Academic journal article Research-Technology Management

T-Shaped Innovators: Identifying the Right Talent to Support Service Innovation

Academic journal article Research-Technology Management

T-Shaped Innovators: Identifying the Right Talent to Support Service Innovation

Article excerpt

The world's innovation landscape is changing. We all know that innovation is not just a strategic option; it is a fundamental prerequisite for survival. But while every company wants to create more global, integrated, and outcome-driven innovations, actually getting a new product or service to market is rare, and category creations or big, radical innovations--new things that dramatically change the marketplace--are even rarer.

A key driver in the search for such high-impact innovations is the move to services. To be truly successful, such a move will require a new kind of talent--T-shaped people-supported by a new kind of organization. In other words, companies need to re-tune their talent engines to support a new generation of innovation.

Delivering Quarter-Inch Holes

Companies are gradually realizing that, by and large, customers aren't looking for products; they're looking for results or experiences. As Harvard Business School professor Theodore Levitt put it, when customers head for the home-improvement store, they're not looking for quarter-inch drills; they want quarter-inch holes (Christensen, Cook, and Hall 2005). Similarly, cars are not just transportation. They are, in the words of Robert Lutz, Chairman of GM, "actually art, entertainment and mobile sculpture, which, coincidently, also happens to provide transportation" (Rae-Dupree 2008, p. 2). Starbucks doesn't just sell coffee, it sells an experience, totally designed from the interior design of its stores to the choice of music playing there, from its comfortable couches to its free Internet access, from the greetings of the baristas to the freshly brewed coffee. These are great examples of design-driven innovations (Dell'Era, Marchesi, and Verganti 2010).

This realization is powering a growing focus on services and service innovation. In one recent study, 77 percent of the 300 C-level manufacturing executives surveyed said that enhancing services is a key factor for competitiveness, and 56 percent are planning to establish service as a profit center (Oxford Economics 2013). Those executives are talking about services that support customers, not products, reaching far beyond repair and maintenance to outcomes-based performance contracts and other innovative approaches (Harmon, Demirkan, and Chan 2011).

Those kinds of services allow customers to hire the product they need to do their specific job, provide platforms for long-term profitability and growth, and build customer loyalty and satisfaction. In highly competitive industries, as products become more commoditized, services can provide differentiation and drive breakthrough product and business model innovations.

Historically, the service part of manufacturing focused on repairing and maintaining products. Today, manufacturers are viewing services not simply as a way to enhance the value of their products, but as a distinct revenue generator with its own value proposition. For example, Rolls-Royce leveraged its expertise in aircraft engine manufacturing to create its Power-by-the-Hour offering. This total care solution transfers the risks and costs associated with an engine being offline to Rolls-Royce, making increased reliability and uptime major value creators for both the customer and the manufacturer.

This kind of service innovation is the result of the application of knowledge for the mutual benefit of multiple entities. The output of service innovation is fundamentally different from that of other kinds of innovation. Product innovation results in a thing and process innovation in a set of activities; service innovation transforms the whole system of interactions between people and organizations to create new, high-value experiences.

Service innovation scales the benefits of new knowledge, globally, rapidly, and sustainably through systems that improve quality of life and develop new capabilities. It changes the nature of innovation itself, shifting the focus from idea to impact. …

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