A free monthly newsletter on leadership, strategy and innovation.

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Welcome

Welcome to the January edition of Strategic Innovation Newsletter, delivered the first Tuesday of each month.

Welcome to 2009.

After a very relaxing break I am ready to get into the new year with all the energy I can muster.  Of particular note will be the monthly breakfasts briefing I am holding, the next is Jan 20, to register please see below.

In this months article I am looking at how to transform your business into a service business, and if you are already in one what you need to look at to improve.

The Shift From Customer to Client.

Service businesses make up approximately 65% of the Australian economy, up to 75% of the European and 85% of the US economies.

Shifting your mindset from moving product to collaboratively creating value with the customer through providing a service can yield far greater results.

Co-creation of Value
The role of a service businesses is to help ‘unlock’ value for the customer. Service work is collaborative, it is not something you ‘do’ to a customer, rather it is about the ‘co-creation of value’ between the producer and customer. Where the customer is in the boundary of organisation.

To unlock the value in service businesses there essentially two variables which need to be considered. Technical Service Quality and Customer Service Quality.

Technical Service Quality
That is doing what you do - well. The first is the technical service quality. That is being able to consistently and reliably deliver your service time after time. This is fundamental to service.

The banking sector in the last 5 years has taken on ‘six sigma’ initiatives, which has significantly improved service quality. Inspired by GE, Australian Banks have implemented this approach to service to reduce the time taken to approve their mortgage broker applications. Rapid response being a key to providing value to the customer.

This demonstrates the power of ‘process design’ as a core science of service businesses. Creating predictable repeatable systems, which are managed up and down the value chain.

Customer service
The second aspect of innovation in the service economy is the actual delivery of the service. The cognitive sciences of human behaviour must be examined. As we don’t simply hand over a product and walk away, instead we deliver a knowledge and help them utilise it. How do we demonstrate and measure value?

Ultimately service businesses are all about relationships. There is no transfer of product. You must get your customers very involved. Listening more and tailoring solutions to their specific needs to achieve the goals they have and unlocking value for them.

Where can you shift to selling what you know? The message is customise and co-create with your customer, thereby making them a client.

Techniques of the month: Identifying Your Core Capabilities

Understanding how you succeed is just as important as understanding your challenges.

1. Brainstorm a list of all your possible potential skills To kick start your thinking review recent successes, customer research, and benchmark studies.
2. From this list Identify which ones are truly distinctive (expect 5 to 25).
3. Further cut down this list by grouping into specific core capabilities (expect 3 to 6)

This exercise is used to determine, why and how you succeed. To asses you market position, and which capabilities to pursue for growth. It is not a wish list, but a pragmatic and critical assessment of your capabilities and ares of distinction.

Want to know more read The Core Competence of the Corporation by Prahalad and Gamel, Harvard Business Review 1990.

Announcements: Business Breakfast - How To Develop a Winning Strategy and take Advantage of Economic times!

You’ve got products to make, services to deliver and customers to please.

The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.

You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.

This seminar will show you tips, and tools so you can develop an effective strategy for you organisation.
 
Learn tools to help you learn:

• Where you actually make you money
• How good is your competitive position
• What do your customers think
• How to increase profits quickly

 
Signs you need to attend:

• Profitability is slipping
• A Strategy hasn’t been updated in more than five years
• Growth is lack lustre
• Shifts in the market place and uncertain as to how they will impact you
• New competitors and products are entering your market place

 
Join Daniel Lock for a business breakfast that will inspire you to re-engineer your business from the ground up and deliver you these results and more!

Date: Tuesday 20 January 2009
Time: 7:15am (7:30am start) to 9:00am
Where: Cut Bistro, 333 King William Street, Adelaide
Cost: $39 per person
 
Don't miss out on this event – book now online.
 

Phone: +61 8 7127 4047
Mobile: +61 413 033 703
E-mail: daniel.lock@daniellock.com.au

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