Innovation in Services

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The Art and Science of Innovation in Services

Innovation has often been played-up by the industry but a quick online check revealed that innovation is simply, an act of introducing something new (The American Heritage Dictionary), the successful exploitation of new ideas (Department of Trade and Industry), or a change that creates a new dimension of performance (Peter Drucker). There is certainly room for improvements in the services industry not quantum leaps or breakthroughs in services but rather incremental improvements to customer service to meet the changing needs of customers; and such incremental improvements to customer service can be as effective as laboratory-based innovations.

Challenging Business Landscape

Attracting the interest and investment of customers are getting more challenging as customers today are spoilt for choices and they indisputably demand for better service. Customers are individuals who judge their providers on different criteria and assess their performance in a wide variety of ways which are meaningful and important to them. The ever-changing competitive business landscape where each business aims to outdo each other in terms of product and service offerings, variety and range of merchandise, pricing as well as promotional mechanics, et cetera for economic sustainability also contribute to the challenges.

We habitually push our top executives for new business ideas, our sales and marketing teams to design new service packages, and perhaps even our frontline service personnel to drive sales, but the real success of any business really depends on  how well its customers are treated.

But what is holding us back in this area? Are our service personnel too preoccupied in trying to achieve their daily sales targets or in safeguarding the rules of the organisation?

Hans Snook, former Chief Executive of Orange, the mobile communications company, once mentioned that companies are too focused on quarterly earnings and meeting the expectations of the stock market to grasp the fact that only by meeting the needs of customers can they deliver growth.

Ultimately, all innovation is associated with PEOPLE who make it happen. This article discusses the art and science of introducing innovation in services.

Competitive Advantage Undoubtedly can Come from Innovation in Services

With such buoyant growth in the services sector and considering the significant contribution to the economy, there is no doubt that there must be a key differentiator (i.e. innovation in services) for those in this industry to remain competitive and economically viable.

Innovation in services can be a new concept:

Products or services
  • Introduction of new products or services offered
  • Changes are introduced to existing products or services 
     
Service delivery
  • New ways are introduced to the means of producing services
  • New ways to interact with customers creating more opportunities for customers to do business with
     

Technology innovation supporting new or improved products, interaction or the delivery process changes are introduced to the technologies used to produce or deliver the services 


Service Innovation in Industries

Simply, innovation is the successful exploitation of new ideas. While innovations in tangible products may be more easily recognised, possibly due to their physical and codifiable nature, there is a wealth of excellent examples of service innovation:

Airport runway space
  • Landing planes is a classic service that is intangible and jointly produced by air traffic control and the service users (airlines carriers). Despite runways having been full for many years, year after year major airports continue to increase capacity. This has been achieved by ongoing innovations including improved efficiency in ground operations, greater coordination between relevant actors and developments in technology that have facilitated safer spacing of landing times. Much of this has been achieved without additional runways being built.
    ‚Äč
Financial Services
  • Many banks now offer a whole range of services facilitated by ICT. Mobile-based banking has emerged as a significant area of growth and has enabled customers in remote areas through branchless-banking. Financial advisers are using tablets to enable customers to make buy-and-sell decisions during meetings.
     
Retail 
  • There have been many innovations in retails services, but perhaps one of the most pervasive has been the use of bar codes. The introduction of bar code scanners linked to information and communication technology has transformed retail. It required retailers to undertake several non-technological changes (e.g. changes to distribution networks, delivery procedures, etc) to take full advantage of the new technology (e.g. more efficient inventory management, measuring the effect of promotions, etc).

 

While these examples highlight some areas of emphasis of innovation in services, it is essentially important to note that all these are but the works of people. People who introduced something new; who successfully exploited new ideas; who created a new dimension of performance; and who ultimately met the needs of customers. Finally, 3 fundamental points to consider when embarking on a service innovation journey:

  1. Service innovation begins with the ultimate objective and belief that what is to be done is for the best interest of the Customer. Customers know what is best for them and are in turn an organisations best contributors and innovators.
  2. Service innovation is not the job of the Service Quality Manager alone or the Innovation Officer of the organisation but everyone in and out (including our customers and stakeholders) of the organisation.
  3. It requires commitment from the top! Leaders must be committed not only in words but in actions, that the needs of their customer do come first.
     

This is an extract from the article the Art and Science of Innovation in Services and was first published in Singapore Quality Institute monthly newsletter.


Author: Kitson Lee, Senior Consultant / Facilitator, aAdvantage Consulting

Kitson has over 10 years of working experience in the areas of Organisational Development (OD). His focus is on Business Excellence; Service Excellence and Organisational Learning. He is a much sought after speaker on Service Quality, Service Innovation and Business Excellence.

He has been featured in the Straits Times and on NewsRadio 938Live for his strong entrepreneurship spirit and innovative ways of bringing organisational successes to greater heights.