Service innovation what makes it different

Here, institutional arrangements, including shared norms, practices and meanings, are also considered necessary for engaging in social interaction Koskela-Houtari et al. This implies that meaning has a role in explaining how actors interact and engage with resources. However, its conceptual exploration has not been thoroughly pursued in connection to service innovation. In the next paragraphs, we focus on further dissecting these building blocks and point to the existing challenges.

Viewing service innovation as new value propositions and new value cocreation posits value formation as an interactive, contextual and phenomenological process defined as value-in-use Edvardsson et al. Research indicates that the process of interactive value formation encompasses a broad network of actors within intricate social and institutional environments Akaka et al.

Additionally, Vargo et al. Some studies focus more on experiential components of value, pointing to the practices of value formation and discussing meaning as an important element of phenomenological experience. Helkkula et al. Thus, value formation is not linear and rational but individual, intersubjective, social and relational, and it can also take place outside of service encounters.

This has important implications for service innovation. Service providers cannot control the entire value cocreation process since new value formation is affected both by the joint and individual actors' contexts Helkkula et al.

However, what service providers can do is influence how their value propositions are designed because they represent the key drivers according to which actors decide to engage in new value cocreation Kowalkowski, Although research indicates the importance of cocreative practices in developing new value propositions and their connection to new value formation Kowalkowski et al.

This implies that understanding new value cocreation based on value propositions should take into consideration not only how value propositions are designed but why actors would find them meaningful to engage with.

Resources and resource integration together represent another key aspect in the process of new value cocreation, making it essential to understand service innovation Mele et al.

In S-D logic, resources are characterized as operand, pertaining to tangible assets, and operant, pertaining to knowledge and skills, and as becoming in use Vargo and Lusch, Thus, through resource integration, actors perform a series of activities to cocreate certain benefits Payne et al. Operant resources cannot be observed outside the usage and interaction in which value cocreation happens since they are not added qualities.

Although S-D logic posits that resources become in use, understanding the process of their becoming needs further clarification, especially regarding the connection between individual interaction practices Findsrud and Dehling, Peters et al.

They emphasize the need to understand resource integration by defining and operationalizing interaction, how people experience it, how it is context related and how people create meaning during resource integration.

They also see resources as having an intended purpose that is realized only through the deployment of human capabilities. As such, resources do not have intrinsic or given value but become valuable only during the intended activity. The human-centered design perspective posits that all interaction and usage are bound by meaning Almquist and Lupton, ; Krippendorff, Therefore, we contend that integrating a human-centered perspective evolving around meaning and interaction can enrich knowledge of resources because meaning can explain resources as possibilities realized in use through human agency.

Although meaning seems to play an important role in understanding interaction connected to value cocreation and resource integration, previous research on the role of meaning in generating new forms of value cocreation is marginal. Thus, we address research challenges that call for understanding how to develop new meaningful value propositions Payne et al.

To this end, we posit the concept of meaning as an essential but missing link in the ongoing discussion on new value cocreation in service innovation, and we explore how the concept of meaning, grounded in a human-centered perspective from the design domain, can be relevant in addressing these challenges. As MacInnis suggests, integrating conceptual knowledge from different domains can open new research spaces for unexplored phenomena and become important for knowledge sharing and multidisciplinary contributions.

Thus, we argue that the concept of meaning can provide new insights to address this challenge, which is relevant for understanding the entirety of the service innovation phenomenon — both its development and adoption. In the human-centered design domain, there is an established body of knowledge regarding the concept of meaning.

Meaning plays a key role in understanding interaction with artifacts because it is underpinned by the assumption that people have agency in interacting with what makes sense to them Krippendorff, The human-centered perspective defines artifacts on a broad trajectory including products, services, systems or discourses and focuses on uncovering the interactive and intersubjective character of meaning regardless of the trajectory level Krippendorff, Defined as a trajectory of artificiality Krippendorff, , this perspective sees artifacts evolving throughout six levels, reflecting the shift from an object-centered to a human-centered paradigm and moving away from the dyadic user-artifact perspective toward systems of multiple actors.

Krippendorff argues that the increasing complexity of the social world in which people interact is responsible for this evolution of artifacts where meaning becomes a key to understanding how people interact with products, interfaces, systems and language. This perspective shifts the role of artifacts that exist as interfaces through which designers deliver functionalities to passive end users in order to satisfy their presupposed needs toward collaborative systems of meaning where actors have autonomy and agency.

Thus, the human-centered design perspective is concerned with a deep understanding of actors' interaction practices depending on how they use artifacts to be able to access different manifestations of meaning. Following this trajectory, value propositions can also be considered artifacts. From a human-centered perspective, understanding how people will engage with value propositions and integrate resources to cocreate new value is a question of meaning. For example, a company developing smart home systems can view their value proposition as a technology that offers a variety of functionalities that provide users with actionable insights about their energy consumption.

The presence of actionable insights ensuring guidance, safety or delight is assumed to be a value-creating novelty that will motivate people to interact with the system, thus enabling new value cocreation. However, regardless of how advanced technology is, how seamlessly it can be integrated into a person's home and how valuable it is perceived to be, its adoption in the form of intelligible and ongoing usage will follow to the extent that a user can interpret the technology as meaningful.

Although the extent of adoption will depend on different cognitive, affective and behavioral interpretative components relating to meaning, acknowledging its role in designing value propositions, resource integration and value formation is important for understanding how new value cocreation emerges. The concept of meaning in the human-centered perspective is, thus, fundamental in explaining interaction with artifacts. This knowledge has important implications for the service innovation process and outcomes.

There are several viewpoints on the role of meaning in design including use and product experience Boess and Heimrich, ; Cupchik and Hilscher, , product semantics and language Kazmierczak, ; Krippendorff and Butter, ; Medeiros, and human—computer interaction Sengers and Gaver, Desmet and Hekkert provide a framework for product experience that is based primarily on the affective component, emphasizing the importance of interaction and interpretation.

However, they appraise meaning as attached to products and, therefore, secondary to experience. What is usually emphasized in this view is that the meaning-making process is cognitive, building upon previous experiences and meanings that emerged from it. It also suggests that meaning, especially at the individual level, can become stronger or weaker with every subsequent interaction.

Another conceptualization focuses on meaning as a phenomenon more closely connected to use. Here, the act of interaction signifies that meaning making took place, as this conceptualization emphasizes that people are always making sense of the artifacts they use Krippendorff, , Therefore, meaning has an axiomatic status and represents the essence of human centeredness, acknowledging that what drives interaction is the meaning-making activity.

Meaning can, thus, be characterized as a semantic quality of an artifact that leads to pragmatic and emotional interaction Medeiros, They argue that these components can reveal the quality of interaction and direct the design practice accordingly.

However, as meaning is tied to the context of use where interaction is taking place, it cannot be predicted Almquist and Lupton, ; Krippendorff, This represents another important tenet in characterizing meaning. Therefore, the idea that meaning can be designed is considered inadequate because it presupposes that meaning is a quality that can be produced and added to artifacts and, consequently, is always interpreted in the same way. Instead, artifacts should be designed to allow and encourage those interpretations to arise in use.

This approach suggests that meaning gives users incentives to engage according to their own interpretative framework. These insights are significant in the context of service innovation from two aspects. First, they acknowledge that value cocreation entails some form of interpretation, which is always part of a user's idiosyncratic sphere, unfolding in interaction.

Meaning and value share a common conceptual ground that includes the following: interaction, context, institutional generation, emergence and idiosyncrasy Kustrak Korper et al. As new value cocreation is not possible without actors integrating resources and resources are contended to become in use Edvardsson et al.

This suggests that meaning encompasses the process of new value cocreation because it allows interactions to unfold among actors relating to resource integration and value cocreation.

Second, meaning has consequences for how value propositions are designed and adopted. As they are instrumental for resource integration, value propositions should be designed to enable interpretations that will stimulate interaction and enable new value cocreation. Although meaning cannot be directly observed, designing meaningful value propositions should entail understanding and interpretation of actors' practices of use that can uncover their mental models, individual and shared competencies and institutionalized norms or what Krippendorff refers to as second-order understanding.

This strongly corresponds to phenomenological views on value and innovation in S-D logic Helkkula et al. In this paper, we posit that meaning manifests in interaction, characterizing it as an idiosyncratic, relational and guided by situational or contextual elements relating to the context of use Krippendorff, Here, context is defined as the boundary within which artifacts can mean something Krippendorff, Understanding that the contextual boundaries have changed will result in the interaction supported by the new meaning.

To some extent, this supports Helkkula et al. Meaning cannot exist without human involvement, where possibilities and restrictions of interpretation are affected by the actors' direct perception of the environment Gibson, Going back to resource integration, this can explain how resources become through meaning and interpretation because resources also require human agency to be recognized as useful or beneficial in a particular context Peters et al.

Thus, meaning is relational, it emerges in use and it highlights the interconnectivity and significance of usage, artifacts and context, which are reinforced through interaction. The previous sections delineated the theoretical building blocks of service innovation and the concept of meaning from the human-centered design domain. They represent the conceptual material used in this section to propose the integrative framework explaining the role of meaning in service innovation, especially its connection to resource integration and value cocreation.

First, we explain the interpretative framework and the dynamics between meaning, resources and value. Then we provide an illustrative example referring to the role of meaning in service innovation, followed by a supporting representation contextualizing meaning in connection to new value propositions and new value formation.

This framework positions meaning, resources and value as the core components of service innovation and considers their interactive, use-driven and phenomenological nature Almquist and Lupton, ; Kleinaltenkamp et al. The core components are directed and reinforced through the process of resource integration and value cocreation. They also frame the interpretative dynamics pointing to the role of meaning for resource interpretation as a way of resources becoming, which precedes the value cocreation Sengers and Gaver, Following the premise that resources become in use Edvardsson et al.

It also shows the relationship of meaning to the phenomenological aspect of new value formation, which is essential in understanding how service innovation becomes adopted Snyder et al. As meaning is both phenomenologically dependent on individual mental models and interactively established through social contexts and practices, focusing on the dynamics of meaning, resources and value is essential for understanding how service innovation is both created and adopted.

As Figure 1 shows, all the interactions between the elements within this conceptual framework are represented in continuous loops that point to the phenomenological and codependent nature of the main concepts.

First, the outer loop points to the interrelationship between meaning and value, while the two supporting loops represent the specific practices of meaning and value related to resource integration. There are fundamental differences between both. What is the difference in terms of development efforts between a new product and a new service? And do these differences matter? To explain, let's compare for example a Fitbit and a lifestyle coaching program. Both can help you with living a healthier lifestyle, yet, they are clearly very different solutions.

There are a few takeaways from the above comparison between the Fitbit and the Lifestyle coaching program, that could be relevant for your new service development project. On the positive side, it is easier to develop a new service since you have more flexibility to adjust a new service as you go.

On the negative side, it is difficult to objectively assess the value of a new service idea, simply because it is less tangible than a product. While you certainly can explain what the new service concept is about, you cannot experience it till it exists.

Whereas for most products, you can build non-functional prototypes that will help others understand what the new product is supposed to do. Another negative is the limited scalability. Your market size is limited by the capacity of a service provider. Given there are only 24 hours in a day and 8 hours in a workday, only a limited amount of people can be serviced by one provider. Nowadays, with the help of technology, you certainly can scale new service solutions and reach larger audiences.

Miles, Land Boden, M. Preissl, B. Information Technology and Development , Elsevier, a. Schumpeter, J. Strambach, S. Brigitte Preissl There are no affiliations available. Personalised recommendations. Cite chapter How to cite? Decision Sciences Abreu Grinevich, Kitson and Savona To analyze what innovation in services means and how it can be measured.

Call for alternative metrics. These metrics should meet four criteria — accuracy, longevity, comparability and ease of collection NESTA, Any new metrics need to be used sensitively, so that they do not distort policy. Survey approach; initially disseminated among individuals from Taiwan who worked in communications-related companies and were responsible for developing innovative services who attended a forum of innovative services.

Later, more questionnaires were distributed within the organizations of the individuals. The findings suggest that competencies can be measured as a five-dimensional construct consisting of industry-specific, product-related, market-related, technology-related, and organization-related. Journal of Service Management Tajeddini To examine potential influences of innovativeness on effectiveness and efficiency and their subsequent effects on restaurant business performance.

Questionnaire approach; personal interviews with owner of Iranian restaurants. Study shows a positive effect of innovativeness on OE operating effectiveness and CE cost efficiency. The results reveal that a favourable combination of CE i. Education, Business and Society: Contemporary Middle Eastern Issues Aas and Pedersen To investigate if firms focusing on service innovation perform better financially than firms not focusing on service innovation.

Two research questions posed: Do firms in 1 the service industries and 2 the manufacturing industries focusing on service innovation activities in the period — perform better financially in the following year than firms not focusing on such activities?

Firms focusing on service innovation have significantly higher productivity sales revenue per employee growth than firms not focusing on service innovation. The increased sales revenues resulting from service innovation in service firms seem to be neutralized by increased costs, meaning that these firms are unable to benefit financially, in terms of operating result growth, from their innovation activities. The Service Industries Journal Den Hertog, Gallouj and Segers Attempts to measure technological and nontechnological innovation, organizational aspects of the innovation process in the Dutch hospitality industry and their link to firm performance.

Based on 12 expert interviews and a telephone survey. Innovation in most service industries is less formalized, less explicitly managed and less often budgeted as compared with innovative manufacturing firms. In terms of firm performance, it is signalled that the impact of innovation should be perceived more widely and also include nonfinancial impacts. The Service Industries Journal Gotsch and Hipp To explore how trademarks could be established as an additional indicator for service innovation.

Trademarks contribute to explaining KI B S innovation and seem to be a suitable innovation indicator for these types of firms. The findings further indicate that trademark registration is an adequate innovation indicator in KIBS industries, at least for product innovations.

The Service Industries Journal Steinicke, Wallenburg and Schmoltzi How can governance mechanisms be utilized to foster innovativeness in horizontal service cooperations in order to enhance cooperation performance?

Collected primary data from service companies via a key informant approach Web-based survey. Both formal and relational governance help to promote coordination and mitigate opportunism among cooperation partners to create the setting necessary for innovation. The authors were able to confirm the proposed predominant role of relational governance in service cooperations.

This is a differentiating aspect between the service and manufacturing sectors, in the sense that formal governance is assumed to be of higher importance in cooperations of product companies. Journal of Service Management Thakur and Hale To understand and compare managerial perceptions about the enabler and barriers of service innovation within and between the U. Online survey disseminated among U. Findings suggest that service innovation is positively related to financial and non-financial performances in both U.

Journal of Business Research Coutelle-Brillet, Riviere and des Garets To analyze the nature of the perceived value of service innovation in the B2B context by investigating the components of Holbrook's framework. A two-stage qualitative study. The paper highlights the diversity of components of service innovation value not only economic and functional components but also emotional, symbolic, altruistic, and interactional components of value.

Online survey in Taiwan. The findings suggest that technology leadership, service leadership, brand equity, and customization are the main determinants of loyalty. Journal of Business Research Yang, Yang and Chen To examine the effects of service innovation on financial performance of proprietorship audit firms in Taiwan. The findings demonstrate that proprietorship firms only providing management advisory services MAS non-conventional firms financially outperform those providing both traditional practices and MAS general firms , and the latter financially outperforms those only offering traditional practices conventional firms.

Mixed methods approach i. The study highlights three attributes of blogging-oriented service innovation related to content creation and information service capabilities, including information sharing, completeness, and professionalization, providing bloggers with a competitive and correct direction for developing new blog services.

Internet Research. Aas, P. The impact of service innovation on firm-level financial performance. The Service Industries Journal, 31 , pp. Abreu, V. Grinevich, M. Kitson, M. The Service Industries Journal, 30 , pp. Adams, J. Bessant, R. Innovation management measurement: A review. International Journal of Management Reviews, 8 , pp. Open services innovation: Rethinking your business to grow and compete in a new era. Jossey Bass, ,. Coutelle-Brillet, A. Riviere, V. Perceived value of service innovation: A conceptual framework.

Den Hertog. Knowledge-intensive business services as co-producers of innovation. International Journal of Innovation Management, 4 , pp. Den Hertog, F. Gallouj, J. Djellal, F. Services, innovation and performance: General presentation.

Journal of Innovation Economics, 5 , pp. Gotsch, C. Measurement of innovation activities in the knowledge-intensive services industry: A trademark approach. The Service Industries Journal, 32 , pp. Jesson, L. Matheson, F.