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Service Innovation

There’s been a lot of focus on product innovation over the years, but very little discussion or thought on innovation in the service sector–despite the vast growth of that part of our economy. “It’s one of those areas that is a tweener, falling between other departments in a company,” says Jeneanne M. Rae, co-founder of Peer Insight.

There’s been a lot of focus on product innovation over the years, but very little discussion or thought on innovation in the service sector–despite the vast growth of that part of our economy. “It’s one of those areas that is a tweener, falling between other departments in a company,” says Jeneanne M. Rae, co-founder of Peer Insight.

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Rae came by the other day with co-founder Tim Olgilvie to talk about the differences between product and service innovation and their search for more tools and ideas to help organizations get a lead in this area. They’ve formed a collaborative venture among eight companies, including Mastercard and Siebel Systems, to share data and deconstruct the successses and failures in service innovation.

It’s a cool project. So far, their research has led to some fascinating insights and the creation of what they call “The Discipline of Service Innovation.” Without boring you with every specific, here’s some of the basic principles Tim and Jeneanne came up with to help 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.