Company Name British Gas Innovation Name Local Heros Award Category New Business Launch Corporate Entrepreneur story Simon Stacey from Market Gravity spoke to Mat Moakes at British Gas to understand more about Local Heroes and to learn about the challenges that the team overcame to launch the new business. Mat has end-to-end commercial responsibility across British Gas On-Demand Services, Dyno-Rod, and Centrica corporate start-up Local Heroes. Mat Moakes Head of Commercial, British Gas LinkedIn Profile: Mat Moakes Visit Site : https://www.mylocalheroes.com/ 0
A new British Gas venture that offers end-to-end on-demand home services delivered by a trusted local tradesmen and backed by a British Gas guarantee. Local Heroes is a new venture from British Gas that s been built and launched to seize a growing consumer trend towards instant, on-demand services that are booked online. Local Heroes, provides customers with instant online booking of local tradesmen with a transparent price and is backed by a 12 month British Gas guarantee. Over the last nine months the venture has formed, built and launched a robust product. The venture team has achieved this through rapidly prototyping and iterating on customers needs and setting up an executive advisory board, which acts as counsel and corporate referee, supporting the venture team towards its ambitious aims. Interview SS: Can you tell us about the situation before the launch of Local Heroes and the journey you ve been on? MM: Think about British Gas as a services business. It s got a massive contract and insurance business, it s huge. It has millions of customers, but it s only really had a tiny share of the on-demand market. It has really struggled to meet the needs of customers that don t want to pay monthly or want the comfort of a contract. It s a big business that is set up with an operating model that is geared to work at scale but just doesn t work in the on-demand market. You need to play differently, you need to be more competitive, more aligned to customer needs and just more flexible. Typically within British Gas, on-demand although strategically important has always been dwarfed by other parts of the business, and getting a business case together to actually ever really drive meaningful change is really hard. 1
So we had a big look at the on-demand strategy and look at how we could make the existing business better, but by the time you drill down to the detail of it, we thought it s much easier if we just started again and created something that s completely different and build around the dynamics of customers and this market. So that s what we did! We basically ripped everything up. We looked at some of the platform models from the States. We looked at some of the academia around what these businesses were doing and how they matched supply and demand, and what these models might mean, particularly for the service industry in the UK. Then we looked at all the assets and capabilities that Centrica had that we could leverage. Its scale, its financial power, its marketing knowledge, networks - that kind of thing. And that s where the concept for Local Heroes came from. SS: Tell us more about the customer experience MM: What I think is completely different about this service is that nobody in this one off job market has ever has delivered the complete end-to-end journey for customers. If you think about the existing supply in the market, the price is still really opaque and complex. It often is not structured and it s hard to second guess there s no price transparency. You also can t go and book instantly anywhere online I don t mean logging a booking request and waiting a day to confirm, I mean getting an instant notification. You also can t go anywhere and get good quality vetted people and be sure that, if it does go wrong, someone with a big trusted brand and experience will stand behind it. No one currently delivers the guarantee and no one does the payment. If you look there are businesses that do bits of it, but no one has joined all the dots and is offering this end-to-end. We wanted to create a proposition that was digital and tech-led, that we could change really fast, without being restricted by call centres and be the first business to join the whole thing up end-to-end. We think there s a massive gap in the market and this is how people will purchase these services in ten years time. SS: Sounds like a good idea. Can you tell us a little bit more about the challenges you faced? MM: I think there were a few. This is a completely new way of working for British Gas as an organisation. It s an established, big business that has to have structure and often 2
works in in a waterfall methodology, with the exception of our Connected Home business (Hive). Hive have carved themselves out and done something very different. But for the services business in British Gas, it hasn t delivered a project like this before, so we needed to convince everybody this was a great idea and then of course to give us some money and then leave us alone for six months so we could get on with it. We were really keen to not spend two years building something that hadn t been built around customers. We set up the team to work like a lean startup and using the wackamole approach of fixing something once we know it s a problem not before! So I think just getting started was the big thing, keeping the team free to innovate. Another challenge was quickly getting going with the MVPs (Minimum Viable Propositions). Picking things that were small enough for us to deliver that meant we could get out and learn, without incurring big risks. For example in the beginning, we launched in Croydon with just two plumbers, so we could learn quickly, without incurring any big risks. SS: What was your vision for the venture? MM: We think Local Heroes could be huge. When you look at the incumbents in the on-demand market and how poorly serviced it is today, you start to think this could be massive. Especially when you think that British Gas already has relationships with millions of customers who have on-demand needs each year and we don t currently fulfil any of these. This venture is so extendable. If you think about landlords, businesses, even international options. The venture has so much runway it s untrue. And the way that society is trending on-demand, it s only going to head the on-demand way. If you look at the trends in society, people are paying less monthly for many things. It actually makes you a bit nervous looking at the size of the opportunity. For me I think the vision has always been whether you re a homeowner, landlord or a business we can complete any job, booked instantly online first in the UK, then overseas. SS: That sounds great. What impact has Local Heroes had so far? MM: Firstly, we re getting great feedback from customers, our NPS is 65 which for a new startup is really high customers 3
love the concept from the price transparency to ease of booking to the support we offer. Customers can book in 20-30 seconds, not the 60 minutes of phoning around that is the norm. The important thing for us is that we re attracting new customers that wouldn t historically consider British Gas, about three quarters of the customers that come to us don t have a relationship with British Gas at the moment no mean feat when you think about 30% of the UK have energy with us. We are also starting to attract a lot of traders, because we are starting to generate a lot of work. Really, the traders are as much our customers as the end consumer, which is just fascinating. Secondly I think this launch has helped to show people in our organisation that if we incubate our projects, give them time and space and focus on customer needs we can innovate and get to market really fast. In terms of the big impact I think that is still to come really, as we re planning to roll-out nationally over the course of this year and next. SS: What approach did you take when developing the venture? MM: We ve got a lot of guys who have worked in the startup environment and the corporate environment. The way that we ve set up the venture, I play the role of keeping the interests of the corporate business away from the team on a day-to-day basis. We ve got lots of backing and support and have negotiated channels of communication and governance that s appropriate to running a startup within a big business. For example, we have an advisory board that both coaches and challenges us. It s tough but it's set up to help us and the business. Another thing that has been really interesting is the attitude we ve adopted. For example if we ve got this customer issue, we go and talk to some people down on Oxford Street and get some feedback. It s a street-fighting customer insight effort! It s been really good, and is so different to how the core business works. We ve also built a mixture of talent. We went into British Gas and found people that had the right skillset and had the ability to work and think in a different way. We found customer experts and trader-side experts. We brought together people from deep British Gas 4
backgrounds with specialist contractors who have experience of this kind of activity, for example designers from Shazam, Head of Product from Hailo, and an experience digital entrepreneur. Ultimately, we ve built a team that s a conglomerate of the best stuff in British Gas and the best of external. We ve also had an environment where people from our core offices have seconded to us and then gone back to the main business, with a new way of working. That s been really good. Overall, I think this has worked because we have strong sponsorship from the very top and crudely what we have agreed is; this is what we are going to learn at each stage. If you are happy with that, we will treat you like venture capitalists and we ll carry on. SS: Where to next MM: We launch the next phase of the project on Monday 3rd October and we ll have 16% of the UK covered. We ve got an aggressive roll-out plan over the next six months nationwide, and will get real scale. We ll become one of the nation s biggest on-demand providers next year, which will be great. Beyond that we ll be looking to diversify to different market segments and then beyond that I expect they ll be an urge from Centrica to go and test our propositions abroad as well, we have some business in North America and Ireland. Also how far can on-demand services go?! Glazing, dog-walking, even handymen style service. It s really exciting. SS: Thank you for your time Mat and good luck in the awards! You can vote for British Gas Local Heros or your other favourite innovation in the Corporate Entrepreneur Awards 2016. Vote now at http://www.corporateentrepreneurawards.com/ About the CEAs The Market Gravity Corporate Entrepreneur Awards is the only event that celebrates big business innovation and recognises the individuals and teams behind it. 5
Back for its 7th consecutive year, the awards aim to inspire and encourage a community of intrapreneurs to share best practice. They provide a unique networking opportunity where peers can learn from each other and other leading innovators across multiple sectors. Some of Europe s most creative, disruptive and entrepreneurial corporate leaders and their teams have won a Corporate Entrepreneur Award. Leaders from Pearson, the LEGO Group, British Gas, Dyson, BMW, Barclaycard, EDF, Telefonica and BT Vision. Enter online today or find out more at www.corporateentrepreneurawards.com. 6