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Why Companies (don´t) change

Agilty is the new management buzzword. It says that organizations should react quickly and flexibly to a changing environment or – ideally – that they should drive the change themselves before others do so. If they react too late, their very existence will sooner or later be at stake.

Against that background, it seems reasonable to assume that all business leaders drive the transformation of their business with high pressure.

However, reality shows that this is not the case. Why? Because every company has its own history and specific development path. The agility principle is relevant for all. But how it is implemented depends on the individual situation: What is right for one company, may be completely wrong for others.

A look at the machinery industry shows, e.g., that companies are in quite different development stages when it comes to marketing services. Some offer, e.g., innovative web-based services like ´predictive maintenance´ or they manage customer processes based on operator models. Others, by contrast, are less advanced and define service as traditional repair and spare parts supply. These companies are often in a comfortable financial si- tuation and offer products with strong competitive advantage for which they can charge high price premiums. It is quite understandable that the pressure for change is not very high here.

However, the best point of time to take the service business to the next level is when the situation is good.

Here are four pragmatic steps that companies can take:

• Make a list of all your services currently offered – paid or unpaid.
• Research (changing) customer needs. Expensive customer surveys are not required here - expert interviews with your sales force can be very revealing.
• Systematically analyze competitors´ service offerings. A look at competitor home pages often produces surprising insights.
• Compare your service offering with those of the most innovative companies in your industry. With organizations listed on the stock exchange, besides their websites, investor presentations are an excellent source of information.

Based on the above analyses, business leaders can take a first decision as to how they want to develop their service business, what actions should be taken and what resources are required.

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