Competitive advantage is fundamentally determined by how an organisation’s knowledge, in the broadest sense, can be applied for the customer’s benefit. In most cases, in this day and age, this is about providing a combination of products and services. For a certain number of organisations, it means a change of direction, starting with an insight into what customers really want.
That’s the foundation for developing a clear strategy for the future and being able to then implement it within the organisation. The organisation then has to definitively let go of its past, with its systems and processes adapted to the future it wants to have.
On Friday, 24 April, the “Shaping the future” event–part of the 30 Years of Maastricht University School of Business and Economics (SBE) celebration–looked at what an organisation needs for successful transformation, innovation, and co-creation. The interactive session, attended by professionals from the private and public sector, got straight to work on establishing the future of the school with an underlying commitment to maintaining its existing innovative character.
Prof. Hein Schreuder, who served as Executive Vice-President Corporate Strategy & Acquisitions at DSM until 2012, shared with the 130 or so delegates at the event his insights into what is needed for strategic learning, based on the evolutionary transformation of DSM from a coal mining to a life science company. This was the subject of his recent book, From Coal to Biotech, The Transformation of DSM with Business School Support.
Gaby Odekerken-Schröder, professor of Customer Centric Service Science and Scientific Director of the Service Science Factory at SBE, then took delegates through what an organisation needs to do today to make the change to providing more services. Her insights were based on the experiences of the Service Science Factory since its establishment five years ago.
In 1984 Prof. Hein Schreuder was one of the three pioneers of SBE. In 1991, he moved to DSM as Executive Vice-President Corporate Strategy & Acquisitions.
The company, founded in 1902 as a coal mining company, was then on the verge of its second transformation. Its first change had happened between 1965 and 1975 when the mines in Limburg were closed and the company continued as a chemical company.
“In 1991 there was another huge strategic challenge in the ongoing development of the company,” explained Schreuder. “This was because the global crisis in the chemicals industry had put DSM into difficulties. We were making a loss.”
DSM urgently needed to look at how it was going to turn itself around. “We did this by implementing what’s known as ‘strategic dialogues’: a learning cycle where we asked our business groups on average every three years what was best for the business,” said Schreuder.
“Based on the decentralised strategies, we established the corporate strategy and then went back to ask for decentralised feedback again,” he said. “But in 1994 we still only had a direction for the company’s development, and no clear outcome.”
The next step was to consider all of our organisational structures, processes, cultures and staff in the light of this new strategy to make new changes to enable it to be implemented. The third step was to organise all the systems within the organisation so that they really were oriented towards the future, rather than legitimising the past. The second transformation of DSM was successfully completed in 2010.”
Contribution of business schools
During this second transformation of DSM, Business Schools made an essential contribution with their knowledge of industrial marketing, business strategies, cultural change, management styles and innovation.
“In my experience, business schools are particularly good at systematic reflection. This is an important element, as 80% of innovations fail. Successful innovations therefore really depend tremendously on reflection: on what is really going on, what aspects play a part and what the opportunities for success are. It’s a process in which different parties each have their own role to play.”
Service Science Factory
The Service Science Factory is currently playing an important role in innovation in the Netherlands. Founded in 2010 as part of SBE, it has access to a broad portfolio of experts and knowledge partners.
The Service Science Factory works on the assumption that, at present, innovation depends on developing services, linked with products, that provide added value for customers. The Service Science Factory also facilitates the implementation of service-oriented enterprise within organisations.
What customers really want now
According to Gaby Odekerken-Schröder, it’s no longer just about products. “It’s about how the organisation’s knowledge can be used to benefit the customer,” she says. “The solution is then often a mix of products and service provision. For a certain number of organisations that means a change of direction starting with an insight into what customers really want.
“That starts with questions that serve as triggers for customers. Which products and services help customers overcome challenges? How can products and services be improved to better meet customers’ needs? How can you work together better so that you can really surprise customers?
“The answers to these essential questions create insights into what customers really expect of the organisation. By reflecting on the organisation’s knowledge and skills from this perspective, you can better shape the value proposition for customers. That enables an organisation to work with its customers to create a shared future.”
For more on the book From Coal to Biotech, The Transformation of DSM with Business School Support, read our interview with Prof. Schreuder here.