X I D E A S

When we think about innovation we associate it with products like ipod’s, cell phones, computers, video game consoles, etc. But now companies, consultants and researchers are shifting their focus from products to services.

So what is service innovation? An example is the story of Thomas Edison, the inventor and innovator who came up with the lightbulb. People don’t tend to think of the related service innovations—getting lightbulbs into houses and schools, setting prices for the electricity services to keep them lit. That’s all service innovation.

More recent examples, though most people wouldn’t think of them under the phrase, are outsourcing and the shift toward self-service.

Why you haven’t heard much about Service Innovation until now, is because it is more difficult than Product Innovation.

There are more dimensions to service innovation than there are to product innovation. Service innovation can be a new service concept, it can be a new way to interact with customers, a new way of service delivery or a technology innovation supporting either one of the three (concept, interaction or delivery).

Service innovation is very different depending on the type of organization. There are differences between the different verticals, resulting in a “silo-approach” for service innovation, as suggested in HBR of February 2005 by Henry Chesbrough. Service innovation is also very different for government than for commercial organizations and again different for not-for-profit organizations. We need to work on a set of tools that are universal over the different silo’s.

A third reason for this difficulty is that other issues are important to services. When designing and developing a new service, organizations need to think about trust, about increasing a sense of transfer of ownership and about experience. Changing the method of payment, can not impact the design of a product, but it is a major change in the development of a service.

These are only a few of the hurdles to service innovation, but I am convinced we are moving closer to solutions. More academic work, books and articles, government initiatives and small companies who work around service innovation are appearing globally. There is a future!

Here are some principles to help you innovate in the service arena:

• Create a clear challenge statement, expressed in terms of a customer need, not a business need, that focuses on the “white space.”
• Do strong ideation: a well-designed, well-facilitated process that includes participation from many departments and disciplines and sources of edge-thinking.
• Emphasize developing concepts that combine multiple elements of innovation (from your business model and IT platform to the channel) to increase the impact and distinctiveness of the idea.
• Use techniques and structures that counter-balance the natural forces of criticism and risk-aversion.
• Employ a design that is guided by a base behavioral model of the customer’s underlying needs.
• Communicate high aspirations for the overall customer experience to stretch the design team’s thinking.
• Use customer-centric analytical tools to measure the customer experience.
• Make creative use of tangible artifacts to reinforced a distinctive experience, the way an ADT lawn sign signals that service or the way Mini Cooper’s roadside assistance service is signalled by its window signs.

I’d like to hear your comments on this.

Here are a few links to:

- Consortium of Service Innovation

- Service Research & Innovation Initiative

Technorati Tags: innovation , service innovation