From Products to Services

During the last thirty years, a wide range of product companies throughout the Western economies have considered moving into or setting up service businesses. Some have rejected the idea after careful consideration, some have wandered into competitive services without any real idea of what is involved and others have deliberately executed a carefully considered strategic manoeuvre. Included in this debate are some of the most famous business names in the western world: Unisys, Ericsson, Michelin, Nokia and HP. For IBM it was Lou Gerstener’s ‘big bet’; at GE it was one of former CEO Jack Welch’s ‘four major strategies’ and, at General Motors, the financial services arm was its most profitable business for many years. Yet very little has been published on this profound transition. As a result, myths and idiocies abound. Some routinely claim that the ‘evolution from products through services to solutions’ is inevitable. Others think that manufacturing is being outsourced to China and India while American or European teenagers face a career in hamburger stalls. The truth is much more fascinating. To succeed in a service business, most functions of a product company need to change. Operations, management, recruitment, finance, sales, new product development and marketing must all be adjusted. So the move into service therefore involves huge risk caused by disruptive and radical change. What has pushed realistic business people in such widely different industrial sectors to take so large a risk? Does their experience contain lessons or warnings for others? Is the trend likely to continue and affect other parts of the world as their economies develop? Will India, China or other developing economies need to learn how to export service once their manufacturing industries mature? Written by a successful businessman who has been at the heart of these changes in several companies and, with case studies from companies like IBM, Unilever, BT, Michelin, Ericsson and Nokia, this book explores the experience of those who have made the transition; and some who have resisted it. It covers in depth subjects such as: strategic focus, change management, service operations, branding a service business, service sales and service marketing. It is the first major work on this subject. “This book is a ‘must read’ for those considering the plunge into service growth and innovation. Even those companies that have already taken the plunge will gain fresh perspective” Jim Spohrer, Director, IBM Almaden Research Centre, USA “Laurie Young details in very practical ways the reasons and methodologies for change … I would recommend this book to every one of my customers.” Douglas Morse, Managing Principal for the Services Transformation and Innovation Group LLC “I am thrilled with the publication of this much needed book. In my work with businesses around the globe, I find that grappling with the challenge of transforming a company from products to services is a compelling priority for increasing numbers of firms.” Stephen W. Brown, PhD, Carson Chair, Professor and Executive Director, Center for Services Leadership, W. P. Carey School of Business, Arizona State University

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