THE CREATION OF NOVEL AND MARKETABLE SERVICE IDEAS

Abstract

Novel and marketable service ideas are useful to most service enterprises. However, the literature has identified several reasons for innovations in services as lagging behind those in manufacturing. Some service enterprises believe that service ideas and innovations are readily imitated by competitors. Others view the impact of service innovations on profitability difficult to assess because specific innovative service elements are typically bundled with many other service elements when delivered to or used by customers. Some service enterprises do not have in-house groups specifically dedicated to innovative pursuits, making it difficult for them to systematically produce new service ideas. Furthermore, because services are usually produced and consumed concurrently, any failure tends to expose the service enterprise immediately, unlike the manufacturing companies which can minimize such risks of exposure by conducting pilot testing away from the marketplace. As a result, many service enterprises are said to shy away from aggressively pursuing new service development projects. It does not have to be this way. This paper describes the combinatorial, heuristic, and normatively guided method, which when correctly applied to a service enterprise enhances the generation of new service ideas in a systematic, speedy, and cost-effective manner, and without requiring the creation of a dedicated and rigid organizational structure. Virtual teams of the "stealth" type are set up to address innovation needs related to marketability and cost competitiveness. These teams may include frontline customer-facing employees as well as customers, suppliers, and other external experts, who can work together despite geographical and time-zone constraints. The application of this method toward developing a specific new service idea is discussed in greater detail. The integration of a "stealth" team can also be readily applied to the front end of a typical stage-gate service development process, whereby parallel teams are engaged to address critical issues and steps needed to successfully market a service idea before initiating costly development, thereby raising the service enterprises' overall probability of developing commercially successful new services over time.