Dave Hart, Managing Partner of Field Service Associates, takes us on a journey down memory lane in this exclusive article for Field Service News.
OK, come with me on a journey down memory lane here…
In 1983, legendary singer Lionel Ritchie (yes, he of Commodores fame) released his new solo album Can’t Slow Down. The following year he released a single from that album entitled Hello (is it me you’re looking for) and it reached number one on three Billboard music charts: the pop chart (for two weeks), the R&B chart (for three weeks) and the adult contemporary chart (for six weeks). The song also went to number one in the UK Singles Chart for six weeks.
Whilst driving along in the car a few weeks ago, I was thinking through my consultancy write up following my conversation with a CIO of a very large company. “Hello, came on the radio” at exactly the right moment; it was one of those moments, almost fate wherein seven words Lionel had managed to summarise the root of the issues this particular company was having.
Whilst discussing with my CIO client her particular hot topics (which was the subject of the call) we discussed her companies service business which was fairly sizeable and when digging a little deeper into the topic with her she proclaimed, “I don’t actually know the name of the guy who runs our service business!”
I know from my own experience running a large service business, our quarterly business reviews with the CEO were two hours long. One hour and fifty minutes discussing how much product we had sold and ten minutes discussing the service business. The service business contributed significantly to the overall EBIT of the company; it’s like it was a given, that service would just perform and achieve the numbers.
During a budgeting cycle in the same company, the regional CFO exclaimed, “I have no real idea how service works, I just assume revenues will go up with the annual price increase, you will keep contract losses below 3% and your budget EBIT number is a given”
So, my question. Should service be taken for granted?
Unfortunately, in so many businesses, it is and my call to action here is that for service to thrive It needs focus from the whole ‘c suite’ to ensure it grows, that it constantly invents itself to cater for customers ever changing needs, market forces and transformational factors.
“Service leaders need to grasp what dominates their business leaders’ areas of focus and then capitalise on that.”
Service is the powerhouse, the profit driver; dare I say, the future of sustainable revenues for product companies. Don’t take my word for it look at the evidence. In the recent TSIA publication ‘The State of Service Revenue Generation 2020’ the report states that 62% of companies polled said equipment revenues were declining and 70% stated service revenues were increasing.
So, ask yourself this question. How many true CSO’s are out there within companies, CSO’s that sit on the ‘C suite’ and influence the business direction, develop strategies for growth, that influence product design to be more service centric and ultimately transition the company to adopt a service mindset?
I bet not many.
I remember a conference from the days when we could travel, data attributed to PwC was presented, PwC had surveyed 2,500 companies in 2018 and found that 83% of those companies promoted the CEO from within. There is a startling similarity to service leaders who are promoted from within (that number is actually 84%), but does this necessarily mean that the potential myopic view of service is maintained?
The challenge for service leaders is to become apparent and top of mind to their CEO/CFO/CIO’s which is by no means easy. Service leaders need to grasp what dominates their business leaders’ areas of focus and then capitalise on that. I suggest service leaders find an approach that works with each persona. Here are some suggestions which are generic but may help the reader understand some areas of potential focus for them…
- CFO’s – Half of CFO’s are fast tracking digital initiatives and 52% are re assessing business strategies. What an opportunity to put service front and centre introducing new approaches and digital transformation to pull organisations out of the COVID slump and back into revenue growth.
- CIO’s – Of course will be concerned with cyber security, data governance and automation but in creating IT products, CIOs will be interested in the emotional value that makes their customers purchase the product or service. CIOs and IT leaders realize that customers buy from companies they feel care about them. Another wonderful opportunity to get on the agenda of the CIO and talk about your service strategy.
- CEO’s – Their top concern is global recession and maybe it’s time to enlighten them about how service can become the engine of growth for their business.
Service leaders need to be able to understand each of the drivers of the people listed above and then ensure they tailor a message to that persona that will resonate. To do that they must be thoroughly prepared to be top of mind with their proposed solution, as each one of the ‘C suite’ will have many pressing priorities, all vying for their and their teams time as well as those precious financial resources.
Benjamin Disraeli once said ‘There is no education like adversity’ and COVID has delivered adversity in spades but I can’t help but feel the time has never been better to influence above, to build a sustainable plan that will resonate with your leadership team, to re-educate them about just how powerful their service businesses are. I then suggest you then pick up the phone and dare I say, start by saying….
Hello, is it me you’re looking for?