An Integrated Approach to Service Innovation

Can we approach service innovation in the same way we have approached product innovation? Will the traditional engineering approach and R&D investments yield services that are feasible and relevant to the customer? The Consortium for Service Innovation has observed that innovation in services cannot happen in R&D labs nor be engineered in ways we have engineered products. We feel this is true for two reasons. First, the customer is not sufficiently present in the R&D and product engineering process. Second, the traditional approach is based on a manufacturing model that is good at producing tangible products, but not well suited to intangible, value-based services. We believe business has to develop organizational models or systems where customer involvement and innovation is both persistent and inherent in the system. This paper articulates an Adaptive Organization model that enables sustained innovation in a dynamic environment based on persistent learning, relevant knowledge, fluid roles, and value-based metrics.