Employ flexibility and integrity to woo enterprises with cultural affinity

One of the hardest things to do as an IT service provider is to differentiate. HFS analysts sit in on hundreds of briefing calls a year in which we hear about a supplier’s services. The remarkable thing is how undifferentiated some of these presentations are. Many spokespeople say the differentiator is their people, which we hear pretty much on every call we attend. We have to try not to roll our eyes if the call is on Zoom. The important part is that providers—and by extension, their spokespeople—must clearly understand their identity. They need to know which deals they’ll take, which they’ll turn down, where their people excel, and where they leave the work to partners. Once they have their identity pegged, they can work on embedding it in their culture.

Undoubtedly, people play an important role. As much as we like to talk about automation and leverage, we know the services business is 100% about people. Regardless of how much automation is embedded and how optimized the enterprise platform is, getting a solution to work requires people, which means unfortunately for analysts having to pick through the bones of undifferentiated calls, the differentiator is people. So how do we unpick this Gordian knot? And how can you make sure a service provider is right for you when everyone says their differentiation is their people and the only real test is using the service?

The real spokespeople of a provider are its clients; bring references to the market that best articulate your cultural values

As HFS analysts, the other type of call we conduct is reference calls. Essentially, we call on a service provider’s clients to talk about how well the provider delivered services, which gives us good perspective on which providers deliver contractual promises and give customers value for money, and it provides an assessment of service quality. Additionally, we can ask customers what they want from providers, how providers are achieving against this desire, and what the most common failings are.

The number one desire expressed by customers from these calls is culture, which differs from the answer we get from the quantitative surveys we conduct. Quantitative survey results tend to skew toward cost when you ask companies what they want from providers—largely because the respondent picks an answer from a list, and reducing cost is an easy first choice. It’s like getting CIOs to pick from a set of priorities—security is always going to be one of the first choices on a list. Customers knee-deep in contracts tend to focus away from cost, which is still a big factor, and toward delivery. The focus is on the customer relationship and, most often, on “cultural fit.”

What does “cultural fit” mean? What identity should providers adopt?

Cultural fit is an oft-abused term, and it can mean many different things—which is probably why it isn’t a single category in a drop-down list of challenges. However, if we analyze the responses more deeply, cultural fit often boils down to two main things:

• Flexibility: It’s not so much about having similar cultures; instead, it’s having an adaptable culture that puts the clients’ needs first and foremost. In one agile engagement, a provider demonstrated its flexibility by letting a buyer “choose and interview the staff for the engagement; that way, we knew we were getting the right people for us.” When pushed about what made a provider flexible, another client said, “they are always genuinely asking for feedback, and they always listen.”
• Integrity: Integrity is a wide area, but customers often talk about wanting honesty from their service providers. In particular, they want people who push back and then work with the customer to achieve the desired goal. One client reference said their pet hate in this area is “the ‘yes man’ who agrees with everything, but nothing material happens,” and the salesmen that “constantly ask for more money.”

The Bottom Line: If you want cultural fit, you need to have flexibility and integrity as part of your corporate identity.

Usually, when we give advice, it’s an either-or situation—there are options to choose from. But, really, service providers have no choice unless they are competing purely on price and customers are willing to compromise for delivery, which seems rare for long-term engagements. Our advice to suppliers is to stop saying “yes” to everything. Train all levels of staff to effectively push back and listen to your customers. Wrap this embedded integrity with the freedom to be flexible, enabling your teams to always do the very best for their client, even when they don’t realize it.

The reality is that many enterprises genuinely believe they live and breathe these values, but from what we hear from their clients and the broader community, we can crudely segment the real market sentiment as:

• 10% of you are doing a superb job.
• 20% of you are good, but you could do more.
• 50% of you are adequate (barely), but you think you are doing great. It may be that you are embedding these values into many accounts, but not consistently. This group of providers has the highest disconnect from reality. They have a higher propensity to arrogantly push back on our ratings and demand rebuttals.
• And the final 20%? You need to seriously overhaul the way your staff interacts with customers.

As a final thought, it’s fair to say to anyone reading this list and switching-off believing they’re in the 10% doing well: It’s almost certainly a sign you’re not.