Need to offer more innovative services? Here’s how companies can do it.
Research shows that companies which are more innovative are more likely to reach their full potential, says Monash Business School Associate Professor Herman Tse. For this reason companies need to focus on continuing to improve the services they offer clients.
Associate Professor Tse says there are four strategies companies should adopt to remain competitive.
1. Redesign jobs
“Companies need a well-defined plan with clear steps driven by a clear company vision,” Associate Professor Tse says.
The first step is to redesign jobs to encourage creative thinking. According to the World Economic Forum’s 2016 Future of Jobs Report there will be a shift by 2020 where employers will view critical thinking as a top skill.
“Critical thinking means being able to integrate abstract concepts and offer unique perspectives, as well as being creative to develop new ideas,” he says.
However, he says, presently in most jobs this skill is viewed as discretionary and often seen as a risk or as challenging the status quo.
Organisations need to redesign jobs particularly at the customer level, such as sales and service roles, to ensure they capture that ground level knowledge of their customers. Strategies to encourage and reward service innovation may include a monthly reward system for some of the best ideas for service innovation.
2. Encourage team diversity
“Innovation involves new ways of looking at things, which requires tapping into different networks and experiences, and different ways of working and thinking,” Associate Professor Tse says.
If the team is more diverse in terms of skills, knowledge, culture, gender or experiences, this has the potential to encourage a broader range of ideas and perspectives. Yet the more diverse a team is, the more potential for conflict, hence a strong innovation culture is important, as is leadership from senior team members.
3. Develop collaborative leadership
“Traditional top-down leadership models do not work for service innovation,” Associate Professor Tse says.
Organisations need to adopt collaborative bottom-up leadership that can create more space for front-line service employees to connect, create and contribute.
Company values should promote valuing people, not just company processes, such as humility, respect and honesty.
Innovative leadership behaviour includes:
- Empowering others by sharing why and where innovation is most needed
- Actively inviting people with different perspectives from inside and outside the organisation to share their ideas that demonstrate that diversity is valued
- Saying “yes” to ideas and not automatically rejecting them. Building on an idea can assist in ensuring a company does not miss out on a new way of doing things for better services
- Creating the space for “safe” experimentation of new ideas, where mistakes are discussed and learnt from
- Sharing stories of success to build a wider support within the organisation and to protect them from the ongoing pressures of business operations.
4. Cultivate an innovative culture
Companies are more innovative when staff always know and understand what’s going on in other business areas within the company, Associate Professor Tse says. Employees in one department may have an idea that can also benefit another business function.
Other ways to promote service innovation include ensuring employees feel comfortable and safe to share their ideas without risk of them being criticised. New ideas can be captured through different ways such as seminars, message boards, small-group discussion and suggestion boxes.
“It is important to realise that new ideas can come from anywhere or anyone within the company,” he says. Everyone should be encouraged to make new and useful suggestions rather than only a specific (R&D) team or a particular (innovation) department.
Different kinds of incentives should be used to reward staff for coming up with ideas that create new services or improve existing services. Lastly, a company needs to accept that it is impossible to innovate new services without taking risks and a long-term view in terms of time and financial investment.
“If an idea fails to transform into a new service, it is important not to criticise the employee who made the original idea because this would demotivate other employees from suggesting new ideas in the future,” he says.