Strategy and Organizational Change

We help clients design and execute service based strategies to build market and competitive advantage and sustain it in the future. We work with managements and their key stakeholders to outline choices and develop the actions required, while improving strategic planning processes and boosting the organization’s execution capabilities, decision making and capacity to initiate and manage change.

We start by understanding market, competitive and technology trends in a rapidly evolving environment; seek out opportunities and identify disruptive threats and changes to the rules of the game. We then help develop new ideas and design business models and offerings portfolios that provide the best potential to create value. Our analysis includes identifying  “hidden” strategic assets (resources, capabilities, data) as well as gaps to close and necessary investments.

Our recommendations are based on robust data and emphasize action planning and systematic execution. Our focused expertise allows us to provide deep insights into key issues, while at the same time sharing perspectives from different industries and sectors.

Key focus areas:

  • Market Dynamics and Industry Economics
  • Industry Value Networks
  • Demand and Customer Buying Behavior – Willingness to Pay
  • New Markets – New Services
  • Digitization and Servitization
  • Competitive Benchmarking
  • Business Models, Revenue Models and Offerings
  • Pricing
  • Risk Management
  • Mergers and Acquisitions
  • Organizational Design
  • Management of Change
  • Coaching to Business Objectives
  • Training 

Programs and Workshops

Designing the Organization - Managing Change

Companies undergoing service transformation as part of their strategy, must align their processes, structure and culture towards enabling the new direction and achieving business objectives. They need to be very clear on their vision and their strategic intent.This is important because service transitions change the company’s value proposition and hence its operating system. A new structure must bring products and services into a symbiotic alignment with minimum internal tensions. Friction or internal competition not only confuse customers, but can lead to inadvertent undermining of both product and service offerings, reputation damage, high coordination costs and lost opportunities. Many efforts to enhance and compete through services fail because of discrepancies between strategy, culture and structure: Managements continue to define their business in product terms while pursuing a service driven strategy and they do not take sufficiently into account the consequences of organisational actions.

We help managements understand how service driven change affects market positioning, customer relationships and the value creation process. Our work helps ensure the design and integration of service organizations supports new strategic priorities; Enables scaling across markets and geographies, supports growth and improves and sustains performance. We identify needs for culture change and emphasize alignment of incentives, inter-organisational relationships and cooperation. We challenge biases, help minimize political agendas and reduce internal friction. We further provide the framework for clear accountabilities and robust governance, addressing the need to reduce complexity. Furthermore we analyse and determine needs and required capabilities for key roles and positions. Once the organisational redesign has been completed, we support our clients in implementation and rapid value realization.

Insights

Service Innovation for value-driven opportunities:

Facilitated by Professor Mairi McIntyre from the University of Warwick, the workshop explored service innovation processes that help us understand what makes our customers successful.

In particular, the Customer Value Iceberg principle goes beyond the typical Total Cost of Ownership view of the equipment world and explores how that equipment impacts the success of the business. It forces us to consider not only direct costs associated with usage of the equipment such but also indirect costs such as working capital and risks.

As an example, we looked at how MAN Truck UK used this method to develop services that went beyond the prevailing repairs, parts and maintenance to methods (through telematics and clever analytics) to monitor and improve the performance and  fuel consumption of their trucks. This approach helped grow their business by an order of magnitude over a number of years.

Mining Service Management Data to improve performance

We then took a deep dive into how Endress + Hauser have developed applications that can mine Service Management data to improve service performance:  

Thomas Fricke (Service Manager) and Enrico De Stasio (Head of Corporate Quality & Lean) facilitated a 3 hour discussion on their journey from idea to a real working application integrated into their Service processes. These were the key learning points that emerged:

Leadership

In 2018 the Senior leadership concluded that to stay competitive they needed to do far more to consolidate their global service data into a “data lake’ that could be used to improve their own service processes and bring more value to customers. As a company they had already seen the value of organising data as over the past 20 years for every new system they already had a “digital twin” which held electronically all the data for that system in an organised fashion. Initially, it was basic Bill of Material data, but has since grown in sophistication. So a good start but they needed to go further, and the leadership team committed resources to do this.

  • The first try: The project initially focused on collecting and organising data from its global service operations into a data lake.  This first phase required the development of infrastructure, processes and applications that could analyse service report data and turn it into actionable intelligence. The initial goal was to make internal processes more efficient, and so improve the customer experience. E+H looked for patterns in the reports of service engineers that could:
    • Be used to improve the performance of Service through processes and individuals
    • Be used by other groups such as engineering to improve and enhance product quality.
  • Outcome: Eventhough progress was made in many areas, nevertheless, even using advanced statistical methods, they could not extract or deliver the value they had hoped   for from the data. They needed to look at something different.
  • Leveraging AI technologies: The Endress+Hauser team knew they needed to look for patterns in large data sets. They had the knowledge that self-learning technologies that are frequently termed as AI, could potentially help solve this problem. They teamed up with a local university and created a project to develop a ‘Proof of Concept’. This helped the project gain traction as the potential of the application they had created started to emerge. It was not an easy journey and required “courage to trust the outcomes, see them fail and then learn from the process”. However after about 18 months they were able to integrate the application into their normal working processes where every day they scan the service reports from around the world in different languages to identify common patterns in product problems, or anomalies in the local service team activities. This information is fed back to the appropriate service teams for action. The application also acts as a central hub where anyone in the organisation can access and interrogate service report data to improve performance and develop new value propositions.
  • Improvement:  The project does not stop there. It is now embedded in the service operations and used as a basic tool for continuous improvement. In effect, this has shifted the whole organization to be more aware of the value of their data.

Utilizing AI in B2B services

Regarding AI, our task was to uncover some of the myths and benefits for service businesses and the first task was to agree on what we really mean by AI among the participants. It took time, but we discovered that there are really two interpretations which makes the term rather confusing. The first is a generic term used by visionaries and AI professionals to describe a world of intelligent machines and applications. Important at a social & macroeconomic level, but perhaps not so useful for business operations -at least at a practical level. The second is an umbrella term for a group of technologies that are good at finding patterns in large data sets (machine learning, neural networks, big data, computer vision), that can interface with human beings (Natural Language Processing) and that mimic human intelligence through being based on self-learning algorithms. Understanding this second definition and how these technologies can be used to overcome real business challenges is where the immediate value of AI sits for today’s businesses. It was also clear that the implication of integrating these technologies into business processes will require leaders to look at the change management challenges for their teams and customers.

To understand options for moving ahead at a practical level we first looked briefly at Husky through an interview with CIO Jean-Christophe Wiltz to CIOnet where we learned that i) real business needs should tailored drive technology implementation, and ii) that before getting to AI technologies, there is a need to build the appropriate infrastructure in terms of database and data collection, and, most importantly, the need to be prepared to continually adapt this infrastructure as the business needs change.

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