Continuous improvement competence, employee creativity, and new service development performance: A frontline employee perspective

Abstract

As an important source of competitive advantage, new service development (NSD) is widely used by service firms for new developments. Since creative ideas are crucial to NSD and service firms commonly involve frontline employees in the process of NSD, we argue that frontline employees’ creativity can enhance NSD performance. In addition, since the implementation of continuous improvement practices necessitates frontline employees to make changes and solve problems consistently, we argue that frontline employees’ operational improvement competence (OIC) (i.e., skills in implementing continuous improvement practices) can enhance their creativity. Furthermore, we draw on the contingency theory and argue that the relationships between OIC, employee creativity, and NSD performance are contingent on six relevant contextual factors. Based on the data collected from 146 frontline teams in the banking sector of China, we test our theory-driven model and the posited hypotheses. Our findings serve to advance the knowledge of multiple disciplines by showing the linkages among their core concepts (i.e., OIC, employee creativity, and NSD performance) and also ascertain the factors (i.e., OIC and employee creativity) that enhance NSD performance and the circumstances under which these factors are particularly effective.