Tool Box
Issue No. 46 - April/May 2009
Shift focus from customer to client
by Daniel Lock
Service businesses make up about 65% of the Australian economy, up to 75% of the European and 85% of the US economies. Shifting your mindset from shifting product to collaboratively creating value with the customer by providing a service can yield far greater results for your business.
In the 1960s Peter Drucker coined the term 'knowledge worker’, which is essentially what a service business is: teaching and transfer of knowledge or a skill, where a physical item is not transacted.
The problem is, most businesses don’t know they are in the service business.
For example, construction businesses often don’t identify themselves this way. Often, employees are not trained how to work in a knowledge and service environment. Overall there is precious little science about managing a service business when compared to manufacturing businesses.
The gap in knowledge is so profound that IBM has initiated a Service Science academic research program to look at the challenges of service businesses, with the goal of improving productivity, quality, learning, and innovation across the service sector.
This change in thinking is result of IBM moving from primarily being a manufacturer of computers to making the most of its revenue from IT service. It is amazing to think that service businesses are 70% of GDP but most managers don’t know the key drivers.
For example scalability in service business presents an enormous challenge, how do CEOs design strategies to tackle service design, development, marketing and delivery systems to enable growth?
Service-based business covers many disciplines, creating complexity and challenge. The disciplines that need to be included are computer science, operations research, engineering, management sciences, business strategy, social and cognitive sciences, and legal sciences. All need to be understood and integrated in an effective service business.
Co-creation of Value
The role of a s...
