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Two Key Tenets To Make Servitization Work

Firms face many challenges when looking to servitize. There isn’t a cookie cutter solution…

The Service Design Group has helped companies across the world revolutionize their business models through servitization. The promise of diversified, long-term revenue and a competitive edge over industry rivals is an enticing prospect, but the process does not happen overnight. 

Firms face many challenges when looking to servitize. There isn’t a cookie cutter solution to magically teleport a company from one way of doing things to another. Changes have to be made on multiple levels, and people are inevitably pushed outside of their comfort zones. 

With so little being known about the servitization process, it’s useful to look at success stories to learn from their experiences. Service Design Group CEO and founder Patrick McGowan sat down with Ben Wilson from Schneider Electric to discuss the ebbs and flows of their servitization journey when creating EcoStruxure Outcomes, secure power as a service.

Among many insights, Wilson’s reflections point to two key ingredients necessary for a successful transition to service-based offerings: perseverance and expertise.

Perseverance

“Any change is hard… new processes have to be created, we have to find new ways of working, and internal politics need to be navigated carefully in order to succeed.”

Wilson says the most important skill for as-a-service innovation is perseverance. “Any change is hard… new processes have to be created, we have to find new ways of working, and internal politics need to be navigated carefully in order to succeed,” he said.

Perseverance is essential for any team responsible for servitizing their business. Resistance to change is expected when tampering with the status quo. That is why strong and experienced leaders are necessary to help shepherd their teams toward success. Faltering along the way is part of the process, but getting back up is an example that needs to be set from the beginning.

Expertise

Expertise is key for ensuring an effective and seamless servitization process.

Wilson’s second key remark was his one piece of advice for someone who is considering getting started designing and launching an outcome-based service. “Get an expert,” he said. “Get someone who knows what they’re doing, somebody who can be that guide to hold a company’s hand through the process.”

Expertise is key for ensuring an effective and seamless servitization process. Even visionary leaders with years of experience and access to all the R&D within their company might struggle to predict the obstacles presented by servitization.

…ideation and being able to launch and build in an agile manner are particularly important…

Whether it be reorienting a marketing team’s mindset, teaching executives to adopt new practices, or recalibrating sales objectives, the path is not easy. Even typical problems have to be handled in a different way. Wilson notes how ideation and being able to launch and build in an agile manner are particularly important for success, but are hard to execute on without informed guidance. 

Next Steps & More Insights

Every industry faces pressure to servitize. Interested in learning more? Let the Service Design Group help you decide whether or not servitizing is right for you and your company. If it is, then rest assured that we will be there with you every step along the way. Let’s do this. Let’s servitize!

To watch the full discussion, check out the Servitization Short video chat posted on Video Chats page of our website (there are links to both the full length and abridged versions of the chat).

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