As savvy politicians and insightful leaders know, there is always a “90-day window” that opens after any significant change. This window is the time frame in which change adoption is the most critical--late enough for individual performers to have some familiarity with the effects of new roles, organization structures, and processes, and early enough so that organizational inertia has not stepped in, blinding individuals to objective evaluation and limiting their openness to the necessary enhancements required of any new effort worth doing. How this “time of correction” is dealt with has a marked effect upon long-term results.
Yet, it’s amazing to see, in situation after situation, this marvelous opportunity wasted on endless meetings on tactics, discussions with no plans, and speeches with no action. Soon the chance to move ahead is twittered away as the window closes, returning the old “way we did it before” behaviors and the mindsets that shape them.
So, adopt the mantra of sea captains of old preparing for an important voyage: “There is not a moment to lose.” Favorable winds can quickly shift direction, and incoming tides always turn to outgoing tides, making navigation difficult or impossible.
When the winds of change blow open the window of opportunity--be ready. Act as if you are facing an outgoing tide, making your every action advance your agenda while you still have the water to make headway. This is the time to lead, not manage; to be bold, not meek; and to move fast, not slow. Your dash and daring will yield confidence and commitment, speeding the voyage to success while keeping your best sailors from jumping ship.
In talking to services executives in charge of leading their company’s transition from product support services to professional services, a common story line develops:
A. They are very interested in:
- Learning best practices.
- Understanding key benchmarks.
- Showing some results quickly (Hey, there is always job security to consider!).
B. They are always concerned about:
- Launching new services offerings.
- Getting the product sales force to sell services.
- Dealing with cultural resistance (product-centered company mindset).
Does this (or did this) sound like you? Addressing A is straightforward--the core and best practices, key benchmarks, and proven transition methodologies can be obtained (at least the 20,000-feet version) very economically and relatively painlessly. Most dedicated services executives will make the investment to learn what is needed. They will read the books, buy a study or two, attend a workshop, and/or have services industry consultants in for a day to learn trends, issues, and best practices. Excellent start. You are now “in for a penny.”
But are you “in for a pound?” How you react to the potential roadblocks of B will provide the answer. If your responses include comments like these:
- “We don’t have time for market research--we are going to launch these six new services and see what happens.”
- “I don’t have the budget to train people how to sell services--can’t they just listen to a webinar?”
- “Culture is all that smoke-and-mirror stuff! I’ve never seen how it really impacts business results anyhow.”
Sound like you? If so, you are still in for a penny. You also are in for a very difficult time.
However, if your approach to the concerns of B sounds like this:
- “Solid voice-of-the-customer research sets the foundation for our services organization, and I’ll commit some money and the necessary 90 days to do things right.”
- “Most product salespeople can learn to sell (at least some) services once given services-specific training, coaching, and motivation. This is a priority to me, and I’ll work with the vice president of sales to provide services-specific training and coaching.”
- “If I am to be successful, I must deal with cultural resistance. I’ll take the time to think through a transformational culture change plan and spend the money to put it in place.”
…you are in for a pound.
These are two distinct approaches. Which one has the greatest probability of success?
The moral of the story is that anything worth doing is worth doing well. In leading the transition from product support services to professional services, commit the time and money to do it right or you are probably better off (at least from a career perspective) not doing it at all.
Every boater knows the feeling, the queasiness in the stomach that comes the instant you feel you are no longer in control--stretched (literally) between where you have been (the dock) and where you’d like to go (the boat). Docking line in one hand and boat hook in the other, while your feet continue to move in opposite directions, you immediately grasp the meaning of “between the devil and the deep blue sea.”
In this situation, your immediate
actions will determine whether you cast-off on your new intended voyage, tie-off back to the firm ground from which you came, or splash-off “down to Davy Jones” (as old sailors would say). Not a pleasant situation.
As a leader of a services organization, you may find yourself with one foot on the dock and one foot on the boat much more often than you’d like. As you work to steer your services organization ahead to accomplish your goals, you may feel a constant current tugging you back to support the different objectives of the product-side of the house. One foot stretched to deliver profitable services projects, the other foot extended (non-billable, of course) supporting product sales or putting out customer fires.
So what do you do to stay on the course of high performance? My latest study of 157 services organizations within product companies provides some guidance to smooth sailing. The high-performing services organizations had this in common:
- They did a better job of communicating the services organization value proposition both outside in the marketplace and inside the organization. Hence, you need to constantly be communicating what your services organization does and the benefit it produces for all stakeholders. This is a big part of your job.
- They had a clearer understanding of how their services organization differentiated itself from competitors. Therefore, get the market intelligence you need to focus your services organization on areas it can distinguish itself with clients (deliver more value and make more money).
- They were much better at aligning their services strategy with the overall business strategy (this is a best practice). So take the time to meet with senior management on a regular basis to force the question, “How can the services organization best help the business accomplish its mission and achieve its goals?” Sure, there will be times when it is necessary to steer a little off your desired heading, but you can plan for this ahead of time and put contingencies in place.
The natural elements (winds of business change, rising tides of the marketplace, and undertows of competition) are always a danger to pulling your services organization off course. Keep both feet on your boat--plan ahead, anticipate trouble, and steer toward your destination with conviction.
"Whistling through the graveyard" ... I love this phrase and wish I could take credit for coining it.* However, I first heard it while interviewing a services executive about how his business operates and the strategic role of services. When I asked him what would happen if there was not dramatic change to his company's business model due to major competitive challenges, his response was, "Well, for the few of us left, it would be like whistling through the graveyard--the business would be dead, and all that would be left are memories of what might have been."
I share this stark but vivid picture with you as a warning signal for all of us who are currently "doing OK," "have things under control," "are meeting our numbers" and so on. If our focus becomes an obsession of doing things better, driving efficiencies, or fine-tuning our plans, we are vulnerable to competitors (both old and new) who don't know the rules of our schoolyard and don't care. If we don't have an eye out, before we know it, the sand might be removed from our box, tag switches to dodge ball, and recess becomes study hall.
Of course, you should strive to streamline your organization, drive efficiencies, and do more with less. But the lesson is that continuous improvement is the opposite of innovation, and innovation is what drives dramatic, positive change and blocks the competitive threats of organizations that want our business.
So don't let your milestones become headstones, dedicate 10 percent of your thinking and your resources to innovation--speculating, scheming, and pondering questions like: "What if we give the product away and really focus on selling services? What would customers do if we send champagne as well as roses after screwing up a project? How about we focus on making our intellectual property our competitive advantage and outsource everything else?"
If you proactively balance your existing model of efficiency with a portion of innovation, you'll not only keep your organization alive, but you’ll be whistling a happy tune.* I can't remember from whom I heard this. If it was you, please contact me, and I'll give you credit for it in a future article.
“Looking back over my career, I have never made a tough change that I haven’t wished I had made a year or so earlier.” This confession* comes from Andrew Grove, chairman of Intel and a person who has faced a tough problem or two over his career. Just about all of us, when facing tough decisions, can well relate--it is much more inviting to hesitate and procrastinate than make a choice that you just don’t want to deal with.
In retrospect, it is fairly easy (although not always comfortable) to look back upon major decisions and discover that there was plenty of information available early on to justify/confirm/demand the decision. In fact, in almost all cases of importance it is not a lack of cost-benefit justification that slows or stalls big decision making, it is the defenders of the status quo, Fear and Dread.
Here is an example: Think about senior management in a product company (maybe your company) who are faced with overwhelming data supporting the business need to transition from product-centric to services-led. Yet behind these logical facts are lingering feelings of unease that stall moving ahead. Fear is one of those feelings, because the company’s future (and that of the executives) may be at risk if things go wrong. Also, executives may question their ability to lead and their organization’s ability to implement the necessary transition. They probably also feel Dread when anticipating all the hassle (challenging the organizational culture and dealing with individual personalities) involved in bringing about a change of this magnitude. Is it any wonder that more meetings are scheduled and another study is commissioned (good for consultants!)? Often, the logical, required action is delayed for months (or sometimes years). Sadly, what could have been a bold move preempting the competition becomes a desperate reaction to catch up with the field.
A little Fear and Dread are a part of all decisions, but they really become a problem when dealing with those big, complex, gooey issues that have potential for major impact, either good or bad. You may be facing this type of situation right now; so might your prospects as they mull over your professional services proposals.
Here are three things to do to accelerate important decision making:
- Realize that Fear and Dread will be a part of any major decision, and consider their impact when building your proposals and communications. Be prepared to speak about that which is not often spoken.
- Face Fear through risk mitigation. Analyze all the potential bad outcomes of the decision and develop actions to eliminate them. Involve key players in the discussion to talk about options to lessen risks. Just stating the issues up front and demonstrating action will greatly lower the underlying fear level.
- Lessen the hassle factor. Think through all the potential personal negative impacts on the people making the decision. Plan out steps to lessen their hassles and communicate what will be done to make things easier and less personally burdensome. Give examples where these steps have worked.
Tough decisions are, well, tough! Taking too much time to make them just postpones and prolongs the pain. Address Fear and Dread head on to compress the cycle of decision making. In most all cases, fast is better than slow. Have a need for speed.* Only the Paranoid Survive. Andrew Grove. Doubleday. 1996.
As mentioned before in this blog, it is important to stay the course. Things may get worse before they get better; overall sales volume may dip before it goes up. People will complain and look for every possible reason why this selling services thing is a terrible idea. You will need to stick to your guns as people test how serious you are. It is hard to do, but again, firing your number one box seller, Ace Flanagan, when he refuses to try and sell services sends a powerful message.
The other critical fact is that understanding and articulating the invisible is much more challenging than discussing feeds and speeds, features and functions. What you think, what you say, and what you do are different when selling services.
A few people adapt quickly and intuitively, most people, over time, can be adequate at selling intangibles given enough training, tools, and reinforcement, but another group will never quite get it. Not because they are bad people or don’t try, but because they are wired differently. From a sales management perspective, this is a very big deal.
Even if you follow all of this advice exactly as outlined, and I hope you do, about one in three product salespeople will not be successful in selling services. (Hey, it’s not their fault—they were hired to sell boxes.) You should understand this from the beginning and be prepared to help them find new jobs inside or outside the company.
So there you have it—the Five Steps to Selling Services Success. Getting the sales force to effectively sell services is critical to long-term success in seriously selling services. Sadly, the common approaches most executives take to bring about this change just don’t work. To be effective, all aspects of the sales performance system musty be changed, coupled with solid training, backed by strong reinforcement, and supported by a leadership team willing to make some tough calls to make sure that the change sticks.
It takes at least a year to yield meaningful results and often three years to make them effective. Yet, do not despair. Future blog entries will outline the steps to kick-start selling services by getting everyone who touches the customer involved in the selling services process.
Very strong training, as outlined in Step Three in the Five Steps to Selling Services Success, is a vital catalyst, and is a mandatory start for changing selling behavior. Remember, though, for almost all of your sellers, this is a very big change, and training won't do it alone. Behavior change takes time and support, so be prepared to invest some time and money into it. Instead of thinking a single two- or three-day training event, craft a learning system with ongoing reinforcement over at least a year.
For example, back up the core sales training with a reinforcement workshop within 90 days to let people share successes and practice new skills in a safe environment. Make sure that the date is announced during the core training, and that expectations for the reinforcement workshop are laid out for all participants. Just letting them know that they are to report on the usage of what they will be learning is a powerful motivator. An even more powerful incentive to get them to do what you ask of them is that they don’t want to look stupid to their peers. This will greatly improve the odds ofthem paying attention and taking the training seriously. If you can’t do a face-to-face reinforcement workshop, at least have a reinforcement video teleconference with the same objectives. Though obviously not as powerful as a face-to-face event, a couple hours of a well-facilitated session will still send a strong signal and advance the selling services cause. If you don’t have video capabilities, then an old-fashioned Webinar can do the trick.
Also, make an electronic classroom available to allow for “ask the expert” dialogue and the further sharing of war stories. Participants may not want to “look dumb” to their management, but if trust was developed with the facilitator during the initial training, sellers will be more open to shoot straight and thus get the help they need to improve.
Consider investing money in providing in-field coaching. You are asking salespeople to perform much differently than they have in the past, and providing one-on-one modeling with real customers and coaching afterward are powerful motivators to personal change. In organizations where sales managers are responsible for hands-on coaching of their people and spend most of their time working with their sales reps, it makes sense to extend their skill set to coaching their people on selling services.
Note, however, that there are a couple of challenges to this approach. First, product sales managers within your company may not be much good at selling services either! Unless they have a different background than their sellers, they probably don’t have the right knowledge, skills, and mindsets to coach the selling of services. Before sending them out to coach sellers on how to sell services, they will need to acquire not only the core training provided to the sales force, but additional training in how to coach. Again, this is another investment, but one that will pay off in the long run.
A second consideration is that in some companies “sales management” spends very little time actively managing salespeople. In these companies, sales managers are often the company’s best sellers and have revenue targets of their own. These individuals are key to the company making its numbers. In these situations it is unrealistic to expect that they will be able to provide the reinforcement requirements outlined above. Not that they are lazy or evil, these folks have big bogies to make if they are to be successful, and that trumps people development every time. For example, I have a long-term client that has built his organization’s success by having a very entrepreneurial approach to selling. The sales managers are the top sellers, and it is in the best interest of the company that they spend a minimum of 90% of their time in front of their customers. They contract me to do in-field coaching of their new hires to help accelerate their learning curve and speed their success. If your company follows this model then you should also look for outside expertise to do the one-on-one, in the trenches, customer-facing sales coaching needed to accelerate selling services performance.
GIST: Behavioral change is difficult, and no matter how good the training is, you won’t get the results you want without strong reinforcement.
For those of you who have attended my training related to building trust and selling services, you'll recall that one of the "six trust builders" is likeability. I espouse that things being mainly equal, the person you select to work with is the one you like better. Hence, anything that you can do to improve this trait is important to creating and strengthening relationships. Finding common ground, showing respect, and being positive are examples of actions one can take to improve being likable.
An article in the Washington Post demonstrates this fact in politics as well as it highlights the defeat of D.C. mayor, Adian Fenty.Here is an example
of a person that most people approved of what he did but disliked him enough to kick him out (you may need to scroll up to the top to see the article).
The learning point? Likeability is important in every situation where trust is a factor, so be more likable and you'll be more successful.
When services inside of product companies were seen as tactical cost centers, the mandate was clear: make the product work, keep the customer happy, and manage costs. Smart services executives did their job and kept their heads down.
However, as services have transitioned to strategic profit centers and contribution expectations have increased, the services business is under much greater scrutiny. Hence, services leadership must re-think their priorities and figure out how to shift emphasis from enabling products to enhancing the business of their customers.Stuff Rolls Downhill
My experience is that much of services activities center around problems that never should have occurred. Poor product design drives services issues that never go away, sucking up valuable resources for the life of the product. Opportunities to move the services business ahead are mired in the day-to-day tactical world of dealing with problems that should and could have been avoided.
A large proportion of these problems can be eliminated by proper thinking and planning early in the product development cycle. Experience shows that proactive, aggressive input by seasoned services professionals from the get-go is the key.
How well are you doing in impacting product design early?
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on designing products for serviceability.
As in any business, if you don’t get the strategy right, it is darn near impossible to get the marketing right, the selling right, or anything else right—stuff rolls downhill.
My research in the technology industry confirms this criticality and expands it to the realities of being embedded inside a product company. A key differentiator that separates top-performing services organizations within product companies from everybody else is their ability to better align their strategy with the mission and focus of the parent organization. Of course this makes perfect sense, but doing so is a constant challenge.
The repercussions of non-alignment can be quite severe, as there is nothing worse than doing things really well that shouldn’t be done in the first place. For example, maximizing utilization rates can be an important target of a mature, free-standing professional services organization (PSO), but if the appropriate strategy of a PSO is primarily that of supporting the parent company by helping to sell products, the goals may be in conflict to the overall detriment of the company. As the quality folks say, “optimizing one group [the PSO in this case] while sub-optimizing the organization.”
Strategic alignment means determining which of three possible strategic roles of services best supports the overall business mission. Take a look at it from your perspective. Which phrase best describes your company today?
1. Product-enablement. The purpose of the services organization is to make sure that the product works as intended.
2. Product-enhancement. Along with product enablement, the services organization is expanded to contribute to profitable revenue by providing additional value-adding services that impact customer functionality, process effectiveness, and efficiency.
3. Services-led. The company pushes services and pulls products.
Number one, product enablement, is pretty straightforward. The role of services is to support the product, help get the business in pre-sales, help keep the business through successful installation (or implementation or commissioning or start up), and troubleshoot, where needed. Products have been, are, and will be the dominant focus. Enough said.
Number three, services-led, is also easy to understand, as the organization pushes the benefits of services and services-led solutions first, and then pulls along their products. Here we emphasize development of new and unique services offerings, encourage the sales folks (and everyone) to sell services, and manage utilization.
Number two, product enhancement, is the tricky one, being betwixt and between, neither fish nor fowl. In this strategy, senior management wants to have its cake and eat it too. This is a philosophy I admire! However, this is not easy to do. Let me give you an example of the pressure this strategy puts on the services organization. This is a summary of what I often hear from services vice presidents far too often that really exemplifies this challenge:
On Monday I had my review with the CEO, and she assured me that my mission was to support the company by profitably growing services revenue while keeping our customers happy. This was just what I wanted to hear! On Tuesday the vice president of sales stopped by, really concerned about services pricing and the need to ‘value-price’ (code word ‘deep discount’) services to help land strategic business. I laid out my best defense—my mandate to drive business, the need for the sales force to really sell value—but in the end I lost the discussion as I knew I would. Sales trumps services every time. My profit margins just took a hit. Bummer.
Then on Wednesday morning I was called into a crisis meeting and ordered by the CEO (the same person I talked with Monday) to board a Boeing to Boston with my best technical experts to fix the problems at Galactic Enterprises and not to come back until the client was satisfied. Never mind that my people were committed to other projects, and of course, it wasn’t billable; it was for the ‘good of the company.’ Forget about what was said, this is a product company first. I just have to live with it and try and make my numbers any way I can.
Running a product-enablement business requires constant vigilance toward efficiency. Hence, the entire services organization is focused on keeping things lean and low cost. Implementing a product-enhancement strategy requires a focus on effectiveness—balancing the requirements of profitable growth with the necessity of helping to sell products on one hand, and keeping customers satisfied on the other hand. Constant negotiations with sales and other executives are required to deliver on the duality of expectations. Running services in a services-led organization requires emphasis on innovation, as the services component is recognized as the greatest potential value contributor. Emphasis is on the creation of unique services that differentiate the organization from the competition. Marketing and selling push services and pull along the products.
Obviously, each philosophy requires different capabilities and mindsets to optimize performance. So being absolutely, positively sure of the strategic role of your services organization is vital to running it appropriately.
My services research confirms the critical importance of understanding and addressing the product company culture. I asked this question, which produced the following data:
What was (or is) the single most significant challenge your organization faced (or is facing) in building and selling services?
58% Culture Change
8% Acquiring Capabilities
5% Senior Management Commitment
4% Obtaining Funding
4% Intra-Service Conflict
2% Project Management
As you see, culture change dwarfs all the other obstacles that must be dealt with for a product company to be successful in building and selling services.
Seriously selling services requires a serious change in thinking about the business. Services now must be viewed as an equal offering of the organization, a true value-adder, the potential differentiator in the marketplace, and an important contributor to profitable revenue. Executives now must view products as customers have for a long time—as commodities that take a secondary role in a total solutions package. Services management and services employees must now vie for the respect that they may not have held before. This is not an easy transition to make, as it flies directly in the face of the tried and true.
Furthermore, certain departments are more threatened than others, as different internal groups, possibly product marketing or engineering, for example, feel that making services more important makes them less important. Transitioning to a more services-friendly, services-are-good-for-our-business mindset confronts internal tradition, established ways of thinking, and embedded power that will work together to try and squelch the selling of services.
Often it is true that the very things that made you successful yesterday are the same things that hinder your success today. Bringing about this services business mind shift is a leadership challenge of the highest order.
GIST: Set the compass heading to north, then stay the course, constantly bringing back the needle in the face of high seas, stiff winds, and changing currents.
There are ten common obstacles that occur time and again when organizations and the people who compose them attempt to do things differently are outlined below...
1. Not tied to strategy.
2. Seen as a fad or quick fix.
3. Short-term perspective.
4. Political realities undermine change.
5. Grandiose expectations versus simple successes.
6. Inflexible change designs.
7. Lack of leadership regarding change.
8. Lack of measurable results.
9. Fear of the unknown.
10. Inability to mobilize commitment to sustain change.
Source: Ulrich, David. 1996. Human Resource Champions. Harvard Business School Press.
Do you recognize any of them? I don’t believe further elaboration is required. Needless to say, all must be recognized, and steps need to be put in place to deal with each of them.
Ponder Point: If it were easy, everybody would be doing it.
Let’s face it, for most product companies, getting serious about aggressively building, marketing, and selling services is a big deal—a major change. The troubling truth of the matter is that about three out of four major change efforts fail to achieve and sustain the desired objectives (Alexander, 2004). My own experience in advising organizations confirms this, and your personal experiences probably do as well. Think back over the last few years during times when you experienced the launching of initiatives (e.g., implementing an ERP or CRM system, adapting Six Sigma, going “Lean”). How many of these efforts have brought about the lasting value intended at the time of announcement?
And anyone who has participated in an organizational change effort knows the tension that develops and the resistance that naturally occurs when the people of the organization are asked to behave in new and different ways. Productivity immediately drops as water-cooler conversations (both face-to-face and electronic) speculating on the impact and political ramifications of the change and the always-present “what’s going to happen to me?” take a priority over the mundane tasks of meeting customer requirements. In addition to the obvious loss of focus and efficiency, other multiple “costs of resistance” take their toll, touching everything from loss of key employees to lowered corporate credibility to stifled innovation.