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Service innovation overview

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  • 1. Service Innovation – overview
  • 2. 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$
  • 3. SERVICE INNOVATION Overview$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 4. Course)basics) :)this)is)an)advanced)course)so)I)am)expec&ng)lots)of)interac&on) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ 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, shaun.west@hslu.ch, 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.
  • 5. 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.$$Use$of$concepts$from$service$industries$will$be$ used$throughout.”$ $ $S$West,$2013$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 6. List)of)classes) Class) Class)&tle) 1$ Introduc9on$and$revision$ 2$ Understand$culture$ 3$ Understand$customer$values$ 4$ Value$of$unknown$needs$ 5$ Develop$processes$ 6$ Product/service$synergies$ 7$ Changing$the$business$model$!$risks$and$rewards$ 8$ Collec9ng$ideas$ 9$ Alignment$of$drivers$ 10$ Crea9ng$the$right$process$for$service$innova9on$ 11$ How$service$helps$(or$hinders)$market$entry$ 12$ Innova9ve$ways$to$deal$with$the$market$ 13$ Real$world$applica9on$ 14$ Check!up$on$the$course$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 7. Objec&ves)of)the)module)and)each)class) Class) Class)&tle) Topics) Objec&ves) 1$ Introduc9on$ and$revision$ Service$innova9on$ introduc9on$ •  To$review$some$old$learning$on$services$ •  To$gain$a$basic$understanding$of$Doblin’s$model$of$ innova9on$ 2$ Understand$ culture$ Hertog$model,$ Mathuieu$model$ •  Understand$why$culture$is$important$for$service$ •  Able$to$use$the$Mathieu$model$ •  Able$to$use$the$servi9za9on$model$ •  To$describe$the$cultural$barriers$that$can$prevent$ service$innova9on$ 3$ Understand$ customer$ values$ Life$cycles$for$high$value$ capital$equipment$ •  Understand$the$life$cycle$of$engineered$products$ •  Able$to$describe$how$the$service$and$product$are$ interrelated$ •  Iden9fy$the$key$value$drivers$of$the$owner$and$ operator$of$the$products$ 4$ Value$of$ unknown$ needs$ Business$successes$with$ service$innova9ons$ •  To$understand$why$are$hidden$needs$important?$ •  An$ability$to$value$hidden$needs$ •  Describe$successes$based$on$discovery$of$hidden$ needs$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 8. Objec&ves)of)the)module)and)each)class) Class) Class)&tle) Topics) Objec&ves) 5$ Develop$ processes$ Product$vs$service$ innova9on,$$ 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’$minds$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 9. Objec&ves)of)the)module)and)each)class) Class) Class)&tle) Topics) Objec&ves) 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$project$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 10. Objec&ves)of)the)module)and)each)class) Class) Class)&tle) Topics) Objec&ves) 12$ Innova9ve$ ways$to$deal$ with$the$ market$ OEM$and$ISP$services,$$ Equipment$densi9es$and$ 2nd$9er$OEMs$ •  To$be$able$to$describe$the$issues$facing$2nd$9er$OEMs$ with$service$ •  To$create$different$collabora9on$models$ •  To$understand$risks$and$benefits$of$working$with$ OEMs$ 13$ Real$world$ applica9on$ Guest$speaker$TAB$ •  To$hear$directly$from$an$industrial$service$business$ •  To$pitch$some$of$your$ideas$to$them$ 14$ Check!up$on$ the$course$ Summary$ Exam$prep$ •  Review$of$the$class$notes$giving$highligh9ng$the$key$ basic$know!how$ •  Work$though$a$case$for$the$remainder$of$the$9me$ Is$it$clear,$any$ques9ons?$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 11. Our)market)segment)‘industrial)services)for)engineered)products’) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 12. Some)books)to)help)you)study) :)please)buy)these)as)they)will)help)your)understanding) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Open$Services$ Innova9on:$Rethinking$ Your$Business$to$Grow$ and$Compete$in$a$New$ Era$ Henry$Chesbrough$ What$Customers$Want:$Using$Outcome! Driven$Innova9on$to$Create$ Breakthrough$Products$and$Services$ Anthony$Ulwick$ Business$Model$ Genera9on:$A$Handbook$ for$Visionaries,$Game$ Changers,$and$Challengers$ Alexander$Osterwalder,$ Yves$Pigneur$$
  • 13. You)may)need)some)addi&onal)books)to)help)you)study) :)these)will)really)deepen)your)understanding) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Service$Innova9on:$How$to$Go$from$ Customer$Needs$to$Breakthrough$ Services$ Lance$BeHencourt$$ Service$Management:$ Strategy$and$Leadership$in$ the$Service$Business$ Richard$Normann$ Winning$at$Service:$Lessons$ from$Service$Leaders$ Waldemar$Schmidt,$Gordon$ Adler,$Els$van$Weering$$
  • 14. We)will)extend)the)content)in)the)books)with)case)studies)and)other) materials) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 15. The)hard)truth…)it)may)take)you)&me)to)get)to)the)‘a:ha,)got)it’)stage) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Time$ Competency$ I$don’t$get$this…$ Got$it!!$ Linear$learning$
  • 16. SERVICE INNOVATION Some$revision…$ …or$an$interac9ve$exam$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 17. Review)of)the)product)development)key) Tell$me$what$you$know?$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 18. Conceptual)design)of)a)product)–)let)us)replace)‘product’)with) ‘service’) Source:$P.$KoHler,$K.$Keller,$F.$Bliemel:$Marke9ng!Management,$2007$$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 19. Let’s remind ourselves why services are important http://www.worldbank.org/depweb/beyond/beyondco/beg_09.pdf Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 20. Service business enjoy higher margins and improved cash generation Bain&Comp.WachstumsmotorService,2010 ROS (EBIT/sales), Industry average share of total sales new products service Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 21. We)need)to)review)the)service)offering)that)was)previously)discussed) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 22. We)always)need)to)draw)on)the)prior)service)class)on)product) development) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 23. We)need)to)remember)that)service)is)a)holis&c)‘team)game’)and)a) process) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ http://www.tech-faq.com/itil-processes.html Tell$me$what$you$know?$
  • 24. Always think in the service 3Ps Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 25. 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$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Tell$me$what$you$know?$
  • 26. SERVICE INNOVATION An introduction to what innovation means for services $ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 27. Service)innova&on)has)many,)many)aspects)for)us)to)consider)this) makes)the)subject)‘interes&ng’) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Is$this$boat$a$product$or$is$it$delivering$a$service?$
  • 28. 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$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 29. What)you)must)you)know)before)you)can)innovate)in)service?) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ 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$
  • 30. What)kills)service)innova&on?) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 31. Service)innova&on…)assume)that)the)product)can)be)copied)quickly) and)easily,)it)will)make)us)think)more)imagina&vely) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 32. SERVICE INNOVATION Some$useful$theory$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 33. Doblin)created)a)helpful)model)for)innova&on) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ hHp://www.doblin.com/$ Set$ innova9on$ strategy$ Design,$ build$&$ launch$ innova9ons$ Become$ beHer$ innovators$
  • 34. Set)innova&on)strategy…) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Set$ innova9on$ 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$
  • 35. Design,$build$ &$launch$ innova9ons$ User!centered$ research$ Ten$types$of$ innova9on$ Prototype$&$ test$ Pilo9ng$&$ launch$ Design,)build)and)launch)innova&ons) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ 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$
  • 36. Become$ beHer$ innovators$ Organiza9onal$ assessment$ Transforma9on$ campaigns$ Leadership$ coaching$ Educa9on$&$ training$ Become)beOer)innovators) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ 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$
  • 37. Looking)a)liOle)deeper)into)the)10)types)of)innova&on)–)this)was)a) key)learning)(or)a:ha))for)me) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Set$ innova9on$ strategy$ Innova9on$ agenda$ Opportunity$ spaces$ Contextual$ research$ Scenario$ planning$ Design,$build$ &$launch$ 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$
  • 38. 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$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Investment$ Returns$ Investment$ Returns$ Why$do$you$think$this$is?$ Investment$ Returns$
  • 39. SERVICE INNOVATION A$short$warning$about$‘standardiza9on’$of$services$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 40. 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$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ !  Employees$hate$it$ !  Your$customers$will$not$like$it$ !  So$why$do$companies$do$it?$ !  What$should$you$consider?$
  • 41. 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$
  • 42. SERVICE INNOVATION Closing$ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 43. Any)ques&ons?) Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$
  • 44. 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$ $ Service$Innova9on$–$class$introduc9on$|$Dr$Shaun$West$ Remember$you$MUST$complete$5$2$page$reports$