Building people is not as quick as building machines

Service organisations represent the customer and the customer operations better than most other parts of the company due to their closeness and local presence and are therefore a natural path to a more customer-oriented approach. A Service-oriented organisation includes all parts of a company able to see the customer dimension in everything they do and take decisions and set priorities accordingly. When successfully done, all parties understand how to coordinate and link their respective agendas.

In this context, the Service organisation continues to evolve where traditional roles such as Service engineers, technical experts, project managers, Service managers and similar have over the years been complemented with a horde of new roles such as business development, Service marketing, product development, key account management and communication professionals, mainly focusing on supporting and developing the Service business. Simultaneously companies have restructured their teams and escalated many Service positions to senior management levels, recognizing the positive impact Service can have on the overall success of the company. The opportunities for working with Services and driving a thriving Service business forward has never been greater. It has opened up new playing fields for professionals looking with anticipation and curiosity at how their careers will evolve and what they can do to influence and succeed in their career choices. Assuming this is true, when you are trying to fill a vacancy of a marketing, commercial, financial professional or a senior director position in your Service team, are you likely to get crowds of applicants, propped with documented experience and trained in the right areas or will you struggle to find suitable candidates? Do the candidates really see the perspective, a successful Service career can offer, is the formal recognition and the benefit package similar to that of traditional product lines and will you find sufficient development opportunities to grow in the role? If awarded with suitable talent and true passion for Service, it is easy to answer yes but if the organisational environment, company culture, strategic direction etc. cast any doubts on your long-term chances of success in a Service career, you might hold back and wait for that perfect job vacancy elsewhere.

A Service-oriented company will ensure that staff working with Services business has the same weight and the same value as teams working with other businesses. Having a solid background in working with Services, should open up new career opportunities, very much thanks to its value-based business dynamics, consequently adding weight to your CV. This will assist many potential colleagues and candidates to take the step and join the Service team.

Service is very much about people and skills. It is also about relationships and trust and it’s about thorough customer understanding. To build a sustainable foundation of competences both in the front-end and the back-end, a detailed development plan is required, covering both individuals and teams. The plan would ideally reflect the level of existing vs. desired capacity and will eventually capture both the quantity and the quality of the team. In executing this plan, you could be looking at a minimum competence development time of 12-18 months for operational roles and 18-24 months for broader managerial roles. Whether promoting internal staff or recruiting externally, a planning horizon of more than 12 months is needed. With this in mind, whilst trying to have the plan approved, attention must be paid to the fact that the cost of hiring and training is immediate and cannot typically be offset by sales until this expertise is ready and chargeable, realistically 6-12 months later. This could in turn adversely affect your profit & loss of the Services business and potentially prevent you from being able to implement your people plan. Depending on how far you have come in building your team and getting it ready to manage business growth and customer expectations, a careful consideration of allowing early “over-recruitment” is needed.

A Service-oriented company can show its commitment to Service and accept short-term additional costs to capture long-term gain. In other words, treating the people plan as an investment rather than an expense is important to consider, even if the accounting principles would suggest otherwise. Once the plan is approved, it clearly anchors the commitment of the company to building a motivated and capable Service team.

Conversely, the Service organisation is often one of the most populous departments of the company and every time justifications of headcounts are on the table; the spotlight will shine brightly on the Service organisation. When addressing headcount, staff cost is an inevitable ingredient and seen in the context of business status and aspiration, a discussion around adjustment (i.e. reduction) of headcount is hard to avoid. To debate headcount of the Service team, especially relative to other teams of the company, it is essential to know that staff costs are often categorised as allocated and non-allocated, indicating the different levels of financial recovery of a person. In other words, the recognition that a Service “head” may very often lead to an invoicing opportunity, must be as clearly understood and appreciated as the cost of hiring or keeping a “head”. If companies were fully aware of this fact, a healthier discussion could be held around productivity improvement. There are always better and smarter ways of doing things, including finding opportunities to do more with less. But it is essential that the headcount debate is held in the context of how successful the Service business has been and is expected to grow and that the financial surplus generated through the Service business is, at least partly, reinvested in Service. The risk is otherwise that the growth of Service is offset or negated by decline or stagnation in other product businesses and all are hit with blanket percentage headcount reduction requirements. This may be effective in reducing costs in the short-term but long term would have an adverse effect on Service and the company in general.

A Service-oriented company will ensure that relevant roles to deliver on Service business objectives are carefully analysed as well as the need of reaching critical mass in Service is key and will recognize that “building people” is not as quick as building machines. It will set an ambition to find ways to smooth business cyclicality, depths and troughs and take a longer perspective to organisational development.

If you would like to discuss any of the above or have questions or comments on the topics, please do not hesitate to make contact with us at: contact@serviceleadersmatters.com

Dag Grönevik

Founder and Partner Service Leaders Matters

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