Topic 5 Services Innovation Framework

© 2010 IBM Corporation

Zaheer Travadi – Sr. Strategy & Transformation Consultant | Program Manager – WW STG Run Rate Marketing

Module 6 - Services innovationServices Innovation Framework and Case Studies

© 2010 IBM Corporation2 IBM-SPJIMR – ACPS 2010

Revenues and Profits of Top 10 (non-energy) Companies 2005


Service Innovation Needs to Focus on Customer Experience

� The customer is the new reference point. The customer has replaced the direct

competitor as the dominant reference point for strategy

� In contrast to the goods-era economy, which had more rigid boundaries of channels and

competition, the fluid nature of the services-era economy introduces:

– (1) competition from new and unexpected sources

– (2) customers that are more informed and more demanding

– (3) opportunities for new, information-driven business models.

� Companies such as Starbucks, Google and Whole Foods have successfully challenged

conventional business wisdom through their uncanny instinct for delivering a compelling,

branded customer experience.


Research – Tekes Exemplar 12 Companies across sectors


Research – Peer Insights

� AARP

� ADT

� Apple

� ARCADIS

� Bank of America

� Baxter Healthcare

� CEMEX

� Crowe Chizek

� Diebold

� Enterprise

� GE Finance

� GE Healthcare

� GM OnStar

� Halmark Cards

� Harrah’s

� Hewlett-Packard

� Intel

� Johnson Controls

� Lloyds TSB

� Mayo Clinic

� McDonald’s

� Medtronic

� Microsoft

� Motorola

� NASDAQ

� Navistar

� NetFlix

� Pfizer

� Pitney Bowes

� Proctor & Gamble

� Progressive

� RIM

� ServiceMaster

� Siemens

� Standard & Poor’s

� Sun Microsystem

� Swisscom

� Syngenta

� The Hartford

� UPS

� Virgin


Service Innovation Framework – Ten Types

“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.


Goods vs. Service Innovation


“Outside In” - Most Successful Innovations


Focus Your Service Innovation


Case Studies

� Consumer Services: Enterprise Rental Car

� Financial Services: Bank of America

� Retail Services: American Girl


Consumer Services: Enterprise Rental Car

Source: Peer Insight LLC


Enterprise Went After White Space and Became #1

Source: Peer Insight LLC


Financial Services: Bank of America

Company Profile

Innovation:

“Keep the Change” program


Ten Types of Innovation Analysis -Bank of America


Retail: American Girl

Company Profile

Innovation

Experiential Toy Experience


American Girl Retail Experience

Showcase Stores: Chicago, Los Angeles, New York

Boutique and Bistro: Dallas, Atlanta

A Story Comes with Every Doll

Shopping experience also via Catalogs and Web


Offering and Delivery


Ten Types of Innovation Analysis – American Girl


Design for the Customer Experience

1. Start with unmet user needs, not new ideas

2. Research methods that are based on deep

customer empathy (e.g., ethnography)

3. Focus is on the customer journey – not merely

your own touch points

4. Emphasis on identifying and winning the

moments of truth

5. Rapid, low-fidelity service prototyping

6. Open innovation – including the customer in the

earliest stages

7. Open innovation – bringing together a unique

value network

8. Creating evidence of the brand attributes within

the touch points

9. Use of storytelling to convey the experience

intent

10. Overcoming metrics that run counter to creating

compelling experiences

11. Creating a broad view of experiences – going

beyond marketing and into operations and IT


Proposed Growth Model for the Service Era


In Conclusion….Focus Your Service Innovation


Business

Topic 5 Services Innovation Framework