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December 1, 2021 | 25 Mins Read

Slowing Down to Speed Up

December 1, 2021 | 25 Mins Read

Slowing Down to Speed Up

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Eduardo Bonefont, VP of Life Sciences Technical Services at BD, talks with Sarah about the need to balance short term priorities with long term potential and shares an exercise in “pausing” that BD did to set the company up for better success.

November 24, 2021 | 27 Mins Read

The Impact of Employee-Centric Management

November 24, 2021 | 27 Mins Read

The Impact of Employee-Centric Management

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Dr. Jack W. Wiley, who is recognized internationally for pioneering research linking employee work attitudes to measures of organizational success, joins Sarah to talk about his latest research and book around the traits and benefits of employee-centric management.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we are going to be talking about the impact of employee-centric management. I'm excited to be joined today by Dr. Jack Wiley, who is recognized internationally for pioneering research linking employee work attitudes to measures of organizational success. Most recently, Dr. Wiley was professor of psychology for Manchester University, where he founded the undergraduate program in industrial organizational psychology. He currently serves as the chief scientific officer at Engage2Excel, and as the president and CEO of both Jack Wiley Consulting and Employee Centricity. That's a pretty big intro. Jack, welcome to the Future of Field Service podcast.

Jack Wiley: Thanks Sarah. I do stay busy. Yes, I do.

Sarah Nicastro: Yes, I can tell, and I like that. I prefer to stay busy myself. Excellent. Before we dig into our content today, is there anything you want to add, tell the audience a bit more about yourself, your background, anything you want to share?

Jack Wiley: Well, I think you've hit it nicely. My background is largely in the field of organizational psychology. I've worked both as an internal consultant to organizations and also spent most of my career as an external consultant. I've had the privilege of working in a variety of different countries. I've worked with leadership teams in 25 countries around the world. So, my research and my perspective really attempts to bring in a bit more of an international flavor, if you will.

Sarah Nicastro: Okay, great. Well, we're excited to have you here. I love the idea of this topic. So, the content that Jack is going to share with us here today is related to a new book that he has out called The Employee-Centric Manager, and he is going to give us a sneak peek into some of the content of that book today and have a discussion about that topic. I like it already, Jack, because we talk a lot here on this podcast about how employee engagement and employee satisfaction relates so significantly and directly to customer experience and customer satisfaction. And we always caution folks not to focus so narrowly on the customer experience that they forget to consider the employee experience. So, excited to hear what you have to say today.

Sarah Nicastro: Before we talk about some of the points and advice that you provide in the book, let's first touch on some of the dynamics that are contributing to the need for managers to become more employee-centric than perhaps they have been historically.

Jack Wiley: Right. Well, I think we're all aware of the fact that over the last 18 months, the workplace dynamic has changed and probably changed in some ways that will be more or less forever going forward. I think some of these changes are simply going to be changes that we're going to be dealing with in our careers as we move forward. So, that represents an unprecedented challenge for managers. They have a lot of additional issues that they need to be attending with, especially today in the United States, we saw the August numbers show that 4.4 million workers quit. A recent survey that I saw indicated about 65% of employees are actually considering leaving their current job.

Jack Wiley: Regardless of where you might be on the issue of vaccine mandates, we have two to 8% of workers who fall under the mandate who indicate that they're not interested or certainly not willing at least at this point to take the vaccine. So, all of this creates some tremendous challenges for managers because they're the ones at the end of the day who have to deliver the goods and services that the organization is committed to. They're not going to make that happen unless they have proper staffing.

Jack Wiley: And any of us who've been out and about in any kind of organization where we've gone to get goods and services, we know that supply chain bottlenecks and the understaffing of service organizations represents the real challenge for managers today.

Sarah Nicastro: Now, what about ... I'm curious your thoughts as well. Certainly, the pandemic has had an incredible impact on all of our working lives and particularly the way that managers need to consider the manager employee relationship. I'm also curious your opinion on the role that generational changes in the workforce has on this topic. So the need to become more employee-centric.

Jack Wiley: Right. I think that's a good question. I mean, we have really the cross of what are the current circumstances, as well as what are the generational differences? So when we think about the current circumstances, employees have indicated that there are things they want more of from their manager now during the course of the pandemic. And that really shows up in three ways. One is, and especially for employees who've gone remote, been in an office environment, now working remotely, possibly going back, perhaps they already have. We're going to end up with probably a hybrid work environment as the most common model.

Jack Wiley: Employees are saying under those conditions, they need more support from their managers, particularly if they're dealing with, if you will, fewer workers to accomplish the same amount of work, if they're working at home and under certain circumstances, they may have childcare situations that weren't like they were before, that place is greater demand on them, maybe the schooling of their children. So they want more support from their managers in terms of just managing the workload.

Jack Wiley: Secondly, as they think about going back to work, they also want more support around safety and their own physical security. Safety, of course, in relation to the pandemic, they want to make sure that the protocols are in place, that the value system really enforces safety in terms of their physical wellbeing. But the third thing is really flexibility. They want more flexibility in how they go about their work. So, they're looking for their managers to provide them with more autonomy. Help me understand what the work is you want accomplished, but give me more room to decide how I'm going to go about doing that myself.

Jack Wiley: Now, in relation to generational differences, I would say that in many cases, the differences are maybe lesser than the popular press makes them out to be, but there are some important generational differences. For example, for the older generation, they're very concerned about making sure that their pay and their income stays the same because they're preparing for retirement. They also want to make sure that they want work for managers who have high integrity.

Jack Wiley: For the younger generation, the emphasis is a little bit more on the values of the organization reflecting my personal values in terms of matching with the vision of the organization and how it operates and its culture, but also the opportunities for growth and development. So, getting into an organization, learning how things get done, but then being able to move up quickly. That's going to happen more readily in organizations that are growing. Everybody wants to be on a winning team and especially younger workers, because that creates more of a draft upward in terms of the possibilities they have with their own career.

Sarah Nicastro: That makes sense. So, before we get into some of the advice on how to be an employee-centric manager, what can you share related to the evidence that this approach is effective?

Jack Wiley: Right. So, I've had the opportunity over the last couple of years to measure the extent to which managers have actually displayed the attributes associated with being an employee-centric manager. What I found is, because I have such a large database, I have ratings on over 10,000 managers on the extent to which they display these attributes. That allows me to actually categorize managers as either top rated employee-centric managers, middle rated managers, or bottom rated employee-centric managers.

Jack Wiley: Then I've looked at the impact that has on the experience of employees, and especially looking at employee engagement index scores, interpersonal team chemistry scores, and then very importantly, team performance scores. What I found is that there is an overwhelming significant positive correlation. The greater the extent to which managers display these attribute that are important to employees, the much higher the employee engagement index scores are, much more our teams likely to say that we operate cohesively. There's good interpersonal team chemistry, and very importantly, team performance scores also pretty much are at the top of the potential for managers who are top rated in the display of these attributes.

Jack Wiley: Middle rated managers do okay, but bottom rated managers, their scores on all three of those metrics, employee engagement, team cohesion and team performance, are really in the toilet, so to speak. That forms your validity. That's what a scientist would look for, do measures on this particular set of attributes actually predict outcomes that organizations are interested in. That's what we call validity.

Sarah Nicastro: Right. Okay. Okay. So in the book you discuss, I believe it's five behaviors, one skill and two values that are imperative to an employee-centric approach. Now, obviously we won't have time to get into all eight of those things in great detail here, plus we want people to read the book. Right? But I'm hoping you can, at least, give us a synopsis of those things and a feel for what they are and what you're covering in greater detail in the book itself. So maybe we can start with the behaviors.

Jack Wiley: Okay. That's a great place to start. In fact, I would back up just a little bit from that. Because I think there are a couple of things I want to emphasize. There are an abundance of leadership theories out there today. Many of which are very good, have been very helpful and are well regarded. But my approach here, Sarah, was to actually rely entirely upon the voice of the employee to inform me about what they most wanted in an immediate manager. That was really the fundamental question that I went out with. Tell me what you most want from your immediate boss.

Jack Wiley: And I went to representative samples of employees in 27 countries around the world. These countries tended to be the largest economies, but I didn't want a US-centric only answer to this question. I wanted basically a universal answer. These countries to which I went in a representative way, present about 85% of the world's gross domestic products. So, my conclusions are fundamentally universal. So with that as a background, the five behaviors are really pretty straightforward. And by behaviors we mean things that managers do to influence or react to their subordinate employees.

Jack Wiley: Number one, they want to work for managers who show support and understanding. They're accessible, they're available, they're considerate, they listen to employees and they respond. That's showing support and understanding. Number two, providing recognition. This is about the psychological appreciation. "Thank you for a job well done. I'm not going to take credit for your good work, I'm going to make sure you're in the spotlight up the chain of command."

Jack Wiley: Thirdly, and somewhat uniquely from other leadership theories, employees said that they wanted to be treated with dignity and respect. And so if we stop to think about that, that's really fundamentally the principle of reciprocity. Do unto others as you would have them do unto you. We find that tenant in most major religions around the world. Certainly in Christianity, we find that. So the whole idea is, I as an employee, am showing up at work to do a good job, trust me, trust my working style, treat me with dignity by asking my opinion about how we should go about doing things. That what people mean when they say dignity and respect.

Jack Wiley: The fourth is very task-oriented, communicate clear performance expectations, define success for me. I'm eager to get the job done, establish the priorities, give me some useful feedback, make sure I'm on the right course, but clearly communicate what performance you expect of me. Then finally, among the five behaviors would be, rewarding performance contributions. I bring my knowledge, my skills, my abilities, I lay it on the line. In return, I expect to be compensated fairly. But what employees said was it wasn't just about the pocketbook. Certainly, they wanted fair compensation, but they also wanted the opportunity for training and development and career advancement. That also is a form of compensation for employees. So the five behaviors are those.

Sarah Nicastro: Okay. All right. It's very interesting. I think what's interesting to me is the way they all sound very, in some ways, simple and fair, and certainly well-deserved by anyone that is committed to doing a good job in their role or their career. But if there's one thing I've learned over 15 years of interviewing folks, it's often in the simplest things where the most challenges happen. Right? So, let's talk then about the skill.

Jack Wiley: All right. The skill, interestingly enough is a lot like a behavior. I mean, a skill actually is a behavior. It's just a behavior that you're very good at, and you're good at it because you've practiced at it. you've learned from your past experiences, et cetera. I played high school and college basketball, free throws is a skill. You have to practice at it to get better. You're not going to step up to the line and hit 80% or 90% of your free throws if you don't practice. The same thing is true in organization settings with this particular skill, problem solving and decision making.

Jack Wiley: And the reason that's important to employees that they work for a manager who's good at doing that is because that knocks down barriers to getting the job done. It knocks down obstacles to serving customers, it puts people in a position to be more successful, especially if their manager can make decisions in a timely way that takes into consideration the implications of those decisions, so that there won't be blow back onto the work group. And also, employees don't expect their manager to get everything perfectly right. But what they do expect is that their manager will learn from a past experience, use that experience to become even better in the future.

Jack Wiley: So that's what they mean by problem solving decision making, be good at that, don't dither, don't waste time, don't drag things out, make the best decision you can and help us get on with the work that you've assigned us to do.

Sarah Nicastro: Yeah. Okay. What about the values?

Jack Wiley: Yeah. The two values are interesting because when it's all said and done, what I found was that, one fifth of the world's workforce identified one of these two values as what they most wanted. By values, I'm talking about personal standard of conduct. What are the personal standards of behavior that the manager brings to the workplace and is known for? And what employees said was, number one, we want our manager to be fair and just. So they're going to make equitable decisions, they're going to be objective, they're not going to play favorites. They're going to honor employees with fairness and justice and decision making.

Jack Wiley: The second is similar, but still different. It's being honest and trustworthy. So this is about the issue of walking the talk, doing what you say you're going to do, show up in and operate in an ethical way. Be transparent, don't say one thing to one group and another thing that's different to another group. Be honest under all conditions. As I said, one out of five employees worldwide identified one of those two values as what was most important for them. That tells me that there's a deficit in how these values show up in the workforce around the world today.

Sarah Nicastro: Yeah. Okay. All right. So here's a couple of questions for you.

Jack Wiley: Sure.

Sarah Nicastro: The first is, with some behaviors and skills and values that all seem very fair and attainable, where do you think the struggle comes in for those that are not in that top tier?

Jack Wiley: Yeah. I think there are probably two or three sources of the struggle. That's a great question. I think part of the struggle is in awareness. Interestingly enough, now this is U.S. specific data. But about a year ago, I asked 1,000 managers in the United States. By the way, there are 24 million managers in the United States who have people management responsibilities. So we're talking about a very large population. I asked a representative sample of 1000 of those managers to tell me what they thought was the most important thing that employees wanted from them.

Jack Wiley: Now, I won't go through all of the results, but let's talk about two areas in particular. Support and understanding. About 25% of employees in the United States would say that that's the number one thing they want from their manager, most important. Only 16% of managers identified that as the most important one. More astoundingly, 13% of employees said that recognition was what they most wanted from employees. Only 1% of managers identified recognition as what employees most want. So, that's one form of disconnect.

Jack Wiley: Now, to be sure, there are a number of those attributes that managers were pretty spot on in terms of expecting or understanding the employees needed from them. But there are also some pretty big disconnects. That's part one. Another part that I find very interesting is that, and organizational psychologists have known this for a long time, managers tend to have an inflated view of how successful they are as managers. So, I actually had managers rate themselves on some key dimensions like overall work management, people management, overall effectiveness, and I had employees rate managers on those same dimensions.

Jack Wiley: What I found was, on a scale of one to five, managers consistently rated themselves about 20% more effective than employees did. We have tons of research in our field that show that upward feedback measurement systems are quite accurate, employee views of how their managers perform are probably the most valid and reliable views of managerial performance that we have, but managers are overestimating how well they're performing.

Jack Wiley: The third thing I found out was, I asked people managers, how much training and development they had received as a people manager? This also is somewhat astounding, but what I found was, over 70% of managers in the United States, and I'm talking about all industries, all different levels of management, smaller organizations, larger organizations, over 70% of managers had either had no training in people management or the training they had received was limited to no more than four hours. And so, when we consider the centrality of people management responsibilities in the context of the overall role of the manager, and over 70% had no more than four hours at best, also I think is part of the problem.

Jack Wiley: Because we know that through awareness and through skill development and through reinforcement, managers can show up in the ways that employees most want them to show up. But if they're not aware of it, if they've got a misunderstanding of what's important, if they've got an inflated view of their own success, then I think these are all answers to the question you post.

Sarah Nicastro: I guess I do agree with you that if those things are addressed, those scores should raise and we should see more managers and not top tier. What concerns me is the people at the very bottom. Right? And some of the reasons that that could be, right, so it could be the inflated view of their own methods and their success. It could be just a lack of training or skill, but I think sometimes people end up in those positions that truly shouldn't be, and either cannot or would not raise to the level that businesses would like them to, or employees need them to. Do you agree with that, or do you think that everyone, even at the bottom tier has what it takes to be able to adopt these different behaviors skill and values and perform the way that you're prescribing in the book?

Jack Wiley: Yeah. I think that's another great question. I think most people do, but I couldn't go on record saying that all of them are capable of performing the way an employee-centric manager should according to the definition provided by subordinate employees. When you think about values, sometimes values are hard to change. If people don't have a historical record of being honest and trustworthy or being fair and just, you can help them understand the importance of this, but they really may have to make some pretty substantial changes in their orientation toward the workplace and toward others.

Jack Wiley: Now, when it comes to some of the behaviors, can I become better at listening? Can I become better at providing recognition? Can I do a better job of communicating clear performance expectations? I think things like this, you can build skill around, but they're going to be limited. If they don't have the cognitive mental ability, if they don't have the intelligence, they're going to be limited in their problem solving decision making skills. So I think underneath your question is also the notion that we can do pre-hire assessments of candidates for managerial positions to see whether or not they have the right personality attributes, whether they have the right amount of intelligence, if they have the experience, the past experience that would allow them to be successful.

Jack Wiley: But I fear a lot of organizations don't use pre-hire assessments very effectively. They don't use the behavioral based interviewing that we would recommend for how you determine whether or not someone is really qualified to move into first level supervision, let alone higher levels of managerial responsibility.

Sarah Nicastro: Yeah. I also think there's an issue of, it's one thing to tackle this from a new hire perspective, it's another thing to tackle it if you're looking at all of the incumbent talent and where they rank and what the deficiencies are, and what needs to be done to address it. I think I do feel that the values part of this is the most important in terms of coachability. Right? If that is there, right, the behaviors can be taught. If that's lacking, that's a problem in and of itself.

Sarah Nicastro: I was curious, Jack, if you could talk a little bit about ... and maybe this is an unfair question, but have you noticed, or do you surmise that there's a correlation here to where those leaders ranked and what the culture of the business is? Because to me, this seems that while there would certainly be some individual variation, it also seems like something that has a trickle-down effect in the sense that, if the company culture is one that those at the top are employee-centric, it would be more likely for the managers among the ranks to have some of those behaviors and skills, et cetera. Do you see any correlation there? Exactly.

Jack Wiley: No, I am totally on board with that assertion. If we think about the culture of an organization, typically it's tied back, especially in younger organizations to the behavior of founders of the organization. If you want to assess the culture of an organization, the two things that I think you look for, first of all, is the behavior that's modeled by people at the top of the house. Secondly, to understand how rewards are allocated, because the behavior of the people at the top of the house and how rewards within the organization are allocated, are going to provide tremendous insight into the culture of the organization.

Jack Wiley: So, if you've got people at the top who aren't modeling the kind of behavior associated with the employee-centric managers, that's going to be a deterrent to displaying those behaviors at lower levels. Obviously it doesn't make it impossible, but you won't see it as rewarded or valued by higher level executives when they look at and evaluate the performance of lower level managers. So, absolutely I am on board with culture being extremely important as a variable that determines a behavior of managers.

Jack Wiley: Now, at some point in time, employees are going to do their own assessment. Managerial employees are going to say, "Either I fit with this culture or I don't, and if I've got the option, I'm going to vacate my position and try to find an organization where I believe that's a better fit for me." When you think about what organizations can do, which is the flip side of this, they can do a better job of pre-hire assessment. They can encourage and put the spotlight on managers at higher levels who model the right kind of behavior.

Jack Wiley: They can implement upward feedback systems to get a readout on how managers are doing against these eight attributes. There are a number of things that they can do. And just like your question suggested, if they're rewarding these behaviors at lower levels, they're much more likely to see those behaviors displayed.

Sarah Nicastro: Yeah. That was going to be my next question, which is, for an individual manager, if you wanted to learn what these attributes are and reflect on whether or not you exemplify them, et cetera, you can read the book and get a sense of that. What I was going to ask about is what you just commented on, which is, the organization's responsibility to drive employee-centric management as part of its culture and what are some of the things that those companies can do or implement or track to move this in the right direction.

Jack Wiley: Right. It is kind of interesting. Let me tie in some other research that I've done that's related to this. When we think about a manager's performance, and if you're a superior to a particular manager and you're responsible for managing their performance and evaluating that performance, what are the variables that you consider? Well, you might be considering the engagement of employees who report to that manager, you might consider whether or not it's a functional cohesive team with good interpersonal chemistry. Certainly, you're going to look at whatever measures of team performance you have.

Jack Wiley: Those are all going to be contributors to your determination of whether or not that manager is doing a good job. Well, the fact of the matter is, that what I've been able to demonstrate is that if we can measure the attributes of managers on these employee-centric managerial attributes, if I know the scores on those attributes, I can actually predict two thirds of what their overall rating is. Now, there are other things that are going to filter in and affect that rating, but basically I can explain or account for two thirds of a manager's overall performance rating based on these eight attributes.

Jack Wiley: So, what's the relevance of that? Well, the relevance of that is that if we want to help managers become more effective in their display of these attributes, and more importantly, in their overall performance levels, then we can help them understand better how to demonstrate these attributes, because that becomes the pathway to achieving a higher performance rating as a subordinate manager.

Jack Wiley: The other thing that I found out, we do this through statistical regression analysis. So we create an equation that predicts an outcome. Well, variables enter at different levels. The three variables that most impact a manager's overall performance rating boil down to just three things, obviously. The first is to listen to employees. If you're seen as a good listener of employees, that's number one. Number two, to be good at problem solving, decision making. So make decisions quickly, make good decisions, bust through obstacles to getting the work done. But then thirdly, providing employees with recognition.

Jack Wiley: Yeah, you have to be smart and experienced to make better decisions, but you have to be aware of the importance of listening and of providing recognition. Really, anyone should be able to do that with a proper awareness and maybe some skill building. So those three things alone can really drive how effectively the manager is perceived by those employees who report into that manager. Again, when we think about overall performance, we can largely explain how a manager's going to be rated on overall performance by taking a look at how they're evaluated on these eight attributes of the employee-centric manager.

Sarah Nicastro: I don't know if you noticed me grinning a little bit, but I was just thinking, when you were talking about decision making, you have to be experienced, you also have to be empowered. Right? I mean, it's just interesting to me how this ties back to the overall company culture. Right? And whether organizations want to foster and nurture this type of behavior or whether they are intentionally or subconsciously doing things that are stifling it. Right? And so, it's just really interesting how those things intersect.

Sarah Nicastro: And to your point, why an individual manager at times gets to a crossroads where they need to question, "Am I at the right place? Am I in an environment that I can be true to the type of leader that I want to be?" Right? And if not, they obviously know they need to go elsewhere. But I think that it's going to become more and more important for companies to move in in this direction overall with the culture and the top leadership.

Jack Wiley: I think you're absolutely right, Sarah. I mean, think about it this way. If I'm a manager of subordinate employees, but my manager isn't treating me with dignity and respect, isn't showing respect for my thoughts and opinions, never ask for my input, if my manager hasn't provided me with clear performance expectations that defines success and gives me permission to pursue that with a sense of autonomy, then it's going to be really difficult for me to show up as a manager to my employees in a way that allows me the full range of possibilities in terms of making good decisions.

Jack Wiley: I may be delayed in my decision making, I may be steered to make a decision that I don't think is the right decision, but I have to agree to it because my boss is demanding it, and that boss at the higher level, really isn't delegating authority to the lower-level manager in a way that really demonstrates confidence in that manager's ability. So that's going to be a stifling factor.

Sarah Nicastro: Yeah, it would be interesting, I know we don't have time for this today, but there's a lot of things at play. When you talk to organizations and you examine some of the different layers of change that are going on in leadership and company culture, I think you spoke earlier about, when we talked about recognition, this idea of people being rewarded or compensated based on outcomes, not output, that type of mentality. There's just so many things going on that I think are really interesting about how the landscape of leadership and company culture is evolving, and I think that it's a really interesting area to talk about.

Jack Wiley: Well, it is, and of course, some of the consequences, we've talked about consequences that are measurable by, let's say attitude surveys, like employee engagement, or even team cohesion. But then there are some hard measures too, that gets back to quit rates and absenteeism and other forms of acting out. If employees see that this really isn't a good fit, managers aren't showing up the way they should. They're not being sensitive. They're placing more demands with fewer resources. All of this creates a sense of stress. I mean, that is the definition of stress.

Jack Wiley: When the demands placed on me outstrip the resources available to me to accomplish what it is I'm asked to do, I'm going to consider myself to be stressed, and over time that's ultimately what leads to burnout. At some point in time, we look at work life balance, we look at other things that affect the family. People end up making decisions that I would be better off exiting this organization and going to work for another organization.

Jack Wiley: But what that means for the company that experiences that regrettable turnover is now they've got to replace that employee. And if that employee is effective, if they're knowledge worker who's performing at a high level, the estimates are that it's going to be the replacement costs to bring someone new into an acceptable level of performance, is roughly approximate to the annual salary of the departing employee. So when we think about what the costs are for ineffective management, it's not just in poor results to a work experience survey or lower employee engagement index scores. There are some real costs associated with absenteeism, with sickness, with decisions to leave an organization and the trailing costs that those represent.

Jack Wiley: So, the more that we can quantify these things and help leaders of organizations understand how they might be really spilling money unnecessarily because of ineffective management, then we begin to get their attention, and open up doors or avenues of thinking about how these things can be managed much more effectively and in a much more cost-effective way as well.

Sarah Nicastro: Yeah. I think acceptance of responsibility. Right? I mean, I think that's one of the things when I keep coming back to the overall company culture, I think it's because it's very easy to point fingers at an individual manager and say, "Well, they're not doing their job." Right? In some cases in that bottom tier, that's why I brought up, can they be coached up? Some probably can, some probably can't. So, it's not to disregard the role of the individual, but I think a company has a responsibility to also consider how the environment of the organization is impacting that performance or not. Right? And look at what those things are.

Sarah Nicastro: The other thing is, when you think of the impact of one poor manager and people leaving, there was two things I wanted to say, you can calculate the cost of replacement. What's impossible to calculate is the opportunity cost. That person that left the organization, you don't know what they would've gone on to do or contribute. Right? So, you don't know what damage you're doing by just allowing this to persist.

Sarah Nicastro: A lot of times, I attended a web event a few weeks ago, and it was a group of folks talking about being gaslighted by manage and the vast majority, if not all of the people that were contributing to the conversation said, yes, they've experienced this, and they just left. They didn't fight back, they didn't bring it up. They didn't often even give a reason as to why they were moving on. Right? Because they don't have hope that the company will handle it appropriately. So they just concede and go somewhere else, to your point. Right? That is very unfortunate.

Jack Wiley: Right? So, an additional cost then more generally in the place of operation of that business is their employee value proposition, and the brand of the employer. It becomes diminished, it becomes hurt when there's a continual flow of people exiting the organization because of a poor experience, whether it's with an individual manager or managers more generally who aren't well trained and aren't reinforced and rewarded for the right kinds of behavior and the right approach to managing others. It's quite unfortunate, but it can be adjusted if there's a willingness at the top to take the actions necessary.

Jack Wiley: Now, to your point, if you think about this, if an organization were to engage in assessing their managers up and down, the totality of that would really provide them with a training needs analysis of what we need to do differently within this organization to reflect the attributes of the employee-centric manager, which going back to a point you made earlier, we know the validity of the model because of what it predicts in terms of outcomes. So this is a pathway to greater success, but sometimes that pathway starts with creating an understanding of where you are right now, so that you can figure out what it is the actions are that you need to take in order to get better.

Jack Wiley: But again, that presumes a certain level of enlightenment and belief in employees and value in employees so that you're creating the right kind of circumstance for them to excel at their work, to want to stay where they are, to be enthused, to provide that higher level of discretionary effort that every employer would want from their employees.

Sarah Nicastro: Absolutely. Very interesting stuff, Jack. I appreciate you coming on and talking about this. Let folks know where they can find the book.

Jack Wiley: Right. You mentioned early on that one of my roles is the chief scientific officer for Engage2Excel. So you can go to the Engage2Excel website. Engage2 as in to the number, engage2excel.com. There are a number of resources there that you can access, but certainly you can gain access to ordering my book. The other way in which you can do that right now is to go to my website at www.employeecentricity.com, and that will show you how you can order the book. Now, in the near future, possibly by the time this is published, we'll be up and running on Amazon as well. Most of us know how that works, but look for The Employee Centric Manager.

Sarah Nicastro: Okay, excellent. I'll make sure the links are in the show notes, and really appreciate you coming and spending some time with me today.

Jack Wiley: Thanks for the invitation and thanks for the great questions. Really appreciate.

Sarah Nicastro: Absolutely. You can find more by visiting us at 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 at ifs.com. As always, thank you for listening.

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November 17, 2021 | 27 Mins Read

The Myths and Truths of As-a-Service with Kevin Bowers of TSIA

November 17, 2021 | 27 Mins Read

The Myths and Truths of As-a-Service with Kevin Bowers of TSIA

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Kevin Bowers, Director of Field Services Research at TSIA (Technology & Services Industry Association) joins Sarah for a chat about some of the biggest misperceptions, thrown around terms, and doubts about As-A-Service as well as a discussion around why this journey is so important to embrace and educate ourselves on.

Sarah Nicastro: Welcome to The Future of Field Service Podcast. I'm your host, Sarah Nicastro. Excited to welcome a special guest here with me today, Kevin Bowers, director of field services research at TSIA. Kevin, welcome to The Future of Field Service Podcast.

Kevin Bowers: Well, thank you, Sarah. How are you today?

Sarah Nicastro: I'm doing well. How are you?

Kevin Bowers: I'm great.

Sarah Nicastro: Awesome. So some of you probably know Kevin quite well from the research that he does and leads at TSIA and we'll talk about that a little bit more in case there are any folks that are not already plugged into that, but Kevin recently wrote a column about as a service. And I came across that on LinkedIn and I thought I really love the idea of industry folks collaborating together to improve understanding, elevate awareness, et cetera. So I asked Kevin if he would want to come on and talk about some of the myths and truths, misperceptions, and realities that both of us are seeing related to the as a service conversation. So that's what we're going to do here today. So Kevin, before we get into the nitty gritty, tell our listeners a little bit more about yourself.

Kevin Bowers: Okay, well, we'll start with the important stuff. I'm a husband, father of six. Fun fact. I'm fluent in Japanese. I spent many years in my teen years living there and I like cooking on my big green egg in my free time all year round.

Sarah Nicastro: Nice.

Kevin Bowers: But then professional side of that coin, as you said, I'm the director of field service research at TSIA or the Technology & Services Industry Association. We're a for-profit research institute where we do a lot of deep operational benchmarking to help industrial equipment healthcare enterprise IT companies increase their revenue and optimize their profits by using fact based business frameworks and best practices. And prior to TSIA, I spent 20 years in the industrial equipment arena, specifically machine tools here in Chicago, where I was in operational roles and then the last 10 years running service parts training and contact centers. So that's how I started my career in spare parts and then ended it in service and spare parts. So now I'm talking to people to do that every day. So it's great.

Sarah Nicastro: Awesome. All right, cool. So as I mentioned, this conversation is stemming from an article that Kevin recently wrote related to this topic. So definitely take some time to check him out, check out his and other analysts' research at TSIA because it is another excellent source of information and industry insights. So what I want to start with is in the article, you start with talking about some of the reasons that... And we're saying equipment as a service, and I think some of this is specific to equipment and particularly the equipment that the types of companies TSIA serves. But I think there are aspects of this conversation that are going to be applicable, regardless of whether it's actual equipment or what as a service offering we're talking about. At the beginning, you talk about some of the reasons that equipment as a service can be ignored or underplayed by those organizations that could and potentially should be taking a closer look. So can you talk a little bit about what some of those reasons are?

Kevin Bowers: Yes. So I think it comes down to it. You're right. My research focuses on people with equipment on premise. However, a lot of the themes of as a service, whatever the buzz words you want to use is, is applicable across many different industries. Software and things of that nature. I think it's a trend that is specifically for on premise people, it's coming, it's been enterprise, IT, Salesforce, all that kind of stuff. And it's slowly making its way across the spectrum to other industries. But when we talk to our members, they'll say one and two things like you can't put my stuff in the cloud, it's physical or we already do that. No problem. Why do you want to talk about this?

Kevin Bowers: But my job is to try to help translate what enterprise IT and all those folks went through for people that are just starting to catch its wave. And it's like you said, it's over LinkedIn. Every time you look, it's as a service something, robotic, software, equipment, whatever infrastructure. So it's there, it's coming. I think people still may think it's a buzzword, but it's not. I think that it's something that we need to talk about. And that's why I wrote this blog. My boss, Val also did an interview earlier in the year talking about it. So I think it's coming and it's better to plant a tree now for when we need it in five, 10 years.

Sarah Nicastro: Yeah, absolutely. And I want to go back to the two main points that you made in that article, which are the belief or misperception that when you talk about something as a service, you're automatically talking about a cloud offering. And that is not always the case. So that's one thing that it can be a part of the overall value proposition, but they are in no way synonymous and it doesn't necessarily have to be a part of it. The other that I think is really important that you mentioned is that people just assume that as a service just means leasing equipment period, like, okay, well, people just don't want to pay CAPEX, so we'll let them lease it and they can pay OPEX.

Sarah Nicastro: And it's really just a conversation about a different way to finance an asset, which is also not the reality when we're talking about the importance of this topic to the companies that have something they could provide as a service, the opportunity it presents. It's that opportunity is not well represented by just moving to a leasing model. So those are two really important things to get out of the way of if either of those two things are things that have precluded you from looking deeper into this opportunity, you need to set those aside and take a closer look. So is there anything else we should clarify about what as a service is not?

Kevin Bowers: Well, you did it pretty good justice. And in my blog, I had the quote where my boss's boss often says, when he does advisory, he goes, do you know what the S in as a service stands for? It doesn't stand for subscription. It doesn't stand for solution. It's for the service. And it's about adding value to that piece of equipment. It's not, like you said, CAPEX, OPEX. It's about adding the value and helping the customers achieve something that they're after. And it can be done. It doesn't have to be in a cloud. There could be parts of your offer that is in a cloud. Software is a prime example of that, but you can have a large 100 ton press that could be as a service if you set it up correctly and understand the value that you need to bring to the customer.

Sarah Nicastro: Right. Yeah. And I think that's a really important point, because again, what we're really talking about here is the journey to delivering outcomes instead of delivering products or services. So even I would go so far as to even say it's even more than just service being the S because I was at a conference in September and Mike from NCR was presenting. And one of his first points when he got up was our customers don't care about our products and they don't care about our service. They just care about the outcome. And it's a very simple statement, but it has a lot of meaning for companies in this space that are ignoring that reality or are... Another reason I also wanted to have this conversation with you on this podcast is because I think there are a lot of companies who think they get it or think they're embracing it, but there's a lot here that can be misconstrued or confused, or there's some maybe beliefs or default actions that you want to embrace it, but then you caution yourself.

Sarah Nicastro: And so then you're hedging your bets in a way that just waters down the opportunity itself. And so, what we're really talking about is this idea of providing outcomes, and so it isn't about offering a product on a subscription. It isn't even about servicing a product. It's about what are the customer needs, challenges, insights that you are uniquely positioned to apply or provide and how do you create a value proposition that is representative of all of those things in a way that delivers on outcome. The simpler, the better, all of those things. And so if we look at the conversation, as anything as a service is a route to delivering outcomes, let's talk a little bit more about why this is so powerful for companies to have that light bulb moment and begin to embrace.

Kevin Bowers: All right. So, as Mike said, and at TSIA, we've been saying it for seven, eight years now, that customers don't care about your product. And you posted about your experience at your event in Netherlands, just recently, talking about it's not about the product, the service. It's about the story, and more and more, that story is about outcomes. And to be clear, it's about the customer's outcome, not your outcome. You're not driving towards more revenue for you or whatever. You're trying to help the customer gain more revenue. So I think that idea still ruffles feathers. Everyone thinks that they've built a better mouse trap, and to say that their product's not important is sacrilege, but at the end of the day, if you have a technological advance, someone's going to catch up in 12, 18 months anyway. So it's about the other things you can bring to it. And another great quote from one of my colleagues is we need to stop calling the product the technology.

Kevin Bowers: It's about the complete offer, the product and the data analytics around it to get you to the customer outcomes. So last month TSI did a conference and each research practice gives a keynote. And I talked about this topic, but when I was starting to research and think about my story, I was thinking about, well, when did I first hear about as a service, and I was digging, digging, digging. I finally, I found a trip report from June of 2009. I took the COO of a large locomotive OEM to Japan to meet our boss, and in my trip notes, it specifically says, I don't care about your product, Kevin, I'm here to learn about how you can make me better. Cool. It didn't register to me then. And it was back then it was the example was Rolls Royce or anyone that had a locomotive, it was connected as a service, blah, blah, blah. But no one else was doing it. So it fell by the wayside. But progressive customers were thinking like that in 2009. So it's not a flash in the pan.

Kevin Bowers: So anyway, as you said, this as a service is a lever, a method to deliver outcomes. And I think outcomes scares people. They think it's complex, but it's not. There's three flavors. You can increase the customer's revenue, you can decrease their costs, or the often forgot one is mitigate risk. Those are the three types of leverage you can pull. And then you have to think about it vertically. What happens with oil and gas is quite a bit different than point of sale in a grocery store, but the same ideas revolve around there. And it is important to understand. And it's important, like you said, you don't want to hedge your bet, but it's not like you have to all of a sudden make every product that you have in your portfolio as a service. We talked about you have the segment, there's some things that it's not worth it. There's no value that you're going to add and help the customer achieve any other outcomes, but you can segment it.

Kevin Bowers: Start to get the data off the product and it'll start to help you I think drive those outcomes and ultimately customers want outcomes. Think in everything that happens in B2C comes to B2B. Think about you want your internet to always work because we have to be on this podcast today. We don't want to... This is a great conversation, but I don't think we want to spend another 45 minutes re-recording. So the outcome is internet service so that we can do business, and it's coming to B2B, so we have to be ready.

Sarah Nicastro: For sure. I think the point I made in that presentation and in the article I wrote after is companies are very accustomed to telling the story of what their products or services do. And increasingly customers do not care about that story. The story they want to hear is how it helps them. And so it's really, I think to start, it's a process of reframing the way you think about your product services and entire value proposition from the mindset of what those customers need help with. And so we did a podcast a while back with Howard Boland from Schneider Electric in Australia, and they've introduced power as a service. And he was joined by a gentleman, Scott Weller from Mossrake Group who has worked closely with them on it. And one of the things that I thought was really interesting about that conversation is this idea that when you think about the early parts of understanding this journey, you have to start with the go to market.

Sarah Nicastro: What is the hook? What is the offering? What is the outcome? And then reverse engineer that into so what does that mean in terms of changes within our business we would need to make to deliver that? Because I think it's really a lot around the communication and articulation of the value proposition, the customer buy-in that companies that have been historically product oriented, they are not used to communicating in those ways and building relationships in those ways. And that in a lot of instances can be a really big initial hurdle to overcome. So to your point, you can do that in an area of the business. It doesn't have to be we're flipping a switch. Today we deliver products. Tomorrow we deliver outcomes, so let's maybe talk a little bit, Kevin, about the idea that I think we both agree that outcomes is the future. And as a service is a very important aspect of how companies can get there. What are some of the challenges?

Kevin Bowers: All right. Well, especially for field services, as you said, go to market, all these things are important. So it's not just a heavy lift for field service. It's the organization that has to do it. And every webinar conference presentation, you see people talk about silos. I think everyone grew up on a farm as much as they talk about silos, but it's true. Everyone has to be in line, and the field service has to have a seat at the table. There's a lot of things that they're going to have to do different. At the end of the day, when you really get to this outcome based pay per use consumption type model, when field service in the past, they didn't get there on time, it was just a missed SLA. All right. There might be a smack on the hand, some penalty, but now you don't get paid.

Kevin Bowers: So that's a mind shift and it's way away from the product. So the service teams, do they have the infrastructure in place? Do they have the ability to resolve the issue quickly? Did a webinar yesterday, actually. And in it, we asked about the different types of SLA offers that field service members had and still only 40% have something around resolution time, but that's all that's going to matter as we move to outcomes. If you get there and mess around for two days, no one cares. They want you to get there and solve it. So that's quite a paradigm shift for most organizations. So you got to put a lot of investment in there. And then again, we talked a little bit about it, but you need the connectivity, that data that comes off the equipment's going to give you all sorts of insights before you go.

Kevin Bowers: So to be efficient, proactive, insightful for the customer, you really need this telemetry. And that'll ultimately drive other types of outcomes when you get that data. I think the data that comes off the product's way more valuable than the product. And like you said, people, it's hard to get people out of the blinders away from the product. We can't be product focused anymore. We got to start to move to efficiency, proactiveness, and then ecosystems that help customers achieve their outcomes, I think, and then you got to, like we said, focus on the metrics. That's what the basics. Can you fix it right the first time? To fix it right the first time everything has to be hitting on the cylinders, you have the right training, the right tools, the right people, software that can help route you the right people.

Kevin Bowers: So, you can't run field service on an Excel sheet anymore and have pie dreams that you're going to deliver an outcome. And then there's also, as you said, financial implications to this, moving from CAPEX to OPEX, every OEM loved that big paycheck 10, 30 days before the product even was installed, they got this huge chunk of money and then little money trickled in. Well, the idea of outcome or as a service is that initial selling is the lowest amount of money you're ever going to get. And at TSIA, we call it swallowing the fish. Your costs go up, your revenue goes down for a while, and then you got to do things to mitigate that. So a lot of that is how fast you resolve things and what data you have to offer different, additional outcomes and offers to help offset that. So it's a lot of fun I think. I don't want everybody to think it's impossible, but you have to think about it and you have to communicate, and it's all aspects of the company really.

Sarah Nicastro: I think the point you make about silos is important in the sense of, I think it's one of the most fundamental challenges here that this is not a field service conversation. This is not a service operations conversation. This is a company-wide strategic direction conversation. And so it has to happen at that level. Or it's a waste of time, quite frankly. And so, one thing we see is you see leaders of service in a ton of different companies that get it, that are working in organizations that don't yet get it and trying to drive this change in a way that causes them a lot of frustration. That's actually another aspect of what we talked about on the podcast with Scott Weller of Mossrake which is he calls it the microcosm approach, but how you can rather than giving up, ultimately you have to get the company on board, but when that feels like an insurmountable task, he talks through some of the things you can do to create this change in a microcosm to prove it out, to help shift those minds.

Sarah Nicastro: But let's just say the top level leadership of the company gets it. And let's say that there's some top level buy-in on the direction of this. So that's imperative. You're still talking about a fundamental change in the way that you do business, in the way that you manufacture, install and deliver products, in the way that you handle your company financially and the way that you deliver service. So again, to your point, none of this is to dissuade anyone from this journey, because I am a firm believer that the writing is on the wall here. So you can ignore that and get further and further behind, or you can embrace it and start working on this change. But I think another big challenge that I've noticed, Kevin, is the idea of there is inherent risk in this model. And it's far different than the risk that these companies are accustomed to. So I also recently interviewed Dave Mackerness from Kaer, K-A-E-R, and they do cooling as a service in Singapore and other places. And they were pretty early adopters of as a service.

Sarah Nicastro: I believe they started offering it in 2012. And I think in 2018 maybe, 15, can't remember, they went all in on it and stopped offering anything else. But what he talks about is the fact that Netflix is $10 a month, and so you can sign up today, you can watch it for a month and then you can cancel at the end of the month, if you're not enjoying the outcome. If Netflix was $10 a month and you had to sign a 10 year contract and pay six years upfront, the model is not successful. And so companies that, again, this is what I was talking about that try and embrace this, but then want to hedge bets, you're really shooting yourself in the foot because that's just not how it works. So there's this idea. I think one of the other challenges is to understand enough about the opportunity and what that opportunity means to your business, to have the confidence you need to accept the risk involved because in most instances, when we're talking about the move to outcomes, customers want guarantees. They want uptime guarantees.

Sarah Nicastro: They want deliverable guarantees, so you are putting yourself in a position where you have to make good on that. And so I think these are some of the things that once people dig in and understand that, they panic and run, but what we're here saying is don't panic and run because you need to face it and tackle it and commit to the journey. There's a customer IFS has in, well, it's a global company, Cubic Transportation, but they do a lot of work with the London underground. And they actually were an earlier adopter of outcomes based service because Transport for London came to them and said, hey, we want to deliver our customers guarantees, which means we need you to deliver guarantees to us. And so they stepped up to that challenge. And going back to the point you made about, so where does technology fit into this, Mike Gosling from Cubic has said many times over, we would not have been able to scale in manpower to meet those deliverables and to uphold those guarantees.

Sarah Nicastro: We had no choice but to rely on technology to automate and optimize things in a way that makes it possible for us to do that. And so that's where you get into first understanding what the outcome is the customer wants. And then like I said, digging into then, okay, how do we evolve to make this possible? You provided a couple of examples in your article that were other ways that companies have started to overcome some of these challenges and take steps in this direction. Can you talk through a couple of those?

Kevin Bowers: Yes. As you mentioned, we're both pretty active on LinkedIn and you'll always scroll down, you see those landscape maps, who's doing this. And there's always these equipment as service ones. And whenever we talk in conferences, generally the same names. Rolls Royce, GE, Heidelberg, Kaer air conditioning as a service is another great example, but I think everyone thinks there's four people doing this. I've seen 50, 60 companies doing this, which there's a lot more, but the point is, it's expanding and there's this ecosystem around them expanding. You need the software, you need the technology, you need the sensors, you need the IOT platform. So you're right. It's here. So back to your question, some examples, so in my blog and also in my conference, I talk about a company called TRUMPF.

Kevin Bowers: They're in industrial equipment. They make laser cutting equipment. And they have a full pay per part, full OPEX. They roll everything in, but they also have this other model where you buy the piece of equipment and it has a six kilowatt laser. And you say six kilowatt laser. What does that mean? It means either I can cut up to maybe a three quarters of an inch pretty efficiently or thinner material I can go faster. Well, what happens if one day you get a job where it's an inch or an inch and a half thick? Well on the machine, they have built in more laser power. And then if you want to go from six to 10, all you do is hit a button. You've signed this contract. Now you start to pay per hour for this laser. Well, that's a subscription.

Kevin Bowers: No. We're helping them meet additional production needs. So, TRUMPF still gets the great, a big chunk of CAPEX upfront, but then they get this incremental amount of money from every time someone wants to jump up in laser power. And they also make a promise if you use it enough, you paid for it. It's yours. So, it's a blend of the traditional model buy an upgrade in the field or pay per use. So I really like that idea because it mitigates some of that risk. You still got the OPEX in front, but you still have the opportunity to show some value and add some more things. And we all always tell our members, make this connectivity option and opt out. You as the OEM need the data, so if the customer opts out, great, Mr. Customer, no problem.

Kevin Bowers: That means it's going to cost you more. And our service levels are going to go down because we need that data to help you achieve your outcome and that's a mind shift. And the other thing that people, I think that you said they shy away from these conversations of guarantees. Well, if you can provide the tangible value and show you what the outcome's going to be and how that's going to help them, you can start to flip the script and say, well, what if you need me to fix an issue in four hours, what if I do it in two? What are you going to give me? That's a conversation you can start to have granted it will not be probably well received, but if you balance it with the value you bring, they'll say, oh, well, that makes sense. And they still gain because they're back to obtaining their outcome quicker.

Kevin Bowers: A lot of things have to change when you start to do this, but it's not all on the customer side. Once you get all this data coming in, it's going to help you on things that aren't as a service. Start to build up your data models for predictive and prescriptive type service for people that are still paying CAPEX. So I think getting the data, it's a win and you should go through some of this pain to do it. And I think this is a great way to do it personally.

Sarah Nicastro: Yeah. Some of what you said made me think of another conversation we had on a podcast here with the CMO of Park Place Technologies. And that was a really interesting conversation because I think they've done an especially good job of how they market these offerings. And again, for some companies that have a deep, rich legacy as a product manufacturer or equipment provider, that type of marketing and communications is very unfamiliar. And she gave some really good advice, but they have a tagline and it's related to their first time fixed guarantee and she talked about what went into identifying the opportunity of offering that and then digging back through, okay, what do we need to do?

Sarah Nicastro: We can't say it and then not do it. So what do we need to do as a business to be able to make that claim and then uphold it? So, yeah, there's a lot of interesting stuff to this. So I wanted to ask too, Kevin, when we talk about the role field service plays in this picture, how do you see that role evolving as we move more and more to delivering outcomes instead of break, fix type service?

Kevin Bowers: Well, we talked a little bit about it. It's a team play. It's not field service. It's not service offer or management. It's not product. Everyone has to play here, but at the end of the day, field service is on the bleeding edge. When product's not working, producing the outcome, who goes? Field. So they're getting beat up. So they have to have a seat at the table. Inform here's what we're capable of. If you want more, we need more parts in more local locations. We need more training. We need more capacity. We need these types of data hooks in the product. Please develop this. So it'll help us. So feedbacks is critical, and really field service's best friends is the contact center. And traditionally the contact center's goal was to solve everything remotely, because it's a lower cost to serve. Well, that myopically doesn't work because overall the customer care is when I call and when it ends, the resolution time.

Kevin Bowers: So field and contact center have to work closer together. So everyone has to come together and break down these silos. I think that's pretty critical. And then like you said, the investment in the structure and the technology, because it's like a pyramid. Automate what you can because you're not going to probably get all the head count you need, think about maybe outsourcing some of the simple stuff that maybe it's not legacy equipment that's not as a service. So that starts to free up capital. So you can invest in your people that you still have and make them the experts. So when it does hit the fan, boom, we're there, we have the density and we get it done. So field's going to take the brunt of this when it doesn't go well. So they're going to have to have the mechanisms to give the feedback.

Kevin Bowers: And at the end of the day, they're the best ones to know what outcomes the customers want. A lot of sales is going to be digital now. Travel budgets are gone. They're never coming back. But field service is and how it has been going on site, from our benchmark data, they go on an average of 40 visits a month. So they're the only ones who are going to give you real feedback from the customer. And if we recall the outcome is the customer's outcome. So you need to know what that is and field's going to get that for us I think.

Sarah Nicastro: I agree. And I think I would take it a step further and say that when you talk about changing the identity of a business from being a product manufacturer and provider to as a service offering or an outcome, a solution provider, and then you think about the fact that to your point in many situations, the field service talent is the most frequently engaging with customers or the only one engaging with customers in a face to face way. So how are they representing the brand? And it's not just about their ability to do the job. And to your point, the tools that you are enabling them with to make sure that outcome is possible, but it's also about their ability to build relationships and to represent your organization and its value proposition in a way that is going to build customer loyalty and all of those things, those are new and different aspects of that role in many ways.

Sarah Nicastro: And so companies need to be thinking about what that means in terms of their need to upskill or re-skill or what they're looking for in the talent they're now bringing in so you're right. They'll bear the brunt of it when it doesn't go well, there's also a lot of opportunity and in many ways the criticality and the importance of the frontline field service workforce increases as we go down this path. I had a conversation recently with Karin Hamel from Schneider Electric and she brought up a really good point, which is well, salespeople get to go on these presidents' club trips, why don't field service people? And some sales people I'm sure would be like, what? But it's a good point and it might be an even more relevant point as this matures because to what degree are we relying on them to nurture and maintain these relationships that are what we are dependent upon for this recurring revenue?

Kevin Bowers: No, you're exactly right. And the CFO is going to drive utilization, get in, get out, get the next job. So we know that getting training time is a premium. So if you only get nine days of training time, you're going to focus all on technical, so you can fix it faster, but that doesn't serve your brand. We need customer service skills, professionalism. If we want to drive this incremental revenue and this land and expand ideas for the field service, we got to give them some skills to do that. And not every field service engineer is good at that. If they wanted to be in sales, they would've went into sales but with the right training, some certifications and like you say, incentives, a president club. And we had a lead generation program at my last company and only 40% of the people did it.

Kevin Bowers: 60% were like, no, I don't want it. But those 40%, when you started to say, hey, I brought home an extra $1,000 this week, can you post that type of information? Boy, boy, does that drive some adoption. Field service is the trusted advisor. I know we don't want to compromise that, but they have the context, they have the immediacy, they're on site. They know what the customer's doing. They know what good looks like because they see bad. So it's a great opportunity for them to drive and keep adding to this revenue and the more incremental revenue you get, it makes that fish smaller and makes the switch a little more palatable. So that's critical.

Sarah Nicastro: For sure. Yeah. All right. So this has been great, Kevin. Is there any other thoughts or comments or advice that you would offer related to as a service, the myths, the facts, the opportunity, any closing thoughts?

Kevin Bowers: Well, so I like quotes and in my blog I had one quote from a Roosevelt and then I found another one the other day from a Roosevelt. So the first one was from Theodore. It says nothing worth doing comes easy. This isn't going to be easy. And the second for Eleanor Roosevelt was it takes as much energy to wish as it does to plan. So you can wish this away. It's not coming from me, but I think we've done a fairly good job explaining that it is so it's planned. Just plan for it. And maybe it's five, 10 years away, but we start planning now, all these muscles you build around all the other things that we talked about were necessary, it's going to help you with your customers today. You're going to start to see the reward there.

Kevin Bowers: So when everyone on the team decides, yes, we're going all in on as a service, you're ready. So start talking about it, start researching, reading about it. Hope they listen to our podcast. Great. Find more research on it, come talk to TSIA, whatever. You have to plan and plan now, I think. It's not going to be easy, but it's not all doom and gloom. And hopefully we tried to dispel some of that today.

Sarah Nicastro: Yeah. Keep looking for the examples of how companies are working through these challenges and making progress and use them and their knowledge to learn from and shape. I know you just had an in-person event the first in a while. When is the next?

Kevin Bowers: The next one is in May, in Orlando. So nice weather. Disney adjacent. So you can bring your family as you learn about things. And it's unbelievable conference. I've been on board at TSIA a year and a half now, and my first three were virtual, which great experience, but-

Sarah Nicastro: Nothing like it.

Kevin Bowers: No, I didn't realize how much I missed people. I'm generally an introvert, but it's like, wow. The interactions. And it was great. And it's like you said, field service, we need to work together and share some of these experiences so that we can have the right ammo to go to the top and say, this is what we need to do the things you want us to do. So we're a community.

Sarah Nicastro: Absolutely.

Kevin Bowers: For sure.

Sarah Nicastro: Good. So everyone check out the May event TSIA is doing, and certainly check out Kevin on LinkedIn, on the blog. And Kevin, I really appreciate you coming and spending some time with me today.

Kevin Bowers: It was my pleasure. It was great. Great experience.

Sarah Nicastro: Good. You can learn more by visiting us at 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 at ifs.com. As always, thank you for listening.

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Kaer’s Journey to Cooling-as-a-Service

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Dave Mackerness, Director at Kaer, shares not only the details of the Singapore-based business’ journey to Cooling-as-a-Service but also the reason for their passion around the business model, what they learned in being an early adopter, and his perspective on what the future holds.

Sarah Nicastro: Welcome to The Future of Field Service Podcast. I'm your host, Sarah Nicastro. I'm excited today to be here with Dave Mackerness, who's director at Kaer, to talk about Kaer's journey to cooling as a service. Dave, welcome to the Future of Field Service podcast.

Dave Mackerness: Thank you very much, Sarah. It's great to be with you.

Sarah Nicastro: Thank you for being here. Okay, so before we dig into the conversation, and there's a lot to it, tell our listeners a bit about yourself and also a bit about Kaer.

Dave Mackerness: Sure. So I'm a director at Kaer. I've been with them for about 12 years and they have been in Asia for about 70 years, in various lines of cooling houses and buildings around South East Asia, and we pivoted to Cooling as a Service back in 2012, and we offer that for commercial buildings, so your offices, your shopping malls, data centers, pharmaceutical manufacturing, those sorts of facilities. That's sort of now our core business and as we're expanding throughout the region into India and some other Asian markets, that's our only offering that we're bringing to those markets.

Sarah Nicastro: Okay good. And you're based in Singapore, correct?

Dave Mackerness: Yes.

Sarah Nicastro: Okay, awesome. All right so it's night time Dave's time, morning time Sarah's time, so good. All right so one of the things that I really loved in talking with you Dave is the conviction you have around this business model. Right? And so I think that's evident, you said you started this journey in 2012, and I think that's certainly on the early side, in my opinion, for the industry and probably the region. So, before we dig into the specifics of the journey, can you talk a little bit about where that strong belief comes from that this business model is the path, not only for Kaer, but for a lot of other organizations?

Dave Mackerness: Yes, so I think. You're right back in 2012 there was no such thing in our industry. I mean servitization had been happening around the world in different industries, but nothing in cooling. And for the first three to four years, we didn't know if we were crazy or had a great idea, because no one else was doing it. It sort of came around, it was actually... I wasn't involved in the decision to move to Cooling as a Service, my CEO was and he was talking with our chairman back in 2012 and asked him the question essentially how do we servitize cooling? Essentially every time they came up against a reason they couldn’t do it, he’d say well let's investigate that a little bit more, let's see how would we would apply it, and let's try it. I think that the key thing was they tried it in our first project in 2013.

Dave Mackerness: And as that went along, I think we learnt more about the model and the more I learn about it, the more I speak to people like yourself and other professionals in the industry, the more I'm convinced that we've made the right decision, and I think we see this momentum gaining and this is doing two things.

Dave Mackerness: I think one is, it's delivering a far better experience for our customers. Someone who has, was used to buying CDs and has moved to Spotify, or was used to going to Blockbuster and then signing into Netflix. It's a very obvious difference and it's chalk and cheese, in terms of the experience you get at the moment and that was the first thing that became apparent to us. The second thing was we have a real challenge specifically in that, people that are in the built environment may not be aware of this, but people who aren't won't be aware the role that cooling plays in terms of meeting some of our sustainability and climate change goals and target. In Paris in 2015 we set out this agreement that said we would limit the global temperatures rise by 2.5 degrees and that's something everyone understands and is working towards.

Dave Mackerness: What people don't understand is that cooling has a major effect on what we can do that or not. It's almost make or break, if we can solve the cooling challenge we can make it, if we can't we won't. Cooling now makes up 10% of the world's energy consumption. That's today. The need for cooling is going to triple in the next 30 years, so if we don't have more sustainable systems and better performing systems, the energy consumption of the world will be 30% cooling, so that's unplannable, we can't manage that.

Dave Mackerness: So, I think the cost essential benefits of the model is that drew us to it, and now it's really being, we're seeing that is the most sustained way and really the only way to hit these goals in terms of sustainability, so that is why I think we're getting more and more passionate about it, because we see it as the answer and by transitioning to this business model we really can make a difference.

Sarah Nicastro: Okay, so I loved what you said about, then when you started in 2012 you didn't know if you were crazy or if you on to something, right? Because to me that is a very accurate description of true innovation, right? Because you aren't jumping on a bandwagon at that point, you aren't making a minor enough change that it's very comfortable, right? That's an uncomfortable feeling, but I think that is a real signal of real innovation and so, I just think it's interesting to point that out and to let folks know that, sometimes the most significant evolution come from a place of being very uncertain and being very uncomfortable and to your point just trying it out. You can have a contingency plan if this doesn't go well we can do X or we can revert to the standard but, I think a lot of the leaders, the category leaders are in those positions because they're willing to takes some risk. So, okay-

Dave Mackerness: And on that certainly, you're right. There was no leader, there was no one we could look to, to understand is this going to be successful or not. I mean we work for a company that allows us to try new things and you're right, we tried it so we added it as a service. So we did all of our legacy work that we had done for 70 years in cooling and then we said lets add this as a product or as a service... We started it and got a few customers on board. So what we did throughout year five we actually did all of our legacy business products and these as a service offering as well and then after about five years we looked at the data and there was two metrics we looked at. The first was NPS, net promoter score and we measured the net promoter score of our traditional model and it was okay, I can't say it was bad, it was just okay.

Dave Mackerness: We looked at the net promoter score of our Cooling as a Service customers, and it was 57%. Which is extremely high. So our customers were just way happier and the same people were offering the other service model on our legacy products, so really it was the power of the model which unlocked that. The second thing was the sustainability, we had been talking about sustainability and performance in cooling systems since 1993, when Kaer opened its doors. Kaer was set up on that premise and we were doing okay, building we were making inroads and making an impact, but it wasn't significant. With Cooling as a Service we've never been in a position like we're in now to make a real considerable difference, so I was always thinking this thing.

Dave Mackerness: Just this morning there was something, I think it was on the BBC or LinkedIn or something and it talked about there's a facility, I think it's in Denmark, it's somewhere in Europe that is doing carbon capture, and it's capturing 1000 metric tons of carbon from the air every year. And I read that and I went and looked it up, there is a 55000 metric tons of carbon every year, so just the impact we could have is incredible alone. So when we looked at those two bits of data, the sustainability metric and the NPS metrics, we actually decided in 2018 to stop all of the legacy business, and just focus everything on Cooling as a Service because we thought, we have to really go all in. It was scary and it took five years to get that data to make that decision.

Sarah Nicastro: Yeah, that makes sense and I think that also an important point Dave for the audience which is, you want to take risk, you want to take calculated risk, right? So this idea of when you were doing this you didn't know if you were crazy, right? Which is the calculated part came from not just shutting off the rest of the business, right? You decided to offer this as a choice to see how it went and to test it out, now over that five years not only do you have the data on NPS and you have the data on the sustainability impact but, you also are building up, I would imagine a variety of customers testimonials that you can leverage so that when you decide to go all in you have a lot of proof points behind you to say "here's why where doing this", "here's why we know that this will work".

Sarah Nicastro: So it's, you didn't just jump off a cliff without a parachute, right? You did so in a way that was pragmatic, but allowed you to get to this point of being able to have the factual evidence to back up the decisions to go all in. Right?

Dave Mackerness: Yeah and I think it was, actually so there's two points of the decision to try it which was back in 2012-2013. The second one was to discontinue or phase out are other product line in 2018. Now you would think that that would've been the scariest point, but by that time we had convinced ourselves and allowed in Singapore and in other markets in Asia, that this was the way forward. So actually that was not a hard decision to make in 2018 because it was backed up by data.

Sarah Nicastro: Right, that makes sense. So maybe you consider this an unfair question Dave because you already said in 2012 when that initially decision was made you weren't really a part of it but, if you have the backstory I'm just curious, if you're in that place where you're wondering are we crazy or is this going to work what was the initial catalyst that sparked the idea within Kaer of, Okay we think this is a feasible opportunity and we want to give it a go. What was the primary drive?

Dave Mackerness: So I do know the backstory. So actually it was a conversation between our chairman and our CEO, and they were having a discussion around why can't we just sell air? If we sell cool air, why can't we sell that? I think they had a discussion around Evian and water. How can we brand, they managed to brand water and sell water, so why can't we do the same thing with air? And that was the catalyst to start thinking about, instead of selling equipment and selling products that people needed to make air, can we sell air itself? And I think it was an idea that was sort of thrown around a few evenings, but then out CEO who started putting it together and so what would that look like, and I think that was the thing that was important for us was that, so Justin Taylor is our CEO and he's been with us since 1995, and had this discussion let's see what it would look like and explored various different models, how we would do it.

Dave Mackerness: And essentially servitization wasn’t then, really so much as a known thing as it is now. So looking at different industries, what they were doing and seeing how we would do that and then put together a contract. Put together some friends and web in source and customers and then, it was over those five years, cooling service today is nothing like when we started out. The contracts are different, the deliverables are different, the level of service is different, so working with our customers to figure this out and put something that we were then confident with in 2018 that we could move I think was really important and he's always been a massive advocate of the business model and really a massive advocate of customer experience. He never talked about equipment, he always talked about customer experience which now is obvious and everyone is talking that way, but back in 2012 it was so common.

Sarah Nicastro: So Dave I think that is a really good point is, want you're saying what it makes me think of is that when I talk to companies that are really struggling with innovating to the degree that Kaer has, when it comes to really doing a 180 in business model, it's often because it's the folks at the top that don't understand the value or don't really want to make the change, so one of the things that comes up very frequently is that this type of evolution really requires top level buy in, so your story kind of reinforces that fact and I think it's really interesting to me that in 2012, he had those view points because you're absolutely right that in 2021 as a service and customer experience are sort of part of our daily vocabulary but, in 2012 they definitely weren't, so I think that is super interesting and I think that I would be interested in picking his brain about that at some point so but, kudos to you all for being really on the cutting edge as far as that goes.

Sarah Nicastro: So I want to dig in a little pit deeper to some of the different area of impact that the Cooling as a Service model bring for care. So the first is the customers so let's talk a little bit about that customer experience because I think that it is really important for organization to understand exactly what it is that their customers want, and be able to sort of reverser engineer how the business needs to change to deliver that, right? So talk a little bit about what this has allowed you all to provide in terms of brand new customer experience.

Dave Mackerness: So I think the business model itself sort of forces you to be relentlessly focus on your customer and I think that every company now says they’re customer centric. Everyone wants to be but, do they actually do it? Is their business set up around it, or do they just talk about how they throw catchphrases out into the market place. So with us, as a service provider, the only way to keep your customers or to get new customers is by differentiating through that experience. Because at the end of the day, our 24 degrees air is a commodity. I mean anyone can put that together, it’s how you deliver it and how you give confidence to your customers that they will have that exactly when they need it with the exact requirements that they have is really important, also how you build relationships around that, how they interact with you as a provider is really important.

Dave Mackerness: In the past, in all business models you get customers by product innovation, so can you get slightly incremental improvement on the speed of your computer and so on. It's all product features and price and branding and marketing as well of course but, if you think about... Let's think about Spotify and Apple Music, they're offering very similar things to kind of the same people and if I sign up to Spotify today I can sign off tomorrow and stop my contract with them. The only way they can hold onto customers is better experience and so it's forces you to do it, so you can't rely on product innovation or things like that. I think that the first thing is because you have, and I talk about this a lot when I talk about circularity and sustainability, but it's valuable for a customer in that when you have a portfolio of building and a portfolio of customers that you're looking after, that portfolio gives you more data and gives more justification and verification for investing in innovation.

Dave Mackerness: So if I had 10 customers and could invest 50 million on something that could improve their experience it might not be so feasible, but if I have 1000 customers and now I invest that money and that improves the service across my entire portfolio, it justifies the investment. So I think when you're looking at customer experience, you need to look at data and technology you can deliver to those customers and the approach that gives you the ability to do that. So we have changed dramatically, I mean we've been talking about cooling for decades, but we don't look anything like what we used to five years ago and that's because of the scale that we have. It allows us to invest in technology, it allows to invest in software and that experience. It also means that you shift the kind of people that you bring in to your organization. So we now, we've never had data scientist and app developers and web developers in our company before because that wasn't seen as core to our business. Now, in the eyes of service world, is absolutely core to our business, it's as core as cooling itself.

Dave Mackerness: So the business model really makes you shift the way you approach your customers and the way you partner with your customers. This isn't a go out and win a job, leave the day after. We are with our customers for years, hopefully longer. So our longest customer is I say 2013 and we're looking now at extending that and staying with them for even longer. So it forces you to be customer centric I think.

Sarah Nicastro: Yeah. There's so much in this story that is really cool and I'm actually thinking of Dave in real time, not to put you on the spot but, there's a couple areas I would love to have you back to dig into in a full episode, because I just think in sort of telling the initial story type conversation it's hard to go deep enough on some different areas and I think, one of those is certainly around risk.

Sarah Nicastro: I think that the conversation around risk is a really important one because I think it's scares a lot of people away or it forces them to dip their toe in instead of leap. Then what they’re doing is not this true shift, it's sort of watered down version of it, right? Which then doesn't accomplish the objectives that they set and then they feel like, oh it doesn't work. But it doesn't work because they're not doing it the way they need to do it to really see what the outcome would be. And I think that there is probably a whole conversation we could have just around excepting the risk that comes with this and why it's worth doing that. So if you're game, I might ask you to come-

Dave Mackerness: So I would love to do but, just one or two minutes on risk. You're absolutely right. When you're talking about Netflix and software as a service businesses, it's different investment of dollars in infrastructure, into physical buildings and what happens is that the providers then get nervous around return on investment or some of the risk around what's going to happen with cooling in the future because you're now investing. The problem is you cannot look at it this way. You have to understand what is your business risk and what is your customers risk and you cannot mitigate your own risk by putting on your customers contract clauses and penalties that you bake into the business model or essentially tying them down into things or locking them into things to secure your revenue.

Dave Mackerness: Those two things really kill the business model. So whilst you'll be able to mitigate your risk, you will also essentially spoil your customers away and that is why when Netflix came around they said to me "Dave give me 10 dollars a month I'll give you all you want" and I thought, I don't really know, once I've watched them all what is going to happen? But I said "I'll do it, 10 bucks a month". If they had said to me "Dave it's 10 buck a month but, you have to sign a 10 year contract and you have to pay me in advance for the first year and to terminate the contract you have to pay me a penalty of six years’ worth of revenue" I would've said "Yeah, no but thanks very much". So you have to stay true to the business model and I would love to talk to you about that it's really interesting.

Sarah Nicastro: Yeah. I think we should do a completely separate episode on that because I just think there's too much to that we can't touch on in a couple minutes but, I mean you think of that as you were describing the Spotify versus Apple experience and you can sign up for one today, try it, see if you like it, if you don't like it switch to the other one tomorrow and I'm just in my mind seeing people cringe and think ugh that's not for me, because it's just not the norm and it is very scary but, Kaer is an example of how it can be very worthwhile to take that risk and I think it would be well worth the time to kind of dive into the layers of that and share a bit how you mitigate it what you need to just be comfortable with and why it's worth doing that, all of those different things. So okay.

Sarah Nicastro: Anything we haven't mentioned in terms of impact on company or sustainability that you think we should add? I know we've talked quite a bit on the benefits of the business model, anything else related to the benefits to care and the benefits in terms of the circular economy in that which you talk about.

Dave Mackerness: So I think with sustainability, you can look at it in a building by building approach or angle, and from that I mean we could talk a lot about systems that we're building and including because of used data and used technology you can be far more sustainable this way. We’ve found also, it's great when you go into this business model you keep finding the benefits. We got a call from the Ellen MacArthur Foundation and they said we want to do a case study on you because we've heard what you're doing. And they were all about circularity. So a circular business model, which when they called and I said "Yeah, of course we're circular," I had no idea what that meant so then I started reading about it and understand more and the circularity benefits that you get so not just around sustainability and energy consumption and those sort of things but, if you're looking at multiple buildings with in a portfolio how do you manage that in the most sustainable way.

Dave Mackerness: So at the moment in the cooling industry, you buy your equipment, you put it into the building, and you cannot change because it's big infrastructure in the basement of your buildings. As that building goes through its life cycle, if it needs change, you're stuck with the same system that you had when you built it or when you estimated what you were going to need, way back when you constructed it. So you’re locked in a system and you just have to do the best you can with it. Generally that's not a great approach and then at the end of the life you throw it away or recycle it, you get rid of it and build a new system. Very linear, and now that we're working with the portfolio buildings we are able to take a more circular approach.

Dave Mackerness: So, let me give you an example. During Covid we had customers that fell into one of three categories, one was customers that weren't really affected with their cooling requirements (not so many of those), others were customers that their cooling requirements fell through the floor, so buildings were shut, people were at home - think about offices and shopping malls in the last year. And then you had other customers on the opposite of that coin whose needs went through the roof because they were in pharmaceutical manufacturing potentially, they were data centers, so we're all watching Netflix not in the office.

Dave Mackerness: So their load requirements went through the roof. What would happen in those cases under a traditional model is they would have very poorly performing systems. With Cooling as a Service, the customers that had increased capacities could serve that new requirement. We could take from where we had excess capacity and move to where we need capacity over here. So what we do is we design modularly we can plug and play cooling capacity.

Dave Mackerness: It doesn't matter what the equipment is it just matters the output. So for our shopping centers, we would move stuff to our data centers. One example where we had an increase in the load, the cooling requirements tripled in about an 8 month to 12 month period and they, on their roof top they can only have four big chillers, 4 bits of equipment. So what they would do in the old world is throw away the four smaller chillers and put in bigger chillers. What we can do now is we can take down those smaller chillers to use elsewhere and we can install new technology or increase capacity but, it allows us that ability to be a modular design. And that's really changed and extended the life of our assets. 

Sarah Nicastro: Yeah, that makes sense. So this is really interesting too, there is a lot of areas we could dig more into but, that makes sense and I think that the level of flexibility that you have and how the assets are leveraged, to your point the insights you have that you can use when you are responsible for the assets versus the customers, right? And you have all the information you need to really fully utilize all of those things is really impressive. Okay, so I have watched a couple presentation of yours and you're a very good presenter Dave, I have to say I've been impressed and I've heard you share a couple of analogies that I would love for you to relay to the audience because I think there really interesting. And the first is your cow analogy, I know there is usually visuals to go along with these but, walks folks through the cow analogy.

Dave Mackerness: So this was how my CEO explained it to me and then I stole the idea. The way it goes is that when we are looking at servitization, we look at innovation in different industries and we looked at different companies and the standard companies come up when you think about what's disruptive and what's innovative. So it was Zoom, Office 365, Spotify, Netflix, IBM Cloud, Amazon Web Services, and when you're looking at all these, Grab Food, the ride hailing Uber, and those sort of companies, we wanted to determine what they have in common. And what we realized was, what they had in common is that they stole their business idea from someone else. Which is quite a controversial statement and then we went on to say, that they all stole their business ideas not just from someone else but, they stole their business ideas from the same person.

Dave Mackerness: And the person that they stole it from was a guy called GW Maxwell. So in 1906 I believe it was in the US, GW Maxwell was the guy who invented the milk carton and he for the first time around, I think it was in San Francisco, he allowed people within that area to, instead of owning a cow to get the benefits of getting the milk that they wanted without buying a cow. They could now buy milk. And we had this analogy that we should be buying milk, we shouldn't need to be buying cows.

Dave Mackerness: If we want milk in our coffee and our cereal in the morning, none of us own a cow in our house and most of us don’t’ have the ability to do so. So it was that milk carton, that was the first time we ever seen the service business model utilized, which is back in 1906 and since then every single company has used that or stolen that idea whether in entertainment, logistics, ride hailing, or in cooling. It's not specific to a particular industry. So that's the cow analogy. We say buy milk, don't buy cows.

Sarah Nicastro: Yeah, there is a lot of people still trying to sell cows. Metaphorically, right? And so it's such a good analogy because it's very true come back to customers want outcomes, right? Customers want simplicity, they want peace of mind, they want what they need when they need it, not and entire cow in their backyard full of milk that they don't need, right? So it's a really good analogy.

Dave Mackerness: And then that's, I think that was part of the original conversation that Justin was having, was we're selling something that people don't want, people don't want cooling systems. They want cool environments that are comfortable to work in or they want process cooling or whatever it may be. So why are we selling something that people just don't want? it's almost like a means to and end to get the benefit that you are actually looking for.

Sarah Nicastro: Yeah, now the other analogy is the caterpillar.

Dave Mackerness: Yes the caterpillar effect is something I was looking at, a couple of months ago and it though now it's hard see this, but as soon as you see it, it just makes so much sense. So what I was looking at was the performance of cooling systems in different buildings across different markets. You could look at the performance of systems in terms of their sustainability metrics or their carbon emissions. And I was trying to look at how wide is the spectrum in terms of performance and not oddly, it's a very standard bell curve in that you have some people that are doing extremely well but there is not many of them, you have some people are doing extremely poorly, and then you have the vast majority of us in the middle that are doing okay. I then was thinking about the fact that we had to improve because of the Paris Accord and what people were talking about in terms of sustainability.

Dave Mackerness: I started looking at how it's moving, how the distribution is changing and essentially what happens is the people who are at the forefront, that really care about and have money to drive performance of their systems, they go and buy new technology they have more data and they improve then it goes out a bit and that kind of flattens the bell curve and what happens next is that technology that was expensive yesterday is not so expensive today because there is newer technology so now the people that were in the middle of the bell curve, they have access to more technology and they have access to more data and the wisdom from those guys who went out and tried new things, so they catch up. So the people and the front go forward and then the rest of the world catches up, people go forward and then the rest of the world catch up. I did some slides and was looking and this animation and it just looked exactly like the way a caterpillar crawls. So then it drags the body behind it, moves forward, and then drags the body behind it.

Dave Mackerness: But the thing is, it's extremely slow and the movement happens in a way we don't see it. And this is really important. The reason we don't see it is because we are improving and the front of that caterpillar is moving quite well this axis of performance. So we don't look at the whole caterpillar we just look at the head, where we were in 2015. And then we get excited and we feel good about ourselves and go and what we do is look at the back of the caterpillar and realize that the vast majority of buildings are still performing worse then the head and to get past that 2015 bench mark will take about 20 years. So it was the caterpillar and how it crawls up this X axis that really got us to think about, okay we can't stand by and just cheer on this caterpillar and say "Come on, you’ve got to go faster, I'm sure you can do it, come on we will have conferences will go to COP20.” Cheering this caterpillar on just seems like such a ridiculous image to me.

Dave Mackerness: And then we looked at the as a service business and as a service business is not limited by the caterpillar effect because you don't have this bell distribution that crawl along the X axis of the graph. You have every single customer gets the exact same level of performance, every single customer gets the exact same level of, if you're talking Netflix which is what I was using as an example, they get the same content, they get the same features. If Netflix improves overnight, every customer gets the new improvement. So I'm a Seinfeld fan, and when Netflix bought Seinfeld rights, overnight the whole world that's plugged in to the Netflix service model got Seinfeld. It didn’t take 20 years for us all to catch up to that.

Sarah Nicastro: And here you are binging, for days on end.

Dave Mackerness: I've seen the first two seasons already, but you know it just really hit me in the face, that the caterpillar takes 20 years to get somewhere and if you move the business model or change it so you are not limited by that it takes 20 hours to get everyone up to that level and it's really powerful.

Sarah Nicastro: I think in our follow up episode that's another good point to dig into which is, you see people that are again, some working in earnest that don't really understand the options for transforming models, some maybe trying to mitigate risk to the point of being detrimental to the truth of the model but, you see people trying to do, let's do tiered service contracts, let's do, and to your point every customer gets the same thing, right? So I think that's another part to kind of dig into which is, what is the integrity of the model and why is it so important? Versus what are some of the common interpretations of the model that often lead to failure or less than ideal results? So, we don't have to do that today, that's going to be our follow up but, I think it's a good point.

Sarah Nicastro: Okay, so two more questions for today Dave. The first is what are your thoughts or predictions on the adoption of as a service and the advancement of it related to sustainability, whatever thoughts you are thinking about the forward look of all of this over the next 12 or 18 months?

Dave Mackerness: I think you will find that adoption of the model will steadily increase, which it has been over the last five or six years. I'm not sure when the tipping point will be. Will it be in the next 12 months, 18 months, 2 years? I'm not sure. But I think will, in terms of, if I go a bit further - maybe 5 or 10 years - I am fairly confident that buildings will be servitized in every part of that asset. From the cooling system, which we've shown it can be done with, to the furniture the office is fit with, I know people are looking at doing that already, the IT infrastructure. There are so many people now that are looking to be asset light and agile. I think this is the, it's the tip of the iceberg for cooling and it's the tip of the iceberg for the entire built environment.

Dave Mackerness: And I've seen the benefits of it and it's not revolutionary to be honest with you, because if you change the word instead of Cooling as a Service, if you called it a utility, electricity today from a utility provider, that's electricity as a service. They buy water, from a water utility provider, that's water as a service. So actually you're just adding cooling as a service, you will then add lighting as a service. You will have lifts as a Service. Why would you buy infrastructure for lifts in your building? Why don't you pay per floor that people travel? So technology and data and sensors in the built environment is allowing people to servitize these, until now, unservitizable building services. So I think you will see that happening across the entire board. It won't just stick to cooling and I think that will be 5 or 10 years.

Sarah Nicastro: Yeah, okay. So we’re going to do a follow up episode if you're willing on all sorts of different words of wisdom, lessons learned but, just to summarize today's conversation. What would be your number one piece of advice for listeners?

Dave Mackerness: I think if you're looking at servitizing your business, you will hear many times why it can't be done and many times why you need to write difficult contracts or complicated contracts in order to do it. And I think it's very simple for me – go back to that philosophy I was always told to ask why five times and if they can't answer on the fifth time then you know it's not a real reason. Change it a little bit, ask why not five times and every time someone gives you a follow up just say, why not and why not, and you'll get to the fifth one and you'll realize you don't have to stick to the old way of doing things. So really, I mean it's not easy, it's very difficult to do and there is a lot of business risk involved but, you can take it a step at a time, you can move towards it, and you can learn from other industries.

Dave Mackerness: We didn't develop this we stole the idea too, we stole the same idea that all these other companies did but, it's extremely rewarding and I think when you look at sustainability and circularity it is the single most important thing that we can do across every industry to buy as a service or offer it as a service.

Sarah Nicastro: Absolutely, okay. Ask why not five times, I like that. All right Dave thank you so much for being here today and I look forward to having your back and digging in a little bit more to some of the lessons learned and the risk conversation. So thank you very much.

Dave Mackerness: It's been a pleasure. Thank you for having me.

Sarah Nicastro: Yes. You can find more by visiting us at 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 at ifs.com as always thank you for listening.

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November 3, 2021 | 28 Mins Read

The Key to Real Progress in Diversity, Equity & Inclusion

November 3, 2021 | 28 Mins Read

The Key to Real Progress in Diversity, Equity & Inclusion

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Sarah talks with Latasha Reindl, Director of Service Operations Excellence at Schneider Electric Digital Buildings, about the central theme that is key to making further progress in the areas of diversity, equity and inclusion.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we are talking about a very important topic, one we hear about a lot, which is diversity and inclusion. We're going to have a very honest conversation about what my guest feels is the real key to driving progress when it comes to diversity and inclusion. I'm excited to welcome to the podcast today Latasha Reindl, who is the Director of Service Operations Excellence at Schneider Electric Digital Buildings. Latasha, welcome to the Future of Field Service podcast.

Latasha Reindl: Thank you so much, Sarah. It's an honor to be here today. Thank you.

Sarah Nicastro: Yeah. So I'm excited to have you. So Latasha and I had the good fortune to meet in September at the Service Council Smarter Services Symposium in Chicago. And I started in this space, Latasha, in 2008. And I will say there was very often, I was the only woman in a room at any of these conferences. And we still were. There wasn't very many of us at the Service Council. And I think we both took note of the fact that among the few women that were there, you were the only black woman there. So there's still some progress to be made when it comes to diversity in this industry for sure.

Sarah Nicastro: So Latasha and I caught up after the event and had a really good conversation about this topic and she was kind enough to agree to come on the podcast and talk with you all about it as well. And I'm grateful for that. So Latasha, before we dig into the topic at hand, why don't you tell folks a bit about yourself.

Latasha Reindl: Sure. As you mentioned, my name is Latasha Reindl. I am first and foremost, excuse me, the wife to a wonderful husband. His name is Steven. We have two wonderful children, Jasmine and Joshua. It's pretty cool to have such a great support system, not only from my husband, but from my kids as well. When you, as a parent, you want to be the best that you can be to lead by example and pave the way for them and ultimately to give them the things that you've never had.

Latasha Reindl: But one of the things that I do think is important that I share with you today, just so you understand how I got to where I am today, is a little bit about my background. At a very young age, I made the decision to make some changes in my life. And let me just tell you why. I was put in foster care when I was six years old. So I am the product of the system. I was exposed to some very bad things. I was exposed to physical and emotional abuse like domestic violence, drug and alcohol abuse, and poverty. I wouldn't take those things back for any reason. It helps define who you are as a person and gives you perspective or your lens on life.

Latasha Reindl: But those experiences made me believe at a very young age that I want something different in my life. So never had alcohol before. I made that decision at a very young age that I would never drink. And I have adhered to that as I am a middle age woman, as well as I am the first person in my family to get a college degree. My grandparents who ultimately raised me, my grandfather couldn't read or write. And my grandmother had a middle school education. So it was very important to me. It's something that I instill in my kids as well. My daughter is a dental hygienist. She's doing fantastic. She's a successful business owner as well, online business owner. My son is studying biochem at the University of Wisconsin Madison. And he will be pursuing his eye doctor degree afterwards. So very proud of those things.

Sarah Nicastro: Yes, absolutely. And you should be. And before I have you tell folks a bit about your role at Schneider, when Latasha and I caught up and talked about these things, it was really just a conversation, two people getting to know each other. And those of you that listen to this podcast regularly know that I'm a pretty inquisitive person and I kind of naturally have a lot of questions. And so some of the questions that I asked Latasha that she agreed to talk about today I didn't really go into that conversation thinking we would do a podcast on this topic. And I just want to be clear that when it comes to the role of non-minority folks, so people, white people, men for sure, all of those things, it really is our responsibility to be willing to expand our own minds, to learn, to take the time to read and to listen to stories and to understand.

Sarah Nicastro: And I asked Latasha very frankly if she would be willing to have this conversation because there are many people that feel it is not the people of color's responsibility to educate everyone. And so she was kind enough to come. And I think she has a bit of a unique perspective on that point. Latasha, I don't know if you mind speaking to that, but I know that for you, you see it as an opportunity, not a burden, right?

Latasha Reindl: Absolutely. And one of the reasons why I'm so willing to share this story is I want to give others that are out there who were like me in that position as a child, hope that where you are at this moment doesn't necessarily determine where you can be in the future. That's one of the key reasons. This is my way of giving back.

Sarah Nicastro: Mm-hmm (affirmative). Mm-hmm (affirmative). Yes. And I think for the people that have a genuine desire to really positively impact the diversity and inclusion in their organizations, while there is a lot of research that can be read and books that can be read, wonderful authors that talk about bias and all of the things that we really do need to educate ourselves on. I don't know that there's anything more powerful than hearing people's personal perspectives. And so that's why I'm very thankful that you agreed to have this talk today. So tell the audience a bit about what you do at Schneider.

Latasha Reindl: Day-to-day, I mean, I'm responsible for driving consistency and standardization throughout the organization, managing a centralized team, as well as making sure our frontline workforce have the tools and processes that are needed to execute our services to our customers. And that's very important to me. We need to make sure our frontline workforce is happy because they are the face of Schneider when they're interacting with our customers. And if our frontline is happy, the customers are happy.

Sarah Nicastro: Mm-hmm (affirmative). Yes. And the title of operations excellence, I mean, that is a very, very important job, particularly when you talk about standardization at the scale that Schneider is standardizing. And so I think based on what I heard at the Service Council and what I heard talking with you, the approach you're taking is very good because it's respectful of the frontline, which obviously is very important.

Sarah Nicastro: So, okay. All right. So the key to making real progress here, we talked about the fact that the word you would put as the key is courage. So we need to have courage to continue to drive progress when it comes to diversity and inclusion. So let's talk about a couple of areas where we need to continue to nurture and find and create courage so that we can move the needle.

Sarah Nicastro: The first is courage in conversation. So I think we're walking that talk right now. So we're here. We're having a conversation for everyone to hear. But talk a little bit more about some of the ways that it is important to bring courage into different conversations related to this topic.

Latasha Reindl: So I read a book a while back called Crucial Conversations. I'm not sure if you've ever heard of that. I thought that book was fantastic. It talks about how important effective communication is as well as making sure you take advantage of opportunities that you're in and have that courage to speak up in that moment, because they'll be more impactful. I was having a conversation with one of the leaders of Schneider Electric and it was pretty interesting and I just want to highlight it quickly. They were sitting in a board meeting and they're very mindful of diversity, equity and inclusion. And as they're sitting in this meeting, they realized there's a gap here. And I think when you recognize things like that, it's important that you have the courage to say something. It's important that you have the courage to take action as well. Those are all important things.

Latasha Reindl: As you were talking about this event that we were at and not many women were there. I was the only minority woman there. And to actually have the courage to speak up and say something to the leader, I noticed that. You put it at the forefront. So they realize that this is important. It impacts other people. So I think when you have the courage to have these types of conversation, it puts it at the forefront. And then maybe they will have the courage to say something and take action in the future.

Sarah Nicastro: Yeah. Yeah. I think that's a really good point. And like I said, looking back on my years of going to some of these events year after year after year, I mean, I see the progress. But I think it's important for us to respect the fact that progress is good, but until things are equal, it's not good enough. And I think that this idea of courage is important because I think, well, I know for myself, I consider myself actively anti-racist. I mean, I read. I research. I donate money. I mean, I do a lot of things intentionally. I surround my children with a diverse network. We have a lot of people in our close, close friends and of all sorts. So it's very important to me.

Sarah Nicastro: But I think the thing we have to understand is even when you can say that that's a value you have as an ally, you don't reach a point where the work is done. And everyone still has things that they don't know how to bring up in the right way. Or so I think that one of the points around courageous conversation that I think is important is intent because that doesn't mean you can just, as a non-minority, say whatever you think with no repercussion. But I think sometimes we are so fearful of speaking because we're so scared to say the wrong thing and have it perceived the wrong way that then we are silent just because it can be scary. Especially in today's media and social media, you can think of an executive thinking, hmm, something's not right here, but I don't want to say the wrong thing. And then so it's a delicate balance for sure.

Sarah Nicastro: But I think that if your intent is good and your intent is right, then you are better off speaking up and having to apologize for maybe saying the right thing in the wrong way, then you are not saying anything at all. So that's just one point I want to make as someone that has had a hard time with that myself is in situations where there's a blatant act that is just needing to be addressed, that's a very clear cut situation where I would never have issues speaking out. But when it comes to the idea of kind of the continual improvement and understanding some of the layers that you might need to understand to make real change. There's a lot of conversations I think that can get avoided because people are just fearful of tackling them the wrong way. So I think have the courage to have the conversation. And know that if your intent is good, do it in the most sensitive and respectful way you can. But understand that missteps are not the end of the world as long as you are acting in earnest. Would you agree with that?

Latasha Reindl: Absolutely. I would absolutely agree with that. And again, it's about having the courage to have the conversation. But transparency, it's okay to say, "I may not say this right, but just bear with me here." Put it out there, be vulnerable in those situations. I think Schneider Electric, today is my one year anniversary and I'm so excited to be here. I've taken a moment to reflect over the year. And Schneider Electric does a good job, a great job at being people-focused as well as creating, I feel like I am in an environment where I am safe to talk openly about things. Just me and my colleague, just I can have an open conversation and it's okay if it doesn't come out right. That is okay. But being open and transparent is a part of that as well.

Sarah Nicastro: Yeah. I think it just, it can't be a crutch though either. I mean, that's the only thing is it's okay to say, "I don't know if I'll say this right." But that can't be an excuse to also not educate yourself and to also not do the work on your own. So that's why I say it's a delicate balance. That's not just a free card to show up ignorant and let everyone give you a pass for not caring enough to dive into all of the resources that are out there to... I mean, I have a stack of books next to me I can go through that I would recommend to people to read on this topic because it is important to invest your time and energy into the things that you care about. But that being said, no one is going to show up perfectly. So we can't wait to be able to do that to have those talks.

Sarah Nicastro: Okay. So the next area of courage is in examining our biases, including unconscious bias. So what would you say related to that?

Latasha Reindl: I think it's important to understand that we all have some kind of unconscious bias that we're not aware of. I think Schneider Electric does a great job at sprinkling the concept of unconscious bias throughout their organization, whether it be initiatives, business processes, communications. And when they sprinkle those little topics and things throughout the year, it makes you think not only at work, but outside of work as well.

Latasha Reindl: I'll just give you an example of one of the business processes that they're using in order to sprinkle in this unconscious bias. I was interviewing candidates for a global position and working with the recruiter. They send you the overall package that includes the candidate's resume. And then there's this interview tips and tricks. And it specifically talks about leave your unconscious bias behind. Don't look at weight. It's okay if they don't look like you. I mean, this was the first time that I've ever experienced that before in the 20 years that I have been managing people. And I'm like, wow, we are on a spectrum right now of change when you talk about diversity, equity and inclusion. And I'm so proud to be a part of an organization where I can see it, where they're really taking steps. And so when you are put in a position like this, just in that interviewing situation, you step back and you begin to reflect as well as an individual and your personal life as well. So I'm very proud to be a part of that change that's going on right now in our organization.

Sarah Nicastro: I think on this topic, one of the things I would point out is to understand that what you said. Everyone has biases, so having them doesn't make you a bad person. Being unwilling to examine them is the problem. And I think Robin DiAngelo's book, White Fragility, really taught me that because when I started reading it, to be honest, I went into it thinking I don't need to read this. I'm not racist. And the intro is, if you think you're not racist, you're racist. And I was like, uh-oh. I need to read this. But the point of the book is you can't go around thinking you don't have these biases. Everyone does. And that's the problem is we associate guilt with them. And so we are unwilling to say, yes, I have biases or yes, I've acted in a way that is racist because that's associated with being bad.

Sarah Nicastro: But in reality, everyone has it. So if you can separate the label of guilt. Now, of course there are people that are just bad and have biases. So that's a different situation. But the idea is on the average, someone doesn't want to admit to a bias because they think that makes them a bad person. But when reality is we all have them. So as long as you're willing to continually check yourself against them, that's where it's about doing the work. So I think the understanding of everybody has these. It's just whether you're willing to admit it and work to correct them or not that can be important. Also recommend that book to everyone.

Latasha Reindl: It was eye opening.

Sarah Nicastro: So okay. The next area is courage in challenging faulty thinking in harmful beliefs and actions regardless of motive.

Latasha Reindl: Yeah. That's a very good one. And overall, I think I lead by example around this topic. And I'll just explain that a little bit. I feel like there's this stigma or perception about the African American woman that we are loud, obnoxious, argumentative, and combative. And I do everything in my power to try and defy that myth. I live in an area called Sussex, Wisconsin. It's a suburb of Milwaukee. It's less than one percent of African Americans in that area, not very diverse so to speak. But I make every effort when I am in the community to make sure I'm leading by example. And I'll give you an example.

Latasha Reindl: I went into a coffee shop, it's a local coffee shop in the area. And there's some retired white gentlemen in there reading their paper. It was probably four sitting at the table and you walk in there. I need to feel like it can be uncomfortable at first, but you got to feel like you belong. So you hold your head high. You go in there and you order your cup of coffee.

Latasha Reindl: And I was shocked by the fact that someone actually looked over to me and said good morning. And I turned back and I said good morning. And this began to happen repeatedly as I would go get my coffee two or three times a week. And one morning the gentleman was like, you're going to have to sit with us because we kept having this little banter. But the whole point of this story is, is I want to make sure that I'm presenting myself in a way that is positive, that I'm articulating myself in a way and that I can carry myself and be present in the moment. I think all those things are important. So I can say to someone else when they look at me, I am defining that myth that they have about the African American woman.

Sarah Nicastro: Yeah. Yes. And I think that going back to the courage to speak up, I think when we see someone say... The reason that I said regardless of motive is because it goes back to the intent. I mean, unfortunately there are some people saying and doing things out of some hatred. And it's just malicious. And that is very unfortunate and it deserves to be called out. It deserves to be addressed. It deserves to be punished. I think what gets a little trickier is when you hear or see someone do something where it isn't a poor motive, it's just ignorance, because I think there can be kind of the question of, oh, do I say something? Or, well, they didn't really mean it that way.

Sarah Nicastro: But the problem is, it doesn't matter if you meant it that way. If you hear somebody say something that is a microaggression or anything. I mean, those are the things that make, we're talking about work, make a workplace not a positive environment for certain people. And so sometimes you might be further along in examining your own biases or actions than some of your colleagues. And to me, I see it as a responsibility to speak up and help educate those around you to say, hey. And not to make a big deal of it, but on the side, "Hey, I don't think you meant anything by this, but when you said X, I wonder if so-and-so could have perceived this in a negative way." So just to point things out to people. And I think to your point, going back to the environment at Schneider, if you can create an environment where this is an important objective for everyone within the organization and have that transparency, that person should want to correct those things and have the opportunity to do that.

Sarah Nicastro: And so I think, again, it can be a little bit uncomfortable because maybe it's a situation where it's even you're a subordinate and it's your supervisor or what have you. But this is where we need to feel empowered to help raise one another up. And again, that's how we move the bar forward. So, yeah. I mean, I love your perspective. I think it's awesome the way you look at the opportunity you have to shift that perspective. And I have a ton of respect for you for seeing that as an opportunity and not a burden. But we all have a responsibility to make sure that as we are seeing and hearing things, they get addressed.

Sarah Nicastro: So okay. The next one is having courage to hold yourself and your business accountable for progress. So what are your thoughts on that one?

Latasha Reindl: As it relates to me personally, I think it's important when you find yourself in a position where you can give back. I mean, I think about my life along the way and all the different people who helped me, other parents that didn't look like me, teachers that didn't look like me, friends. Having that support system around you is important. And if I can provide some hope to someone, I want to take the opportunity to do that. I'm becoming more and more aware of how I impact others. And I want to leverage that whenever I have an opportunity.

Latasha Reindl: I was just talking to one of my employees and they're interviewing candidates. It's like, make sure you have the candidate pool is diverse. Work with your recruiter. If you're in a position where you can make a difference and influence, you should take advantage of that. I always feel like if you have power to make change, to influence, make it for the better. And I feel like in the position that I am in, personally giving back to the community, making sure people see that there are people like them that can be successful. And then from a business perspective, making sure I'm making decisions where I can help influence and make change.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. Are there any other areas of courage that come to mind other than those that we have brought up?

Latasha Reindl: I think it's okay to be uncomfortable. I mean, we talked about this a little bit. It's okay to be comfortable. It's okay to have that courage to speak up. If anything, you walk away from this podcast, I want you to be mindful and understand that it's okay. It's okay to be uncomfortable. But the fact that you are aware that you're uncomfortable is the first step. And being transparent and honest and having those courageous conversations is an important step in the right direction. It's okay to be uncomfortable.

Sarah Nicastro: Yeah. I mean, honestly the idea of change doesn't come from comfort zones. So if the idea is we need to increase diversity, people are going to have to get uncomfortable for that to happen. So you have to kind of embrace that a bit. Yeah.

Sarah Nicastro: Okay. So I'm going to ask you, this is a really upfront question. But the reality is, I mean-

Latasha Reindl: I'm ready. I'm ready.

Sarah Nicastro: I know you are. I know you are. The reality is probably the majority of people listening to this podcast are white men. Okay. So I would just say I don't know if it's 51% or 85%, but I mean, that tends to be the audience still. And in your years of professional experience, as a woman of color you have come up against some very challenging, very unfair situations. We don't need to go into any of those. But what I do want to ask is two questions. And the first is, for any white man listening to this, leading a business, what do you want that person to consider related to this topic?

Latasha Reindl: I think that's a very good question. I would say what I would want someone to hear, my response is leave your conscious or your unconscious bias at the door. Look at me who I am as an individual. And as we continue on this spectrum that I say that we're on, this change around diversity, equity and inclusion, ask yourself what you're doing as a leader in your organization to make the steps for change.

Latasha Reindl: And I was looking at some of the statistics out there and there's a lot of them, but I'll just point out one where you talk about equity. And it's not just about money. It's about making sure everyone is on an even playing field. And if you look at some of the statistics, statistics about an African American woman, there's like 64% of African American families are led by a single mom. And if you think about equity and everyone being on an even playing field, what are you doing in the workplace to attract and keep good talent when you have them? Because that's a part of it, too. Not only did you got to get them, you got to be able to keep them. So leave your unconscious bias and your conscious ones at the door and reflect on yourself and look at what you're doing to make change within your organization and for yourself. Part of it is reflective on yourself, too.

Sarah Nicastro: For sure. And I think this diversity, equity inclusion is one of those topics. There's a handful of them, that are everyone says it's important because they know they have to. But it isn't a matter of, okay, well, did I check that box? Yeah. So for sure, we're definitely focused on that. You have to actually care. You have to actually have a desire to make this change. And you have to be willing to put in the work. And I think also part of it is how are you driving accountability for these efforts? So they say only what is measured gets attention. So if you are saying this is important for your business, then what is the real accountability you're holding the organization to, to make that progress?

Sarah Nicastro: Okay. The second part of that question is if there is a woman of color listening to the podcast who sort of may be earlier on in her career, what advice or words of wisdom would you share?

Latasha Reindl: I would say performance is at the top of the list. Make sure you're doing what you're say you're going to do or what they expect you to do. I think that's very important. You got to be able to perform. But also I think it's important that you continue to reflect and defy that myth, that false impression of an African American woman. And I'm not saying to not be your authentic self. I'm not saying that at all. But it's important. I think if you are your authentic self, it's going to have even more of an impact to influence other that are around you and have the courage to be that example for change within the organization that you're a part of.

Sarah Nicastro: Yeah. For sure. I do really admire you a lot for the way you look at that because I think that that's, I mean, it's a heavy burden to bear to always feel like you are fighting someone's interpretation of you before they've even met you. And to be where you are and to overcome what you've overcome and to get to where you are, but do it without any sense of bitterness or anger. And maybe you have it and you just don't show it. I'm not sure, but it doesn't seem like, and I think that takes a very strong person to be able to be proud of where you've come and grateful for your blessings, but also be able to see it as an opportunity. And yeah, but-

Latasha Reindl: Absolutely. I... Oh, sorry. Don't mean to cut you off.

Sarah Nicastro: I was just going to say your attitude about it is admirable. But I do have a lot of respect for just the burden that that must be. I mean, there has to be moments of immense frustration in all of that as well.

Latasha Reindl: Well, let me just tell you something just really quickly, Sarah. For me, I look at things in a positive light. They can be good or bad but it's how you interpret it. I think having a positive attitude about things is that that glass half full. I mean, I see a situation and I see it as an opportunity to learn and grow. If you make a mistake, okay, move on. What have you learned from this? And I try and have that perspective on everything that I do. I mean, I told you at the beginning some of the challenges that I've had in my life. They've helped define who I am as an individual. And it gives me a perspective. It gives me a lens on life that others may not be able to relate to or can relate to. And you just move on. You learn from it and be positive. #positive.

Sarah Nicastro: Yeah. I love it. I do. Okay. So you've mentioned a little bit sort of the spectrum or the continuum we're on of, okay, it's better than it used to be. And in many organizations there is real progress happening. And I think it is important to point out the fact that we don't need to aim for perfection. I mean, ultimately we do get to a place where this conversation isn't necessary. I mean, I think that's the end goal is that diversity, equity and inclusion reach a place where it isn't such a hot topic because we've just gotten to that spot.

Sarah Nicastro: But until we're there, we don't need to hold ourselves to a standard of perfection. We just need to be continually looking at how to make progress. So you mentioned some of the things that Schneider has done in terms of making that progress. So you talked about the unconscious bias checklist in the hiring process, which you were impressed by. You mentioned that they have done some efforts around salary equality which is incredibly important, incredibly important. The other thing I was hoping you could tell folks about is the privilege walk because this is super unique. And I think it would be good for people to hear about.

Latasha Reindl: Yeah. Very first time ever doing a privilege walk. And I think when we talk about biases and that we all have some biases, but being aware of those biases are very important. And I think this privilege walk makes you aware of many things. And it was another opportunity to create that culture. I think culture is built on different experiences that you have along the way. And this is just one of them where you have this safe place where you can speak out and be vulnerable. So let me just give you an example about this privilege. Being right-handed is a privilege. Being raised in a home with two parents that love you is a privilege. We don't think about those things every day. And being vulnerable, I mean, I heard so many amazing things about my colleagues that I didn't know before. And it really changes how you interact with them going forward. It was truly, truly an amazing experience to go through something like that. I would encourage others to look it up, have a session with your managers, with your direct reports. It was a really awesome, awesome experience.

Sarah Nicastro: So tell people a little bit. What is it? How did it work?

Latasha Reindl: Yeah, so basically we had some leaders come in that led the conversation. It was very interactive. And when I say interactive, it's not in person. We had to make it as interactive as we possibly could virtually. But basically they asked some very, very probing questions out there.

Latasha Reindl: And one example, if I can think of it, they talked about how in some industries they expect women to be a little bit more passive. And then if they are going to come across as aggressive, they see them in a negative light. And then I brought up the whole African American female. To be able to be open about things like that at work, I mean, it was just a pretty amazing. You find out what language do you speak? What's your primary language? It is a privilege to be in the United States and have English as your primary language. There was some of my team members, they were born in Taiwan. English is their second language. And when I interact with them, I'm like, okay, he has to think even harder when he's trying to talk to me about complicated things. It's just awareness, transparency. And it allows you to relate to the whole person, not just my colleague, if that makes sense.

Sarah Nicastro: Mm-hmm (affirmative). So it was a virtual session led by certain leaders where it was really just sort of an open forum dialogue around different, I guess just personal journeys of folks. And people talking about what their struggles are and things of that nature. Am I understanding correctly?

Latasha Reindl: Yes. That is correct. And these individuals were trained on this type topic in particular, to bring out the conversation, to bring out the dialogue and make sure people are aware of your privileges that you have. Did you ever think being right-handed is a privilege? Being white, does my husband see that being white is a privilege that I don't have? It brings awareness. And I think that is a first step, an important step in the direction of change in my opinion.

Sarah Nicastro: Yeah. I think so. I mean, this idea of immersion in differences is important. It's one of my favorite things about traveling and why I think traveling helps so much with broadening people's perspectives. It's if you're just living in your own universe, you don't have that view of what else is going on in the world. And it's the same idea of people fear what they don't understand, or they maybe have some misconceptions about things that are inaccurate that could be repaired by just hearing people's stories and understanding some of the differences instead of misunderstanding them. So yeah, I think that's a really interesting thing.

Sarah Nicastro: So the idea of the privilege walk is something folks could look up and other organizations do it, have done it. Okay. Yeah. I think that's a really good takeaway for folks to look into. I know that you mentioned it was impactful. Some of the other Schneider team at the event talked about it. And these are the types of things I think that we need to be examining of how do we get creative? How do we do things maybe we haven't done before to, like you said, get everyone to know each other a bit better and reflect on what other people are bringing to the table.

Latasha Reindl: Yes. I walked away from that session feeling revived. I mean, I think it was maybe an hour and 45 minutes, two hours. And you're like, what are we going to talk about? It was amazing. It was amazing.

Sarah Nicastro: That's awesome. And I think, too, when you get... I always say, in anything, we've done a number of podcasts on mental health. And so leaders need to drive these conversations because when people within the organizations see leaders getting vulnerable or see leaders confronting their own biases or saying, "Hey, I have a question and it might be worded the wrong way, but let me ask it anyway." Or it's leading by example. And that is opening the door for others to understand that it's okay for them to also have the same courage. I mean, it's important to show that. So okay.

Sarah Nicastro: So Latasha, in closing, do you have any other thoughts you would like to share or advice you would suggest for individuals or for organizations that really care about this and want to continue to make progress?

Latasha Reindl: I'll just reiterate having the courage to speak up, creating a safe environment where people have a platform to speak up, to be transparent. And also understanding and recognizing that you have a gap and creating a plan, a meaningful plan to make change, meaning have good goals, understanding where you are today and say, I want to be here by when. And developing meaningful actions to get you to that place. I think that's one of the most important things that you can do. It's one thing to say, yeah, I know we have the gap. But what are you truly doing in order to get there? And can you measure it?

Sarah Nicastro: Yeah. I think the idea of the privilege walk is super important. I mean, salary equity should be just table stakes. But I mean, that's an area people obviously need to work on. I love the idea of the unconscious bias checklist. I think the other thing is, think about how you leverage your network. So I mean, internally, if you don't know where to start, create some focus groups and give people a chance to open up and be honest about their experiences. And that might give you a really good indication of things that need to be addressed. Or reach out to a colleague in an organization that is maybe a few steps ahead of you and ask some of the things they've done and get some different ideas that way. I mean, yeah. The point is do something. Do something. Do it courageously. Don't sit still. Take action.

Sarah Nicastro: And know that an honest intent and a real desire to educate yourself and to make progress here is what matters more than anything. So Latasha, well, thank you so much for having this conversation with me.

Latasha Reindl: Thank you, Sarah.

Sarah Nicastro: I appreciate it more than you know. And I'm sure that our audience will find it incredibly valuable. So I appreciate you being here.

Latasha Reindl: Thank you. It was an honor. Appreciate it.

Sarah Nicastro: You can find more at 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 at ifs.com. As always, thank you for listening.

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October 27, 2021 | 18 Mins Read

Cimcorp Shares 4 Defining Characteristics of Strategic Alignment

October 27, 2021 | 18 Mins Read

Cimcorp Shares 4 Defining Characteristics of Strategic Alignment

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Maarit Leppäaho, Vice President, Corporate Marketing and Communications at Cimcorp Group, shares with Sarah the guiding forces and lessons learned from the company’s recent initiative to reshape strategy and create better strategic alignment.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Strategic alignment has become a very important focus as companies are innovating at faster paces than ever, transforming their businesses in different ways. Looking for ways to introduce new customer value propositions, dealing with issues related to changes in the workforce and the idea of working toward a common goal and a common mission as an entire organization has become super, super important.

I'm excited to be joined today by Maarit Leppäaho, who is the vice president of corporate marketing and communications at Cimcorp, to talk with us a bit about their defining characteristics of strategic alignment. Maarit, welcome to the Future of Field Service podcast.

Maarit Leppäaho: Thank you so much. And thank you for inviting me here.

Sarah Nicastro: Absolutely, thanks for being here. Okay, so before we dig into the conversation related to strategy and strategic alignment, tell our listeners a little bit about yourself and your role at Cimcorp.

Maarit Leppäaho: Well, like you already told I'm VP corporate marketing communications and I lead this function globally. I'm also a member of our executive management team and I've been leading this strategy process at Cimcorp group.

Sarah Nicastro: Okay, good. How long have you been at Cimcorp?

Maarit Leppäaho: For two years.

Sarah Nicastro: Okay. What's your background, prior to this role?

Maarit Leppäaho: Well, my background is in marketing and communications, different kinds of multinational and domestic companies in Finland.

Sarah Nicastro: Okay.

Maarit Leppäaho: In electricity field, mainly. Before, yeah.

Sarah Nicastro: Okay, okay. So, a little bit of a different perspective from that background.

Maarit Leppäaho: A little bit, yeah. Yeah.

Sarah Nicastro: Yeah. Okay, good. All right. Cimcorp has recently undergone a process of revisiting, revamping, reshaping strategy, to create this better alignment. That we, as I just mentioned, know is super important. We're going to talk today about some of the guiding forces, of how you have reshaped your strategy and created better alignment. But, let's talk a little bit, first, about the purpose for this initiative.

What are some of the reasons, within the market, within the company, within just trends in your industry and in the world, that it was important for Cimcorp to undergo this project of sort of taking stock in strategy and looking at how to create better alignment?

Maarit Leppäaho: Well, our business in logistics automation solutions grows fast and develops with giant leaps. We, of course, want to help our customers to succeed in their future business. So, we need to be prepared. We need to be innovative and a couple of steps ahead. We have been growing and now is the time to take that growth even more seriously and plan according to that. That's why we, at the beginning of our strategy work, studied trends carefully.

Sarah Nicastro: The trends that you studied; can you talk a little bit about how you did that? What were some of the sources of insights that you collected? What were some of the things that you examined to think through where you wanted to take the direction?

Maarit Leppäaho: Well, the logistics business trends are the most important, of course, because it's our business. We studied and then, we found the three main trends. They are complexity, shorter lead times and increasing share of online.

Sarah Nicastro: Okay.

Maarit Leppäaho: Then, we of course studied, because the world is also changing. We studied the mega trends and wanted to align our work and plans together with the global mega trends. They are sustainability and automation.

Sarah Nicastro: Okay. Yes. It's interesting. One of the things that comes up in almost every conversation I have these days, is the pace of change. To your point, this idea of needing to stay a few steps ahead of your customers and be anticipating, not just their current needs, but what are they going to need from Cimcorp in a year or three year or five years? Be making sure that you're taking steps to be able to meet those needs. I think the idea of complexity is a big one, right?

Maarit Leppäaho: Yeah.

Sarah Nicastro: I mean, there's complexity from many layers, right? I mean, there's complexity in the world right now, there's complexity in various industries. There's complexity in the workforce, there's complexity in technology, right? At the end of the day, what customers want, is an outcome.

They want what they need, and they want peace of mind and they want predictability. So, to do that, it just requires a lot of effort to master that complexity, so that, it's, in many ways, invisible to the customers, right?

Definitely a lot going on that makes it very important for organizations to create this strategic alignment. I think, if you look historically at how businesses have operated, the pace of change wasn't as fast and it was okay, in many instances, to have some different silos that were working toward initiatives. Because things weren't changing as quickly as they do today.

So, it's really adjusting our thinking and adjusting our working processes, to make sure that we're reshaping the way the business plans and creates goals and measures progress, to be aligned with where the market is today. Okay. So, as we talked about the process that you and this import team have undergone, we really talked about four major themes that guided the development of the new strategy.

I want to talk a little bit about each of those and why the theme was so important. What it looked like as you went through this process, et cetera. The first is prioritization. Talk a little bit about the role of prioritization in creating strategic alignment.

Maarit Leppäaho: Well, we have professionals working in various areas of work, from assembly to finance and everything between. Each of them have a variety of projects and priorities, everyday duties and routines. Then, add in to the mix, that we work in three big segments. Tire industry, warehouse and distribution industry and then service. Each of them are demanding. So, prioritization is the key when aligning everyone's workload, so that the resources match from each function.

We needed common priorities, because in a corporate company, everyone has to work towards mutual goals and in the same rhythm. When we think about that, in today's hectic world, prioritization gives peace and clarity. We have a new purpose statement, and it is, "We guarantee profitability and peace of mind." When we made this, we thought about that, when we give to our customers profitability and peace of mind, we also get it at Cimcorp.

Sarah Nicastro: Yeah, that's a very good point. There's a lot of research that's been done. If you look at employee engagement and employee satisfaction, on understanding expectations, right? Again, this conversation around prioritization is a big one, because I've talked with a lot of folks that work in organizations, where it's just every week, the priority changes, you know? It's almost simply putting out fires, right? It's, "Oh, well, last week we were going to focus on this, but now this week, this is happening and we need to do this."

When you operate that way, it's hard to make actual progress, right? So, there's also this idea of what gets measured makes traction or gets action. I think that that's true, when it comes to looking at, "Okay, what are our strategic objectives?" We can't prioritize 40 of them, right? No one can effectively consume, and on a daily basis, measure progress or work toward too many competing priorities. Or, not even competing, but just parallel, right?

There has to be some focus. I think the other big thing here, related to prioritization, and I've talked about this quite a bit on the podcast and in different articles, is this idea of the pace of innovation, right? There's mastering the day-to-day business and making sure that you're operating effectively. That you're meeting customer needs, that things are going smoothly, that you're handling all of that complexity. But then, there's the idea of all of the forward thinking, planning and strategy to innovate the business. To not only meet those needs today, but be two steps ahead, like you said, right?

So, it's doubly complex, because you're talking about prioritizing what needs to be done in the present day, to make sure that you are optimized. Then, there's prioritizing the strategic priorities for innovation and transformation, to meet the needs of those customers in 2, 3, 5 years. I think the concept is super important. Now, how did you all kind of narrow it down? If I remember correctly, you landed on six key areas of focus. Out of, I'm assuming, quite a few, right?

Maarit Leppäaho: Yeah.

Sarah Nicastro: So, how did you decide what was most important for the key focus? Then, how frequently will you be revisiting that, to see if you need to sort of change those priority areas?

Maarit Leppäaho: Well, we have chosen the key focus areas, the battles that we are going to win. This strategy is for 2024. Of course, during the strategy period, every year, we will be revisiting that. How we are doing? Should we change the direction or correct some things, clarify some things? I think that strategy work is constant work. It's not that we have done our strategy and that's it, really, for the coming three years. But, it's constant work, all the time.

Sarah Nicastro: Yeah, it is. That's a really good point. If you're looking at creating this strategic alignment, you need to be examining, how frequently are the key stakeholders of the business communicating? Because what you don't want to do is say, "Okay, we did this initial sort of evaluation and setting strategy process. Now, everyone, go do your parts and we'll come back in a year and see how it's going."

I mean, because people are going to learn things as they go. There's going to be struggles and there's going to be wins. If you're not sharing those among those key stakeholders, you risk fueling or feeding those silos, right? I mean, you have to have that visibility across the business. To be able to ensure that you are making progress and that you're also all staying on the same page.

Maarit Leppäaho: Yeah. Of course, that people believe in that, and really buy that, in a way that they are involved.

Sarah Nicastro: Yes, yes. We're going to come to that. Now, number two, the second key area is globalization. At Cimcorp, we're looking at the growth and realizing that there needed to be better globalization of strategy. So, talk a little bit about that.

Maarit Leppäaho: Well, we have had entities and customers around the world for many years, for tens of years. But, being global doesn't only mean that we are present there in some countries. It means understanding and including different cultures, languages and personalities. With this new strategy alignment, we wanted to clarify internally, what it really means to be a global company.

We took the time to really understand and analyze what global means for our processes. For our customers and for ourselves. We came to the conclusion that truly global means that the customer experience is equal, no matter where in the world. Customer experience is a direct result of good employee experience for us.

Sarah Nicastro: Okay. Now, the third key area is harmonization. Explain to me the difference between globalization and harmonization.

Maarit Leppäaho: Well, in harmonization, to reach the consistent high quality around the world, it requires harmonization. It's about the processes, in a way that, before being able to do that completely, we needed to understand how our processes were functioning and find the best practices for that. I think that's the difference. They are very much connected to each other and we talk about globalization and we have our harmonization processes in the globalization process.

Sarah Nicastro: Just to make sure I'm understanding, would it be fair to say that the globalization was more in the thinking around, "How do we take our truly global footprint and standardize it in a way that is true to everyone? Then, the harmonization is really the action of the processes below that, to bring that vision to reality." Does that-

Maarit Leppäaho: Yes-

Sarah Nicastro: Okay.

Maarit Leppäaho: You are right. Yeah.

Sarah Nicastro: Okay, okay. That makes sense. I think, again, that idea of the first part of it, the thinking part, the understanding that every country, every region, every area of the business. I think, when companies standardize things globally, it's always tricky, because every region feels that their own entity and they do it the best way.

There's a lot of emotion tied to that, so it can be difficult to honor the hard work they've done to create whatever processes and strategy they have. But, also help them understand the value in, as an organization taking a more consistent approach. It's easy to run through that on a list of things, but I know that it's far harder than it sounds.

Maarit Leppäaho: You're so right. You're so right.

Sarah Nicastro: Yeah, but it's important. That's where you get back to the people part, which is, if you don't consider everyone's viewpoints and thoughts and ideas and hard work when you're making some strategic changes, then people get disconnected. Disenfranchised in what that mission is, because they don't feel that their work to that point has been valued.

How do you make everyone understand, "Hey, you've done a great job and any change we make isn't related to you not having been effective. But, here's why it's important to all of us." So, I guess that kind of brings us to the fourth point, which is connection. This is sort of the people part. I think when we spoke about this, it's not just about change management, because unfortunately, I've spoke on this podcast a few times about my frustration with change management. Because, when I talk with companies about any sort of change and I ask them, "What were the biggest missteps or lessons learned?" It's always related to change management.

"Well, we could have done a better job with change management." "The hardest part was the people." Yet, it is continually de-emphasized, under-prioritized, under-invested in. Because, I think, for a variety of reasons. But, I think that people also see it as, like you said, this one-time process. "Okay, we'll set our strategy and then we're done. We'll manage the change and then we're done."

It's not that way. I mean, so I like that we framed this as connection, because it's ongoing. It has to be an ongoing focus of, "Are our employees invested in our company mission? Are they invested in our strategy? And, if not, how do we help them more? How do we help them feel more connected?" Talk a little bit about how you've connected the strategy and the mission to the employees within the company.

Maarit Leppäaho: Okay. Well, strategy is only strategy when everyone understands it, remembers it, and follows it in the same ways. In this process, we wanted to bring the strategy close to our everyday work. Strategy can easily be something distant, difficult to understand and to follow. There's some there on the top level and the management is doing something and no one else understands and is not really interested in that.

We didn't want to create that kind of strategy. Our goal was to be able to really prioritize our work and to support the collaboration between functions and to grow in a conscious manner. We have so many big things going on at the same time, because we have been growing for a long time already. But now, we want to do it so that we involved every single person, in some ways, in this process.

We started in January and we interviewed the key persons extensively. We have had a lot of workshops. Then, we have sent a couple of queries, asking about important things. People could be involved and give comments and ideas for the strategy work. This process was well thought and planned, because we wanted to hear everyone's opinion, but also, to do it in a controlled manner. So that not everyone can be involved with everything, but anyway, everyone could have had just their say to the process.

Sarah Nicastro: Yeah. It's interesting, how this idea of connection is tied, really, to the other elements. Like you said, strategy is only effective when it's understood and can be executed. I think that goes back to when it can be understood, to me, ties back to prioritization. No one is going to understand a list of 30 strategic priorities, right?

Maarit Leppäaho: Right.

Sarah Nicastro: I mean, so you have to simplify that down, to some degree, for it to be consumable, repeatable. To be something that people can keep top of mind. Then, something that can be executed and that, again, you can have clarity around. "Here's our six key areas of strategy." But, if you get there and then you say, "Okay, go do this however you will, regions, countries, locations."

Then, it's sort of that communication game, right? Things get lost in translation. Some things are interpreted one way and some things are interpreted another way. You have to have that globalization and harmonization, to make sure that, not only are you creating a consumable list of priorities, but you are ensuring that people are clear on how they're expected to make progress toward those priorities.

Maarit Leppäaho: It's very, very important to have a proper communication implementation plan in a way that we are going to have workshops, so that everyone understands that, "What is my role in this strategy?" So, it will last a long time. It is not ready, yet. It was launched, but it's not ready. It's going to continue, like I said, all the time.

Sarah Nicastro: Yeah, yeah. Right. Okay. There has to have been some challenges along the way. What were some of the challenges that you've encountered and how did you navigate those?

Maarit Leppäaho: Well, because we are a global company and we have offices in six countries, of course, we had the time zone a little bit difficult, because we had to be innovative in a way, how to include everyone efficiently, without overbearing their workload. Of course, it was easy to gather the necessary information from all functions with those queries and everything. But, then going through all the data and find the diamonds, was hard work and required many conversations and reflections with the organization.

Then, there's one thing that, I wouldn't call this a challenge, but something to have in mind, was also the fact that our Cimcorpers work in many different tasks in many, many different responsibility areas. We have professors working in workshop insights, mechanics, warehouse, everywhere. We have people in office, software to engineering, they have different places. They don't have always the connection and they can't conversate in the same ways.

We wanted to involve everyone, but everyone's job includes different aspects. We wanted to create a strategy that truly is connected to our everyday work. Just a strategy, but it really has to be connected and it can't be something new, but it has to be connected to our values and also to our customer experience.

Sarah Nicastro: I want to go back to a point you made, which is the data. You have these workshops and these meetings and you're involving as many people as you can, in the appropriate ways, so that everyone feels they have a say in this. You were researching trends and all of those things. When do you decide, "Okay, we could examine data and have workshops forever. But"-

Maarit Leppäaho: Yeah, that's right.

Sarah Nicastro: "We need to make some decisions and set the strategy and then get going." Of course, it's an ongoing effort. It's a continual work in progress, but I mean, you have to start somewhere. You have to kind of make a judgment call at some point, of, "Okay, enough discussing, enough investigating. Here's what we land on, here's how we move forward." How did you make that decision, or get to that point?

Maarit Leppäaho: Well, we made the final decisions some weeks ago. There's person in our organization who is in charge of this implementation process. There are certain development streams, development processes that will be worked on. We have chosen the specific one and of course, there will be strategies for functions and regions and everything. But, the development work has started already.

Sarah Nicastro: Okay, yeah. I think it's a tricky thing, because the idea of getting input is important. The idea of doing due diligence is important. But, sometimes, I think companies let that paralyze them from action. You can kind of get lost in an endless cycle of planning and talking and researching, before you actually make some hard decisions.

The reality is, again, when we look at the pace of change today, that's not a good idea. I mean, you're better off making some decisions and needing to course correct, than you are staying in sort of an endless cycle of analysis. Okay, Maarit, what would you say is the biggest lesson that you as an individual learned throughout this process?

Maarit Leppäaho: Well, this has been very, very exciting and interesting journey. I have to say that, to listen and to plan well. Because balancing the everyday work with something as extensive as strategy work can be difficult. Also, to me, because I have my responsibilities and then I have been leading this process. But, I think that, with the strong project management, planning, agendas, meeting those deadlines. Very strict, in a way, discipline that can be done. Because everyone has to do this and everyone says, "Should I participate in this? Or should I do my daily routines?"

Sarah Nicastro: Right, right. It's a very important point and I think it's one for businesses to consider too. In the sense of, to the degree you want any layers of your workforce to be involved in strategy and innovation, you really need to think about how that fits with their day-to-day demands. Is there steps that we can take to create space for them to do that work? Because I agree, that the input is invaluable. But, I've talked a bit, here in this forum about the weight it puts on leadership, to be responsible for both day-to-day operations and innovation. How do we make sure that we're having realistic expectations and not creating too much burnout, I guess, is the key, right?

Maarit Leppäaho: Yeah, right.

Sarah Nicastro: Yeah. Last question, Maarit, is what impact do you think this process, this effort will have on Cimcorp as a business and on your customers?

Maarit Leppäaho: Well, our employer experience will be globally harmonized, and higher quality. That ensures a stronger customer experience, that's how it started. With this strategy alignment, we wanted to ensure that we have the proper tools and resources to grow in a cogent manner. Without the possible growing pains that may happen if a company grows too fast and without any plans.

Our end goal is to have globally harmonized customer experience, no matter where in the world. Also, a globally harmonized employer experience. Our good team spirit, which we call Cimcorp Spirit, inside the company. It needs to be seen and felt throughout the group.

Sarah Nicastro: Yeah. I really admire the attention that you all are putting on the employee experience and understanding how that will relate to customer experience. I think that companies have become very focused on customer experience, which of course is a good thing. As it should be. But, sometimes, the correlation between employee experience and customer experience is overlooked. So, there's this effort to improve the customer experience, at the expense, sometimes, of the employee, instead of along with their experience.

I think that the way you're looking at it, Cimcorp's looking at, it is absolutely the right way. It's the only sustainable way. I mean, you need to be able to continue to attract and hire and retain good talent. Giving them a positive experience as a valued employee is the only way to do that. I like that you've prioritized that in the big picture and understand the role of that for the company. All right. Well, Maarit, thank you so much for joining me and sharing today. I really appreciate you being here.

Maarit Leppäaho: Thank you. Thank you so much.

Sarah Nicastro: You can find more by visiting us at 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 at ifs.com. As always, thank you for listening.

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October 20, 2021 | 23 Mins Read

Bureau Veritas’ Focus on a Sustainable Future

October 20, 2021 | 23 Mins Read

Bureau Veritas’ Focus on a Sustainable Future

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Lou DeLoreto, Vice President, Safety & Sustainability- North America, Bureau Veritas talks with Sarah about the company’s focus on improving sustainability, both in achieving its own objectives and also by helping customers with their sustainability goals.  

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we are going to be talking about how Bureau Veritas is focused on building a sustainable future. I feel like I'm going to be saying this for a number of podcasts in a row, so you may already know this, but I do have some renovations underway in my house, so if you hear any background noise on my part, please bear with me. The show must go on, so we're going to forge ahead, but there might be a little bit of noise. Okay, so I'm excited to welcome to the podcast today, Lou DeLoreto, who is the Vice President of Safety and Sustainability for North America at Bureau Veritas. Lou, welcome to the Future of Field Service podcast.

Lou DeLoreto: Super happy to be here. Nice to meet you, Sarah.

Sarah Nicastro: Thanks. Thanks. Happy to have you, so before we dig into the topic at hand, can you tell our listeners a little bit about yourself, your background, and maybe give a little recap on BV as a business.

Lou DeLoreto: I will do that, so let's see. I won't bore you too much with my career, but essentially for the last 26 years professionally, I've been in the health, safety, and environment field, most with two large multinational companies, a lot of field service construction, in fact elevators were a big part of that career throughout the world. And it's now I think been about eight months since I've joined Bureau Veritas, like you say, BV safety and sustainability for those. And BV sometimes isn't well recognized in the US, but I can tell you that anyone listening at some part of their day, BVs been involved whether it be the food or water you drink, to the car you drive, the bridge you cross, the building you work, or school you study in. Maybe it's an electronic vehicle that you're driving. We really inspect, certify everything from food to, like I said, infrastructure, but we really are like kind of the quality control, the trust of the product for those who use it, so you've definitely have been around us whether you know it or not.

Sarah Nicastro: Yes. Thank you, Lou. And we recently had Maggie Laureano on and we put a link in that show note episode, I'll do the same for this one of the kind of day in a life video that shows a lot of those different interactions with BV. And it really illustrates your point of, you may not know the brand by name, but you've inevitably come across pieces of infrastructure that have been touched by BV.

Lou DeLoreto: And I'd say like in the North America space, roughly about 6,000 plus employees and 150 locations of labs and buildings around US and Canada, that's kind of where we're positioned.

Sarah Nicastro: Okay, cool. All right, so Lou, my first question is really just, if you can comment on the topic of sustainability and the desire to move toward a more sustainable future. In your words, why is this so critically important to have top of mind right now?

Lou DeLoreto: Yeah, I think, we think a lot about that and I say that I think it's always been critical, but you can't find a news outlet or something on social media, that's not talking about some major climate event. Whether it's the fires happening in the west, what Ida just did to the south and up to the Northeast. Whether you're choosing not to listen about the impact of climate or maybe some worry denial, it's real and present. And I think that's where you see a lot of, I would say even organizations, regardless of policy, really taking on some environmental stewardship, recognizing that it's going to take all levers to try to get around this thing, but really not only find out what their impact on their businesses to the environment, but how can they use their businesses to make it even better. I think it's just really eye opening what's happening around the world. And I think you're seeing a lot more, I'd say leadership in the space and I think that's extremely critical for us to make some improvements.

Sarah Nicastro: Yeah. I think that's a good point. It kind of feels to me like, particularly in North America, we're reaching a tipping point here where companies have an option to do some of what we're going to talk about today, that BV has done and sort of lead the charge in this area or quickly be forced into doing so, right? And so just like most business change, the more you can be proactive instead of reactive, the better off you're going to be. But there's a lot of new legislation coming along, new regulations being passed that companies are going to be forced to comply with. And so whether your catalyst is altruistic or just business focused, it's an important topic to sort of educate and do some work on.

Lou DeLoreto: You know what I'm seeing, so obviously you're also seeing financial institutions. If you want backing and support, they're expecting you to be mature or at least have a plan to be mature in this space around sustainability, as well as like attracting and retaining employees, so employees just it isn't all about just the paycheck anymore. They also want to be part of something bigger, so the more that you have some strategy around making the planet or making people better from when they came to you to your company and went back home, like people are starting to expect that, so it's even beyond the environment, you know? And I think that's important.

Sarah Nicastro: Yeah. Those are really, really good points and different areas of consideration around this topic. Lou, can you talk a little bit about the role you feel or not, do you feel like COVID has had an impact on the way companies perceive this topic and are taking action?

Lou DeLoreto: Yeah, I think COVID had a couple of, I'd say important aspects on how companies not only saw how they can support clients but also what COVID did is really made companies think about how they can operate during a pandemic, right? For us, I can give examples, we're an important say part of a supply chain, so if you have a big project you need do, or you want your fuel, or if you need your food certified so you can go sell it, we had to be there. And so we found ways on how we could keep our labs operating, how we could leverage drones for example, or even halos for lenses, but really kind of be creative on how we could bring that same service during a pandemic while making sure we have health and safety of our employees. That was one aspect, right?

I'd say the other thing is, are there other ways we can help our customers during a pandemic? And one example would be like the restart of the business, so we did a lot of audits and inspections of building spaces to make sure they could reopen refaced or even have the right checklist or things in place, so if people were at work they had the same protocols, masking, distancing, hygiene, all those things. We did two things, we said, okay, how can we continue to provide the same service so that clients need it. How can we also help them to keep their services? And then lastly, I'd say it also gave us a look at how much is there a nice to have versus a real necessity?

And so for an example, we had a lot of virtual work, do we need 60,000 square feet in this building anymore? When a lot of what we could do is maybe virtual. How much is true essential travel? The idea of like a carbon footprint, it also made us reflect a little bit on, okay, so what could the future look like where we reduce the impact of carbon to the environment based on the way we work. We're seeing opportunities there, so I think there's lots of areas where it did actually impact us.

Sarah Nicastro: Yeah. I agree. We had a podcast published recently with Dr. Andreas Schroeder of the Advanced Services Group at Aston business school. And we were talking about how specifically servitization, but even just services and sustainability are inextricably linked, and his point was there is just so much that is really good business that improves sustainability. And there's so many opportunities for sustainability in business, right? He is kind of talking about whatever your lens is in looking at this topic, there's business benefits to becoming more sustainable and there's business opportunities in sustainability, right? You can look at those things a bunch of different ways, but I agree that COVID was a big reflection point in a lot of those areas of, okay, wait a minute. And then there was some points where I read some different research on how it impacted the environment.

And I think that made people think about, to your point, is all of this necessary or are there things we could be doing that would have a big benefit that we just... You get caught in the status quo and that shook things up enough, I think for people to reflect and think about that a bit more. Lou, I want to talk about two different areas here next. I want to talk about how Bureau Veritas in some of the ways that you're enabling your customers to become more sustainable. And then I also want to talk about how you as an organization are focusing on your own sustainability as well. To start, can you talk a little bit about some of the efforts and options that BV is offering to its customers to improve their sustainability?

Lou DeLoreto: Yeah. It's interesting, and I look at it in both of those areas, so when we look at how BV looked internal for sustainability, as well as external, what we found is a lot of the things we were already doing before ESG or CSR was kind of a thing. We were always doing stuff on it. What this allowed us to do is kind of get more strategic around it, get it under one sort of packaged umbrella, but we had a lot of offerings, so we call them our green line of services, okay. We kind of have like four pillars. We work in sort of the consumption and traceability space, so that's like supply chain resilience, the food, everything that you're using or... Is it traceable and what's the sourcing and making sure that we've got that aspect for customers.

We also do obviously the building and infrastructure. We'll do the green building certs, we'll make sure we project manage good life cycle of all of those projects to make sure from conception design, to final install, all those are meeting that expectation and really all those aspects of infrastructure that would be for renewable energies, we have a piece of that. Third is new mobility, so I think 25% of the carbons really around air travel, vehicles, all those things, so we actually try to work with clients on a variety of technologies, mixing fuels. Bless you. To see if there's alternative ways that we can do that travel more efficiently. In fact, I think we're one of the only companies that have conceptually put the whole life cycle of electronic vehicles from design to install, to even govern it's inspections, to make sure they're always doing it.

And so that's kind of a new offering we just came out with on mobility. And then lastly, it's just like the resources and production, which is really around the renewable space. We just acquired and bought to the BV family, Bradley Construction. And they're really heavily in the solar and wind space. I think they've got over 50 projects that they've been a part of. And that's like probably like the fourth pillar that we are in, so the renewable piece. But long list of renewable, I would say, our green line service are really helping other clients achieve their sustainable goals too, which is exciting.

Sarah Nicastro: Okay, so let me ask you this. You mentioned that BV has really been doing these things for quite a long time, but the focus on these initiatives has allowed you to sort of become more strategic, categorize things differently. How long would you say the green line of services has existed? Even if it wasn't referred to as that?

Lou DeLoreto: Hard for me to exactly say, but I know some of the industries I spoke about is who BV was born on like in Marine & Offshore, so thinking about how they can be more efficient and optimized, that travel has always been there so like conceptually, I feel like there was always pieces of sustainability in BV strategy. I can't give you a year, but I know it's kind of, if you think about Veritas is the pursuit of truth, right? We've always been trying to help clients do the right thing and confirm they're doing the right thing. And sustainability's been just part of that, so I think it's really conceptually, always a piece. I just think the pieces are getting a lot bigger in our offerings going forward.

Sarah Nicastro: Yeah. That makes sense. Would you think it's fair to say, like has there been an increase in interest specifically around those sustainability services? Like of customers looking at it from the lens of sustainability, so their desire to expand their initiatives?

Lou DeLoreto: Yeah. One of the things, so we've got a platform we talk about as Clarity. We do a lot of certification, so training certification, and buildings, and everything, and people, so we're getting a lot of interest of us leveraging our platform to come into a company and help baseline where they think they are in sustainability, so it pulls in, you can help decide what's important to you in the whole CSR or ESG space. We come and help you walk through where you are in that journey and then work with you on the pace for which you want to get to somewhere different, so we've seen a lot more interest in that, because I think you can define CSG so many different ways. We help you define what it makes more value add for the company yourself.

And I see that's come a long way as well as just infrastructure, right? Even as we're getting a lot more project-based work that's in that area to make sure that obviously the quality, the control, and even the sustainability targets they have in those projects are met, so those are probably two big ones I'm seeing. 

Sarah Nicastro: Now, if you consult with a client who has this interest in improving their own efforts, do you provide guidance on the best ways to do that? Or do you just help them execute the plan that they've set?

Lou DeLoreto: No, I think the product and the service is just that, so I think it tells you where you are.

Sarah Nicastro: Mm-hmm (affirmative).

Lou DeLoreto: And I think it then it gives you some BDPs practices that we know from other clients.

Sarah Nicastro: Mm-hmm (affirmative).

Lou DeLoreto: And then we just work realistic to a timeline and investment that, that client's interested in, right?

Sarah Nicastro: Yeah.

Lou DeLoreto: It's collaborative.

Sarah Nicastro: Yeah. And I think it's interesting that you say that's an area that there's a lot more interest in. We are recording a podcast with Tetra Pak and they're kind of seeing the same type of thing, and having organizations that they work with in their services division, looking for more assistance on what are the right targets? What is the right path to get there? How should we measure our success? And it's just interesting to me that some of the companies like Tetra Pak or BV that have maybe then more of a leader in this area are in a really good position to leverage that expertise and experience to help others on this path. Okay, cool. All right. Lou, let's talk a little bit then about how BV itself is transforming in the area of sustainability, so maybe if you can talk a little bit about what are the goals, what are the focus areas, that sort of thing?

Lou DeLoreto: And I'd say like, this is the same kind of thing. When you start taking inventory of the things that you do in CSR, you find out, wait, we do train people. We do care about the environment, so the inventory was already there, but again, it allowed us to kind of really kind of package it, and be a little bit more strategic, and really get some KPIs around it. But so we go to market shaping a world of trust, right. And really building it for our customers, helping them, internally we call it shaping a better world, so CSR in BV is called Shaping a Better World, okay. And so we're kind of playing on really what I think is important. And we look at three, I would say areas within sustainability. One is people of the workplace, and the middle is the environment and the climate, and last is business practices.

And so we're kind of emphasizing initiatives in each one of those. In the workplace we talk about things, health and safety. We talk about diversity and gender, training and development, right? There's a lot of whole people play in the work place. The environment is really about impact on the climate, our carbon per employee. And then business practices is not only do our own business practice, but our suppliers. So we kind of make sure of ethics and those things are important. When it comes to like goals and KPIs. There's 17 sustainable development goals that are recognized around the world. We've started with five that we think we can make a good impact fast. And who knows if it doesn't turn into all 17, but those five all live in those three pillars, so we are looking at equal pay and diversity, health and safety, economic growth and development, climate action is the middle.

And then the last one again is like business practices. And all those drive KPIs, right? We want to reduce our injury rates by 2025, by 50%. We want to get women in leadership positions, equal pay to a percentage, so we've got KPIs lined up for each one of those. Climate, we want to reduce our carbon footprint per employee all around the world, so we've got like different KPIs that we've set up ourselves up to 2025, and then we'll probably push again thereafter. And then when it comes to like management's engagement, like other things CSR is kind of a pay for performance, so their engagement and I'd say influence of those KPIs that I just mentioned are really built into sort of the objectives that we're all held accountable for.

Sarah Nicastro: Okay, so apologies if this is a silly question, but the 17 metrics that you mentioned of which BV has picked five to focus on, are those BV metrics that you could choose from, or you're talking about like a global standard?

Lou DeLoreto: Okay, so the five SDGs are global standard. What we do is we assess BVs maturity of each one of those five, okay. And they're not really KPI driven, it's just a maturity path. Here is you're doing everything, what percentage of you do you still need to do? That's a separate, like how does BV perform against other companies in those, and everyone has the same kind of self-assessment, so that's one get out of those five SDGs that are around the world. Inside that we develop BV KPIs, so it's kind of more of a target based KPI than really just the maturity of that whole development area, so we might have, 95% completion in health and safety because we've been doing it forever, right. But we still want to reduce our actions by this, here's the KPI. They're kind of two separate focuses for us, keep maturing in those five but also give yourself some agreeable targets as a KPI. Does that make sense?

Sarah Nicastro: It does. Yes. And I think there's a couple things that I think are just important enough to touch on, right? One is this idea that when BV decided to sort of formalize this focus and you know put some different structure and terminology around it, you realized that there was quite a bit you were already doing, but it also then brought clarity to the areas that you did need to focus more on, right. And so I think that if I'm just thinking about how to derive some of what you're saying into actionable insight for folks that are listening. The first thing is if you don't have some formality around this within the business, that's where you need to sort of start. You always hear if it's not measured, it's not going to change, right?

It's sort of this idea that, if this is going to be an important focus, then it needs to have its own structure, its own strategy, its own measurement, et cetera. Which leads me then to the second point, which is you saying that you have the key areas of focus, but if I'm understanding you correctly, the individual KPIs within each of those categories can change related to where you have made progress and have achieved the target level of performance and what areas still need to be improved upon. Is that correct?

Lou DeLoreto: That's exactly right. And it allows us to kind of lean in and try to drive a little bit more, I would say, tactical improvements.

Sarah Nicastro: Right.

Lou DeLoreto: And really kind of push us.

Sarah Nicastro: Yeah. And that's what I was hoping you could maybe talk a little bit more about, is just this idea of the role accountability plays in all of this because CSR and sustainability, I mean they are buzzwords, right. And there's a lot of things in business today, we have a great company culture and our employee experience is awesome. And there's all these things that people know they should say, but there's a difference obviously between saying it and doing it. And I think particularly related to things that are very measurable, like a lot of the KPIs that you're giving as examples. This idea of measurement and accountability is super important, so can you talk a little bit about that?

Lou DeLoreto: Yeah. I think there's two important things. I think when you talk about sustainability, although like I'm probably the facilitator and lead, you're not successful in sustainability unless everyone owns it, right. No matter what role you are in the organization, you do have to support sustainability activities for BV to be successful and for us to truly make an impact, right. That's one thing, and I think the way I integrate that into all of the different roles throughout the organization is really important. And I think that's still a maturity path, right? For every individual to wake up and say, oh, CSR is part of what I do takes some time, right. It's kind of new script, so that's got a maturity path to go to. In terms of, I would say accountability or like even I think is like more importantly, if a company says it's important to them, how are they really showing it by action?

And an example I could say is, one of the things that we're trying to increase is participation in citizenship and volunteering, right. And we had pockets of people doing it just because it's the right thing to do with no real BV sanctioned program, so we recognized that through our self-assessment and through not really knowing the participation rates of volunteering. We came out with this year that we support eight hours for every individual, as a proved PTO to go help someone or something, right. And that was a huge demonstration by leadership to say, we are really supporting sustainability and here's one exact way, right? In fact, this month around the world, all of BV is Shaping a Better World month, so we have people all over the world doing what they can themselves or in teams in volunteering, right. And so that's pretty cool. I think that's an important part too, is not only just saying it's important, but like what are you putting yourself out there that shows you really are driving it and really important to it? I think those are two important parts.

Sarah Nicastro: Yeah. I like that point too because, so we have that as well at IFS, we have a CSR day and what I like about that is there are KPIs and metrics, which are going to be driven by process change, and technology change, and operational things. But you need or should balance that with how to get your people personally invested in making a difference as well. You can have the goal to reduce fuel consumption or whatever those things are that are more operational. But I like the idea of also considering how do we bring each individual, that's a part of this company into this mission and how do we... I mean, to your point, some people are going to do it just because it's already a part of their life, but for those that don't already, that's a great way to get them involved.

Lou DeLoreto: Yeah. I think leveraging your resources, and finances, and your business processes to make impact, but more important leveraging your employee resources to give back is huge, so I think that, that participation level is really important to us and we want to see that really increase.

Sarah Nicastro: Yeah.

Lou, if there's someone listening who let's say is lagging a bit in making this a real focus in the business. Like we talked about with some real structure around it, with some real strategy around it, with some real accountability around it, what is sort of your best overarching advice?

Lou DeLoreto: I think there's a few things, its workshop driven. It's really kind of... Well, first you could hire BV to help you to get the sense of where you are, but it's like who are you as a brand? How do you see or define CSR today? Where are you on that maturity path? It's really just taking stock of looking inside your walls, and learning about your company, and what your impact is on the environment to people, to the CSR sort of like structures, but it's like really doing the self-work of learning what you do, and what's important to you. I think, like not giving yourself the space and time to really kind of think that through and jot down that inventory is really important, that's one thing.

There are experts out there like us and others that can help facilitate the discussion, make you ask the right questions, there's tons of tools. We've pulled in experts globally. We've got kind of a board of exports that help us sort this out. We meet quarterly, but really it's kind of a dynamic process. We're always kind of learning more and there's not one size fits all. But I think it's giving yourself that time and space to understand, what does it mean? What do you do? What does it mean to you? And where do you want to go with it, right? I'd say the last thing is just start, like waiting to make it perfect is just a loss of time, so just start getting engaged, picking a few things that are in CSR is really important.

Because you can lose months and years if you want to try to make it perfect. And we've already recognized, even our first start is, let's expand on this and we've got now OGs, which are regions around the world, they're adding their own different goals, so they're even like the foundations there globally, but their own country or culture thinks this is also important and they're roping more things in, so it's not perfect. Start somewhere and ask the experts, they're out there.

Sarah Nicastro: Yeah, that makes sense. I think too, just thinking through when you're in that sort of thinking process. Thinking about the different drivers for this, right? It is, what difference do we want to make? What type of initiatives and efforts do we want our business and our brand to be associated with? But it also is, what opportunity is in this to provide different green services to our customers. And then also what is the customer demand? Depending on the market you serve, people are becoming more and more invested in our future and they're going to demand better from their service providers, and their vendors, and their manufacturers, so it's important to consider that as well.

Lou DeLoreto: Yeah, that's a good point. I think like even asking your clients where they are and what's important to them.

Sarah Nicastro: Mm-hmm (affirmative).

Lou DeLoreto: Helps you mirror sometimes what you might be missing, so having that dialogue with vendors, suppliers, and clients start finding it for you as well.

Sarah Nicastro: Yeah. Or if you're... Again, really just getting started with this initiative, it may give you some really good insight on where to start. What are the biggest areas of impact, and start there and like you said, you can't do it all at once. It's not going to be perfect.

Lou DeLoreto: Yeah.

Sarah Nicastro: So figure out what's most important to your customers and start with those things and then go from there. Lou, I also wanted to ask, what do you think are going to be some of the biggest trends or topics related to sustainability that we'll see over the next 12 or 18 months?

Lou DeLoreto: Well, I do think it's in the way of infrastructure, so we're kind of seeing some of that push through some of the policy changes. And I think you're going to see a lot more investment in some of those sort of infrastructure, climate driven project work, for sure. I think, we're already seeing a lot of that happen and people sort of looking at that opportunity to see how we can support our clients with that project work. I do see it in some of the mobility piece, so you're going to get a little bit more, I'd say recognition around electric vehicles, and stations, and those pieces. But the last piece is I think you're going to still get a lot more transparency around how to measure different companies on sustainability. Make sure they're not green washing, that they're really kind of doing what they say they do and not trying to find shortcuts, so I think you'll find more ways where you can normalize and configure control. How someone's good at it and they can prove it. I think those are probably three areas we see coming.

Sarah Nicastro: Yeah. That's really interesting. I hadn't really thought about that from a consumer, or even a business consumer, consumer of services perspective. Being able to investigate the transparency and the efforts that each company is doing. Cool.

Lou DeLoreto: I mean, we have about six or eight non-financial agencies that come and look at our work-

Sarah Nicastro: Mm-hmm (affirmative).

Lou DeLoreto: So that we can make statements and be comfortable and transparent about it, so I think you're going to see a lot more of that you're going to need to be kind of accredited-

Sarah Nicastro: Right.

Lou DeLoreto: About the lofty goals, KPIs, and maturity path you're taking.

Sarah Nicastro: Yeah, no, that's good. Any other comments? Words of wisdom? Closing thoughts?

Lou DeLoreto: No, the construction work wasn't so bad back there, so that was okay. I didn't hear much.

Sarah Nicastro: Okay, good. Well, you did have to say the dreaded you're on mute once, so apologies for that. I was trying to be fast enough.

Lou DeLoreto: No worries.

Sarah Nicastro: I think the mute helped, but I'm glad it wasn't too disruptive.

Lou DeLoreto: No, I appreciate the time. Listen, we're very passionate about the topic and we're doing some great things, so it was great to have the opportunity to share with you and listeners.

Sarah Nicastro: Yeah. Well, thank you for being here. And BV does a really good job on social media, sharing some of its sustainability initiatives, safety initiatives, diversity and inclusion initiatives, so well worth a follow and checking out some of the things that are going on. Lou, thanks again for being here. I really appreciate it.

Lou DeLoreto: Great.

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

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October 13, 2021 | 25 Mins Read

Creating a Compelling Employee Value Proposition

October 13, 2021 | 25 Mins Read

Creating a Compelling Employee Value Proposition

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Lauren Winans, CEO and Principal Consultant and Next Level Benefits, talks with Sarah about ways to modernize the perception, creation, and articulation of an employee value proposition to improve success with recruiting, hiring, and retention.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Before we get started, I do want to apologize in advance. If anyone hears any background noise. My kitchen is being remodeled and in the work from home life, there are very few places for me to go that would be less noisy. So I figured I would have equal trouble at Starbucks as I am here. So if you hear any loud crashes, smashes, or booms, please know that everything's fine. So, all right. I'm excited to be here today talking about creating a compelling employee value proposition. We've talked a number of times on this podcast about how it is becoming increasingly challenging to attract new talent at the pace we need to with folks leaving the workforce. And what makes up a compelling value proposition for employees evolves regularly. And so, I'm thrilled to have on the podcast with me today, Lauren Winans, who is the chief executive officer of Next Level Benefits. Lauren, welcome to the Future of Field Service podcast.

Lauren Winans: Thank you, Sarah. I'm really looking forward to this conversation today.

Sarah Nicastro: Me too. And I will say, we had some technical difficulties getting started, which is a rare occurrence, and Lauren has patiently hung with me. So here we go. Okay. All right. So Lauren, before we dig into some of the things that we're going to touch on today, tell our listeners a little bit about yourself.

Lauren Winans: Sure. My background is human resources. I've been a human resources professional for over 20 years now. Prior to starting my own HR consultancy practice, I was in corporate HR roles, primarily in total rewards in the employee benefits space. But have been an HR leader for many years with experience across all disciplines of HR. I've worked at large public corporations, primarily in organizations that have a multi-generational workforce that is dispersed across the country. So I have a lot of experience in trying to find the best ways to engage employees.

Lauren Winans: So when I started my practice about two years ago, just really excited to leverage my experience in a new and different way. And right now we work very closely with HR teams to help them build a really wonderful employee value proposition that is deep, that is truly what employees want, and not necessarily what companies want to offer. It's something that we pride ourselves on from a strategic standpoint. And I can say right now we've got four different clients that we're working on this exact project about. So it's something that is near and dear to my heart and I'm excited to share some experiences and some stories with all of you today.

Sarah Nicastro: Cool. Well, thank you. And Lauren is my quasi neighbor down interstate 79 in Pittsburgh, Pennsylvania. So we're going to make a lunch date happen here at some point.

Lauren Winans: That's right.

Sarah Nicastro: Okay. So I have a couple things that I think would likely be preconceived notions, maybe some of my own that I want to kind of clear up maybe to get us started. And I will say, Lauren and I have talked about the fact that the listeners of this podcast are primarily not HR. I mean, there may be some, but it is not the majority. That being said, I talk with you all listeners regularly about the challenge of filling the talent gap and understanding better what needs to change in terms of meeting those employee wants and needs is important regardless of whether you are actually in the HR function or not. So, that's kind of the context we're going to take today.

Sarah Nicastro: So Lauren, I have a feeling there could potentially be people that listened to the setup of this episode and think, I'll tell you what the employee value proposition is. The employee value proposition is show up to work and collect paycheck. So what would you say to that?

Lauren Winans: Well, I would say, yes, that's one side of the employee value proposition. The other side would be, well, what does an employee get in exchange for showing up and providing the company with the hours in which they're providing their service. And so, the other side of this is, what does an employee get out of it? And ultimately those, they have to be in balance. So what the employer wants to get out of the relationship with the employee versus what the employee wants to get out of the relationship with the employer, they have to be you in a balanced situation in order to kind of keep that talent, retain that talent within your organization and attract new talent. And so that's why it's important to consider this concept.

Lauren Winans: I'll try as much as I can during this dialogue too, to kind of let you know when I have my HR hat on and when maybe I have my leader hat on or my employee hat on, just so you can kind of get the different players and stakeholders that are part of this conversation. They all want something different and they all play a different role in the process. So an employee value proposition, ultimately, when you think about what it is, it's what is an employee getting out of this relationship? And what's an employer getting out of the relationship? And so the best way to infuse value into this relationship is to identify what it is that both parties want and to construct a... let's say a structure around what that really looks like. And there's typically four components of employee value proposition. And I'm going to talk about them now, just so that this concept gets a little more clear.

Lauren Winans: So it's primarily total rewards, which is compensation and benefits that companies would be offering to employees. And then it's also, career growth and opportunity as well as employer culture. The actual culture within the organization. So all four of those components in an ideal situation have the right balance of what an employee wants out of those four categories and what an employer wants out of those four categories. Some of those categories, most of those categories cost an employer money to offer or to create or to operate or to train. And in most cases on the employee side, these are things that are very valuable to you. Your wages, incredibly important. The health insurance that you have, incredibly important. The ability to grow your career and to work in an environment that's inclusive and equitable and fair. These are all things that employees want.

Lauren Winans: And so ultimately, employee value proposition is an incredibly important concept, but you definitely need to get a good sense of what it is and not necessarily go into it with any sort of preconceived notions. Naturally there are, I think some, misconceptions out there around what value, how you can actually define value. But I think generally speaking, if you can think about, if you can really break this down into what does an employee want? What does an employer want? And yes, an employer wants you to show up and just do what you're supposed to do, clock your hours and in exchange give you a paycheck. That's the basic formality of the transaction here.

Lauren Winans: But ultimately employers are in a place where they need to build upon that, and employees have a lot of choice right now. They can easily move to another employer to find a deeper and more meaningful value proposition that works better for them. So to ignore this concept would be a miss in a lot of different ways.

Sarah Nicastro: For sure. And I think, just to explain a little bit, and Lauren and I have talked in preparing for this. We're talking a lot about field service roles, manufacturing roles and things like this. And so I think there is this issue where maybe generationally, there was a time historically where the employees priorities or what they wanted from the employer was different. Maybe i.e. perceived as simpler. And as the generational changes take hold along with the fact that you have less people coming into these types of roles. And so it's creating this urgency to recruit and to fill a bunch of talent. We need to, as an industry, understand that the desires of the talent base have matured and the way that we're looking at this type of talent need to as well.

Sarah Nicastro: And I'm talking a lot about the frontline workers, but that feeds up into the management level, the director level and all the way up. I mean you need people in all of those spots as well. And so, it's just something to think about. So, maybe can we talk about that a little bit, Lauren, in the sense of like, it seems like when you talk about employee value proposition or a compensation package, that seems intuitive at a certain level of management or leadership, maybe not all the way down to the front line. And so for some of those roles that the workforce is beginning to have more mature or different desires. Talk about the fit or the need to consider value proposition, whether you're talking about hiring in a new CEO all the way down to hiring in a first time field technician.

Lauren Winans: Yeah. I think it's very important at every level. Doesn't matter what level we're talking about. It doesn't matter if they're a leader, if they manage people, if they don't, if they're an individual contributor, if they're entry level. The value proposition exists at all levels. And in most employers, it's different at every level. So if you think about executives, you've got, executive compensation packages are very different than entry level or perhaps field, any sort of individual contributor is going to have a different package as an executive would. And it's okay to develop employee value propositions that are different for the different positions or the different levels within your workforce. I think that ultimately when we're thinking about employees that are individual contributors, and when I say that, I'm saying, they're not managing people.

Lauren Winans: When you think about that type of employee, regardless of their entry level, or they've been enrolled for many years. What're ultimately wanting to do is create a package that makes sense for that individual. And there's a lot of data that can be poured through and analytics that your company will have at its fingertips to identify what types of compensation makes sense. Not just salary, but also like pay raises and bonuses and how fair we are and equitable across the different compensation scales and whether or not, people are getting fair on treatment across the board. All of that kind of is a compensation package, not just that dollar figure, not just that salary figure, that hourly rate.

Lauren Winans: And so if you think about that across all the different types of jobs within an organization, it's really important to remain competitive and to make sure that the value that you're building has direct meaning to those that you're building it for. And so, for example, if you're building an equity program for an executive, you're going to want to make sure that the number of shares that are being offered to that executive is comparable to your like size competitors or your like industry competitors. And same goals for a frontline field technician. You want to take a look at that salary. You want to bench that compensation on a regular basis. You want to make sure that you're ahead of those who are going to try to take those people away from your organization.

Lauren Winans: And that's ultimately what a value proposition does, is it keeps people in the seats, it keeps people in the trucks, it keeps people wherever that they might be. It keeps them in role. And then ultimately allows you to attract more talent and new talent into the organization, and from a talent gap perspective, that is incredibly important right now. You ultimately want to bring in really bright talented individuals. There's a lot of different skills that you can train than you can teach on. But you definitely want to be finding, talented folks that are willing to learn and are willing to grow with a company. And in order to do that, they're shopping around just like you would interview several candidates for a position. They're shopping around and looking for the right companies that align with their values or offer the right benefits and compensation, allow them to grow and move up the ranks over time.

Lauren Winans: And so it's a really interesting conversation, because when you're talking about the talent gap, the talent gap has really put a magnifying glass on employee value proposition, how important it is to the conversation and how important it is to make sure that you're customizing an EVP, Employee Value Proposition. An EVP that is sustainable for the different pockets of your organization, the different generations within those pockets. And so it's just really important to kind of think through it big picture, and that's ultimately what an HR team does, but a lot of times it takes leaders to kind of come forward and say, this is something we need, I want to be able to offer this to our entry level employees. Or I want to be able to spend time figuring out a succession plan for these four individuals.

Lauren Winans: You're absolutely in your right to partner with the HR team to develop a value proposition that works and is customized based upon your specific team, based upon what your workforce needs. And I think that there's even folks who are maybe in an older generation, maybe close to retirement, they're still going to find this meaningful, just as much as someone who's coming in from college or maybe coming in from a trade school, or maybe coming in directly from high school. Everyone is looking for value in exchange for their time and their effort and their skills.

Sarah Nicastro: Yeah. There's a couple points that I want to go back to there. So the first one that comes to mind is the idea that employee value proposition is important for everyone, but it doesn't need to look the same for everyone. And I think that when we talk about some of the roles that companies in our audience are having the hardest time filling right now. So we'll just generalize field technicians. Okay. There's aspects of the role that are there already that if you just position them creatively could get more attention.

Sarah Nicastro: So I'm thinking specifically of a conversation that I've had with a gentleman who's been on the podcast before Roy Dockery, he's with Swisslog and he's done a lot in his role in service leadership to revamp how they recruit and hire. And his point was as he started as a pretty young man in their business as a field technician. And one of the things that he loved is being able to travel, and see different areas of the country. And so just kind of understanding better what aspects of the job could be attractive to candidates and looking for how to creatively call out different things, rather than just always defaulting to only, and here's what the pay is. I mean, there are other things that you can leverage to your advantage with a little bit of creativity to get people's attention or to differentiate or to draw yourselves in.

Sarah Nicastro: So I'm wondering if we can talk a little bit about, I think people have a better understanding of the hard benefits. Like, okay, well, people obviously want paid and for a lot of folks that consists of, a base pay and some sort of variable pay and how should that be structured, etc. Things like health insurance, things like that are fairly standard. Let's maybe talk about some of the soft benefits and different categories or examples of those so that the listeners can get kind of get a sense of areas they could maybe explore if they haven't.

Lauren Winans: Yeah. I think anything that really kind of falls into that career or culture bucket, those two buckets in addition to the comp and benefits. But the career and the culture, I think are really where some of those soft items kind of fall into. So if you think about culture, an organization's mission and values are really important and they need to be defined and they need to be communicated. And so employees who are coming into an organization need to have a really good sense of what those are. And it's really important for an organization to also be able to kind of walk that walk and not necessarily just be kind of like, okay, here's our mission and values, but they don't have an environment that kind of lives up to that.

Lauren Winans: And so, the atmosphere and the sense of teamwork and camaraderie that kind of exists within culture is something that can translate from top to bottom, from an office setting to a field setting, to a factory setting. All these different, it doesn't matter where an employee is working. You should be able to feel the culture throughout out the entire organization.

Lauren Winans: And culture can be something that you're waiting to feel as an employee, or it can be something that you participate in because it is part of your day to day interaction with your coworkers or with your boss, or with other colleagues. And I think the reason I say that is that particularly, employees that are dispersed and are not necessarily in one location aren't always going to feel culture exactly the same way that someone who might be sitting in a corporate office is feeling it. But you can still live it, it can still be embodied. It can still be something that your leader takes the time, effort and energy to make sure that by checking in with you, by communicating with you, by sharing messages that you to be hearing about, by letting you know about big company changes or how the company's investing in some community efforts, or has just made a charitable contribution or it can also even be making sure that you have an opportunity to watch any sort of company videos or read any company announcements directly.

Lauren Winans: It's a matter of what steps and what types of activities and events can, myself as a leader, get my employees involved into as well as if I'm an employee, what types of things do I want my leader to help inform me about. And all of these relationships are all two way streets. So let's say, right now you are listening to this and you're an employee, not managing anybody, but you just don't feel that connected to your organization. There is nothing wrong with trying to figure out how to seek out repairing that, because if you don't have a deep connection with your organization, perhaps that's a box that remains unchecked when it comes to the employee value proposition that your organization is offering you. Your company wants to know that. They want to know if they're falling short in some of those areas. I mean, most companies do.

Lauren Winans: And so expressing that is not necessarily in my opinion an issue. I think it's, hey, I need to better understand what our mission is here, or I need to better understand what my guiding principles are when I'm making decisions out in the field on my own. Or are we able to get together once a month so I can meet with my team. Or, hey, can we create some sort of standard check-in meeting where, we're able to kind of just discuss some of the challenges that we have so that we can all be on the same page, kind of help each other through it.

Lauren Winans: There's a variety of different soft skills that kind of fall into a culture bucket. And culture, that term is thrown around a lot. And I think the best way that I would describe it is, it's how you feel about the company that you're working for. It's how connected you are to their mission, to their leaders. Whether or not you agree with what's going on, or you don't. And it's kind of hard to sell to someone who's coming into an organization as someone who's coming in from, let's say maybe they're in their early twenties. It's a hard concept to kind of wrap your brain around. It's also hard for someone who might be on the tail end of their career and going to be retiring soon.

Lauren Winans: Culture wasn't necessarily something that was that big of a... It wasn't really part of a value proposition for the entire time that they were employed. But it's about making sure that you are able to get something out of this relationship more than just financially speaking. Now, some people may be totally fine with a financial arrangement that does not have anything to do with culture, and there's nothing wrong with that. But there are a lot of employees who want to love where they work, who want to connect on a deeper level, and who might feel that that connection is lacking and are looking for ways to kind of bridge that gap. So I think the soft side of culture, combined with a little bit of the soft side of career, like around coaching and training. Those are types of things that a company who does culture and career development well will definitely find themselves being able to retain employees over longer periods of time.

Sarah Nicastro: Yeah. So it is tricky because number one. Well, let me just say, you're right. It might not be super critical to everyone, but I think there's a lot of research that indicates its far more critical, too far more new employees than it ever has been before. So I think it is undoubtedly incredibly important to be thinking about. So there's that.

Sarah Nicastro: The second thing that gets tricky though is, we're talking about this assuming that the company does care about its culture and the environment it's providing. Which is fine for the sake of this conversation, but to put real action behind it, that has to be true. And then the third thing that gets really challenging is just playing devil's advocate. If I'm someone who has a bunch of different job opportunities, or I'm taking a look at what's available in a certain industry, everyone is going to say they have a good company culture. And so it gets hard to think about tactical ways to illustrate that.

Sarah Nicastro: So to your point, I think that when we talk about retention, it does the work for you. Like if you are really putting the effort into having a good company culture and providing career development opportunities for employees that you bring in, that will be reflected in retention. But I'm thinking about sort of the initial sell, the initial hiring process and what is in the employee value proposition that sticks out. And that is really tough. So what I'm thinking, now I'm no HR expert and maybe you're going to tell me like that's too expensive or crazy or whatever, but what I'm thinking about, again, through the lens of our audience is, you all know your company mission and company values and company culture characteristics better than anyone else. But maybe look at those and try and think through some fairly inexpensive ways to make those tangible for new hires.

Sarah Nicastro: So for instance, like let's say that you want your employees that are in the field to have an opportunity to learn and educate them. Maybe give them an audible subscription, or maybe... things like that. Maybe it's Spotify. I mean, whatever it is like you're talking about 10 or $15 a month. Something really low cost, but things like that, I'm just thinking whether it's you want to play up the fun or the education or the we care. I mean, there's a ton. You could do Headspace. If you want to say, hey, mental health is very important to our company, so we give all of our employees a subscription to Headspace or Calm or whatever the different options are. But I'm just thinking like, those are the type of creative thinking processes that I believe companies need to be doing to take what on paper is very abstract, and honestly easy to be highly skeptical of. And at least put some specifics behind it in a way that can stand out a little bit and make people think like, oh.

Sarah Nicastro: I mean, I've seen people that do, they purchase their employees a certain number of books per year, or they do. And those are all just for their consumption. That's more on the culture side. On the career side, what I've seen that has worked well is because the younger workforce does want to have more progression opportunity and we kind of know that with them coming in, mapping that out and discussing that in the interview and hiring process so that they have of what the longer term potential is from the outset. So I'm kind of babbling, but I'm just trying to think through different ways to take some of the soft things that can be very abstract and try and make them more tangible for folks.

Lauren Winans: Yeah. I think those are really good examples. And I think that there is some cost issues that come along depending on how large you are with those sorts of things and how many employees you might have. But that's the type of actionable examples that we need to be thinking about when you think about employee value proposition, because it's going to be different for each person you're kind of catering it to.

Lauren Winans: And to your point, when you're trying to attract new individuals to your organization, really trying to hone in almost like creating a persona. Okay, well, if I'm going to be hiring a 25 year old in this particular geographic area who is single, who doesn't [inaudible 00:33:31]. And you kind of list out who they are, you can develop more of a custom EVP in a different way. And if you just kind of wing it and you're just kind of like, you're trying to figure it out.

Lauren Winans: But yeah, it's all about creativity. It's about the type of people you want working for your organization and what you know about them and what you know would be valuable to them and meaningful and then just creating something around that, whether that be comp or whether that be a benefit, whether that be career development in, maybe it's a succession plan or maybe it is something as simple as I just want these people... Anyone on my team to have access to masterclass or something that helps people to learn a little bit more from a personal and a professional standpoint. And then culture naturally kind of wraps around all of this and is really critical.

Sarah Nicastro: I was thinking maybe focus groups would be a good idea too, in the sense of, if you have a new wave of employees come in that you can tap into, or if you have your HR team, maybe it's a university, high school, trade school, depending on what the requirements of sort of your entry level positions are. But go out and sit down in a room of those people and just ask open-ended questions. Like, as you start looking for jobs, what are you looking for? Or how would you rank these criteria? What's the most creative idea... And get some input that way. Because that's one of the things too, is I think historically we've reexamined employee value proposition maybe less frequently than we need to today. Would you agree with that?

Lauren Winans: I agree. I think what I would say is on an annual basis, you need to be looking at the four factors that kind of make it up. You don't necessarily need to make sweeping changes in each category every year, but you need to be assessing it on an annual basis. And the reason being is that things are changing so rapidly within the labor market, within the workforces that, we all are a part of. And it is silly to think that something that worked you year ago or two years ago is still working today. And not just talking about the pandemic, I'm just talking about generally speaking, even if we aren't in a pandemic, it would still be something that you need to be looking at regularly to stay ahead.

Lauren Winans: And ultimately we all want to stay ahead and be pulling the best talent possible into our organizations and be working with the best colleagues possible. That's what makes work fun is when you can accomplish things together on a different level. And the only way you're going to be able to do that is to gradually enhance that EVP year over year to a place where you can feel confident and comfortable that you are able to retain and you're able to attract. And it's a hard thing to do because I think there's a misconception that HR and or leaders are solely responsible for EVP, and that's not the case. We're all responsible in some way, shape or form in all of these categories. And even an employee in an entry level position is responsible for contributing to the culture of the organization.

Lauren Winans: So everyone touches this in various different ways and it's important. It's more important now than it ever has been. It's going to get more important than it is today in the future, and it's got to be something that you at least spend some time better understanding, and figuring out which ways you can take action on it.

Sarah Nicastro: What are some of the, I guess, further changes or evolution of kind of what employees want or what becomes important to consider over like the next five years?

Lauren Winans: I think that EVP is going to get bigger over time and not just focused mainly on like four categories. I think diversity equity and inclusion is going to end up with more of its own category, so to speak and not just kind of shoved in there in the culture category. But that's going to become more important and naturally so. So I think that is something that we can see kind of change over time. I do think too that some of the things that we're used to seeing today as it relates to benefits and compensation are going to change over time, especially if federal minimum wage at a $15 an hour rate does indeed take hold. I think there's going to be quite a few changes in total rewards and how we kind of look at salary scales and compensation in general.

Lauren Winans: And then lastly, I think from a career development standpoint. What we're finding right now with a lot of the clients that we work with is that there's a desire to make sure that all training components and methods are able to meet people where they're at. So for example, I think there's going to be a lot more training and development opportunities available via video through your company over time. As well as through external third party sources that your company's going to contract with to offer development opportunity. And so I think that's going to be something that grows over time because of desire and need, but also because we all consume content differently and we're all leaning more towards that video, audio content more so than actually reading the words on a page.

Sarah Nicastro: Right. That makes sense. Okay. In summary, any sort of last words of wisdom, missteps to avoid.

Lauren Winans: Yeah. What I would say is, if this concept was a little bit foreign today, that makes total sense, because this is an evolving concept that changes quite a bit. But what I'd like you take away from the conversation hopefully is that there are components to an employee value proposition that could attract and retain employees in a different way than maybe it is being done today. And so spending some time, identifying what that EVP is and coming up with solutions for tangible changes that are going to move the needle for you to bring in talented individuals and keep them, I think is worth the exercise of going through.

Lauren Winans: And you can even make small tangible changes for your own teams. If you are a leader listening to this, you can make similar, just small changes to some of the things that you're doing to increase inclusivity or help someone get promoted by getting more development opportunities or making sure that everyone on your team is making a fair and equitable wage for the work that they're putting in. You have the power, and I think we all have the power when it comes to this. It's just a matter of figuring out where you kind of fit in the equation. And I hope that you will also kind of take away from today that, this is an important concept to continue to learn about and to not necessarily assume that just giving someone a paycheck is going to be enough anymore.

Sarah Nicastro: Yeah. I did think of one other question. So we talked a little bit at the beginning about sort of assessing the competitive landscape. So in your industry, what are other people providing and how do you match or address that. But I also think there could be some maybe creative inspiration just looking outside of industry. So I just wanted to ask, and it's okay if the answer is no, but is there any one company that comes to mind or a couple that you think do a really good job of this right now?

Lauren Winans: I really do think that Walmart does a really great job of this. I think everyone has varying opinions on Walmart and some of the stances that they take. But what I will say is that their ability to create culture and infuse it in every single thing that they do, including making sure that total rewards packages and career development opportunities are available. They really take the time to know their employee base and know what would be meaningful to them. And they develop their EVP around that. And I think they do it very well. So I would say they're a really great example to turn to, even though they might not necessarily be within your specific industry. They have some really great examples of how they're doing that. And it's public, you can just like Google these things and the information on their website. And so, there might be some really great ideas out there to kind of take advantage of.

Sarah Nicastro: Yeah, that's good. I think it is helpful. It's always helpful to look in industry, but I think it's helpful to look outside of your own industry as well and get some different thoughts and fuel the creative process. So, okay. All right, Lauren. Well, thank you so much. I really appreciate you coming and talking with our listeners today. And this is a super important topic, and I know that there's a lot of other areas of this we can address. So I'd love to have you back at some point.

Lauren Winans: Yeah. I would have to come back. We've just scratched the surface of EVP.

Sarah Nicastro: Yes.

Lauren Winans: But I very much appreciate the conversation and I look forward to chatting with you again soon.

Sarah Nicastro: Awesome. All right. You can find more by visiting us at futureoffieldserviceref.ifs.com. You can also find us on LinkedIn as well as Twitter at thefutureoffs. The Future of Field Service podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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October 6, 2021 | 29 Mins Read

Tetra Pak on Sustainability and its Services Potential

October 6, 2021 | 29 Mins Read

Tetra Pak on Sustainability and its Services Potential

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Sarah is joined by Jason Pelz, VP Sustainability Americas at Tetra Pak, and Sasha Ilyukhin, VP Services Solutions at Tetra Pak for a discussion around the company’s leadership position in its own sustainability efforts as well as the opportunity it sees for growth in offering services related to sustainability.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we are going to be talking with Tetra Pak and discussing their view on sustainability, both internally and in the services potential that it provides the company. Super interesting conversation and thrilled to be joined today by Jason Pelz, who is the Vice President of Sustainability at Tetra Pak in the Americas and Sasha Ilyukhin, who is the Vice President of Services Solutions for the Americas at Tetra Pak. That's a mouthful, gentlemen. But welcome to the podcast. Thanks for being here.

Jason Pelz: Thanks for having us.

Sasha Ilyukhin: Thank you, Sarah. Glad to be here.

Sarah Nicastro: Yeah, absolutely. Good. So before we get into the meat of the conversation, let's just go through some intros. So Jason, can you start and just tell our listeners a little bit about your background, your role, whatever you want to share?

Jason Pelz: Sure. So as you all now know, I'm Jason Pelz. I'm the VP of Sustainability for Tetra Pak Americas. My background, actually, I grew up in a family that had a recycling collection, sorting, and bailing corporation, so I've been around part of the space for a long time, and I've worked for a few companies. And since I've been at Tetra Pak, myself and my team have really been out fighting the good fight for Tetra Pak, pushing our sustainability agenda, most recently across the Americas.

Sarah Nicastro: Very cool. It's really interesting you have a background in all of this. I didn't know that part. Good.

Jason Pelz: Yeah, you can't leave it.

Sarah Nicastro: Yeah. Yeah, for sure. All right, Sasha. Sasha, you've actually been on the podcast before.

Sasha Ilyukhin: I have.

Sarah Nicastro: I didn't look and see what episode it was, but it's been a while.

Sasha Ilyukhin: I don't remember the number either. That's okay.

Sarah Nicastro: Go ahead and tell folks about yourself.

Sasha Ilyukhin: Absolutely. So my name is Sasha Ilyukhin. I'm VP of Services Solutions for Tetra Pak Americas. My background is I am from Russia, so I was born in Russia, and then I came to the US to study and then ended up starting my work adventures here in the US. So I'm in the food industry for more than 20 years, most of that time is with Tetra Pak in a variety of different roles in the US and in Europe as well. I am also responsible for the services solutions. So my entire career has been in services and customer services. And I am currently leading the team that is growing the business of services solutions for our customers. And sustainability is a pretty big theme these days. So we're doing some interesting work with sustainability and services.

Sarah Nicastro: Awesome. Okay. And so this is going to be sort of in some ways a two-part conversation. Because we're going to talk with Jason a bit about some of Tetra Pak's sustainability initiatives and objectives, and then talk with Sasha about how that translates into potential for the services business. I feel like I've said this on a string of podcasts lately, but I do have kitchen renovations underway. So if you guys hear any crazy noises in the background, I apologize and just bear with me. Okay. So, Jason, I'm going to start with you. Maybe give folks a little bit of context on, I guess, the Tetra Pak business, but specifically how the company has gotten to the point of being seen as really a leader when it comes to sustainability and sort of the passion the company has around really focusing on that leadership position and being as involved as it is in its own sustainability initiatives and also encouraging its partners and its customers and the world to focus more on this area as well.

Jason Pelz: That's a very broad way to start, but I'll give it a shot. I think the most important thing to say is this, it's not new for us. Sustainability has really been part of Tetra Pak's DNA since Dr. Rausing started the company. He said, "A package should save more than it costs." And I think when you immediately do that, you've already got in mind something tied to sustainability. As I said, you've gone in a bunch of different directions, but really, since our beginning, if you think about the package we created, an aseptic package which allows for products to be safely held within a package, not needing refrigeration, long shelf life, you're talking about things like not needing electricity, excuse me, not needing refrigeration, food waste can be minimized, things like that. Again, to go back, for Tetra Pak, it's been a journey. This hasn't been something that is new in five or 10 years. It's really been since the beginning.

Jason Pelz: The company, I would say, because of that initial DNA, I would say, we've always looked at things that we need to be out there driving and pushing the envelope to make things better. So whether it is in our processing solutions, how can we have more efficient equipment? In our packaging, how we make a more sustainable package, how we better protect food. How, at our own factories, at our own sites, what can we do to reduce the footprint we have on the local environment? I could talk for an hour on this one thing. We look at things from a holistic standpoint. Every part of what we do contributes, in the end, to how we want to make sure that as a leader, we have the least footprint on the environment as possible, yet at the same time, be able to provide people with an exceptional package that can handle these products.

Jason Pelz: If I go into certain details, for example, we've made commitments. In 2010, we set a goal to cap our CO2 emissions at 2010 levels at the time we reached 2020. And not only did we cap them, we reduced emissions by 19% and we grew our packaging by 16%. So there's something to said about what we achieved. We've made other commitments. We engage and do things based on the sustainable development goals set by the UN. Again, Sarah, I could go on for a long time about all this stuff. But really, what maybe is the best thing to say is because it's so much part of our culture and because it is so much ingrained in what we're trying to do, not that it's easy to accomplish, but the company believes in it, and therefore, we're given this power to move forward. And that's why we're doing so many of these things.

Sarah Nicastro: Yeah. So, Jason, one of the words you said, holistic, I really liked. Because that was one thing that struck me when we talked in preparation for this discussion is... And it's both because of how Tetra Pak's business is structured, right? You have the packaging itself. You have the packaging equipment. You have the services function. There are these different areas of this life cycle that you touch. But I think it's also in culture, to not overlook opportunities of impact. So the word holistic, I think, is a really good adjective for the way it seems Tetra Pak approaches its sustainability objectives. Because you're looking across the business, across those different areas of impact, not having a narrow view on, "Okay, let's just pick more sustainable materials for our packaging." That would be maybe a more obvious aspect to focus on. But there's all these other components that you all are working on as well to really drive the most positive change that you can. So I think holistic is a super good word for that. I was wondering if you could talk a little bit about your sustainability mission statement is broken down into sort of three pillars. Can you talk a little bit about why it's structured that way and what those three areas are?

Jason Pelz: Yeah. Basically, our brand promise is to protect what's good. And then if you take that a step further and you look at the three, what you're talking about, you've got food, people, and planet. So what we want to do is when it comes to the food, we want to make sure that we protect and make food available everywhere to anyone. So to us, that is part of our mission, and from a sustainability standpoint, that is key. We need to feed a growing population and we believe that we have a great way in our whole process, processing, technical services, the filling equipment, and the packaging, to do that.

Jason Pelz: When it comes to the people, for us, it's our people who obviously at Tetra Pak that we want to protect, but it's also the communities that we work in. We want to make sure that we're good stewards to the communities that we work in. And then it's to the greater world. Again, I talked about food safety and food availability, we want to make sure we do that. We take diversity and inclusion very seriously. We want to have a very well-structured and open environment at our company. Again, which is all key to making sure holistically we're driving sustainability.

Jason Pelz: And then finally, when it comes to planet, this is the buzzword of all, which is the environment. Everybody is very in tune with the environment. And for us, we want to have the best, least impactful packaging material. We want to use the least amount of energy, the least amount of water. We want to work with our customers to allow them do the exact same thing. We want to reduce our carbon footprint across the value chain. And that gets us involved in a lot of different things. We're very involved, for example, in the recycling value chain because we need to be there, that's part of what contributes to it. But we also take very seriously how we source our materials. Because you can have a very recyclable package, but if it all comes from fossil-based materials, you're not looking at things... You're not taking the planet into consideration. And so this is why for us, we do it. And by breaking it into those three areas, it allows for good focus as we drive our mission forward.

Sarah Nicastro: That makes sense. Sasha, I was wondering if you can talk a little bit about how people typically view the sustainability life cycle. And so as I just mentioned, one of the things that struck me when we spoke about this topic is sort of the attention to detail in terms of Tetra Pak looking at all of the areas where it can improve sustainability and making sure that things don't get missed. And the description you gave of sort of, "Here's some of the top of mind areas that people commonly default to thinking about," which are important, "But here are some of maybe the less-considered areas to address," which relates into the services conversation we'll get to. But I think it also would be a good point now to touch on so people can sort of visualize what we talk about when we say holistic.

Sasha Ilyukhin: Yeah. I think that that's a very, very good word that Jason had used as well, and I like it. All of the value chains are becoming circular. People are looking for products as consumers that are circular products. So you buy something, you consume parts of it, and whatever is left kind of enters the value chain in one shape or form, and then it just makes that full circle. So if you look at that circular value chain, sourcing becomes extremely important and recycling becomes extremely important. Jason mentioned those two things. And I would argue that if you just go out in the street and stop the first 20 people and you ask them, "What is the most important part of the value chain?" that's what they would most likely say. The would say that it's important to them where the product is coming from, that it's actually sourced properly, and how is that product then recycled, what happens to it at the end of life so it doesn't just go into the landfill and just pollute the planet.

Sasha Ilyukhin: What is interesting about this is that there is one piece in the middle there in that circular value chain that is called manufacturing. So you source the materials, you start putting them together, that typically happens in a manufacturing plant. Then there may be multiple manufacturing nodes, if you will, on that value chain because then it goes further. We manufacture, for example, equipment. We manufacture packaging material. Our customers manufacture consumer products using what we had manufactured previously. So if you take that whole manufacturing piece, our data suggests that the whole impact on sort of the carbon footprint of the entire value chain, 48% of that footprint is actually caused by manufacturing. So you think about, again, sourcing, extremely important, recycling is extremely important, but half of this entire impact comes from manufacturing.

Sasha Ilyukhin: And for many people, for good reasons, manufacturing is kind of a black box. You, as a consumer, you have no idea how different products are made. Yeah, there is this how it's made series on TV. That's great. I love to see it as an engineer. But for most people, it's kind of a black box. That black box is extremely important. I think it's gaining a lot of relevance. And we can talk about it when we talk about services. We can talk about how services can actually impact what's happening within that box, too, to reduce the footprint.

Sarah Nicastro: Okay, perfect. Yeah, go ahead, Jason.

Jason Pelz: Sarah, can I just add something to what Sasha said which is super important, and that's where we've made some of our commitments. We've committed to be part of the Renewable Energy 100, which is by 2030, we want to have 100% of our infrastructure supplied by renewable energy. So we've made investments. We're not just talking, we're walking the talk. We've put solar arrays. We're buying credits. We're buying green energy where we can, because Sasha's got a great point, if we don't start working on that manufacturing base to make sure that we reduce the impact it makes, and even take it a step further, and even with our suppliers, how do we work with them? Because again, we have to look at the whole scope. It's true that black box becomes a big piece of the puzzle. And if that 48% can get reduced, it makes a big deal.

Sarah Nicastro: Absolutely. And you actually... That was a perfect segue into the next question I wanted to ask you. Which is there is more and more conversation around sustainability, which is a great thing, it's something that should be being discussed for sure, but acted upon. And so the point you made around we're not just talking, we're doing, is super important. Because the reality is, as these things become top of mind for people and reach sort of a buzzword status, then you have a lot of people that jump on and say, "Oh yes, we're also focusing on sustainability." And so what the actual efforts are and what impact they're having is super, super important. And I was just wondering if you could talk a little bit about how do you create accountability around making real progress on the goals that you're setting as an organization?

Jason Pelz: What we do, we have reporting, there's government, so you have reporting mechanisms. When it comes to our sourcing, for example, we have certifications for our renewable sourcing, be it FSE certification. We have certification for our plant-based polyethylene. We're part of the Aluminum Stewardship Initiative. Which even though aluminum is not necessarily a renewable resource, there's still a right way to source it. So we do engage with a number of those things. We've signed on to the UN Global Company. And so these are ways that we've kind of done it. Our targets are verified by science-based targets. So we make sure that we're very transparent and we have these ways to show the people that we're not just saying it, we're doing it. And these are well-respected certifications. And it's a commitment. It's a commitment with time and people and costs. This isn't free to do this stuff. These are all the things that we do to take into consideration and how we've driven it and continue to drive it.

Sarah Nicastro: Yeah. No, that's good, and I just think that's such an important part of this topic is how do you make sure that the areas you're focusing on are having a real impact and that you're doing enough. Every bit helps. But just going back to the conversation about if you think only about sourcing and recycling, there's this chunk of half in the middle that never gets addressed. So just thinking about how to make sure you're looking at all of the areas you could have an impact and keeping yourself accountable for making progress is really important. All right, Jason, last question for you before we talk a bit about services is what lessons have you learned or what advice do you have related to driving this topic forward and making real, significant progress as it relates to sustainability?

Jason Pelz: A couple of things. You have to have... Your company's got to be committed. And when I say committed, it's got to be top down, bottom up. One layer in the company can't drive it, and then you can't expect everybody else to just be there. No one can be a spectator. That's a good way to put it. Everybody's got to be engaged. Doesn't matter, from the CEO down to the person working in the plant every day, everybody's got to understand it and everybody has to drive it. Because really, if your company believes in it, I think that's key. You've got to be willing to spend some money. It's not free. It's going to cost money. The returns will probably not be immediate in some cases. But long term, there will definitely be a benefit.

Jason Pelz: And I think the final thing that I've learned through this and I think we as a company have learned is you can't do it alone. There's no one group that's big enough, or one company, I believe, that is big enough that can make this happen on their own. You've got to have partners. And it can be interesting partners. It can be your competition. It can be whomever. But you've got to be willing to work with others. For two reasons. One, it's important for knowledge to be shared both directions, whether you to them or them back. Secondly, people think of stuff that you might not have or your company might not have. So you can't assume you know it all. And by having these partners, and whatever it is, and we've done, I think, a great job more recently in doing so, if someone is better, bring them along, have them help. Don't look at it as a challenge, look at it as something to take advantage of and work together to create something better. That's what I would say.

Sarah Nicastro: Yeah. Those are really, really good points. Good. Okay. So let's shift gears a little bit and talk about services. Sasha, I want to talk about your perspective around how sustainability is going to become a bigger driver for services businesses overall, but specifically Tetra Pak's service business. I guess before you comment on that, for folks that didn't listen to your first podcast, maybe just speak a little bit about sort of the types of services that you provide and how that shift toward sustainability as a driver is taking place.

Sasha Ilyukhin: Yes. Wow, what an introduction. Let me start first with a little bit of a story, and then I will talk about the portfolio and kind of where we go with this. So the story goes like this. I recently booked a business trip, so yay, we're starting to travel again after over a year of these lockdowns. I want to go and see my customers face to face. So I've started to book some business trips. And an interesting bit of information I see in our travel booking software is that I see carbon footprint. So always, when I look at flights, I'm choosing flights, and okay, this flight is this many kilos of CO2 and this flight is this many kilos of CO2. And if look at the price of the flights, okay, I could choose a flight that's, let's say, $200 less, for example. But now I see that, wait a second, it's 500 kilos more when I choose that flight. So all of a sudden, I am, as a business consumer in that case, I'm kind of thinking about, I'm making conscious decisions, how should I focus and what should I focus on? And we have a commitment to reduce carbon footprint across the value chain and within Tetra Pak as well. So all of a sudden, I'm paying attention to these things.

Sasha Ilyukhin: This actually very much applies to just us as regular consumers. So a lot of customers, or many of our customer, I should say, are starting to put carbon footprint on their package. Oatly is a great example. Oatly, all of their packages, you take any package from Oatly, there is a figure on it, and I know that they're working hard on reducing that figure across the board. So that's a good example. And it's not only Oatly, but there are many other customers that are starting to put their carbon footprint on the package.

Sasha Ilyukhin: So again, it becomes very relevant for consumers. It becomes very relevant for customers. And of course, it is very relevant to us as well. And I think at the end of the day, from a business point of view, it also becomes a competitive advantage. If I was a consumer starting to choose which package do I buy or which ticket do I book, with which airline, etc., etc., all of a sudden, that drives my decision, my purchase decision. And that, of course, has a big impact on the business if you kind of accumulate that across the consumer base.

Sasha Ilyukhin: And now so let me just kind of digress a little bit and talk about the portfolio and kind of where we're coming from as a company. And these two lines will meet together. So we as a company, in services, we started very traditional. If you watched the previous podcast, Sarah and I, we talked about this at length. But we started with a traditional portfolio, kind of parts, maintenance, after sales, if you will, etc. And then over time, we started to introduce outcome-based solutions, well, service contracts, maintenance contracts, and then outcome-based solutions, solutions that are focused on cost reductions, on improving efficiencies, and some hard commitments, for example, on operational costs, etc., share of savings, and these types of contracts.

Sasha Ilyukhin: And what we see lately is there's also a clear need from our customers in improving sustainability as well. Because Jason said it. You cannot do it alone. And it's the whole value chain that we talked about earlier that needs to work on it. So all of our customers are setting their science-based targets on their reductions and their commitments to the environment. We do the same. So how do we work together? We work together by basically aligning our services portfolio into what it can do to help our customer reduce their carbon footprint to enable them to be more competitive versus other producers out there. And this is our commitment to our customers on that as well, on sustainability.

Sasha Ilyukhin: So this is kind of how it all kind of comes around, and this is where services play a big role. But from a services organization perspective, then we need to think about, "Okay, so what are the competencies that we need for this? How can we do this?" Because this is not just claiming and proclaiming, we need to actually prove. We need to put the numbers. We need to calculate. We need to make sure that the numbers are audited, they're confirmed, and that we are really reducing the impact across the value chain.

Sarah Nicastro: Okay. So I want to go back to the value chain part. But, what was interesting to me about the story you shared about your flight and kind of looking at the criteria and then talking about how some of your customers have started to publicly state their statistics on their packaging, it just made me think, we have this whole point about accountability. And so that public declaration of, "Here's where we are. And you can watch and see if we're making progress," is them forcing accountability on themselves to continue prioritizing this as an objective. And I think that to your point, that is a competitive advantage. It will become increasingly so.

Sasha Ilyukhin: Absolutely.

Sarah Nicastro: But what's interesting to me and what sort of helps paint the picture of the opportunity you see is so some customers are doing that now, it's going to be more and more and more, and so they will be creating their own accountability and forcing their own increased actions to have this impact. And so that's where you're seeing this as a growing driver of services. So, I guess, going back to the value chain point and the sort of manufacturing part that sits in the middle that makes up for roughly half of the opportunity here, talk a little bit about some of the ways that that can be addressed and some of the areas there to tackle from a services standpoint to really provide value to your customers.

Sasha Ilyukhin: Yeah. We are learning. I'm not going to claim that we know everything here on how to approach this. So we're also on a learning journey. But what we've learned so far is what I can share is that when we do the cost reduction projects with our customers, when we help our customers reduce their operational costs, we do it through total productive maintenance. So we use the methodology of TPM, total productive maintenance. And that typically starts with doing things like mass balance of the plan and what is called activity-based costing. This may be too specific of a term, but we call it ABC, so activity-based costing. Where you basically slice and dice everything that's happening in the manufacturing facility on the vector of time and on the vector of the phase of production to see what activities are actually happening, how much cost they generate, and where are the opportunities to actually reduce that cost. So this is how we sort of map it out and start to approach it.

Sasha Ilyukhin: With sustainability, it's a very, very similar process. So we've learned how to do a mass balance, but using the energy, using the water consumption, using the VODs, CODs, using the waste. So we are doing a different type of mass balance, but it is, anyhow, a mass balance of energy, if you will, energy that is a carbon equivalent of mass balance. And then we approach it in a similar way with total productive maintenance. So we basically set up focus improvement teams. We set up pillars with our customers with the typical sort of lean manufacturing TPM where you look at autonomous maintenance, you look at preventive maintenance, you look at education and training, early equipment management, etc. So you have these pillars and you have the standard 16 losses in manufacturing. We'll look at that. But we look at it also from the standpoint of how they impact the carbon footprint of the facility.

Sasha Ilyukhin: And to give you some examples, so recently we've managed to reduce in one of our customers over 1,000 tons of CO2 per year. So this is a confirmed equivalent that we have reduced. If you convert that back to the efficiency of the plant, so overall equipment protectiveness, that increases 19.4%. So 19.4% efficiency increase plant-wide is equivalent in that case to just over 1,000 tons of CO2. If you convert that to yet another equivalent of like, "Okay, so what does that even mean?" That means that you need about 1,500 acres of forest to sequester that CO2 out of the atmosphere, so just to put it kind of common terms.

Sasha Ilyukhin: How is that done? About 40% of that actually came from standardization across the plant. And the specialists out there, the black belts and the green belts, they will immediately understand what we're doing. What we're starting with is we're center lining everything. So we are bringing equipment to basic conditions. We're making sure that everything is serviced properly, that it's properly maintained, managed, etc., and so everything runs properly in that facility. That itself brought about 40% of that improvement over the year. And then, for example, another big chunk was cleaning. So when we looked at cleaning, not only the cleaning cycles themselves, but it has to do a lot with how the production is planned, for example, all the production cycles. So we analyze all of that. So we have this what is called minimal economic quantity. We look at balancing supply and demand. It's a lot of very tedious work. So it's not just you come with a very quick method, etc. No, it takes weeks and weeks and weeks. But we balance supply and demand of that manufacturing facility. That drives the corporate cleaning routines, for example, and corporate downtime for cleaning. That, in itself, gives around 30% of that overall annual carbon footprint reduction, for example. But there are some other things, of course.

Sarah Nicastro: Okay. So I got really wrapped up in the example and forgot where my next question was going to come from. All right. So there's all of these ways, all of these specific detailed ways that you can go in and really examine, in the same way you would if you were driving efficiency. So if the whole goal was to increase efficiency to reduce cost, in this instance, you're talking about really examining processes and increasing efficiency to lower carbon footprint. So same concept that you are accustomed to using, just different metrics by which you're operating. And you can go in and look for all of these areas of opportunity. Now, we had talked previously about the fact that this is maybe a different way to approach this than some may initially think of when they think about, "Okay, how do we have a more sustainable manufacturing facility?" And maybe the first thought is, "Let's get more energy-efficient equipment." But that can be cost-prohibitive. And so talk a little bit about why that's not a bad goal to have, but it might not be immediately feasible for everyone that thinks that that could be a good option. And so this process of examining the current operating conditions and structure and looking to make these improvements can be an option to make immediate impact and maybe put yourself in a position where new equipment becomes a more reasonable option to invest in.

Sasha Ilyukhin: Yeah. Well, what can I say? We also manufacture equipment. And we'd love to sell more equipment, because our new equipment is awesome. From the sustainability standpoint, our packaging lines, for example, use 40% less energy than our previous generation packaging line. So if you talk to any equipment manufacturing, any OEM, of course they would tell you that, "Yeah, absolutely, just go and change out the equipment and this will help reduce the carbon footprint." And that's true. The tricky part for that is, of course, budgets and CAPEX in general, there's not a lot of appetite for CAPEX out there. In fact, I see, even from the services point of view more and more drive towards OPEX. Even with the big brands, what's happening is they're saying, "We don't want to focus on the manufacturing assets anymore." So a lot of it goes into contract manufacturing or co-packing. And the brands then focus on their brand, on developing the products and what's inside the package and the ingredients and the recipes and all this great stuff and marketing and so on.

Sasha Ilyukhin: But manufacturing still becomes relevant. So all of a sudden, you have these co-packers and contract manufacturers that are getting bigger. They are, of course, typically a mix of old equipment, new equipment. So what do you do? If you're a contract manufacturer or if you're a traditional manufacturer with capital equipment, what do you do? You can't go out and just start changing all the equipment in your facility. That's completely unrealistic. So my advice to that is, is there such an enormous potential in total productive maintenance, in that case. So please look into sort of fine tuning, calibrating your equipment and looking at where the costs are, driving the costs out. In a typical manufacturing facility, in food manufacturing, I'm speaking food manufacturing now, the average total utilization of the equipment, if you take total capacity utilization, is somewhere between 30 and 40%. So equipment, you've got the CAPEX out there, it's only producing products 30 or 40% of the time. Is that an opportunity? Absolutely. Absolutely it is an opportunity.

Sasha Ilyukhin: And when it's producing, it's typically producing with some losses, some quality losses. A lot of food manufacturers, the way that they risk manage, for example, is that there's a lot of quality sampling. I've seen up to 2% quality sampling, which is, in my opinion, a pretty crazy figure statistically speaking. So there are a lot of different ways to drive efficiency and therefore reduce carbon footprint without changing the capital equipment.

Sarah Nicastro: Yeah. It makes sense. And certainly, it's not to say that new capital equipment isn't great when it becomes a reasonable option to invest in. But in the meantime, there are all of these other things that can be done to have a more immediate impact. One of the comments that we talked about is the fact that sustainability is just good business. So, talk a little bit about what that quote means to you.

Sasha Ilyukhin: Yeah, I think it's becoming more and more the license to operate, in my opinion, the license to stay in business, not only good business, it used to be good business. It used to be you are in business, and if you also care about the planet and if you do some things for sustainability, you're doing good business. And that's true. But I don't think it's any longer relevant. I think that it becomes mandatory, it becomes license to operate for businesses to define how they impact sustainability, what are they doing to impact sustainability. And people can argue for days and days about, for example, how humans are impacting climate change and whatnot. There's huge arguments about this. But there is no argument to we as stewards to this planet, it's just good stewardship. And to me, it makes absolute sense that businesses are starting to pay more and more attention and put more and more effort into sustainability goals. It's not the bottom of the balance scorecard anymore. It goes to the top of the balance scorecard. And I have examples in our business where in talks with our customers, some customers are starting to place these goals as equivalent to their business goals. So they not only want to achieve their net sales and profitability, they also want to achieve their goals on carbon reduction and being carbon neutral and things of that nature. So, absolutely, it is a license to operate.

Sarah Nicastro: Yeah, I was having a conversation not long ago with Dr. Andreas Schroeder from the Advanced Services Group at Aston Business School. And we were talking about the intersection between servitization and sustainability. And it was a similar reflection from him that the business they work with on their servitization journeys, sustainability historically has been sort of a secondary focus. So there was always a primary focus and that would be sort of, "And where and when we can, we'd also like to positively impact this." And his point is it's very quickly picking up steam and being the primary driver, not a secondary objective. So I think that's very much in line with what you're seeing in terms of those priorities becoming more level versus it being further down the scorecard. Okay, so I want to ask you both one final question for today, which is, I guess, if you had to kind of give one premonition or prediction on what we think is something notable we'll see over the next six or 12 months, what are your thoughts on where this is all heading?

Jason Pelz: Do you want me to go first?

Sasha Ilyukhin: Go first, yes.

Jason Pelz: Listen, I would say to you the importance of this topic, the premonition is it's just going to become that much more important. I think Sasha hit it on the head when he said it's a license to operate. I also think it's almost becoming not even so... It's going to become a license to survival is what I really think. I would even take it one step beyond to that, where companies, and we as society, are going to have to make some decisions. Because clearly, you see things going on. And really, I only see the topic of sustainability, how it's going to affect how people run business or are even able to start businesses, it's going to just become more and more important. Again, one is a license but two is a survival thing. Because really, we're in a resource-strapped world, I would say. And if things aren't taken into consideration, whether it is reducing what you take from the planet or your ability to take advantage of those renewable things to run your business, you may find yourself in a situation where you can't run your business. So it's not a question that someone might shut you down, it's a question that you just might not have access to some input that you need. So I would say, and people may think, "Thanks, Captain Obvious," but truly, it's going to be more and more important. This subject is not going away.

Sarah Nicastro: That's what I call my husband a lot of times, Captain Obvious.

Jason Pelz: It's an easy one to quote from the TV.

Sarah Nicastro: All right, Sasha, what do you think?

Sasha Ilyukhin: Well, what I think is that this is really people-driven. And I wanted to say consumer-driven, but that's not the right way to say it. It's really people-driven. So of course we're all consumers. We all go to the grocery store. We all buy different products and food and beverages, etc. But what's happening here and the need for this increased attention to sustainability and real action happening in sustainability is people-driven. And we as consumers will make choices, we will make these decisions. So, I agree with Jason, it's not only a license to operate, it's a license to survive.

Sasha Ilyukhin: But the good news is that we as people, we're everywhere, at all levels of all of these organizations, at our customers, in Tetra Pak, and at IFS and in all of these companies. We are people that care, and people that start to care more and more and more. And I for one, I want to leave a better planet for my daughter. So I do care. I do make choices when I can make these choices. And I think that's a great thing. So every small change counts. And if you're running a business out there, tap into your people's potential. I strongly believe in the power of teams, power of people. This is where the change is happening. Don't wait for someone to come in, some smart consultant or vendor or whatever to tell you what to do. You need to figure out what to do and then look for the right partnerships in that area. So that's my thought on this.

Sarah Nicastro: Yeah, I think that's a really good point. It's the power of people. And like you just said at the end, it's also the power of partnerships. Jason, you made a really good point earlier where, yes, in instances, this is a competitive differentiator, but it's also a moral imperative. So it can't be something where we're feeling like, "Oh, this is our secret sauce to sustainability so we won't share this." We all really should be invested in the bigger picture and the common goal of, to your point, Sasha, leaving the world in the best possible state for the next generation. And so the point you made earlier, Jason, about this is something where the benefits of community and collective knowledge and learning from what others are doing and tapping into whomever and wherever and whatever you can get some perspective from to drive the needle forward is super important.

Sarah Nicastro: So yeah, and this podcast is a good start. This is great. I really, really appreciate you both being here. I think that we will need to revisit this conversation because I do think that it, as we've said, Captain Obviouses, it will only become more and more important. And I think that as that continued focus plays out, there's going to be more and more lessons learned and best practices and what's next for us to be talking about. So thank you both for spending some time with me today.

Jason Pelz: Pleasure.

Sasha Ilyukhin: Thank you, Sarah. Thank you. It's such a relevant and such an important topic. So thank you. I really appreciate being here.

Sarah Nicastro: Absolutely.

Jason Pelz: Yes, I appreciate you inviting us.

Sarah Nicastro: Yes. All right, you can find more by visiting us at 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 at IFS.com. As always, thank you for listening.

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September 29, 2021 | 21 Mins Read

Darren Roos on the 2021 Gartner Magic Quadrant for FSM

September 29, 2021 | 21 Mins Read

Darren Roos on the 2021 Gartner Magic Quadrant for FSM

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Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. I'm joined today by Darren Roos, CEO of IFS, to talk about all things service and reflect a bit on the most recent iteration of the Gartner Magic Quadrant for Field Service Management. Darren, welcome back to the podcast.

Darren Roos: Thank you, Sarah. Thanks for having me again.

Sarah Nicastro: Yes. Thanks for being here. It's been another exciting year in many different ways and this marks the sixth consecutive year in a leadership position for IFS on the Gartner MQ for Field Service Management furthest for vision. How are you feeling about the MQ this year?

Darren Roos: Look, Sarah, we're incredibly committed to our customers and we've worked tirelessly with them building capability that's important for them to be able to run their businesses better. When we see that recognized in the MQs, it's obviously very satisfying. We have a team that's constantly thinking about what additional value we can make available to our customers. They're out there talking to customers, their challenges, day in and day out, and that means that we have a very open communication channel, the customers talk to us and that's reflected in our vision position. So, very proud, but it's a reflection, frankly, of the work we do with our customers and then that MQ is a by-product.

Sarah Nicastro: Yeah, absolutely, and reflecting on the last year, I know everyone's very tired of talking about COVID, myself included, but it is just an undeniable part of our reality. I will say that not being able to change that fact, it's made me very proud to be a part of IFS both in how you led the company to handle the impact of the pandemic internally, so the culture we have, and then also how we've banded together to help our customers in various industries, various regions handle the complexity that was thrown at them. When you think of the internal and external experiences of the past year, what comes to mind for you?

Darren Roos: Look, I think the key... First of all, thank you. It certainly didn't feel easy going through it.

Sarah Nicastro: It wasn't. That's a fair assessment and it still isn't, so yeah, for sure.

Darren Roos: I mean, that's a good point. I think, first of all, it's not over. Not only is COVID not over, but the repercussions and consequences of the decisions that have been made by governments and companies over the last 18 months will live with us for likely decades to come. At IFS, it was really about communication both with our employees, with the leadership team and then also with our customers. But if I just start with the internally, I was running these monthly fireside chats with the whole company, as you know, it was really about increasing visibility and giving people the opportunity to talk about what was on their minds, what were they concerned about. From an IFS perspective, the direction that we took, as you know, was to make sure that we protected jobs. I didn't want to be in a situation where we were having to make people redundant during COVID when they would be at their most vulnerable.

Darren Roos: Job security was my number one priority. And then, in reality, the business continued to grow and our customers saw value in what we were doing. In that dialogue with customers, immediately became apparent that there were ways in which they needed us to change what we were doing to be able to navigate these wild fluctuations in demand and work circumstances, so different demand and different work circumstance. Can we take a couple of examples of that with, for example, the technology like our IFS Remote Assistance, with Munters, they needed this remote assistance capability urgently to continue to run their business. We did the initial deployment in just six days and now we're expanding that remote assistance globally where we'll finish the full roll out globally in the next couple of weeks, and that includes build technicians, third line support who are using the solution on their existing mobile devices.

Darren Roos: We also had experts guiding customers and people internally on the opening of new production lines, for example, in their manufacturing facility in the Czech Republic. So, crazy levels of innovation within the business, but really rapid. That was capability that we had, but frankly, we just hadn't been as much demand, but because we had this dialogue, we were able to identify areas that we could help customers. So, that's one example. Panasonic was another one where Panasonic heating and cooling systems had been piloting remote assistance in the UK and in Germany. The feedback was overwhelmingly positive. Super interested in the technology throughout Panasonic and, in the pilot, it's super interesting how you learn new things that in addition to driving service consistency by having this remote capability, it also enabled them to capture and transfer knowledge while retaining technical insights that they just didn't have before that they're now used to educate and upskill their workforce.

Darren Roos: Just everything that we're doing has changed but it comes down to communications then close to our customers, close to the employees and finding ways in which we could help employees and then help customers.

Sarah Nicastro: Yeah. When I think about the communication side, it's a lot of honesty. I think about those fireside chats and that's one of the things I liked about them is you weren't pulling any punches, there wasn't this facade of everything's great guys. I mean, it was an acknowledgement that, "Hey, this is a really hard experience for us all to go through, and let me try and tell you as much as I know about the current moment, knowing it's all probably going to change again before tomorrow." I think, in the same way, our customers had to get very honest with us. Munters, for example, they had this on their roadmap, but just to your point, hadn't been an urgent priority. It was something they were prioritizing a bit ahead. The idea of them calling IFS up and saying, "Hey, we need this, but we need it right now," and being able to say, "Okay, what do we need to do to adapt internally to be able to boom? If this is going to help them, let's get it done." The speed of that is full.

Sarah Nicastro: But also, I don't want to say things have normalized. I just think, what does that even mean? I mean, that's a whole different conversation, but what's cool about Munters and another example is Alfa Laval. They also turned to remote assistance for business continuity, but they are evolving that use as the business needs change. Where it was we cannot travel, we need a way to do remote service as our lifeline, once travel became an option again, it's not we don't need this anymore. It's great. This is awesome. We have it. How do we evolve its use to become a part of our service delivery and our overall strategy?

Darren Roos: It's a great sustainability angle there also which every company on the planet today is thinking about ways in which they can reduce their carbon footprint by which they can run their businesses more sustainably. Travel is a huge carbon polluter and I don't know a single executive that doesn't have this on their agenda today and finding ways, as you say, in which they could sustainably change that dynamic of travel is huge. Massive. For people who aren't in service, you think about travel as transcontinental travel. But when you have thousands of tens of thousands of technicians that are driving around in polluting vehicles and historically the narrative would have been, can we convert these to electric, and now all of a sudden, because of COVID, you actually know you can do this remotely, that's a massive benefit and we definitely see loads of examples of that.

Sarah Nicastro: Yeah. It's a super good point. I mean, I've had a lot of conversations just over the last few weeks, one with Bureau Veritas, one with Tetra Pak, one with the Advanced Services Group at Aston, all around the shift people seeing in sustainability being a key factor to the driving factor in a lot of these decisions, technology investments, et cetera. I think that there's conversations I've had around the goal isn't all service be remote service, but when you're sending technicians out in a truck to drive however many hours or miles or kilometers, and for them to just say, "Yep, I went to figure out what's wrong, didn't have what I needed to fix it so I'll go back next week." You know what I mean? The idea of how much of that that is inefficient and unnecessary that can be eliminated is just astounding. Okay. It's been a crazy year and a lot of it has been challenging, but there's been a lot of good things going on too.

Sarah Nicastro: When it comes to the momentum that IFS has internally and related to service, we have not slowed down. We've just kept full speed ahead and then some. Can you talk about, you know, some of the highlights of the last year that I'm sure have had a big contribution to our leadership position?

Darren Roos: Yeah. Look, again, thanks to our customers, we've experienced a fantastic growth, significant growth in service management in particular, 2020 was another triple digit growth year. We demonstrated agility as we responded to these crazy needs that we just talked about in the way the market changed in providing solutions that were more relevant to customers and help them keep the business on track. We didn't just hunk it down and this year we are continuing the growth and transformation plan. We're completing our own digital transformation by implementing IFS cloud within our own business. We obviously have Clevest having joined the family in the utilities service management and asset management space, Axios in the IT service management space and Customerville customer satisfaction surveys, and those are just three of the acquisitions that we've done over the last 18 months. They're all connected by our goals to support companies as they evolve their own business towards servitization.

Darren Roos: We fully relaunched the IFS branding and our new product, IFS Cloud, obviously has come to market. In fact, we're coming up to the second release already now in October. Customers can see that this is why they're choosing IFS and providing the most incredible feedback to analysts like Gartner, et cetera, and others as we see in the MQ.

Sarah Nicastro: Yeah. It's funny, I was thinking one of the calls I was on this morning, someone says, "How's it going?" I'm like, "It's insane." The pace is crazy, but for me, it's energizing. I think that all of these things are very visible in the industry as to what is going on behind the scenes and it's fun and it's exciting, and it's all to your point geared toward what is the best value we can deliver to the customers, what do they need, how do we continue evolving to meet those needs and I just think that that's really cool.

Darren Roos: I think if I can comment on that. Every business leader deals with this challenge of change management. We are compelled to continue to evolve the business. There's a great Jack Welch quote around the pace of change in a business. Effectively, he says that when the pace of change outside the organization is greater than the pace of change inside the organization, the end is near. I think we can all relate to that. Even COVID aside, the landscape around if we think about the topics that we're talking about here, technology and servitization, they are rapidly changing. If you are static and you're not evolving, then you will not be competitive and you will likely not exist. But, the counterpoint to that is that people are naturally resistant to change. Employees don't want to be doing something different all the time.

Darren Roos: It is difficult to continuously train people and make them aware of new technologies and new capabilities. It's difficult to continuously evolve and change your business model. These are tickets to the game today and I think it's the organizations that have embraced technology to support the business, that have an appetite to change and evolve that are the ones that are most likely to succeed. It's the old Darwinian Theory of Evolution. It is the ones that evolve that survive, and that's what we're seeing. During times like this, that pace of change is much quicker and therefore much more difficult to manage.

Sarah Nicastro: Yeah, I haven't shared this with you, Darren, but I've tossed around the idea in my head multiple times and at some point I'll get to it. It's just something that would take up some significant concentration, but the journey that you've been on for the last three years at IFS, three and a half, and the journey that a lot of our customers are on in service really parallels one another in a lot of ways. This idea of disruption and innovation and change, and how do you modernize a company culture, and how do you put people at ease and bring people along on the journey and equip them with the training and knowledge they need and all of those different things, I mean, there's a lot of what we are going through as an organization that gives us a real sense of empathy for what our customers are going through as they face a lot of that same thing.

Sarah Nicastro: The shift to servitization or outcomes-based service or advanced services, I mean, it is a foundational shift in how a company does business and it's far bigger than just technology or just focusing more on service. I mean, there's layers and layers of everything that has to evolve. I think it's an interesting parallel that I'd like to explore a bit more at some point. Okay. One of the other things that was introduced in the last year is IFS's messaging around Moment of Service. I absolutely love this messaging. Tell me a little bit what that means to you as it relates to us and how we serve our customers.

Darren Roos: When the idea was initially pitched to me and as you probably know, Sarah, we didn't hire an agency to do this. We got a focus group of employees together, people that we felt were at the right mindset to be able to shape where we would go in the future and they did a load of work, and then we came up with that Moment of Service messaging. When I heard it the first time, it immediately resonated with me because what we recognize is that every single one of us understands the concept of the Moment of Service. We've all, whether it's buying a car and having that delivery, or whether it's having the, I don't know what you guys call it in the U. S., a boiler or geyser, the thing that makes hot water break down and then call a service company and the technician arrives, and you've got hot water again to stick the kids in the bath. We've all had that moment of service. The next step is appreciating and realizing that every single business has moments of service. When you're able to shape a business by helping them to create outstanding moments of service, which is what we do, it's the reason we exist, is to help businesses in the industries that we operate to orchestrate the parts of their business, their assets, their people, their customers, to orchestrate those to create outstanding moments of service.

Darren Roos: That's a fantastic thing to be able to do. When we think about the ways in which we've built out technology and the acquisitions that we've made with customable, being able to listen to our customer's customer at that moment of service and validate that we've given an amazing moment of service is really important. A lot of people think this is about us offering outstanding moments of service. Of course, that is important, and we measure our moments of service. Much more importantly, this is about how we help our customers create outstanding moments of service for their customers. They can be no doubt that if you stay close to your customers and you can create those amazing moments of service, then you have a sustainable business model. That's simple.

Sarah Nicastro: When I first heard this message, I immediately saw in my mind moment of service, but the word could rotate. So, moment of impact, moment of opportunity, moment of differentiation, moment of influence. There's all these things that that moment represents for businesses both that are trying to really optimize and protect and master that moment, but also those who are looking at how to evolve and innovate what that moment means for their business. I just think that I love the term because I think it can represent so many different things and is just super, super important, and really reinforces the really immense power that the frontline worker has in helping you carry out your service objectives, which I think is a whole another topic that's super important.

Sarah Nicastro: Okay. I realize I'm a service nerd and probably get a little bit overly excited about all of the potential and innovation and opportunity, but, trust me, I didn't think I would be here either. When I started and didn't know what field service was, I certainly didn't envision myself 14 years later being still fired up about this stuff. But, I think it is something that I get really excited about because I think that we've only just begun. Both IFS, I truly believe, and also the innovation and the evolution and transformation that's taking place, you know what I mean, we're there, but we've really only scratched the surface of all of the potential. Looking at the future and all of that opportunity, what do you think you would list as our biggest strengths and differentiators for helping our customers really seize that service opportunity?

Darren Roos: There's a few things I would talk about here but let me just start by saying that I agree a hundred percent. I think that we are at the beginning of a very long continuum of service improvement and artificial intelligence and machine learning, and next generation analytics, IOT, all provide for provide incredible opportunities for us to significantly improve what service means across virtually every industry, and anyone that asserts that it's just about the human touch, just doesn't understand it at all. There is so much that we can do and ways in which the insights and technologies that are available to us today that simply weren't available in the past, it really changes the game. So, the key things though, the ways that I think IFS specifically impacts the service capability is, the first thing is that orchestrating this capability across an organization, I said earlier, customers, assets, your employees is incredibly hard.

Darren Roos: What's happened in the IT industry over the last decade, particularly, is a massive fragmentation of that IT landscape. If you go back further than 10 years ago, we had quite large monolithic systems that were integrated single data model, single UX, and that in some ways, while it was clunky and it was slow move, it was integrated at least. At least you have the idea of a single view of those three elements, customers, assets, people was potentially possible. With the advent of cloud and the fragmentation of the IT landscape, nobody's solving that, there's no standards, which means that the complexity of integration falls to customers and that is incredibly difficult to do. The first thing is that IFS cloud is one single solution and it supports this idea that we can provide a single view of our customers, single view of service, and enable customers to orchestrate these reports. However, we recognize that not every customer is going to start from scratch.

Darren Roos: Not every customer wants everything from IFS, and therefore we approach it from a very integration centric, API centric approach supporting the idea of a composable enterprise, but whereas, idealistically, you want to be able to do that with 50 disparate applications, one for HR, one for procurement, one for travel and expense management, one for service, one for finance, you can carry on forever. That's not really practical unless you're in an enormous company and you have thousands and thousands of people in it. What we give customers the ability to do, and this is the most common use case for us is that they will run a chunk of their business on IFS that might be asset management and field service management, it might be ERP and field service management and ITSM, it might be ITSMs and service management, but at least we give them the ability to have this platform on which they can then add on other things. So, that single solution is incredibly important.

Darren Roos: Next thing, and I touched on the role of innovative new technologies, digital twins, low code development environments, embedded analytics, artificial intelligence, all of these are capabilities that we bring to the customer natively in the platform. This is newer technologies that many customers that perhaps are a little bit less sophisticated are saying, "You know, how do I leverage artificial intelligence or machine learning or IOT or digital twins in my business when I don't have a thousand people in it. And I don't have a budget of billions to go and do a massive POC." We bring that capability in a very pragmatic way to our customers today. So, single platform innovation embedded, not attached, embedded. And then the third thing is choice where we offer customers the ability to deploy either on premise or in the cloud. We offer them choice around who deploys.

Darren Roos: It could be us; it could be one of many partners, and we've worked very hard across those elements to provide customers choice, not being overly prescriptive, not saying you're going to have it in the cloud, you can't configure this application beyond the very tight parameters that we've given you and you're going to take an upgrade every year or plus a year, et cetera, et cetera. That's not the way we think about it. We offer them choice because we recognize the complexity of that heterogeneous IT landscape and we're not saying we're going to be overly prescriptive. I think those are the three big things, choice, innovation embedded and single platform to reduce that complexity of integration.

Sarah Nicastro: It's interesting. Our customers are all very heavily focused on improving their customer experience, and so when I think about the fragmentation you described, the first thing I think about is all of the failure points that that surfaces for areas where they are likely to drop the ball on their customer experience. This idea of more cohesiveness and simplification, elimination of unnecessary failure points, all of those things are so, so important and I just want to urge listeners, I don't know the number off the top of my head, but I did a podcast interview with Pekka from Cimcorp who is leveraging IFS Cloud and the insights he had on their more modern IT strategy were just spot on, I think, in where people need to head to. I certainly would recommend anyone go listen to that. Darren, I have two more questions and I know we're almost out of time, so we'll try and keep them really brief. Six years and running as a leader in the Gartner Magic Quadrant for Field Service Management, what is going to be the key for us maintaining that status?

Darren Roos: Look, I think I'm actually going to go back to something that you said now and answer a question that I'd rather answer here than that one because maintaining that status actually for me, is not an objective. Making sure that our customer is happy is an objective that I'd want to maintain, but you touched on this voice of customer and the customer satisfaction, and how do they make sure that their customers are happy. Actually, I think it's a pretty simple equation. For me, and I'll use IFS as an example as a company. We run IFS. We also run a host of other applications because IFS doesn't do everything. We run a very heterogeneous application suite. Everything's in the cloud, everything's integrated. The way we think about it is that we offer moments of service to our customers and we've identified, I think it's seven or eight different areas where we provide and we endeavor to provide an outstanding moment of service to our customer.

Darren Roos: That could be, if we just think about our business, during the sales cycle, it could be when we respond to a request for some work, when we're in the implementation phase, when we go live, et cetera. There are these moments of service and what are the critical things that we've done is that we've leveraged Customerville, which we now acquired, but prior to acquiring Customerville to listen to our customer's feedback at those moments of service, and now we know whether we're doing well. I think it's a much simpler equation. I think, just going back to your question of this complexity is that every business leader goes, what are the moments of service that I provide and am I listening to my customers at that moment of service to know whether I'm doing a good job or not?

Darren Roos: If I'm not, let's get real-time feedback so I can fix it. And then, we have the capability to orchestrate the bits of the business that I need to fix it. Not as complicated as many people would make it out to be. I think we provide that capability, but I think technology aside that for me is got to be the aspiration. That only anyone's going to argue that whether you're building carports or whether you're a pest control company killing bugs, or whether you're a mining company, you all have a customer and every one of them is trying to delight their customer. If they offer their customer outstanding moments of service, then they will get more customers.

Sarah Nicastro: Yeah, absolutely. All right. Last question, Darren is, in this wild, challenging, but also exciting last year, what's the biggest lesson that you as a leader have learned?

Darren Roos: We touched earlier on the communication and I think, historically, I've relied a lot on my ability to get out and see people face to face and meet them and get to know them, and all of a sudden that luxury wasn't there. I think that it became incredibly important for me to be able to make it clear where are we today, where are we headed and how is each person expected to help us get there. There's a few different dimensions to this. There's clarity for everyone and where we are, there's clarity for everyone on how we get there. Everybody has different roles though. It starts to become quite difficult on how do you make sure that you're communicating effectively across the various functions of the business, how somebody makes a contribution. But, we did a lot of this. We did a lot of talking. I think we've got to the point where I was pretty sure people were tired of hearing from me, but it was very important to me that we over communicated and that everybody understood the role that they would play in taking IFS to where we were going.

Darren Roos: In the feedback that I've had, it's proven to be more important because people were suffering with mental health issues, people were struggling with the fact that they couldn't get out there, almost caged, and the fact that they had a sense of importance, that they understood the role that they would play, that there was a bigger cause underpinned by this job security topic that I spoke about right at the beginning really made a difference. Frankly, I was just trying to figure out how to do it. There was no genius involved. I think I got lucky. I had a great leadership team that, together, we coached each other through it.

Darren Roos: One thing I would add, and I'm not just saying this for effect, but I learned more from our customer CEOs than anybody else. I continue to talk to our customers. Many of them shared fantastic ideas of how they were responding to the crisis. In fact, our initial actions when we responded and what we did right out of the gate was based on a customer that I spoke to and some guidance that they offered me on what they were doing. So, really appreciative to everyone who shared their ideas with me. That was the big thing, super communicate, over communicate, make it clear where we're going, have people understand where they are now and how they can individually contribute.

Sarah Nicastro: Yeah. I love that illustration of the power of community, and how you're connecting with them and taking just as much from those interactions as you're trying to give. I think that's really cool. Darren, thank you so much for your time. I really appreciate it. Thanks for being on. You can find more on all things service at www.futureoffieldserviceref.ifs.com. You can also find us on LinkedIn as well as Twitter @thefutureoffs. The Future of Field Service podcast is, of course, published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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