How to go beyond the status quo with tech and green
Photo by Vlad Sargu
Professional service providers focus on digital transformation and sustainability to stay future-proof and meet market demands. It makes sense - service providers need to evolve their data and technology and take responsibility for the future of our planet.
Instead of defining a challenging vision that contributes to a meaningful and sustainable future, the focus is on maintaining the status quo and leverage efficiency opportunities. In doing so, service providers miss an opportunity to reinforce the essence of service: making a meaningful difference in your customers' lives and society.
Balancing the agenda
Leading a professional service firm is like playing chess on multiple boards simultaneously while the game’s rules constantly change. The pressure to deliver results, achieve growth, and comply with legislation and compliance in the context of legacy systems, data governance, changing working relationships, DEI, and emerging new business models makes running a service firm challenging. Digital transformation and sustainability are strategic issues on top of these daily challenges.
Approaching this challenge from a meaningful, value-driven perspective provides guiding principles for exploring future direction.
The current state of services
Services have been the economic backbone since the 1st Industrial Revolution. Companies grew with the support of banks, lawyers, insurers, and other specialists. With their high-quality knowledge, skills, and access to relevant networks, professional service providers contributed to the success of their clients.
After World War II, service providers changed fundamentally. From the understanding that many services, such as credit, insurance, and essential legal services, were highly standardized, service providers began to take advantage of the possibilities of automation. It was when large-scale, factory-based service providers emerged, selling services as efficiently produced commodities.
The services-as-commodities paradigm focuses on producing and delivering traditional services as standardized, transactional products. Offering accessible, high-quality knowledge in the form of scalable, low-cost products proved to be a successful business model.
The logic within the services-as-commodities paradigm is internal and transactional. The service's value relates to the effort to deliver the service, not the value-in-use by customers. Many Midcorp service providers operate from this logic.
Change of perspective: serve to make a meaningful difference
We need to understand the challenges and aspirations of customers to live up to the purpose of services, which is to make a meaningful difference to customers, society, and the planet.
Consumers and businesses experience the complexities of contemporary life and are concerned about their future:
The effects of climate change are becoming increasingly apparent;
How we have organized health care is unsustainable;
Governments no longer guarantee social and financial prosperity;
Peace is no longer a given.
Preparing for an uncertain future is difficult, especially in areas where customers lack the knowledge and skills to make good choices. Yet companies and individuals want to achieve higher-order goals. Service providers make a meaningful difference with their expertise, experience, and networks at the intersection of an uncertain future and higher-order goals. Not with the commoditized services they deliver.
Decisions on strategic issues like technology and sustainability should contribute to making a meaningful difference and go beyond maintaining the status quo.
Being comfortable to break the status quo
It may feel difficult and risky to break the status quo and challenge ingrained truths that have defined the service industry and organizations for a long time. However, starting the shift to being meaningful to customers and society requires limited resources and little risk. The knowledge, experience, and networks exist among professionals working with clients. The challenge is to extract this potential from the current organization and create an environment in which this potential can flourish.
At its core, it involves evaluating the current mental legacy. That makes the change profound but with manageable risks and low failure costs.
Designing a comfortable process
With the challenges ahead, service providers can take a considerable step forward by thinking and doing from the meaning they have for customers and society. By harnessing technology and sustainability for the good of customers and society, you open the door to new possibilities and create an alternative to the dominant financial and compliance-driven decision-making.
Digital transformation and sustainability are still relatively unknown areas that require an explorative mindset. Leaders cannot rely on best practices or past experiences. Decisions in these areas are intrinsically uncertain and complex.
A practical approach to moving beyond the status quo begins with redefining the organization's meaning for customers and society. From this follows an evolutionary program that mitigates risk by experimenting, learning from experience, and developing change leadership. With this approach, service providers
Change their perspective of the value they add to the world
Make profound change happen with limited investments and a low risk of failure
Integrate their digital transformation and sustainability with their higher purpose
Explore and learn to progress
We used this method with one of our clients, an insurance company specializing in risk management and insurance for municipalities. Their data strategy focused on improving operational processes such as claims handling and compliance.
After surveying customers, they changed the data strategy based on customer needs and challenges. Clients were eager to learn how to improve based on risk and insurance-related data and wanted to be able to integrate the data into their reporting systems. By collaborating with customers and following our experimental approach, our client was able to reposition itself as a partner for its clients and become more meaningful from the knowledge and experience they already had in-house.
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