Managing service innovation involves particular challenges. Some of these are generic and some are specific to the service sector under consideration. Ideas on how to manage services are relevant to manufacturers and organizations that only provide services.
This chapter has shown the key role of services in many economies, the increasing importance of services for manufacturers, and the need for innovation in the public and not-for-profit sectors. As part of this, products are inextricably linked to their production and delivery – service augmentation. Service augmentation, including the environment in which the service is delivered, has a strong influence on customer satisfaction. The intangibility, customer contact, inhomogeneity, perishability and multifaceted quality of services all have implications for the management of innovation.
Managing innovation and new service development is challenging because of the diverse nature of service sectors and the many categories of services. A suitable management process is required and this must consider not only the product itself but also the augmented service offering. The process also needs to ensure good teamwork, spanning the front and back offices.
Interview with Jeff Gould
Management Recommendations
Irrespective of whether your organization is in the manufacturing, service, public, or not-forprofit sector, identify the role of services in your business. Consider which customer segments require particular services.
Identify where innovations in both the service product and the augmentations can lead to competitive advantage. Make these improvements as tangible as possible to customers.
Recognize the need for an efficient new service development process.
