Service innovation
Exploring opportunities for growth
Service innovation: Exploring opportunities for growth
This stream helps managers to rethink their entire business with the objective to systematically identify and explore growth opportunities through service innovations and solutions. The first step on this journey is to unlearn the commonly held belief that services are "intangible products" and can be managed and innovated as such. The second step is a shift in perspective, where participants move from "value chain" thinking to analyzing and shaping "value constellations." Thirdly, customers are not "innovation adopters" in "target markets", but active and resourceful co-creators of value. Within this perspective, the firm's value proposition can be characterized by relieving customers from activities they do not want to perform and by enabling customers to co-create value differently. This radical reframing leads to the fourth step, identifying and exploring profitable growth opportunities for service innovations and solutions.
I am Stefan Michel, the professor of marketing at IMD and I am the stream director for service innovation. The objective of this stream is to help you rethink your business and to identify growth opportunities through service and solution.
First we have to unlearn some of the thinking that prohibits service innovation in many companies. One is that services are perceived as intangible products, the other one is that we have to move away from the idea of a value chain towards the idea of a value constellation and third, customers should not be perceived as passive recipient of value but actually be as co-creator of value. So on the first day we talk about the idea of moving from value chain thinking onto value constellation thinking and there are many applications out there, for example, Google or Itunes or Grameen Bank or mobility car sharing and so on, so we start with this broader picture of a value constellation.
On the second day we talk about the role of customers as active co-creators of value and we look and we look deeper into their roles as users, as buyers and as payers. Again there are several cases that link to that, for example, Hiestand, the b2b bakery has applied that concept or of course Ikea or Express, those are all companies who really got the idea and create this new innovation.
The third day builds on that, when we look at what is the value constellation in this new thinking and if we perceive the customers as an active co-creator of value, what actually company does is, it relieves from doing things they don’t want to do anymore and it enables the customer to do things they want to do.
The forth day in the program is making sure that the innovations are not only liked by the customer but also that they are profitable. This is often a big problem for companies that they have good ideas, they have the solution but they cannot make it profitable because they try to use old pricing models and strategies to sell new services, so we talk more about understanding and capturing the willingness to pay of customers for service and solution.
Finally the last day is not about the what of a service innovation but it’s about the how. What does it take, not in any organisation but in your organisation, to make it happen? What are the capabilities and resources and tools you need to create service innovation.
If you want to learn more, please join us at OWP 2010.