Frontline employees’ collaboration in industrial service innovation: routes of co-creation’s effects on new service performance

María Leticia Santos-Vijande,José Ángel López-Sánchez,John Rudd

doi:10.1007/s11747-015-0447-4

María Leticia Santos-Vijande, José Ángel López-Sánchez + Show 1 more

Open Access

https://doi.org/10.1007/s11747-015-0447-4

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Abstract

AbstractFrom a Service-Dominant Logic (S-DL) perspective, employees constitute operant resources that firms can draw to enhance the outcomes of innovation efforts. While research acknowledges that frontline employees (FLEs) constitute, through service encounters, a key interface for the transfer of valuable external knowledge into the firm, the range of potential benefits derived from FLE-driven innovation deserves more investigation. Using a sample of knowledge intensive business services firms (KIBS), this study examines how the collaboration with FLEs along the new service development (NSD) process, namely FLE co-creation, impacts on service innovation performance following two routes of different effects. Partial least squares structural equation modeling (PLS-SEM) results indicate that FLE co-creation benefits the NS success among FLEs and firm’s customers, the constituents of the resources route. FLE co-creation also has a positive effect on the NSD speed, which in turn enhances the NS quality. NSD speed and NS quality integrate the operational route, which proves to be the most effective path to impact the NS market performance. Accordingly, KIBS managers must value their FLEs as essential partners to achieve successful innovation from an internal and external perspective, and develop the appropriate mechanisms to guarantee their effective involvement along the NSD process.

Highlights

Both scholars and management practitioners acknowledge that service innovation is of fundamental importance for the future competitive strength and growth of modern economies, as the service industry has gradually increased its contribution to the output and employment of developed countries (Cadwallader et al 2010; Kuester et al 2013; OECD 2012a, b)
We opted for the use of partial least squares (PLS)-structural equation modeling (SEM) over the statistical covariance-based methodologies for the following reasons (Barroso et al 2010; Chin and Newsted 1999; Hair et al 2011; Reinartz et al 2009; Wold 1985): (1) because of the explorative nature of the study, where the emphasis is on the development of new theory; (2) because the number of observations is relatively small and PLS does not require a large dataset; and (3) as PLS is a nonparametric technique, the data do not necessarily need to have a normal distribution
We found that the influence of frontline employees (FLEs) co-creation on new service (NS) market performance is not double-mediated by FLE outcomes and customer outcomes (H10), being the indirect effect for this double mediation 0.022 (0.181×0.402×0.302), and the t-statistic associated being statistically non-significant

Summary

Introduction

Both scholars and management practitioners acknowledge that service innovation is of fundamental importance for the future competitive strength and growth of modern economies, as the service industry has gradually increased its contribution to the output and employment of developed countries (Cadwallader et al 2010; Kuester et al 2013; OECD 2012a, b). An increasing body of research has focused on drivers of new service (NS) success, empirical insights, when compared to the plethora of research available on product innovation, are relatively limited. From the evidence available, the new service development process (NSDP) is cited as a key controllable factor for firms that can contribute significantly to service innovation success (Kuester et al 2013); implementation of the NSDP has become of critical interest to service innovation researchers (Alam 2002, 2006, 2012; Johne and Storey 1998; Storey and Hull 2010)

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