service innovation and service thinking

Services are the new frontier of business, as executives extend and expand their core propositions to embrace and explore new opportunities. The implementation of new service strategies requires a blend of creativity and discipline. Service innovation and service thinking simply reflects the new field of business.

Services Thinking is a business strategy with an emphasis on technology. Not the other way around.

Services Thinking is a framework for solving business problems.

It creates value by enabling organizations to adapt to rapidly changing conditions. By focusing on the capabilities each part of the organization needs to compete — and then helping the organization deliver those capabilities in manageable, independent, interoperable pieces. These capabilities cut across business processes, organizational charts, and technology solutions.

Services Thinking isn’t a strategy for simplifying business. Instead, it’s a way to embrace complexity, breaking operations down into discrete capabilities so that you can solve problems more effectively. Services Thinking can apply to every dimension of technology and business operations — but it’s important to pick and choose priorities.

Research and customer feedback show that the demand for services development and creative new approaches in services design and delivery is growing every year in all sectors of industry. In the face of mounting competition from the emerging countries and in the context of the increasing complexity of integrated services offerings by many industry leading competitors, most industrial companies, large or small, cannot ignore the race for a more diversified product-service offering. With the increasing digitalisation of industrial products, the potential to create new features through effective controls and operator interfaces is exploding.

For example remote diagnostics appears to be offered by many equipment manufacturers, but do their customers get the true value out of the product. Faced with more complex products, and a trend to outsource fixed costs such as maintenance, it becomes very difficult for a manufacturing business to maintain the performance levels of their equipment over time. Hence the great opportunity for OEM suppliers to step in with maintenance contracts, engineering consulting and other value added services.

Service infusion is the development and offering of services in product-dominant firms, largely as a growth or profit strategy. The promises of service infusion are many—financial growth, increased share of customer wallets, improved customer satisfaction and loyalty, and differentiation from competition—yet the realization of success is limited. companies must understand where their innovative service offerings are positioned at three important points on a continuum: firm resources needed, service priorities, and service challenges. Success depends upon aligning position with these key points.

For a large segment of the global business community the source of value has shifted from tangible assets (physical goods or products) to intangible assets (services, information, relationships, loyalty, influence). Traditional business structures and practices, largely based on a manufacturing metaphor, have not yet responded to this shift in the source of value. The linear manufacturing model where research and development is done in a R&D lab and products are built on a production line has proved its worth in the creation tangible products. The manufacturing approach proves to be woefully inadequate for a services business. The traditional approach lacks the flexibility and customer presence that we need in a services business to dynamically create capability and capacity that is relevant to complex and rapidly changing customer needs. In fact, state of the art manufacturing models have even moved away from the traditional static, linear production models. Service and support and ultimately all customer interaction models have to become more adaptable. Hence there is a need for the Adaptive Organization, The Adaptive Organization proposes a profound shift in thinking about organizational structures and practices.

The basic principles that help innovate in the service arena are

Create a clear challenge statement, expressed in terms of a customer need, not a business need, that focuses on the white space.

Do 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 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 implied 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.