Structuring the Unstructured: Service Innovation in a UK Small Business Services Firm

This study focuses on structured innovation models for the services sector. A plethora of research recognizes the importance of formal and structured innovation processes (Booz et al., 1982; Bowers, 1989; Scheuing and Johnson, 1989; Griffin, 1997; Johne and Storey, 1998; Cooper and Edgett, 1999; Cooper, 1986, 2001; Akamavi, 2005). The literature however lacks process models that specifically address services development. Cooper and Edgett (1999) with their ‘stage-gate’ model attempt to provide such an approach. This generic ‘from idea to launch’ innovation system was generated through research in leading USA business to consumer (B2C) companies. The innovation system, whilst constructed on the basis of best practice, was not designed to meet the needs of business to business (B2B) services firms. Alongside the lack of process models, a number of researchers claim that service firms have no process, or use unstructured, informal and often ‘ad hoc’ service development processes (Sundbo, 1997; Gottfridsson, 2011). It is therefore unclear whether a systematic approach to service innovation, or indeed the implementation of a model such as the ‘stage-gate’ (Cooper and Edgett, 1999) is useful for B2B services firms. This study therefore reports on a case study of a small B2B services firm implementing a novel ‘end-to-end’ innovation system, and considers the implications for its management practices. In this longitudinal case study (18 months), we adopted a participant observational methodology (Jorgensen, 1989), with connotations of action science (Argyris and Schon, 1978). The research involved all those participating in the innovation system in the firm, including decision-makers, middle managers and employees at lower hierarchical levels and the firm’s external networks. The researchers established that a systematic approach to service innovation through structured process could meet the needs of the case study organization and it is found that such a process is appropriate and useful in the context of small B2B services firm. The paper explains the reasons why such an approach was found to be appropriate and useful, in the context of small B2B services firm. A better understanding is provided of how small business services firm can adapt and improve the usefulness of such a structured process. Key words: innovation, services, new service development, B2B, small business