This paper summarizes interviews with 20 operational managers from industrial companies that have implemented servitization strategies. The interviews identified 10 critical lessons for overcoming challenges with servitization change management. Key lessons included reframing how the company communicates about services, integrating installed equipment into customer relationship management, and creating cross-functional teams focused on services. The interviews confirmed barriers to servitization identified in prior research, such as organizational culture and customer relationships. Insights from the interviews will inform the development of case studies and guides to help other companies address servitization challenges.

1. Overcoming the challenges of change
management associated with servitization:
lessons from 20 practical cases
The Spring Servitization Conference 2019
Delivering Services Growth in the Digital Era
Linköping University, 13 - 15 May 2019
Shaun West, Paolo Gaiardelli and Anet Mathews

2. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Introduction
The problem and the purpose of this paper
To describe best practice from operational managers on how they
overcame the change management process
To provide empirical examples from in depth interviews of how
business leaders have overcome the barriers to servitization
Purpose of this paper
How do operational leaders overcome the challenges associated
with servitization change management?
Problem
This builds upon two earlier
studies by West and
Gaiardelli (2017) and West
et al. (2018). This paper
provides a full perspective
on how servitization change
management can be
successfully achieved.

3. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Introduction and background
What lessons could be reused to support
These categories were used to support the survey developmentServitization is a complex change management process that transforms an organization
There are gaps in the research…
…it is important that we explore the
operational challenges of servitization
transformation
Baines, T., A. Z. Bigdeli, O. F. Bustinza, V. G. Shi, J.
Baldwin, and K. Ridgway. 2017. Servitization:
revisiting the state-of-the-art and research
priorities. PPC.
Hou, J., and A. Neely. 2013. Barriers of servitization: results of a systematic literature review. SSC
West, S., P. Gaiardelli, A. Bigdeli, and
T. Baines. 2018. Exploring
operational challenges for
servitization: an European survey.
SSC.
West, S., and P. Gaiardelli, P. 2017. Driving The
Servitization Transformation Through Change
Management: Lessons Learnt From Ten
Industrial Cases. Frontiers in Service.
West, S. and P. Gaiardelli. 2016. Driving the
servitization transformation through
change management: lessons learnt from
industrial cases. SSC.
Gebauer et al., 2005
Oliva et al., 2012
Mathieu, 2001
Zott et al., 2011Gebauer, 2007
Gaiardelli et al., 2015Baines & Shi, 2015
Neely et al., 2011Vargo & Lusch, 2008
Alghisi & Saccani, 2015
What changed?
Why change was needed?
How change occurred?
The literature identifies a number of different strategic and market barriers
No clearly identified actions nor clarity for managers on the implications
Transition to services depends upon context and on business heterogeneity

4. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Methodology
Results from prior studies were integrated into the methodology
Input
Survey data
from SSC paper
West, Gaiardelli,
Bigdeli & Baines.
(2018)
Createinterviews
Create list
interviewees
Create interview
scrips
Holdinterviews
Target 20
interviews
3 test interviews
Target 1
interview per
‘challenge’
Analyzeinterviews
Compare finds
with the survey
results
Review the
findings based
on Hou and
Neely (2013)
Discussion
Discuss finding
and compare
with survey
Identify
conclusion and
recommenda-
tions

5. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
The firms interviewed and their ranking of the servitization challenges
Over 20 hours of interviews provided detailed examples in six of the seven categories
Ranking
Customer
Organizationalstructure
andculture
Knowledgeand
information
Productsandactivities
(services)
Competitors,suppliers
andpartners
Economicandfinance
Societyandenvironment
2018 survey 1 2 3 4 5 6 7
2019 interviews 2 1 5 3= 6 3= 7
Interviewees chosen based on results of
2018 survey
- 20 interviews with senior managers
- All sizes represented
- Range of industrial segments
- Local to global players
- 16 product based firms
- 18 firms had a service P&L
The two most important barriers do not
change, albeit the order has switched
At day-by-day level a major interest in
managing organizational issues and
activities emerge as essential
No real additional input on “Society
and environment” from the interviews

6. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
10 critical lessons from the interviews on change management for servitization
The insights from the interviews confirmed prior survey results
“Service is not a painful necessity, but a
potential for growth” – VP Service, large global
firm
“Re-define “after-sales” because the
relationship with the customers should never
end” – GM Regional SME
Changed in communications
from from product to customer
centricity
Replaced the term of ‘after-sales’
with ‘customer support services’
Integrated the the installed base
into the CRM
Provided the customers with
active service offers using the
installed base to trigger sales
Insight from the interview What How

7. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
10 critical lessons from the interviews on change management for servitization
The insights from the interviews confirmed prior survey results
“Turn internal competition into co-operation ”
- Global Vice President, large global firm
“IT Department was the barrier, but we had
the top management on our side” – Director
Market Insights, large global firm
Using customer journey mapping
the sales team leant to
modularize offers
Created a novel modular
subscription model to capture
value along whole the lifecycle
Introduce methodologies for
value analysis and definition of
pricing polices
Stopped giving away services to
justify the premium price of the
product
Insight from the interview What How

8. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
10 critical lessons from the interviews on change management for servitization
The insights from the interviews confirmed prior survey results
“The company was acquired and there was a
clash of cultures and expectations” – COO,
large global firm
Described and shared among the
organization [service] success
stories based on use cases
Improved communications as
both business had different
business rhythms
Insight from the interview What How
“We have the “know-how”, customers don’t
have the “know-why” – MD, regional SME
Learnt to follow the customers’
buying process
[customer journey mapping]
Developed a sales process to
deliver the ‘know-why'

9. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
10 critical lessons from the interviews on change management for servitization
The insights from the interviews confirmed prior survey results
“The customer relationship changed with the
joint approach of ‘we are in this together’... ”
– Director Sales, large global firm
Co-created service offers to gain
the customers’ trust
“A team of dedicated people is required for
servitization” – Sales Manager, large global
firm
Moved from a
technology/project focus to a
customer centric view
Created a core team with a
service mindset to help balance
the project/product approach
Developed working groups with
customers to create new services
[open innovation]
Insight from the interview What How

10. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Results
10 critical lessons from the interviews on change management for servitization
The insights from the interviews confirmed prior survey results
Insight from the interview What How
“They used to call us pirates for daring to
touch another OEM’s equipment” – Service
Senior Consultant, large global firm
Described and shared among the
organization the technology
innovation in use cases
Provided evidence that they were
discipled when innovating
“Communication determines how well
servitization is Implemented within the
company” – Head of services, large global firm
Service business included in the
agenda of every team discussion,
and all staff meetings
Develop a service-centric
communication stimulates the
culture of service

11. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Discussion
Assessment of the servitization change from the interviews
The industrial community is searching for both peer support and practical expert support
What was the situation when the change occurred?
Empirical cases show that the journey to new service
transition strategies follows a continuous evolutionary
process in rational stages
How did the change occur?
The transition to services is started because of a strategic
impulse from top management
What changed?
The culture changed in the most successful firms as a result
of the servitization change management
When should the change take place?
There was limited evidence provided on “when”
How should the change occur?
The strategy for the change needs to be described by the
senior managers and supported by changes in processes to
enable the barriers to servitization to be overcome
What should be changed?
Identification of the barriers to servitization (Hou & Neely,
2013) would provide a systemic approach to support the
identification of what should be changed

12. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Discussion
Five practical implications leant from the interviews
The industrial community is searching for both peer support and practical expert support
The interviews confirmed that the servitization translocation process is only a
complicated cultural change process
The change management questions of Baine et al. (2016) supported the
analysis and understanding of the transformation journey
The seven challenges defined by Hou and Neely (2013) provided depth and
allowed further analysis of the transformation journey
This study provides an empirical basis for the development of a lessons learnt
case book that could support the development of example cases
The use of practical examples of servitization lessons learnt (both positive and
negative) would support firms facing individual challenges

13. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Conclusions and recommendations
Servitization transformation through change management is an important theme
20 industrial companies that have integrated effective service
strategies into their operations over recent period
Trustful relationships, as well as the loyalty and motivation of
human resources, sustain performance in the long run
Lessons (positive and negative) from the paper provide practical
examples from service leaders
There is no magic bullet to
overcome the change
barriers either on a strategic
or operational level.
More information on the context would support deeper
understanding from both external and internal perspectives

14. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Playbook: real people
managing projects
From developing the idea
to measuring success.
Business and design working together
to find a better way to lead projects.
Inspired by‘Design Thinking’and
‘Agile Project Management’to create a
Visual Project Management framework.
Written by:
Renate Åkerhielm
Hannes Felber
Shaun West
Cookbook: Hints and tips for
designing and delivering
industrial services
Shaun West
Peter Alexander
Paolo Gaiardelli
Nicola Saccani
This book has been
written using real
operational examples of
industrial services in
business to business
environments. It uses
practical examples to
help you make the move
to services.
The servitization
lessons from the three
papers will be included
in a change
management
cookbook.

15. West, Gaiardelli and Mathews⎹ The Spring Servitization Conference ⎹ May 2019
Thanks for your time!
Questions over coffee… Slides on SlideShare.net
Anet Mathews
MSc Student
Lucerne University of
Applied Sciences and Arts
Paolo Gaiardelli
Associate professor
University of Bergamo
Shaun West
Lecturer
Lucerne University of
Applied Sciences and Arts