service innovation overview

Service Innovation – overview

Or$in$3$lines…$

What)have)I)learnt)on)my)journey)in)industrial)services?)

!  That$there$is$so$much$to$learn$about$‘industrial$services’$

!  To$embrace$change$as$it’s$fun$!  To$communicate$well$is$really$hard$!  That$a$small$team$can$be$highly$effec9ve$$

!  That$you$must$be$a$good$project$manager$

!  To$hate$bureaucracy$and$indecision$!  That$people$are$key$to$success$$

Or$in$3$words$‘intangibles$really$maHer’$

Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$

SERVICE INNOVATION Overview$


Course)basics)

:)this)is)an)advanced)course)so)I)am)expec&ng)lots)of)interac&on)


t_e_service_innovation 1/3

Module: Service Innovation

Module code TA.SI

Module type X Core ! Related ! Project ! Minor

Module level ! Basic ! Intermediate X Advanced

ECTS-Credits / Points X 3 ! 6 ! 12

Bachelor degree course Archi-tecture

Interior design

Building technolo-

gies

Civil engineering

Electrical engineering

Computer Science

Mechanical engineering

Business engineering | Innovation

Compulsory X / optional (X) X

Module responsible Dr. Shaun West, [email protected], telephone number

Execution X Semester ! Intensive week X Fall X Spring

Language ! German X English

Required entry Competencies All core modules on Basic level successfully completed, CON and SM+PM participated Proven English knowledge on level B2 or higher

Admission Conditions and mode of the competency confirmation

Admission Conditions: Competency confirmation: Final written exam

Competencies to achieve Operational learning goals concerning:

Professional Competencies F1: The students are able to use the den Hertog's model of service innovation and the Mathieu model of service supporting the product to service supporting the client.

F2: The students are able to define the service portfolio in relation to the lifecycle of high value capital equipment.

F3: The students are able to define service innovation and its importance to business success. F4: The students are able to present the similarities and differences with product

innovation/development. F5: The students understand how service innovation can be used to defend existing products

during the life cycle of the high value capital equipment. F6: The students are able to describe mythologies for the collection of innovative ideas. F7: The students are able to present the synergies that exist between technical and business

model innovation. F8: The students are able to adjust the stage-gate product based innovation process for a

service environment. F9: The students understand how service development is required to support the introduction

of new products or for the extension of existing products.

Methodological Competencies

M1: The students are able to chose and apply the respective tools correctly. M2: The students can develop results individually and in teams. M3: The students are able to analyse problems and to present and justify the results

considering the needs of the audience. M4: The students can integrate product design and business design by using appropriate tools

and methods.

Personal Competencies (Social Competencies)

P1: The students are able to acquire new competencies individually.

P2: The students are willing to assume responsibility for results developed individually or in teams.

P3: The students are able to communicate their results effectively and efficiently.

Literature / Teaching Material 1. KNOWLEDGE-INTENSIVE BUSINESS SERVICES AS CO-PRODUCERS OF

INNOVATION, PIM DEN HERTOG, International Journal of Innovation Management Vol. 4, No. 4 (December 2000) pp. 491–528

2. Valérie Mathieu, (2001) "Product services: from a service supporting the product to a

Short)descrip&on)of)the)course))

“The$focus$is$on$the$industrial$services$required$for$engineered$products.$The$importance$of$close$coopera9on$between$the$new$equipment$and$service$departments$of$a$business$to$create$high$value$innova9on$will$be$discussed.$$The$innova9on$stage$gate$process$will$be$described$and$its$limita9ons$discussed$within$the$constraints$of$a$service$environment.$$Use$of$concepts$from$service$industries$will$be$used$throughout.”$$

$S$West,$2013$


List)of)classes)

Class) Class)&tle)

1$ Introduc9on$and$revision$

2$ Understand$culture$

3$ Understand$customer$values$

4$ Value$of$unknown$needs$

5$ Develop$processes$

6$ Product/service$synergies$

7$ Changing$the$business$model$!$risks$and$rewards$

8$ Collec9ng$ideas$

9$ Alignment$of$drivers$

10$ Crea9ng$the$right$process$for$service$innova9on$

11$ How$service$helps$(or$hinders)$market$entry$

12$ Innova9ve$ways$to$deal$with$the$market$

13$ Real$world$applica9on$

14$ Check!up$on$the$course$


Objec&ves)of)the)module)and)each)class)

Class) Class)&tle) Topics) Objec&ves)

1$ Introduc9on$and$revision$

Service$innova9on$introduc9on$ •  To$review$some$old$learning$on$services$

•  To$gain$a$basic$understanding$of$Doblin’s$model$of$innova9on$

2$ Understand$culture$

Hertog$model,$Mathuieu$model$ •  Understand$why$culture$is$important$for$service$

•  Able$to$use$the$Mathieu$model$•  Able$to$use$the$servi9za9on$model$•  To$describe$the$cultural$barriers$that$can$prevent$service$innova9on$

3$ Understand$customer$values$

Life$cycles$for$high$value$capital$equipment$ •  Understand$the$life$cycle$of$engineered$products$

•  Able$to$describe$how$the$service$and$product$are$interrelated$

•  Iden9fy$the$key$value$drivers$of$the$owner$and$operator$of$the$products$

4$ Value$of$unknown$needs$

Business$successes$with$service$innova9ons$ •  To$understand$why$are$hidden$needs$important?$

•  An$ability$to$value$hidden$needs$•  Describe$successes$based$on$discovery$of$hidden$needs$




5$ Develop$processes$

Product$vs$service$innova9on,$$Dobin$model$vs$open$innova9on$

•  To$understand$Doblin’s$innova9on$model$•  To$understand$Chesbrough’s$open$innova9on$paradigm$

•  To$describe$the$innova9on$process$for$services$based$on$outcomes$

6$ Product/service$synergies$

Defending$products$with$service$innova9on$ •  To$understand$product/service$synergies$

•  To$review$one$product$upgrade$in$detail$•  To$be$able$to$create$upgrades$that$deliver$customer$value$and$protect$from$compe99on$

7$ Changing$the$business$model$!$risks$and$rewards$

Growing$products$via$service$innova9on$(new$business$model)$

•  Understand$that$services$can$be$packaged$to$create$more$customer$value$

•  Understand$how$it$was$done$in$other$the$aero$industry$

•  Understand$how$you$can$create$similar/alterna9ve$business$models$

8$ Collec9ng$ideas$Collec9on$of$innova9on$ideas$ •  Know$who$has$valuable$input$for$service$innova9on$

•  Understand$how$to$extract$the$service$innova9on$ideas$that$exist$in$peoples’$minds$




9$ Alignment$of$drivers$

Technology$and$business$model$innova9on$synergies$ •  To$be$able$to$understand$customer$drivers$

•  To$be$able$to$create$service$concepts$that$align$drivers$

•  To$iden9fy$internal$fric9on$points$caused$by$the$alignment$

10$ Crea9ng$the$right$process$for$service$innova9on$

Pros$and$cons$of$the$Stage$gate$process$for$service$innova9on$

•  To$be$able$to$evaluate$an$innova9on$process$•  To$be$able$to$present$the$limita9ons$of$the$stage!gate$process$with$service$innova9on$

•  To$be$able$to$develop$an$service$innova9on$process$that$fits$your$company$and$its$market$

11$ How$service$helps$(or$hinders)$market$entry$

Services$suppor9ng$new$technologies$–$barriers$to$market$entry$

•  To$be$able$to$able$to$describe$the$barriers$that$a$new$product$may$face$without$a$well$defined$service$concept$

•  To$be$able$to$create$a$service$concept$suppor9ng$new$project$




12$ Innova9ve$ways$to$deal$with$the$market$

OEM$and$ISP$services,$$Equipment$densi9es$and$2nd$9er$OEMs$

•  To$be$able$to$describe$the$issues$facing$2nd$9er$OEMs$with$service$

•  To$create$different$collabora9on$models$•  To$understand$risks$and$benefits$of$working$with$OEMs$

13$ Real$world$applica9on$

Guest$speaker$TAB$ •  To$hear$directly$from$an$industrial$service$business$•  To$pitch$some$of$your$ideas$to$them$

14$ Check!up$on$the$course$

Summary$Exam$prep$ •  Review$of$the$class$notes$giving$highligh9ng$the$key$

basic$know!how$•  Work$though$a$case$for$the$remainder$of$the$9me$

Is$it$clear,$any$ques9ons?$


Our)market)segment)‘industrial)services)for)engineered)products’)


Some)books)to)help)you)study)

:)please)buy)these)as)they)will)help)your)understanding)


Open$Services$Innova9on:$Rethinking$Your$Business$to$Grow$and$Compete$in$a$New$Era$Henry$Chesbrough$

What$Customers$Want:$Using$Outcome!Driven$Innova9on$to$Create$Breakthrough$Products$and$Services$Anthony$Ulwick$

Business$Model$Genera9on:$A$Handbook$for$Visionaries,$Game$Changers,$and$Challengers$Alexander$Osterwalder,$Yves$Pigneur$$

You)may)need)some)addi&onal)books)to)help)you)study)

:)these)will)really)deepen)your)understanding)


Service$Innova9on:$How$to$Go$from$Customer$Needs$to$Breakthrough$Services$Lance$BeHencourt$$

Service$Management:$Strategy$and$Leadership$in$the$Service$Business$Richard$Normann$

Winning$at$Service:$Lessons$from$Service$Leaders$Waldemar$Schmidt,$Gordon$Adler,$Els$van$Weering$$

We)will)extend)the)content)in)the)books)with)case)studies)and)other)

materials)


The)hard)truth…)it)may)take)you)&me)to)get)to)the)‘a:ha,)got)it’)stage)


Time$

Compe

tency$

I$don’t$get$this…$Got$it!!$

Linear$learning$

SERVICE INNOVATION

Some$revision…$…or$an$interac9ve$exam$


Review)of)the)product)development)key)

Tell$me$what$you$know?$


Conceptual)design)of)a)product)–)let)us)replace)‘product’)with)

‘service’)

Source:$P.$KoHler,$K.$Keller,$F.$Bliemel:$Marke9ng!Management,$2007$$



Let’s remind ourselves why services are important

http://www.worldbank.org/depweb/beyond/beyondco/beg_09.pdf



Service business enjoy higher margins and improved cash generation

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ROS (EBIT/sales), Industry average

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new products service



We)need)to)review)the)service)offering)that)was)previously)discussed)



We)always)need)to)draw)on)the)prior)service)class)on)product)

development)



We)need)to)remember)that)service)is)a)holis&c)‘team)game’)and)a)

process)


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Always think in the service 3Ps



Remember to consider what the best in the pack do to win

- Customer/service-oriented culture - Clearly defined strategy - Value services for the sake of service - Adapt business models - Collaborate with customers and partners - Know their customers and the installed base - Creativity and ‘eyes wide open’ -  Leadership seen on ‘shop-floor’ spreading the

message (and enforcing the culture)



SERVICE INNOVATION An introduction to what innovation means for services $


Service)innova&on)has)many,)many)aspects)for)us)to)consider)this)

makes)the)subject)‘interes&ng’)


Is$this$boat$a$product$or$is$it$delivering$a$service?$

Intangibles)become)more)and)more)important)with)services)

!  Value$stack$consists$of$all$the$elements$of$the$customer$stacked$on$the$of$each$other$

!  The$decision$maker$needs$to$understand$this$to$‘make$the$right$

decision’$Narayandas,$2002$Price$paid$$

(features)$

Value$received$

All$benefits$(tangible$and$intangible)$

Features$vs$benefits$


What)you)must)you)know)before)you)can)innovate)in)service?)


Know$your$past$

Know$your$customer(s)$and$their$markets$

Know$your$people$Know$your$culture$$

Know$your$market$

You$can$then$innovate$$in$service$

Know$your$capaci9es$and$where$to$acquire$new$ones$

What)kills)service)innova&on?)


Service)innova&on…)assume)that)the)product)can)be)copied)quickly)

and)easily,)it)will)make)us)think)more)imagina&vely)


SERVICE INNOVATION Some$useful$theory$


Doblin)created)a)helpful)model)for)innova&on)


hHp://www.doblin.com/$

Set$innova9on$strategy$

Design,$build$&$launch$

innova9ons$

Become$beHer$

innovators$

Set)innova&on)strategy…)



Innova9on$agenda$

Opportunity$spaces$

Contextual$research$

Scenario$planning$

Define$specific$goals$and$ini9a9ves$

Iden9fy$and$define$opportuni9es$for$growth$in$new$and$exis9ng$markets$

Understand$the$paHerns$and$outliers$of$innova9on$ac9vity$

An9cipate$forces$of$change$and$possible$futures$$

This$is$about$business$strategy$


innova9ons$User!centered$

research$Ten$types$of$innova9on$

Prototype$&$test$

Pilo9ng$&$launch$

Design,)build)and)launch)innova&ons)


Unearth,$research$and$understand$customer$needs$

Use$our$framework$to$develop$the$most$robust$innova9on$ini9a9ves$

Refine$and$de!risk$new$offerings$to$accelerate$launch$and$scaling$

$$

Develop$strategies$for$partnerships$and$commercializa9on$$$$

You$must$have$flexible$process$and$tools$to$assist$

Become$beHer$

innovators$Organiza9onal$assessment$

Transforma9on$campaigns$

Leadership$coaching$

Educa9on$&$training$

Become)beOer)innovators)


Assess$the$innova9on$condi9on$of$a$business$$or$group$

Design$and$deploy$new$structures,$processes,$tools$and$resources$for$innova9on$

Advise$leaders$on$their$unique$responsibili9es$for$championing$innova9on$

$$

Teach$the$principles,$prac9ces$and$methods$necessary$for$innova9on$$$

You$need$to$know$the$organiza9on$and$its$culture$

Looking)a)liOle)deeper)into)the)10)types)of)innova&on)–)this)was)a)

key)learning)(or)a:ha))for)me)



Innova9on$agenda$

Opportunity$spaces$

Contextual$research$

Scenario$planning$


innova9ons$User!centered$

research$Ten$types$of$innova9on$

Prototype$&$test$

Pilo9ng$&$launch$

Become$beHer$

innovators$Organiza9onal$assessment$

Transforma9on$campaigns$

Leadership$coaching$

Educa9on$&$training$

This$helps$us$understand$where/how$to$innovate$

Doblin)provides)a)great)model)for)moving)away)from)product)

development)

!  they$view$the$balance$between$product$development$and$other$forms$of$innova9on$is$unbalanced$


Investment$

Returns$ Investment$

Returns$

Why$do$you$think$this$is?$

Investment$

Returns$

SERVICE INNOVATION A$short$warning$about$‘standardiza9on’$of$services$


Service)is)not)about)turning)employees)into)robots))

–)this)is)a)very)expensive)mistake)

!  Schlesinger$and$HeskeH$(HBS)$established$that$the$model$‘the$employee!as!a!disposable!tool’$is$very$costly$to$a$service$company$


!  Employees$hate$it$!  Your$customers$will$not$like$it$!  So$why$do$companies$do$it?$! What$should$you$consider?$

Schlesinger)and)HeskeO’s)model)included)4)elements)–)all)of)them)

are)very)humanising)

These$humanizing$themes$will$be$seen$in$many$classes$Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$

Valuing$investment$in$people$as$much$as$investments$in$

technology$

Using$technology$to$support$(not$

replace)$front$line$people$

Purng$as$much$emphasis$on$selec9on$and$

training$for$front$line$employees$as$much$as$managers$and$execu9ves$

Linking$compensa9on$and$performance$for$

employees$at$every$level$

SERVICE INNOVATION Closing$


Any)ques&ons?)


Hint$–$review$your$old$class$notes$and$consider$the$life9me$of$a$car$

Next)lecture)–)understanding)cultures)

In$your$teams$prepare$a$presenta9on$(5$slides)$that$on$an$industrial$company$of$your$choice$(note:$if$you$want$guidance$please$speak$with$me)$1.  Overview$of$the$company$and$their$

structure$2.  Goods$and$services$that$they$provide$3.  How$do$they$view$(or$value)$service$4.  A$SWOT$or$3Ps$on$service$5.  A$view$on$their$service$innova9on$culture$$


Remember$you$MUST$complete$5$2$page$reports$

service innovation overview

Business

product service

service portfolio

constraints service

mathieu model of service

service innovation overview

service innovation module

shaun west

business success