether they're collecting it proactively or unilaterally by leading leaders or it doesn't make sense to me much, but some organizations still are manually transcribing numbers into a spreadsheet. But there's so much information that now has been collected and transmitted and shared by the equipment and the systems themselves. And companies are finding themselves in a situation where they're collecting too much data and they either don't have the bandwidth to process it and analyze it and assess it.

Bill Pollock: And then once it's analyzed say, "Hey, this is good stuff. This is not so good stuff. Let's take the good stuff, who should get it? Who do we share that with?" So that's where the data lakes can become data oceans and you can drown in that data. But there are other organizations that collect information and never do anything at all with it. I know for example, that one of the critiques that we've received over the years is that our customer surveys, the field service management and others are long. There are many questions. And what we find is that we process the same data every year and do some trend analysis, but there's some data from some questions that we ask that we've never really done anything with. So in the past couple of iterations of our surveys, we started cutting back on some of the data we were collecting because we knew we would never use it and it would not be that important in the overall scheme of things anyway.

Bill Pollock: But then the converse of that is if we're collecting it and we think that it may provide some information, that it may be of interest, then we sit down and we analyze it and then we write about it and we share it with our clients or our clients share it with their customers. And it's the same thing with the data that's being collected. I do not believe that you can move from a break-fix environment where you're scheduling your PMs four times a year and your performance is measured on the basis of, "We have to arrive on site within four hours or eight hours the next day." You can't move from that model to servitization where everything's measured in terms of outcomes, without breaking away from collecting the right data and not collecting the wrong data.

Bill Pollock: I think that Brian Wilson said it so succinctly in the song Wouldn't It Be Nice. "Wouldn't it be nice to have this data" is not a mandate for collecting that data. I need to know is your mandate for collecting the data. So there's need to know and there's nice to know. And you might want to take a step in every once in a while because you might find something that you wouldn't have found otherwise, but you really need to focus on the need to know and your KPIs, and metrics that you use to measure your performance have to focus on those sets of data so that the data you're collecting is actually used in a proficient way to allow you to enact change management, make things better.

Sarah Nicastro: Sure. Yeah, I think that's a good point. I also think this is a really clear example of where today's digital tools come into play in the sense of having strong business intelligence and business analytics tools and being able to leverage the data you have to look at different scenarios and plan accordingly. I mean, you mentioned a couple of times the impact that COVID has had related to this topic and it comes up in almost every conversation I'm having that these organizations have moved from reviewing data and making business decisions weekly or monthly or quarterly to day to day and even hour to hour, right? Because the circumstances are just evolving so rapidly. So it's just a really important area for these businesses to consider. I agree with you that as you move toward outcomes-based service, you need to focus in on the data that's most important, but you also need to be very, very proficient at processing data and deriving valuable insights from it.

Sarah Nicastro: So I was hoping, Bill, if you could share with our listeners all of the things we've considered. So we talked a bit about the historical perspective, we've talked a bit about what is changing and what has changed and some of the pitfalls to avoid, I guess. But if you, based on your research, based on your expertise were to suggest five key KPIs for the new world of service, what would they be and why? And I understand, just to put the disclaimer out there, that there is no prescriptive approach for every service organization. But if you had to look at what, in your opinion are five of the most important, what would those be and why?

Bill Pollock: Well, obviously I'm a prime advocate for always measuring customer satisfaction. If you're a services organization, you've got to measure your service revenue trends, your profitability trends and your cost trends. But there are other things, like for example, I wrote a report once on contract and warranty management, and I thought, "This is going to be not the most exciting report I'm ever gone to write." I didn't really appreciate the value of things like contract attach rates and contract renewal rates and things of that nature. But what I saw is the difference between those organizations that are using a solution that helps them to basically annuitize their contracts that takes the work off of their table from having to say, "Oh yeah, it's two months before this client renews. I better send them an email."

Bill Pollock: What they found is that they were able to annuitize their revenue stream and bolster it. You still have to work at it, but much of the heavy lifting is already done. So what I would advise any services organization is to look at the solutions and the modules that are available to them from IFS or whomever they're using, and to say, "What difference is it going to make if I improve our activities in this area?" Whether it's a service contract compliance or contract renewals, or just things like, "Why don't we look at total revenue per field technician as a ratio and see can we still generate the same revenue gifts because of COVID-19? We're losing some workers that we had to furlough them or they've gone elsewhere." Look at the opportunities. And then you need to establish a baseline first. "Where are we before we execute this change?"

Bill Pollock: And then six months, or most likely one year later, "Let's revisit this again. Let's ask the same question. Where do we stand today?" And in most cases, a year later, you'll stand in better shape because you're using a solution that helps you to generate more revenues or cut costs or increase the contribution of individual employees or field technicians. Very rarely have I seen organizations use new solutions and one year later it just costs a lot of money and they didn't see any improvement. So the rule of thumb would be where you're most vulnerable, measure that. Start measuring that now if you're not, and take steps to remove your vulnerability. And it could be something as simple as your Salesforce is not as good as your competitors' Salesforce is. It could be something as simple as you might have the best product around but you're not promoting it well enough, so your marketing needs to be stepped up.

Bill Pollock: So in that latter case, it's a matter of, "Well, let's start measuring marketing dollars spent toward increases in our market awareness or increases in our sales." So the thing is, it's almost like you're building an exoskeleton for yourself, and it's going to make you stand up straighter, walk faster in the right direction and improve everything. But each element of that skeleton really has to address areas that you're looking to improve in, areas that you're looking to avoid, some of the pitfalls that you had in the past few years. If you know you're going to be merging or acquiring another company, what do you need to know before that happens to ensure that the metrics you're measuring now, you can separate and measure a year from now under a new scenario? So it's a matter of what fits you the best.

Bill Pollock: But I think what we're seeing in servitization and outcomes-based, if all you've been measuring in the past is your ability to be in compliance with your contracts, to arrive on site at the right time, to fix things on the first visit, and you're not looking at new metrics for measuring throughput rather than system uptime, you can't have throughput, you can't be processing something on an assembly line if your systems aren't working. But the question is, "What do we have to do as a company, as an organization to make sure that our volume, our capacity, our throughput is maximum for what we have as tools and resources and staffing? And if there are any breaks in the fence, what do we need to measure in terms of ensuring that those breaks don't become catastrophic breaks and cut our throughput?"

Bill Pollock: So it's a mindset from the overbearing manager who looks at individual metrics and says, "They were five minutes late to arrive on time. Our system uptime was one tenth of a point short of the 90% they guaranteed us." Instead of nitpicking like that, you've got to change your focus to, "What do we need to measure to make sure that our throughput goes through cleanly, regardless of how many times there were prevented failures and how many times, God forbid, there were real failures that had to be fixed?" So it's a change of mindset. Some companies get it, some companies don't get it. And in fact, I just wrote something for the Future of Field Service about, are you getting a servitization? And if not, why not? When are you going to get it? So those organizations that get it are already making the migration or transformation from the old way of measuring things to the new way of measuring things. And those that aren't doing it yet really need to [inaudible 00:29:49] so they don't fall further behind.

Sarah Nicastro: Right. I agree. So I understand, like I said, the variability from organization to organization. So you started off with customer satisfaction and service revenue and profitability. Are there others specifically that companies need to be thinking about or considering?

Bill Pollock: Well, sure. If you've got a field force that's still going to the field, some of them, many of them are shrinking from what they used to be because remote diagnostics and remote repairs are taking over in those areas, you really need to focus on field service utilization. Again, and that's how much time you're spending actually doing repairs divided by the total amount of time you're spending that day working for the company. There's a few field technician productivity, and historically that's been based on the average number of calls per day. But in many cases, that metric is changing substantially because you may have fewer field texts and fewer needs for onsite calls. So the metrics are changing, but there's so many organizations that need to measure that. What I like is a third in that hat trick, if you will, field technician efficiency, which is the average daily calls completed by the total calls assigned.

Bill Pollock: So what are the total calls are dwindling on a daily basis from 10 to eight to six? How many are they completing efficiently divided by how many they had to do that day? And then all the other KPIs that we've been talking about, fixing right on the first time and those kinds of things start to fall into place. There is one thing, it's tough to measure, but I'm a strong proponent of this, and that's fixing the customer while you're fixing the equipment. You can imagine that if you're walking into a manufacturing plant, the assembly line is down. The plant manager say, "When is this going to get fixed? We're processing milk. We're going to have to throw out thousands of gallons of unprocessed milk. It's going to cost a fortune then we're going to have to add a third shift tonight."

Bill Pollock: And what you need to do as a field technician, or if the technician doesn't go on site, what you need to be able to communicate, whether it's through chat or chat bot or whether it's by telephone or however you communicate with your client to let them know from the outset that, "This is a minor thing, we'll take care of it in about 20 minutes." Or, "This is a major thing. It could take an hour or more to fix. We'll keep you apprised along the way." So it's really tough to measure that. That's more customer relationship management, but I would venture to say that any of these quantitative KPIs that we've been talking about are important. So is the more qualitative KPI of fixing your customer while you're fixing the equipment.

Bill Pollock: And there are surrogates that you can quantify the percentage of time that you communicate with a customer before an anticipating failure, during the failure, following up after the failure, what they could do to prevent a similar failure later on. So there are ways to communicate that. So if you're running an organization where you do not believe that your field technicians or your dispatchers or any of the employees are really treating the customer while they're treating the equipment, you might want to look at those kinds of quantifiable metrics to see what percentage of customers that have had problems with you or complained with you, what percentage of them had actually been communicated with in terms of, "Here's what you're likely to face. Here's what we're going to do about it. Here's the estimated time for completion."

Bill Pollock: And if you find that you're not talking to them enough, that may be enough of the reason for why they're unhappy with your service tech or your company as a whole. Nobody wants to hear bad news, but if it's bad news, then they need to hear it. And once they hear it, then they're not as likely to complain to you about your performance afterwards if they know why it was caused and what you've done to prevent it from happening again.

Sarah Nicastro: Right. Yep, that makes sense. And that is along the lines of how we see the field technician role evolving, right? So as you said, as we look at organizations utilizing technology to enable more remote systems, remote assistance, remote service, remote repairs, what is required of those onsite visits is changing to be more of a face of the brand, a personal touch, a consultative relationship, those sorts of things. So, yeah, I think there's probably a lot of areas that companies are looking at in terms of how metrics and how measurement needs to evolve to reflect the way that the field technician role is changing, along with the way service delivery itself is changing. So, that makes sense. Any final thoughts or comments, Bill?

Bill Pollock: Yeah. I'm as guilty as any other research analyst or consultants of using the phrase new normal. Nobody wants to hear new normal anymore. I thought that I was a little different by originally talking about there's not going to be a new normal, there's going to be a series of new normals. And then others started saying the same kinds of things. When you get right down to it, nobody a year ago could have foreseen exactly what shape we would be in a year later today. And we don't even know what our fall, winter and spring are going to look like right now. So the thing is that whether you call them new normals, old normals, a new way of doing things, whatever, just be prepared to change. And there's one phrase that one of the major computer manufacturers used the year I started my business and it was the use of the expression "agile adaptability."

Bill Pollock: And I loved that because agile to me doesn't convey even half the image. Agile means, well, I can move this way. I can move that way. But what way are you moving? Adaptability means that you're adapting to your new situation, your new scenario. So you've got to be both agile and adaptable to be able to sustain your business through COVID-19, and quite frankly, through any normal circumstances. But we've got turmoil in the streets, we've got economic crises, we've got medical and healthcare pandemic, and they're saying we're going to have locusts later this year, too. So yeah, it's really a mess out there. And whether you can predict what's about to happen or not, and I don't think you can very well, you need to have that agile adaptability to make sure that your service organization can turn virtually on a dime and deliver to the marketplace, to your clients and customers, and especially to your prospects what it is that you can do for them tomorrow, regardless of what tomorrow is. So I think that that's a parting phrase.

Sarah Nicastro: All right, Bill, well thank you so much. I appreciate you being here and sharing your perspective with our listeners. You can find more on service transformation and how companies are grappling with COVID-19 challenges and working towards servitization by checking us out at www.futureoffieldserviceref.ifs.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.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

September 2, 2020 | 19 Mins Read

3 Pillars of Redefining Service Delivery

September 2, 2020 | 19 Mins Read

3 Pillars of Redefining Service Delivery

Brad Resler, President and COO at Brady Services Inc., talks with Sarah about three pillars Brad feels are critical to service transformation success.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking about three pillars of redefining service delivery. We talk a lot on this podcast about the different journeys that companies are on when it comes to transforming their businesses to better meet the needs of today's customers. The reality is there is a lot of foundational work that goes into structuring a business to be able to evolve to meet those needs.

Sarah Nicastro: I'm excited to welcome to the podcast today, Brad Resler, president and COO of Brady Services to talk with us about Brady's journey and the foundation that they've set in the business. Brad, welcome to the Future of Field Service podcast.

Brad Resler: Thank you for having me.

Sarah Nicastro: Thanks for being here. Before we dig into the topic, Brad, can you just tell our listeners a bit about yourself and your journey and Brady's business?

Brad Resler: Sure. Well, let me start with Brady. We are a mechanical contractor, HVA service provider, and a building solutions organization that is headquartered in Greensboro, North Carolina. We were founded in 1962 by Mr. Don Brady, who left the train company and moved down to Greensboro from up north. Since then, our company has grown to almost 500 associates and we've diversified into parts sales service, building automation. We even have a large integrated security division, all in the commercial and industrial space. We do business throughout North and South Carolina.

Brad Resler: As far as my own journey is concerned, I've had the privilege of being here at Brady for about six years now, starting in a sales leader role, and for the last three years or so have had the opportunity to run our organization from an operational standpoint.

Sarah Nicastro: Great. Good. Well, thank you for that. I was obviously really excited to dig in. Brad, you and I connected not long ago and had a really in-depth discussion about Brady's journey and the way the business is evolving based on the current landscape of what customers are looking for, and how that differs from how things may have been one or three or five years ago. We've talked about how you're leading the company through this journey in an effort to find new and different ways to serve your customers.

Sarah Nicastro: One of the facets of that conversation is us discussing how building a strong foundation upon which to build that evolution, how important that is. That's why I asked you to come and join us here, because I think that that foundational work that you've led Brady through is very, very important. Because I think sometimes it's that foundational work that companies race past and then ultimately end up having to go back and fix. Based on the conversation you and I had, we broke the foundational work into these three pillars.

Sarah Nicastro: As we talk through those three pillars today, I want to talk about the foundational changes that you've made at Brady that have allowed you then to move past that foundational level and start building upon that. The first pillar we're going to talk about is culture. That's the first pillar of this idea of really redefining service delivery. Talk to our listeners about culture and how at Brady that needed to be evolved foundationally and how you've been able to build upon that.

Brad Resler: Yeah. At any organization, the foundation of success is its culture. Brady has long had a very strong family-friendly culture, a culture of performance excellence. Those are things that we certainly didn't want to change as we looked at how we were going to continue to evolve our business. As strong as that culture was, it was also in some ways our biggest challenge, because as we've grown to the size that we are now, we've had to change. We've had to scale the business and it requires doing things a different way.

Brad Resler: Sometimes when you've been successful in doing things a certain way for a long time, it's hard to understand why you'd need to do something a different way. We've really focused in the last several years on our culture and have been very intentional about how we wanted to preserve the good and evolve as we've needed to. It's really come down to getting good leaders in place and having a culture that is very performance-based, very data-driven and very process-focused, and helping everybody understand that that's not a bad thing.

Brad Resler: That's a good thing and it's going to help us continue to grow and continue to distinguish ourselves from our competitors in the marketplace. Sounds easy, but it's a lot of work to take an organization in that direction.

Sarah Nicastro: Yeah. Yeah. I mean, there's a couple of good points you made. The first and I think the most important I want to go back to is the way I asked that question I think set it up to sound that you had to build this culture. The reality is, to your point, you had a really good culture. This idea of evolving the culture isn't an idea of going from a bad culture to a good culture. It's about taking a good culture and making it even better. The reality is it's human nature for both people and businesses to get comfortable doing what they're doing if it's working.

Sarah Nicastro: You can go on for a long stretch of time and have success and you just get in a good rhythm. When there's market changes, technology changes, business changes that require significant change, it's not a matter of making a bad culture good. It's about making a good culture comfortable with evolving, right?

Brad Resler: That's right.

Sarah Nicastro: I think that's a really good point and I think the more you can acknowledge the good and make people feel appreciated for the good and not just drive change, the more open they'll be to that. In terms of the foundational aspect of culture, you mentioned a couple of things related to being more process-based, being more metrics and performance-driven. Are those new things that you had to put in place and introduce, or are those aspects, again, that you just evolved?

Brad Resler: Well, both. It certainly evolved. We certainly had measures around our business. What we didn't consistently do was apply those measures at the individual level and set really good expectations and communicate what good performance means, which for us, is tied to good outcomes for our customers and have a way of measuring that and rewarding people for that. Or, if it's not working, correcting the course. One way that we've done that is a couple of years ago we revised our core values.

Brad Resler: One of our core values that as an organization now we talk about constantly is the value of continuous improvement. That really gave us a language and a structure to talk about how we get better without it indicting anybody for what's happened in the past. It's let us say, "Hey, it's okay to be where we are. Let's understand where we want to go and let's figure out together how we want to get there." That's a different conversation than, "We're not getting it done," or, "You haven't done it right," or, "You're not getting the job done."

Brad Resler: A lot of that is really in how you frame the conversation and how you frame the goals. We, over the last couple of years since we've had those core values, have seen some pretty significant improvement in our engagement survey scores. It's working in that we're able to engage our associates, get voice of associate into the change that we're driving and really have an organization that embraces getting better.

Sarah Nicastro: Yeah. Yeah. That's a good point. I think there's a couple of common things that come up when we talk about this idea of cultural shifts and change management, and you touched on a few. I mean, one is, people want to feel heard. To your point, they want to feel that you're listening to their input and their insights. Another is, I think that the more you can explain what the driving forces are for the changes you're making, and most importantly, how adapting to address those forces will help the individual.

Sarah Nicastro: To your point, setting up not only measurements to be able to measure performance, but tying that back to if we can, as a business, meet these needs, here's how that will benefit you. I mean, it just makes it personal. The other is, to your point, I think that people like to know what's expected of them. I think that when you have a lot of ambiguity and uncertainty, that doesn't make employees feel comfortable. That's stressful.

Sarah Nicastro: Even if some of these performance measurements and things are new and more structured than in the past, I think once employees can learn them, I think oftentimes we see uptick in engagement and satisfaction because it's just the expectation is clear and they know what they need to do, and they can focus on doing it well. That tends to make people feel more comfortable.

Sarah Nicastro: With some of the foundation you've put in place, the core values, and some of the things that you've done around the idea of continuously improving the company culture, what do you see as the next steps in terms of continuing to build upon that and continuing to innovate?

Brad Resler: Well, in all the things we have been doing in terms of innovation is actually redefine what innovation is for our associates. We've learned this the hard way. Innovation isn't always transformational or redefining your business. Innovation comes in a lot of little improvements as well, and little improvements that affect the day-to-day activities of our associates. We like to try to get innovative about how we complete our service paperwork in the field so it's easier on our technicians, it's more thorough, it gets processed faster to our customers, quicker.

Brad Resler: Those don't seem like innovation in a grand sense, but for us, it has a very big impact on our productivity, on our customer satisfaction and on our ability to get onto the next job. Those types of things are very important innovative aspects of our business. Some of that recasting the perspective on innovation has really helped us zone in on what's important. The other thing that we've had to do is really focus on and get discipline around creating standard work.

Brad Resler: We've got a lot of folks who have grown up and worked in this organization for a long time, do great work, but they may do it differently than one of their counterparts. The result of that is a different service outcome to our customers. If we've got a customer in Raleigh, we want them to have the same excellent experience as a customer may have in Greensboro or a customer may have in Wilmington. It's really important that we have systems and processes in place that guide that standard work. We're now in the midst of becoming ISO certified, which is the benchmark of having good standard work.

Brad Resler: That's helped continue to drive that process, but it's just so important, especially as you continue to grow geographically that you have that strong standard work in place. We spend a lot of time on that.

Sarah Nicastro: Yeah. You're actually giving me a really nice natural segue into the second pillar, which is around process standardization and optimization. That's the next foundational aspect of this service delivery evolution, is making sure that you do the work of standardizing and optimizing the processes. What's interesting is I think the reason it comes up on an answer around culture is there's a huge intersection between those two things.

Sarah Nicastro: If you have that employee that is used to doing things their own way, you have to balance the desire and business benefit of standardizing without making them feel too unappreciated for their own way of doing things. Does that make sense?

Brad Resler: It does. Yeah.

Sarah Nicastro: Yeah. Tell us a bit around what some of the work is you've had to do in terms of process standardization and optimization and how that sets you up for the future.

Brad Resler: Yeah. A couple of years ago when we started the journey of transitioning to IFS, that was a natural time for us to start thinking about how we look at our standard work in the field. We certainly want to do the work that our customers expect of us, and we have customers that have a wide range of requirements. If we're working in a pharmaceutical company facility then we have to meet certain FDA standards. If we're working with a customer who makes aircraft, then we have FAA standards we have to meet.

Brad Resler: It's difficult to have consistency from job to job, so we had to figure out how we create some broad processes that let us get on the job and get off the job and deliver paperwork and be safe, and fulfill whatever the scope is in a consistent manner. There was a lot of work done to think through that and create boilerplate scope where we could, and also build a system that allows us to meet the needs of our customers. That's a unique challenge that we, and a lot of our competitors in our industry have. The other thing that's really important is the consistency aspect of it.

Brad Resler: This isn't a flash in the pan, or a focus that's going to wane. This is who we are and how we're going to do business for now and ever more. It's really making sure that, again, you have local field leaders who understand that, buy into that and help drive that into the field through their quality assurance and oversight. Leadership development has been a huge part of how we've come at this because that's ultimately what is going to win, is having good leaders. We've also put a lot of investment and time into organizing our data and creating internal dashboards.

Brad Resler: We use Power BI, and how do you take an enormous amount of data and structure it, summarize it, make it available in a usable, actionable way? That has evolved significantly in the last two years and will continue to evolve significantly as we go forward. If you're a database, data-driven organization, you've got to figure out how to use your data as effectively as you can. That's been a challenge for us.

Sarah Nicastro: Yeah. I mean, the reality is, every business is a data-driven business today. I mean, or should be. It's like you said earlier, these are things that sound simple, but are not at all simple when you have to actually do them. That's why some of these areas are the areas where companies fall down the most because they try and race past this foundational work and then have to come back. It's the same thing with the standardization and structure of processes. I mean, you're not going to automate a poor process and get a result from it.

Sarah Nicastro: I mean, you have to do that examination and that refinement before you can really build upon that. It makes sense. The third pillar is around technology. You alluded to your use of IFS. Talk a bit about the idea of putting foundational technology in place and what that process looks like at first, and then how you can build upon that.

Brad Resler: Yes. Technology comes in a lot of different forms, obviously. For us, we view technology as impacting how we work, how we demonstrate our performance and how we train our associates. If we start with how we work, as a service provider, in the old world a lot of times we would wait for the phone to ring. The phone would ring and somebody would say they're hot in the building and we would dispatch a service technician to the site. Hopefully, that service technician knew what to do and fixed the problem and then hopefully we got paid for it.

Brad Resler: In today's world, we often know, or have the ability to know about problems before a building owner even does. We're connected to hundreds of buildings and have all of the building data from their automation system at our disposal, and receive thousands of alarms a day that we have to sort through, decipher, and again, make actionable, and oftentimes can respond without even sending a truck to the site. Just a massive transition or difference in how the industry works and therefore what our customer's expectations of us are.

Brad Resler: Technology has been a big element of how we manage that, how we offer service around that, and how we track our activity around that. Certainly, a service software platform is important, a building automation system is important. We look at those almost in sync to determine how we can take data out of a building, make it actionable, understand what the problem is, get it into our service platforms so we can dispatch and provide a technician with actual data before they get to the site so they know where to go, or they know what piece of equipment to start troubleshooting.

Brad Resler: Again, a big efficiency time-saver and opportunity to provide a differentiated service to our customers. That's how we work. How we demonstrate performance is a big part of what we do as a service provider. Oftentimes, since we're working on very large and complex machines in industrial and hospital or other complex environments, it's difficult for our customers to even understand exactly what we did. We certainly try to convey that in a written service report, but we've also adopted video recaps of our service events.

Brad Resler: Our technicians, when they complete an event ... and they may get some before footage and then show some after footage and can describe exactly what it is that they did so a customer has a better understanding of what happened and what they're paying for. Every one of our service reports and our invoices as well, contains a link to a video recap of that service event. It's a pretty simple piece of technology, but it's been very effective to convey to our customers what it is we do.

Brad Resler: Then in terms of our training, really at the end of the day, what we sell is the expertise of our people, so training is a huge area of focus for us. Being spread out all over the southeast, we've really turned to technology to up our training game when it comes to providing virtual training events, different ways of making content available upon demand, even in the course of a service event, that can help our staff be more effective. Technology is really embedded in every aspect of what we do. Some big, some more so.

Sarah Nicastro: Again, looking at the building upon what you have in place, from a technology perspective, what do you think are some of the next iterations or next steps for Brady?

Brad Resler: Well, some of it is what I described. It's how do we respond more effectively to what buildings are telling us and working with our customers more as a business partner than a contractor to help them solve their problems. Just even having a good technical understanding of the data and of what's happening, is only part of the picture. We need to understand our customer's business objectives. How they want to operate that plant or that facility, what exactly an operating room needs to be set up as in order to do those procedures.

Brad Resler: We have to know those requirements of our customers and marry those with our expertise to provide them proactive service. That's really the future of our organization. That's how we're trying to differentiate. That's how we evaluate technology in order to make good investments and implement it appropriately in our business. That's what we'll continue to do as we go forward.

Sarah Nicastro: Yeah. Yeah. It's interesting because on one hand I see that customers really want simplicity. They want you to take on the complexity of doing all of those things on the backend that makes the service to them seem simple. It's just things are working the way they should without a lot of complexity on their behalf, but on the other hand it's interesting what you mentioned about while that is true in terms of wanting the service to be executed with simplicity on their behalf, they also want the insights.

Sarah Nicastro: In that sense, they want more information than maybe you were giving in the past. It's not just, "Hey, yep. We were here, we did the job. You're welcome." It's, "We were here. Here's what we did and here's a video of it." They want that reassurance that they are getting their money's worth or what have you. It's interesting that on one hand they want super simplicity and on the other hand, they want more context maybe than they've had in the past. There's a ton of opportunity in terms of the move to more predictive and how you expand to meet more of their needs and all of that.

Sarah Nicastro: One of the things that I also find interesting is, a lot of the steps you've taken within these three areas or these three pillars has given Brady progress in improving the customer experience and providing better service to the customers, but also improving efficiency and productivity for the business. Is that a correct understanding? It's a lot of these areas of focus or areas of investment are double-focused?

Brad Resler: Yeah. If you're doing it well, they certainly go hand in hand. You're streamlining your operations to only provide the outcomes that are important to customers, that makes you more efficient, that makes you more valuable to your customers when you can deliver on a consistent basis exactly what they're looking for. Even the next level is really justifying the value of what you provide customers. Customers are increasingly looking to us to help with energy modeling and helping with ROI type of data on either replace or repair machines or just overall operation of their facilities.

Brad Resler: Again, that's how we become a business partner and a trusted advisor rather than just a service dispatch operation. A lot of that's driven through technology, but it's understanding that at the end of the day, it's about expertise, it's about speed, and it's about doing business in a way that the customer wants to do business with you. All of those things are part of how we evaluate and implement any technology that we would adopt.

Sarah Nicastro: Yeah. That makes sense. Good. You've shared what you see as the future for Brady coming up. Anything you would add in terms of what you expect on Brady's journey over the next 12 or 18 months?

Brad Resler: Well, the next 12 or 18 months are going to bring a lot of change, just like the last 12 or 18 months. Certainly, in the age of COVID our customers' needs in the last four months have changed significantly. They've got, in some cases, less people in the building, or they need to get a better understanding of who's in the building, where they are. They need to introduce fresh air into the building more often when it's occupied. They need better ventilation and air quality.

Brad Resler: Change is just really coming at us very rapidly, but through all of that, we've got to remain focused on the fundamentals, because while you've got a lot of change happening and a lot of change in the world, our fundamentals won't change. Our fundamentals are providing a good, fast service that our customers can rely on. We've got to be able to continue to do that as we deal with the rest of the change. We never try to stray too far from the fundamentals.

Sarah Nicastro: Yeah. Would you say that the foundational work you've done in the three areas we talked about today, so culture, processes and technology, helped you be more adept in how you've responded to COVID and the changes that it has brought?

Brad Resler: Yeah. I really think it has. Yeah. Focusing in those areas that has allowed us to develop some great customer relationships and communication now is more important than ever because we've had to navigate with, when can we be onsite? How do we go onsite? How long can we stay onsite? Are we restricted to work in certain areas? It's just introduced a lot of friction in our operations that without having those good relationships and those good fundamentals in place, would be even more disruptive than they are.

Brad Resler: I think it's certainly been helpful. We certainly learned a lot and we fully expect to come out of COVID with a better understanding of how we can do those things than when we went in. We try to look at that as an opportunity as well.

Sarah Nicastro: Yeah. Last question, Brad, and I like to ask most of our guests this question, I just find it very interesting, is, as you've led Brady through all of this foundational work or fundamental work to be able to adapt and evolve and innovate, what is the biggest lesson you've learned?

Brad Resler: The biggest lesson I've learned. Probably that faster isn't always better. I like to do things fast and check things off the list and accomplish something, and pace is just so critical when it comes to managing change and evolving culture and adopting new technology. You certainly don't want to go too slow or you'll miss the boat, but you definitely can go too fast. That's been an adjustment for me. That's something that leaders of the business that have helped me with, leaders in the field have helped me with in perspective of everybody involved.

Brad Resler: It's just something you have to learn as you go in some cases, but I definitely have a different perspective on that. It just requires more planning, more discipline and a better thought out strategy than maybe you would otherwise. That's been a real eye-opener for many of these last several years.

Sarah Nicastro: Yeah. That's a very, very good point. I'm like you, it sounds. I'm a little bit ... I like to move fast and I'm not the most patient person so that discipline is important and that's a very good point. Well, Brad, I really appreciate you joining us today and sharing your story and Brady's story, and look forward to staying connected and having you back at some point and seeing how things are progressing. Thank you for being here.

Brad Resler: That sounds great. Thank you Sarah.

Sarah Nicastro: You can find more content by visiting us at www.futureoffieldserviceref.ifs.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.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

August 26, 2020 | 22 Mins Read

Peloton Invests in Field Service as a Strategic Differentiator

August 26, 2020 | 22 Mins Read

Peloton Invests in Field Service as a Strategic Differentiator

Jamie Beck, VP of Field Operations at Peloton, joins Sarah to discuss the company’s perception of service as a strategic differentiator and how field operations is being used to deliver a first-class customer experience.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about Peloton's investment in field service as a strategic differentiator. I'm excited to welcome to the podcast today Jamie Beck, Vice President of Field Operations at Peloton. Jamie, welcome to the Future of Field Service package.

Jamie Beck: Thank you, Sarah. Great to be here.

Sarah Nicastro: Absolutely. Thanks for being here. So we're going to talk today about the Peloton field service story, and I'm very excited to do that. Before we dig in, can you tell our listeners a bit about yourself and your role with Peloton?

Jamie Beck: Sure. I've been with Peloton a little over four years. Joined as the VP of Field Operations back when it was really just coming off of a pilot, and so really been a part of, I guess, the meteoric growth over the last few years, and in this role, I oversee our internal teams that do the delivery, repair, and refurbishment of our products to our members. Prior to Peloton, I spent some operational roles. I was at Fresh Direct, which is a large online grocer in the New York area, spent a little bit of time at Target, and then spent time at Cintas as well, the large uniform company, where I was in a number of different roles, and then going way back, I was in the Navy. I did ROTC in college, so I spent four years in the Navy. So most of my career has been in the operation space. A lot of it in the delivery, both B2B as well as B2C prior to Peloton.

Sarah Nicastro: Okay. Very cool. So you and I connected, Jamie, and talked a bit about the Peloton story as it relates to service, and I love it because I think it is a really good illustration of a lot of the trends we see right now with companies in all different industries, recognizing the opportunity that exists to use service as a strategic differentiator, and so this story is very representative of that, and I think it's a very interesting one to dig into, how field service is such a valuable tool in being the face of a brand. So let's talk a bit about that. So you mentioned that you joined the company after the decision was made to invest in field operations and field service. So can you talk a bit about some of the reasons that the company's leadership felt it was important to make that investment?

Jamie Beck: Sure. As I think back, there's probably three reasons that I think about. And so John Foley, our CEO, they started selling bikes in 2014 and as we started to deliver them, one of the early important things as a company was to put our members first, and we call all of our customers members, and really to deliver to them a great brand experience, and I think John took a look to say, "Hey, how can we make this delivery experience better than what we're currently doing?" And so they started with a pilot in the New York area in order to test this out. Can we deliver better brand experience than what we're currently doing? And so I think that's the first thing. The second thing was we know that over time, these are big bulky products and they're bikes and they could break, and so I think the investment in field service was not only about the delivery, but I think thinking ahead to how are we going to service these? And how can we control that experience so that our members have a great experience, not only on the delivery, but also on the repair and service so that we can get into their homes and fix them quickly?

Jamie Beck: I often equate it to if your iPhone breaks, you take it to the Apple store. If something goes wrong with your Peloton, you can't simply put it into your car and drive it to one of our showrooms. We have to come to you. The third thing I think was ... and I think this was John's foresight as a leader was this is back in 2015 when this category was really just being created. Competition was going to come. If we're successful, competition is going to come, and so it's an investment in field operations. Obviously there's probably cheaper ways that we could do this, but we knew that by investing in this field operations team, delivering this great brand experience, being able to service and repair your products, it helps put a strategic moat around what we were doing as a business, and I think those three things are really what we thought about, what John thought about when we decided to make this investment in field operations.

Sarah Nicastro: Okay. So prior to doing this, the delivery and installation was handled by third party providers, is that correct?

Jamie Beck: That is correct. Yep. Yeah, and we still use 3PLs today. It's a mix of internal and 3PLs. We'll always have 3PL partners. Our relationships with our 3PL partners, they've actually probably gotten stronger since we've started our field operations team, because we've been able to learn from each other, but as we move forward, we'll always have those 3PL partners, and today the majority of what we do is done by our own teams, but we'll never be at a point where we're a hundred percent field operations, whether it's in the US or any of the other countries that we operate in.

Sarah Nicastro: It's a good point though, having that function internally gives you the wealth of knowledge to help foster those relationships and, train those third party providers on what you're doing yourself as the field operations of Peloton and therefore what you would like them to do or what you would expect them to do. That makes sense, and I think the idea of ... I think when people think of Peloton, they think of a premier, exclusive product. So desiring to provide a service that is on par with that brand perception makes a lot of sense to me. So those were the three reasons that the CEO felt it was important to do this, and that makes sense. As I said earlier, investing in field operations, seeing an investment in field operations from a brand like Peloton is representative of how we see businesses perceiving the opportunity around service and how they can leverage a frontline workforce in really being the face of a brand, particularly if it's a product scenario where you buy online.

Sarah Nicastro: You might come to a showroom and you might have a face to face interaction, or you may buy online and not have that face to face interaction. So when that delivery person shows up at your door, that might be the first face to face impression you have of the company you're purchasing from. So can you talk a little bit about with this investment and with the field operations team that you've built, what is the user experience that you desire to provide to your members?

Jamie Beck: Sure, and going back ... I don't anymore, because the scale has been too much, but I used to interview every field specialist that would be going into the homes, and I think that the litmus test we would always use is would I feel comfortable with this person coming into my home? And I think we still do that today, obviously at a much, much larger scale, but it's one of those where you get the branded van that pulls up, you get the team that comes out of the van and they're wearing the branded Peloton gear, athletic looking, similar in line with what we promote around fitness, but then they walk up to your door, they'll introduce themselves with their name and then they will walk the path, but the first thing that they do is they'll ask, "Would you like me to remove my shoes before I come into your home?" And it all goes back to we're being invited into your home and we respect that and we're going to treat it and respect it in that way, and so whenever we go into the home, those are some of the things we do.

Jamie Beck: Once we bring the product into the home, into room of choice ... and the bikes are about 90% prebuilt. We do that so that we can get good quality and test data, and it also ... we realized early on when we were delivering them in the box and building in the home, it wasn't really value add, and actually, from an experience standpoint, it was uncomfortable, because does the member talk to us? Do we talk to them? It just was something that we said, "Hey, this is non-value-added. Let's make sure that the time in the home is complete value add." So we'll bring it into room of choice, we'll size them to the bike to make sure that the settings are correct to that member. We will have them try on the shoes and learn how to clip in and clip out, because if you've never clipped out of a cycling shoe, out of the cleat, it can be difficult.

Sarah Nicastro: Yeah. You don't want them to get stuck.

Jamie Beck: Right. Completely, and these are all things that we've learned along the way. We do customer satisfaction surveys with every member and we get a great response rate and things that we've learned. We connect them to their WIFI. We get them set up on their account, but we do little things too. One of the things that the bike asks you during setup is to enter your height and weight, and so when it comes to that point in the screen, our team member will step away in a way that demonstrates to the member that we respect your privacy, but at the end of the day, the experience of the delivery is so that when we leave, you are ready to ride and you can enjoy your Peloton from there forward.

Sarah Nicastro: So I think those are really interesting observations, and I think that what you're describing sounds like you could achieve the ... and you did achieve the function of delivering the bike and setting up the bike without doing that yourself. I mean it's totally possible, but this goes back to the concept of investing in this field function as a way to differentiate the business. So when you talk about what you're doing ... so you said, the bikes are 90% prebuilt. You're not going there just to build the bike. You can do a lot of that before you arrive, but you're going there to provide a Peloton customer experience. You're going there to make that member feel valued and important and appreciated for the investment they're making. So a lot of the things you're talking about, the interactions you would have with them, how it's personally to that person, and how you make them feel important in terms of let us help you get completely set up so that when we leave your house today, you can get on and ride and get the full value out of your investment. It's really about using service as a way to reinforce that Peloton brand and the feel you want those folks to have from buying the product that you provide.

Jamie Beck: It is. It is, and it is about an experience. That's something we talk about. It's not necessarily about the delivery. It's about the experience, and I think one of the things that helps us differentiate that too, is that the majority of our teams delivering our products have their own bike at home. It's something where a few years ago, our president William Lynch actually lowered the price of the employee bike so that they could have that, because it's so powerful when you walk into someone's home and they're asking questions, and you can say, "Well Hey, I was on my bike last night and my favorite instructor is Robin, and this is my favorite type of class." It's more about that experience, because we know ... and it's the experience, obviously. They're going to go tell their friends about it or their family to say, "Hey, not only did I get the Peloton, but let me tell you about the delivery experience." I mean that's how we think about it. It is a true differentiator to what we're doing.

Sarah Nicastro: Yeah. That's a really good point. If they can say, "Hey, let me show you this cool function. This is my favorite thing," or to your point, "This is my favorite class, my favorite instructor," it's a really good point. So I have a couple of questions then about how you're preparing these frontline workers to provide the service experience. So what type of training are you giving? What type of expectations are you setting in terms of what they should be doing while they're there? And the reason I asked this, Jamie, one of the things that came to mind as you're describing this experience is you're really doing this to set yourself apart, not to "turn and burn." You're not saying, "Get out there and deliver more bikes, more bikes. Drop them off, move on." You really want them to spend time and invest in providing that experience. So what resources do you provide to equip them to do that, and what, I guess, metrics or objectives do you put around what you want them to be measured on in terms of their performance?

Jamie Beck: Sure. It starts with hiring. I think we look for people, like I said before, that you would feel comfortable coming into your own home. A lot of our employees ... there's a whole wide range. We don't necessarily look for, hey, this is the prototypical field specialist for Peloton. We have former division one athletes. We have people that have worked retail. So it runs a lot, but it's generally just good people. It starts there. The training we provide obviously is knowledge about the product, but the thing that we don't do is we don't give our team a script. We don't expect them to go into the home and say, "Hey, you have to say this and in this order," and we learned that through benchmarking some other delivery companies, because let's say you're going through your script, but the member only is concerned about, "How do I clip out? Because I've heard that clipping out is hard," and so they're going to be patient, and I think that's a key word that we've learned in the experience is they're going to be patient with a member.

Jamie Beck: And in order to do that, they have to have the knowledge around the product and how it works, which again, is helped by the fact that most of them are owners. Even if you're not an owner, we have our products set up in our warehouses, and so if you want to do a ride when you get back from your day of working before you go home, that's something that we encourage, but they'll go in and really it's about listening to the member, and so I think as much as product knowledge, it's just customer service training and being patient, and it goes back to what you said. It's not about dropping off X number of bikes a day. We want every member to feel that they have all the time in the world, and so if you have a hundred questions, we're going to stay there and answer all 100 questions, going back to that goal of when we leave, you're ready to ride. And I think one of the things that we tell our team is whether it's your first delivery on Monday morning or your last one on Friday afternoon, that members should have the same level of experience, and so I think going back to your question, obviously there's product knowledge there, but more important is how do you deal with members and be patient with them?

Sarah Nicastro: So a couple of questions on that. So would you say that you hire more based on personality and the ability to provide that customer experience or technical aptitude?

Jamie Beck: Yeah, great question. I think more about their personality right now, and obviously when we first started, it was a lot about delivery. It's still mostly about delivery, but the service component and the repair component and the field service component for us is only going to continue to grow. As we get products that are older and have more use in the field, and as just the sheer number of products that we have in the field grows, the amount of service and repair work that we have to do is increasing, and so sometimes we'll find people maybe that worked at a bike shop and have that level of service, but for the scale that we have been growing at, that would not allow us to hire enough people, if we just looked at technical skills. We can teach the technical skills, and so as we've grown, we have built in what we call our master technician courses that allows that field specialist to promote into a role where now they can go into the home and they're not delivering anymore. They're just providing service, and so traditionally we've looked for more personality, knowing that we can train the skills in order to do the service.

Sarah Nicastro: Yeah, and that was what I was expecting, because I think that's in line with ... when you look at companies providing service to a consumer, I think that tends to be more the case. It's more important to get the right fit in making them feel the way you want them to feel while you're there and once you leave, and the stuff you're actually doing while you're there can, most of the times, be taught. So that makes sense. Now in terms of measurement of performance, is that mainly based off of those customer satisfaction surveys then?

Jamie Beck: Yep. Yeah. So we send out a survey, whether it's a delivery or a service or repair, and we have a very high bar. We measure it on a customer satisfaction, on a five star scale. As a company, we also measure net promoter, NPS, of existing members, but when it comes to our internal teams, we strive for a near perfect five. We're not there, but overall, over tens of thousands of surveys, we're at about a 4.92. So it's a high bar that we set, and we have locations, individual locations that are at sometimes a 4.97, 4.98, and our teams really thrive on that, especially when if you see in the comments, "Hey, I got my delivery today. Wow, I was blown away. Jamie and Sarah did an amazing job." It's recognition and our teams love to see that. So we make a big deal out of the success that our teams have, and at the same time we look for areas or trends where we can improve the overall experience for our members.

Sarah Nicastro: Sure. Okay. That makes sense, and I think it's interesting, when you look at the employee engagement and how that relates to the customer experience, promoting that culture of even being a part of something that is as "elite" as Peloton, and feeling invested in being able to provide those experiences. If you have employees that are excited about doing that, and you promote a culture that rewards them for doing that, that's going to help them just be excited about showing up and giving that customer the feel you want them to have while they're there. You're not asking them to just, "Can you show up, can you check these boxes and can you move on?" To me, it sounds like if you can find the right fit, like you said, from a hiring perspective, it's a job that would be really fun for folks to do, because if they like engaging with people and they like that customer service aspect of it, they have great opportunities to be able to do that.

Jamie Beck: Certainly.

Sarah Nicastro: So you mentioned this Jamie, that as you started with field operations, the focus has been more ... just the nature of the relative newness of the business and of the equipment, the focus has been more on the delivery side. So I'm curious, over time, how do you see the evolution of the service side of the business and how do you see this investment in Peloton field operations as an ability to continue to differentiate?

Jamie Beck: Sure. The service component's only going to continue to grow. I think the biggest opportunity for us is right now, we work in a more reactive or break fix service area. So you're riding your bike, something goes wrong, then you have to call into member support and we'll send someone out to fix it, but I think with Peloton, obviously it's a connected product and we have data. We know how many rides you've done. Every member that hits a hundred rides, it's called their century ride and they get a tee shirt that they probably wear that says, "Hey, I've done a hundred rides," and so we have that data, and I think where we're going to be going with this over time is how do we get to predictive maintenance?

Jamie Beck: Because we know that, hey, this bike and this home has ... similar to your car, it's got 3000 miles and it's time for an oil change, and so how do we utilize that data that we're capturing to say, "Hey Mr. or Mrs. Member, we'd like to come out and do a bike tune up for you to ensure that you can continue riding. You're someone that rides every day. We want to make sure that you're not interrupted in any way," and I think that's the way that we'll be able to do it. Another interesting component obviously is how can they interact with us without potentially even getting off their bike? So through the touch screen on the bike that enables them to access our full library of classes, is there a way just to contact member support? There are a number of things that we have in the bike where you can send data from the bike to our member support team if there is something going on, and so those are all areas that we're exploring, but I think over the coming years, that's where we want to get to, is being able to make sure that people that want to ride or run every day can continue to do that because we're getting ahead of their potential problems before they happen.

Sarah Nicastro: Yeah. That's a good point. I mean it's the evolution of, of service. So if you look at, hey, it's great if people call us and we're there quickly and we fix their problems quickly and they have a good experience while we're there, but what's even better than that? What's next is how do we predict those issues? How do we get ahead of that? How do we prevent them from even happening? So that makes sense to me. So as you look back at your time with Peloton and the huge potential that exists for the field operations division with the company, what's the thing you're most excited for in the future?

Jamie Beck: Yeah. I think our growth has been crazy in a good way, and I think that COVID is obviously ... we're one of the few companies that I think has, in a way, grown even faster due to what's going on right now. I think what I'm most excited about is just the way that we continue to innovate as a company, and I think that's at our core. It's not just about innovation in products or content. It's how do we innovate with field service as well? And so I think there's a lot of opportunity to continue to innovate, whether it's predictive maintenance or using the internet of things in order to make our company more successful.

Sarah Nicastro: Okay. So Jamie, in the time that you've been at Peloton, and as you look at what's on the horizon as the field operations division grows with the company, what are you most excited about as you look at the future?

Jamie Beck: Yeah, I think, obviously, we continue to grow at a really rapid rate, but I think more than anything at our core, Peloton, we're an innovation company. We happen to be in the fitness space now, but how do we think about innovating, whether that's in hardware, in content, or even in field operations, and so how do we improve the member experience? And I think what excites me is there's so much opportunity out there that maybe people aren't doing today. For example, in the big and bulky delivery space, this high touch, white glove experience, not many people are doing that, and so we continue to use technology to even improve that level of experience. How do we use the predictive maintenance, the internet of things, artificial intelligence? I think there's so much out there for us, and as a technology company, I think we're in a position where we can harness that, because we're using it in other areas of our business to bring that to our field operations team. That's probably one of the things that excites me the most.

Sarah Nicastro: Yeah, and I mean 2014, it's a relatively young company and it's a hugely known brand. I mean the impact that you guys have made in a relatively short amount of time is just staggering. The other thing that's interesting is if you look at the current situation that we're in with COVID, I know that home fitness stuff has been one of the industries that has been positively impacted by what's going on, and I'm sure that that creates some craziness for you all, I would imagine, with trying to keep up with that demand, but it's giving you a chance to expand the footprint even further and to have a bigger customer base from which to consider, how do we innovate? How do we expand? And you're right. I think the opportunities are really significant. So it's a very cool story in a very cool company to be a part of. Last question I wanted to ask you, Jamie, is with your time at Peloton, leading the field operations function, what's the biggest lesson you feel you've learned so far?

Jamie Beck: Yeah. Great question. When I started four years ago, I was the VP of Field Operations, and today I'm the VP of Field Operations. My team has gone from maybe 20 people to 2000 people though, and so even though my title's the same, my roles and responsibilities have changed a lot, and I think one of our value statements as a company is to hire smart creatives and get out of the way, and we talk a lot about empowerment at Peloton, especially within the field operations team, and it goes down to if you're a field specialist delivering a product and maybe you don't have the answer, but you know it's a good decision for the member, it's a good decision for the company, and it's a good decision for you, then make a decision. I think the worst thing that a member customer wants to hear is, "Let me check with my manager."

Jamie Beck: And so I think the biggest thing that I've learned as a leader is to really step back and empower your team and trust them, and I think that goes not only to helping the member, but it really helps our team as well. You mentioned before engagement of the team. When you empower teams, they are so much more engaged and they are doing what you want them to do and more, and I think that's the biggest thing I've learned is as we've grown in scale, putting people in positions that can do that and just continuing to step back and let them lead at their level has been the biggest lesson, and I think it's going to be critical for us because our growth is only going to continue, and so making sure that we're designing for that for the future as well,

Sarah Nicastro: It's a really good point that you just made and it makes me think about how earlier you said that you aren't at all prescriptive with what you want your field team to do or say on site. You want them to accomplish the objective of making the member happy and having them ready to go when they leave, but how they do that is up to them.

Jamie Beck: Correct.

Sarah Nicastro: So you're not prescriptive and you empower them to make those decisions, and I think as we look at how do companies leverage field service more strategically, those are two really important points. It is hard to provide the type of customer experience you're seeking to provide if you're trying to tell someone exactly how to do that. "Here's what you should do. Here's what you should say," and making them feel that they can't problem solve on their own or they don't have that empowerment to make decisions and not fear repercussions for acting in the member's best interest. I think it's not only important to consider how that approach benefits the customer experience, and therefore Peloton's ability to use service strategically, but also for you to hire those type of people that you want to hire, giving them that freedom to be themselves and to do that job the way that's natural to them, as long as they're accomplishing those goals. I don't think you could get those people and then be prescriptive with them. I don't think they would be happy.

Jamie Beck: Agreed.

Sarah Nicastro: So I think those are really, really good points for people to consider. I think if you look at companies that have historically had a field service function, a lot of them are coming from a school of thought where it's very efficiency, productivity driven, and therefore it is prescriptive and it is get in and get out and do more and do more, and those employees oftentimes don't feel empowered to be themselves or to make decisions, and I think that there's something from the Peloton story for those people to learn from today's discussion, which is how do we evolve our thinking around what our service function means and how do we think more strategically and how do we empower those folks more? I've really enjoyed having you, Jamie. I think it's an interesting story in a lot of ways. I really appreciate you joining us and sharing it today and would certainly love to have you back in the future and talk about how that service part has evolved and what's new and what you're learning. So thanks again for joining us and for sharing.

Jamie Beck: Awesome. Thanks, Sarah. Thanks for having me today.

Sarah Nicastro: Absolutely. You can check out more of our content by visiting us online at www.futureoffieldserviceref.ifs.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 Solutions by visiting www.ifs.com. As always, thank you for listening.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

August 19, 2020 | 14 Mins Read

Evaluating Today’s Wearable Technology Options

August 19, 2020 | 14 Mins Read

Evaluating Today’s Wearable Technology Options

Sarah welcomes back to the podcast Roel Rentmeesters, Director of Global Customer Service at Munters, to discuss the company’s evaluation and addition of smart glasses to its merged-reality solution.

Roel Rentmeesters: Yep, that's correct. We didn't think really of using smart glasses at that time, or the wearables, because we wanted to have a quick solution, fast implementation, and our people were mostly sitting at home, so they did not have to wear the glasses at the time.

Sarah Nicastro: And that was... You guys had a very fast deployment of that technology. And one of the ways in which that's possible is the ability to just deploy it on whatever device that is in use. But as you did that, how did you determine the need or opportunity for migrating that to wearables?

Roel Rentmeesters: Yeah, as it wasn't initially a solution we wanted to use towards our customers and those customers would not have the wearables. But quickly, internally, people from the operation side, the factories, who are also stuck in their country and could not travel to other countries. So for the internal use, it's where they came up and said, "Yeah. But you have people on the factory floor maybe want to start up lines or change lines to other locations. Since we can't bring expert from one factory to another factory, is there another solution that we can have a hands-free way of working?" And that's when I started looking into those smart glasses. So it came from an internal use because of the non-travel.

Sarah Nicastro: Okay. And the remote assistance solution is in use both in the field operations as well as in some of those manufacturing applications?

Roel Rentmeesters: That's correct.

Sarah Nicastro: So are the wearables also used in both?

Roel Rentmeesters: No. I've sent a few to the field service organizations to test it. And actually, it worked really, really well. We did an intervention in Australia, from Australia for New Zealand. So we sent the glasses to New Zealand and the technician who was doing the commissioning on site was guided by technicians in Australia. And that technician on site, he was wearing the wearables. Also in Germany, we are testing it, see the feasibility. And I've sent them also to Brazil and US for testing. And so far, it seems to be going well. On top... So, that's field service. We had the factories, as I mentioned before, but also the R&D organization is now using the wearables to communicate between each other. When they talk about parts and specific pieces, they can visualize while they're holding it in their hand, etc. So it's becoming a bit more widespread inside the organization, outside of the field service.

Sarah Nicastro: Yeah. And you think about the increase in efficiency and productivity that the hands-free environment really creates, and it is a compelling value proposition. Whether you're talking about in a factory or, like you said, R&D, or in the field, it really can speed things up and make things easier for those folks to be able to use both hands instead of holding that smartphone and using the application that way. So it makes a lot of sense. How did you set out to evaluate the options that are out there? And maybe share what you found as you were doing so, and what you landed on.

Roel Rentmeesters: Yeah. To be honest, I've been experimenting with HoloLens in the past, and that was before we were talking about IFS Remote Assist solutions, so it was more like, "What could HoloLens do in the future?" Taking into account that HoloLens is an amazing device, it was the HoloLens first, and it was very heavy on the nose, et cetera. But once I looked into IFS Remote Assist, I checked with IFS what companies are already certified to be using, from a wearable perspective. And there were two. I don't remember if the first brand and the second one was Vuzix.

Roel Rentmeesters: And we spoke with some experts who were from IFS Remote Assist, and they advised us for the things we needed to go for a specific brand, the Vuzix M400 Smart Glasses because of the screen quality, the way you could mount it, the fact that the solution is integrated in it, so there's an app that you can download on the smart glasses. And one of the major things that helped was the fact that this type of smart glasses, you can control them from your mobile phone. There's an app that you can download. So on the side of the glasses, there is a thing that is difficult to see, but you need to, with your hands, scroll over like a touch pad to manipulate it. Whilst with the app you have on your phone, you can do it on your phone, which is much more user friendly as people are used to doing it. So you control, actually, the menu in the smart glasses from your phone. And that was, for me, the most compelling argument to choose this.

Sarah Nicastro: You can use the phone to scroll the menu to make the selection you want, then put the phone down and do what you need to do hands-free?

Roel Rentmeesters: Yes. Yeah.

Sarah Nicastro: Okay. That makes sense. So, when you started testing the Vuzix Smart Glasses, how did you feel about the user experience? And what I'm most curious about is, I've talked with a number of companies now that have deployed remote assistance that commonly talk about how easy of an experience it is, both from the initiator and the recipient's perspective, within the application. And the deployment is simple because you can use whatever device you have. The user interface is clean. So knowing that you deployed first on the smartphones that you had, and then you introduced the Vuzix Smart Glasses, how would you compare the user experience between the two?

Roel Rentmeesters: Well, the fact that it's hands free is a really good one. The app that was designed to work with the glasses look and feel completely similar as the thing on your mobile phone, so you will recognize everything you need to do, how to make a call, how to answer a call, how to share things. You can recognize it very easily, because it's exactly the same look and feel. And the quality of the glasses is amazing.

Roel Rentmeesters: The little screen that you have in front of your eye, it takes getting used to because you need to focus here and then focus there, but it's so sharp and the quality of the camera, that others can see on the other sides is also so sharp that I would say it's maybe even better than the phone because of the quality of the screen and the camera you have on the device. Does it mean that I would be using it to do normal stuff? Probably not. If it's quicker and easier, I would do it with this because the battery drains quite fast on the wearables, et cetera. But if I really would need my hands, I would have no doubt to switch to the smart glasses.

Sarah Nicastro: That was the other question I was going to ask, is it really wouldn't be something that would be used instead of the smartphone. It would be something that would be used in addition to, as an option when that hands-free experience is mandated. Is that accurate?

Roel Rentmeesters: Yeah. If a technician needs a quick-and-dirty answer because he is facing something, but he knows he does need to manipulate it, it would just be, "Can you confirm that it's that part that I need to change? Or that is what I'm looking at is indeed this," that I would do with my phone. But if I need to manipulate at the same time, then I would definitely use the smart glasses. And the way we did it in the factories was actually, as you can use three people in the solution, one provide support, one receiving reports, and somebody else who can witness and intervene if needed, we use a third person view to put a big screen in the factory as well. So one guy was wearing the glasses and others could monitor what he was doing next to him on a big screen at the same time. So they saw what he was doing, and they saw the intervention that the provider of support was doing as well, guiding him. So that's the way we use the smart glasses in our factories.

Sarah Nicastro: And you can record those interactions if you want to, right?

Roel Rentmeesters: Yes.

Sarah Nicastro: And you can still do that with the Vuzix the same way you could through the phone?

Roel Rentmeesters: Yes. There's no difference. No difference.

Sarah Nicastro: Okay. So, the user experience is very similar, and I think that's also an interesting point to mention, which is that it wouldn't be like teaching your employees how the solution works on the smartphone and getting them used to that, and then teaching them an entirely different interface or experience on the smart glasses. They're very similar, and so that would make, I assume, the training and introduction to that technology fairly straightforward?

Roel Rentmeesters: Yeah, you're right. The only thing that is different, which is logic, is in the first instance, you need to set up the glasses. You need to download the last firmware, et cetera. Then you need to make sure that you install the app, the IFS Remote Assistant app on the device. And that, I would suggest somebody else does. But once it's there... It's a one page instruction, so it's really, really clear. Once that is done, they're up and running like a mobile phone.

Sarah Nicastro: Okay. The other question I wanted to ask is just based on the experience you had. So, I know that the main use of the Vuzix currently is on the manufacturing side, but being tested on the field side. If someone were looking at, or debating between, "Okay, we're going to deploy an augmented reality or merged reality solution." What's your opinion on, should they deploy first on smart phones and then incorporate smart glasses, should they skip that step and go right to the smart glasses, or a combination of both? How did you feel about the way in which you did it and how that would lead you to advise others?

Roel Rentmeesters: I would do it the same way as I did it. I would first go for the smartphone solutions. And why do I say this? Because you can use the solution then, both with customers that don't have a license and an application, which you can still already support them whilst they don't have the smart glasses. Your internal use is done more with the smart glasses. And like we said before, for the quick-and-dirty things, people will probably still want to use their phone. So you have a much quicker deployment. You have less investment because there's a cost attached to these devices as well.

Roel Rentmeesters: For instance, I'm not planning to supply every technician with such smart glasses. The focus that I would put is if we know we have a big commissioning that we need to do, that the technician that will do that has them. And we target the junior technicians. So the ones that just come in, we provide them with those glasses for a couple of months, so that in case they need support, they have them always with them and they can use them. The more senior ones will be using their own devices to provide assistance. They don't need the glasses to give assistance. It's really for the receiving end. So, much broader audience, less investment, quicker deployments.

Sarah Nicastro: Okay. That makes sense. So, I'm curious. How has the employee feedback been on the introduction of smart glasses? And has there been any difference between the different applications, so manufacturing, R&D, in the field? And I ask this because we commonly see resistance to change and new things. And I would say smart glasses are a pretty new introduction to these types of applications. I mean, they've been around for a while, but as I said at the beginning, we're just now starting to see them get more widely deployed. And so, how have your employees responded?

Roel Rentmeesters: Luckily, we have a bunch of these millennial people inside our organization, the ones that are keen for new technology and look into that. And you will see most of the junior technicians that you will bring in are also younger and grown up with more technology than the old generation has. This being said, I can feel a trend change inside Munters, where we really look at new technologies to help us in our evolution for the future. So from top management, this is something we're really... R&D is looking into this, product management is looking into this, and field operations is also looking into this. So we try to make people warm on this new technology, so we're showing them the benefits of it. And I can really feel that some are really eager for us to come up with this new technology. So you have, of course, both cases, the more traditional people that say, "I don't need this."

Roel Rentmeesters: On the other hand, we're asking now, those more traditional, maybe different generation, to provide the support to the ones that are on site. And if the one on site says, "Maybe you can guide me using the app. I have the glasses with me," the technology gets more embraced and people see the benefits of it as well. I can see when we deployed this solution with the smartphones in the beginning, lots of people started testing it, so then it fell a bit silent, also because of the fact that we could start traveling again. Now I see it rising. I see the use of the solution rising back up because people start to see the benefits of it. And it's the same with the smart glasses. But the top sponsors is actually management. Management is using them to do virtual tours of the factories, to inspect the factories, et cetera. So management is starting to use them a lot, actually.

Sarah Nicastro: Okay. So, when you have someone providing the insight, so like you said, if you have a junior technician out in the field that has the glasses on, the experience for the person providing the insight doesn't change, right? So it doesn't matter what's on the receiving end. That instruction is the same.

Roel Rentmeesters: Yes.

Sarah Nicastro: But seeing the use of those glasses and how it helps the person on the other end can help them warm up to the idea of it a bit. That makes sense. And I think, going back to my question I asked about, would you recommend starting with smartphones then introducing smart glasses, or introducing them together, it might be another check in the column of introduce smartphones first, because it gave your employees an opportunity to see the value of the technology and become familiar with the use of the technology before you introduced something else that was cutting edge. So it kind of phased that change a bit, to where they could welcome the remote assistance, and then you introduced this new thing, and perhaps they were a little bit more willing to consider that since they had found value in the tool already. That makes sense.

Roel Rentmeesters: Yeah. I can see a lot of possibilities using smart glasses, from parts recognition when you look at them, when you glance at them, et cetera. So I really look forward into the new technologies and possibilities that will come out using smart glasses, from a training perspective, where you explore the views and you have virtual devices, from a marketing perspective, from a sales perspective, et cetera. And I think as new technologies come out and things we can do with those glasses, people will start embracing them more and more and more. It will become part of our life and the way we work on a day to day basis. This is the beginning. We are just at the beginning of what these things can do.

Sarah Nicastro: Yeah. Yeah. Okay. Last question. And we touched on a couple of things here, in terms of you mentioned the weight of the glasses and making sure that they're comfortable, you mentioned the clarity of the view for the user, as well as the clarity of the camera for the user on the other end. What other criteria would you mention that are critical for people to have in mind as they're evaluating the wearable options that are out there?

Roel Rentmeesters: Probably the way to manipulate the glasses. The fact that you need to find an easy way to scroll, or to change apps, et cetera, specifically if these wearables will be used more using different applications, maybe to report on your call or your ticket that you're performing, et cetera. The way you be able to control and manipulate will become very important on top of the fact that they need to be very comfortable and not fall off, et cetera. Wearable on helmets, if needed, or on hats. You can see that is really coming. So if they're difficult to operate, people will not use them. That's something, for sure.

Sarah Nicastro: Right. Now, you mentioned the battery life can be a challenge. Did you find that to be pretty universal, in terms of the options you evaluated?

Roel Rentmeesters: I didn't really check that, I must admit. But there is solutions. The fact that it's HDMI, et cetera, you can use a normal power bank to continue to charge the devices. So it's not that it's a problem in the long end, but I think it's normal that the battery life... I think it's consumes a lot, and I think it's normal because of the camera and screen at the same time. Actually, we have the same with mobile phones. If you use a solution on mobile phones for quite some time, you see the battery drainage as well on the phone. So I think it's normal on the technology.

Sarah Nicastro: Yeah. It's just something to be aware of and plan for. So, that makes sense. All right. Well, thank you Roel, for coming back and talking us through this. I'm certainly excited to see how the use of Vuzix expands within the organization to the field force, and then also, as you said, as things evolve and more aspects of the technology become possible.

Roel Rentmeesters: Thank you. It was my pleasure.

Sarah Nicastro: All right. If you haven't yet had an opportunity to listen to the previous podcast we did on Munters' journey to Servitization, take a look at that on Future of Field Service, www.futureoffieldserviceref.ifs.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.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

August 12, 2020 | 20 Mins Read

Sub-Zero On the Criticality of Effective Training for Customer Experience

August 12, 2020 | 20 Mins Read

Sub-Zero On the Criticality of Effective Training for Customer Experience

Tyler Verri, Customer Service Manager - Training and Installation Strategy at Sub-Zero Group, Inc., talks with Sarah about the crucial role training plays in ensuring a positive customer experience – particularly as Sub-Zero relies on third-party providers for service.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. On today's podcast, we're going to be discussing the criticality of effective training on the customer experience. I'm excited to welcome to the podcast today, Tyler Verri, Customer Service Manager for Training and Installation Strategy at Sub-Zero Group. Tyler, welcome to the podcast.

Tyler Verri: Hi Sarah.

Sarah Nicastro: Thanks for being here. So before we dive into today's topic, tell our listeners a bit about yourself and your role at Sub-Zero.

Tyler Verri: Absolutely. So I'm Tyler Verri, I've been with Sub-Zero about 14 years. Sub-Zero Group is a manufacturer of high end residential cooking, refrigeration, and we recently got into dishwashing products. 12 years I actually spent in IT, managing a variety of teams, and the last two years I've actually been in customer service, as you mentioned, as the manager of the training and installation strategy.

Sarah Nicastro: Yeah. So, you and I had caught up prior to this and I said, "Wow, the transition from IT to customer service is an interesting one." So how have you liked it?

Tyler Verri: It's definitely been a unique path to get here. Obviously, my role in the past in IT, very focused on internal operations and support of our organization, and now I've shifted to one where I'm supporting external partners and direct contact with our customers. It's definitely been a welcome changed, it's pushed me to expand my business knowledge, and learn how we go to market, how we support our products in the field. So extremely grateful for Sub-Zero and the opportunity to develop my leadership in different forms.

Sarah Nicastro: Cool. Yeah, it is an interesting transition, but in my former role, I hit the 11 year mark, not quite 12, and it was time for a change, so it's a good time to try something different and expand horizons. So what I want to talk about first is the structure of Sub-Zero's installation and service business, because, I think, for our listeners understanding how you do those things is going to be important in framing the conversation we have around training, and what effective training entails, and how training impacts the customer experience. So Sub-Zero, for both installation and service, you leverage partner networks for both functions. So, talk our listeners through what that structure looks like.

Tyler Verri: Yeah, correct. So network is a bit unique in terms of we leverage certified third parties to provide our installation and service of our products. So our service network is a bit more defined than our installation, being we have control, we pay the service companies if they're doing warranty work for us, and we've really narrowed that down to specific service companies in very large metro markets. And they can provide, and majority of them do, sole support of the Sub-Zero Group brands. Our ultimate goal by doing this and leveraging third parties, we really want to make sure that we're giving them the most touches on our products, whether it's from an installation or a service perspective. So we really try to drive the majority of our business, for our customers, through the certified companies that we have in our network.

Sarah Nicastro: Okay, good. So you leverage third party for both installation and service functions. And in talking with the service community, one of the biggest concerns we hear when it comes to the pros and cons of relying on contingent workers or a third party workforce, is really that loss of control over the customer experience, right? So that tends to be one of the biggest hesitations in embracing that model. So at Sub-Zero, and in your role, you are relying heavily on training to preserve the customer experience. So what I want to talk about first is some of the aspects that you feel make for effective training, that therefore help companies retain some of that control.

Tyler Verri: Absolutely. I think the big thing, for us, on creating an effective training is making sure that we understand what are the needs of our partner organizations, and ensuring that we're building to meet the different learning styles. So not just creating something that is web-based when we know, some people, they can't sit in front of a computer and do something. These are technicians, they work with their hands, they want to get hands-on. So making sure that, yes, we do have some content that is web-base, engages videos, but we also want to make sure that we also are creating hands-on curriculum, forcing critical thinking, understanding what are the tools that they can leverage that we have built for them.

Tyler Verri: But then also understanding that as much as we want uniformity in our network, we want to make sure that they have autonomy to continue to fit the needs of their culture and identity as their organizations. The thing that I do find unique, we're a family-owned company, third generation, and a lot of the companies that we have partnered with, they're very similar in that manner, they're smaller scale, but they're usually family-owned, multigenerational companies, you have owner-operators, from that perspective. So I really see the ties of culture connecting that way, and it really helps us in the synergies.

Sarah Nicastro: Yeah, that makes sense. And I think that what you articulated, that balance between autonomy and uniformity is really what companies are striving to achieve. And I think that that balance is really relatable, not just for companies that are leveraging third party workers, but even companies that have a really large geographical footprint and have different divisions of their business, regions of their business that have traditionally operated fairly independently. And as organizations look to really standardized service delivery, making those, either departments, or in this case, partners, feel that we're not trying to control you and we don't want to take away all of that autonomy, but we do want to be consistent with our customer experience, and we do want to provide some level of uniformity that people can be assured to have when they have a Sub-Zero service, right? That is a really important balance. And I'm curious, what are some of the ways that you, from a communication perspective, try and strike that balance?

Tyler Verri: So communication, for us, is leveraging key partners in the field that have been vocal about what we're doing and how we're doing it, and making sure that we engage them on a reoccurring basis of, how are we performing and what are the things that you need? And we've created an advisory council that leverages both service, installation. We bring them together as a peer group because, yes, they're usually two very separate businesses in terms of how they operate. Service generally isn't doing installation, and once again, installation is not generally doing service, but they are... Ultimately the goal of providing that customer experience and aligning us from manufacturing all the way to service is key, and that's why we do bring these groups together and engage them.

Tyler Verri: How do we do it? We generally, on a yearly basis, have a partner summit. Obviously, with the current climate we live in, we've had to think differently in how do we continue to engage and get this feedback. But for us, it is tying very closely to our partners, and making sure they understand what we're doing, we understand what they're doing, and how do we all continue to march in the same direction.

Sarah Nicastro: That makes sense. So, you touched on the importance of a multi-format approach when it comes to training. And so, rather than as an organization thinking about it from the context of what's the easiest and most efficient way for us to get this information out there, you really need to be thinking about the fact that, as you mentioned, not everyone can learn the same way. Not everyone consumes information in the same way, so that multi-format approach is important. And as you said, you're looking at opportunities to leverage digital and video, hands-on, and also when possible, an in person aspect. But we also talked about in that multi-format approach, you have three tracks of training that you're focusing on. So share with our listeners what those three tracks are and why they're important.

Tyler Verri: Absolutely. Yeah, as we were looking, knowing that our partners are onboarding new employees, especially from the service and installation companies, there's turnover, there's retirements, there's a lot of things that play into the changes and growth of these organizations, and we wanted to make sure that we meet those changes. So as we were looking at how do we deploy and develop training, we developed three tracks. So we have the e-learning, which is our first and I would say our basic track, it's self-paced, you go online, it's on demand, you can take it as you need it, and we generally structure them to be about 20 minute classes. So you go in, a new employee can come on, they really can learn about Sub-Zero, Wolf, Cove culture, and do a 20 minute training onboarding them to the brands. Before they get into the technical weeds of everything, it's just, "What am I supporting?" And starting at that level.

Tyler Verri: The next is regional based training. We understand that taking technicians off the road, whether they're doing installation or service, that's taking away profit from those organizations. They're not able to go out and make money, so we really wanted to provide a training format that limits their amount of time off the road. And so we've developed a regional training spaces to really fit those major markets, where are the majority of our partners so that they can travel there, receive some of that hands-on. Especially understanding, from a regional basis, if we sell specific products in that market, we can train specific to that. Not a, everybody gets everything, because that's not successful in terms of, if you don't see the product often enough, you've wasted that individual's time.

Tyler Verri: And then finally, the immersion one, which is factory training. Bringing them back to the Sub-Zero campus in Madison, Wisconsin, immersion into the Sub-Zero culture. So that's usually multiday training, it involves at least two days of travel to get here. Madison, not a major airport, so some of those issues we run into from a travel perspective, but it's a huge commitment of time for our partners to be able to take a week off the road to getting here. But that's where once they've made that investment in the organization that they're joining, or have been a part of it for a significant amount of time, that's usually where that fits, where you come back to the factory and get indoctrinated in what we're doing and how we're doing it.

Sarah Nicastro: Okay, good. So what I want to talk about next is some of what you're covering in this training. So you had said, before we get to the technical stuff, which obviously is important so that they can be effective in the service they're providing, but before you get to that, you really want to do some training on the Sub-Zero culture, the Sub-Zero brand. And then there's the technical training, and you and I had also talked about a really heavy focus you have right now on soft skills training. So tell us about some of those areas and what type of insights you're striving to provide through the training, and then secondly, why that soft skills component is so critical.

Tyler Verri: Absolutely. Yeah, soft skills is a key component of the customer satisfaction. We've noticed, it's not just fixing the product in the customer's home, but it's also, now you have to fix the customer. They're frustrated, you have to step back and resell them why did they make the investment in the product that they did. And these individuals aren't salespeople, but they have to put on that salesperson hat of reselling why do they buy it, and the product is fixed now, but what do we need to do as we move forward. So soft skills, for us, we had been doing it and developing it regionally, and one of the things I wanted to shore up was consistency of how we deployed that. So I actually spent some time working with our sales and marketing team, and they had created a selling skills track for their dealer network a couple of years ago.

Tyler Verri: So we took the fundamentals of that training, and really transformed it into an essential skills training to fit the way that we engage with our partners. And we're actually going to be piloting soon with our partners, and it really aligns so that we have a seamless transition when a customer goes into the showroom, when they're interested in looking at getting our products, and then they work with a dealer, and next they work with the installer. And if necessary, they have to work with a service provider and receive service, we want to make sure that those experiences, being their third party individuals, are really aligned to the brand and what we're doing. So that's been a big push for me, how do we ensure that continuity all the way through the process and aligning with what have they been told upfront, and making sure it's consistent all the way through that chain.

Sarah Nicastro: So that continuity that you're striving for, whether it's from the showroom to the dealer to the install to the service, when you think about it in the context of the customer experience, what are some of the priorities in terms of that customer experience you're looking to provide all the way through? What are some of the characteristics that you focus on teaching so that the customers experience those characteristics from the showroom to the dealer to the install to the service?

Tyler Verri: For us, I think it's focusing on luxury. Our appliances are pretty expensive, and making sure that we're tying to the luxury, as well as the quality of our product. Now, everything that has a computer or technology in it, it will break down at some point. So that's where, for us, you've invested a significant amount of money, so how do we make sure that you're realizing the investment, you're understanding that the value of the product, but you're also understanding the use and care. What do you, as a customer, need to do to maintain it to ensure it's operating at the proper state, as well as all of the features and functions that are a part of the product? Because I think that's a lot of the things that are overlooked, that it's, "Well, it cooks or keeps things cold." Well, there's so much more to it, and if you don't have everybody through that process, continuing to tout the features and functions, that's where you start to break down of, "Well, it was really expensive, but it keeps things as cold as my other refrigerator that I spent half the cost on."

Sarah Nicastro: So when you think about the soft skills perspective in particular, and let's take service for example, what are some of the soft skills that you're focusing on so that when that service technician goes into a customer's home, they know to do X, Y, or Z? Or not do A, B or C, right?

Tyler Verri: For sure. Well, for the course that we've constructed, we really have them do prework before they even show up, to think about what are some of the experiences that they've had as a customer, to really put them in a frame of mind of, "As me, the customer, what would I expect?" And so we put them through that exercise. And then when they come on site, it's really understanding what their role is and making sure that they're following suit with asking specific questions, pointing them in the right direction and not, "Well, that's not my job, or I don't know who sold it to you or gave you those benefits."

Tyler Verri: So it's not placing the blame, it's understanding what's going on. And they have enough knowledge of the network to say, "Here's what I know, but I think you need more information. I can get you to a dealer or a showroom where they can provide you more tips and tricks around how you do certain things." So making sure that they really have the skills to break down the customer, to make them understand that there is a network of people out there willing to support any of the needs that they have around the products, versus, "Well, this is my only hope, is this individual, and they didn't give me what I need so now I'm done."

Sarah Nicastro: Yeah. It's an interesting conversation, thinking about how important it is to prioritize soft skills in training when you are a luxury brand, right? So I was having a conversation recently with another luxury brand, and just talking about, from a customer experience perspective, if you're selling a premium product and you're sending folks on site that maybe have really strong technical knowledge but are not polished in how to present to the customer, it's not going to give the premium or white glove experience that you want those customers to have, knowing that they've made a significant investment with your product. So it really is important. I honestly think that the correlation between a focus on soft skills and how that impacts the customer experience is an important correlation, whether it is a premium product or not, but even more so, right, when you are selling something like that. So that makes sense. So you have been leveraging a learning management system to help you keep track of and manage all of this training, so tell us a bit about that and how it's been helping you?

Tyler Verri: Absolutely. So my amazing training team spent a year developing and building out this system. We actually just rolled it out in March, and we're already starting to realize some of the value of just the speed with which we can deliver training now, and roll it out to our partners. Whether it's through all the three mediums that I mentioned, e-learnings, regional trainings, factory trainings, the ability to get that out there and have that visibility to our partners is critical. For us, the really big part that we're able to gain from this is the reporting on who's done what and when, down to the individual technician level. And we can slice and dice the data to really understand within a territory, do we have an issue with a specific product, do we need to level up some of the training, have they attended the training, but there's still issues with first call completes, what can we do, what do we need to develop?

Tyler Verri: And allowing us to continuously improve what we've developed, and or develop new content to fill some of the gaps that we're starting to notice based on what the data is telling us. In the past, it was spreadsheet upon spreadsheet and manual work, and so to do this it would take a tremendous amount of time. Now it's a few buttons, you're clicking, you're building reports, and you can provide it out to those individuals within the field, and we really have a better view of what's going on. So it's still in its infancy in what we can do, but it's been incredible to see the quick wins that we've had with getting people in, and really pushing some of our partners to make sure to sign everybody up, to get people access. Because it was amazing to see the amount of people that actually did not have access into our system and the tools that we had available to them. So, the ability to make them more efficient through this process has been great to see as well.

Sarah Nicastro: Now, do you correlate any of that data that you're getting on the training completion? And looking at how that relates to first time fix and therefore, perhaps, effectiveness of the training or what have you, do you correlate that at all to customer feedback?

Tyler Verri: Yeah. And that's one of the goals as we are now rolling it out and have better visibility. So we're creating the baseline of tying that to the customer feedback, CSAT for service, installation, first call completes, on the product that we've trained on. And then also measuring our trainers and their effectiveness, because that's been the biggest challenge of, it's a tremendous investment to build out training, to have trainers, and we want to make sure that we're proving our value and showing the worth of the team. Otherwise, it's very easy to have that cut from the budget and back to the days that we had in the past. And so that's our goal, to be able to track and trend and really show that we're moving the needle.

Sarah Nicastro: That makes sense. And I think it just gives you the insight you need to create effective training, rather than just creating something that you hope will resonate or hope will work, and throwing it out there and crossing your fingers, so that makes sense. And I think it'll be interesting to see what you find when you cross reference the insights from the learning management system with the customer satisfaction data, so that you can really start to pinpoint areas that you need to focus more on, or training that maybe you thought you created perfectly that you need to go back and look at why is this causing this reaction or what have you. So that makes a lot of sense. So the next question, Tyler, I wanted to ask is, what do you feel are the biggest missteps that companies make around training, and what advice would you provide on avoiding those?

Tyler Verri: So, few missteps? And I think I have a different idea kind of taking it from internal, obviously we're working with external partners, so some of the things that the partner organizations... For me, there's no secret. The technician of today is different than the technician was 20 or 30 years ago, especially for our industry. I mean, just the sheer number of products that we developed 20 years ago versus what we developed today, it's tremendous, and the complexity of the products is so vast. So keeping that in mind that I'm going to go back to, they don't invest enough in building training in different formats to meet the way that people learn.

Tyler Verri: Whether it's a young technician that's very used to technology that will embrace watching a YouTube type video to learn how to do it, versus you have an older technician that they want to be hands on, they don't need to hook up a computer to diagnose it, they can do it by listening and testing certain things. It's trying to find the way to navigate both of these worlds. So, for me, the biggest takeaway and misstep is making sure that you engage with your participants in training. So survey them, talk to their managers, what works, what doesn't, be flexible to their needs. And as I mentioned, the training program should encompass continuous improvement along that way to ensure that we're meeting the needs of everyone that's taking and participating in that training.

Sarah Nicastro: Yeah, that makes sense. And I think that, going back to what we just talked about with the learning management system, I don't know that I would say that it would be a misstep to not leverage something like that, but I do think that it is a significant opportunity to understand the impact your training is having. So I would think that would be an important area of focus for folks as well.

Tyler Verri: Second misstep, for me, is when times are good or you're busy, training is usually shifted to the back burner, and when it's done right it should be a part of your organization. So really making training a part of your culture, whether it's biweekly, weekly, monthly, I think it's evaluating what fits for your organization. Everybody's going to be a bit different, but showing that focus and commitment and investment to your employees and training is critical, because I think it's very cyclical of, "All right, we have time now, let's cram in a bunch of training," and it's the wrong mindset. It should be continuously learning, and in making that investment and enhancing knowledge, creating those efficiencies which ultimately should make you more money.

Sarah Nicastro: I would think there's also a psychological component to that of, if continual training as a part of the culture and ongoing learning is just something that is built in, it feels different than if all of a sudden we're going to focus on this, which means you must be doing something wrong. So we don't always do this, but now we have this focus on X because you're falling down in this area. That then gives a totally different feeling to someone than being able to bob and weave a bit with something you always consistently do, by just feeding the insights of what you feel like those folks need to focus on, rather than having those periods of not doing any training and then heavily focusing on something.

Tyler Verri: For sure. And one of the last points, I think, from a misstep is the mindset of, "Well, I provide training all the time." Only to have them leave to a competitor, or the job has high turnover so they make the bare minimum investments in training. I think it really is seek to understand why do employees leave, build a culture that can continue to keep them coming back every day. I look at it as create a pay scale or a recognition program that reinforces training, do so many classes, achieve a certain level, you get a wage increase or time off. What fits your culture and your organizations and your employees, figure out how you do that to move that training process and program forward.

Sarah Nicastro: That makes sense too. Good. All right. Good. Well, any other comments or closing thoughts?

Tyler Verri: No. I just want to say thank you, Sarah, for the opportunity to share with the community. To me, it's exciting. I'm very passionate about what can I share, the learnings that we've had here, because I learned so much from others. Whether it's the same industry or not, we're all in this together to create that customer experience that really leaves the customer saying, "Wow." And telling their friends, because that's ultimately what it's about, word of mouth, spreading that way. And I realize everybody's trying to monetize social media and all the different aspects, but it really is hearing it straight from the individual that had that experience and selling it that way, that's really been the cornerstone of our company and has driven where we're going from a customer service perspective.

Sarah Nicastro: Well, I appreciate you being here, Tyler, and sharing your perspective. I mean, that is what we're all about, so we love to hear from different folks and learn about what they're up to, how they're innovating, how they're tackling challenges. And training isn't a topic that we've discussed a whole lot, even though it's a very, very important one. So, thank you for coming on and for sharing today.

Tyler Verri: Absolutely.

Sarah Nicastro: You can find more content on training, on engagement, on customer experience by visiting us at www.futureoffieldserviceref.ifs.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. All right.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work

Lead Yourself First: Exploring the Link Between Self-Care and Service Excellence

August 5, 2020 | 29 Mins Read

Tim Baines of Aston Business School on Advanced Services Transformation

August 5, 2020 | 29 Mins Read

Tim Baines of Aston Business School on Advanced Services Transformation

Tim Baines, Professor of Operations Strategy & Executive Director of the Advanced Services Group at Aston Business School, joins Sarah for an engaging deep dive into the forces driving businesses on the journey to Servitization and outcomes-based service and the framework his group has created to help guide organizations through that journey.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, I'm excited to welcome to the podcast, Tim Baines of Aston Business School to discuss the Advanced Services Transformation. We all know that organizations are somewhere on the journey to Servitization and outcomes-based service, and we do a lot of coverage on those topics. Tim Baines is the Professor of Operations Strategy and the Executive Director of the Advanced Services Group at Aston Business School. And they do a lot of work and research on these topics that I think our listeners today are going to find incredibly valuable. Tim, thank you so much for being with us today. I appreciate you joining the podcast.

Sarah Nicastro: So, before we dig into some of the insights that you have with your research, can you tell our listeners a bit about yourself and the work that you do with the Advanced Services Group at Aston?

Tim Baines: So, my work is all about the Servitization of manufacturing. It's all about helping companies who are coming from traditional product base to compete through services and particularly advanced services. And we use the term advanced services to really represent a cluster of high value, disruptive business models that manufacturers can adopt to help them compete inside the marketplace. My work in manufacturing goes back to 25 years. I started my career working as a technician apprenticeship inside manufacturing industry, and then moved slowly but surely through business and then into academia. So, all my work has been about manufacturing operations. Our research center was created specifically to really push forward the agenda of Servitization, both in the UK and internationally.

Tim Baines: I'd like to think of us very much as like the center of gravity for both the academic and the industrial community coming together to debate, understand Servitization and move forward with this innovation.

Sarah Nicastro: That's very cool. So, you mentioned you've been in the manufacturing space for about 25 years. I've been in this role or a similar role of covering this industry for about 13. I came into this evolution about midway through your experiences, but it's been very interesting for me interviewing service leaders and manufacturing business leaders day in and day out. How this has evolved, and what these opportunities are, and really how far we've come with a common understanding of why this trend is so important and how relevant it is to the future of these businesses. And then of course, as we'll talk through today, really getting into the complexity of such change. And coming up with the plan for a successful journey.

Sarah Nicastro: So, I'm really interested to hear your perspectives today. So, I've had a look at some of the research you've done on Servitization in the Advanced Services Group. And as I mentioned to you before we kick this off, I think it's excellent. I think it's clear that it comes from a deep understanding of the industry, and it's really quite easy to understand which I think makes it very helpful for companies in charting their own path. So one of the pieces of content that I had a look at is, what the Advanced Services Group has identified as four forces behind Servitization, two of those internal and two external. So I'm hoping to start, you can talk with us about those four forces and give us an overview of what they are.

Tim Baines: Sarah, if I can, I'll just take you a bit of a step back first of all, just to comment upon some of the introduction you gave to Servitization. And if I may, almost explain why it's such an important phenomena for manufacturing businesses. And the story goes like this, that, as a university professor, as a senior professor in a top university in the UK, one of our roles is to be almost like an authority and a custodian of this knowledge upon a phenomenon. And the phenomenon that's interested me all the way through my career, is this manufacturing operations, on what does good look like? And I think it's very interesting when you think about it from the perspective of an academic. Of course, we come across a lot of very senior business leaders that are engaged with business transformation, and they're in the trenches, like they're bringing about this change.

Tim Baines: As a professor, quite often you have the luxury of taking a step back and reflecting upon the trajectory industry as followed over hundreds of years. And it's the very popular term and quite the idea of a paradigm for manufacturing. And we have coming out of Germany Industry 4.0 as a paradigm. And it might be shocking to some people to understand that not all professors subscribe to Industry 4.0 as a Fourth Paradigm for manufacturing. This is a very technological view of the evolution of industry. And there is another view, which is almost like the social changes which are taking place inside industry. It's right behind what you're seeing with Servitization.

Tim Baines: And the story goes, something like this, that, if you go back to the very birthplace of what we recognize as an irregular manufacturing now. You go back, you know what the concept of a factory, what was the world's first factory that we recognize? It was actually, Boulton and Watt's manufacturing in Birmingham, UK manufacturing steam engines. And then you have Henry Ford coming along and creating something that we recognize as mass production. And that was the paradigm. And in the 1980s, and 1990s, and the 2000, we have this concept of lean. And everybody's now thinking, "Well, what is the next thing? What are we going to do if Industry 4.0 comes out?" And Industry 4.0 impart, is part of actually, in which it's an incomplete part, because everything we've seen so far, it's been a combination of a reaction to both market forces and what you're seeing in terms of technological change.

Tim Baines: And where you are today with Servitization, it's really about a shift in our understanding of what it looks like to be a manufacturing business. Because the bottom line is, that for many industries, the model of production and consumption, make, sell, dump, that's gone. The rich carbon based business models of the past in many industries, are on a very limited timeline. What's happening, is society is moving away from the consumption of products, moving towards the consumption of service businesses. Developed economies like UK, like the States, they are service based economies. And Servitization is all about manufacturing businesses responding to the shift in the societal appetite for services over society's appetite for products. And not just services which are about repairing a product, or providing spare parts for product, but services which provide outcomes.

Tim Baines: So when you think about the big picture that we're seeing, Servitization to me is the shift towards this new emerging paradigm about what it means to be a manufacturing business. And most industries will get into that paradigm sooner or later. And when you think about the forces which are causing it to happen, it's the same forces which have shaped the paradigms for manufacturing over the past 200 years. They are the pull from society coupled with the technological innovations. Innovation takes place as the interplay between market pull and technology push. And that's what we're seeing. Manufacturing businesses and a lot of service businesses are all being caught up in this, that they might not recognize it, that's what's actually happening.

Tim Baines: So when you think about service transformation side of business, two of the big macro pressures which are determining what's going to happen, are these two sets of forces on the outside. There are others, but they're the two which are first and foremost to keep in mind. That, change is inevitable, it's going to happen, the only thing you have control over is to some extent the rate of which is going to happen. Does that start to set that context for you?

Sarah Nicastro: It's one of the best explanations of Servitization that I've ever heard. I think it's perfect. It makes total sense to me, and I think it will make absolute sense to our listeners. And I think that to your point, or at least if I'm understanding, one of the points you made is, as a business is considering how this journey applies to them specifically, it's important to make sure that their next steps are not dictated only by the technological forces, but also by those market forces.

Tim Baines: Exactly. Yeah.

Sarah Nicastro: So really understanding that social and societal aspect of, what's at a very high level driving this need for change. And I'm sure we'll talk more about this today, but I do think that that is an area where people veer off course because you have these advanced technologies and they're really exciting and they're great enablers. But if you start to go down a path of leveraging them and deploying them without a clear understanding of what those market forces are for your business, and ultimately what your customers want from you related to those outcomes and those experiences, then you're not looking at the big picture. So I think it's a great explanation and that makes total sense to me.

Tim Baines: And what you've just described, I see that in businesses around the world, and it's not a conversation where the technology is more important than customers and markets, it's a conversation as both are important, it's the meshing together. So, when we look at this change process, when you look at changes taking place inside a manufacturing business, and I'm referring to manufacturing businesses, but it's not exclusively manufacturing businesses by any means, but let's just focus on those for a moment. You've got a situation where change is going to happen either as a reaction where you are forced into, make a change because of the circumstances, or it's going to happen, because you are looking forward and you are trying to shape the future for your business.

Tim Baines: And when we look at Servitization, when we look at those businesses which have really been at the forefront of their adoption of the more advanced services, and I'm thinking about some of the cases, people like Rolls-Royce for example, it's probably the best example I can think of in terms of their development of... Well, people recognize power by the hour.

Tim Baines: When you look at somebody like Rolls-Royce, I barely manage to see it, but I understand that Rolls-Royce were pulled into this space, and they've been pulled. And a lot of businesses are looking at people like Rolls-Royce, and they're saying, "How did they do it?" Well, they got pulled into this space. But that doesn't explain how businesses should do it, because it's about how you shape the future can be informed by what people at Rolls-Royce are doing, but it's not about following their path.

Tim Baines: And it's about looking forward, understanding how technology and how markets can be combined, and how you can exploit those through these more advanced services. And the advanced services, we recognize them in various ways. Some people will talk about them as being outcome based contracts, or performance based contracts. So, I purposely used the term advanced services because I don't want people just to think about it as a contract. It's much bigger than that. It's a collection of different forms of business models, which are high value and disruptive. And really speak to the shift towards an outcome based society, that's what we're talking about. Responding to an outcome based society.

Sarah Nicastro: Yes. I had a call recently with someone who was a service leader within an organization. And he was asking me some questions around, "Well, we've deployed IOT and no one wants to buy it. None of our customers want to buy it." And I said, "Well, how are you marketing it to them?" I mean, are you telling them that you've deployed IOT, so you want them to buy it? Because one, they probably don't understand what that means. And two, it doesn't matter to them. That's a tool your company has within its arsenal to provide an outcome to your customer, but that is not the outcome, right? So we could get into a whole discussion I'm sure about different examples and whatnot.

Tim Baines: We have a separate conversation that we ought to have, which is really about the form of those business models.

Sarah Nicastro: Yes.

Tim Baines: And about how you describe those business models, and how you make sure that the language you use to describe those business models, isn't simply a replay of what it is that you do with that inspired your organization to deliver the outcome. Or it isn't overly suggestive that says that, it's always going to be a panacea, because that's not true either. So, we'll park it for the moment, maybe we should come back and speak about the business model specifically. I know you're interested today in transformation.

Sarah Nicastro: Yeah. That's a really good point, so I'm going to make a note of that and I'd love to have you back. And the other point that we should probably not dig into it in an effort to stay on track with what we've defined today is, you talked about these companies really are either going to be forced into this change, or they're going to see this opportunity and be proactive about making this change. Right? And one of the conversations we've had a lot of this year is, how COVID-19 has played a role in that first idea of some of these companies that were lagging. In either accepting that this change is a reality or they had accepted it, but they were lagging on taking action on actually embarking on this journey, have been propelled forward.

Sarah Nicastro: And I'm really interested to see over the next few years, how that plays out in a spur of progress through this journey. So I would love to talk with you about that too. What?

Tim Baines: Yeah, we should embark on that section.

Sarah Nicastro: We would be here for a few hours obviously.

Tim Baines: It's good.

Sarah Nicastro: So, I will write those two topics down and we'll have you back soon. Okay. So we talked about the need to consider both the market forces and the technological forces that are leading to this. Tell us about the other two forces that play a role here.

Tim Baines: I think the way to think about this is, when we work with a manufacturing business to try understand what's happening. First of all, you have to be quite clear, some people will talk about it as a shift from products to services. Now, we don't use our language. And the reason that we don't use it is that, we don't want to suggest to a company that it has to abandon products and production, there's a danger in that. People who are today in the production operations of a company, it can cause them anxiety. We don't need to worry about that. So we don't talk about shift, we don't talk about transition, we talk about transformation. And we'll talk about Servitization in simple terms, for a manufacturing company, building revenue from services rather than just products alone.

Tim Baines: And we're interested in a particular type of services, and these advanced services. So we're about a business which makes product looking to expand itself, not just to deliver services which support the product's condition, but to deliver services which ultimately deliver the outcome that a product enables. So we're about providing the shift from selling, gas boilers to how it is to selling kits to service. A shift from selling air conditioning units, to selling cooling as a service. From selling automobiles and cars, to selling mobility as a service. That's the shift that we're talking about. Now, when we look back, and we do quite a lot of work where we've looked at manufacturing businesses and included in our mix of manufacturing businesses, we've studied are companies that you will know, and people like Rolls-Royce, Caterpillar, Goodyear, Alstam with opening up MICS, we've done case studies in all these companies, and we've looked back at the journey they've been through and we tried to rationalize it.

Tim Baines: When you think about the contribution that the research community makes to this conversation is, it's all about providing the frameworks which help people to understand what's going on is, we providing for them the skeleton, which they can then dress them in a way which reflects their organization. We're providing the bare bones of, this is what the change looks like. So looking back, when we try and make sense of what we see, we see an organizational transformation, because that's what it is. It isn't just about selling a few services, it's about an organizational transformation because it's the organization which delivers the services, they don't just appear. So it's about an organizational transformation from production to also providing services, especially with these more advanced services in organizational transformation. The success, and the rate of that transformation is being determined by forces, which you can group into four categories.

Tim Baines: Two, we've already spoke about, the market pool, the customer's appetite for their services and the technology push. If you go to a group of customers and they really want these services, they'll pull you into this space. If you've got lots and lots of technology and it's everywhere, you're going to spot the opportunities. So, the interplay between the market pull and technology push, are very, very powerful. A set of forces all about where you are in a value network. So, if you as an organization are dealing directly with the customer, would be interested in acquiring these more advanced services from you. You're going to find it easier to gain traction and likely more successful than an organization that is much, much further down the value chain.

Tim Baines: So an organization which is perhaps developing an engine, which then goes on to a gearbox, which goes into a generator, which is sold through a distributor specified by an architect, ends up inside a building, which is rented by somebody, that becomes a more complicated situation. So, where you are in the value network affects you. Almost like culture, the conditions inside your organization. If you've got a management which is committed to this, you move faster. If you've got a management which is skeptical, you move slow. It's very interesting. Even during COVID-19, people react to change in different ways. And we have seen, one of the businesses we're working with in this space, are very... Up until recently, we're starting to incubate some of these things, there's more advanced services.

Tim Baines: COVID-19 hits, and this particular business as kind of abandoned its plans to move into services, move back to pushing boxes. And when you say, "Why?" Well, the managing director of this business, he's looking forward to his pension, he's only got another 18 months in the position. So he is making sure that his business fulfills those needs he has to make sure that his pension part is there. So, that's an indication of the internal culture inside the organization. Even people like you and I are going out there and absolutely advocates for this, and believe it, and he might even believe it in himself, or when he's thinking about his own pension part, it's a different story. So you've got these two sets of forces, which are more about the positioning of the organization, both externally and internally, which are affecting it. And what really, we think that all the shape, the rate in which an organization progresses can really be determined by those four sets of forces. Does that fit with what you've seen before?

Sarah Nicastro: Yes. I think so. And I think that, really those organizational forces are what either propel a company through or really get them stuck in the muck, you know?

Tim Baines: Yes.

Sarah Nicastro: And so, yeah. It's very interesting. Okay. So, we talked about the four forces. Now those four forces are leading companies through phases of this journey Servitization. There's four phases that you've identified, so can you tell us what those four phases are?

Tim Baines: Yeah. Okay. So, it's interesting. You can approach the conversation about this transformation from different angles. Quite often, I would actually start to talk about first and foremost, those almost like stages of organizational maturity and then think about the forces. We've spoke about the forces first and now we'll talk about stages of organizational maturity. It doesn't matter, it's just really... For people listening to us today, I guess it's just a flag at this stage that, you can think about the transformation from two different perspectives. And this stages of organizational maturity is the second phase, the second way of thinking about it. So people will come and they will say, "Okay, I'm interested in Servitization. But I don't know what it is, I don't know what type of services I might offer. Well, I need to go buy in a more senior executive. Which customers should I pilot with? How am I going to get paid for it? What investment? What will I do with technology partners? I'm going to have to have a new organization, what will I do with existing products?" They're overwhelmed. Okay.

Tim Baines: Very often when we start a conversation with people about Servitization, they're absolutely overwhelmed. They'll say all those things too. They'll typically say something like, "Should we have a separate organization for services?" And we'll say, "You might, but you don't need to worry about it yet. You can push that forward." And that's what this transformation journey is all about. It's about saying, "Look, there's lots of these decisions that you're going to need to make. A lot of decisions leading to actions." But you need not worry about all those things upfront. When you look retrospectively at the businesses which have been successful and had success in this area and map it out, you will see they'll go through four phases.

Tim Baines: And when you start to think about the decisions and actions relative to those four phases, the whole thing becomes simpler. And the four phases that typically they will go through are, the first phase of exploration, where they're thinking about whether Servitization is relevant to them, they'll be asking questions such as, "Are we're going to make any money out of it? Do we need senior management support?" Et cetera. That's this exploration phase. If a company is successful, it's exploration, it will mean that they've built up a conviction inside the company there is value in Servitization for them. Now, engagement is where companies start to experiment with different business models based around services. The whole conversation based about, what is a business model? And what's a revenue? And what's a service delivery system? It's a separate conversation to have, which we haven't got time to go in here.

Tim Baines: But the engagement phase is about unpicking what that business model looks like, going to customers, understanding pains and gains, bringing it all together, testing it, piloting it, reviewing it. And it's all about the organization demonstrating to itself that there's value in this stuff. Once the organization has really got to that stage, we've got evidence. We believe it, we can see it with evidence that there is opportunity here. Then the organization moves into scaling, and scaling as you can imagine is all about rolling out new customer value propositions, new business models in different regions. Once it gets through scaling, it then will move into a phase of exploitation. And exploitation is where it's looking for efficiencies, so it's delivery. So if you take an organization like Rolls-Royce aerospace, quite a lot of what you see at Rolls-Royce will be an exploitation phase.

Tim Baines: What's the initiatives or where the efficiencies will be about ensuring effectiveness of their value services. Whereas if you take companies that we have worked with in the past, companies that you might not be so familiar with, but we've worked with people like, Initiator and stuff like that. They're much more of this exploration phase where they're trying to see whether there's an opportunity for them in this space. But in terms of these four phases there of exploration, engagement, expansion, and exploitation, the value of thinking about it like that is, you can look at it and you can say, "There's conversations which are typical to this phase, and that's where I am. So I only need to focus on these and I'll get these things right before they're moved to that phase, and then to move to that phase, and then to move to that phase."

Tim Baines: And your progression through these phases is not really prescriptive. I wouldn’t go to a company and say, "The first thing you must do is, A then B then C." Because of course companies situations change. A framework like this is helpful to give a structure to what's going on, but it doesn't prescribe. It doesn't say, "You must do this, and you must do that, and you must do the other." Because of course, the entry points differ, companies differ. So I just said a lot there, is there anything particular that you'd like me to dig into or clarify?

Sarah Nicastro: So I think it makes sense. And I think what you mentioned at the beginning, that sense of overwhelm that companies often come to you with, this framework helps minimize or reduce that overwhelm, right? If you can say, "Here's where you are, so let's just focus on this box first." Right? And these specific steps that commonly happen in this phase, and before you worry about this end of the journey. So I think that makes sense. And I think that one of the points that I always bring up to folks is, I think this journey applies to businesses of many sizes. Obviously there's different scales, but those societal and social themes that you talked about really are trickling down from the largest companies all the way through.

Sarah Nicastro: And so when you think about that, that means that at some point, a company like Rolls-Royce has developed a team specific to, this Servitization stuff. But in some of the midsize and smaller companies, oftentimes it's someone that's leading this charge at least initially in addition to doing their "day job." Right? And so that overwhelm can be crippling to making progress because it just seems insurmountable. So I think something like these phases that talks about, like you've said, it's not prescriptive, but it's based off of interacting with a lot of different companies and observing those commonalities. It gives people some areas of focus to ease some of that overwhelm. So I think that makes good sense. Go ahead.

Tim Baines: No, I was just going to add, it was interesting, because if you look at that roadmap, that framework, and it's published in academic journals and it's on our website, et cetera. That came from this research, which observed these case studies of businesses. And I use companies like Caterpillar, and Goodyear, Rolls-Royce because you'd be familiar with them. But we also study small businesses just like you've said. And we work a lot with small businesses. Small businesses because of the committee, incredibly agile. And it's very good. So, one of the businesses we work with is a company. It's a British company, it's looking to sell its product in China, and it, well, sorry, it's not looking to sell its products in China, it's trying to break into the Chinese market. And to do so, it's saying, "Right. We're not going to try and sell rice milling machine, we're going to sell rice milling it to service." A small company, relatively sneaky, but it fits exactly what we've seen.

Tim Baines: That's one of the tests to frameworks like this is that, they have to be relevant to businesses large and small, and they help you just get this clarity about what it is that you're trying to do. I mean, some of the, I'm sorry. It's interesting when you look back at some of the management literature. So the frameworks that people use in everyday business operations, frameworks like SWOT analysis, they're just valuable, straightforward, simple frameworks. And they've been around for many years and it's that type of framework, which I think is most helpful to businesses, not something which is too convoluted, it's too complex to understand.

Sarah Nicastro: Absolutely. So I was curious to ask, Tim, right now, based on the interactions you have and what you've witnessed in the market, in those four phases, where do you see the majority of organizations today?

Tim Baines: Exploration and engagement. Absolutely. We have two businesses that work with the research center. And one is a consortium based around large businesses, and the second is a consortium based around small businesses. The large business consortium tends to have a few number of businesses, but we tend to have a more deeper intervention with those. And we do this, it's called the Advanced Services Partnership. We work with these businesses because we help them and they help us to understand the process of Servitization. And when you look at these businesses, these businesses, they're great companies to work with, because they're genuinely committed to this, and they're pushing ahead with it.

Tim Baines: And when you look at them, invariably, they're in the exploration engagement phase. And when you look at where they sit compared to their peers in the marketplace, invariably they're ahead of the game. We first started to work on Servitization, my first paper on Servitization was late 1990s. And when we started to do some of our very early research and publications in the late `90s, early 2000s, we were using this term Servitization, and the common question people would say to me is, "How'd you spell it?" And they were, "Do you spell it with a z or an s?" And everybody in the UK was trying to change it to an S. And I would stand up and say, "No, it's a z, because it's American phrase, it's an American word."

Tim Baines: I also then went into history and said, "Actually, the American language is a true representation of the old English then the quarantine." But that's a different story. So the use of z's was actually English language previous, anyway, long story. But use it with a z. And we had a whole conversation about Servitization and radius, well, this word, what does it mean?

Tim Baines: And then you say to people, it's where we're competing through services." And they say, "Oh, we do this already. We sell spare parts." And then you get into a canvass. Now, today, people don't come to me and say, "What's this thing called Servitization? How do you spell it?" We've moved beyond that. So we are in the expert, we get in, slow but surely through exploration. But they're the conversations they're having is, "What's the business model look like?" And then I'm saying, "Be careful in your mind, there's difference between business model and revenue model and service." Et cetera, et cetera.

Tim Baines: So we start to unpack that, and then we'll talk about pains and gains. So they're entering that, they've an interest in business models, but of course we're talking about a subset of business models. So they'll go and get, for example, the business model canvas, which is a great tool, but it's a very generic tool. It's like using SWOT's analysis, great tool, but it's too generic. So we're talking about the subset. And so there are tools out there which help specifically with that subset. And that's where companies are, they're poking at it. Today, of course, lots of businesses immediately are concerned about COVID and such like that. And they want to innovate the way out of it.

Tim Baines: And you're saying to them, "Yes, let's innovate. Let's innovate the business model and let's innovate the business model towards services." And that's the way to break out of it. Most businesses I would say, Sarah, their exploration, early stages of engagement.

Sarah Nicastro: Yeah. I think that makes sense. And that's very much in line with what I would see from talking with a lot of these companies as well. The one observation I had when I was looking through the framework is, while it's a much smaller sample of businesses that have reached the exploitation phase, the one thought I had that I was curious to get your thoughts on is, those companies that are leading this charge, that have worked their way through those four phases, and they have successfully reached the exploitation phase. So you mentioned some of them by name, it seems to me that this would not end, right? Like it's not, "We reached exploitation, we've crossed the finish line, let's put our feet up and have a cocktail." It would naturally revert back to exploration. Because in my mind, once companies have understood the criticality of this journey and they've experienced walking through it and going through those phases and understanding those forces and developing value propositions and successfully turning those into service models and whatnot, they would naturally continue to look for those next opportunities. Do you think that's an accurate observation?

Tim Baines: Yes, Sarah, you're exactly right. That's exactly what happens of course. If you take a step back and you see these four phases, and of course, those four phases are true of whether you're developing a service, an advanced service, or even just worrying about products. And this is the secret is that, the reason that they stack up is that one of the things that we did as a group of researchers, one of the things that's important to do is to go back to theory. Theory has to apply press amongst industrialists. Very often they'll say, "Don't give me theory type of words like in practice." And I think really what they're saying is, "Look, don't be too abstract. Make sure that what you're telling me is relevant to what I'm doing." But theory is helpful. Because theory tells us, how different variables relate to each other.

Tim Baines: Theory tells us in a very abstract way, how things change. On the pins, the model that we've talked about today is, the theory of business growth. And business growth goes through phases and often the people will scroll up the badges perhaps going through five phases of incubation. Explaining the basics by all those types of things. And then we rationalized it to whether it's four, seven, six, it doesn't matter. It's the fact that it's the business growth. And the way business growth happens is that, you start off, you go through a period of relatively smooth changes, you're starting to get to grips of what's is you really doing. And then you go through a period of very rapid, very disruptive change. Then it settles, and then you move on and there are rapids that they'd wrap around changing and then settles and move on.

Tim Baines: And this is Grey phase, the process is called punctuated equilibrium. Equilibrium punctuated by these... And you go through, then move on. And that's the basic theory, it's equivalent to Einstein's theory of relativity, it was a social science theory. That's his basic theory, which from independence has changed. And that's what you're actually seeing. You're seeing the theory explain it. So when you say to me, "Tim, is this model true of all? When we think about, a business it's moved, it's developed, it's exploiting these things." Yes. And then it'll move and we'll think about the next one. Yes. And it moves off what's called the services staircase. Separate conversation that fits with our business model conversation.

Tim Baines: It moves up that staircase. However, it does make an assumption there. And the assumption is that, the business doesn't forget, and businesses do forget. If you go to some businesses who are actually advanced in this space, and you say, "How did you get here?" They've forgotten. They've got some excellent examples of more advanced services, but they're in isolation. It was created because we had a particular customer, who pulls into that space, we formed a group of people, We pulled this all together, we made it a success. We've been running it for 10 years and all those people there have now retired. Businesses do forget. So I think it's important to keep that in mind, but you are right. Servitization is innovation. We gave this name Servitization to describe the innovation of an organization. It comes right the way back to where we started our conversation today.

Tim Baines: The root of what we're talking about, is coming up with a picture of what an organization in our world, the manufacturing organization looks like to compete in the world in the 21st century. We know what an organization looked like, that manufactured model T-Fords. We know what the organization looked like, which manufactured steam engines. What does the organization look like that manufacturers services? That's the question that you dealing with, with all this?

Sarah Nicastro: Well, Tim, I could ask you many, many more questions today, but I know we're almost out of time. And so, I would love to have you back soon. I think there's at least the two conversations we mentioned earlier to dig into, and I also think it would be interesting to have a conversation around, what are the common missteps? Where do companies veer off course? But let's have you back and dig into those if you would be so kind. And I also wanted you to tell our listeners, the Advanced Services Group is having a World Servitization Conference in September, which I'll be a part of, and I'm so excited for. So, can you tell folks a bit about that and where they can sign up and find some information?

Tim Baines: Yeah. Well, first of all, Sarah, thank you for the conversation today. I too have enjoyed it, thank you. Right. So, part of our activity at Aston is very much about cultivating international community around Servitization, academic community, and practitioner community. And for the past 10 years, we have run something called the Spring Servitization Conference, which is a prestigious academic conference, research conference in this space. And that's moved around Europe and it's done extremely well. This year, the academic community has a great platform for having a conversation on Servitization. But the industrial community doesn't. The industrial community doesn't have the same platform, which is, how can I put it? Is a neutral platform where people can come along and see what manufacturers that are leading the space are doing, learn from them, and not feel pressurized necessarily to buy something or to take on some consulting or whatever.

Tim Baines: So we wanted to create this platform for the industrialists to have an equivalent conversation to the academics. So we've created the World Servitization Convention, it's on the basis of what we've done before. This year, of course it's virtual, but it's been dealt with a lot of care. We've gone out and acquired a platform, which gives us an experience which is as close to the experience that you would have as if going to a physical event. So we've got a whole platform of keynote speakers and we've got 25 businesses exhibiting what it is that they're doing in this space. And there are leaders that are executives will be there, and they'll be talking about, their shift, their business models, there'll be time just to have a conversation with them. And it's going to be as close to having a physical exhibition as we can get using digital technologies.

Tim Baines: So it's in September, we'll post you the links there after this. And if people would like to come along to that, it's targeted manufacturing community, and IFS is sponsoring you this, and yeah. We're delighted they're supporting it. So if anybody listening to this podcast would like to come along, send your link, register for it, just come and listen to people that are actually doing that. The purpose is all about forming the industrial community to advance Servitization.

Sarah Nicastro: I'm looking forward to it, I really am. We'll make sure we post the link in the show notes, which will be on the podcast episode page. So, we'll make sure we do that. Tim, it was a pleasure having you today, I really appreciate your time and I look forward to having you back very soon. So, thank you again.

Tim Baines: Thank you, Sarah. Bye. Bye.

Sarah Nicastro: You can find more content on Servitization and other topics by visiting us at www.futureoffieldserviceref.ifs.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.

Stay Connected

Most Recent

From Combat Pilot to the Corporate World: How the Military Shaped My Leadership (& Considerations for Recruiting Military Talent)

Mental Health Matters: Resources to Support Wellbeing at Work