Developing Innovative Practice in Service Industries

Developing Innovative Practice in Service Industries

Elayne W. Coakes (Westminster Business School, UK), Peter Smith (The Leadership Alliance Inc., Canada) and Dee Alwis (Middlesex University, UK)
DOI: 10.4018/978-1-60566-264-0.ch015
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This chapter presents the argument that service innovation is promoted by supporting divergent interpretations, enlarging the scope of employee and organizational skills and competencies, making interactions and knowledge sharing between people easy, and by encouraging close ties with customers. The chapter further argues that service organizations that utilize sociotechnical mechanisms for knowledge sharing through the use of a successful community of innovation (which we term a CoInv), and that build into their innovative capacities a strong relationship with their customers and suppliers, are very likely to innovate successfully. The argument is demonstrated through a qualitative case study where data analysis was deductive from multiple data sources. The chapter also demonstrates the power and efficacy of channeling activities through community innovation lenses. We argue that identifying innovation champions and comprehensively supporting them will potentially trigger more successful innovations thus improving service competitiveness in the market place.
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The role of networks in innovation begins at the earliest stages of the innovation process, where they provide the collective support necessary to risk going against the established ways of doing things.

—A. Hargaddon (How Breakthroughs Happen, 2003)



Services lie at the very hub of the economic activity of all societies. Indeed according to Groönroos (2000), today’s firms do not compete on the basis of physical products but rather on the basis of the services they offer. This is because from the customer’s perspective there is often little to differentiate competing products. Over the last decade, deregulation and the globalisation of markets and service companies have made for severe and relentless competition among service firms. It is therefore no surprise that service innovation is at the heart of a service organization’s competitiveness, and that constant adaptation in a turbulent environment requires a continuous flow of new offers (Stevens & Dimitriadis, 2005). Service executives are increasingly recognizing the need to regularly develop new services to stay competitive (Alam, 2006), and research has confirmed that new service development (NSD) is indeed a major competitive factor for the service industry (Johnson et al., 2000; Fitzsimmons and Fitzsimmons, 2001).

Stevens and Dimitriadis (2005) confirm that what facilitates new product development also facilitates new service development i.e. the way to foster innovation in either case is to foster learning. This is why, supporting divergent interpretations, enlarging the scope of skills and competencies associated with a particular development, facilitating testing, making interactions and knowledge sharing between people easier, and encouraging the formalisation of outcomes should be used more systematically as a guiding principle for managing NSD.

The authors have argued elsewhere (Coakes & Smith, 2007) that successful innovation must be based in co-ordination mechanisms that support the problem-solving efforts of the organisation’s human capital and the dynamic processes of sense making and learning within the organisation, and that innovation-focused communities are one of the most effective supporting organisational forms for creative product development. Additionally, the generation of new ideas that activates innovation is facilitated by diversity and breadth of experience, including experts who have a great deal of contact with other experts in the fields; links to users; and links to ‘outsiders’. The theory of innovation put forward by Pennings and Harianto (1992) emphasizes that innovation emerges from a firm’s accumulated stock of skills (internal innovative capabilities) and its history of networking (external innovative capabilities). Creativity often springs up at the boundaries of disciplines and specialties, Whitworth (2007) agreeing that “...creativity seems to occur at the intersection of fields, so letting knowledge flow in new ways seems a good way to “water” a knowledge garden”. Innovation-focused communities are effective because of collaboration between individual members and intra- and inter-organisationally. The authors have named these aggregations “communities of innovation” (CoInv) and propose that such communities are the place for best developing new practices, new services and new products.

It is therefore necessary to test out pragmatically these propositions: firstly that innovation-focused communities are one of the most effective co-ordinating organisational forms for NSD; and secondly, that these communities should be based around innovation champions and formally constituted as such rather than being communities for task-oriented practice, by using case-based experiences in a service oriented organisation. Technology as experienced by these communities is utlised as an addendum to their main function of knowledge sharing but is important in those functions it does support.

Key Terms in this Chapter

Communities of Innovation: CoInv are a form of CoP that are specifically dedicated to the support of innovation, and their formation and sustainability are the responsibility of those individuals charged with organisational entrepreneurship.

Intellectual Capital: Various definitions in the literature including: “The collection of intangible resources and their flows” where resources equal “any factor that contributes to the value generating processes of the company and is, more or less directly under the control of the company itself”. Bontis N, Dragonetti NC, Jacobsen K, & Roos G (1999) Knowledge and knowing capability of the collectivity. Nahapiet J & Ghoshal S (1998) “Everything everybody in a company knows that gives it a competitive edge” Stewart TA (1997)

Service Industry: firms competing not on the basis of physical products but rather on the basis of the services they offer

Communities of Practice: Wenger et al (2002; p. 4) have provided a widely accepted definition of CoPs as Groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in this area by interacting on an ongoing basis. These authors add that “These people don’t necessarily work together every day, but they meet because they find value in their interactions” (ibid; pp. 4).

Innovation: the process of bringing new problem-solving ideas into use (Amabile 1988; Glynn 1996; Kanter 1983). The emphasis in this quote is on the phrase into use, for Tidd (2001) argues that just the invention of new knowledge is insufficient and Sullivan, (1998) and Teece, (1998) say that innovation has only occurred if the new knowledge has been implemented or commercialised in some way.

Relationship Capital: Relationship Capital is often called the External Realities of an organisation. It is usually conceptualised as the network of virtual and physical relationships, and connections, held by the critical stakeholders of an organisation, which enables the organisation to leverage intra-organisational achievements.

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Editorial Advisory Board
Table of Contents
Ben Shneiderman
Brian Whitworth, Aldo de Moor
Brian Whitworth, Aldo de Moor
List of Reviewers
Prologue: General Socio-Technical Theory
Chapter 1
Brian Whitworth
A socio-technical system (STS) is a social system built upon a technical base. An STS adds social requirements to human-computer interaction (HCI)... Sample PDF
The Social Requirements of Technical Systems
Chapter 2
Matti Tedre
This chapter introduces the reader to some social research characteristics that are central to the social study of computer science. It introduces... Sample PDF
The Social Study of Computer Science
Chapter 3
Ann Borda, Jonathan P. Bowen
This chapter introduces the concept of a Virtual Organization (VO), using the Internet to link geographically separated participants in an efficient... Sample PDF
Virtual Collaboration and Community
Chapter 4
David Davenport
This chapter analyses the effect that social values have on the design of technical systems. Beginning with an examination of the role technology... Sample PDF
The Social Derivation of Technical Systems
Chapter 5
Ken Eason, José Abdelnour-Nocera
This chapter sets the traditional focus of socio-technical systems theory on primary work systems in a modern context where information and... Sample PDF
Socio-Technical Theory and Work Systems in the Information Age
Chapter 6
Peter Day
This chapter introduces the community engagement strategy of the Community Network Analysis (CNA) project and considers its significance to research... Sample PDF
An Engagement Strategy for Community Network Research and Design
Chapter 7
Cleidson R.B. de Souza, David F. Redmiles
This chapter reviews the socio-technical relationship between organizational and software structure. It describes the early theoretical work about... Sample PDF
On the Alignment of Organizational and Software Structure
Ronald K. Stamper
Prologue: Socio-Technical Perspectives
Chapter 8
Catherine Heeney
The chapter discusses the traditional expectations about privacy protection and argues that current models for the governance of data do not... Sample PDF
Privacy and the Identity Gap in Socio-Technical Systems
Chapter 9
Ronald Leenes
Second Life can be seen as a social microcosmos in which fairly normal people lead a social life and where social needs develop. Privacy is one of... Sample PDF
Privacy Regulation in the Metaverse
Chapter 10
David Tuffley
This chapter introduces a process reference model of leadership for integrated teams operating in virtual environments. Geographically dispersed... Sample PDF
Leadership of Integrated Teams in Virtual Environments
Chapter 11
Monique Janneck
For a technology use to be successful, the circumstance of its introduction into a use context—or recontextualization— is crucial. The users of a... Sample PDF
Recontextualising Technology in Appropriation Processes
Chapter 12
Petter Bae Brandtzæg, Jan Heim
The last few years have seen a substantial growth in online communities such as MySpace and Facebook. In order to survive and increase in size... Sample PDF
Explaining Participation in Online Communities
Chapter 13
Malcolm Shore
This chapter is about the way in which computer hackers invoke social networking paradigms to support and encourage their activities. It reviews the... Sample PDF
Cyber Security and Anti-Social Networking
Chapter 14
Wilson Huang, Shun-Yung Kevin Wang
This chapter examines the gaps that arise between reactive social control systems and proactive technology systems. The authors further link these... Sample PDF
Emerging Cybercrime Variants in the Socio-Technical Space
Chapter 15
Elayne W. Coakes, Peter Smith, Dee Alwis
This chapter presents the argument that service innovation is promoted by supporting divergent interpretations, enlarging the scope of employee and... Sample PDF
Developing Innovative Practice in Service Industries
Mark Aakhus
Prologue: Socio-Technical Analysis
Chapter 16
Hans Weigand
Often socio-technical systems are designed simply on the basis of what the user asks, and without considering explicitly whether the required... Sample PDF
Using Communication Norms in Socio-Technical Systems
Chapter 17
Jonas Sjöström, Göran Goldkuhl
This chapter introduces the theoretical framework of Socio-Instrumental Pragmatism (SIP) and illustrates how it has been used as an analytic... Sample PDF
Socio-Instrumental Pragmatism in Action
Chapter 18
Paul J. Bracewell
Analytics provides evidence for objective corporate decision-making. Lack of understanding of analytical techniques can create confusion amongst... Sample PDF
A Framework for Using Analytics to Make Decisions
Chapter 19
Mikael Lind, Peter Rittgen
Setting up co-design processes involving several stakeholders is a complex task. In this chapter the authors have looked upon experiences from... Sample PDF
The Challenges of Co-Design and the Case of e-Me
Chapter 20
Harry S. Delugach
Automated tools are often used to support software development workflows. Many of these tools are aimed toward a development workflow that relies... Sample PDF
Formal Analysis of Workflows in Software Development
Chapter 21
Dorit Nevo, Brent Furneaux
This chapter reviews the significance of expectations to information systems development with particular emphasis on the process of requirements... Sample PDF
The Role of Expectations in Information Systems Development
Chapter 22
Jeff Axup
With mobile technologies increasingly weaving themselves into the fabric of our communities, it would be beneficial to increase our understanding of... Sample PDF
Building a Path for Future Communities
Thomas Erickson
Prologue: Socio-Technical Design
Chapter 23
Thomas Herrmann
Socio-technical systems integrate technical and organizational structures and are related to various stakeholders and their perspectives. The design... Sample PDF
Systems Design with the Socio-Technical Walkthrough
Chapter 24
Anders I. Mørch
This chapter presents a translational approach to socio-technical design, as a new approach to the theorybased design of user interfaces, supported... Sample PDF
Applied Pragmatism and Interaction Design
Chapter 25
Manuel Kolp, Yves Wautelet
Information systems are deeply linked to human activities. Unfortunately, development methodologies have been traditionally inspired by programming... Sample PDF
A Social Framework for Software Architectural Design
Chapter 26
Designing for Trust  (pages 388-401)
Piotr Cofta
Designing for trust is a methodology that attempts to design our perception of trust in information systems, in the long-term expectation that such... Sample PDF
Designing for Trust
Chapter 27
Dan Dixon
Three decades ago the concept of pattern languages were introduced in the field of architecture and they have since become widely used in... Sample PDF
Pattern Languages for CMC Design
Chapter 28
Anton Nijholt, Dirk Heylen, Rutger Rienks
In this chapter the authors discuss a particular approach to the creation of socio-technical systems for the meeting domain. Besides presenting a... Sample PDF
Creating Social Technologies to Assist and Understand Social Interactions
Chapter 29
Jos Benders, Ronald Batenburg, Paul Hoeken, Roel Schouteten
This chapter sketches an Organization Design perspective called “Modern Socio-technical Design”, and subsequently discusses the implementation of... Sample PDF
A Modern Socio-Technical View on ERP-Systems
Chapter 30
Mary Allan, David Thorns
The chapter introduces the Bourdieuean habitus and field theory as a framework for an alternative way of investigating how perceptions of Media Rich... Sample PDF
Being Face to Face: A State of Mind or Technological Design?
Chapter 31
Rebecca M. Ellis
This chapter introduces the work of sociologist Pierre Bourdieu and his concepts of “the field” and “capital” in relation to eBay. In any given... Sample PDF
Applying Bourdieu to eBay's Success and Socio-Technical Design
Chapter 32
Christopher A. Miller
This chapter focuses not on technology mediation of human relationships, but rather on human-like relationships with technology itself. The author... Sample PDF
Relationships and Etiquette with Technical Systems
Anton Nijholt
Prologue: Socio-Technical Implementation
Chapter 33
Laura Anna Ripamonti, Ines Di Loreto, Dario Maggiorini
The necessity of supporting more and more social interaction (and not only mere information sharing) in online environments is the disruptive force... Sample PDF
Augmenting Actual Life Through MUVEs
Chapter 34
Mohamed Ben Ammar, Mahmoud Neji, Adel M. Alimi
Affective computing is a new artificial intelligence area that deals with the possibility of making computers able to recognize human emotions in... Sample PDF
The Role of Affect in an Agent-Based Collaborative E-Learning System Used for Engineering Education
Chapter 35
Pernilla Qvarfordt, Shumin Zhai
Eye-gaze plays an important role in face-to-face communication. This chapter presents research on exploiting the rich information contained in human... Sample PDF
Gaze-Aided Human-Computer and Human-Human Dialogue
Chapter 36
Licia Calvi
The chapter presents and combines the results of two case studies dealing with online communities1 in order to understand under which conditions... Sample PDF
How to Engage Users in Online Sociability
Chapter 37
Ivan Launders
The UK National Health Service (NHS) provides the opportunity to undertake local socio-technical system design to help staff maximize the... Sample PDF
Socio-Technical Systems and Knowledge Representation
Chapter 38
Claire de la Varre, Julie Keane, Matthew J. Irvin, Wallace Hannum
This chapter describes the design of a sociotechnical system to support rural high school students in an online distance education (ODE) course. The... Sample PDF
Social Support for Online Learning
Chapter 39
Jeremy Birnholtz, Emilee J. Rader, Daniel B. Horn, Thomas Finholt
This chapter uses the theoretical notion of common ground to explore remote participation in experimental research. On one hand, there is a desire... Sample PDF
Enabling Remote Participation in Research
Starr Roxanne Hiltz
Prologue: Socio-Technical Evaluation
Chapter 40
John M. Carroll, Mary Beth Rosson, Umer Farooq, Jamika D. Burge
Socio-technical systems are social systems that incorporate technological infrastructures. At the group level of analysis, the most important... Sample PDF
Community Collective Efficacy
Chapter 41
Tanguy Coenen, Wouter Van den Bosch, Veerle Van der Sluys
This chapter views social networking sites as supporting social capital and the advantages which derive from it, namely emotional support... Sample PDF
An Analysis of the Socio-Technical Gap in Social Networking Sites
Chapter 42
Olga Kulyk, Betsy van Dijk, Paul van der Vet, Anton Nijholt, Gerrit van der Veer
This chapter addresses awareness support to enhance teamwork in co-located collaborative environments. In particular, the authors focus on the... Sample PDF
Situational Awareness In Collaborative Work Environments
Chapter 43
Janet L. Holland
This chapter deals with research on the development and use of an assessment instrument for measuring affective satisfaction in online learning. The... Sample PDF
A Scale of Affective Satisfaction in Online Learning Communities
Chapter 44
David Hinds, Ronald M. Lee
In this chapter, the authors suggest how measures of “social network health” can be used to evaluate the status and progress of a virtual community.... Sample PDF
Assessing the Social Network Health of Virtual Communities
Chapter 45
Bertram C. Bruce, Andee Rubin, Junghyun An
This chapter introduces situated evaluation as an approach for evaluating socio-technical innovation and change. Many current evaluations simply... Sample PDF
Situated Evaluation of Socio-Technical Systems
Chapter 46
Heike Winschiers-Theophilus
Communities all over the world have established their own value systems which do not necessarily correlate with the intrinsic values of technology.... Sample PDF
Cultural Appropriation of Software Design and Evaluation
Charles Steinfield
Prologue: The Future of Socio-Technical Systems
Chapter 47
Peter J. Denning
Wicked problems (messes) are tangled social situations that are too costly to stay in and too intransigent to get out of. Collaboration is essential... Sample PDF
Resolving Wicked Problems through Collaboration
Chapter 48
Rachel McLean
As a social activity, the shopping experience can not be recreated or improved through technical design alone. This chapter proposes that there is... Sample PDF
The Myth of the e-Commerce Serf to Sovereign Powershift
Chapter 49
Theresa Dirndorfer Anderson
This chapter explores the challenges associated with teaching the principles of socio-technical systems in the dynamic climate that characterizes... Sample PDF
Teaching the Socio-Technical Practices of Tomorrow Today
Chapter 50
Isa Jahnke
The chapter describes an empirical study of a socio-technical community—as an extended part of an institution— with the aim of revealing its... Sample PDF
Socio-Technical Communities: From Informal to Formal?
Chapter 51
Laurence Claeys, Johan Criel
This chapter introduces the concept of critical user participation as a means to see the socio-technical gap in context aware applications as an... Sample PDF
Future Living in a Participatory Way
Chapter 52
Paul Hodgson
This chapter analyses the formation and generation of social trust through communications technology in postmodern society, and presents some... Sample PDF
The Impact of Communications Technology on Trust
Chapter 53
Kenneth E. Kendall, Julie E. Kendall
This chapter explores the social, organizational, and individual impacts of emerging information technologies using the advent of recent... Sample PDF
Good and Evil in the Garden of Emerging Information Technologies
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