user driven service innovation tools

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Service development tools in actionJari Kuusisto • Arja Kuusisto • Pirjo Yli-Viitala

Lappeenranta University of Technology

Department of Industrial Management

Reser Conference

Hamburg, September 8-9, 2011



2 Lappeenranta University of Technology

Introduction • Focus & Motivation

• Service innovation is a key source of productivity gains andcompetitive advantage across the industries

• At the same time, systematic management of complex serviceinnovation activities is still at an early stage of its development

• There clearly is significant scope for improvements

• This paper proposes two management tools that assistbusinesses in developing more systematic and effective servicedevelopment process

• The focus is on making optimal use of customer and user inputsduring the service innovation process.




Objectives and approach

1. To utilize (service) innovation literature in management toolsdevelopment

2. To make visible strategic level questions of the desired role of customers and users in new service development.

3. Propose a reference process for engaging customers effectively inservice innovation activities

4. Test and refine the usability of the tools in real life business cases




Developed tools

1. Integration of Customers into a New ServiceDevelopment Project• A seven step reference process

2. Selecting a most suitable Customer- or User-driven New

Service Development Method• Three key approaches for innovation management




TOOL # 1

Integration of Customersinto a New Service Development Project




Customer- and user-driven service innovation

• Tool assists businesses in setting up joint servicedevelopment projects with their customers or users

• A 7-step model gives a structure to the process of

integrating customers or users into a new servicedevelopment project

• It highlights key issues that managers of an innovatingservice provider should be aware and make conscious

choices of




Integrating customers in the NSD

• Flow diagramme and key modules of new service development

1. Define the focus of the service innovation projectin terms of the type of the customer and the service

category / service.

2. Define goals for customer /user engagement inthe project.

3. Identify customer groups or individual customerswho are able and willing to participate in the project.

4. Ensure resources and motivation to engage in aco-development project in your own organization.

6. Co-develop a good understanding of the customer need(s) and preliminary new service concepts to

address this need.

Evaluation of the key outcomes; New ServiceConcept and Renewed Service Development

Process.

5. Contact potential customers/users and arrange asession to discuss and set up the joint development

project.

7. Make agreements on the details of the jointdevelopment project.




TOOL # 2

Selecting a most suitable Customer- or User-driven New Service Development

Method




Developingunderstandingon user needs

New research

methods that

provide in-depth

understanding on

users needs

Supplier driven R&D&I and market research

User as drivers of innovation activities

©Kuusisto,2009

Users as R&D&Iactors andresources

New level of interaction

gives users more

power & responsibilities

in the R&D&I process

User innovations and their commercialization

User innovations represent great

potential but the effectivecommercialization requires new

skills and capabilities




Three alternative methods

• Building deep customer understanding

• Generates insights and contextual understanding on users needs

• Transforms this information into the service provider’s innovation process

• Ethnographic approach, emphatic design, contextual enquiry, contextual interviewing

• Involving customers in new service development• Customers directly participate in one or several stages of innovation process

• Customer or user roles or tasks vary

• Customer involvement has many objectives

• Participatory design, Conversational approach, ‘In situ’ identification of needs

• Making use of user-generated content and innovations•

Customers and users are innovators on their own• Effective commercialization of services that users have developed for their own use

• Harness user communities, innovation tool kits for users, lead user method




The desired role of customers or users inservice innovation - strategic considerations

• What kind of influence are we willing to grant to our customers andusers in new service development?• Active subjects or rather as objects?

• The contextual nature of service use - and its implications for new

service development?• Where and by whom do we think customer needs are best identified, and new ideas

most likely to be created?

• What challenges and changes do the desired new customer or user roles impose on existing new service development process?

• What is realistic?• How can management act to facilitate the change?




Conclusions




Concluding comments

• Presented tools focus on customers and users role in new servicedevelopment. The tools can be useful as they

• Provide a road map for the often vaguely defined early stages of customer co-operation

• Sharpen the focus and structure of the development project (modularity)

• Direct attention to key issues (e.g., objectives of engaging customers or users; allocation of resources).

• Introduce customer perspective into the innovation effort from the verybeginning – which creates customer commitment to the process and itsresults

• Stimulate assessment of various options

• Facilitate better informed, realistic choices

• Help communication inside organization and to external developmentpartners




Concluding comments

• From research-based concepts into practicaldevelopment tools• Literature analysis was essential in tools development

• But not sufficient as such

• Insights and feedback from the businesses wereessential• Translation of research-based concepts into practical service

development tools

• Tools need to be highly flexible and sensitive for situational elements




Concluding comments

• Developed tools proved to be very useful for businesspractitioners

• They clarify complex new service development situationand sharpen the management objectives

• Tool highlighting options of user involvement proved tobe an effective eye opener for the management• It demonstrated various ways to obtain information on user needs, and

possibilities to involve them into service development projects.

• A critical issue was how much influence and power the business really isready to distribute for the users?




Concluding comments

• Modular approach can• Enhance well-focused and systematic service development efforts

• Tackle the complex and often abstract nature of service innovationprojects

• Divide service process into manageable parts that focus the attention tokey tasks and actors relevant in each stage

• Divide the process into concrete work packages that are easier work with• Make communications much more effective across the organisation and

partners, content and requirements of each individual module

• User involvement• It is easier to involve and motivate users module by module

• It is possible to specify required contributions and skills module by

module• Modules enable effective monitoring of service development project




Thank you!

user driven service innovation tools

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