Leveraging Services to Grow Solutions Revenues at GE Healthcare
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Moving from a product to a solutions focus is a daunting challenge for most B2B companies. When companies realize that a product-only strategy is, in the long term, a great market-exit strategy, the challenge they then face is how to make the shift to a true customer solutions orientation. Some of our Solutions Marketing colleagues have semi-seriously suggested it would be easier to make a U-turn with a supertanker inside the Panama Canal than change their organizations from a product focus to a customer-centric, solutions culture.
Knowing Where and How to Begin the Journey: As in most journeys, getting off on the right foot is critical. Missteps will quickly erode confidence that the shift will be effective and derail your overall transformation plan. A number of years ago, for example, we saw Hewlett-Packard decide to change their entire organization to be more solutions-capable. To do so, they developed two groups – a customer-facing organization and a back-office, solutions creation “factory”. By trying to swallow the entire elephant at once, the company almost came to a screeching halt – so they pulled the plug and went back to their traditional organization structure. The challenges of implementing the proper roadmap to becoming a solutions company aren’t restricted to product-based companies. We also witnessed a large systems integrator that had tremendous difficulty working across their Business Units to develop and take customer solutions to market. After nearly a year of planning and design work that ended in a recommendation to make massive changes across the entire organization, a new executive team deemed the transition too risky and “deep-sixed” the entire initiative.GE Healthcare: Starting with the Service Portfolio:
GE Healthcare faced the same business problems many large, product-based B2B companies have encountered in recent years – an increase in global competition from companies with robust product and services portfolios but a lower cost structure, a reduction in margins, and global customers who wanted assurances that their large product purchases would deliver the business value they expected. While the GE brand still opened doors, both closing the sale and maintaining long term relationships were becoming more difficult.
The response? Move to a more solutions-based business model. As Bret Barczak, Chief Marketing Officer for Global Services discovered, making the transition was a daunting task. Ultimately, he adopted the following four-point strategy: