Last month myself and Field Service News Editor Kris Oldland were fortunate enough to interview Dave Gordon from Rolls Royce’s Defence business in Bristol, about their Services Journey and why it is so important to the future growth of the business.
Although Rolls Royce is a leading global manufacturing business, many people do not realise that over 50% of its revenues are now generated through Services. Initially Services became a strategic contributor to growth in their Civil business as they reacted to customer and market pressures.
In his own very engaging way, Dave Gordon describes about how the defence business has taken these processes and embedded them into its core offering. As VP of Service Strategy and currently LiftSystem Programme Director for the new vertical takeoff Lightening Fighter, he is uniquely positioned to talk about the transformation from time and materials support contracts to sophisticated advanced services.
They very much took an OUTSIDE-IN approach, not only looking at their own industry, but best practice companies in unrelated businesses
Key to this journey has been changing people’s mind-set through the metric of ‘Customer Disruption Cost’. This measure calculated the direct and indirect costs to their customers if the engine was not available. The tangible benefit was that it enabled Rolls Royce to build a value based offer around the customers business needs. The hidden benefit was that it focused the people within the organisation on what was really important to the customer.
Dave explains the importance breaking down the innovation of services into bite size chunks.
Starting first with availability contracts on small modules, and gradually increasing the scope as their knowledge and infrastructure grew. Key was building a database of how the product was used, enabling engineers to model their equipment behaviour, so as to predict future performance. Then leveraging this knowledge and insight to develop new proposition and solutions.
As the service business has matured, the data capture and analysis has increasingly moved into customer located Service Delivery Centres, so making the value creation processes truly co-constructed.
But in this age of nervousness around cyber crime and intellectual property, he stresses that security and segregation of customer data is key to developing a trusting collaboration with the customer.
It is this collaboration that has been key to their success. So not only has it been a journey for Rolls Royce, but their customers as well. They have had to step back from describing ‘what they want’, to ‘where they want to be’.
Dave Gordon goes on to say ‘Creating the future’ is all about deepening relationships and harnessing innovation around customer value. Key is the willingness to listen but where necessary take risks and innovate ‘outside the box’ to make change happen.