Summary : the shift from the old manufacturing model to a service one is key to the future competitiveness of lots of industries. Rather than adding a layer of service at the point of contact with customers, it’s about reinventing businesses, value propositions and the way it’s executed. It’s easy to understand that the paradigm shift needed for this revolution is very similar to the one needed for enterprise 2.0. And is surely more understandable for lots of organizations.
A couple of weeks ago I discovered and read with a lot of interest Du management au marketing des services : AmÃ©liorer la relation client – DÃ©velopper une vÃ©ritable culture de services (in english from services management to services marketing – Improving customer relationship – Developing a culture of services) by Benoit Meyronin and Charles Ditandy. You may wonder what is the link with the topics I usually discuss on this blog. In fact it’s quite about the same thing but seen from a different point of view. It’s even possible to consider that the ignorance or misunderstanding of some issues related to services management is a real barrier to enterprise transformation, to the paradigm shift that is needed to rethink old manufacturing models and turn them into a services model and prevents from drawing all the organizational consequences.
As am matter of fact, as the book says, the key question est about implementing a culture of service within organizations. Let’s start with a quick aside. There are many ways to define a culture of service. A first one applies to people in their day to day actions and behaviors, most of all when facing customers. The second one is more global. It’s about execution but, also, the way things are seen, thought and designed. The first can come without the seconde but is only to dazzle customers. It makes employees embody a system, a policy that as no structural and operational reality in organization that don’t question themselves. It prevents value creation through services. Pratically speaking, when organization add a service layer on an old industrial/manufacturing model without trying to reinvent the whole, it’s like putting some polish on the customer interface. It has no impact no the delivered value and even less on the perceived value. In such a context, services are a cost that is easy to cut instead of being a value lever.
In short, adding a service layer to a system designed with an industrial/manufacturing approch costs money while rethinking the model as a service one makes organizations make more money. Examples are numeros in our day to day lives. I’ll spare you my usual and favorite digression on the airline industry (which really need to understand this !) but the book is full of examples from many industries (hotel, transportation, car parking…).
Take a minute to think of what “selling mobility” vs “selling cars” means for a car manufacturer. If the old car selling model survives, the “mobility” option costs a lot because it’s layer added on the system. If mobility becomes core, it’s differentiating and helps to create more value. That’s the path that’s followed by lots of car manufacturers. In B2B industries, tire manufacturers have stopped selling tires to airlines for years : they now sell a number of landings and take-offs.
In the end, here are a couple of examples of what a service culture means, taken from the book.
– a bet one employees’ collective intelligence because they need to permanently adapt their work to context and circumstances. Not doing so means service interruption to wait until a decision is made by someine else (“I can’t”) or inappropriate actions (“I know but it’s like that..”).
– customers are considered as service co-producers and not only subjects.
– “servuction” (vs classical production) is a systemic activity (a change in any of its components impacts the whole system) while the classical vision relies on independent tasks and denies the existence of interactions between all the components of the system.
– a customer centric approach that follows the previous point : a 360Â° service oriented approach that makes anyone accountable and involved at any time (opposite to “ah…this is not my responsibility, not my part of the job…I can’t do anything for you Sir”). Il implies solidarity and collective accountability (vs independence and not being personally accountable when facing the customer).
– a new role for managers that need to become coaches, guides, in a logic that aims at making employees more accountable and loyal;.
– valuing experience : when it comes to services, feelings and subjective value matter more than quantitative and objective things. It has many impacts on how value is measured and the use of resources like time. It also implies a work on customer experience as a part of the delivery process and not as a new independent layer supposed to make things look nicer. Some say it’s the “experience economy”.
Does it remind you of well know things ?
Let me also add something : here we talk about customers in the traditional meaning of the word but we should also consider that customers may be internal and that any department or entity in the enterprise should be seen as producing services for others.
Two things to end:
-Â those who think that behind the words “enterprise 2.0” or “social business” there are only useless concepts now have an answer ; it’s a way to support the journey from old models to services ones.
– the survival of lots of enterprises and industries will imply a move toward services logics. Rethink the models, reinvent the value proposition, align the organization. Heavy but necessary. If not, we’ll keep on with endless discussions on how to make old industries competitive, why enterprises struggle at creating value. The answer is obvious: they value model is dead. In other works, service innovation and what supports it should be their next goal.