New ESRC-funded Research Project: Pathways towards Servitization

I am grateful to receive my first research grant as the Principal Investigator, awarded by ESRC (Economic and Social Research Council, UK) to conduct a study on ‘Pathways towards Servitization’. This is a £250k research project starting 1 November 2017 for three years, and the Co-Investigator is Professor Tim Baines. The key aim is to develop transformation pathways for manufacturing organisations (large and SME) intending to move towards servitization and compete through advanced services.

As we know, servitization is still a very fertile topic to study, and understanding and guiding the ‘transformation’ processes is especially interesting and vital for researchers and valuable for practitioners.

There is however a paradox. Executives in manufacturing firms seeking to servitize are inspired by the success of leading companies in the field. The organisations that are commonly agreed to have successfully servitized (established adopters) such as Rolls Royce, Xerox, GE Power and MAN Truck & Bus UK have followed emergent strategies and through organic growth find themselves to be seen as exemplars. Detailed accounts of the pathways they followed are elusive and subject to post-rationalisation opinions.

However, what executives of the firms that have recently started the transformation journey (current adopter) are actually looking for is a robust and step-by-step approach drawn from the experiences of the leading companies, which provides prescriptive strategies towards servitization. The executives wish to know about the stages of transformation, the forces and factors affecting the progression, and the actions taken. Therefore, the pathways followed by the established adopters have to be captured and analysed in a systematic and structured way to enable the establishment pathways to be operationalised by the current adopters (both large firms and SMEs).

This research project will be conducted during a period of immense social, economic and political uncertainty across the globe. In the UK specifically, one of the biggest challenges to the manufacturing industry is the domestic uncertainty created following the EU referendum, and, manufacturing’s position at the forefront of the UK’s gradual recovery from the economic crisis in 2008 has started to look unsustainable due to the intensified competition from low-cost economies.

In such an environment, servitization can offer a defensible long-term strategy that localises value creation and value capture. Today, an increasing number of manufacturing organisations embrace digital technologies with a growing tendency to offer solutions rather than stand-alone products. Their lack of knowledge, however, about how to transform to compete through servitization undermines the prospect of operational scalability and financial sustainability being achieved.

This project, therefore, has been designed with the aim of producing good quality, cross-disciplinary social research that is carefully positioned to deliver rigorous theoretical insights and also findings that are highly relevant to senior executives. This aim makes the proposal highly relevant to the ESRC’s “New ways of being in a digital age” priority area. In this respect, a portfolio of activities will help to foster the economic and societal impacts of this research by ensuring that the potential beneficiaries have an opportunity to engage.

I am planning to quarterly post updates on the progress of the project as well as its outputs, events, etc.