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Open Service Design? Exploring Customer Co-creation in a Service Manufactory

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In many service design projects, co-design is seen as critical to success and a range of benefits are attributed to co-design. In this paper, we present an overview of benefits of co-design in service design projects, in order to help the people involved to articulate more precisely and realistically which benefits to aim for. Based on a literature review and a discussion of three service design projects, we identified three types of benefits: for the service design project; for the service’s customers or users; and for the organization(s) involved. These benefits are related to improving the creative process, the service, project management, or longer-term effects. We propose that the people involved in co-design first identify the goals of the service design project and then align their co-design activities, and the associated benefits, to these goals. The paper closes with a brief discussion on the need for developing ways to monitor and evaluate whether the intended benefits are indeed realized, and the need to assess and take into account the costs and risks of co-design.
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Purpose The aim of this paper is to present a macro view of the evolution of innovation for value creation, from the closed to collaborative, open, and now co‐innovation. It reviews several mega trends that have dramatically changed the dynamic nature of the global market place and also several new forces that have made innovation imperative for organizational value creation. Design/methodology/approach The paper provides a conceptual overview of co‐innovation through some of its basic elements such as convergence revolution, collaboration, and co‐creation with stakeholders. Findings Co‐innovation is a new innovation paradigm where new ideas and approaches from various internal and external sources are integrated in a platform to generate new organizational and shared values. The core of co‐innovation includes engagement, co‐creation, and compelling experience for value creation. Thus, the practices of co‐innovative organizations are difficult to imitate by competition. Practical implications Innovation is imperative for organizational survival in today's turbulent global market. This conceptual paper presents many real‐world examples of co‐innovative firms' strategies that can provide new insights for follower organizations. Social implications Innovation is a universal strategy for every organization, be it a firm, non‐profit organization, or even a government agency. The new innovation approaches suggested in the paper can contribute to social reforms such as creating shared value for all stakeholders. Originality/value This is an original paper that presents a broad‐stroke direction and vision for new organizational strategies for innovation.
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Purpose – The purpose of this paper is to understand the differences between proactive and reactive market research techniques during the development of new market offerings. The study focused on the financial and innovative performance of traditional market research techniques, such as focus groups and in‐depth interviews, in comparison to more co‐creation‐oriented techniques that are designed to capture customers' value‐in‐use. Design/methodology/approach – The study was a two‐stage process. Study I, an empirical investigation of 195 development projects in European companies, examined how these companies use different market research techniques and how this relates to the profit margins of new products and services. Study II designed an experiment with 50 users of a consumer good and evaluated the contribution of different market research techniques, based on the degree of originality and customer value. Findings – Significant differences were found, in terms of both content and originality, between the technique based on customer co‐creation and the two traditional market research techniques (Study II). These findings can help to explain why the relationship between the use of market research techniques and profit margin (Study I) is stronger for co‐creation techniques than it is for traditional market research techniques. Originality/value – Despite empirical evidence that the application of market research techniques based on co‐creation can lead to original ideas, there is a lack of valid studies regarding how co‐creation techniques perform in relation to more traditional methods of collaboration with customers.
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Purpose – Customer co‐creation is becoming increasingly popular among companies, and intensive communication with customers is generally seen as a determinant of the success of a new service or product. The purpose of this study is to analyze customer co‐creation based on four dimensions of communication – frequency, direction, modality, and content – in order to understand the value of customer co‐creation in service innovation. One of the key aims of the study is to investigate whether all dimensions of customer co‐creation have an effect on product and market success, and if the effect depends on the degree of innovativeness of a development project. Design/methodology/approach – The authors conducted a study including 334 managers with experience in new service and product development to examine how development projects applied customer co‐creation in terms of communication in order to address future customer needs. Data were analyzed using partial least squares (PLS). The first analysis was performed with a sub‐sample of 207 development projects regarding incremental innovations. A subsequent analysis was performed with a sub‐sample of 77 development projects on radical innovations. Findings – A total of three of the four dimensions of customer co‐creation (frequency, direction, and content) have a positive and equally significant effect on product success when developing incremental innovations. For radical innovations, frequency has a positive effect and content has a negative significant effect on product success. These findings suggest that co‐creation and innovation can be combined, but that the choice of methods for co‐creation differs depending on whether incremental or radical innovations are developed. Originality/value – Despite a general consensus that co‐creation with customers is beneficial, there is a lack of agreement regarding how and why. The present article addresses this shortcoming and shows that co‐creation is largely about communicating with customers in order to understand their future needs. On the other hand, a company working on radical innovations may wish to limit customer input that is too concrete or solution based.
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Methods for managing innovation have been described in academia in many contexts. Service innovation processes pose particular challenges compared to those of product innovation – one of the core reasons being the lack of dedicated R&D structures in service firms or units. Collaborative innovation both with employees and with customers can be an effective means to drive innovation in services. Based on empirical evidence of a study of German innovation managers, this paper discusses findings of service innovation in organizational practice. We review the current extent and future potential of the involvement of employees and customers in the innovation process, as well implications for companies and academia.
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Purpose The aim is to propose a conceptual framework consisting of research propositions concerning the key strategies required for the successful involvement of customers in the co‐creation of new technology‐based services. Design/methodology/approach The methodology involves a single case study from which data are derived and analyzed using the grounded theory methodology of “constant comparative analysis.” User‐generated ideas for future mobile phone services are collected from four user involvement projects and analyzed at several workshops attended by senior managers from telecommunications firms. Findings Seven key strategies are identified as being essential for successful user involvement in new product development. Each strategy is described and illustrated in relation to existing theory and presented as a research proposition. Research limitations/implications The exploratory nature of the research means that the findings are tentative and need to be confirmed in other settings by other researchers, including quantitative large‐scale studies. Practical implications The results of the study provide management with guidelines for organizing successful user involvement projects with a market‐oriented approach. Originality/value Despite the increasing popularity of user involvement, little research has examined the conditions required for successful user involvement in new product development. This study makes an original contribution by proposing strategies critical for a successful outcome.
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Focuses on the roles of customers in creating quality and productivity in service experiences. Presents two conceptual frameworks to aid managerial understanding and focus research efforts on customer participation. The first framework captures levels of customer participation across different types of services. The second discusses three major roles of customers in the service delivery process. Two examples of the concepts are presented - one in a weight loss context and the other in a mammography screening setting. Both are based on empirical research and illustrate specific applications of customers’ roles in creating the service experience.
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Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of "goods," which usually are manufactured output. The dominant logic focused on tangible resources, embedded value, and transactions. Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships. The authors believe that the new per- spectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange. The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators.
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There is some acceptance of the idea that services and products are so intertwined that the process for development is the same, but there has been no rigorous empirical evidence to support that contention. Uses data collected in in-depth interviews with 80 senior level managers in 16 different firms, 25 group discussion sessions with 388 executives in 241 additional firms, and from a mail survey of 217 senior managers in firms from 11 differing service categories. In all three phases, elements of the service innovation process were examined. Examines the general similarity to new product development and concentrates on the major factors differentiating successful from unsuccessful service innovation. Concludes that there is some similarity between product and service innovation processes, but that significant differences exist, with the service arena demonstrating more of a lack of new service strategic planning, reliance on competitive imitation for new concepts, and less presence of innovation champions. Successful firms in new service development more closely fit innovations with the current business than do unsuccessful firms. They also present more of an opportunity for a champion to stay and manage a new offering after launch. There is no apparent difference in the formality of the process between successful and unsuccessful managers, with most service firms reporting a more ad hoc process.
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The involvement of users and customers into the service innovation process has recently become a top priority in finding out how users derive value from different services. This has been referred to as customer co-creation. Instead of sourcing special customers to help co-create new services, we suggest that managers take a closer look at the customer interface as it is. Customers take part, and derive value, in the normal user situation: the customer interface. The problem is that this interface is not properly understood, and not investigated to its fullest extent. This can be done, we suggest, by abstracting mental models from the interactions taking place there. Based on findings from six service cases we develop a framework of abstraction mechanisms as a strategic tool to spur service innovation.
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Due to major structural changes in the service sector, many service managers are recognizing the need to continually develop new services that are timely and responsive to user needs. Thus, user input and involvement in new service development are an important area of inquiry. Although there has been a resurgence of academic and practitioner interest in new service development, there is a dearth of research on how users are involved in new service development. This study first combines insights from extant literature and exploratory interviews with practitioners to identify four key elements of user involvement, including objectives, stages, intensity, and modes of involvement, and then investigates these four elements in 12 service firms. Based on the findings, the author develops an inventory of activities that needs to be carried out in involving users in a new service development project.
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To solve a problem, needed information and problem-solving capabilities must be brought together. Often the information used in technical problem solving is costly to acquire, transfer, and use in a new location—is, in our terms, “sticky.” In this paper we explore the impact of information stickiness on the locus of innovation-related problem solving. We find, first, that when sticky information needed by problem solvers is held at one site only, problem solving will be carried out at that locus, other things being equal. Second, when more than one locus of sticky information is called upon by problem solvers, the locus of problem solving may iterate among these sites as problem solving proceeds. When the costs of such iteration are high, then, third, problems that draw upon multiple sites of sticky information will sometimes be “task partitioned” into subproblems that each draw on only one such locus, and/or, fourth, investments will be made to reduce the stickiness of information at some locations. Information stickiness appears to affect a number of issues of importance to researchers and practitioners. Among these are patterns in the diffusion of information, the specialization of firms, the locus of innovation, and the nature of problems selected by problem solvers.
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The Power of Co-Creation: Build It with Them to Boost Growth
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Ramaswamy, V., & Gouillart, F. J. (2010). The Power of Co-Creation: Build It with Them to Boost Growth, Productivity, and Profits. Free Press.