Contextual Innovation Management for service innovation

Contextual Innovation Management for service innovation

Oudijn, E.G.

Trott, P. (mentor)
van der Duin, P.A. (mentor)
De Bruijne, M.L.C. (mentor)
Testers, P.A.J.A. (mentor)

Technology, Policy and Management

Technology, Strategy and Entrepreneurship

2011-06-30

The aim of this research is to translate the possibilities of Contextual Innovation Management into recommendations which Stedin Meetbedrijf can use to develop innovative services. The main research question is: How can Contextual Innovation Management be applied for the service innovation process of Stedin Meetbedrijf? Contextual Innovation Management (Ortt and van der Duin, 2008) is a contingency theory that describes that organisations should tailor their innovation approach to the context. The context is described in terms of so-called ‘contingency factors’. Contingency factors are factors in the context of the organisation that have an effect on the organisation in general and on (its) innovation management approach in particular (van der Duin et al., 2011). Contingency factors influence the organisational structure for innovation. Contingency factors consist of different levels. Levels are possible outcomes the contingency factors can have. RESEARCH In the past years, the innovation process of Stedin Meetbedrijf has been focused on (radical) product innovation. However, nowadays competition in the measurement segment is more and more on additional services on top of the smart meter (see paragraph 3.1). The goal of this research is to explore the applicability of Contextual Innovation Management for the management of service innovation within Stedin Meetbedrijf. The main research question can be divided in five sub questions: 1. What does the service innovation process of Stedin Meetbedrijf look like? 2. What relevant aspects of service innovation management can be derived from literature? 3. How can a Contextual Innovation Management framework for service innovation be developed? 4. How does the Contextual Innovation Management framework for service innovation look like? 5. What are the implications of the Contextual Innovation Management framework for the innovation process of Stedin Meetbedrijf? The questions have been answered with the research approach developed in chapter 2. The research approach consists of steps that all answer a research question. During the research a Contextual Innovation Management framework for service innovation is developed. The framework matches suitable innovation processes to ideas for innovative services, based on contingency factors. The research will apply this framework to the case of Stedin Meetbedrijf. DEVELOPMENT OF THE FRAMEWORK The framework is developed by selecting the relevant contingency factors for service innovation and defining suitable innovation processes in a figure that can be developed based on these contingency factors. It was decided to define two contingency factors and two levels, because this delivers a clear, workable framework. Employees involved with innovation at Stedin Meetbedrijf had to select the contingency factors, because this way the framework is applicable for Stedin Meetbedrijf. These employees can be considered as the experts on innovation within the organisation (internal experts). Experts on innovation with different backgrounds (external experts) had to define the suitable innovation processes, because of their knowledge on innovation. RESULTS The research presents the implications of Contextual Innovation Management for the innovation process of Stedin Meetbedrijf. Results of the research indicate that Contextual Innovation Management can be applicable for the service innovation process of Stedin Meetbedrijf. A Contextual Innovation Management framework for service innovation is created and applied to Stedin Meetbedrijf. The framework consists of four quadrants that might need different innovation processes. Quadrants have the same characteristics (combinations of levels). Quadrants are numbered clockwise, starting with the first quadrant in the lower left corner. - Quadrant 1 consists of the ideas for service innovations that are incremental and market pull - Quadrant 2 consists of the ideas for service innovations that are radical and market pull - Quadrant 3 consists of the ideas for service innovations that are radical and technology push - Quadrant 4 consists of the ideas for service innovations that are incremental and technology push The Contextual Innovation Management framework for service innovation consists of two axes that represent contingency factors that are relevant for service innovation. The relevant contingency factors for service innovation are: - Driving force: market pull and technology push - Degree of newness: incremental and radical These contingency factors form the basis for the Contextual Innovation Management framework for service innovation. The circles and oval represent innovation processes that are suitable for the area they cover. The list of innovation processes used in this research can be found in paragraph 6.2 and consists of the current innovation process of Stedin Meetbedrijf; the innovation process that was used for one of the current services of Stedin Meetbedrijf (e-DataPortal) and 5 processes that are currently deployed at other business units (BU’s) of the ENECO Holding. EXPLANATION OF RESULTS This section will explain the results. It will per quadrant elaborate on the predominantly mentioned processes. Quadrant 1 (Incremental-market pull) The predominantly mentioned innovation process for quadrant 1 is the ‘market pull’ process. This seems plausible, because innovations in this quadrant are incremental, market pull innovations. Because the innovations are incremental, little “ground-breaking” knowledge is needed. This knowledge can be achieved from the market via market research. The market pull innovation process is significantly more mentioned by experts. Quadrant 2 (Radical-market pull) The predominantly mentioned innovation process for quadrant 2 is the ‘lead user’ process. This seems plausible, because innovations in this quadrant are (more) radical, market pull innovations. Lead users are users that are more involved in new technologies and services and are ahead of the mainstream user. Therefore it seems plausible to develop radical innovation with and for lead users. Quadrant 3 (Radical-technology push) and 4 (Incremental-technology push) The predominantly mentioned innovation process for quadrant 3 and 4 is the ‘technology push’ innovation process. Innovations in these quadrants are technology pushed innovations. Therefore it seems plausible to develop technology pushed ideas with an innovation process that is focused on technology. RECOMMENDATIONS STEDIN MEETBEDRIJF From interviews with internal experts can be defined that Stedin Meetbedrijf develops services in 3 of the 4 quadrants of the framework. The Contextual Innovation Management framework for service innovation prescribes that these services can best be developed with different innovation processes. Contextual Innovation Management can therefore be a valuable method for addressing service innovation within Stedin Meetbedrijf. Contextual Innovation Management delivers two main recommendations for Stedin Meetbedrijf: (1) Stedin Meetbedrijf has to adapt changes in the current innovation process (2) It shows the innovation processes that can be used to develop the current ideas for innovative services (1) Adaptation of the innovation process Stedin Meetbedrijf has a formalized innovation process that consists of five steps. The innovation process is formalized in the Quality Management System of the organisation (Kwaliteits Management Systeem (KMS)). These steps are described in paragraph 3.2. Here only the changes to these steps will be presented: - Opportunity identification - Feasibility study - Development of the product - Supplier/ Product selection - Order retrieval These steps consist of activities that have to be performed to develop an idea of an innovative service/product. These steps are used as basis for the innovation processes that were used throughout the research. The ‘market pull’; ‘lead user’ and ‘technology push’ innovation processes have to be incorporated in the current innovation process. Employees then can use the framework to find the suitable innovation process for the idea at hand and perform the activities that belong to this innovation process. To incorporate the Contextual Innovation Management framework for service innovation in the innovation process, Stedin Meetbedrijf has to adopt changes to the steps in the innovation process. In comparison with the current innovation process: - technological developments have to be analysed - market research is explicitly mentioned before the commercial analysis - the demands of the lead user have to be added to the list of sources in the opportunity identification step. Furthermore, the feedback on the performance of the service has to be done in cooperation with the lead user, after the lead user has tested the service for a period . (2) Innovation processes to develop current ideas for innovative services The implications of Contextual Innovation Management for the current ideas for innovative services of Stedin Meetbedrijf can be deduced from figure 2. - The ‘Dashboard of the e-DataPortal’ and the ‘e-DataPortal Plus’ are located in quadrant 1 and according to this research can be developed with the market pull innovation process. - The ‘e-DataBroker’ is located in quadrant 2 and can be developed in cooperation with a lead user. Also the co-creation innovation process, supplier innovation and market pull innovation process are found suitable. - Only the innovation process for the ‘REST-server’ cannot directly be deduced from the research, because it is located on the border of quadrant 3 and 4. This leaves Stedin Meetbedrijf with at least two options. It can (1) analyze which of the two processes is most suitable or (2) try to develop a process that is a combination of the two innovation processes. This research will recommend the first option, so the innovation processes that are formalized in the KMS can be used. FURTHER RESEARCH Next to the results, this research also indicates different options for further research. Further research can focus on Contextual Innovation Management for Stedin Meetbedrijf and on Contextual Innovation Management for service innovation in general. Based on limitations of the Contextual Innovation Management framework for service innovation a new approach for research into Contextual Innovation Management is developed (appendix D). The first recommendation to Stedin Meetbedrijf is to conduct a research that uses the new approach to validate results of this research. Another interesting option for further research for Stedin Meetbedrijf would be to vary the contingency factors of the framework. Further research on Contextual Innovation Management in general can also focus on the choice for the number of contingency factors. Currently two contingency factors are considered, because this delivers a useful framework. It might be an option to see if and how more contingency factors can be incorporated. Future research can also concern the development of the Contextual Innovation Management framework for service innovation by positioning the innovation processes in the framework according to the ideas instead of the quadrants. This way the positioning of the innovation processes is unconnected to the quadrants.

case study
contextual innovation management
contingency theory
service innovation

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Campus only

Student theses

master thesis

(c) 2011 Oudijn, E.G.