Services innovation demands that new solutions be created at the speed of business rather than the speed of research or development, Xerox executives Jeffrey Grabowski and Gabriele McLaughlin wrote in the Winter 2007-08 issue of this newsletter. William A. Steenburgh, senior VP of Xerox Services, expanded on the demands of services innovation at the latest CIMS Sponsors Meeting, this past October. Drawing on his 30 years as a services executive, here’s what Steenburgh said: Traditionally we have measured the success of a new process or technology using standard metrics such as response time, meeting service agreements and overall customer satisfaction levels.
While all these and many others are important, from an economic perspective the real questions are, Did the solution provide the full value and enable the customer’s business to better meet its objectives? Did the solution provide all the potential that was explicitly or implicitly committed to during the sales process?
In the end, the service providers themselves need to own the consumption of value on the customer’s behalf and ensure that it is delivered. To enable that to happen we will have to foster a level of collaboration and partnership that is rarely seen today. We need to lead our customers on a journey far beyond their expectations and turn our routine customer satisfaction interviews, Advisory Councils and all customer touch points into opportunities to totally rethink the services we provide and how we deliver them. We need to get our customers involved in every step of the innovation process, from brainstorming to design and implementation, then keep them involved by using technology such as blogs and other social networking tools to gather continual feedback about how to improve service delivery.
This pervasive customer focus requires a culture change. It is more important than ever not to lose sight of the critical role people continually bring in the services space. Without a motivated and skilled work force engaged with the customer, aligned with their goals and empowered to achieve them, a leader will never be that trusted advisor who can successfully advocate for real change and innovation needed to enable the full release of value to our customers.
Tools To Succeed
Once you have the right people in place, you need to give them the tools they need to succeed. Although technology has produced an explosion of innovation in the services space, it has not yet fully harnessed the value of real-time information. The plethora of data available needs to be turned into useful information and knowledge that enables the optimization of value that is so desperately needed by our customers.
This optimization has been effectively done in manufacturing and in most areas of the supply chain, but is still deficient in the services space where the manufacturing process is carried out on hundreds of thousands of customer sites each and every day. The challenge I would give to the Operations Research community is to continue to find ways that we can use real-time data to support better decision-making at the point and time of need — and that requires a level of customer intimacy that is not readily available.
We Need a Systemic View
We must also never forget that for the business model of innovation to work, as Geoffrey Moore writes in his book Dealing With Darwin, it must create differentiation that leads to customer preference during buying decisions. We need to have a systemic view of innovation that always keeps that goal in mind, and constantly ask ourselves, Will this give us a sustainable competitive advantage in our customer’s eyes, or neutralize a competitor’s advantage? Will it enhance our productivity and lead to better margins? And most importantly, will it provide our customers a competitive advantage with which to grow their own businesses?
Additionally, you need to ensure that this innovation is systemically addressed in all phases of the technology adoption life cycle, from the product or service’s inception until its end of life.
Managing the portfolio of services in a high-tech company is every bit as important as hardware portfolio management in a product company if we are to be sure that our shareholder obligations are fulfilled.
Few Great Services Companies
Many product companies talk about being great services companies, but in reality not very many are. Very few companies have a fully integrated view of the services value chain from R&D throughout the consumption of services value on our customer’s sites. In fact, there are very few services executives that have assumed C-level positions within most industries.
As a result, most companies don’t have sufficient cross- functional knowledge or financial transparency to manage the business model of the services they offer, and their services business is not effectively integrated into the overall short and longterm goals of the company. We have to balance our long-term objectives with the short-term demands of our business model, balance our obligations to our customers, our employees and our shareholders, as well as balance our professional and personal lives in a 24-7 services world.
Building a more balanced services economy means seeing things from a global perspective. This can not be about winners and losers in a global economybut has to be much more about raising the level of the lake for all. Innovation and education remain two of the critical enablers to unleash the full potential of the world-wide services explosion that is underway. In short, it’s time to think and act big. Solving issues in the services business would go a long way toward solving many of the world’s problems. Together if we can eliminate the silos and get the leadership of academia, government and industry aligned, we can really make a difference – a difference for all.
William A. Steenburgh
SVP, Xerox Services