Katri Ojasalo

Service productivity: Towards a conceptualization of the transformation of inputs into economic results in services

Abstract The productivity of a process is related to how effectively input resources are transformed into value for customers. For the needs of manufacturers of physical products, there are widely used productivity concepts and measurements instruments. However, in service processes, the underlying assumptions of these concepts and models do not hold. For example, manufacturing-based productivity models assume that an altered configuration of input resources in the production process does not lead to quality changes in outputs (the constant quality assumption). However, in a service context, changes in the production resources and productions systems do affect the perceived quality of services. Therefore, using manufacturing-oriented productivity models in service contexts are likely to give managers wrong directions for action. Research into the productivity of services is still scarce because of the lack of viable models. The purpose of the present article is to analyse the requirements for the development of a productivity concept for service operations. Based on the analysis, a service productivity model is developed. According to this model, service productivity is a function of (1) how effectively input resources into the service (production) process are transformed to outputs in the form of services (internal efficiency), (2) how well the quality of the service process and its outcome is perceived (external efficiency or effectiveness) and (3) how effectively the capacity of the service process is utilized (capacity efficiency). In addition, service productivity as a learning experience and directions for developing measurement models for service productivity are discussed.

Foresight and Service Design Boosting Dynamic Capabilities in Service Innovation

Identifying opportunities for service innovation and exploiting them requires novel capability building in the rapidly changing business environments. This study extends the existing literature on dynamic capabilities in service innovation by operationalizing the capabilities of sensing and seizing new opportunities. The purpose of this chapter is to examine how futures thinking and design thinking can facilitate service innovation from the dynamic capabilities point-of-view. As a result this chapter provides a conceptual framework for service innovation process that is grounded on foresight and service design. To synthesize the literature into a new conceptual framework, this chapter is based on a large body of literature from four burgeoning fields of study: dynamic capabilities, service innovation, foresight, and service design. The key point the chapter wishes to make is that a forward look at new methodological perspectives in service innovation is needed and that integrating the methods and tools of foresight and service design to the service innovation process provides a promising new avenue to future success.

Service productivity as mutual learning

Purpose – The purpose of this paper is to analyse the mutual learning implications for service productivity of the characteristics of service and service production. Design/methodology/approach – This is a conceptual paper. The starting point is, first of all, that productivity as a management concept should help a firm to manage its economic profit, and secondly, that service organizations are open systems, where the customers participate as co-producers and are exposed to the firm’s production resources and processes. Unlike in manufacturing, to understand productivity in service organizations as a means of managing profit, cost effects and revenue effects of changes in the productions system cannot be separated. Due to the interaction between customers and the firm’s resources during service production, dialogical collaboration between them develops. This enables mutual learning. Findings – Given the social dynamics in service production processes, four learning processes that influence service product...

Enhancing service innovation in a business-to-business context

Purpose – The purpose of this article is to develop a theoretically and empirically grounded interdisciplinary framework for understanding service innovation in a business-to-business (b-to-b) context, particularly from the perspective of the small- and medium-sized enterprise (SME). Design/methodology/approach – This study used an abductive research process, supported by theoretical insights from a literature review, and empirical evidence from a multiple-case study. Six SME case companies were all transforming towards service logic. The empirical data consists of semi-structured interviews with the case companies and their business customers, workshops and business documents. Findings – The study identified four critical service logic-related perspectives in service innovation in a b-to-b context, and related key questions: How is potential for new service business recognised? How is freedom of action perceived? What kinds of strategies are plausible? What are the reasons, objectives and support for the...

Service Logic Business Model Canvas

Purpose The purpose of this study is to develop a service logic oriented framework for business model development. “Service logic” covers the basic principles of the three contemporary customer value focused business logics: service-dominant logic, service logic and customer-dominant logic. Design/methodology/approach This study is based on an empirical qualitative research and deployed the focus group method. The data are generated in a series of interactive co-creative focus group workshops involving both practitioners and academics. Findings As the outcome, a new tool was developed, called Service Logic Business Model Canvas. The new canvas is a modified version of the original Business Model Canvas (Osterwalder and Pigneur, 2010). Research limitations/implications This study adopts service logic in business model thinking and increases knowledge on how to keep the customer needs in the centre of business model development. Practical implications The developed canvas makes the theory of service-dominant logic tangible and easily applicable in practice. It enables service innovation truly based on customer value by ensuring that the customer is in the centre of all the elements of a business model. It can function both as a rapid prototype of a new business model and as a communication tool that quickly illustrates the company’s current business model. It can also help in creating a customer-centred business culture. It is designed to be applied to each customer profile separately, thus enabling a deeper understanding of the customer logic of each relevant profile. Originality/value Earlier business model frameworks tend to be provider-centric and goods-dominant, and require further development and adaptation to service logic. This study adopts service logic in business model thinking. It embeds the true and deep customer understanding and customer value in each element of the business model, and contributes to both business model and service-dominant logic literature.