Companies, governments, and universities worldwide have recently awakened to the realization that services dominate global economies and economic growth.1 Yet, in practice, innovation in services is less disciplined and less creative than in the manufacturing and technology sectors.2 While Business
Week’s 2007 top twenty-five most innovative companies list includes a number of service businesses (e.g., Google, Walt Disney, Wal-Mart, Starbucks, Target,
Amazon, and E-Bay),3 the number of innovators is not nearly reflective of the size of the service sector. A recent comprehensive review of the academic literature on product innovation also reveals little explicit coverage of research on service innovation.4
There are many reasons for this historic lack of rigorous attention to the unique aspects of service innovation. Some of these reasons are rooted in the remnants of the industrial revolution and the habitual fascination with tangible products and hard technologies as a source of product innovation, as well as an underlying belief that services have no tangible value.5 Beyond these historic reasons, however, the lack of widespread and disciplined innovation in services derives at least partially from the nature of services themselves. Services are
The authors thank the Center for Services Leadership for its support of this project. They also sincerely thank the individuals who contributed to the case studies including: Greg Reid and Maynard
Skarka of Yellow Transportation (YRC Worldwide); Renee Ryan, formerly of ARAMARK and currently with Best Western International; Mark Rosenbaum, consultant to Marie Stopes International and a professor at Northern Illinois University; Rick Mears of the San Francisco Giants; and Sara Moulton
Reger of IBM. They also thank Lynn Shostack for the vision she provided over twenty years
Bibliography: ” European Journal of Marketing, 32/3-4 (1998): 184-251. 12. P.J. Danaher and J. Mattsson, “Customer Satisfaction during the Service Delivery Process,” European Journal of Marketing, 28/5 (1994): 5-16. 13. J. Singh, “Understanding the Structure of Consumers’ Satisfaction Evaluations of Service Delivery,” Journal of the Academy of Marketing Science, 19/3 (Summer 1991): 223-244. 14. S.W. Brown and T.A. Swartz, “A Gap Analysis of Professional Service Quality,” Journal of Marketing, 53/2 (April 1989): 92-98. 17. D. Padgett and D. Allen, “Communicating Experiences: A Narrative Approach to Creating Service Brand Image,” Journal of Advertising, 26/4 (Winter 1997): 49-62. 18. L.P. Carbone and S.H. Haeckel, “Engineering Customer Experiences,” Marketing Management, 3/3 (Winter 1994): 8-19. 19. S.H. Haeckel, L.P. Carbone, and L.L. Berry, “How to Lead the Customer Experience,” Harvard Business Review, 12/1 (January/February 2003): 8-23. 21. P.J. de Jong and P.A.M. Vermeulen, “Organizing Successful New Service Development,” Management Decision, 41/9 (2003): 844-858. 22. B. Edvardsson and J. Olsson, “Key Concepts for New Service Development,” Service Industries Journal, 16/2 (April 1996): 140-164; F.I Service Experiences: Lights, Camera, Experiment, Integrate, Action!” Business Horizons, 49/2 (March/April 2006): 149-159. 26. M.J. Bitner, “Managing the Evidence of Service,” in E.E. Scheuing and W. F. Christopher, eds., The Service Quality Handbook (New York, NY: American Management Association, 1993), Quality Management in Services (Assen/Maastricht, Netherlands: Van Gorcum, 1991). 28. B. Stauss and B. Weinlich, “Process-Oriented Measurement of Service Quality,” European Journal of Marketing, 31/1 (1997): 33-55. 29. K. Siau and P. Loo, “Identifying Difficulties in Learning UML,” Information Systems Management, 23/3 (Summer 2006): 43-51. 30. See pages 267-276 in V. Zeithaml, M. J. Bitner, and D. Gremler, Services Marketing: Integrating Customer Focus Across the Firm, 4th edition (Boston, MA: McGraw-Hill, 2006) 32. S. Moulton Reger, Can Two Rights Make a Wrong? Insights from IBM’s Tangible Culture Approach (Upper Saddle River, NJ: IBM Press, 2006). 33. J. Gadrey and F. Gallouj, Productivity, Innovation, and Knowledge in Services, New Economic and Socio-Economic Approaches (Cheltenham, UK: Edward Elgar, 2002). 35. P. Echeverri, “Video-Based Methodology: Capturing Real-Time Perceptions of Customer Processes,” International Journal of Service Industry Management, 16/2 (2005): 199-209.