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September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

September 15, 2021 | 29 Mins Read

The Demand for More Digitally Adept Leaders

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sarah Nicastro: Overdo it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sarah Nicastro: We'll do it again soon. You can learn more by visiting us at 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 8, 2021 | 24 Mins Read

The Intersection of Servitization and Sustainability

September 8, 2021 | 24 Mins Read

The Intersection of Servitization and Sustainability

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

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

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

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

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

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

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

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

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

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

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

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

Sarah Nicastro: Excellent.

Dr. Andreas Schroeder: Thank you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Importance of Service Benchmarking

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The Importance of Service Benchmarking

Hilbrand Rustema of Noventum joins Sarah again to talk about the value and importance of service benchmarking, the best practices for gaining valuable insight, and what trends are most important to gauge against at the moment.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host Sarah Nicastro. Today we're going to be talking about the importance of benchmarking when it comes to achieving strategic service objectives. We talk a lot on this podcast and within our content on Future of Field Service about all of the change that's taking place in the industry right now, all of the ways in which companies need to be innovating to keep pace with customer expectations and market pressures, and benchmarking can be a very important way to make sure that you are progressing the way you need to be with those objectives.

Sarah Nicastro: So I'm excited to welcome back today Hilbrand Rustema who is partner at Noventum. Hilbrand, welcome back to the podcast.

Hilbrand Rustema: Hi Sarah.

Sarah Nicastro: Thanks for being here. So you may recognize Hilbrand's face. He's been on the podcast a few times and is back today to talk about this topic. So disclaimer, obviously Noventum does benchmarking. So there is that, but regardless of that aspect, it's certainly something that warrants a conversation because it can be a valuable way to understand how you're keeping pace with the change that is being demanded of you. So let's start off Hilbrand just by talking a little bit about the importance of benchmarking for service-based businesses today.

Hilbrand Rustema: Yeah. What I would say is that it's important, particularly for service businesses, to benchmark. I think there are two major areas where every sort of service executive should be using benchmarking. First of all, when you define your service business strategy, you need to set realistic, achievable goals. And therefore it's very useful to know what other similar companies have been doing, are doing in similar stages of their growth and their development so that you set realistic, achievable goals.

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: Now I think that's one area and the second area is looking at what is it that you're really doing? How is your performance currently compared to, of course your strategic objectives, but also compared to the rest of the world and what are similar companies doing? Because-

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: When you set your strategy you typically have at least a medium to long-term view. And in the meantime, lots of things can happen. So if you do some regular, I would say at least once a year, but preferably more often, some benchmarking on how you're doing versus other similar companies, it would give you like a reality check.

Hilbrand Rustema: And that would allow you sometimes to sort of pivot a bit your strategy and to know if it is working what you're-

Sarah Nicastro: Mm-hmm (affirmative) Mm-hmm (affirmative) Yeah. So some folks probably know that in my role with IFS I run a customer group, customer community, and we engage really frequently, twice a month or so. And in some sense it's almost like benchmarking anecdotally versus in a quantitative way, right. And I think there is so much value in the idea of understanding what your peers are up to, right. And so there's instances where I see these light bulb moments in the group of honestly feeling not alone in the struggles, right? So it can be reassuring to see that organizations with similar objectives to yours are struggling in some of the same ways that you are. And then obviously in the group we have a lot of conversations about how to overcome those challenges so that we can kind of build collective knowledge and help share some insights and spark different ideas.

Sarah Nicastro: But then there's also an element of understanding where you may be lagging and kind of getting a little kick in the pants in the right direction when you realize that there might be areas where you are behind the pace of your peers. And so certainly in that group communication type setting, I've seen the value of this type of insight play out in real time. And I think that the idea of putting systems in place to do this regularly and to look at more quantitative data and see things in numbers and charts and graphs and percentages is certainly valuable with all of the objectives that companies are juggling today.

Hilbrand Rustema: I think it's very good that you mentioned that. I think making a distinction between the qualitative and the quantitative benchmarking is a good one because qualitative, like in terms of talking about best practices and how do you solve this issue, is very useful, very valuable, but quantitative, really looking at the financials for example, that has multiple purposes and obviously any well-run business needs to have a clear, good sort of dashboards on how they're performing financially.

Hilbrand Rustema: Currently what we're seeing is that there's a lot of companies that want to go into the data-driven services, the predictive services, more sophisticated services, and they are not so sure what the growth potential is, what the profitability of each type of service is because if you really look at it, there's so many different types of these sophisticated services that go beyond the basic product related services and each has its own sort of business model with different growth and profitability potential that the world is suddenly becoming a lot more complex.

Hilbrand Rustema: And one of the things that I see service leaders also sometimes a bit struggling is to explain to their colleagues, particularly if they're in the manufacturing business, on what the growth opportunity really is or the profit improvement potential really is. And having data that shows, "Hey, these type of companies, or maybe even a very direct competitor, is able to do this and why are we not able to do something similar?" That is also sort of a change management tool.

Sarah Nicastro: Right.

Hilbrand Rustema: It helps you to get the rest of the organization to realize, "Hey, it's real. Others are doing similar things. So we should be able to do that as well."

Hilbrand Rustema: And until you get that realism, many organizations will sort of say, Yeah, yeah. Okay. Let's see and wait." So yeah. There's a very important change management aspect to using benchmarking, the quantitative benchmarking effectively.

Sarah Nicastro: Right. Yeah. I mean, when we talk about topics related to customer experience, customer satisfaction, we always talk about the importance of that balance between qualitative and quantitative insights and it's really the same thing here. It's hugely valuable to sit down in a group of five or six or 10 peers and have a detailed conversation, but it's also incredibly valuable to look at a study and get a quantitative idea of where you are in that journey versus some of the others. And to your point, certainly as it relates to servitization or delivering outcomes, it is a real challenge for some organizations that there is this idea of needing to kind of convince or win over the hearts and minds of some of the folks on the value of that journey and the importance of that journey.

Sarah Nicastro: And certainly in those instances, I think, there is nothing stronger than being able to present some objective quantitative data that's looking at how others are progressing and what benefits they're seeing. So absolutely an important part of being able to convince leadership and convince others within the organization of the why behind a certain direction. Okay. So we've talked a little bit about the importance of benchmarking, the value it can provide. Let's talk about where organizations go wrong. So I guess one thing would be just not doing it or not participating in the act of looking at or doing some benchmarking, but what else kind of prohibits companies from utilizing this type of insight as a good resource?

Hilbrand Rustema: Well to give you an example, looking at profitability of your service business is so insightful or can be so insightful if you use benchmarking in there. One of the things that we see happening right now is that a lot of companies are moving from this preventive maintenance or full service contracts to the predictive services.

Hilbrand Rustema: And obviously that creates enormous value for the end customer because you are improving performance of the equipment, you are reducing maintenance costs. And one of the interesting things that we see happening in the benchmarking that we do is that we see that companies, when they're in this experimental mode almost when they sometimes not have the full value propositions, the new service proposition, the promise to the customer, when they haven't fully developed that, when they don't have a full understanding of what is exactly the value for the customer, they are still saying, "Yeah. It's not completely ready yet." So let's just give that functionality included in the full service contract.

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: And effectively what they're doing then is they're giving a lot of value away-

Sarah Nicastro: Right.

Hilbrand Rustema: For free. And it's amazing how quickly customers get used to that new level of performance.

Sarah Nicastro: Right. It's really cannibalizing the ability to monetize it when you're ready to do that. Like when you've sorted out how you want to do that, then you're really backtracking at that point to say, "Oh. Well, we've been giving you this, but now we've landed on this new offering and so what that looks like is you would pay X for it." And so that is a really big challenge for folks.

Hilbrand Rustema: Yeah. I mean, let me give you one example. I was working with a client the other day that provides street sweeping equipment. And they see several things going on. So obviously they are now able to connect their machines and sort of monitor real time of what's happening with these machines, but also they're electrifying, meaning that that equipment is maybe three thousand parts that were heavily sort of maintenance intensive parts.

Hilbrand Rustema: It goes back to 30 and they see their potential service business, in the current business model, they see it quickly disappearing. And this is the right moment for them to sort of switch over to a totally new business model. So maybe they should be offering the same equipment as a service right now. And as this is not fully crystallized yet in that industry, if you would look at benchmarking data and say, "Okay. Well what is the profitability? What's the growth opportunities for that type of business model versus what we are having right now?" You can say, "Well, okay. It makes sense." But right now the tendency for this type of situation is, "Let's wait and see and well we have another year or two," and then suddenly some competitor shows up and they've done it-

Sarah Nicastro: Right.

Hilbrand Rustema: And you're gone, you're out of the business.

Sarah Nicastro: Yeah. That's a good point. We did a podcast quite a while back with a gentleman who his name is Sae Kwon. He was at Cisco at the time. And it was called weighing the decision of disruption. And it was basically around that conversation. In their instance he was talking about them making the decision to evolve the business before there was any urgency and that sometimes has its own challenges because things are running smoothly, you're successful, and so there's a huge don't rock the boat mentality. But when you see the opportunity to make that change before it becomes kind of dire circumstances, there's a lot of benefit in acting early.

Sarah Nicastro: And so the idea that, the company you're referencing, there's this change that now they have to react to, but that then puts a certain amount of pressure on the time in which they react and the way in which they react, where if you can have a little bit more of a forward thinking or innovative perspective and get ahead of those opportunities, it gives you a little bit more latitude to make that change on your own terms instead of making that change on the industry's terms or the market's terms.

Hilbrand Rustema: Exactly. So you can see several trends and you can benchmark yourself against those trends.

Sarah Nicastro: Right.

Hilbrand Rustema: So you can sort of see it coming rather than just being internally focused and if you just look inside your organization and don't benchmark that much, you would be happy with yourself.

Sarah Nicastro: Right. Right.

Hilbrand Rustema: Yeah. It causes some sort of inaction.

Hilbrand Rustema: The other thing is very often when companies have to make these difficult decisions to quite drastically change their entire business model, they don't know what they're getting into.

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: If you are able to look at benchmark data of similar companies that may not have the same product, but at least they have a similar business model that you are aspiring to you can kind of see what to expect there and that facilitates the decision-making because without facts, usually the senior executives are not willing to make any decision at all.

Sarah Nicastro: Mm-hmm (affirmative) That makes sense. So I think you've touched on a few, but just to sort of recap or add anything to the list, what are some of the biggest trends or areas right now that you think organizations should be benchmarking against? And obviously I'm referring to organizations that would be the folks listening to this podcast, which are very similar to the types of organizations that Noventum works with. So what are some of the biggest areas that you would suggest companies be investing time and effort into benchmarking on and paying attention to?

Hilbrand Rustema: So, first of all, I would benchmark the type of service revenue that you are into. So if you just throw all the service revenue on one big pile and you see growth and you're happy with that, usually you have a distorted picture.

Hilbrand Rustema: So you have to try and distinguish between well-established types of service revenue. Like be it parts, be it preventive maintenance contracts, full service contracts, preventive maintenance contracts, or even go beyond that. So what we always call the customer business related services. So process optimization type of services can be outcome-based or as a service business models where you have the equipment, you may finance the whole equipment as well, managed services, business process outsourcing, or the real data-driven type of services where you have maybe in that category alone, you can already have sort of 10 sub categories. So trying to look at the type of service revenue and see where you are growing, where you're not growing.

Hilbrand Rustema: And then perhaps if you have that ability to look at what are your customers doing and which type of customers are the most profitable ones as a result of different types of revenues that they are consuming or what they're spending their money on.

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: And then the second area is the profitability. So if you can distinguish between the different types of service revenue in your own accounting systems or even if it is by approximation, that's also pretty good already, then you can look at what are gross margins for each of these types of services. And what are the trends that you see there?

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: One of our recent studies showed that most service executives, they expect not to see any growth in the purely product related service revenues in the coming three to five years. So that means that, "Okay. It goes beyond product related service revenue." So what should they be looking at? What type of business model, what type of service revenue will be the right one for them to focus on and what is the expected growth of that and the profitability?

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: So you may come to a conclusion, particularly in a highly digitalized world where sometimes the leaders of the back, it's a winner takes all model in many industries. So you have to try and look ahead, look at the trends, and look at revenue, profitability, and the growth rates. And I think if you are able to do that as a service leader, you're in a pretty good position, you can avoid a lot of nasty surprises.

Sarah Nicastro: Mm-hmm (affirmative) Yep. Okay. So last question is around what are the best practices? So what's your advice for folks on, we've talked about the importance of benchmarking and some of the areas that people need to be paying attention to. How do they benchmark and make sure they're benchmarking well?

Hilbrand Rustema: Well first of all, inside your organization you need to be able that you compare apples with apples. So most, let's say professional service organizations, they have their accounting principles standardized across the globe so that the different types of revenues are clearly defined and recorded in that way. And profitability is a result of cost allocation and recognition in the right way. So I think that's sort of the basis for the financial type of benchmarking.

Hilbrand Rustema: Then I would say you need to find reliable sources of that benchmark data. I know it's hard. So the choices basically are you can identify a couple of companies that are similar enough. Usually your direct competitors don't want to benchmark with you or they're not allowed to, but you can identify a couple of companies and that's one of the things that we do as Noventum. You work with a consulting firm that has the research capability, that has the benchmark data available in a sort of statistically validated way so that there's a quality check on that data.

Sarah Nicastro: Mm-hmm (affirmative).

Hilbrand Rustema: Another important best practice I would say is not only to benchmark at, let's say the headquarter level, throw everything in one big bucket and benchmark at that level. No. Also try to, if you're a multi-national, try to benchmark the individual country or regional operations.

Hilbrand Rustema: And you may find lots of interesting differences there and then figure out why is one country performing very well in one particular area and why is another country doing in another area much better? So that gives you the opportunities to benchmark internally, which is probably the best quality of benchmark data that you can get if you do that internally. So another best practice is to not fall into the trap of wanting only to benchmark within your industry.

Hilbrand Rustema: What we've found in our benchmarking database, if you look at it statistically, there is no correlation very often between different players in one industry because they are in a totally different level of maturity of the service business. What we've found is it doesn't matter what is the type of equipment that you service, it's more what is the business model that you have?

Sarah Nicastro: Right.

Hilbrand Rustema: And so to make sure that you have a peer group of similar companies that fulfill certain requirements, such as obviously size, but maturity level, the type of services. It is more important than trying to benchmark with only your industry peers.

Hilbrand Rustema: Because if you do that by definition you may run behind, whereas you can learn so much from other industries, which may be further ahead than your own industry in terms of the service business.

Sarah Nicastro: Yeah. And I think that's an important point is a lot of the advanced service type offerings that we talk about, they are, at a macro level, the same, industry to industry or similar enough. And so I think this idea of only looking within your industry at what's happening and what the trends are and what companies are doing and what customers want, you could lead your industry, but still be behind in terms of really where the future of services going.

Sarah Nicastro: And so I think most companies have embraced that fact and find a lot of value in looking for inspiration and innovation ideas outside of their industry, but it's certainly an important point. I always say, so going back to the group that I run, you're talking about companies in different industries, across the world, and we have so many good conversations and I always say like there's no one in this group that can create you a map of where you need to go and how to get there.

Sarah Nicastro: But by having those conversations, by exposing yourself to what others are doing and how others are thinking, it gives you a lot of opportunity to spark different ideas that can lead to immense positive change within your business. So I think it's a really important point that when you're looking at how to innovate, it's valuable to take inspiration from other industries, even industries super different than yours. I mean, that's how those disruptive ideas happen, not by kind of sticking close to home and playing it safe.

Hilbrand Rustema: Yeah.

Sarah Nicastro: Makes sense.

Hilbrand Rustema: So what you're saying here is obviously a mix of quantitative financial benchmarking and qualitative. And I would say another best practice perhaps if I come back to the question is start with the financial benchmarking and then you will identify certain areas of improvement. And then go into the qualitative benchmarking, look at service industry standards, look at the best practices. There are many out there obviously. So in that approach and try to look at statistically validated information rather than anecdotal.

Sarah Nicastro: Right. Right. Alright. So as it happens, not coincidentally, but intentionally, there is a benchmarking project that you have underway. So tell folks about that and who is a fit to participate, how they can participate, and where they can participate?

Hilbrand Rustema: Yeah. So at the moment we're running a large benchmark project, which is open to any, let's say, manufacturing company interested in growing their service business. That's the name of the project. So it's called the 2021 service growth benchmark. You can have a look anybody's interested in that and finds it valuable to participate in such a benchmark. You can have a look at our landing page for that is called thefutureofservice.com. So thefutureofservice.com. Companies can participate by filling out a survey. It's a database. It collects data until the end of September, then it will be closed. Then all participants will get an automatically generated benchmark report. And we do that by, or the system does it, by indeed creating peer groups of similar companies, pretty much according to maturity level, sizes, et cetera. And then you get an individual benchmark report.

Hilbrand Rustema: And depending on how much data you have actually filled out, you will get back on the parts of the survey that you have actually entered data in. It's free of charge and there will be a number of executive round tables organized. So to get sort of the story behind the results that we'll see. So we will be inviting some of the companies that have remarkable results and we'll invite them to talk about that. And then in small groups, 15 people or so, we will discuss the outcome by peer group. And that is more the qualitative part as you were mentioning, Sarah. And yeah. It gets a story behind the numbers.

Sarah Nicastro: Okay.

Hilbrand Rustema: And then the project will end with sort of a full report, which we expect to publish in January next year. That should give a pretty in-depth insight in the biggest trends and some of the best practices of the most successful companies.

Sarah Nicastro: Okay. Good. Well I urge anyone that is listening that is in the manufacturing space to check it out. So we are future of field service. This is the future of service. So that could get a little confusing, but we'll make sure we put it in the show notes. I mean, you all know that I'm a huge, huge fan of the idea of pure perspective and the voice of the industry and understanding what is happening across the space and this is certainly a really helpful way to get a view of what the trends are and where you sit amidst the trends. So definitely participate and maybe in January Hilbrand, we'll have you back to talk about some of the findings and share with folks what the trends are for those that participated. But I appreciate you coming on today to talk a bit about the importance of this and to share the project with everyone.

Hilbrand Rustema: Yeah. Well thanks a lot, Sarah. For sure we'll be back in January when we have the report.

Sarah Nicastro: Sounds good! If you'd like to participate, that is thefutureofservice.com. Not to be confused with futureoffieldserviceref.ifs.com, which is where you can find more of our content. You can also find us on LinkedIn as well as Twitter at The Future of FS. The Future of Field Service podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.

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How Brinks Home is Fueling Service Innovation

August 25, 2021 | 24 Mins Read

How Brinks Home is Fueling Service Innovation

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. We talk a lot on the podcast and within the content on future of field service, about how organizations are focusing and making progress with innovation, related to all of the opportunity that service presents. Today, we're going to be talking specifically with Joni Chapas, who is the Vice President of Field Operations Support for Brinks Home about how Brinks Home is tackling this issue, challenge, journey. Joni, welcome to the Future of Field Service podcast.

Joni Chapas: Hi Sarah, thanks for having me.

Sarah Nicastro: Thanks for being here. So before we dig into the conversation, can you start just by telling our listeners a little bit about yourself, your background and your role at Brinks Home?

Joni Chapas: Sure. I actually came to field service in maybe what be a little bit of an unusual path. I really spent most of my career at a telecommunications company and I was on the IT side of the house there. And I spent really most of my career there on the IT side, focused on mergers and acquisitions, and then really sort of project management and IT solutions. So I was working with the business units in that telecommunications company, implement improvements and automation and things to help address their business needs. So when I left there and came to Brinks Home in September of 2019 to shift from being on the IT side to coming over to the business side of the house, where I came in as working in the operations support organization. A lot of those skills that I had learned in working with the business on how to implement solutions to improve their process, I could really bring to the table in the new role.

Joni Chapas: So at Brinks I'm the Vice President of Operations Support. And my team, as you know, the name probably implies, we support kind of all aspects of the operations team. And that ranges, we handle anything from kind of tactical support from things like fleet management and helping us with our ... we have third party partners, helping them obtain equipment that they need to do work for us, to really the more strategic part, which I think we'll talk more about today, of things of business process improvement, analytics, business intelligence, project management, learning and development, that kind of thing.

Sarah Nicastro: Good. So as I mentioned at the beginning, there's a huge amount of change underway in service at the moment. Both in terms of customer expectations and market demands and ways that organizations are evolving and modernizing their service delivery or business models. And then you have technological change, there's a lot going on. And I think I wrote an article, I don't know how long ago, but it was sort of about the idea of the dichotomy of service leadership, right? And so this concept that, as the landscape changes leaders have been tasked with the huge, huge, huge challenge of innovation while also needing to keep pace with their quote unquote day job or all of the day-to-day demands of the work.

Sarah Nicastro: And so with your role, the idea that Brinks Home has, is that innovation can be led by a dedicated team that sits alongside operations, right? To sort of balance that workload and help spearhead and some of those innovation related efforts. So I think I explained that correctly, if I didn't please correct my explanation and maybe talk a little bit about some of the reasons that it is so difficult to expect innovation from operational leadership.

Joni Chapas: Yeah. I mean, I think it's just the fact that there's always ... in operations, there's always a fire that's closer to you than that smoldering ember that's out in the woods. Now that smoldering ember might end up being what's going to lead to the forest fire that really can be truly, severely detrimental if you don't stay on top of it. But before you can even look to that, you have to be dealing with what's in front of you. So, I mean, we look to operational leaders to make sure that they're managing your day to day metrics. I mean, that's what you're looking at. I kind of use example of, most call centers in the world have a ticker or some kind of screen that is up on the wall of their call center.

Joni Chapas: Maybe now that a lot of folks are remote, they don't quite have that, but where you've had, where it's kind of showing how many calls are on hold, what's average handle time right now, how many ... what's the abandoned rate for calls that are coming in? So we have things like that that are flashing before these operational leaders, their eyes to make sure they're keeping up with those day in day out, minute by minutes stats of how things are going. So to then also really expect that, oh, and hey, and by the way, in the next quarter, next year, we need to see this overall improvement in those metrics, it's kind of tough for them to have that dual focus.

Joni Chapas: I mean, again, even you can use a whole host of analogies, but it's the same thing. Like you can't really read a book if you're sitting on the beach, you can't really both read your book and watch your kids that are running off in the distance, right. You really can focus on one or the other. And so if you have ... if you're looking back and forth too much between the two, it's hard to be effective at either one. So I think that's what ... it's not about do they have the knowledge? They absolutely do. They're the people that are living and breathing it every day. But you also don't want them to take their eye off of those ticker numbers that are flashing in front of them that show you how you're doing it this very minute. So the idea of my organization is really to partner and work alongside, so that we can have more of the eye on the future, while they're focusing more on the near term and what's right in front of their face.

Sarah Nicastro: And it does sort of feel like an unfair expectation that companies put on leaders to do both ends of that spectrum, right? I mean, to your point, it isn't about the operational leaders not having the ideas, or the insight, or the perspective, right? It's about the bandwidth that it takes to really enable innovation and not expecting those folks responsible for the day-to-day to be able to just magically manufacture that bandwidth.

Sarah Nicastro: So I'm wondering if you can tell us a little bit about the thinking behind, how did this role, your team come to be at Brinks Home? Because I think that I've certainly talked with people that are in situations where they have the expectation of both. They are, fair or not, being tasked with keeping pace with the day-to-day and looking for the opportunities for innovation. And, then I've talked with other organizations that sort of do this type of approach where it's a specific function within the business that kind of drives the effort. So how did the idea to put this in place, come to fruition at Brinks Home?

Joni Chapas: It started off really with, when I came to Brinks with the idea of coming into operations, to kind of help find continual process improvements. But it was really to ... it was really focused on project management. So I said, I was in IT and telecommunications for the earlier part of my career, but that was ... let me be clear, I was never a real techie person. I was always on the ... within IT, but was always more on the sort of getting solution side and project and program management. So when I came to Brinks it was really with that idea of, hey, we have some large operational projects and we just need project management to sort of help see those through. So I kind of came with the idea of sort of establishing a project management organization within operations to just help drive those things forward.

Joni Chapas: But what we kind of quickly found was that we wanted to expand that and not just help execute, not just help manage the execution of those, but to really help with the more the strategic analysis, because it really does tie, we ... the operations folks are ... they have ideas of what are some of the strategic things that need to happen.

Joni Chapas: But again, really taking the time to really analyze those ideas, to go and explore is something that they really aren't afforded the time to do. So it just became ... just sort of developed out of ... as an extension of, oh, hey, there's a project we want to do, can you have somebody, have a team that will help manage those projects to more, can we have more ownership on what the right projects are and what the ... how we can optimize the technology that's out there, how we can research about where ... what are really some ... the true business problems and what solutions we might have for those. So it really kind of expanded, but that was just kind of the evolution from, again, more tactical project management to strategic planning.

Sarah Nicastro: So what does the working relationship between you and your team and the operational leadership look like? Like how do you kind of collaborate together and learn about their ideas and their insights and figure out what to put into action? What does that collaboration look like?

Joni Chapas: Yeah, I mean, and it's, again, it's really imperative that we be working right with those operational leaders. So my team and I felt we do work directly with those operations folks when we're looking at, for example, our monthly metrics and doing our end of the month summary of how are things going and what things are we experiencing, I'm participating right along with that, that we're as accountable to the KPIs of the organization as those operational leaders. And so we work really closely with them, but what we're able to do is, and most people will kind of hear this and say, in anything that you're doing, people always talk about, it's easier to have a straw man or something to work from, and then get feedback on what's wrong with that than handing somebody sort of a blank piece of paper.

Joni Chapas: So we generally try to do that. I mean, sometimes we come ... I have one of my peers come to me with a business problem and say, can you help us in figuring out how to solve that? And we go through and kind of brainstorm and think about ideas and talk to different people involved to get some feedback. And sometimes they come really with an idea of a change that they've observed and they think is a change that can really benefit their team, and are just asking for more help in putting that all together and getting all the right people involved and operationalizing a change.

Joni Chapas: So we work closely with them and again, what we do going into my straw man point is that we're generally taking and creating those strawmans, whether it's based on an idea that they feed us or business problem or something from even higher level leadership that we can go through and say here's a straw man for how this might work, or what change that we could make, and then let them kind of tweak and edit that. Where if they're truly without us, it's like somebody handing them the blank piece of paper and saying now you have to go draw it all yourself.

Joni Chapas: So it's much more efficient for them to be able to let us do the documentation, do the ideation, go through and do analysis of what does the data show us? What does ... what are the cost benefit of and risk factors associated with it? Let us go through and do that, go do industry research and things like that. And then be able to do more of a sign-off and approval or give tweaks and adjustments, as opposed to having them again, have to go through all those steps themselves to achieve the objectives.

Sarah Nicastro: That makes sense. So how would you describe the biggest advantages to the structure that you have set up at Brinks Home, where your team is working alongside operations to drive innovation?

Joni Chapas: I think there's ... the couple key things are just the ability to focus on it because you, as you're mentioning earlier, there's the ever, ever evolving future field service, just like what this is, this whole series is about, that you have to keep an eye and you have to look to the future and you have to innovate, or your business is not going to be successful. But you again, also have to take care of these day-to-day items. So it's really just kind of, instead of having the same people with divided focus, it kind of lets us focus on our own ... focus on those individual pieces. And again, we can't do that in silos, to your point, there definitely is collaboration and working, we're on the same team. I mean, we literally work for the same leader, but that focus, and then it really is minimizing the time spent from the operational leaders on projects.

Joni Chapas: And some of the ... I don't want to say administrative in a term that's negative, but when you're doing an organizing project, there's a lot of that analytics and thinking about things, organizing, making sure we have all the right constituents identified, making sure that you're really thinking about all of the impacts throughout the organization, dependencies, costs, timelines, all those kinds of things that we can focus on. And those operational leaders really don't need to think about that. They need to think about the impact to their operation or what is the business need that they have. And so we get to take some of that off of their ... those other pieces off their hands, that let's be honest are critical to the success of longer range projects.

Joni Chapas: But if you have a leader that is also responsible for day-to-day metrics, this is probably to stop that sort of slipping through the cracks. They probably ... not because they're not capable, but because of the timeframe that they have, that they probably aren't able to get to as thorough of analysis as they might like here. Or maybe the communication piece kind of, and coordination with other parts of the organization maybe falls through the cracks a little bit. So it helps for a little bit cleaner in those projects and minimizes the need for the operational experts to handle some of those other pieces.

Sarah Nicastro: Yeah. No, that makes sense. And I think you're right about what slips through the cracks. It's the less urgent it is, the easier it is to postpone. And I think that's one of the important things to have folks understand is that the pace of change today and the degree to companies are innovating, there is a need to dedicate specific resource or make investments in the longer term strategy and the innovation that's going to get you there. Whether that's a structure, like what you have at Brinks Home, whether that's consultants, whether that's someone, some other structure. It doesn't necessarily need to be prescriptively done in a certain way. But it absolutely is important, I think in terms of keeping pace strategically, to understand that there has to be some dedicated resource, energy, effort to this type of initiative. So are there any drawbacks to this approach that you would caution people on?

Joni Chapas: Yeah. I mean, it requires communication, absolutely. So it's really the relationship building, it's trust and buy-in are the initial pieces. So as much as the ... there's kind of a mix. You'll have some operational leaders that, because they're very accountable to metrics, I mean, their life is generally metric-driven, most anybody that works in operations, they've got KPIs and that's what they are held accountable to all the time. So because of that, there are times where they are a little bit leery, of kind of handing over ... seemingly handing over some control of projects or things that are going to affect those to somebody outside of the team. So they really do have to build that relationship of trust and buy-in, and know that we're not making decisions on their behalf, they're part of it.

Joni Chapas: We're doing more of the legwork piece. We're still ... and we have to hold to that. We have to make sure that we're accountable, to not be trying to implement change that they're not ready for, to not be making decisions that impact them without their buy-in. And to know that we're ... my team is just as invested in the KPIs that they're held to as they are. So I think it's not, definitely not so much be a drawback as much as it is a ... just a, it's a kind of, a little bit of a, it can be a little bit of our hurdle to getting there.

Joni Chapas: In some cases you have folks that out of the gates want to ... are happy as can be to have someone else that can, hey, I've been meaning to try to get to this improvement for a long time, and I haven't been able to have anybody on my team focus on it, so here, I'm glad you're here, go take this. So you'll get some of those, and in that case, you'll get more work than you have time for. But there is really that fact of building the right collaboration so that it is a balance of ensuring that those leaders also, at the end of the day, aren't able to come in and say, oh, well we were hoping that this initiative was going to achieve a 10% improvement in X, Y, Z metric, that at the end of the day, if it doesn't achieve that, that they don't get to just look and be like, I don't know Joni and her team did that. I don't know what they did.

Joni Chapas: So there definitely ... that's one thing is that it can't be viewed as, it's not a throw it over the wall, either way from my team to those folks or vice versa, that it is collaboration that we're in it together. So you have to make sure that relationship, it's really key to the success.

Sarah Nicastro: Yeah. I like the idea of making decisions together, but then you sort of are dividing and conquering when it comes to the efforts, right? So it's ... we have to decide together where we're going, but now, you keep doing X, Y, and Z, we'll go do A, B and C when it's time to reconvene, we reconvene. But to your point, it really allows both parties to focus on their responsibilities in a way that maximizes productivity versus trying to have either responsible for both.

Sarah Nicastro: So the next area I want to talk about ... so when we talk about innovation, I think one of the biggest barriers to innovation, other than allocating appropriate resource, which we've already talked about is the idea of organizational silos. So another big part of your role and your team's role, is to aid in that strategic alignment and to ensure that the innovation that's taking place at Brinks Home is well coordinated, is in line with the company's objectives, etcetera. So talk a little bit about that aspect of things.

Joni Chapas: Yeah. So, and we're responsible for that kind of both within the various teams that make operations, as well as outside of that. So the easy examples within the organization, we've kind of touched on it a little bit within operations, but we also, again, I use learning and development as one of the areas underneath of my organization as well. So we might go through and look at when we hear about a challenge that we're having in operations, we can jump on that to go through and say, okay, what can we do? What can L&D do to help with those issues? So, I'm ... not too long ago, asked my L&D manager to go through and review the latest set of KPIs for the operations team, and then to come back and tell me to say, here are things either that we can build on in training that we already have, here's development for ongoing development for the team, here are resources that we can make available.

Joni Chapas: But it's, again, some of that is making sure that we're not just getting complacent and oh okay, we have these training that we hire, we do these types of webinars and lunch and learns, but to go through and say, it's actually directly tied to those strategic goals. Here are the strategic KPIs that we're trying to do. But again, also, as far as going across other organizations, I'm afforded a little bit more, have a little bit more bandwidth in my team to go through and have regular reviews and one-on-ones, and participate with product development, with sales.

Joni Chapas: So we can look and see what's on their roadmap. What are they doing? And take some time to absorb that and think about what does that mean? What does that mean to where we want to go? How do we ... from an operation standpoint, what are the impacts? How can we drive some of that innovation together? Again, it's just that ability to spend some time, focus and thinking on that, where from a really a more pure operational perspective, you typically will get like, oh hey, sales is rolling out this new program, or whatever it may be.

Joni Chapas: And then now let's kind of react to it. And even if you're doing it as part of our project, you're going through and putting those things in place, but you're not often looking at ... and those operational leaders aren't often looking at sales where are you trying to get to in the next year, three years, five years where I can do more of that.

Joni Chapas: So it's imperative that we can again,a cross the silos of the organization and I've built relationships with those other leaders or say, hey, can I sit in on your monthly review or quarterly review, so that we can get ... that we can see where they're headed and take that into consideration and make sure that we're all sort of headed in the same and right directions that we can align, for strategies and innovation, because we can hear, hey, you guys, it sounds like someone's looking for a tool that may aid in X, Y, and Z, but that really closely aligns to something that we want to do too. So maybe this is instead of, in a vacuum one group going and looking for a tool set, that we look together and kind of go through and do that through the power of putting that together.

Sarah Nicastro: Yeah. I mean, it always shocks me. It seems like it shouldn't be, but there is always a lot of missed opportunity within any company of those collaboration points within function to function. So having a team that acts sort of as a conduit for ensuring that those opportunities, you get ahead of them instead of to your point at being reactive, oh, you're doing this? Great. We could use it this way. Getting ahead of that curve and thinking more strategically about the areas of opportunity across functions, so that you can be more intentional about those. That makes a lot of sense. So good. All right.

Sarah Nicastro: And then the last area is around technological innovation. So your team is also responsible for innovation in terms of technology and digital transformation. So, this recently resulted in a partnership with IFS, and that is something again where you're looking at how different tools can be leveraged across the business, to drive success in sort of modernizing the company's approach to technology. So talk a little bit about what that looks like, in terms of working alongside operations to bring those digital transformation projects to life.

Joni Chapas: Yeah, so we work, again kind of to the point of working sort of across the silos is that, I also work pretty closely with our IT organization, that ... and then vendors, for example, IFS is this key one that we've recently been working on, but to work with our IT team and again, make sure that I understand what their roadmap is and to get our needs on, on the roadmap and to be looking out ahead, of not just, hey, there's something that came up, we need to get a request in now, but what are the advancements that we want to be making?

Joni Chapas: And it's more about more of the long-range planning. But specifically for something like, IFS is a great example of that a lot of people can probably relate to. We did that through an RFP process, and if anybody's ever done that, in most organizations, there's a whole lot of ... you're putting together lot of the information on what are the requirements and what's needed, the whole RFP process, identifying vendors that are going to participate, reviewing their responses, doing Q and A sessions with them, getting demos and whatnot from them, typically putting together some cost benefits on the ROI type of information. You're able to generate a score card that you're comparing people that participate in the RFP process.

Joni Chapas: So really my team did all of that type of work. Actually, we also ... even if you step back from that, we kind of more of the research to look and see what's out there in the marketplace. And to say, we know we have a particular need that we want to address, but we also want to think ahead to a tool that not only will address that specific need, but will grow with us, and that has additional modules, functionality, and a roadmap that kind of aligns with Brinks Home, where our roadmap was going. But anyway, but going through that process, so going and coming up with all of those pieces of ... through that RFP process, what we did was then take some of the experts in and said, hey, come in and sit in the demo and help us score them.

Joni Chapas: And then yeah, they helped us provide information on requirements upfront as well. But all the other pieces and people, again, if you've done an RFP process, you know it can be very time consuming. They didn't have to spend the time on that. But, from the technology standpoint, again, being able to look ahead, investigate, understand what other teams within the organization, what their needs are, so that we can ... because obviously when you're spending money on certainly outside tools, you want to have a tool set that's going to integrate together, where you can have, not just disparate a whole bunch of one-off tools that now don't talk to each other and, or duplicative in nature. So really our role is to, again, define, think ahead, define what those needs are, then really shepherd it through that whole process.

Joni Chapas: And then when it came to actually working on the project of ... to building and rolling out field service management and PSO, that we could go through and again, play the key role in a lot of the documentation, working as the primary project team and bring those, the SMEs in as needed. We could do a lot of the testing and review and then bring them in for final sign-off. And again, take a lot of that burden of all the time that it takes, so that we could turn that around as a ... realistically turn that around much more quickly than it would be if we were relying on people to do that in addition to their day job. That's kind of the other thing I say a lot is everybody in operations, they have a day job. This is our day job.

Joni Chapas: So, but you know, really technology is a key for innovation and automation, is what you need to get there. I mean, obviously in the modern world, innovation and technology are kind of hand in hand. And so really thinking through those, understanding the longer range vision, and trying to figure out how to do that, helps you progress and bring change to the organization without crippling the organization in the meantime.

Joni Chapas: It's definitely, I mean, it's disruptive. It's disruptive, but you have to be able to kind of put all the pieces in place to have that disruption be as minimal as it can be, and then achieve the result that you want, again, without jeopardizing your day-to-day in the meantime.

Sarah Nicastro: Yeah. And I think, you mentioned speed, right? If you are relying on operational leaders to do that whole process in addition to their everyday responsibilities, it's ... the whole thing is going to move at a slower pace, than if you have a team dedicated to it. And speed is imperative when it comes to keeping pace, and innovating, and leveraging technology today. Everything is changing faster than it ever has before, and it's not slowing down. So looking for the best way to set your company up for success, to not only focus as needed on the short term, but focus the way you need to on the longterm is super important.

Sarah Nicastro: So whatever that structure looks like, whether it's a structure like Brinks Home has, whether it's something completely different, for any company that is focusing on driving innovation, what would you say are some of the key ingredients to success?

Joni Chapas: Yeah, I think a couple of key things. One is leveraging the best of what you have right in front of you. I mean, I know that there's a balance between, yeah we want to change and we want to think outside the box, which we need to do, but you want to take a look and know what the strengths of what you already have and how to leverage those as you move forward, is really key. A lot of folks get into the almost the throwing the baby out with the bath water. So really want to make sure you know yourself and know what your strengths are. Data-driven decision-making. I mean, I can't probably preach enough. So, I'm thrilled that within my organization at the Brinks Home, that the data analytics team is there, because that's essential.

Joni Chapas: It's essential to the business. You need to look at, let the trending, tell you where you're going, but predictive analysis and analytics tell you kind of where you need to improve and where you need to go. And then that you're going to make the right decisions. I mean, there are a lot of things, don't mistake the fact that there's technology out there that's really cool to have, but when you put pencil to paper, the business case for that really cool technology may not be there.

Joni Chapas: But you will need to really understand your data and using that, again to make the right decisions for your business of where you're going to get the most bang for your buck. What's the return? Where can you really improve? That's really key. Attention to detail, which is probably, if you summarize a lot of the things that we were talking about, about sort of the focus, that's one of those pieces that, because the team's able to focus we can pay more attention to those details, that's often what happens to any of us. Any time you're rushing through something, or you're doing two things at one time, that's generally what suffers is the detail.

Joni Chapas: So, obviously everybody knows the phrase, the devil is in the details, of when you're working through certainly a complex implementation or a technology change. And so, making sure that you have people that can focus on that. And then of course, collaboration and communication, just so important to everything that we do. And regardless of the organizational structure, like you were mentioning, communication and collaboration really has nothing to do with your org chart. It's all about people. And so that's just one of my other mantras, is that we have to engage and keep talking with each other and make sure that everybody's on the same page. Because as things are moving faster and faster, it's very easy to miss those steps and to try to, race ahead and be in a hurry and miss some of those key points.

Sarah Nicastro: That makes sense. Very good advice, Joni, and I bet there's going to be people listening to this podcast that are being tasked with the operational duties and the innovative duties that are, are going to be jealous of the support that you're providing at Brinks Home. So it's a good model though, I think for anyone to kind of think about and to consider and really just to do some critical thinking about what exactly the focus on innovation is within the business. And is it scaled to the degree it needs to be, is it as effective as it needs to be, are you moving at the pace you need to be, et cetera.

Sarah Nicastro: So I appreciate you coming on and talking a bit about how you're doing that at Brinks Home and thanks for being here.

Joni Chapas: Thank you. Thanks for having me.

Sarah Nicastro: Absolutely. You can check out more of our content by visiting us at futureoffieldserviceref.ifs.com. You can also find us on LinkedIn as well as Twitter @thefutureoffs. The future of field service podcast is published in partnership with IFS. You can learn more by visiting ifs.com. As always, thank you for listening.

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Embracing The Realities & Possibilities of Innovation

August 18, 2021 | 24 Mins Read

Embracing The Realities & Possibilities of Innovation

Dan McClure, Systems Innovation Choreographer at Innovation Ecosystem discusses with Sarah the differences between incremental improvement and true innovation and provides advice for companies on how to react sufficiently to today’s disruption.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host Sarah Nicastro. Today we are going to be talking about both the lure and the detriment that the idea of incremental improvement can cause your business. I'm excited to be joined today by Dan McClure who is the systems innovation choreographer at Innovation Ecosystem. Dan, welcome to the Future of Field Service Podcast.

Dan McClure: Sarah, it's great to be here.

Sarah Nicastro: It's great to have you. So before we get into the thick of it, why don't you tell our audience a little bit about yourself?

Dan McClure: Well, I have been somebody who has through good luck been thrown into burning buildings throughout my entire career. So I started my career in an industry that was going through massive deregulation, had a chance to spend time as an entrepreneur for a decade and then have gone from industry to industry really looking for the places where disruption was happening and there were opportunities to do what we've called system innovation, changing the way that they fundament organization works to create value in the world.

Sarah Nicastro: Okay. Now it's interesting that you would categorize being thrown into burning buildings as good luck, because I don't know that everyone would feel that way. Why do you say it that way? What do you think that that fact has enabled you to learn or to do?

Dan McClure: Well what's exciting about a burning building or more conventionally framed, a burning platform, is that you are in a position where there is not only a motivation for big change, but you've broken out of the status quo. There are pieces that are freed up that allow you to be really boldly creative. So if you're the type of person who says, "I don't want to simply repaint the house, but I want to imagine the house with an entirely new set of rooms," a burning building is not a bad place to start because you really get the chance to bring other people along on a big bold dream and do something that has a real impact in the world.

Sarah Nicastro: Yeah. That's really cool. So I read an article you wrote that said ... The quote said, "The hard truth is that complex systems problem can't be solved with piece meal inventions. They need to be addressed with far more ambitious systems solutions." So tell us a little bit what you mean by that quote and what the route of systems innovations is.

Dan McClure: So most organizations are in the habit of working. They have built up a set of system, they've built up a value proposition. They've built up a market place. That all work together to essentially deliver value to their customers and to their shareholders and to their employees. Everything works. And for those types of organizations, simply making an incremental change to make things a bit better makes them more profitable, more competitive. Sustains their role in the market place. The challenge is, if they need to make a bigger change, let's say a competitor comes in and offers a radically better proposition, or the fundamental basis for their marketplace disappears, then they can't make small changes to the way things work, because those won't be enough. They'll find themselves in perhaps three different categories of situations.

Dan McClure: They may find themselves commoditized. So they can continue to sell in their market, but they're not going to make any profit on it. They may hit a plateau where they really still have their market share but they're never going to grow any further than they are. They have essentially gone as far as they can and they're just waiting for something worse to happen. And the third thing, the worst that could happen, is they might find themselves completely obsolete. So this temptation to resort to small incremental innovation often leads to these dead ends or these areas where the future is really not very bright at all. And so moving beyond incremental change becomes the thing that they need to do. They need to create a new value proposition that's new and differentiated in the market.

Sarah Nicastro: So what I'm curious about and I recorded a podcast a while back with a gentleman who at the time worked at Cisco and the title of that podcast was weighing the decision of disruption. And it was this idea that Cisco's business in the area and region that he worked, was doing quite well. But they knew there was an opportunity to do things differently. And it was a tough choice to make because there wasn't this catastrophic burning building type issue. They weren't becoming obsolete. There wasn't that big of an issue. But there was a significant opportunity and I think Dan, that a lot of people in our audience are in similar situations where there's a big opportunity being presented by the market and the customers that these customers serve for more and for different than what they've historically provided. But maybe for a lot of organizations, the need for that change isn't so intense that it's a do or die type scenario which causes people to drag their feet. So how does a company know when it's the right time to look at more of a systems innovation approach then just sort of incremental improvement?

Dan McClure: I think the whole question of disruption and the way people react to disruption is interesting. Often times disruption is framed as opportunities early on. So you look at the marketplace and you say, "Ooh, there's a new opportunity, maybe we could be a fast follower, or maybe we could do this sometime in the future." There's a couple of problems with that. That optionality, that assumption that we can wait because things are going pretty well right now. You sighted that example of the gentleman from Cisco. The reality is their platform may well be burning, well in advance of the time they see smoke. And often times these disruptive changes are already well in flight before anybody realizes them.

Dan McClure: The other problem is, is that there's an assumption that if we delay, when we do see the disruption, we'll have the time to respond. And frequently once these changes start to happen, they happen incredibly quickly. So consider the classic case of Uber, which used to be the innovation example cited in every conference three or four years ago. But it took them only three years to outpace New York City taxi cabs as the primary provider of transportation service in New York City. If you look at other industries like healthcare, in the first six months of the pandemic, there was a 16,000% increase in digital health services. Once the lever tends to tip, it tends to tip very, very quickly. So this idea that we can wait, because we don't have a burning platform right now, is often, misses the true reality of the situation organizations are at.

Dan McClure: The other thing to remember is you don't simply get to claim market share by showing up. And so when these new market opportunities emerge, they're going to be fiercely competed for. And as a result, if your organization isn't making the kind of deep thoughtful creative changes to position you as a leader in that market, you're not going to be in a position to show up late in the game and say, "Okay, now I want my share."

Sarah Nicastro: Right. Okay, so that makes sense, but I think what I want to talk about is sort of what you refer to in some of your content as the lure of incremental improvement. So saying it makes sense. It makes sense. You need to be creative, you need to innovative. You need to stay ahead of disruption. It all sounds very good. But it's obviously harder than it sounds when we're talking about it. And I think part of that is this lure of incremental improvement. So let's talk a little bit about why that tendency is so so strong for organizations to sort of stay in their comfort zone, maintain or incrementally improve the status quo, et cetera.

Dan McClure: Yeah. I think it's interesting and you almost have to go down to a project level. So imagine you're a project leader and you have two ideas. One of them is an incremental change and the other one is a disruptive change. For the incremental change, you're going to be able to document pretty hard evidence of the types of improvement you see. So you may be able to reduce head count or you can project with reasonable certainty a 1% increase in market share. And as a result, that projects going to be very easy to sell. If you're the sponsor, the person with the budget, you're going to be able to say, "Well, I'm pretty sure I can get that type of project delivered." But that's got to have some pretty high degree of certainty of results. And then I you look for everybody else across the organization, it's just going to be a small change to the way they work, so they're going to have an easy time to adopt it. So all along the way, that project, that incremental project, is going to be easier to sell, lower risk to execute and easier to adopt. And that's a very attractive thing in an organization. Nobody wants to be the person who's spearheading a failed project.

Dan McClure: Now contrast that to a disruptive change which requires an entire system to change. Here we're saying, "We're going to imagine a much bigger opportunity and it's not even going to really be proven out by any evidence in the marketplace yet." So we're going to have to hypothesize over what we think the opportunity is. We're going to have to change lots of different pieces and put in new things that nobody's thought about before really carefully and therefore the risks are going to be higher. And finally, we're going to have to get everybody else onto an entirely new page. And so all those system changes are going to have to cascade across the organization. If you compare selling those two projects, it's a heck of a lot easier to sell that small incremental project. And at the same time, it's the big disruptive system change project that really offers the hope of getting past these big threats that we were talking about earlier.

Sarah Nicastro: Yeah. It's interesting because it makes me think about in a lot of the conversations that I have here, we talk a lot about, I mentioned before we started recording that some of the big disruptive change in our space is related to the idea of this journey to servitization or to outcomes based service. And we have a lot of conversations on this podcast about the fact that that level of change and evolution is not possible without buy-in from the top. And so that is just making me think about what you're saying which is the ultimate stakeholders that you're presenting these options to, if they're very comfort zone in status quo oriented, if they have certain motivations that maybe make them incredibly risk averse, if they are quite stuck in their ways for a number of different reasons, it's really hard for anyone that sees this opportunity within the business to bring it to the forefront. It just, they keep defaulting to the easier options that are being presented. And so it's just making me wonder your thoughts on the criticality of leadership who is willing to take risks and be creative and embrace a more innovative approach.

Dan McClure: So here's where I think sometimes the narrative is a little too simple. I certainly have been the person who's been going to a leader and then been slapped down hard, and that's not a pleasant experience. And I probably went out to the bar later that evening and had a beer and was complaining to my friends about what Luddite and risk-averse manager we had and da dah, da dah, da dah. The reality is, while that can be a concern, more often it's that people are pursing system innovation in the wrong way. They're asking their leadership to do things that don't make sense and as a result, what we really need is to figure out how to do system innovation well and then use that to go to management with a clear set of here's how we're going to approach this disruptive change.

Dan McClure: So let me give you a few examples of things that people do wrong when they go and talk to senior management. The first thing is they arrive and deliver a dead rat. So they walk through the door and they say, "The world is ending. Everything is going to go bad and we need to change something." And then they stop talking and they've delivered the dead rat, but they don't actually have a solution. And this is often way easier to do than actually coming up with a solution for a hard disruptive market change. If you were to imagine your newspaper co, a newspaper, and you've got print editions and this is your business, and certainly I'm sure lots of people ran into management offices saying the world is coming to an end. Much harder to come up with, and now what do we do? So that's the first thing is the system innovator, the person who's proposing these changes actually has to think through what it is they want to see.

Dan McClure: The second piece is they need to come in with a solution that is complete and compelling. So it's not enough to simply say, "We need to make this one little foray into some change. We need to add a mobile app." For a while there it was, we could become a digital company simply by adding a mobile app for example. I think servitization often becomes the same sort of silver bullet solution, is we'll simply add a bit more service onto our product, do what we've always done. And what the system innovator needs to do is if they're going to go to management, they need to come up with a big enough and powerful enough system change that it actually does create new differentiated value.

Dan McClure: And finally, they need to go with a strategy that basically manages the risk. You're asking an organization to take big leaps in faith, plow into areas of uncertainty and so you need a strategy that allows you to evolve this new market opportunity. Evolve this new disruptive system over time. And it can't be we're going to invest for four years, put millions of dollars into it and then see if it works at the end. There have to be early points of feedback, all the way along the way to show that this is all working. I think if you do that well, we'll find that a lot of those senior leaders that seemed like they might be anti-change, are very appreciative of the fact that they don't want their company to fail either and they have a real opportunity here. Here's something they can actually act on with faith.

Sarah Nicastro: So it just makes me think, what is it then that would drive someone within the organization to take that on, because it does sound daunting. So at the beginning when you've mentioned you've had the good luck of being in these burning buildings, I mean it sounds like you have looked at this through the lens of liking the challenge and seeing the opportunity and wanting to do this work of presenting a solution and seeing it through. What is it within a person that you think gives them the likelihood to want to spearhead systems innovation?

Dan McClure: So I think it's really fascinating that there are different types of roles within organizations, that we've clearly defined. We know what a manager's role is and what the skills are that go with that. So you need somebody who's organized, who has good attention to detail. We understand in many ways that executives are good about exercising control and being able to take bold moves, et cetera. When we look at systems innovation, there is an unnamed role that is I think far more common than people realize. But it's a type of person that we've labeled as a choreographer. And their focus is really ... Their passion is about new ideas. And not small new ideas like we've made a bit of change in the production line. But rather, this is a big bold idea that gets me excited. So at the risk of citing guys who have been launching themselves into space, the Elon Musks, the Richard Branson, the Jeff Bezos, are all these sort of excited by big idea people. Regardless of how you feel about them individually, you can certainly get the sense that there's a group of people that are excited about big ideas.

Dan McClure: The other aspects of that type of personality is they tend to look at big pictures rather than at the details. So when they look at an opportunity, they don't see the small things that stand in their way. They see the big connection of how all the piece fit together. And they're fostered in that by the ability to be generalists. So one of the phrases that I really dislike is the, "he's a jack of all trades, but a master or none." A generalist is basically a specialist in everything. A specialist in seeing across things. So they don't necessarily know the details of everything, but they see how a lot of things fit together. And when you combine this sort of passion for big ideas, the ability to see the big picture, a generalist background, along with a certain rebel attitude of what being willing to break thing apart, you end up with somebody who not only is able to accept that kind of challenge, but who fits actually very poorly in most other jobs and so they need to go find those types of challenges if they're going to be happy.

Sarah Nicastro: Okay. So here's my next question then. So if you think about, let's just take an example of an organization that manufactures something, has been around for 100 plus years and there is this disruption happening, but this tendency towards incremental improvement versus true innovation. Do you think that it's possible for somehow that organization to find this talent, motivation, inspiration, skill set among itself, or is there a benefit to seeking outside perspective or different roles, different talent if you're trying to make some progress in this area?

Dan McClure: So what's interesting about choreographers, because they don't have an official job title, often times there are choreographers wandering your hall and you're not even aware of it. So part of it is simply just being aware of the choreographers that you have. You probably have some that have been banging around, looking at the bit problems, excited about ideas, but haven't been recognized for their ability to do this. So part of it is just look at the groups that are within your organization. A second feature here though is, don't kill them off. So most organizations are actually well designed to identify choreographers and get rid of them because they disrupt the way things work.

Dan McClure: Christensen talked a lot about this, just there are people who within organizations will try to bring up new ideas and the organization is designed to stop them from doing that. So part of it is just removing the immune system to these types of people. But the reality is most of these individuals have very random resumes. So I've been talking about my own resume being a fruit salad of all these different things all tumbled together across multiple industries. If you're going to go out and look for choreographers, look for people who have the skill of dealing with big disruptive ideas, rather than somebody who's a specialist in your industry, who's had a particular job title, et cetera. You're really looking for a unique type of person rather than a particular career path.

Sarah Nicastro: Okay, that makes sense. Going back to the question that I brought up about knowing when is the time and recognizing disruption, and you point about often times it's well underway when you have that aha moment, but there're companies that are choosing to nurture disruption and to embrace it and to try and be ahead of the curve. And then there are those that are responding to disruption by force. So are there differences in approach that need to be taken with systems innovation for an organization that is sort of being more proactive versus reactive? Does that make sense?

Dan McClure: Yeah. I think, so the first thing I would observe here is, many of the things that companies do to check off the I'm an innovator check box, are really pretty ineffective and they're designed for either incremental or irrelevant innovation. So there was a period of time where every company wanted to have a hackathon and there were big company celebrations around here's all the ideas that came out of our hackathon. Those types of events very, very seldom produce substantial systemic change, because they're small ideas imagined in the moment without deep connection to where the company is or where it's going. Likewise, innovation labs, where a few privileged innovators are given a space to go off and test out new ideas et cetera, very seldom successful in actually scaling up ideas. And to go back to the idea of spin offs. Perhaps you create a spin off company that could go and test out an idea.

Dan McClure: The problem with all of these is they essentially isolate the change in a corner of the company. And what you really need for this type of disruptive deep change, the type that's going to allow you to capture a new market place is you need to be weaving change throughout the entire organization, which makes it a much more enterprise wide effort. And so it has to be technology, it has to be business, it has to be senior leadership. It has to be middle management. Middle management is often the biggest barrier to a lot of these changes. So when we look at a genuinely agile organization, it's somebody who's able to take all the pieces of their organization and engage them in these new ideas.

Sarah Nicastro: Okay. So can you tell me why it is that middle management is often the sticking point here?

Dan McClure: Yeah. So the phrase that you often hear is the frozen middle. So people on the ground are often choreographers, can have ideas, they see things that are new that are different. They are generally focusing on particular problems and challenges, and so they can get excited about those. Senior leaders see the big market challenges, the dangers, et cetera and often times they will bring in specific people who are charged with making all those new and different strategies go. Middle management is basically in the role of making the organization as it is work. And both their job security and the nature of their job, puts them in a position where they need to keep the status quo what it is and as a result they're going to be hesitant to raise up ideas from below and they're going to resist the types of deeper systemic change, even if it's coming from above.

Sarah Nicastro: So then how does an organization counterbalance that?

Dan McClure: So you really have to intentionally plan to do system change. And that's where we'll come back here to the concept of system innovation. System innovation basically says, I'm not simply changing a process or an output, like a feature or a product. But rather I'm changing the way everything works to achieve a new type of goal. And so the entire effort has to be around all those different types of change. And that means that you need a vision of what that whole change is going to be. But you also need the choreographers to work across the organization to make all those pieces of change happen. So you basically are designing your entire organization to be embracing this kind of change.

Sarah Nicastro: Okay. Now you said earlier that a lot of times companies put in place things that they think are fostering innovation that really aren't, so the examples of the hackathon or the innovation lab, et cetera. Is there any sort of self-reflection test or criteria a company can use to determine, do we think we're innovating, but we're really just continuing to promote incremental change maybe at a better than average pace? Do you know what I mean?

Dan McClure: Oh yeah, absolutely. So frankly, if they were promoting incremental change at a better than average pace, that would still be a positive outcome. Frequently what you see with these programs is really nothing is happening. So the first piece would be simply measuring what your actual outcomes are from these operations and whether it's a lab or a hackathon. Not how many things were generated this week in the hackathon, but rather for last year's hackathon how many of those things actually went into practice. So there could be just some discipline in classic lean fashion of how much did this change matter to me?

Dan McClure: I think more fundamentally though, as we've talked about just more, better incremental change is not going to be enough. And so the real question is, how do I know that I'm on the path for doing something deeper and more systemic. And there it really begins with understanding that there is a systemic change that you want to make and putting that front and center of everything and then starting to build in measures around how close am I to making this systemic change. It becomes really a case of refocusing yourself on that bigger, deeper change.

Sarah Nicastro: Okay. So talk to me about the role of agile in all of this and then also some of the misperceptions of what that means.

Dan McClure: So for a lot of folks, both the phrase systems and the phrase agile is tied to technology teams. And there are certainly uses of those terms. So if we're talking agile as far as agile software development, what that really is a more flexible business aware form of software delivery. It allows for less upfront design and allows you to deliver software in ways that you could learn as you go along. That's great stuff. You should be doing that no matter what. Agile applied to an enterprise level is really a much bigger change. And what you're really talking about there is the organization can exhibit agile practices. They can identify long term goals. They can adapt and change. They can respond to insights as they go along.

Dan McClure: All of these things are at really a different level than agile technology teams. And so while we've called them the same thing and they have some of the same principles, learn as you go along, have clear goals of where you're going et cetera, it's a very different type of journey for the organization and you shouldn't assume that you can simply take your agile scrum coach and throw them into the enterprise and you'll get the kind of results that you want. Because what you're really trying to do is a much different type of creation. You're creating a new system in the organization rather than creating a new piece of software.

Sarah Nicastro: Right. Now is there advice about how to adopt a more agile mindset and business mentality?

Dan McClure: So is an element at the senior level of beginning to recognize where you want to go from an opportunity perspective. So instead of focusing on scheduling the projects that you're going to do in the next year, understand the opportunities that you want to pursue. The advantage here is that once you've shifted to think about opportunities, you can continue to change the way you approach and pursue those, rather than simply saying, "I've now executed this project and it didn't really didn't make a difference whether I changed anything in the marketplace or not." So this shifting the executive focus to opportunities and where do you want to go. So what are these big new things you want to do?

Dan McClure: Then when you start to make change across the enterprise, you're going to want to do it in a vertical slice. So it's going to be very difficult to get the entire enterprise to change all at once. So instead, pick a layer of executive, middle management and folks on the ground who can all work together around a new idea. And that type of slice will allow executive sponsorship, middle management, operational control and hands on work on the ground to actually all work together around the change. And then move additional thin slices as you go through.

Sarah Nicastro: Now is there a typical slice that usually works well, or it just depends on the industry, the organization, et cetera?

Dan McClure: I would say it depends on the system you're trying to create. But the key thing here is to note that opportunities come from bolting many things together, multiple things together. So your thin slice won't necessarily be just the marketing operation. It may well be multiple pieces of very different things that all need to work together to create this new opportunity.

Sarah Nicastro: Yeah. And that sort of higher level orchestration, the elimination of silos, they change management of getting everyone bought into these concepts, I mean, that is the hard hard work. I mean, those are the things that come up time and time again in the conversations we have here about why regardless of what that opportunity is, it can be very, very hard to make progress. So yeah, this is great insight, Dan. I wanted to ask what are you favorite sources of insight or motivation related to innovation and considering how to make progress here?

Dan McClure: I think one of the things that's really exciting is, for a long time, if you were a system innovator, there was not a lot of language around what we did. So there was sort of very academic abstract systems thinking books that you could get. And then there was a lot of sort of management theory books about some details of ways that you might do bigger strategies. But there wasn't a lot about people who were actually doing system change. It's exciting in the last year and a half perhaps, to see the level of embrace of practical system change. And so I think one of the things you could do is simply look for examples of places here people have changed the way things work and look at how they did that. And I would strongly advise to look outside your particular field. It's often easy in your own domain to get trapped into the idea that's the hot new idea and think of that as the innovation. Whereas really the question is, is how do you make systems work differently? How do you make the organization work differently and bring together different pieces? And for that, being the generalist, looking outside your own particular domain, can provide a lot of inspiration.

Sarah Nicastro: Right. That makes sense. I mean the idea here is not following the latest trend to be able to orchestrate yourselves to deliver on that. It's this concept of re-engineering the way your business works to be able to recognize and deliver on opportunities. Whatever those are and as they change. I mean-

Dan McClure: And it's complex opportunities. It's not we were the first person to pick up X and then we were the first person to pick up Y. But rather, it's we re-imagined how this manufacturing business might go if we thoroughly integrated service to the product offering. Or we imagined how we could be more customized in the delivery of services to customers. And those aren't a series of one off type additions. They're really reshaping the way the organization works and creates value.

Sarah Nicastro: ... Right. Right. Okay, this is some wonderful food for thought. Do you have any closing thoughts or last words of wisdom before we wrap up for today?

Dan McClure: I don't know, if I was in an organization that was on the cusp of being a burning building, whether or not the flames have come out or not, I think if I was the choreographer, I would say rise to the challenge. See the big opportunities there and learn how to make big ideas acceptable to leadership. And for leadership I would say recognize that this big change that you want to do is going to require you to change things across the entire enterprise and you're going to need the support of choreographers within your organization to do that. So there's a real opportunity for everybody here to rise to exciting new challenges, and I think while it's exciting as all get out, it's also pretty exciting.

Sarah Nicastro: Yeah, I agree. It's a little bit of both. All right, well Dan, thank you so much for being here with us today. I appreciate it.

Dan McClure: Thank you very much.

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

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The Art of IT at Compugen

August 11, 2021 | 21 Mins Read

The Art of IT at Compugen

Catherine Wood, Service owner, Engineered Deployment at Compugen, talks with Sarah about the role of creativity in IT and how she views it as an art form as well as her experiences as a woman in IT leadership and the advice she'd pass along to newcomers.

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 art of IT. Yes. You heard that correctly. We're going to be talking about how IT relates to art. I'm excited to welcome to the podcast today, Catherine Wood, who is the Service Owner for Engineering Deployment at Compugen. Catherine, welcome to the Future of Field Service Podcast.

Catherine Wood: Hi, thank you for having me.

Sarah Nicastro: Thanks for being here. So before we talk about where are the worlds of art and IT collide, why don't you say hello to our listeners, tell them a little bit about yourself and your role with Compugen?

Catherine Wood: Sure. Well, I've been with Compugen for 15 years. Before that I was with IBM. I am currently the Service Owner for Engineered Deployment. So the installations across the country, very technical services role. And that's about it. I've been in IT for about 20 years.

Sarah Nicastro: Okay. All right. So let's talk about your life before IT. So I found this interesting when we connected, it hasn't always been IT for you. You went to school for fine arts and you were a teacher at one point. So tell us a little bit about that and how this transition to the world of IT occurred.

Catherine Wood: Yeah. It's been a strange road. I went to school for fine art. I loved art, always have, but I've always been interested in computers since I was a kid. When I was finished school and started having a family, I wanted to go back to work after my kids were in school. So I took a computer courses at a local computer college, but just to be able to use a computer again, been a while, but I got a job as a teacher, teaching arts. I was teaching art for a while and I moved to a couple of different schools. But at one point I was teaching at a private school and their computer teacher left and they knew I had this computer background. So they asked me to fill in and they needed a teacher fastest. So I all of a sudden became a computer teacher and it turned into me only being a computer teacher after a few years. And from there I went to IBM and now I'm here.

Sarah Nicastro: And the rest is history.

Catherine Wood: Yeah.

Sarah Nicastro: Cool. Okay. So this correlation between art and IT, so you said that one of the reasons you love IT is because for you, it requires the same type of creativity that art does. So talk a little bit more about what you mean by that.

Catherine Wood: Well, first of all, the exciting part to me is you could do anything with a computer, whether that's programming or automating, it's very creative. All you have to do is dream it up. Computer programming is just another medium. It's just like oil painting or water painting or writing or film. It's just another medium. And it requires that somebody dreams up something new to do with it. And so it requires that creative process right at the beginning, what do I want to do? What problems am I trying to solve? And from there, then you decide on the technical pieces and you put the technical pieces together about how to build it, but the dreaming it up, that's absolutely creative.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So you paint. So when you are going to paint, do you have in mind what you want to create?

Catherine Wood: Yes. Me personally, I do. Not everybody is like that. Some people get in front of a Canvas and they just start. Me personally, I do. I have an idea in mind. I have something I want to say, something I want to communicate. So I will start with sketches and then outline. And sometimes you do color samples and you test different things on test canvases. Absolutely. Plan it all out beforehand.

Sarah Nicastro: Yeah. I was just thinking about the consideration of those two mediums, if you will. So thinking about your process when you paint and the process of an IT project and you have a vision in mind for where you want to be and that process of working towards it and the use of technology as a medium is the creative journey. I think there it... Just the reason I was asking is I was thinking if you had a different type of creative process where you just sat down and painted, and you didn't know what you were trying to get out before you start.

Catherine Wood: Well sure. I mean, if you're going out and you're painting something spontaneously or you're painting outside but you're still choosing what it is you want to do. You're not trying to create a great work of art or necessarily, you're trying to paint what's in front of you. So yeah. In that case, you're not doing a lot of planning other than making sure that you have all the tools you need with here. There's still not. And you have to be skilled enough with the medium that you're working with too, whether that's paint or whether that's computers, or IT in general, what is it capable of doing so that I know when I get inside in front of something that I can do whatever it is I want to do.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. Just it's interesting because it had me thinking a bit about and I know agile becomes a tricky word, but just the idea of what you can find or learn as you're going through the process. So the idea of maintaining some level of flexibility. So as you embark on a journey, either journey, you're going to create as you're going along to some extent, so okay.

Catherine Wood: Actually an interesting point about that. So part of creativity is not creating something right up front, like starting to sit it down and write a program or build something, but how you're going to find creative solutions for the limitations or the challenges that come up. And I think that speaks to the agile piece that you're talking about there, where coming up with creative solutions to things that come up in front of you are really part of the creative process and all part of it. You're constantly creative as you're trying to problem solve.

Sarah Nicastro: Okay. So let's talk about this idea of creativity for a minute. So you hear people say, well, I'm not creative. And then there's people that wholeheartedly identify themselves as a creative. So there's two ends of that spectrum. Do you feel like people either are, or aren't creative? Do you feel everyone is and it's just a matter of whether it's tapped or untapped. Like what do you think about that?

Catherine Wood: Well, yeah. People look at me like I have two heads. I'm creative in IT, that can't possibly work. How does that work? So I think I innately feel that everybody has a creativity that they don't make it necessarily recognized in themselves. I mean, somebody who builds their own deck or renovates a house, or even cooks or bakes or how about creates a PowerPoint presentation because they have to for business. To do that those are all creative endeavors. And I think people fail to recognize in themselves when they're creative. I hear that all the time. I can't even draw a stick figure. I'm not good at that. But people are creative in so many different ways. They just don't recognize it. And so they don't give themselves that credit and they don't have the confidence to say that I can create something new when they do it every day in other areas of their life.

Sarah Nicastro: Mm-hmm (affirmative). So I think confidence is a really good point. But if we take that a layer deeper, I think that this idea of how creativity fits into the way you just explained it into all of these different work projects and processes that we do or could be responsible for. Part of it is confidence. It's kind of like a muscle, the more you use it, the stronger it gets.

Catherine Wood: Sure.

Sarah Nicastro: But I think the other thing is in terms of corporate culture, it isn't necessarily urged in the sense of an employer may think it's great if they have a creative employee, but they're not necessarily giving people the space or the fail-safe environment that they might need to feel that they have the latitude to explore their creativity or build that creative confidence. Does that make sense?

Catherine Wood: Yeah. No, absolutely. Creativity, well, has been traditionally not thought of in business or in IT. So I definitely think there's some, it's undervalued there for sure. I think that's changing. The employers are starting to see where creativity needs to come in to problem solve. And if you look at any CEO or anything else, to be able to change is a creative action itself, but it is undervalued. But I think that it also takes a leadership team or the leadership needs to be able to provide the trust. People need to be able to trust that they can take chances and that they can try things and fail and fail fast and recover.

Catherine Wood: And that's all creativity, but that comes from the leadership down. Absolutely. The other thing is that I really think is the organizations don't tend to value that time, where someone is sitting in themselves and just giving themselves the space to stop and think and people have been told our whole lives. You're sitting there doing nothing. What are you doing? You're not doing nothing. You're thinking about... you're problem solving. You're thinking about things. Your mind is wandering. You're making connections that you wouldn't be able to make if you didn't give your mind that kind space.

Sarah Nicastro: Yeah. I think that's such a big part of it. Everyone's busy, everyone's overtaxed and it can be really hard as individuals and then for organizations to prioritize the white space that tapes to have time to think creatively, definitely something that I struggled with a little bit. I always blocked time in my calendar and never keep it. So, yeah. So is there any tips you have either, again as an individual or as a leader for how to give yourself some of that creative space or provide that creative space to your employees?

Catherine Wood: Well, for myself, it really is that set the time in your calendar and keep it. You need to have time to think about things to problem-solve, to strategize, all of that kind of thing. You need to give yourself that space. For my teams, I try and for team members that really are comfortable doing that or don't have time, I'll try and get on a call with them and brainstorm with them and then give them the time and space to take it away and say, look, this is a priority that we solve this or that we find a strategy for this. So we'll start to brainstorm and Hey, why don't you take that away and see what else you can do with it? What else can you come up with? And that's encouraging that creativity time. And hopefully they understand that they can take that and they can take the space to do that. It is a priority and it's a part of their job.

Sarah Nicastro: Yeah. That makes sense. Can you share an example of what it looks like to use your creativity in practice in IT at Compugen?

Catherine Wood: Oh, it's pretty messy. I use a lot of whiteboards. And when we were locked down in the pandemic, one of the first things I did was run out and order. Now I have a lot of easels around, so I have an easel in front of my desk here and by all sorts of big newsprint and colored markers. And so when I do book myself, that time that I need to write it down or I need to see something visually, or I can do a mind map or where I'm just brainstorming with myself and trying to let my mind free flow, different concepts in different words.

Catherine Wood: And then I can sit back and I'm a visual person, obviously I'm a painter, so I can sit back and I can look at it again and from a distance and say, oh yeah, okay, that works or that doesn't work, or, oh yeah. What was I thinking? I'm a visual person. So I use those kinds of mediums to try and work on something creative if I'm doing it just the same as I would, if I'm painting where I'm going to do a bunch of sketches beforehand and sketch it out, what works, what doesn't.

Sarah Nicastro: Mm-hmm (affirmative). Mm-hmm (affirmative). That makes sense. So let's talk a little bit, shifting gears slightly, when you first transitioned into IT, we talked about the fact that, so you said that was 20 years ago. And you said you were often the only woman in the room. So how much or little would you say that that has changed?

Catherine Wood: It has changed. It's slow, but it has changed. I'm not as often the only woman in the room. Men are more comfortable seeing women in IT. And we're seeing more women in leadership roles in IT, which gives other women the confidence to be able to say, Hey, I can see myself there or I can succeed in this. It's unfortunate. It's still happens where you get questions. But and even just a few weeks ago, I was in a meeting and someone tried to explain to me where the start menu is.

Catherine Wood: He knew we both work in IT. He knows the company I work for. He knows my role. And he's explaining to me how to find the start menu. I don't keep quiet in those situations. I used to when I was younger, but I don't anymore. And I really asked him as politely as possible. I asked him what makes you think that you need to explain to me where the start menu is? And I know he was uncomfortable, he was. But I said, Hey, look, if you're wondering, ask before you explain something like this. So it is changing. When I first started at Compugen, there was no women in upper leadership and there are now, and that goes across the industry. So it's so exciting and women bring new perspectives and new problem solving and new experiences to IT that I think really expands and helps solve the problems of the world that we're all trying to deal with right now. But yeah. There's still ways to go.

Sarah Nicastro: Work to do, yes.

Catherine Wood: Yeah. Work to do.

Sarah Nicastro: What would you say have been the biggest challenges of often being the only woman in the room?

Catherine Wood: Hmm. I often feel, I have to give my resume every time I'm in a new room and I'm asked questions that nobody would think of asking a man, because if he's in that room, he's already qualified to be in that where they see a woman walk in and they think, oh, she can't possibly be technical, or she can't possibly know anything about this. Women get talked over. We still get spoken or talked over in meetings or dismissed or someone will say something and will get ignored. The conversation will just keep going. Those are still challenges that we deal with today.

Sarah Nicastro: Yeah. It's interesting. I mean, you hear a lot about, you hear the term like microaggressions, you know. And it is really true. There's a lot of things that get said that I question, "Would somebody say that to a man?" And it's not always malicious, but that doesn't change the impact of it. And so it's very easy to say or think, oh, they probably didn't mean it that way. But it's still harmful even if there isn't mal-intent behind it.

Catherine Wood: Well, isn't that just the same boys will be boys kind of excuse. Like they didn't mean it that way. Just move on, get over it. If it happened once in my lifetime, I'd get over it.

Sarah Nicastro: Sure.

Catherine Wood: When it happens multiple times a day, it starts to have an impact on me. And maybe it's multiple people during the day and they all didn't mean it. But the challenge is changing everyone's understanding of what that is not dismissing the fact that it has an impact on the people it's happening to.

Sarah Nicastro: Yeah. So you gave the example of the start menu the other day and speaking up about that, and you said you wouldn't have always spoke up. So can you talk a little bit about what do you think helped you find that voice and being more comfortable using it and what might you say to a younger woman who's starting a career in a male dominated field in terms of not maybe waiting as long to speak out or speak up.

Catherine Wood: Hmm. Those are a few different questions in there.

Sarah Nicastro: Yeah. I have a tendency to do that.

Catherine Wood: Okay. Well, let me see. I might start with the second one. What I would say to someone who's younger than me is advice based on what I had to learn, which is first be a sponge, learn everything that you can from every interaction, because there's always something that you're going to take to the next meeting, to the next project so learn everything that you can. And the other thing is, don't worry about it. If you ask a question and you think it's stupid or forgive yourself, if you make a comment and somebody gives you a look like I ask it that, just let it. Forgive yourself, because we are so hard on ourselves that we're going to say the wrong thing or somebody's going to think less of it. Nobody's thinking that. Nobody in the room knows everything. Everybody contributing makes goes towards that shared goal of solving the problem of moving that project to completion of great customer experience, all of those kinds of things.

Catherine Wood: So speak up. Even if you think that it's stupid or it's wrong, it's a bad question, or maybe you're wrong. I was in the room. And so to address the first question, what did it for me was leadership. People who would call someone out in a meeting who hadn't spoken, do a round table at the end of the meeting so that everybody gets a chance to vocalize something. What do you think? And what do you think and what do you think? And leadership that would say, "Hey, Catherine, we haven't heard from you, did you have anything?" "Well, yeah, yeah, I do. And the more you do it, the more confident you get. And so leadership goes a long way towards giving people that confidence, men and women, young men have the same problem. Men and women, giving young people the confidence to speak up and say something in these projects and in these meetings.

Sarah Nicastro: Mm-hmm (affirmative). That's such a good point because some of this issue, the issue of learning to use your voice. Yes. It's something that everyone's personally responsible for. And you want to work on and work on doing well. But that point, I think, is an important one because there are ways that leaders can really help enable that rather than just sitting back and waiting for everyone to miraculously build their own confidence level enough to verbalize their thoughts and feelings. Yeah. I think that's a really good point. And I think it's also a good point that the idea of asking questions. I've shared a story a bunch of times about very early in my writing career. It was actually the first like case that a type article I ever wrote.

Sarah Nicastro: And I didn't understand probably 80% of what the guy said to me in the interview, but I didn't want to seem stupid. And so I just did a lot of aha. And then I tried to write an article based on that. And the copy editor just threw it back at me and said, call him back. And I had to call him back and so it was a good lesson and just asking and once I became comfortable in really any situation, just saying I don't really understand what you mean. Can you explain it to me differently? Or I've never come across someone that wasn't willing and it's helped me learn so much just by being able to, you know, ask for clarification or examples or details, you know?

Sarah Nicastro: And then the final thing, I think is the example that you shared from the other day with that gentlemen. I think it is important to, you said he was uncomfortable and you're probably at a point in your career where you could have just easily ignored it or blown them off. Like, you don't need to point that out to make yourself feel better or different. But I think it is important to do because in a lot of cases, like I said, there's things that get said that it's not ill intent, but it's unnecessary and it shouldn't happen. And so it does take someone who has built up the confidence to speak out so that maybe that person thinks a bit about how they're coming across and can acknowledge that behavior so...

Catherine Wood: Right. And it wasn't trying to... My goal wasn't to make him uncomfortable obviously. But my goal was to gently educate him. Because he wasn't doing it on purpose. He was trying to help. He really thought he was trying to help, but he just was going about it in a way that he needed to think about it a little bit more and be aware of.

Sarah Nicastro: And he was probably uncomfortable because he cared about the fact that he had come across that way.

Catherine Wood: That's right.

Sarah Nicastro: If he was doing it maliciously, he probably wouldn't have been uncomfortable so much as combative or dismissive. I think that discomfort comes from any time you realize you've done something wrong and you care about what you've done. You feel that discomfort. And to your point from earlier, you have to forgive yourself. You do as best as you can until you know, better and then you do better.

Catherine Wood: And then you do better.

Sarah Nicastro: So hopefully that'll help him.

Catherine Wood: Sure.

Sarah Nicastro: A couple other questions. So before you were with Compugen, you changed roles pretty often because you liked variety, you liked new challenges and now you've been with Compugen for 15 years. And so when I asked you what made you stick around, we talked about the culture and how as a woman and especially a working mom, the culture has been a really good fit for you.

Sarah Nicastro: This is a conversation I think is very important because also being a woman and also being a working mom, I started my motherhood in a career, in a workplace that was not a very working mom friendly culture and come to be a part of IFS and to be in this role, it's really honestly changed my life. I mean, it has made me feel that I can excel in both my career and my role as a mom at the same time, without constantly feeling like I'm sacrificing in any area. Of course, it's still a lot to juggle. I mean, we all know that, but it's at least impossible. So can you talk a little bit about as companies look to continue to bring more women into the workplace, particularly into IT roles and things like that, what are some of the aspects of culture that you think are particularly important and beneficial?

Catherine Wood: Well, first and foremost, I would say flexibility. I mean, women are responsible for so much when it comes to the family. Rightly or wrongly, I'm not going to debate that one way or the other at the moment. But at the end of the day, when it comes to dentist appointments, doctor's appointments, dealing with schools, all of those kinds of things, they tend to fall more on the mom, on the woman in the household. And so to be able to have an environment that you've got some flexibility with your schedule, whether that's here's your deadline, you meet your deadline and you figure out how you're going to meet that deadline, or whether it's just, you are in an environment where if you have to say, I have to run out to my child's school, something happened, they just fell off the swing set or something.

Catherine Wood: And you can say that without fearing for your job or that it's going to negatively impact your career. The flexibility that I was afforded in my first few roles went a long way to that. It really gave me a quality of life and feel and quality to my children's life and my family that I could be there for them. And that only made me want to work for Compugen even more and even harder and do everything I could to help the organization succeed. And I think organizations miss that. Some organizations who don't do that really miss the point that doing that will make the employees work so much harder for you.

Sarah Nicastro: Yeah. It pays dividends.

Catherine Wood: It definitely does.

Sarah Nicastro: I really really believe that. Mm-hmm (affirmative).

Catherine Wood: Yeah, I do too. Compugen has employees who have been there for well, and I still feel like the new girl at 15 years, because they've got 15, 20, 25, 30. There's a lot of employees that stay and stay for a long time. And that's a real indication of a great corporate culture. So that's a lot of it. The other part of it that made me stay personally is I worked in all these different jobs and different roles and I think this is career number six for me overall.

Catherine Wood: And I like variety. So I don't have a role right now. And I haven't in the last 15 years where it's the same day, every day. I'm not doing the same thing all day, every day, the kind of variety and choose what I'm working on right now. I mean, I have a list that I've been given. I have to do all of this, but I don't have to do it all in a certain order. As long as I get them done by my deadlines or a new problem comes up that I have to solve, or a new project comes out that has a different, so that gives me the variety to keep me interested and keep me excited about what it is I'm doing. And they afforded me opportunities to succeed. Like I have been in multiple roles in Compugen. And so I've been able to feel like I can grow my career, that I'm valued, that I'm respected. All of that is that corporate culture in Compugen specifically which has really kept me here.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. I just think it's an interesting dynamic. There's huge conversations happening right now around what will the future of work look like and how are we going to attract and hire and retain talent, all over the board, from leadership all the way to the front line and I think this whole idea of re-examining company culture and really thinking about what your employee experience is like, and is it conducive to the type of experience that the level of talent you want to attract is going to want for themselves? And some of the things we're talking about, it's not trips to Aruba every year and $50,000 bonus. I mean, it's nothing ridiculous that is so important. They are things that are absolutely attainable if people are just willing to reflect and think through and that sort of thing.

Sarah Nicastro: So I think it's important for across the board. I think particularly the idea that we talked about as working moms, I think that we bring a lot to the table, but there's some of those key factors that are going to be extra, extra important. And I think the point you made about being, given that flexibility, making you only care and be more loyal is absolutely true. Okay. Last question for today is as a leader, but I'm also going to ask you as an artist, what are your biggest sources of inspiration?

Catherine Wood: Hmm. People. People are my biggest source of inspiration. As a leader, I really only want to be of service to people. It's about my team. It's about giving them everything they need to succeed personally and to be able to succeed and for the organization to succeed and to guide them and to be of service to them. In my art and creativity, it's still people, it's learning in so many different ways from so many different people. So mentorship means a lot to me. Me mentoring, because you get so much back when you mentor, but also me having a mentor and guidance and different kinds of medium like podcasts and books and other people's experiences. That brings me so much inspiration for where I want to go and what I want to do. People is my biggest source of inspiration. And it's also what I paint. I paint. I do a lot. All of my paintings revolve around the human form and portraiture and things like that. So, yeah.

Sarah Nicastro: Very cool. Very cool. All right, Catherine. Well, thank you so much for joining me on the podcast today. I really appreciate being here.

Catherine Wood: Thank you so much for having me. It's been fun.

Sarah Nicastro: Thanks. You can find out 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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Bringing the As-A-Service Opportunity to Life

August 4, 2021 | 24 Mins Read

Bringing the As-A-Service Opportunity to Life

Sarah talks with Scott Weller, Partner at Mossrake Group, about the work he does helping companies bring as-a-Service offerings to the market and how the microcosm approach can aid in overcoming the barriers in realizing the potential of as-a-Service.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about what it takes to successfully introduce an as a service model. You may remember from the podcast, Scott Weller, who is partner with Mossrake Group. Scott, welcome back to the Future of Field Service Podcast.

Scott Weller: Thank you, Sarah.

Sarah Nicastro: Thanks for being here. Scott was on the podcast a while back with Howard Bowland from Schneider Electric, talking about their introduction of an as a service offering. I wanted to have Scott back because he has a lot of really interesting and valuable expertise in this area that I think our listeners will find a lot of benefit in hearing.

Sarah Nicastro: So, Scott, before we get into the content we have planned for today, tell our listeners a little bit about yourself and your background, and then we'll get started.

Scott Weller: Sure. So, Scott Weller. I'm a partner with Mossrake Group. And we work with technology product companies who are looking to grow through services. And these days, that conversation inevitably goes to as a service models and outcomes based business. Prior to Mossrake, I was the global leader for the support services business in Hewlett Packard Enterprise, and in our time, there we built a multi-billion dollar IT as a service business, that's now known as HPE GreenLake.

Sarah Nicastro: Awesome. Okay, so you have experience with this transition and evolution firsthand from your time at HPE and you also have a lot of experience helping organizations on this journey as well. You just mentioned two terms, and I want to clarify the intersection here of the terms outcomes based service, and then as a service. So, can you give some context on where you see those two things intersecting?

Scott Weller: Well, in our business, we, again, work with technology product companies, and usually, their identity is tied up in being product focused. And of course, they'll have services to maintain the products. But shifting to outcomes is a very different kind of animal. Outcomes is about putting yourself into the customer's shoes, looking at the business they're in, and looking at what they're trying to get done versus focusing on the particular asset. So, I suppose it's not required to move to as a service to be able to deliver an outcomes basis, but what we find is, is that... Well, we haven't seen an example of that, quite frankly. Customers really want to shift the way they procure, the way they consume value when they're focused on outcomes. And so, we see those almost being synonymous but they're not really synonymous, but in practice, they might as well be, from our experience.

Sarah Nicastro: Okay. That makes sense. So, you mentioned the word identity, and this is a term that we've talked a little bit about. And when you're looking at transitioning to as a service, you have said that identity is a really big factor in that transformation. So, talk to us a little bit about what that means, what identity means for the business, and how it affects the journey.

Scott Weller: Well, so identity in a company is really around the unwritten rules, what we're here to do, what we value, what we're good at, what we're known for, and identity gets codified into the business model, so that the value chain aligns to it, and really, the businesses optimize for that identity, and even over time, as the business might evolve, identity is what survives. And so, if you try to introduce a new business model into an existing business, what can happen is the entire value chain can work against you. It becomes a barrier.

Scott Weller: You think about sales, salespeople have to move from a transactional relationship to one that's continuous and collaborative. And of course, there's the never ending questions about, how do you get paid? You will find people in your company who firmly strongly believe that anything that leads to a monthly payment, that must be in the purview of the financial services organization or an external financial partner. And probably, the most difficult transition is for product development. You have engineers and product management who identify with making the coolest thing, the fastest thing, the best, the highest quality thing, and now they're asked to be a supporting cast member in an ensemble trying to deliver unique experiences and outcomes.

Scott Weller: So, really, it's a fundamental shift, it's very difficult. And this is why you find a lot of mature product companies either haven't started on the journey or are still on that journey even though there are clear demand signals from the market.

Sarah Nicastro: Okay. So, there's a massive opportunity with this journey but there's significant challenges in terms of intrinsically, that identity companies have and evolving that and overcoming what that means in terms of migrating the business towards this more modern approach. So, generally speaking, what's the path? What do organizations need to consider? What's the best approach to make progress here?

Scott Weller: Typically, when something this big, this kind of shift is needed, it's a C level decision. And, of course, what's top of mind there is, "How do we overcome the inertia within our company to do this and make the investments while still making our financials for the quarter and the year?" It's not an easy problem to solve. So, what we've seen is there are usually two paths that are taken. One is, if you're a technology product company, you engage a third party finance firm. And that's really problematic, because number one, it puts another entity, another brand, another identity between yourself and the customer. I mean, you've worked out maybe how to do billing, but that hasn't solved the problem of becoming an outcomes based or an experience based company, and customer see right through that. So, that to us is not even a good half step.

Scott Weller: The other approach, of course, that companies take is through mergers and acquisitions. And as we all know, acquisitions rarely fulfill the entire promise. It's very problematic. You're starting with two different identities trying to come together, two different value chains, mismatched expectations, and on and on. So, that's a very high stakes, highly visible play to make. It brings in all kinds of special help to make it work, and so it's really a challenge.

Scott Weller: So, really, our view is, we feel strongly and we've actually done this in practice, is that the microcosm approach is really the best one. The internal incubator, start small, an agile approach is really the best way for us to see this succeed, because in the end, what this approach does is it allows the new business model to essentially gestate within the existing machine and has to knock down all of these value chain barriers one by one, which is not a small challenge. But when you do it in a microcosm, it's just much easier, and by the time the bigger machine realizes what's going on, the model is entirely proven. And then the question is not whether it works, the question is, how do you go faster?

Sarah Nicastro: Right. Okay. So, one of the things I want to just touch on before we talk a little bit more about the internal incubator approach is this idea that the reason those other methods are problematic is because when you're looking at introducing as a service, it isn't about the financials, it's about the value proposition, right? So, that idea of just, "Okay, so we'll take our products from a CAPEX model to an OPEX model, and that will move us to as a service," right? That's basically faulty thinking, correct? Because customers are looking for, it's not about the method of financing, it's about the value proposition.

Scott Weller: Yeah. I mean, this is kind of a rat hole that you can get into in every conversation. And so how is this different than financing? And financing, really, if you think about it, is still very much a product focused, asset focused approach to the market. It simply is a different way to pay versus a very different kind of experience and outcome. Because if you work with financing, that's great and there's a place for that, but if you want an outcome basis, you've got to be thinking about what is the experience you're delivering? Who's looking after that asset in the customer context? Who's there to ensure the promise is fulfilled? Who's there to make sure that, as the customer evolves, essentially, the solution evolves with them? Again, a financing arrangement is still a transaction, versus an ongoing, continuous relationship that's really more like a collaboration than anything else.

Sarah Nicastro: Good. And I just wanted to clarify that to make sure people understand that they are two very different things. And when you're talking about getting the ultimate results of introducing this model, it's in the context of moving toward that outcome or experience approach. Okay.

Scott Weller: Right.

Sarah Nicastro: So, let's talk in a little bit more detail about the internal incubator or microcosm approach. So, this is something that we discussed in the context of the Schneider Electric example. I found it very interesting. So, in that instance, Howard in his region, along with Mossrake, has done this internal incubator type process. So, tell us a little bit about how that works and why it is a really viable option for companies that are looking to make progress on this journey.

Scott Weller: So, I don't want to make it sound easy like there's a silver bullet here, because it's never going to be easy. And I guess the other thing I would say is, it does require a visionary leader on the ground. And this may be why companies don't do it, because they can't find that kind of person where they need them. But once you have someone who's visionary, by that I mean they can see how this plays out, they're getting the demand signals locally, they can see how this can play out, they really believe in the idea, and they're willing to put their neck out a bit and have the courage to see it through. And I don't use that term lightly in the context of business, because it is high stakes even if it's in a microcosm.

Scott Weller: But with all that, I mean, really, it's almost like the antithesis to the big, monolithic, multi-year, very expensive programs that big companies tend to embark on when they need to make a transition. It's not common to say, "Hey, let's go do a small thing, see how the market reacts, let's see how a few customers react, let's go after this." And by the way, the local team has to be willing to do this as a second job. So, you have to enlist people who are game for this and have the right skills.

Scott Weller: So, it's not like a miracle has to occur, but a lot of the right things have to come together at the local level to do this microcosm approach. But then, as I said, I mean, I can tell you from our experience back at Hewlett Packard Enterprise, and then more recently with Schneider Electric is, you do these small things, you test it, you come back, you refine, you pilot, you get a few customers, they tell you what's good and bad about what you're trying to do. And the thing then can grow. And if it's going to fail, it fails quickly on a small scale without any of the reputational risk and financial risk really.

Scott Weller: But again, once it's proven, companies can continue to study this and should we do it or should we... But I mean, there's no question that it works, the only question might be, well, maybe it doesn't work in every locale, and that's fine. But again, in my experience, what happens is once senior management sees this, they're like, "Okay, this is really good, and why aren't you going faster?" If you think of the question.

Sarah Nicastro: Right. So, the microcosm, so we're talking about taking a particular region or a particular area of the business and using it as that internal incubator. So, what does that process look like? And I know that at Mossrake, you guys are really working hand in hand as an extension of the team to take this from vision to reality, refinement to reality, etc. So, tell us a little bit about what that looks like.

Scott Weller: Well, like any other management consultant project with a client, usually, it's begun by this visionary leader who may not have the skills in their team, or they may not have the positional authority, or even the credibility. Like a new leader can come in and they're an unknown quantity, so they seek our help to really, first of all, determine, are the demand signals that they are personally seeing representative of the broader market? If so, then what is the opportunity in the market? And then get down to, okay, well, what do we want to offer here? Define that, build it out, again, using an agile approach, where you don't solve every problem at the beginning, you know that you don't know everything, and you start building.

Scott Weller: So, that's how we did it as internal executives back at HPE, and that's how we did it working with Howard at Schneider Electric, and that's how we do it with our other clients that are in flight.

Scott Weller: And there are times we've seen where, once this is all laid out, a client might say, "Hey, listen, we have so many things on our plate right now, we just can't do it. We think it's absolutely where we need to go. We can't do it." Others are saying like, "We're so late now. How do we do all this but speed it up?" And there are ways to do that, but also limits, because if you want to be thoughtful and build incrementally versus these large, monolithic programs, simply, there's a point where you can't make it go any faster.

Sarah Nicastro: Right. So, there's a couple of things, if I'm reflecting back on the example that I'm most familiar with, about the microcosm approach that I think are really interesting to discuss. The first is the role that you played in terms of, not only helping create the value proposition or the go to market, but then also acting as a resource in terms of almost training in real-time on how to articulate that to customers, right?

Sarah Nicastro: So, I found that very interesting because when you're making this big of a change in an organization, we're talking about changing the whole way that you think about, deliver service, and engage with your customers, it seems terrifying to me to just say like, "Okay, salesperson, go have this conversation and see how it goes." Right? And you guys played a very hands-on role in that process, so that through some cycles, you were able to help get those conversations comfortable and build those skills, almost leading by example, right? So, can you talk a little bit about that aspect of it?

Scott Weller: Sure. And I should say that we did what you've just describe, not just in the go to market, but across the value chain, having done it and lived it in another big multinational. But for sure, on the sales side, it's things like, what is the story? What is the message and how do you package that as sales enablement? And then how do you begin to train up sales people who are, in a way, predisposed to a different kind of messaging verses what they've might have been massively successful doing before? It doesn't necessarily mean that this is the kind of message they feel comfortable with, the storytelling might be quite foreign and uncomfortable to them.

Scott Weller: So, you have to intersect the right kind of messaging with the people who are able to receive it and take it to customers. So yes, we did a lot of that, shoulder to shoulder, as they say, with individuals. In the case of Schneider, COVID threw a wrench into our being physically present, we did some of that prior. But in any case, you do have to take that shoulder to shoulder approach and really support the sales activity with research.

Scott Weller: Back at HPE, I did the SWOT for a SWAT team approach, where some of my local leaders from the global team would literally fly out and do seminars, and go into customer situations and help either deliver the pitch or assist in delivering it, do post-mortems and all that sort of thing. So, yeah, I mean, you have to really understand that this comes down to people. Every aspect of this comes down to people. You talk to someone in product development, they say, "What's in it for me? I want to make my cool stuff." And so, really, it's very much about people all through this, and sales especially.

Sarah Nicastro: And I think, again, the value of this internal incubator approach is, one, it's at a scale where you're able to provide that shoulder to shoulder type of support so that you really are having that opportunity in a vacuum to get that story right, refine that message, train those skills and how to have those conversations, and get it right before you expand it out, right? So, rather than trying to do it at scale and have however many customer interactions potentially go awry, you're really refining that in this incubator before you start to take it out to the masses. So, it seems very smart to me. And I think that that was one thing I found really interesting.

Sarah Nicastro: The other thing I wanted to touch on related to the microcosm approach is this idea of, from the very beginning of it, you have the intention of documenting everything well so that there is an opportunity to, once you're successful, expand it throughout the rest of the business. Can you talk a little bit about that?

Scott Weller: Yes, and I completely agree that this has to be well documented, again, across the value chain, every aspect. So, all the sales. I mean, we essentially have quite a sales library built up and, essentially, training programs, also partner program well documented. So, really, every aspect is within what we call an operational blueprint, so that when we're no longer involved in the activity, the business is able to survive personnel changes and so on. It's essentially a matter of institutionalizing what you're doing to the point that it will survive personnel changes, and certainly, our involvement coming to an end. So yeah, I think that has to be really designed in upfront when you're going to go down this path, that somehow you're not going to have successful business in the moment, but nobody knows what to do when a new person comes in or an experienced person leaves. It's really critical that you have everything written down.

Sarah Nicastro: Right. And I just think that's a really good point, because this isn't an internal incubator, like, "Hey, let's try this, see what kind of success we find, and then we'll figure out what comes next," this is doing it with the intent of, "Let's create the success in this microcosm with the ability to blueprint it and then take it throughout the organization." Good.

Sarah Nicastro: So, you've mentioned agile a few times, and I want to talk a little bit about this because I think this is a term that just gets misinterpreted, or misunderstood, or thrown around a lot, and I want to talk about what it is, and isn't, I guess, in regards to a project like this. So, tell us a little bit about what the agile process looks like within this microcosm approach?

Scott Weller: Sure. Well, again, it's a process that's, as I mentioned earlier, the antithesis to the big monolithic program, it's really meant to be iterative and collaborative, collaborating not just with the end customer in terms of, what do you think about this, but also you have to collaborate with your channel partners, your sales organization, how you run inventory, how you do billing, all of these sorts of things have to be brought into the process.

Scott Weller: And, again, the presumption is that you have a pretty good idea of the pins that you have to knock down along the way, but you certainly don't know everything. You have a pretty good idea about what will resonate with the market, but there are pieces that you can't know, and you might have to, maybe not do a hard left or right, but you have to be able to shift direction. And especially for the sponsor of a program like this, they have to have a rapport with their peers and management chain that allow them to come in and say, "Hey, listen, what we've learned is we need to shift a little bit to the left or right, and that's got to be okay. That's not going to kill this," right?

Scott Weller: And, again, keeping the reputational risk low, the financial risk low means that no one is going to lose their mind, their heads aren't going to explode over some of these kinds of natural shifts. And at some point in time, after enough work has been done, there should be a hard go-no-go decision, not unlike the classic waterfall model, you do need to prepare for that moment in time where you're going to say, "Okay, we've learned enough. Is this what we really want to do?" Because the next phase will inevitably require more people, more resources, more investment. And especially, if you've built a local successful business, now you want to take it on the road, and take it to other locales and try to build the business in those places.

Scott Weller: That's a huge commitment and investment, and pretty soon, the company, if they haven't by that time already, they're going to be talking to the market about it, it's going to become an investor discussion even. And so, you really have to be prepared for the bigger transitions. And so, there are some moments in time that are hard choice points, but not at the beginning, not in the initial build out, not in the figuring out, "Is this a business that works and is one that we want to be in?"

Sarah Nicastro: Yeah. I think there can be this interpretation of agile as just completely loosey goosey, and we'll just go in and see what happens. I think the idea here is you have a good plan going in but you're open to evolving, refining, learning, in those early phases to make sure that before you take it out of that microcosm, you have something that's pretty well vetted and pretty proven.

Scott Weller: Absolutely.

Sarah Nicastro: So, that makes sense. What I'm curious about, Scott, is, what does this all look like from the perspective of the pilot customers?

Scott Weller: Well, pilot customers, I would say, if they've become a pilot customer, they appreciate this approach. The individual, the sponsor on the customer side is probably, you could call them an adventurer, a forward thinker, and they like being part of a process like this, realizing that they're investing themselves, they're investing their own time, it can be a distraction to do this in their business, but they're game for it. And I would say, other than maybe a higher frequency of interaction, because again, it's a collaborative process, we try to keep the burden low and we try to essentially create a commercial arrangement that allows them to go down the road with us, but at some point, say, "You know what, this was fun and all, but we need to take our hands off this wheel and go back to the former way of operating," and that's fine.

Scott Weller: So, you have to give them a path out, you have to give them a path to double down if they really like what's happening. So, it does take a different kind of care process for this customer, beyond maybe your traditional product services, you've got to really look after them and make sure they're good every step of the way.

Sarah Nicastro: And what's your advice for fully leveraging success with a pilot customer once you've got to that point?

Scott Weller: Well, we do ask for references, if they would be willing to be a reference customer. Sometimes they have their good reasons not to be. If you're in a sensitive industry, maybe being seen as the first or not being seen as a conservative brand might hurt you. So, they say, "Well, listen, we love this but we just don't want to put our name on it." Other times they love it, they want to be associated with forward thinking and innovation. And so, every customer is different, but we do ask for that.

Sarah Nicastro: Okay. So, we talked about the need for a visionary within the company to spearhead this, but as you mentioned earlier, especially early on in the process, you're also asking a lot of people that are going to be involved that are early on, both keeping up with the day to day and the traditional way of doing things while also introducing this and working on this microcosm. So, I love that you call them adventurers. I think that's really cool. I'm curious if there are, I don't know, common characteristics that you look for. How do you find those adventurers and enroll them in this journey?

Scott Weller: It's harder than it looks. You do depend on knowing people. And this is where the internal sponsor, they need to have their network of people, because you can find people who are really up for it but they're just bored, they just want anything else as a distraction, but they may not be the kind of people that you need at the moment.

Scott Weller: So, you look for people who seem to be a high energy, always looking to find ways to do things in a better way or have a better outcome, people who were maybe questioning the system every day, asking themselves, "Can't we find a better way to do this?" And it's almost like you know when you see it. And even then, not everybody can sustain the level of energy and output, because working today is hard, there's a lot of demands on people, and so sometimes people just have to excuse themselves on the process, that it's the coolest thing ever but they just don't have the bandwidth to do it. And even those who you get into these programs and they go on for a year or more, at some point, people may be looking at career transitions. And so, it's not like you can get your dream team set up day one and then they're there forever. People come in and out.

Scott Weller: So, this is where you're constantly evaluating people for this, and hopefully, eventually, as the business takes off, you can put people into this new business officially, and they don't have all the other distractions. But what we see happens, though, is, even when that happens, especially in this microcosm model, there are things that you have to overcome or build that you say to yourself, "Really, this should be a corporate initiative," like when it comes to IT systems, for example. "Why should a local team be worrying about ERP or trying to get these systems to bend to the new model?" So, there's always the next challenge, and people can get burned out.

Scott Weller: And so, it's not enough to be the visionary leader, you have to always remember that this is a people things, people are at the core of all of this, and you need to really watch how people evolve themselves personally through this process.

Sarah Nicastro: Yeah. And I would think, as that visionary leader, you need these adventurers, not only to drive progress, but to keep your own energy high. Do you know what I mean? If you're the only one that's kind of pushing this, right, not only is that not feasible, but that would be a pretty isolated place to be. So, if you can find this network of adventurers that are excited about the opportunity and willing to work alongside to drive it, it's beneficial in both ways.

Scott Weller: It is. Although I would just say that, really, the visionary leader has to be more a source of energy than a sink of energy. Unfortunately or fortunately that's typically how it works.

Sarah Nicastro: Right. So, maybe they can get some of that energy from you and Mossrake instead of the team internally, right? Because they need to be providing it, not taking it.

Scott Weller: Yes.

Sarah Nicastro: Okay. So, this transformation to as a service depends on both internal and external influence. So, talk a little bit about how that materializes in the work you do with your customers.

Scott Weller: So, again, every customer is different. What we find are some common themes, though. I mean, even I would say more than ever, companies realize that what got us here won't get us there. We might be at the top of our game, but the world is evolving and changing so fast. The chances of getting blindsided, particularly if you've got a lot of momentum and you've had a lot of success, is people will double down on what they did yesterday versus looking for the challenge to do something different today. And that momentum becomes nothing more than inertia to be overcome in the next turn of the business.

Scott Weller: So, I think this notion of optimizing, optimizing down, what you've got today as a path to success, really, I think is more and more... of course, companies want to optimize. Why be wasteful in what you do? But at the same time, optimization can mean that a company is fragile. And so the next time you want to introduce something different, then, really, everything breaks, there's just fires everywhere. And so, how do you create a business that can be resilient through these transitions, and also, how do you engender in your people a kind of... Well, I always talk about three things; adaptability to the change, tenacity so that you can hunker down and get through it, and curiosity, because there are views that, really, without curiosity, civilization can't really evolve and transform.

Scott Weller: So, these three attributes are so critical to engender in your people. You have to hire for it, you need to encourage that way of thinking. I've just seen in a lot of cases people will say, "Hey, I listen to what you're talking about, and I have to admit, I'm not a very curious person. You give me a problem, I'm on it dog on bone. I'm going to make this thing happen, and that's great, but I don't think about, 'Well, what does my peer do? What does this other group do? How are we working together to create this outcome?'" And you can see that if you had an organization that had those kinds of attributes and then learning, "Okay, today we're product focused, tomorrow, we're going to be outcomes focused," you can see how having the right kind of mental model and attitudes within your people can make that transition really a lot easier or a lot harder.

Sarah Nicastro: Yeah. I think you're absolutely right. And that goes back to the point you made about this is all about people, right? I mean, that is the key thing here. And there's a lot of different enablers, there's a lot of different do's and don'ts, but your success or failure really comes down to who you have as a part of the journey.

Sarah Nicastro: Okay. Well, this is a lot of great information, a lot of good food for thought, and I'm sure there's a lot of other things we could dig into, so perhaps we'll do it again in the future. But for today, Scott, any other closing comments or words of wisdom that you want to leave the listeners with?

Scott Weller: In storytelling, it's thought that really there are only a few unique themes, like coming of age, or good versus evil. One of them is about courage and tenacity, perseverance. And I would say that that is the theme of moving to as a service and outcomes. You have to have courage, or some small group of people have to have the courage to think differently, to put themselves out there a little bit, to champion the cause, to fight the good fight to stay with it through and through, and those kinds of people are hard to find. It's much easier to play it safe and let somebody at the top of the company make the big decisions. And so, if anyone is listening to this that's at that point where they're ready to put themselves out there for something they believe, just go for it. It's well worth it, and you can, as we did back at HPE, you can literally change the direction of the company.

Sarah Nicastro: Yeah. No, that's really good advice, and I think you're right that those people are hard to come by, and I hope the companies that have those people understand the value of those folks, right, because it's a huge asset. So, thank you for that, Scott.

Sarah Nicastro: Scott Weller, Mossrake Group. You can find Scott and Mossrake Group on LinkedIn, if you want to check out a little bit more about what they do and how they work with different folks that are on this journey. So, thanks again, Scott, for coming on and sharing your wisdom.

Scott Weller: My pleasure. Thanks, Sarah.

Sarah Nicastro: You can find more content 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 about IFS at ifs.com. As always, thanks for listening.

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Tactics for Closing the Talent Gap

July 28, 2021 | 33 Mins Read

Tactics for Closing the Talent Gap

Co-authors of the book Game Changer: How to Be 10x in the Talent Economy, Michael Solomon and Rishon Blumberg, share with Sarah and listeners insights on how to navigate working remote, the demand for innovative and fast responses to customer needs, virtual-only experiences, and high unemployment rates.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today I have two guests with me to talk about some of the ways that we can tackle the talent gap. We all know that this is a problem in all of the industries that we cover here at Future of Field Service. This challenge is only going to increase in the coming years. And so we are committed to bringing you as much content as we can to discuss some of the ways that you can prepare and take control of the situation. So today I have with me the authors of a book, one of which is Michael Solomon, Michael Solomon, hi, Michael is an established entrepreneur and the founder of 10x Management, 10x Ascend, Brick Wall Management, Musicians On Call, Kristen Ann Carr Fund, and The We Are All Music Foundation.

Sarah Nicastro: So clearly Michael, you don't stay very busy. He is also co-author of the book Game Changer, which is a lot of what we're going to be talking through today. Another author of the book is Rishon Blumberg who graduated from The Wharton School with a degree in entrepreneurial management. He co-founded Brick Wall Management along with Michael, as well as 10x Management and 10x Ascend. And also coauthored the book Game Changer. So we are going to be picking the brains of these two gentlemen today about some of the tactics that companies should be considering and deploying to tackle the growing talent gap. So before we dig in, gentlemen, do you mind just telling everyone a bit about yourselves, Rishon, I'm going to start with you.

Rishon Blumberg: Yeah. First of all, we've known each other since third grade. So what I'm going to say to you covers a lot of Michael, so I'm sure he'll chime in with his own personal take on certain things, but basically we've done it all together. We grew up in born and raised in New York city. I'll take you back to the '70s and '80s, which was really a very interesting time in New York. It was incredibly entrepreneurial in a wide variety of ways. We happen to be exposed very early on to people whose parents were in the music industry. And so for us, it was our first entree into a career path, which at the time we didn't know, we just knew, oh, someone so's dad is a huge music entertainment lawyer and someone so's mother co-managers and artist and someone so's father is a concert promoter.

Rishon Blumberg: And then we both fell into the entertainment industry and started to management company in 1995, Brick Wall Management. And then that led naturally over the course of about 15 years to the creation of 10x Management. When we saw that there were different types of people that were being considered talent. I think that one of the things that we'll talk about today is the fact that we believe all companies need to consider their employees as talent. They're so valuable to everything that a company does, that they have to be treated that way. They have to be thought of that way. Once you start thinking about people that way you really start to treat and value them in a different manner. So we started to think about different types of talent. We saw that chefs were having managers and agents, their celebrity chefs, all of a sudden that need representation.

Rishon Blumberg: And so we felt the tech talent where there was a huge supply and demand gap would be an interesting place to test out the ideas that we had been running in entertainment for a long time. So we started 10x Management, technically in 2012, but we really started the company in 2011. We launched the company, soft launched the company in 2011. And the book is really a culmination of the lessons that we've learned working with all this different type of talent over the course of the last 26, some odd years. So that's a little bit of background, Michael, I'm sure you can color in.

Michael Solomon: I just need to acknowledge that he glossed over some of our earlier entrepreneurial endeavors, not all of which were legal. So we had a great fake ID business and we did keg parties in high school. And the only reason I bring that up is I think it just speaks to, I don't know that entrepreneurs are born versus made, but we definitely had the entrepreneurial bug from the beginning. And I think that's a through line that we see. And then the other through line being the talent and distilling the lessons that we've learned for managing what now includes musical talents, music producers and writers some directors and filmmakers, and then over to tech talent and entrepreneurial talent and getting to see other than maybe people in a major talent agency who work with writers and athletes and actors and directors.

Michael Solomon: We got to see such a broad base of talent and see what they had in common and to distill that into this book and really, why does that matter to companies now and why to companies need to think about this differently. And even as we, we'll get further into this, but even as Rishon was using the word talent, I'm thinking about the difference between the term human resources department and talent. It sounds important, which sounds valuable to the company. And I just think that we need a really big paradigm shift about how companies think about the people that make their workforce happen.

Sarah Nicastro: Yeah. That makes total sense. So first of all, kudos to you guys for staying friends through all of this and-

Michael Solomon: We're not friends.

Sarah Nicastro: Okay. Can't stand each other. And I think it's a spirit, honestly. But I also think it's interesting that you bring that up. What led you to create the fake ID business back in high school, which transition to another company into another company into another company. There is, I think an element to the conversation we're about to have of not only looking for the checklist skills, but learning how you can qualify or identify some of those less tangible spirit type, so if it's spirit or initiative tenacity, some of those things that you might find in a candidate that doesn't have all of the checkbox skills, but has the thing. That would make them ultra-successful, despite that.

Sarah Nicastro: So all right. We'll get into all of that. Now, Michael and Rishon, and I spent a few minutes chatting before we started recording this podcast and I found out some of you listeners know that I'm in Erie, Pennsylvania. There is a band from Pittsburgh, Pennsylvania that my husband loves called the Clarks. And these gentlemen actually have managed the Clarks for, I think you said 26 years or something like that?

Michael Solomon: Very close to that. I think it's 25.

Rishon Blumberg: Yeah. It's about 25 years.

Sarah Nicastro: So small world, and that is very cool. But while we chatted, I also got them up to speed on some of the challenges that our listeners face in terms of the changes in business strategy, the changes in leveraging service as more of a strategic opportunity and what that means in terms of how the skills and personality traits and leadership traits that companies are looking for within their talent have changed and are changing. So before we get into some of the nitty gritty, I guess, you mentioned this Rishon at a high level, you took some of your experiences over all of these years with all of the different types of talent you've worked with and put it into the book. What do you think it is in terms of the changes in business landscape that make a book like this so necessary and relevant right now? So Rishon, do you want to take that?

Rishon Blumberg: Yeah. I mean, I think that the purpose of your podcast and what you focus on is exactly the reason why we felt that this book was super necessary. So we had been working for about 10 years in helping to place exceptional 10x, excuse me, 10x level freelance tech talent with companies. And we kept finding all of these procurement issues. Either companies weren't set up properly to really work with this kind of talent or understand why they needed to work with this kind of talent. And then some companies were set up exceptionally well. So we saw that there was a divide in perhaps understanding and information around what was necessary in the marketplace. And I think what people that are watching this podcast are seeing is there's a difference between the things that you need today from your talent versus what you needed 15, 20, 30, 40 years ago.

Rishon Blumberg: And that talent gap creates this supply and demand imbalance. They have a demand for these people, they need these people, but there isn't a great supply. And when you have that situation, you have to really change the way that you do business. So this book is really the first half of the book is all about what companies should be doing. And part of that is a cultural shift from the top down ways in which we believe 10x level talent needs to be worked with. And 10x level is really that is this concept of somebody who's a very high performer, high achiever. The second half of the book is about what people can do to push themselves down that 10x spectrum. But it all relates to what you're talking about, which is what can companies do? What do companies need to do to find the types of resources that are crucial to the success iteration and growth of their business? So that was really the impetus behind writing the book.

Sarah Nicastro: Yeah. And I think a couple of the points you made about just calling it talent instead of workforce, or instead of a resource. There's a lot of disruption in the industries that would be listening to this podcast right now. There's a lot of big, big change in customer expectation and customer demand. And I think there's a number of areas that we discuss quite regularly within our content where, you see organizations that are reacting quite adeptly to that disruption in multiple ways. And they're redefining their business models. They're redefining what their service offerings are. They're snatching up this 10x talent and recognizing the need to bring in a fresh perspective or to introduce a new area of the business, et cetera.

Sarah Nicastro: And then there's people that are quite stuck in legacy thinking, culture, technology and it's really holding them back from evolving at the pace that they need to. And so I think discussing those things as it relates to like you said in your book, how do you get ahead of this and how do you capture some of the talent that is in such high demand is really important topic. So, yeah. Michael, go ahead.

Michael Solomon: I was just going to jump in there and talk about one of the things that when we wrote the book, which was before the pandemic, we were writing and talking about the need to allow certain people to work remotely because they're going to give you better results that way. And you can get access to people you'd never otherwise get access to. And I don't want to say that was a radical idea because this had already begun, but we were really trying to help companies understand the value and the need for that. Move fast forward over the last 16, 18 months. And not only do people want that, you now are seeing this huge wave of people who will not go back to the office, they're quitting their jobs when they're being told to come back to the office, which was far bigger illustration of our point than we ever could have possibly conceived of.

Michael Solomon: And that's one attribute. So when you start to think about your people as talent, and you think about what does talent mean, and how does talent get treated in the world? It's really about understanding who they are and what they need and what they want. And that doesn't mean that you have to be everybody, when we talk about this, they think, "Oh, we're just going to give them everything they want." That's not where we're coming from. This is about being human first and understanding that people have lives and nobody was born on this planet to work. That's not what we're here for. I don't know what we are here for, but I know that is not the purpose of being a human being.

Michael Solomon: And we may derive pleasure and purpose out of working, but that's not the only thing. And as soon as you start to understand and look at what somebody is driven by, you now can appeal in trying to hire or retain or manage them to them. And that's the paradigm shift is it's no longer about what can you do for the company, but it's a little bit about how does the company fit into your plans?

Sarah Nicastro: Right. Okay. I have a few thoughts, but I want to take it in order. Okay. I mentioned this to you a bit before we started recording, but let me recap. I hate when I have to generalize our whole audience, because it is a variety of different industries, different size organizations, different regions, it's a global audience, et cetera. But for the sake of the conversation, I'm just going to generalize a couple of things in terms of the challenges that are common here in recruiting this next generation of talent. So I mentioned the fact that one challenge is the role itself is evolving. And so while companies are trying to seek talent, they're also redefining it which can be complex.

Sarah Nicastro: But beyond that, we're talking about industries, manufacturing, HPAC, telecommunications. Some things where these aren't necessarily the sexiest jobs. When you ask the six year old, what do you want to be when you grow up? My son will say a firefighter or a doctor or a teacher, there's some common things that people visualize and you don't really hear field technician most often. I mean, I, myself, when I entered this space 13, 14 years ago, didn't even know what field service was. So that's a challenge. So the unsexiness or even just the lack of awareness that these job opportunities exist, combined with some of the verticals within the industries we reach are maybe not as glamorous as some candidates might seek.

Sarah Nicastro: And then you do have issues with flexibility that maybe aren't as big of a consideration in tech for instance. So travel requirements, set schedules, service level agreements, et cetera. So those are some of the challenges that being said, these folks are all faced with the need to manage the incumbent talent that they have, while hiring a whole new generation of workforce to carry the torch and carry the torch in an evolved and improved way. So based on some of the things that you cover in Game Changer, even if it needs some modification for our audience, what are some of the elements that these organizations need to be considering in terms of what today's talent is seeking? So, Michael, do you want to take that one?

Michael Solomon: Sure. I think the starting point is asking the talent, what are they seeking? I mean, as you talked about incumbent talent, you have to survey that group of people to understand what they like and don't like about their jobs. And that's not something that I think many of these companies were giving a lot of thought to, but that may be part of what informs how you put out offerings to bring in the new talent or to train new people. Because this is, I don't know enough about this specific field, but I have a feeling that it's going to be a requirement of the companies to build the runway to the talent of the future, to train them, to teach them, to create mentorship opportunities. And if you don't start out by understanding what is the talent want, what do they like? What do they hate?

Michael Solomon: You're shooting in the dark. And when a big part of what we've learned over our entrepreneurial journey is you have to start with a little bit of data. You can start with a hunch. I mean, our entrepreneurial background is, hmm, that sounds like a good idea. Let's do it. And it's only over the last 15 years that we've thought, hmm, that seems like a good idea. Let's see if it actually is. And then if it is, we can do it and if it's not, we can iterate. So I think that the starting point is looking for what people want. And then also as you're actually hiring individuals, understanding what is their why? What do they care about in life?

Michael Solomon: We have somebody on our team where it's become very clear that they are very happy, they like us. They like working with us, but they're there for the money. The money is there, they're going to stay. And we have other people for whom the money is not the driver at all. It's the nurturing environment and the opportunity to grow and learn new things and constantly be challenged. And until... On the macro level, you want to get data about the group, but on the hiring level, you want to understand about the individual, not because you're going to tailor everything around them. You're not going to create a new job for them or a new job title or a new job description for them, but you might sell them on different parts of your company once you know a little bit more about them. And you might even change your offer based on their needs.

Sarah Nicastro: Yeah, that makes sense. I think one of the thing, as you were answering, I was thinking as challenging for just some of the folks that I've talked to about this and in our space. When you talk about surveying the incumbents, that gets tricky in the sense of, in a lot of cases, there's some real generational differences. And so what the incumbents like about the job, or don't like about the job or what drives them or et cetera, could be glaringly different than the people that these organizations are looking to hire. That being said, that's not universally true and it's certainly still a good advice.

Sarah Nicastro: But I think, there's a situation here where a lot of these folks are trying to better understand how these roles fit with a younger generation and how to within what's possible and reasonable to still deliver the outcome, to evolve the working environment, a company culture, et cetera, in a way that will be appealing. So I'm just wondering if you guys could maybe share just based on your insights, with the next generation of talent, the younger workforce, what are some of the things that are most important at that macro level?

Rishon Blumberg: Well, their purpose. I think that that's something that I don't think we can gloss over that. It's also something that I think high achievers are in general. So I think there's something in common with being a very high achiever and Millennial and Gen Zs, which is that they're purpose driven. They want to know what kind of difference they're making. And that's why we emphasize heavily how important culture is in a company and how important from the top down the messaging needs to be, because that is part of the allure. Culture can be really sexy even at an HVAC company. If you treat people well, if you put forth very clearly what your purpose is, we're here to help ensure that people don't burn up, like in Portland at 113 degree temperatures, we want to have, we want to make sure that the HVAC in people's homes are always working, that the downtime is limited because people suffer from that.

Rishon Blumberg: When you start connecting, as Michael mentioned earlier, the why of what the company does. I think you can really attract a different type of employee. I mean, in reality, I think what you're talking about in the field service businesses is very much like a concierge business where something goes wrong and the person that it goes wrong for, wants somebody to come there and solve their problem with a smile and make them feel better. They want to be made whole and that requires obviously a lot of technical skill, but it requires a lot of EQ. It requires the emotional capacity, the empathy to understand the pain that they're going through. I had a great experience recently with my cable provider. And I've been with the same cable provider for probably 15 years.

Rishon Blumberg: I've seen a conscious effort and differentiation to make the quality of service better, to make it feel like they actually care that I'm having an issue. And that's got to be from the top down. That is a cultural shift at that company. And that is a huge differentiator. So that's what I would say is the number one takeaway.

Michael Solomon: I think to the point you're making, and this is going back to what we were saying earlier, is if you're interviewing somebody and you now know that they're mission driven, they care about the what and the why, if you're an HR person, and you're still sitting there telling them about the benefits and the money is this, and you get two weeks and you're not talking about, "We save lives. We want to make sure people don't die in heat waves and cold snaps. And this is essential work, and we're not often thought about that way." And you can connect that to that person and make them feel like, "Oh my God, I'm going to be a frontline person. I'm going to be saving lives." I'm being a little bit hyperbolic with all of this, but there's actually truth to it. I mean, I happened to-

Rishon Blumberg: When you express those things properly and by properly, I mean, you actually walk the walk and talk the talk, and you live that day in and day out the company you create many evangelists for your company. And that's really what great companies do and why people want to work at those companies because other people talk so positively about it, both on social media. Obviously we live in a world where reviews are instant anonymous and frequent.

Rishon Blumberg: And one bad review can change the trajectory of a company. So you have to constantly be working to reinforce the culture that you have to create these evangelists who can really go out and talk about how wonderful it is to work with this organization. That, yeah, okay, we're an HVAC company, but what we really are is this, we help ensure that people stay warm when it's cold and cool. When it's boiling hot, et cetera, et cetera really changed the narrative of what you're doing. And you can attract a different type of person.

Sarah Nicastro: I think that's a really good point. And that idea of purpose has come up a lot in our conversations. The other one that comes up quite frequently, that I'm just interested to get your opinions on is the idea of, again, making some big generalizations. But the idea that while a certain generation of field technician may have been happy to do the same job day after day, year after year for 25 years. A lot of younger workers really want a progression path. And so this concept for organizations to do a better job of obviating that ahead of time for candidates and clarifying what some of the growth opportunities are. So that not only do they know from the beginning they exist, but the stage is set for what that looks like and how they would get there in terms of both, I guess, initial appeal and retention I don't know what your thoughts are on that.

Rishon Blumberg: We have very, very clear thoughts on that. At 10x Ascend, what we do is we help people negotiate their compensation packages, their new compensation packages. And we have something, a tool called lifestyle calculator that has 24 different attributes of a compensation package that they have to weight against each other. So you have a total of 100 points and you have to weigh these different things against each other. So you can see really, you can challenge yourself "What's important to me?" And you can see graphically where those things rank. And one of the things that I think that does both for the individual and for the company is it helps them understand what's important to that person. One of those things is career progression. So want any time that that ranks in somebody's lifestyle calculator, we want to make sure that that question is asked very clearly of a company so that they know going in.

Rishon Blumberg: And so I agree with you. I think that it's super important for companies to assess the importance of that for the candidate, but also to be out front and explain what that progression really looks like, what their expectations can be, what the timelines can be, what success metrics look like, what does success mean for that company? So we're all about that. And we think that it is super important, especially at the outset. The hiring process is the place where you set the stage for what you know about this person and that process helps them to be onboarded much more effectively. So I agree with you 1,000% you've got to make those things clear. You have to understand as an organization, what that is too, right? You have to be very intentional about this process. It's not something you can wing. You have to know what the culture is. You have to know what your values are, and you have to know what your offerings are and what success looks like at the various offering levels.

Sarah Nicastro: That makes sense.

Michael Solomon: I would just add to that, that I think that many of these service roles, there's not a natural progression for a whole cohort of people to move up the corporate ladder. I don't think that works when you need that many service people. And part of what I think companies are going to need to do is recognize that some people will be able to move up and others will not going to be able to advance them. Either we're going to be able to retain them by creating very specific retention bonuses that are, if you're here at the end of your third year, you get this. And if you're near your fifth year, you get that or understand that there's going to be a degree of turnover, because that's the nature of where things are right now. And we're going to plan and constantly be looking and planning.

Michael Solomon: I mean, we started talking about what we're seeing happening right now, about three months ago. And it's very clear to see these trends and that's on a macro industry scale when you're dealing with the service industry and certain kinds of workers. You need to be reading the tea leaves and surveys are one way there's other data that's always being generated by industry leaders that's really important. And just going back to the survey for a second, the survey should be done in a way, if it's done well, well, you can tell that young people have different needs than people have been from a different generation. And what those are and how those and people who live in suburbs have different needs than being, that's part of a well-orchestrated survey so that what you get in terms of data really informs your next moves.

Sarah Nicastro: Makes sense. Okay. So Rishon, in the book you guys talk a lot about importance of trust. While that might seem like an obvious thing, I'm sure you wouldn't bring it up if it didn't get overlooked or under prioritized quite often. So talk to us a little bit about trust and why it's so important and maybe some of the reasons that it gets under prioritized or lost in the employee, employer relationship.

Rishon Blumberg: Yeah. I mean, we come at trust from the angle of what managers need to do in order to effectively manage people. And that's where that bond of trust comes into play specifically in the book. And what's so crucial about that is if you are a manager who instills that kind of trust and faith from your team, the type of management you can do is very, very different. If they don't trust you and you don't trust them, it's a whole different ball game from a management standpoint. So what we really talk about is ways that managers can develop trust and also what team members can do to bring that, to earn that trust. But one of the things obviously, and this is a natural thing, is to really stand up and fight for the people on your team and ensure that they get the things that they need when they need them.

Rishon Blumberg: We believe a manager's job is to provide an environment for the team to succeed, not necessarily to become an impediment themselves. We use the example. I can't actually remember if we use this specifically in the book, but I certainly talk about this frequently. If you remember the movie Office Space where you've got management floating around talking about TPS reports, and did you get the memo about the TPS reports? And you've got to come in over the weekend and they don't really care at all about who these people are. They're just cogs in the machine. And that's the old way of work. That doesn't work anymore. The people that are in your employee now are too important. Technology allows you to do more with less. So the people that you're working with, you have to value more highly because there aren't as many of you can't throw numbers at the problem.

Rishon Blumberg: So managers have to know who these people are and when you get to know somebody, you develop trust, when you're there for them day in and day out when you stand up for them, when you defend them, when you create an environment for them to succeed and do the best work that they can do, that builds trust and trust is a very, I think, underrated tool in business. There's a lot of backstabbing, there's a lot of political infighting and office politics, and that really undermines trust. Trust is about you showing up for somebody day in and day out. And when you don't, that trust bond is broken like this, and it's really hard to repair. So you can't really undervalue what trust means in the hierarchy of management and employment.

Sarah Nicastro: Yeah. That's a good-

Michael Solomon: You build trust one drop at a time into the bucket and you lose it all when the bucket falls over, because you breached the trust, it's all gone and you're starting usually from even worse than from when you started.

Sarah Nicastro: I think it's really interesting because I think trusts to me really comes down to treating people the way you want to be treated. And so I do think that the pandemic gave us an element of greater humanity. And maybe an opportunity here to prioritize that a bit more going forward. And maybe that's just wishful thinking, but the other thing I wanted to point out Rishon based on that response is a PSA for people listening, which is don't focus so much on the recruitment of your frontline workers that you don't put equal, if not more focus on management, because you won't keep good hires if you don't have good managers.

Sarah Nicastro: And so, that's just something that can't be overemphasized, you're absolutely right. That's what makes or breaks all of this. Like you said, Michael, the culture has to be top down, but if your managers aren't carrying that out for you, then anything you can do to get good talent in the door is going to be-

Rishon Blumberg: You're going to lose them.

Sarah Nicastro: right.

Michael Solomon: Can I make one little subtle comment on treating people the way that you want to be treated? I think that's where we are coming from. And now we need to shift to treating people the way they want to be treated. That's the big difference, a golden rule versus the platinum rule, if you will.

Rishon Blumberg: And the key you to that not to jump in here is if you don't understand who these people are, if you don't have a sense of what is important to them, you can't do that. Yes, you may treat them the way you want to be treated, but they may not share the same values that you share. And they may be different things. You would treat somebody who's 27 that doesn't have kids differently than you would teach somebody who's 36, that has two kids. What they need is going to be different from what the other person needs. And so you have to try and meet them where they are not force them to come to meet you where you are.

Michael Solomon: And I just want to add the technology is also creating so much opportunity if people are willing to think outside of the box. So what we're talking about is customizing things to make it more flexible for the employees. So they can live the best life that they want to live, however they want to live. So if I were managing a big team and this is much easier, said than done, I'd look at Uber and say, "Wait a minute. All I hear from my team is that they want flexibility. So what if I make it that all of our employees use an app like Uber and set up their schedules."

Michael Solomon: And all of a sudden, we going to have surge pricing because no one wants to work this Saturday and overnight shifts. So we're going to pay a little bit more. And then all of a sudden people want that. And the whole idea that you could create within your infrastructure and get out of the well, I need you to be working 40 hours a week and I needed to like yeah. Make it so that it could be really flexible and it works. And it's not at the detriment of the company. There's ways to do things that are so different than whatever what came before them.

Sarah Nicastro: Yeah. I think that's a good point. I mean, creativity is a really important aspect of tackling this problem, not only in evolving the job descriptions and the way that you present them to people, but to your point, the job itself. Like, are there legacy criteria that just aren't super relevant anymore? Is there things that are holding people back from taking these positions that maybe you need to find a resolution to? I mean, there's yeah. Thinking outside of the box is an important,

Michael Solomon: Yeah. The working in the office thing is that is the thing that just completely changed because of an outside input, but there was no reason that it needed a pandemic to cause that change, innovative companies were already doing that. And when you think about all of the areas that change can happen, we've barely started scratching the surface and you just opt to not allow, well, that's not how we've done it, or that's not how it's done where that's not, that should never be the reason for anything that can be for a reason for why did we do it that way? But that's it.

Sarah Nicastro: I think too, it just made me think, Michael, that you need to look not only at your competitive set, but far outside of it for inspiration on how to be creative. Like you said, the innovative company is already doing it. Well, if you're someone listening to this podcast, that's really struggling with hiring, now, again, I'm not trying to minimize that this is a real proven challenge. Like we're not talking about, you're not trying hard enough. That's why you're not finding them. There is a gap, but you still have to do whatever you can do to do your part to close it. Don't just look at what's the other biggest HPAC company doing to get talent? But look at Amazon and look at some of the companies that are having success and that doesn't mean everything they do, you can do, but that's part of the creative process of getting some inspiration and understanding better what's important to those candidates.

Sarah Nicastro: Okay. I want to talk about the criticality of setting clear expectations. I think for our audience, this is particularly important because those expectations are evolving in many instances. And so even for the existing talent, there's a shift in what that role can look like and what is desired. But let's talk a little bit about why and how expectation management is so important. So Rishon, do you want to take that one?

Rishon Blumberg: Sure. You can't really succeed at something if you don't know what the expectations are. So until a company can clearly explain to somebody what the expectations are that person can't really meet or exceed those expectations. And we look at expectations setting and delivering on expectations as a form of trust building. This is all part of building that trust in the person either that you're managing or the person you're delivering something to. And so if it's not super clear what those expectations are and what success looks like, then you're going to see failure more often than not. Because again, you're not meeting them where they are and you're not treating them with the golden rule or the platinum rule. So that to us is an element of building trust is understanding what the expectations are clearly explaining them. Also trying to elicit from the person that you're managing or the person that is your manager what it means to be successful in a given role.

Rishon Blumberg: Even before you start setting expectations of specific project-based needs, what does success look like? Manager, what will it look like for me to be successful in your eyes? And also getting a lot of feedback when expectations aren't met, it's very easy for people to make excuses or sweep things under the rug, or maybe play the blame game. 10x-ers people who are high achievers, don't do that. What they do is they get feedback, they try to solicit from people, either what went right or what went wrong, because you want to learn from those things. So the next time the expectation is set. You have a better sense of what success looks like.

Sarah Nicastro: Yeah. And I think from an employer perspective, there's nothing more frustrating than ambiguity and not knowing what it is you're working towards. So not only failure or even if not failure, that frustration that you're causing is a problem.

Rishon Blumberg: People want to succeed. So if you can't explain to them what success looks like, they're not going to be happy.

Sarah Nicastro: Yeah.

Michael Solomon: And it has to be measurable. It's got to be something that you can measure.

Sarah Nicastro: Yeah, absolutely. And I think hand in hand with expectation management is another theme you guys talk a lot about in your content, which is empowerment. And I would say in many instances in our industries, empowerment is something that has been lacking particularly in some of the frontline roles. Again, it's more of you're an employee. You clock in and do this job. You go home, et cetera, using service strategically changes that whole relationship with that talent has to change because it's no longer that type of vibe. It's more, hey, we're relying on you to build the customer relationships. You need to be a trusted advisor, et cetera.

Rishon Blumberg: You're an ambassador in the field.

Sarah Nicastro: Exactly. And so if these companies want to have talent that will take that on, there has to be an element of hiring good people in setting clear expectations, but then giving them the latitude to do it in a way that is authentic to them. So Michael, do you want to talk a little bit about empowerment?

Michael Solomon: Yeah. I was actually going to use an example that I think I read about, and we knew somebody who was involved, but in near New York City Parks Department, at some point in '2000s went from whatever system they were to saying, "You employ on this part of the park and you own this part of the park and you own this part of the park, it's your responsibility." And this is whatever the specifics were. And the parks turned around because people were taking pride in "This is mine." And they were looking at somebody else's and it was so empowering to those employees who before were just like, "You mow the lawn over there, you mow the lawn over there," it allowed for a complete transformation.

Michael Solomon: And it also allowed not only did it empower them to do the job and see the result, but I think it gave them a sense of ownership in a way that never would have happened with the prior model. And that's not necessarily perfectly applicable to field service teams. But I think the idea that you get out of that is really important. And again, technology, I don't want to keep coming back to this, but we happen to represent technology. Technology is making it so much easier to do these things well, so this is creepy, so it's not the right example, but when the person showed up at Rishon's house to fix the cable or do whatever they were doing, there is no reason that that database couldn't have said, "Wife, Isabel," that's risky to say, how's your wife because maybe you got divorced, but the whole idea that you could create a system that allows for a little bit, the last person was here on this date, and this is what they did.

Michael Solomon: And is that holding up well? And all of these things that are just so easy, if you make them, if you build them into your systems to make things seem so much more personalized and also if you're the person who's delivering that information, you get to have a different level of engagement with your customer.

Sarah Nicastro: Mh-mm-hmm (affirmative). Exactly. I think the parks example is a good one. And I think that while that might not be completely transferable to the examples we're talking about the very first podcast we recorded was with Otis Elevator and it was 120 ish episodes ago. But what stands out in my mind from that is the gentleman I was interviewing said that they look at their frontline field technicians as the company's most treasured resource. And I thought that was really smart because they recognize that in an organization that's trying to use service strategically that is often the face of your brand. And there's a lot of power in that experience. There's also a lot of insight that those employees gain from those experiences that can be very valuable in setting strategy or deploying technology.

Sarah Nicastro: And so, this idea of not just giving them a sense of ownership because you think it might be important to them, or it might help them work harder, but really valuing that relationship and that input I think is a really good point. Okay. I have already gone over time and talk long enough, but to close let me ask you guys each one more question. Rishon, anything that we haven't talked about today, or to summarize a most important point, what would you give as a last key piece of advice when it comes to finding, hiring and retaining top talent?

Rishon Blumberg: This is something we have talked about, but I want to underscore it again. And it's the idea of the top-down mentality that you can have managers that are great, but if it doesn't come from the top down, it is not something that is going to be practice company-wide and it's not going to be practiced day in and day out. And culture being so important today, you're going to lose employees if you don't live the culture at every level. So to me, that's the biggest takeaway. I think of all companies at this stage of the game is you really have to lead from the top down. People need to see the head of the company, the C-suite, really living by the same ethics and values that they expect the lower level, subordinates and or other team members and talent at the organization to live by.

Sarah Nicastro: Okay, good. Michael, what would you say is the biggest trend in the next, we'll say one, three, five years, whatever you think that people need to be preparing for related to how we work and that will impact hiring?

Michael Solomon: I'm sorry to say that I think the biggest trend is the jobs are going to continue to evaporate at record numbers and an accelerating pace.

Rishon Blumberg: You mean automation? Due to automation?

Michael Solomon: ... of automation and AI. And we're having a moment right now where people are being very selective about jobs because they can be, and I suspect this is one of the last moments that that's going to happen. And as a society, and I'm going very deep with this, we actually really need to think about how are we going to, two problems are going to keep people out of poverty and what are people going to do with their time, talent and energy when there's no longer a full-time job that's available for everybody? And those are fairly existential questions that are not super helpful to a manager. But I think those are very big trends. And I certainly think mission-driven work is becoming more and more and more relevant and important. And the more you can figure out how your company connects to people's missions, the better you're going to do in hiring and retaining and managing.

Sarah Nicastro: Mh-mm-hmm (affirmative). Okay. All right. Well thank you both very much, Rishon, can you tell our listeners where they could find more about 10x and Game Changer the book?

Rishon Blumberg: I can do that, Sarah.

Sarah Nicastro: Thank you.

Rishon Blumberg: Gamechangerthebook.com is a website that we have that has a lot of information on the book. It has a bunch of content there. It also has a fun quiz that you can take to see where you fall on the 10x spectrum. How 10x you are as an individual. And you can also take it on behalf of your company to see how 10x they are. And all of our contact information is there as well, LinkedIn, Medium, et cetera. Gamechangerthebook.com.

Sarah Nicastro: Awesome. Well, thank you both very much. I enjoyed the conversation. I'll probably have to have you back at some point if you're willing, because I have a whole list of follow-up questions already, so.

Rishon Blumberg: Love it.

Sarah Nicastro: Thanks for being there.

Michael Solomon: Thanks Sarah.

Rishon Blumberg: Thanks so much.

Sarah Nicastro: All right. Thank you. You can check out more of our content on futureoffieldserviceref.ifs.com. You can also find us on LinkedIn as well as Twitter @TheFutureOfFS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS Technology at ifs.com. As always, thank you for listening.

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Removing Barriers to Digital Transformation ROI

July 21, 2021 | 38 Mins Read

Removing Barriers to Digital Transformation ROI

Join Sarah as she talks with Philip Carter of IDC, Fredrik Tukk of Maersk Drilling, and Marne Martin of IFS about why research shows that only 25% of companies achieve ROI from digital transformation and what can be done to increase likelihood of measurable success.

Sarah Nicastro: Hello everyone. Thank you for joining us for today's event. We are here today to talk about digital transformation and what it takes to achieve ROI on your digital transformation initiatives in today's landscape. We know that digital transformation is a key enabler of creating better customer experiences and moving toward delivering outcomes. But a lot of companies fall prey to some traditional practices and behaviors that can inhibit the level of success that most folks are looking for. So we're going to dive in today to some of the things that you might want to work on doing, to achieve the ultimate success, and maybe some of the things you want to avoid doing to achieve the ultimate success. My name is Sarah Nicastro. I run industry versus resource future of Field Service, and I will be your moderator for today's event. I am joined today by a wonderful panel, and I'm going to ask them now to briefly introduce themselves. Fredrik, I'm going to start with you.

Fredrik Tukk: Thanks Sarah, for the introduction. My name is Fredrik Tukk, I'm head of Innovation Scouting for, Maersk Drilling, which is a Danish headquartered, offshore drilling operator. And my role is I'm building the ecosystem with the outer world, focusing mostly on startups to bring in, to help us solve the products we are running.

Sarah Nicastro: Excellent. Well thank you for being here, Fredrik. Phil, would you mind introducing yourself?

Phillip Carter: Sure. Thanks Sarah. And thanks a lot for having me. Hi everyone, my name is Phillip Carter. I'm the Chief Analyst for IDC in Europe, and I also run our global C-suite tech agenda program, quite a long title that apologies, based in Munich and, yeah, looking forward to another learning adventure with this group on digital transformation and action.

Sarah Nicastro: Excellent. Thank you, Phil and Marne.

Marne Martin: So, I'm Marne Martin, the President of the Service Management, Global Business Unit, and it really is a pleasure to be with a great IFS customer, as well as IDC who we work with on how we continue to achieve the digital outcomes that are so in demand today. It's really a pleasure to be part of this panel, Sarah, and thanks for hosting.

Sarah Nicastro: Thanks Marne. Okay. So we have, three different perspectives on a very important topic, which is going to make for a very fruitful conversation. So Phil, to start us off, I'm hoping you can share a little bit of context from the research that shows, how the pandemic has impacted digital transformation efforts and, and what you're sort of seeing right now in this space.

Phillip Carter: Sure. Yeah. So I think what happened in 2020 was an inflection point for IT spend and digital transformation efforts more specifically because it was the first time ever we saw a lack of correlation between GDP trends and IT spend. Normally, so if you go back to the financial crisis, significant drop in GDP, IT spend follow that very closely. Look at 2020, the biggest drop in GDP since World War II, and IT spend held up remarkably well, and that was driven primarily by investments in digital transformation. So we expect that to continue into 2021. Actually our research shows that we will hit $1.5 trillion investments in digital transformation globally, growing at about 15%. So we are literally hurtling towards our digital destiny.

Phillip Carter: We're moving towards a digital first mindset, not just at a business level, but also at a personal level, societal level. I think we can feel that we can see that. But the problem is that our pre pandemic research showcases that only 26% of organizations are really delivering an ROI from all of those investments. So that's the digital ROI gap as we call it. And we need to close that, in order to drive the next phase as we move to reignite business, across the board.

Sarah Nicastro: Mm-hmm (affirmative). That makes sense. I know that as I conducted interviews with business leaders throughout last year, there were kind of two ends of the spectrum. There were folks that had already invested heavily in digital transformation and we're feeling very thankful that they had done so. And then there were folks that realized how much they were lagging behind and how critical it was that they get up to speed. So the efforts have increased, but we have that 25%, ROI metrics. So why is that gap so big?

Phillip Carter: Yeah. So, that's a good question. And I think what you described there in terms of that K shape, we call it the K shape recovery in a sense at an organizational level, because there are some organizations on the up slope of the K, that are leveraging the investments in digital technologies to drive competitive advantage into the market. And then the ones who are fighting for survival based on the fact that they were slow to adopt some of these key technologies. And so the reason for this major digital ROI gap, we also asked, we've kind of went into the research on this and ask the follow on questions. Like what's the problem here? And the primary reason is the inability to scale due to organizational silos. So that's the key thing, the key piece of feedback, these barriers across traditional organizational structures which are linked to the legacy technology architectures of the past.

Phillip Carter: But second on the list, which is also interesting, and I know Fredrik, can talk to this, is that the feedback is that IT and security leaders slow us down, so that there is a sense that business and IT need to come together in a more cohesive fashion in order to drive that scale, we call it the digital dream team. So moving from the C-suite to the future, which is the digital dream team where every business function becomes a technology function. But, they need to raise the tech IQ across all of those business functions, but IT needs to be at the table as well. Technology needs to be part of that discussion and helping to drive the outcomes that are required to pose that ROI gap.

Sarah Nicastro: Okay. All right. So Fredrik, can you tell us a little bit your perspective on how, what Phil's describing aligns with what you've experienced?

Fredrik Tukk: Yeah. Thanks Sarah. And thanks Phil, for the analysis for sharing that, that's really interesting stuff. Yeah. And as Phil also alluded to, things are happening much faster these days, and technology is taking more and more a central role in many ways, but what you used to have is that IT department was building the foundation for the company and say, you can execute then you can get the data from us. But these days, many times you find new technologies or new vendors that comes to you with a different technology perspective where you can execute. And the lifetime also own this, and especially around the COVID times, it hasn't been focused on the ROI. It's been focused on actually delivering a value to the customer that might not be measurable. One example I have from our industry, when you couldn't travel now.

Fredrik Tukk: So not as you used to in the, during COVID, when we need to have a technician or a maintenance person out to the rig, you fly them out by the helicopter and do the maintenance. But now in COVID, it wasn't so easy. So you have to find a way of actually utilizing new technology and actually do remote maintenance, for instance, where you utilize the people on board, but you have the experts on shore. And that's something that has been more focused on, you don't have a direct ROI on that. That's not a business decision, it's a necessity to keep the rig going. So you need to find the solution, where then technology played a major part that, that solution wouldn't come from IT, in the first instance, you need to find someone who can deliver that to you today, and just make sure that it works because you have a maintenance problem or a challenge on the rig.

Fredrik Tukk: And that's why you need to find other ways of working with these solutions than the traditional way, as Phil alludes to. And also then the first and foremost, it's not your ROI, because that's more a strategic business decision. I'm saying, "We do this so we can have an ROI on it that we see that this is good for the future of the transformation of the business, but here is more specifically focused on solving an issue here now that you might only have for six months or 12 months, but you need to solve it."

Sarah Nicastro: Okay. That makes sense. So, Marne Fredrik is speaking to sort of the internal look at what this means and what's needed in terms of evolving to look at things a bit differently, but I'm wondering if you can speak to, how a technology provider like IFS, what is the responsibility there, or what is the assistance that IFS can provide in helping close this ROI gap?

Marne Martin: So let me talk to pick up a couple of things from Phil and Fredrik, and then answer your question as part of that. So first I would say that Fredrik raises a critical point that often is not communicated or well understood, what technology investments support, the continued evolution of the business, i.e., the growth of a healthy business profitability, et cetera. The strategy that they might already be executing on, but they do need additional technology to continue supporting that growth. So effectively the ROI is already in a way buried into that growth strategy of a business. And then you also will have what I call inflection point investments, that will genuinely give ROI on their own. And often those either enable an increase in revenue or greater profitability, or something like that that has a very tangible ROI.

Marne Martin: So I do want to layer in that clarification, because we often find gaps that we can help bridge as a vendor, looking at say, upside cases, what are continued execution of strategy cases, and then what are really say a ROI cases. And we do that through business value engineering, and then how we plot the project and the outcomes that maps to kind of which of those buckets is primary in a business. Ultimately we want all of our customers here at IFS to grow and grow faster ideally than their peers. When you think about the digital dream team, one I love that concept. And I like to talk a lot about sport analogies. And since two thirds of the panel is in Europe, I'll give an example about Premier League. So often the business feels they are the offense, and we need them to be the offense, but there's either a perception. And sometimes the reality that IT is playing defense and slows down the offense.

Marne Martin: So we need to be thinking about how we get a full team to be working together. And you have the coach for the leader that will really bring them into the Premier League. And that's where I think often when we're looking to scoping out and moving also from the handover of the signaling to the implementation, to the longer customer success phase, we often don't have that coach or a leader that can bring, say the offensive and the defensive elements together to work as a team and specifically a Premier League team. So that's where we have activities and actions that we can continue to drive and be better at, as part of IFS as a vendor. But we're also looking to how we can enable the leaders and the coaches in an organization like Fredrik is in his organization to be more effective. And to the extent that there isn't that type of leader in the digital dream team, that we call that out and work with our customers to address that.

Sarah Nicastro: Okay. That makes sense. Fredrik, can you talk a little bit about, from your perspective, how would you articulate what it is about a traditional or legacy IT mindset that just does not work for today's digital transformation efforts?

Fredrik Tukk: Sure. Yeah. And really good points by Marne there. I fully agree with your analysis there, it's really interesting. The things we see, I see happening both here and in other companies, when it comes to this digital transformation is that there is for some natural reasons as well, lack of flexibility and adaptability to take on new technologies and test them out on the side more or less to the legacy system. And I have examples where we have come up with startups we're working with, that comes with a technology that might be set in a different cloud setting, for instance, a different cloud solution. And then we say, "We need to have that." They say, "They need to be hosted in whatever AWS or whatever."

Fredrik Tukk: And then if I come to my IT department, they say, "No, we are Microsoft, no discussion." And that just shows the flexibility, because if you could do that to be more flexible, and I understand why they also can't just say yes to everything, because it's a gigantic task of evaluating this and from a risk perspective, and everything else, since you need to have some structure as well, but with increased speed in change, in digital and the need for being out in the market, go to market needs to be fast. They need to be able to be flexible in that sense. We have an example where we now developed a solution with an external startup, where our, IT department's struggling for years to find a solution for building a performance driven tool. And the startup comes in and do it in two months, when we eventually get to go ahead for it.

Fredrik Tukk: It doesn't say that the old is the best solution, but it does say one example being, where you need to be taken into that flexibility and see who else can actually come in and do it in a non-traditional way. And by that solving your problem and go to market much faster.

Marne Martin: Sorry to jump in Sarah, but I think as we, it's like the emerging technology often the digital dream team, or a lot of these companies don't have say incubation or early adopter phase programs, or if they do, they get stuck in POC. So, how are they able to embrace new technology, whether it's from an existing vendor or a startup, and then really commercialize that, understanding the different phases of technology maturation, adoption, et cetera, is it always as crystallized and taking that sort of approach in companies? And I think that's what handicaps them to a different degree that they're not thinking about say technology, say development, almost like how you develop talent, that you're putting it to work, you're continuing to test it. You're continuing to evolve and challenge it. And eventually going back to my Premier League example, you have your Premier League star.

Phillip Carter: And I think also just building on that. I talk quite a lot about this notion of four wheel drive innovation, which is taking the speed and mindset from the digital innovation initiatives around the edge, into the core as well. And that's basically saying, "Okay, we need to evolve quickly so that there can't be two speeds of technology investment or technology adoption, or business direction." It needs to be one speed. And that speed is a lot faster than it currently is. but that involves people like Fredrik who sits, digital innovation initiatives, pushing those, the agenda on the frontiers to come also to bring that mindset into the core, well across all of the different business units. And that's part of the digital dream team stepping up to this new level around digital investments and outcomes associated with that.

Sarah Nicastro: That's a good point. So I think I have a related question Fredrik, to follow-up on the point you made. Okay? So bear with me. So Marne gave the analogy of offense and defense, right? And so my question when you talk about, having that startup come in and put this solution in place in two months, that you had been struggling to do internally, how do you do that in a way that doesn't further that offense defense divide, right? And kind of exacerbate the problem of that divisiveness within the organization?

Fredrik Tukk: Yeah. That's a really good question. The way we have done it is that you need to, you need to work together, you need to make sure that both parties move, because there's no like one answer is the right one. It's not that you only do startups, so you only do core, but you have to cooperate, both need to move away from where they are. So in the beginning where we actually took in the startup to improve the existing solution that the internal team had built, to emphasize that, but in that process, they also came to realize that actually the startup had a better solution that we then went with. So that that's one way of doing it, to work together. And the other thing that is, building on Phil's point here is that, it's also things that companies like us or any old company with a legacy, not only in IT, but the legacy in general and during the digital transformation, is we don't use to that.

Fredrik Tukk: Now we're starting to build software, basically in our company, we're launching or building that. And we don't have a tradition, IT doesn't have a traditional company. We need to find new ways of how do you do that? What's the competencies we need? Do we want to build them? And the classical discussion we can have that as a separate discussion. You want to build them in house then, or do we want to buy them? And all these discussions, that's something which all companies I think are struggling with in order to see, how do we want to do this? And that's, of course, again, something you need to do together in cooperation, we need to bring in the startups to challenge the existing IT, to some extent, and they need to come back to us and challenge us and say, you can't do that because it's a lot of other legacy systems and we need to have a control, and it's also risked with security and everything else.

Fredrik Tukk: But I think it's also a sort of a middle ground. And it's a transition period as well, where you go from being, saying that IT used to service the traditional business, while now we are getting into more, having a software side to it, at least, where we develop software and that's requires new skills.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So there's an issue of pace. I'm sorry, Phil. I didn't mean to cut you off.

Phillip Carter: I would add to that, because I think it's a great point that, Fredrik made, but I will also say that what we see here as a way of driving that alignment across the teams is a focus on metrics that everyone signs up to. So if you're coming back to that remote maintenance example, that use case that Fredrik highlighted at the beginning, if you've got a metric around meantime to resolution for that use case, and IT, and the business, and digital or oh, working towards that, suddenly there's a different level of alignment. And you bring that speed from the innovation areas, into the core, as part of the fact that you guys are all going to be measured on that outcome. And therefore the behavior is in line with what is expected at the end of the day.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So, we are talking about fostering more collaboration. Okay? We're talking about, Marne the point you made about, you need a strong cultural leader, i.e., coach, right? That's going to help the team see that we're not offense and defense we're one team, right? And then, Phil, to your point, if you can align around metrics or measurements that everyone agrees upon that are driving toward a consistent goal, those are all things that can help alleviate the issue of these silos, which is, as you said, Phil, one of the biggest contributors to the ROI gap, open to the floor, so any of you can jump in. What else? So what else are the important considerations or pieces of advice for folks listening, in terms of breaking down these silos, creating this collaborative culture and aligning more toward a common objective?

Marne Martin: I'll jump in with incentives and compensation, and then I'd love to hear Fredrik's thoughts from being in a company and obviously, Phil's from the research. So often we see and this ties into, I'd say, bridging the divide between speed and outcomes is that, we need the key businesses focused on the outcomes that matter most in their transformation projects to make sure that they deliver against them, that you don't have scope creep or other opinions that take you away from why you did the project in the first place. But we also find that sometimes with business and IT incentives, how they're compensated and what project success means to them isn't aligned. For example, if IT is compensated on speed of implementation, they might say, "Hey, let's just copy what we have. That's what we know best. And therefore we can be the fastest at that."

Marne Martin: When really the business won't get what they wanted out of the technology investment to meet their goals without taking that into account, the change management and additional training, et cetera. So I'd be really curious to hear more. And in general I see this across every single customer we support, in these initiatives I'd be really curious to hear, Fredrik's view on how best that can be tackled pragmatically, and then also Phil's related to the research and his recommendations.

Fredrik Tukk: That's a very, very interesting point, Marne. Again, so, yeah, my first take on your question, Sarah is also, I think that most of the products we have now that are, you could call this digitalization projects. They are actually initiated by us in innovation, not by IT. And the reason is also, I think because of the culture we've fostered and built up in innovation where it's a dare to try, it's fine to fail, you can fail. But if you do fast, instead of doing this, I don't say that everybody does waterfall, but it's like bigger products most of the time. I mean, and the face implementation is a big product and our thing.

Fredrik Tukk: And of course, that's one thing. But on the other end, these digital products we run we need to try out faster and dare to try, and they can fail, and that's fine. But also, like you say, Marne the whole incentivizing of how you run these projects and why you should do it and everything is super interesting. And, I guess, Phil, have some good comments on this research from other companies as well.

Phillip Carter: Yeah. I mean, it's top of mind, around kind of time to value. So that's the balance between speed and outcome, just thinking about the time to value story. And I think there are a few things that we see changing. Number one, regardless of the technology project, they are getting shorter. So even if you think about a large scale ERP project of the past, that took five years, that's no longer acceptable. It has to be months, weeks, at least in terms of some level of time to value from the project. Secondly, the idea that a business case is created once and then thrown out the window once the project starts is also not acceptable. So you have to have a dynamic business value realization approach for the week long or two weeks, or three week, the sprints that are put in place in that much more agile fashion of rolling out a project, regardless if it's going to take a year or two to finally end, but you have the checkpoints every week or month to say, "Okay, how are we relating to the metrics coming back to this, or metrics and the incentives and behavior?"

Phillip Carter: So I said with that, to, Marne's point, on an ongoing basis. So it becomes a much more dynamic. It becomes, an element that the elements of that dream team are engaged with and are measured on, and therefore are, they're bought in upfront and then they actually contribute to making a success. The last thing I would say is that, you look at the software vendor relationship with buyers overtime. And historically, there has been a mismatch in terms of expectations. And now we see that there's a big change in, Fredrik's point around, the rethink around bill by partner, acquire, that's happening, it's really happening.

Phillip Carter: And if a software provider isn't able to deliver that time to value in the shorter timeframe that I described, the buyers of technology will find a different way to do it and to deliver it, to, Fredrik's point earlier two months to deliver that time to value, because the business has to get that outcome in a much shorter timeframe. So those would be the three things that I would highlight associated with that story around value realization.

Marne Martin: That's actually a great, those are great points. And it made me think of something else. So, I talked about, sometimes we don't have coaches or leaders to the degree needed to really drive a transformation, but I'll also say that sometimes projects aren't a bit scope for what they are. Some companies really are going through a learning journey, even though they're contracting for something, they don't know, say what value or what actually they want delivered yet. Okay? Other companies have really well understood their innovation plans, their business models, where they want to go, et cetera. And then we're really, that brings almost like a template if you will, for execution. And then it really is about optimizing time to value. So I think it is super important.

Marne Martin: And we're trying to do a better job working with our customers, with the idea of this return to value understanding, are we implementing off of kind of a well understood strategy template, they know what they want to do? Or is this really more of a learning journey that we need to assume that, we need to move as quickly as possible through the design phase, knowing what we know, but then we're going to have multiple cycles potentially of rework UAT, et cetera, or we'll have different phases of adoption, et cetera. So, we need to be able collectively all of us to drive for more clarity on not only say the digital maturity of a company for the point that everyone has made, but also is this a learning journey project, or is this really more of a template implementation, business value realization?

Sarah Nicastro: Yeah, I think that's a really good point, Marne. And it makes me think earlier on in the conversation, as we're talking about the silos within the company being one of the biggest barriers to ROI, in the content that I work on, those silos are also one of the biggest barriers to servitization or advanced services, or realizing the opportunity of more strategic service. Right? And so you kind of have two parallel journies happening where, to your point, depending on where the company is at in sort of the business journey, what's the business model? How are we innovating? What have we been and who are we trying to be?

Sarah Nicastro: And how well-defined that is and how much alignment exists on those objectives, and how much the silos have already been eliminated in that effort will have a huge impact on what that digital transformation journey looks like. Right? Because it is really, the huge enabler of all of that progress, right? So that's a really good point of kind of the, intersection points along those settings.

Marne Martin: For sure. I'll make one other point, which I know Phil has research on, and perhaps you won't ask Fredrik to comment, but, and I'll explain why in a moment. It's interesting, and there was a really fascinating piece of research that I read in the last few weeks about how digitally competent most CEOs are. Right? If you think about how most CEOs are promoted and get to the C-suite, it's a lot of the business acumen, the relationships with customer, shareholders, et cetera. And the majority of their career, they won't be in the digitally active cycles like we are now, whether, just kind of how Moore's law is to say bleeding into everything that we do in technology, including how organizations need to adapt or, this post-COVID era. So, I read this statistic that only about 25% of CEOs feel that they understand how to drive themselves digital realization.

Marne Martin: And it made me wonder that we should look at perhaps the correlations, of the 25, approximately percent of companies that are getting ROI from the digital investments. Does that match to say the more digitally aware experienced CEOs? Yes or no? How do we not only need to think about business and IT at the implementation level, but also of how we're working with the C-suite and boards. So, I'd love to hear your thoughts Phil, on this. And again, I have no idea if there's actually a statistical correlation or not, but I just thought it was really fascinating research.

Phillip Carter: Well, yeah, absolutely. In line with a lot of what we're seeing on it. So based on our C-suite survey, we asked the question, so who's most likely to be the next CEO in your organization. And first of all, it was COO, second was external hire and then third was CTO. So that's the first time that we've seen the technology leader on the leader board effectively on the career development path. And it reflects a new reality where to your point, you need that different understanding around digital and technology capabilities, in order to deliver the new value. So if you look at, there's really interesting dynamic happening at the moment where there's a correlation that we're looking at between digital maturity and actual valuation. So market valuation, because we've got an index that tracks digital maturity by company.

Phillip Carter: And we look at the stock price overtime and you can see a clear correlation. So what does that mean? Well, for the CEO, it means if I'm chasing value, then I need to chase tech, which means I need to ensure that I've got the right level of skills in the organization. And if I'm the CEO, then I need to also ramp up my capabilities in that respect. I need to appoint the right technology leader. And there's a huge amount of change in the technology leadership happening in the market at the moment, because of that. And I might have to acquire some tech companies, which as you see that ramping up, we've had two inquiries in the last week of healthcare device manufacturers asking about software acquisitions. So, just I think you will see, so it's and the CFO linked to that, is going to have to become a lot more savvy around valuation of tech as they make those investments around what's the price to pay for the tech.

Phillip Carter: And you, again, build by partner. So that's a fascinating part of the outcome of this acceleration to our digital destiny that I highlighted earlier. But I don't know, Fredrik it would be great to get your perspective on this, because I know the CEO of, Maersk Drilling is kind of big behind the digital transformation of the broader organization, but any thoughts on how you see that evolving?

Fredrik Tukk: Yeah, it's an interesting observation, Phil and yes, our CEO three years ago when we brought this up, that we wanted to drive digitalization much more and try it out. He was behind that, and has been supportive of it all the time. So he's actually... And, I guess it's also because he sees his own limits within this space at the same time he sees that it's a good thing that we as an organization learn this and try out stuff. So he was very supportive of that, but it's like I say, it's not only in [inaudible 00:34:23], I've spoken to a lot of other C-level people. And one guy in another company he said to me, that when we were discussing, he said, "I used to not believe in this, with a lot of digitalization. And I said to people, you can't make money by getting clicks. I was wrong." He said.

Fredrik Tukk: And that's the whole new economy basically. So he said that they changed their minds. So the more example, if they see, and the more transformation that is happening around, more and more companies now also C-levels saying that we, we used to make money off of our core business. And now we see startups come up or other companies moving much faster and we need to do something about it. And so they are awakening to some extent. So that's interesting to see.

Phillip Carter: What's starting, because I've done a bunch of CEO interviews recently and what I'm starting to hear is that the untapped potential around tech as being open to them. So they seeing this, one of them is a train operator and they managed to get access or transfer ownership of a new trained in the midst of a lockdown completely remotely, similar to the remote example that Fredrik mentioned earlier. And now they're not going to go back to an onsite delivery of that asset, it's going to be complete... Because they realize it's cheaper, it's more efficient and the customer experiences data. So that's just a portal into the potential that's in front of them. And I think as a result of that, the next question is, "Okay, how do we make sure that this is scalable and outcome is driven across the organization?" But I hear a lot of what Fredrik described in terms of, I used to think this way now I realize that it needs to be done differently and it's going to be a big part of the business model moving forward.

Sarah Nicastro: Yeah. It almost seems, in terms of the CEO role that it's really overcoming any sort of legacy thinking or culture, it's more of an awareness and a willingness to put the right team in place than it is necessarily having to have, the skills themselves. Right? And, and I think that's reflected when you start looking at the organizations that are making the most progress and then, look at what the mindset of that leadership is. Fredrik, I wanted to come back to the point about, looking into the future of digitalization, your thoughts on some of the work you're doing on building out that ecosystem and the importance of co-innovation with customers. Can you talk a little bit about that?

Fredrik Tukk: Sure. Yeah, because we come to realize yes, as Phil said before as well, that you need to take these decisions on, do want to build it or buy it or co-created, or have a strategy on that? And the best way we found out is that if you... We need to start with the customer needs. And it's so easy to forget that, but you say to the bigger organization, they think that you have a lot of knowledge, you build something, that then the customer doesn't really want to need, or at least don't want to pay for. So you need to involve them early on, which we do now in all the products we're on, basically stores based on a customer need.

Fredrik Tukk: But then again, if we need to have the flexibility and the agility, to build these things, we don't... If you're going to scale up that internally or taking an external supplier, that you have a traditional working relationship with, it mostly takes too much time and as Phil before, the lifetime expectancy of solutions, now the digital ones are shorter and things go faster. It's easier to copy as well from your competitors. So that's why we are looking and taking more and more startups to actually deliver this to us. Because if you find the right startup and that's, of course the challenging is, is to find the right data flows, to find the right startups and evaluate them, to make sure that they can deliver this.

Fredrik Tukk: But if you find them, because I can guarantee you, they are out there, whatever your problem is, as startup, you can do this today. There's many, and they are also developing so fast. They also die very fast. So you have to be aware of that. You need to be quick and you need to help them to grow. But if you do that, then you have a much more flexible, structure. And as Phil said, as well, the example I gave before, where we now built a solution with two months, I never met that startup physically. I found them online, we negotiated online, they delivered a demo online, they deliver the product online.

Fredrik Tukk: We have been talking to them, I have teams all the time. So we never met them, you don't have to. Before it was like, you need to see them in the eyes and say, "Hey, yeah, and we need to have a beauty parade with X number of companies as procurement would ask you for." And these days, when we find someone that is like, we can do this maybe for 80% of the solution, we co-create the rest together, because that's the fastest way forward we see, so.

Marne Martin: For sure, I think, related to the innovation cycle and how we build an innovation here at IFS, that is something that continues to accelerate. And of course, we're doing it both for point solutions, as well as a broader platform. The start a point is interesting, having done startups in my career, early on in my career, I still love how we can partner with these startups, right? And even IFS as a vendor, there are times that we also will work with them on how we can enable, say a go to market structure, how we can think about embedding them into our applications to accelerate what we're doing and even acquiring them.

Marne Martin: So, what's great is that you see vendors like, IFS that are really looking to how they can be more flexible, faster and more progressive in terms of bringing innovation of the various type that's needed by customers, to satisfy their end customers. But also, one of the parts of, that I enjoy at my job, is getting to know these startups and the ones that are, validated as being in our key verticals and impactful for our customers, thinking about how we can either partner on a go to market or continue to make some interesting acquisitions.

Fredrik Tukk: Yeah, and that's a good point, Marne where everybody's like you say, trying to be more agile, more flexible to you also as supplier can see that, you have the opportunity to bring in knowledge on some cutting edge technologies, to improve your product. But it's interesting, because there was one of our biggest products that came to be a couple of months ago and said, "We have this huge challenge, and we think it's going to take two years to build it, but we heard that you are connected to startups, can you find someone that can do this?" And I had this, and I presented them with three startups. They interviewed two of them and came back to me and said, "That's amazing. These guys can do this in three months. And they are exactly what we're looking. We didn't know they existed."

Fredrik Tukk: And that's also an eye-opener for my companies to see that there are other ways of doing this, than the traditional way. And that's also where you need to be. It doesn't say that startup is the only answer or the answer all the time. It's just that, that alternative that many corporates hasn't considered that before. And now you see that with the increasing pace and everything, you need to look into it at least to see if that's an option.

Marne Martin: To be pragmatic. Again, a lot of companies won't necessarily be as progressive as Fredrik's, and there'll be concerned about the risk of the startup, them running out money before they can deliver et cetera. So, it's always a balancing act, but it's absolutely is true that there's such a vibrancy of new technology and innovation that's present today. So, for example, if there are startups that can get validated with an enterprise customer, but maybe stall out at 1, 2, 3, 4, 5,000,000 and in revenue, which is often the case, at that point, they often have an inflection point, do they say start the private equity journey and how that is?

Marne Martin: Do they align with the strategic, et cetera? And I think, here at IFS again, we are working to be more and more nimble, and we bring a lot of very impactful technology to market as part of ERP, FSM, EAM, et cetera. But also, sometimes I laugh at Fredrik who'd be, almost our corp dev department, letting us know which startups he thinks are most cool for us to go look at, to talk to.

Phillip Carter: I think it's a new business model for Maersk Drilling to be the startup to connect that.

Marne Martin: Exactly the issue in point.

Sarah Nicastro: There you go.

Marne Martin: But you really don't know it. Having run startups myself. I mean, there is such a big step for a startup to move from alpha to beta, to really true enterprise GA. That is not to be underestimated by anybody. But to the extent you can get a startup at exactly the right inflection point, and do that at a value that is accretive, per Phil's point, that is really interesting. And of course, something that we also do at IFS.

Sarah Nicastro: Okay. Good. All right. So I'm going to ask you all one, sort of closing question of my own, and then we're going to try and have a couple of minutes for a few audience questions. So just in terms of summarizing our conversation so far today, if each of you had to give sort of one key piece of advice for listeners on how to prepare for the future of digitalization, what would that be? So I don't know who wants to start. Phil?

Phillip Carter: I can go-

Marne Martin: Can I go first and then Fredrik-

Phillip Carter: ... Yeah. You go on.

Marne Martin: ... and Phil wrap it up, with their insights. So, we've talked a lot about technology and what have you. And technology is what powers our daily lives, our businesses, our future. But the one piece of advice I have to all of you is don't forget the people aspect of it and specifically you need the right type of leadership to be successful, whether it's a digital transformation, new business models, your company continuing to perform. So you need to make sure that you are analyzing, assessing, recruiting, developing, making sure they stay happy, the leaders in your organization, the people that are going to make this happen. Because technology doesn't get implemented on its own, business value doesn't get realized on its own and if you don't have the right leaders in your organization, then you will be, not able to leverage technology projects, opportunities that you otherwise have.

Sarah Nicastro: Good. Phil, do you want to go next?

Phillip Carter: Okay. Yeah, I will let Fredrik close it off with his wise words. No, so why recommendation is get the order right. And what I mean by that is start with the business. So what is the use case? And then the measurement associated with that. So then you measure and you drive the performance of the back of that, and then comes a technology. So use case, metric technology, and then build up, the use case journey. So that becomes the new digital roadmap to prepare for the future where horizon three, the longer term mission is clear and the whole digital dream team is on board and agreed on that ultimate mission, and then execute along that roadmap. So get the order right.

Sarah Nicastro: Good. And Fredrik.

Fredrik Tukk: Yeah. I'm trying and find some value based on all these fantastic advice, as you know, from Marne and Phillip, mine, and it's a personal reflection basically, but I came to realize this, in the last couple of years, got to try, don't sit and plan for too long. Don't sit and think, oh, we should find someone else, we should do this. We should plan more, give it a go, give it a try. The worst thing can happen is you fail. But if you do it small and fast, no big harm done. And the other thing then to do that is to start small. And then when you notice it's actually functioning, then you can scale it, but don't plan for this massive product that's going to take four years, it's like dare to try.

Sarah Nicastro: Very good advice.

Marne Martin: I love that. I mean, the soft skills of courage and curiosity I think are under analyzed as necessary components to successful digital transformation. I think that's a fabulous point Fredrik.

Fredrik Tukk: Thanks.

Marne Martin: Yes.

Sarah Nicastro: Absolutely. Okay. All right. Let's get to a couple of audience questions real quick before we close. So the first is you mentioned the digital dream team, but for a company where projects have traditionally been led by business or IT, how do we determine who the coach is? So who leads the digital dream team?

Marne Martin: So I think coach the change. Phil will have some other insights on kind of the personas or the roles perhaps that have been most successful. But I think you need to look for the people that can work through the conflict. Make sure, keep the team on track, being able to motivate and drive the courage and the curiosity to actually get it done. So there are certainly, and I'd love to hear Phil and Fredrik who kind of the archetypes or the personas that also most frequently rise to the top, but, I encourage people. Don't just think of it from a functional perspective. Think about it as who has the enablers to it done and that that person might come from finance, or might come from sales, or might come from operations, IT, you don't know necessarily where that person comes from. It might also be a C-suite sponsor.

Marne Martin: And then, you can figure out once you have the person that has the right leadership and soft skills to run the change, how you compliment that. I love the point that Fredrik made that, you don't necessarily need a CEO, that's a CTO, but you need someone that sets the agenda and make sure that the project, the talents are all staffed appropriately.

Phillip Carter: Yeah. I mean, I would say building on that, that it's much less about the title, but more about the personality. And so I think it's the classic T-shaped person, someone who's strong in key detail areas where it linked to the project at hand. So they need to understand at least the domain associated with the use case, but then have those emotional intelligence so to speak, in terms of courage, in terms of curiosity, in terms of engagement, bringing people along, dealing with the friction, picking up the ball, running with it. So I think that that's more of the personality type that should lead. But then there's the question of, it shouldn't be business or IT driven. Now my view on that is, if it's more of a specific area, which is driven by a specific business function, then the business needs to lead more clearly.

Phillip Carter: If it's more kind of a platform based approach, which cuts across multiple functions, then IT probably needs to play more of a role or maybe not IT, but that the technology leader, that digital leader that should be able to cut across those areas. And I think that the new type of IT leadership are able to orchestrate, and so budget stakeholders, architectures across that platform. And if they're not able to then new people step into that frame, and those are the new leaders, right? So the new digital leaders that we see emerging, that would be my take, I don't know if Fredrik, if you've got a perspective on that.

Fredrik Tukk: No, I fully agree, Phil because like you said, if on one hand, the business are closer to the customer and the market, so they might have some insights, but they might not have the understanding of how to drive, or to tell what the solutions should be, then it's better that you keep actually the IT department who are more in the forefront of the technical development to lead it, so I fully agree with your analysis there.

Sarah Nicastro: Okay. All right. Let's get to one more question, real quick before we close, which is our last digital initiative, did not go well. And how do we bounce back from that, from a cultural perspective?

Marne Martin: Fredrik, I think you have the lead off answer on that one.

Fredrik Tukk: It's an interesting question of course, you know what I mean? There have been probably marketing needs as a big thing, and the big change, and if it's a failure, then no one has the belief in the technology. If it's a specific technology they were doing or that product, and then how do you get people convinced? And again, back to my point, I think then you need to start small and maybe you should launch a couple of other initiatives, that you can get some pilots or something that shows that this is actually working. And then you take the biggest steps and launch it at the biggest scale, because then people will build back the belief in it, and see that it is actually working. But if you do it in a different way, maybe... And then of course you can make an analysis on that specific products and why did it fail?

Fredrik Tukk: Was it resistance? Was it lack of knowledge or the resource? Or whatever it might be, you find the reason for it. But then again, I'm a fun believer in saying that you can show and prove that it's working in a small scale, then it's easy to scale it. So that's my point. I'll take on that. And Phil's probably have some good points as well.

Phillip Carter: Yeah. I think what we've heard is this notion of moving to a ritual descent type of model, where you are willing and everyone accepts the idea that you should take feedback. If something doesn't go according to plan, then you have an open discussion and people provide their feedback. You're not allowed to defend yourself. You basically hear the feedback and that there's no blame off the back of that, and you move forward quickly. So that, that's a culture that, I mean, you've got to develop that culture overtime. If you're used to have a blame culture, then it's difficult, that's the objective, if you can get to that, then it's amazing what can be done because it's a sense of honesty, but at constructive feedback, as part of the conversation.

Marne Martin: 100% agree with that, I think, organizations that are very, very political and kind of what I call zero sum type organizations that someone, there's winners and losers, that's really hard to implement the type of culture that Fredrik is talked to, dare to dream, dare to fail, dare to innovate. So, the advice that I have is absolutely, even though people don't like doing postmortems and sometimes it's hard, do one that's very honest and think about how you remove the impediments of the past failure, and then make sure that you're doing projects for the right reasons. I can't comment too much on the reason for the failure without understanding more, but it might be that had the wrong expectations or the wrong team, or what have you. So, digesting it so that you don't repeat, say the reasons for the failure again is really important.

Marne Martin: But you also have to have a culture that does allow people to move forward and take some chances. Because even the best performing people in the world, and I'll go back to my sports analogy to wrap up, every time they have a strike and goal, they don't make a goal, every time, LeBron James in the U.S takes a shot he doesn't necessarily make a point, right? Even the people in the hall of fame in baseball, didn't bat 100%. So you have to figure out what your tolerance level is for failure and mount that into the cultural expectations of the business. Obviously you want to minimize that, if you think about statistical normal distribution, you want most of your projects to be successful. You might have some small tail positive ones that far exceed the expectations, but you're also going to have some failures, i.e., your small tail negative outcomes. And in that you have to recognize and move forward on.

Sarah Nicastro: That makes sense. Very good insights. So Fredrik, Phil and Marne, thank you so much for joining me today. I really appreciate you all being here and sharing your wisdom. So, thank you for that. And everyone that joined, thank you as well. Be sure to visit IDC and IFS, to find some of their content. You could also check out Future of Field Service, and hear some stories from the industry. Thank you for being here and hope everyone has a great day.

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