The Truth about moving to a solutions business
It’s interesting looking at what’s going on in both Telecoms and IT Companies at the moment.
There is a large focus on moving from a product to a solution play, but this isn’t the first time we are seeing this.
Back in the 90’s numerous IT companies like Digital, NCR and IBM were looking to differentiate and move away from a commodity scenario.
History has shown that IBM were the role model organisation that moved from predominantly a products play to a balanced services product mix with good success.
Over time more and more technology companies find themselves in a commodity play and quite rightly look to successful paradigms from the past.
This is becoming more evident especially in the Mobile and Service Provider space, where the life of a technology cycle is short lived, and the product factory tries to keep up.
This transformation is critical in driving the organisation to success in Services and Solutions, with a great deal of references to draw on, but interestingly some of the more obvious approaches may not lead to the method that will have the most traction and success.
This short blog focuses on the key learning’s that have been recognised over the years and offers a few tips on the priority areas, key activities and pitfalls for transforming from a product to a solutions or services play.
Most Product to solutions and services transformations fail to get traction … for three key reasons:
1. No or Low Sponsorship
The change required is understood intellectually but doesn’t really have senior level or stakeholder commitment, mainly because they don’t believe the outcome will meet the goal, and that the activity will de-focus people away from the core business.
2. Failing to balance the short and long term
Organisation’s try to change too much at once, and not focus on the areas that will give the greatest return, and therefore spread the jam too thin, with little real traction in the right areas, and take too long to get a result. Transformation should be long and short term focused, with a strong focus on short/medium significant results.
3. No or Low Focus
Because people are already busy, the wrong people are assigned normally on a part time basis. Generally having the wrong people doing the wrong things, too much analysis and presumptions about what needs addressed with a lack of experience about what really needs to be done, and the people who have the experience and need to be assigned are busy elsewhere or not put forward by their management, as Transformation sometimes gets seen as something that is done on the side.
Miss the following at your Peril! …The UN-SAID
1. Not everything is a Solution
The biggest mistake people make is trying to make one size fit all. Because of the enthusiasm of moving to a solutions business it becomes an obsession for everyone to only talk about being Consultative. The truth is most organisation’s buy both transactionally and Consultatively, so not recognising this is a mistake. It depends on whom you are speaking to in an organisation. More technically minded people will know what they want and buy on quality and price, and therefore buy transactionally, while others may need advice and guidance, so being a thought leader may be more appropriate. Catering for both is key. The way this manifests itself is companies try and throw out anyone that doesn’t look like a consultant. The appropriate mix is 75/25 with 75% still selling what is your core business. This is not the time to be ashamed of what is core business, just build a solution wrap to complement and differentiate what you do.
2. Be Careful, people hire mirrors of themselves
Look out, there is definitely a need to enhance and upgrade your team, but be careful what you wish for. History has shown us that people generally hire mirrors of themselves. One organisation I worked with changed out 50% of the sales force, but didn’t move any further forward as the managers that were hiring hired the same types of people they let go.
Also there is a real danger of defocusing people while you are trying to build the solutions wrap. Instead of trying to de-focus people and get people to do this important activity in their spare time, it makes sense to get a small team of people who are dedicated full-time, use mainly internal people so you can get commitment and bring people with you on the journey, add a few customer advocates and an external subject matter expert who knows the pitfalls, knows what good looks like and has a track record of doing this before, then slowly hire the right people but get a cross functional view of each hire.
3. Be joined at the hip with the Sales force
It’s important to develop a strong Professional Services business and organisation to help drive the change and get traction with Customers, but it’s really important not to do this in isolation. For example, some organisation’s think that as the solutions or services business has not been successful before, it must be due to the lack of skills in the sales organisation; so they build a shadow organisation and pursue success as an Island. This clearly doesn’t work and is one of the main reasons for the failure of this type of transformation. The shutters come down as the sales force gets alienated, and people look for reinforcement of what they thought was wrong in the first place. The most effective approach is to be joined at the hip with the sales, to build a joint team and have sales and PS in the Tent together with complimentary skills driving together in the same direction.
4. Prove the value quickly
There are 90-120 days to get traction, during your focused work stream make sure you get Incremental and significant results quickly so people see that this is not another programme that doesn’t deliver, and your stakeholders gain confidence quickly. This will also ensure further sponsorship you will require to accelerate. You will need to have a really clear idea about where to focus for the best returns and move aggressively towards your goal. Shock and Awe!
Hope it helps – Good Luck!