Abstract
PurposeThe present study intends to foster understanding of how a traditional manufacturer can utilize the “simple rules” approach of managerial heuristics to facilitate its smart solution development (SSD) process.Design/methodology/approachThe study uses an in-depth single case research strategy and 25 senior manager interviews to understand the application of simple rules in smart solution development.FindingsThe findings reveal process, boundary, preference, schedule, and stop rules as the dominant managerial heuristics in the case and identify how the manufacturer applies these rules during the innovation process phases of ideation, incubation, transformation, and industrialization for attaining project outcomes.Research limitations/implicationsThe study contributes to the new service development (NSD) literature by shedding light on simple rules and how managers may apply them to facilitate SSD. The main limitations stem from applying the qualitative case study approach and the interpretative nature of the study, which produces novel insights but prevents direct generalization to other empirical cases.Practical implicationsThe resulting framework provides guidelines for managers on how to establish formal and clear simple rules that enable industrial solution providers to approach decision-making in smart solution development in a more agile manner.Originality/valueThe study comprises one of the first attempts to investigate managerial heuristics in the context of SSD and puts forward a plea for further NSD research applying psychological conceptualizations to enrich the simple rules perspective.
Highlights
In search of higher economic returns and competitive advantage, equipment manufacturers have engaged in delivering a variety of smart solutions to extend their core offerings; a strategic transition acknowledged as digital servitization (Sklyar et al, 2019; Paschou et al, 2020; Tronvoll et al, 2020)
There are studies investigating decision making in servitization (Cui et al, 2019; Dahmani et al, 2020) and new service/solution development (NSD), little is yet known about managerial heuristics and, in particular, “simple rules” that guide how yes/no decisions are made in practice (Huikkola and Kohtam€aki, 2021)
This study starts with explicating new solution development process model triggers and interprets how managerial heuristics enable each solution development phase
Summary
In search of higher economic returns and competitive advantage, equipment manufacturers have engaged in delivering a variety of smart solutions to extend their core offerings; a strategic transition acknowledged as digital servitization (Sklyar et al, 2019; Paschou et al, 2020; Tronvoll et al, 2020). Some previous studies have focused on a rational and slow decision-making approach among manufacturers engaged in servitization, but agile decision-making routines have not been given a particular emphasis (Kristensson and Magnusson, 2019). This deficiency of evidence of managerial decision making restricts our understanding of how manufacturers manage their new smart solution innovation processes in situations where there are always more opportunities to pursue than resources to do so and when digitalization makes the business environment more complex, turbulent, and foggy. Paschou et al (2020, p. 278) call for research on decision making when managing innovation development: “This picture calls for future research endeavors to extend the scope of investigation into digital servitization (regarding the technologies covered and their combinatory effect, the potential benefits, and the application domains) and to develop models and frameworks to support decision-making by practitioners.”
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