Successfully leading a professional services organization in a product-centric company is not for the faint of heart. Learn what works. In last issue’s discussion of Step One, Analyze, I stressed the criticality of getting relevant, in-depth, current information about key clients, the marketplace, and your professional services organization. In this issue, I will talk about what to do with that information--to rethink, reformulate, and revise your professional services business and your personal leadership plans. First, we’ll discuss how to use the information to test the probability of accomplishing your business goals. Then, we’ll explore how to create a logical yet emotionally appealing case for change that people will not only accept but get excited about. I’ll also introduce two powerful tools to help you along your path. And finally, I’ll give you a real-life example on how to get key players on board. This is how a Stranger earns his or her keep!

5 Steps to Services Leadership (Step One)
Survival Skills for Leading Professional Services in a Product Company
5 Steps to Services Leadership in a Product-Centric Company

Welcome to the first installment of our 5-part Stranger in a Strange Land Series.

Successfully leading a professional services organization in a product-centric company is not for the faint of heart. Learn what works.

Selling professional services effectively and efficiently is no easy task. In fact, personal experience consulting with the leaders of PSOs shows it is always one of their top issues.

Here are a few tried and true tactics that can help move box pushers along the path toward being true professional services sellers.

The Core Competency Conundrum
By James A. Alexander, EdD.

Don't be surprised or angered or embarrassed if customers don't see your PSO as possessing some unique capability of high value today.

For years strategists have urged executives to 'keep to your core,' 'stick to your knitting,' define what you can do really well and try to outsource everything else. This is solid advice that has helped many an organization redirect its resources and fine-tune its focus to extract both efficiency and effectiveness internally. This is all well and good, but it is not enough. The downside is that often your core competency is the same as your top competitors' core competency. So unless your core competency is seen as markedly better externally (in your customers' eyes, not yours) you have no marketplace differentiation, zip advantage, nada uniqueness. In other words, your organization is a commodity.

Our new series kicks off this quarter with featured articles by Noel Adams of PhaseForward. The first of the series highlights Hagen Hohn who recently found himself, as many of us have, suddenly plunged into the world of product management. About a month ago he was given a new title— Services Product Manager. Never having been in product management, let alone services product management, Hagen is feeling a little overwhelmed. But, after talking to him, it's clear that he's also come up with a sound approach for overcoming his challenges. He shared some thoughts and ideas that could be beneficial to many of you in similar situations.

Read the rest of the article.

For services organizations that are a part of a product-centered organization with a strong brand (e.g., Xerox, Kodak, Dell), an interesting dilemma occurs. On the one hand, assuming the product brand is perceived as positive, it lends instant awareness and credibility to the services organization. In most situations (and without the need for proof), the services organization will be seen as possessing strong capabilities related to product support services, and possibly given the title of best-in-class without further thought. ...

Leading a PSO in a Product Company

Commandment Nine: Commercialize the Sales Promise

Gather, showcase, review and audit

by Mark Hordes, Principal, Alexander Consulting, LLP

The purpose of a business is to create and maintain customers (Drucker, 1973). No matter what type of business or what type of industry, that basic purpose stays the same. It is the role of service marketing to facilitate that purpose (Levitt, 1981).

It’s fair to say that the services marketplace does a less than stellar job in marketing and helping the sales force commercialize market messages and service offerings. The problem gets even more complicated when the sales force is often left on their own to explain services offerings without support marketing collaterals or integrated service marketing packages. Delivery people are often affected once an engagement begins. What they discover to their dismay is that what they thought they were supposed to deliver is not exactly what was sold. When everyone is surprised, no one wins in the service experience. To avoid all of these problems, learning to commercialize the sales promise is the answer.

The Stranger in a Strange Land Series: 5 Steps to Services Leadership in a Product-Centric Company
Successfully leading a professional services organization in a product-centric company is not for the faint of heart. Learn what works.
By Jim Alexander

Just the facts, ma'am, just the facts.*

Whether you are in the throes of a startup or your PSO has been around since the days of analog, you gotta have facts to effectively run your business. Ideas, hunches, and past experience can get you by for a time if you are lucky, but current hard data drives decisions, and in the end, finalizes your fate.

Envision for a moment that the traditional approach to providing 'break-fix' solutions support to your client base disappeared overnight. What thoughts, feelings, and actions would begin to emerge? How would your organization react? What options would you explore? Where would the shortfall in revenue come from? And last, what would be required to move your entire customer support organization to a higher level of services where you identify your client's issues and problems and begin to offer a 'Total Solution Services' alternative?

"Pulling" Products with Services: Six Best Practices for S-Business
Using a Services-Driven Strategy to Drive Exceptional Performance
by James A. Alexander, Ed.D.

Smart executives in product companies have known for a long time the revenue and profit contribution of a solid services organization. Not only do strong services complement and add value to the product, they contribute directly to growth and margin targets.

It's 5 p.m., and Lou Dobbs is on CNN telling his listeners once again, 'Beware of the evils of outsourcing-the big, bad wolf is going to get you if you don't watch out!' This is pure baloney. Lou is a sharp guy, but in the case of outsourcing, he is dead wrong.

Anyone who has participated in an organizational change effort knows the tension that develops and the resistance that naturally occurs when the people of the organization are asked to behave in new and different ways. Productivity immediately drops as water cooler conversations (both face-to-face and electronic) speculating on the impact and political ramifications of the change and the always present. What's going to happen to me take a priority over the mundane tasks of meeting customer requirements. In addition to the obvious loss of focus and efficiency, other multiple costs of resistance take their toll, touching everything from loss of key employees to lowered corporate credibility to stifled innovation.

Lessons from the Trenches Part Two: Leading the Transition to Professional Services

Question: How long does it take to re-educate customers to accept professional services?

You must educate your own people first, because everyone must believe in the customer value that you can deliver. Make sure that this conviction is in place among your organization before even thinking about going to your customers.

Lessons from the Trenches Part One: Leading the Transition to Professional Services

Last October at the AFSMI S-Business Education Summit and Expo in Reno, Nevada, Jim Alexander had the opportunity to moderate a panel of services executives who were personally involved in helping their organizations make the transition to professional services. Participants were: Carol Vega, senior vice president of client services for Timberline Software; Rick Welch, vice president of professional services for RSA Security; Dan Wiersma, senior vice president of Sony Professional Services; and Bob Yopko, vice president of global services for Emerson Electric. Here are some critical issues, best practices, and personal challenges from the many gems of wisdom shared. Learn from their years of experience.