Services Innovation: Successful versus Unsuccessful Firms

There is some acceptance of the idea that services and products are so intertwined that the process for development is the same, but there has been no rigorous empirical evidence to support that contention. Uses data collected in in‐depth interviews with 80 senior level managers in 16 different firms, 25 group discussion sessions with 388 executives in 241 additional firms, and from a mail survey of 217 senior managers in firms from 11 differing service categories. In all three phases, elements of the service innovation process were examined. Examines the general similarity to new product development and concentrates on the major factors differentiating successful from unsuccessful service innovation. Concludes that there is some similarity between product and service innovation processes, but that significant differences exist, with the service arena demonstrating more of a lack of new service strategic planning, reliance on competitive imitation for new concepts, and less presence of innovation champions. Successful firms in new service development more closely fit innovations with the current business than do unsuccessful firms. They also present more of an opportunity for a champion to stay and manage a new offering after launch. There is no apparent difference in the formality of the process between successful and unsuccessful managers, with most service firms reporting a more ad hoc process.