February 23, 2011 16:3 WSPC/0219-8770 195-ijitm ... · International Journal of Innovation and Technology Management Vol. 8, No. 1 (2011) 113–133 c World Scientiﬁc Publishing

February 23, 2011 16:3 WSPC/0219-8770 195-ijitm S0219877011002167

International Journal of Innovation and Technology ManagementVol. 8, No. 1 (2011) 113–133c© World Scientific Publishing CompanyDOI: 10.1142/S0219877011002167

THE CREATION OF NOVEL AND MARKETABLESERVICE IDEAS

C. M. CHANG

Department of Industrial and Systems EngineeringState University of New York at Buffalo

Buffalo, New York 14260, [email protected]

Received 3 May 2009Revised 25 July 2009Accepted 26 July 2009

Novel and marketable service ideas are useful to most service enterprises. However, theliterature has identified several reasons for innovations in services as lagging behindthose in manufacturing. Some service enterprises believe that service ideas and innova-tions are readily imitated by competitors. Others view the impact of service innovationson profitability difficult to assess because specific innovative service elements are typi-cally bundled with many other service elements when delivered to or used by customers.Some service enterprises do not have in-house groups specifically dedicated to innovativepursuits, making it difficult for them to systematically produce new service ideas. Fur-thermore, because services are usually produced and consumed concurrently, any failuretends to expose the service enterprise immediately, unlike the manufacturing companieswhich can minimize such risks of exposure by conducting pilot testing away from themarketplace. As a result, many service enterprises are said to shy away from aggressivelypursuing new service development projects. It does not have to be this way.

This paper describes the combinatorial, heuristic, and normatively guided method,which when correctly applied to a service enterprise enhances the generation of new ser-vice ideas in a systematic, speedy, and cost-effective manner, and without requiring thecreation of a dedicated and rigid organizational structure. Virtual teams of the “stealth”type are set up to address innovation needs related to marketability and cost competitive-ness. These teams may include frontline customer-facing employees as well as customers,suppliers, and other external experts, who can work together despite geographical andtime-zone constraints. The application of this method toward developing a specific newservice idea is discussed in greater detail.

The integration of a “stealth” team can also be readily applied to the front end ofa typical stage-gate service development process, whereby parallel teams are engagedto address critical issues and steps needed to successfully market a service idea beforeinitiating costly development, thereby raising the service enterprises’ overall probabilityof developing commercially successful new services over time.

Keywords: Service ideas; customer value; service innovations.

1. Introduction

Service innovation is important but difficult for many service enterprises to accom-plish [Lovelock and Wirtz (2006)]. Some service companies may, indeed, be reluctant

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to pursue innovation because of a number of pragmatic issues. To begin with,companies believe that service innovations are easy for their competitors to imi-tate. Sometimes, they also find it difficult to single out the beneficial impact ofa service innovation, especially when it is bundled with many other service ele-ments. In addition, the lack of dedicated in-house groups to pursue innovationshas been a detrimental factor. Finally service innovations, without the shieldingbenefits enjoyed by manufacturing companies through prototyping and testing, arereadily exposed to potential failures, as innovations are produced for and consumedby customers concurrently.

This paper describes an idea generation method — the combinatorial, heuristic,and normatively guided technique [Chang (2008)] — that is capable of not onlyfacilitating the generation of new core service ideas, but also mitigating some ofthe afore-mentioned pragmatic issues. Since a given service value package is usuallycomposed of many elements, a short discussion on customer value dimensions isoffered. In general, even though not all service innovations are created equal, someof these elements ought to be the foci of service innovations in order to maximizethe relative competitiveness of the resultant service package

The generation of novel service ideas precedes the development of these newservice designs [Frei (2008); Alam and Perry (2002); Chai et al. (2005); Matthinget al. (2004)]. This paper focuses on the generation of new service ideas, which, whenproperly evaluated and screened, could form the basis of developing new innovativeservice designs.

We all know that new service ideas are of no value if they are not marketable.This paper continues with a discussion on the marketability of service innovations,citing specific examples of successful services, in order to sharpen the focus of theinnovation efforts of any service enterprise. It then describes the basic ideas embod-ied in the combinatorial, heuristic, and normatively guided technique, which hasbeen class tested over a period of time. A specific case of applying this method tocreate a new service idea — the new student advisement service — is then discussed.

The suggested technique can be applied as the front-ends to a traditional stage-gate development process [Cooper et al. (2002)] for new services in order to addressissues critical to marketing (e.g. cost-effectiveness, customer perceptions, and com-petition in the marketplace), methods for pursuing open innovations involving cus-tomers and suppliers, and ideas for engaging the use of failure mode and effectanalysis [McDermott et al. (2008)] to minimize exposure risks, and erecting barri-ers to prevent imitation by competitors. After a comprehensive discussion of thistechnique and its impacts, conclusions are drawn.

2. Customer Value Dimensions

Sawhney et al. [2006] suggests a number of value dimensions, which are of greatimportance to customers. Customer value is created by having achieved satisfactionalong one or more of these dimensions. Innovations along these nine dimensions areeffective in creating competitiveness in the marketplace. Figure 1 illustrates thesenine dimensions (shown in oval elements) and the foci of innovations (shown inrectangular elements) that are needed to achieve them.


The Creation of Novel and Marketable Service Ideas 115

Fig. 1. Customer value dimensions.

Among them, the dimension of service features demands the highest level of cre-ativity and innovation. This is because service features, serving as the core elementof a given service value package, are the foci of strategic differentiation among theservices in direct competition, and these features are usually not readily copied orimitated.

Lovelock and Wirtz [2006] present another illustration of the service value pack-age. They propose the “flower of service” concept and describe a service valuepackage as consisting of a core benefit supported by eight supplemental service ele-ments (Fig. 2). For a service to be appreciated by customers, both the core and itssupplemental elements must be “fresh and well formed,” because both of these ele-ments will have an impact on the overall perception gained by the customers. Thismodel fits well with many service value packages, although not all supplementalservice elements are equally important to many core services. Some supplementalservice elements engage the customers directly, thus having a more profound impacton influencing the customer’s perception than others.

Here, the discussion of serving marketing is of critical importance to any serviceenterprise interested in first generating new service ideas and then developing newservice designs. Not knowing how customers perceive a given service package andhow they make procurement decisions is a liability that will significantly impact thedegree in which commercial success can be practically achieved.

Services enterprises which offer similar core commodity services are competingprimarily in supplemental service elements, such as friendly and attentive customer-facing employees (hospitality), effective problem-solving routines (exceptions),the free-of-charge use of safes in hotel rooms or parking facilities (safekeeping),


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Fig. 2. The flower of service.

knowledge and attitude of front-desk staff and phone-operators (consultation), aswell as Internet-based reservation and order processing (order taking).

The key word here is differentiation. Based on these systems view of service, itis indeed useful to focus companies’ innovation efforts primarily on these core ele-ments. Only if the core service elements can not be differentiated from those offeredby competitors, should the company focus its innovation efforts on the supplemen-tal service elements. As discussed later, innovations in the core are less likely to beimitated by competition than in the supplemental service elements.

3. Categories of Service Innovations

Lovelock and Wirtz [2006] group the innovative service elements into several cate-gories. Some of these categories are clearly more effective than others in establish-ing long-lasting corporate competitiveness. These categories are listed below andinclude specific examples in the order of relative importance.

(1) Major service innovations (new cores with novel characteristics and pro-cesses) — Fed Ex (overnight nationwide express package services focused onspeed and reliability), CNN (global news service accessible 24/7), eBay (onlineauction services between unknown buyers and sellers), Google (search-relevantinformation with speed and scope), Starbucks (unique experience plus coffee),and Cirque du soleil (a hybrid of circus and dance performance).

(2) Major process innovations (new delivery processes for existing cores) — Uni-versity of Phoenix (on-line degree programs), Netflix (easy access to rentalmaterials via Internet and mail), Walgreen (24/7 convenience, store layout,and locations), and Enterprise Rental Cars (convenient locations within citiesinstead of at airports).



(3) Product line extensions — (expanding service categories) — Banks sell insur-ance products, phone companies add call waiting and call forwarding services,and Kinkos offers high-speed Internet access 14/7, besides its traditional copy-ing services.

(4) Process-line extensions — (adding Internet or phone-line services) — Barnes& Noble adds an Internet subsidiary (barnesandnoble.com) to compete againstAmazon.com. Others add self-service options, in addition to their regular labor-intensive customer-facing operations.

(5) Service improvements — (adding incremental improvements to the core or sup-plemental services to improve speed, convenience, or cost).

(6) Style change — (making minor changes in presentations) — Add new colorto buildings, introduce new uniforms for employees, adopt a new bank checkdesign, and change service scripts for employees in minor ways. For example,Singapore Airlines are known for the slick uniforms their stewardesses wear.

In general, service innovations which are based on process or process extensionsare readily copied by competitors, whereas those that represent major service inno-vations are not. Thus, in order to increase barriers to competitive imitation, serviceenterprises should emphasize the development of major service innovations. How-ever, as pointed out by Lovelock and Wirtz [2006], “major service innovations arerelatively rare.”

Among the categories of service innovations listed above, major service innova-tions represent the significant contributors to a company’s long-term competitive-ness in the marketplace. Why then are these major service innovations relativelyrare? One possibility may be that companies may not have tried hard enough.Another possibility might be that companies have not applied an effective and deep-thinking methodology to systematically develop major service innovations. For thelatter scenario, the combinatorial, heuristic, and normatively guided technique sug-gested in this paper can help.

4. Combinatorial, Heuristic, and Normatively Guided Technique

A law of innovation was proposed, which says that for every 1000 ideas formulatedonly one or two would prove to be both feasible and marketable [Hamel (2002)].Thus, to be successful, we need a lot of ideas. In addition, creative minds need tobe properly engaged to create those ideas.

Many knowledge workers possess creative minds. Their experience, insights, andtacit knowledge are of tremendous value to those service companies which know howto engage them. To engage creative minds, Chang [2007] suggests two ENGAGEmodels. The second ENGAGE model describes specific ways of encouraging workersto think out of the box, based on the following six specific tactics:

(1) Explore Metaphors and Analogies. Thomas Edison said: “The inventor has alogical mind that sees analogies.” The ability to perceive similarities and analogies isone of the most fundamental aspects of human cognition. Analogies are known to beuseful in promoting breakthrough ideas. Substantial innovations often result fromtransferring problem solutions from one industry or domain to another. Although an


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Fig. 3. Systematic search for analogies.

innovation can be based on a new scientific or technical discovery, the recombiningnature of innovations is more dominant [Hargadon (2003)]. A systematic method ofapplying analogies is advocated in [Herstatt and Kalogerakis (2005)], as depictedin Fig. 3.

Nikola Tesla invented the alternating current (AC) motor by applying the anal-ogy of the Sun rotating around the Earth to the motor’s magnetic field rotatinginside the motor. Leonardo da Vinci discovered the fundamental property of soundtraveling in waves by relating the sound of a bell to the water waves generated by afalling stone. Samuel Morse periodically boosted the weak electromagnetic signalsfor them to become strong enough to travel coast-to-coast by applying the analogyof exchanging horses at relay stations.

Recognizing metaphors is also a useful way to discover new ideas. AlexanderGraham Bell conceived the telephone by understanding the inner workings of theear and the movement of a stout piece of membrane to move steel. Thomas Edisoninvented the phonograph by combining a toy funnel and the motions of a paperman and sound vibrations.

A number of years ago, parallel computers were invented to process computa-tionally intensive tasks concurrently in different processors in order to arrive at thefinal solutions in the shortest period of time possible. In analogy, modern day sup-ply chain systems want their final product assembled in the least amount of time.In order to accomplish this goal, they parcel out the tasks of producing specificsubassemblies to different vendors and require them to design, manufacture, andquality control their respective products concurrently at global locations. A casein point is the ongoing production of the new Boeing 787 Dreamliner, which isprojected to require only three days for final assembly [Boeing (2007)].



It is useful to apply known analogies to unrelated domains by asking questionssuch as (a) What simple and new analogies can be applied so as to solve the problemsat hand? (b) What does this remind me of? (c) How can a known technology inone domain be repurposed for a new problem space?

(2) Notice lessons from failures and mistakes. As Winston Churchill once said:“Success consists of going from failure to failure without loss of enthusiasm.” Asuccessful person understands that failure is a necessary part of the process ofdiscovery and that it is important to learn from our mistakes and to keep moving on.Charles Goodyear takes this idea one step further when he says: “What is hiddenand unknown and cannot be discovered by scientific research will most likely bediscovered by accident, if at all, by the one who is most observing of everythingrelated thereto.”

By closely analyzing their first failed attempts, many unexpected discoverieswere made in the past by great inventors. In order to understand this processbetter, we can ask questions like: how can we find new discoveries by finding out whysomething (e.g. chance events, accidental outcome) behaves strangely? Finding outwhat is good about our failures and mistakes allows for new learning opportunities.When individuals discover something interesting, they should follow their instinctsand keep going even if this takes them off track, as they may benefit from theopportunities created by an accidental discovery.

(3) Garner divergent perspectives. Albert Einstein said: “To raise new questions,new possibilities, and to regard old questions from a new angle, requires creativeimagination and marks real advance.” Individuals need to set aside their traditionalmind set and look at the broader picture. It takes a tectonic paradigm shift in orderto “see around the corners.” This is the reason why oftentimes outsiders can offera fresh point of view that the closed community cannot. Individuals need to cajolethemselves into seeing things from a variety of different perspectives.

Cosmetic products offer different value propositions to different groups of stake-holders. They are chemicals, colors, and powders to the producers, hope for ayounger and more attractive look to its consumers, tax revenue sources to gov-ernments, and marketing challenges to vendors competing for the same customers.Companies pay more heed to customers in order to benefit from their perspectives.

China’s “one-child” policy created a lot of “little emperors” in the families, asboth parents and grandparents spoiled these children, allowing them to do whateverthey wanted, including eating junk food. This behavior consequently generated awide-spread public health concern in China. Looking at this concern from anotherperspective, these “little emperors” contrived golden opportunities to some innova-tive food companies, who made big fortunes by marketing nutrition-enriched drinksto Chinese kids. These companies made their profits by both satisfying the childrenand appeasing Chinese parents and grandparents’ health concerns.

Restructuring or restating a problem in different ways can yield new alternativesand ways of seeing that are unfamiliar and thus force us out of our routine percep-tions. One may ask the question: “In what way might I . . . ?” to start a problemstatement. Applying thought experiments to change the level of abstraction, from


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local to global and from components to systems, and to separate components fromits systems, will promote the generation of alternative perspectives.

Lateral thinking was advocated by [DeBono (1971)] as a way to break loose from“vertical” or “analytical” thinking paradigms. Individuals could garner differentperspectives of a problem by (a) exploring the interface in cross-disciplinary domainsfor opportunities, (b) envisioning problems from different angles to think “out of thebox,” (c) nudging the conceptualization level up from elements to systems, or (d)going after new forward-looking ways to do familiar things. Table 1 lists examplesof open-ended questions, which could be asked from different perspectives.

(4) Adopt idea combinations. Combining ideas from different domains is known torender new possibilities by integrating and synthesizing known patterns, concepts,and relationships. Combining things in novel ways is a technique to conceive of newideas. Questions may be asked: (a) What changes may be made to the mental modelthrough a combination of new information, combined with one’s own experience?(b) Which conceptual models or images could be combined so that cross-disciplinarycombinatorial invention may be possible at their intersections?

(5) Go after intellectual prompts. Intellectual prompts may come from reading liter-ature, making observations, conducting experiments, traveling, and/or interactingwith creative people in groups. By employing the open innovation paradigm [Ches-brough (2003); Rigby and Zook (2002); Huston and Sakkab (2006)] involving globalinputs [Jose et al. (2004)], one could realize the benefits of the global scope ofeconomies in developing new ideas.

“Read thousands of pages and walk thousands of miles” is a known Chinesestrategy to promote creativity by constantly seeking intellectual prompts.

Table 1. Examples of open-ended questions from different perspectives.

# Exploratory questions from different perspectives

1. May the problem at hand be reframed in a new way to lead to unexpected possibilities?2. What new possibilities can be envisioned from the problem at hand?3. Which industries, domains, or fields could be bridged to find new opportunities?4. What types of prototype could be built to try out an idea?5. What missed need remains unexplored?6. Is the newly defined problem worth solving (e.g. market size, profitability)?7. What problem may lie inside of the problem at hand?

8. Which component is not working successfully and how can an improved replacement bedevised?

9. How can a technique in one area be applied to a new domain?10. How can something be made to work better, once its reason for working becomes

understood?11. How can insights be layered upon others to create new ones?12. What may be the outcome, if a systematic thinking process is adopted?13. What “future states” may be imaged which differs significantly from the “current state”?14. What is next?15. What can be learned if a higher level broad-based perspective is adopted — instead of

looking at individuals trees, survey the forest?16. Which nuggets of wisdom (e.g. business trend, scenarios, rules, application practices, ways

of looking at the available knowledge, reasons for something that works, and how analogieswork in different context, etc.) could or should be replaced, modified, or reapplied?



(6) Envision relationship graphically. A. P. Usher said: “Invention establishes rela-tionships that did not previously exist. In its barest essence, the element of inno-vation lies in the completion of a pattern or in the improvement of a pattern thatwas unsatisfactory and inadequate.” “One picture is worth a thousand words,” asthe Chinese would say. Making thought visible helps display relationships in differ-ent ways other than in words and mathematics. An active deployment of graphictools would derive a better conceptualization of ideas, patterns, relationship, andinsights. Questions may be asked: (a) How can it be visualized in pictures, props,and in graphical forms? (b) How can thought experiments and mind games beactivated to probe “what if” ?

Figure 4 illustrates the divergent and convergent thinking processes that areessential in generating a lot of raw ideas first, and then pruning them down toexpose the really novel ones.

In order to promote creativity in teams, Chang [2008] further recommendsthe collaborative, heuristic, and normatively guided technique, which consists of(1) combining a multi-round Delphi technique with a series of thinking strategies(e.g. brain storming, divide-and-conquer, “Deepsmart,” etc.) that are to be appliedby team members, (2) changing the level of abstractions to alter team members’perspectives, (3) guiding the collaborative idea creation process with customizedquestions to maintain focus, and (4) pruning the multi-round outputs to enabledigging for increasingly novel ideas. Figure 5 illustrates the work flow of engagingsuch thinking strategies to generate new ideas.

The principal novelties of the suggested technique lie in its capabilities of (1) pro-cessing a number of desirable rounds (typically 4), (2) being self-directed andhighly cost effective, (3) invoking a multi-mode of thinking patterns, (4) allow-ing participants to remain anonymous so as to avoid the known shortcomings of“social loafing,” “evaluation apprehension,” and “production blocking” in face-to-face brainstorming sessions [Furnham, 2000], (5) assuring the outcomes to be mutu-ally exclusive and collectively exhaustive, (6) allowing busy knowledge workers toparticipate by spending no more than 5% of their time (2 h per week) without

Fig. 4. The divergent and convergent processes.


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Fig. 5. Generation of new ideas.

disrupting their normal daily duties, (7) creating an internally competitive environ-ment to foster the drive for excellence, (8) enabling the application in concurrentfashion (parallel teams to involve many experts at the same time) or a sequentialmanner (allowing outcome of the previous teams to jump start new teams in orderto drive the new concepts to deeper levels), (9) applying readily in global settingsfree of geographical and time-zone constraints, and (10) establishing a valuable listof domain experts who are superior in innovative pursuits.

Specifically, this work model proceeds as follows:

(1) Empower a well-respected and knowledgeable team leader to manage the teameffort. Seek assurance of management commitment and support, offer feedbackto individual participants after each round of deliberations, and introduce spe-cific recognition and compensation policies to promote team participation.

(2) Select the right participants, typically 7–10 workers per team, who are willingto participate and have diversified backgrounds and expertise, know-how, andpersonal tacit knowledge relevant to the project topic at hand. Team members inthese “stealth” teams will interact with one another. The participants’ personaltacit knowledge in the subject matter is important [Chang (2006)].

(3) Specify an innovation project objective, which is focused, and compatiblewith the company’s known strategic objectives, and aligned with existing ser-vice/product lines.

(4) Define work rules (e.g. one-man brainstorming, no negative criticisms, buildingon others’ ideas, and applying different thinking tactics to think out of thebox, etc.) and provide training in the use of relevant communications tools tofacilitate instant information sharing.

(5) Initiate the first round by providing background information, known practices,illustrative examples for explaining concepts, and guiding questions that focus



the team efforts on the issues involved. Each participant receives feedback anda performance grade, based on his/her output. The first round outcome is thensummarized, categorized, edited for redundancy, and returned to all participantsfor starting the next round.

(6) Introduce specific thinking tactics, such a “divide and conquer,” “analogies,”and “level of abstractions,” for the purpose of inducing participants to seeissues from both the systems and components standpoints, to gain differentialperspectives by making use of analogies, and to innovate by changing the levelof abstractions. In addition, the team coordinator will insert guiding questionsto direct the team’s energy to specific areas that might need more attention.Again, each participant will receive a performance grade for his/her resultingoutput. The outcome of this second round will then be properly analyzed andcategorized so that a list of potentially novel ideas will emerge. This list is thenreturned to all participants for starting the next round.

(7) Start the idea convergent process by encouraging team participants to passjudgment on which of the ideas currently on the list are commonplace, obvious,or trivial. This is to help prune the ideas by making use of the participants’vast knowledge and experience base. Ideas that are deemed by people skilledin the art to be obvious are not patentable. Concurrently, the participants arealso encouraged to apply another set of “deepsmart” techniques (e.g. the ninespecific thinking tactics involving discovering, eliminating, expanding, pursu-ing, swapping, merging, adjusting, revising, and transposing to add new ideasnot already on the list). These new thinking tactics are intended to encour-age participants to think creatively by looking for unusual and innovative ideasapplicable to the project at hand. Again, the results are categorized, furtherpruned using the team coordinator’s personal knowledge and experience, andsummarized for the participants in the next rounds. Again, each participantwill be assigned a performance grade.

(8) Stop the process, if the outcome of the third round deliberation contains asufficient number of innovative ideas. The team coordinator will then ask allparticipants to take a vote in the fourth round. This voting process encouragesthe team to exercise collective judgment on prioritizing the identified novelideas. The final list containing the rank-ordered new ideas will be shared withall participants.If the outcome of the third round deliberation does not produce a sufficientnumber of innovative ideas, then the team coordinator may decide to continuefor one more round, by inserting additional probing questions.Figure 6 illustrates a key step incorporated in the multi-round brainstormingprocesses — the idea pruning process.

(9) Review the performance records of each participant and take note of those whohave clearly demonstrated a high level of collaborative attitude and a superiorcapacity of inventiveness. When constantly updated and expanded upon, thislist of willing and capable experts represents one of the most valuable andstrategic assets of the service company, insofar as future innovation resourcesare concerned. When companies train the future team leaders to scale up theinnovation efforts, suitable candidates are readily identifiable.


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Fig. 6. Idea pruning process.

The above-described collaborative, heuristic, and normatively guided techniquehas undergone classroom testing for a few years, involving Masters-level graduatestudents as participants. The outcome has been quite positive. In each and everyinstance, there were useful novel ideas generated to improve the existing operationsof several different services, such as FedEx, Fidelity Investment, Travelocity, andothers. The development of a new service was the subject of a test case last year,as described below.

5. Generation of New Service Ideas — Case Study

The project objective is to develop a new student advisory service to provide thebest match between personal aptitudes, job characteristics, as well as, disciplinesand sector growth prospective in order to maximize the individual student’s careerpotential, Fig. 7.

Fig. 7. Optimal match.



A total of seven parallel teams were established, each comprising of five to sevenparticipants, who were first-year graduate students studying Engineering Manage-ment courses at University at Buffalo. The teams went through four rounds of elec-tronic brain storming sessions without face-to-face group meetings during the Spring2009 semester. The outputs of each round were regrouped, categorized, edited, andgraded by the author, who served as the common project coordinator for all. Listedbelow are some sample ideas, which were provided by these teams:

(1) Develop a system to match personal aptitude, job characteristics and disci-plines/sectors, similar to the “compatibility matching system,” which is usedby eHarmony to match people using 22 dimensions, or to the computer-basedmatching system by Durand et al. [2001].

(2) Apply the Kapnor–Tregoe rational decision making method [Kepner andTregoe (2006)] to prioritize choices. Job characteristics could include the broadcategories of technologists, management, production, marketing, and technicalconsulting.

(3) Use Holland codes [Gottfredson and Holland (1989)] to define vocationalpreference. (1) Realistic — practical, physical, hands-on and tool-oriented, (2) Investigative — analytical, intellectual, scientific, and explo-rative, (3) Artistic — creative, original, independent, and chaotic, (4)Social —cooperative, supporting, healing, and healing/nurturing, (5) Enter-prising — competitive environments, leadership, persuading, and (6) conven-tional — detail-oriented, organizing, and clerical.

(4) Devise a software program, such as an expert system [Giarratano and Riley,2004], that allows the questions to change depending on the answer given tothe previous questions, in order to produce a more refined identification ofpersonal attributes.

(5) Develop a standard profile for each discipline, the mid career of a compositeindividual. Develop a questionnaire based on this profile for the freshman. Ifanswers score 85% success/happiness, this discipline should be recommended.

(6) Apply the “music genome project” [Castelluccio (2006)] concept so that stu-dents input a selection of disciplines. The system then offers various charac-teristics to each chosen discipline to which students apply feedback of “like”or “dislike.” Based on the intuitive responses of the students, the additionaldisciplinary characteristics offered results in better choices in disciplines.

(7) Offer “test driving” opportunities for students to test out the chosen disci-pline and job functions. Having certain tasks for the students to do and thenevaluating the outcome will offer similar assessments as a “test drive.”

(8) Develop a SIMS style game [Birlew (2007)] that focuses on the career pathof individuals in various fields. Based on the players’ inputs and decision, thecareer path and situation could change. Actual projects, problems, and/orsituations could be portrayed to simulate or “test” the various fundamentalsof engineering, soft skills, and the player’s decision-making ability. Also, per-sonal decisions (marriage, family) and professional aspirations (management,technical, and industry) could be considered to simulate, as closely as possi-ble, the potential career path from entry-level engineer to retirement. Playing


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multiple scenarios would help the freshman to experience various industrialfields, career paths, and understand how their personal attributes/aspirationswill affect their success.

(9) Organize the available resources like an “interactive museum exhibit” to showthe essential knowledge contents and databases of each discipline, so that thestudents gain a better appreciation of what might be involved. This simulationwork could show entry level through management level work.

(10) Create an interactive software to allow students to experience different kindsof jobs, and then meet with experienced professors or company engineers tofinalize the choices.

As can be seen from the above-described results, the team outputs were quitecomprehensive and unique. The specific method of “analogies” was applied repeti-tively by cleverly “borrowing” ideas from unrelated fields. In general, participantsliked the experience offered by the combinatorial, heuristic, and normatively guidedtechnique; they provided a large number of positive responses quoted below:

(1) It offered a chance to be able to convey ideas without having to worryabout being criticized or being limited to the amount of ideas one could pro-vide. Everyone’s voice was heard to the full extent without being limited, ordisturbed.

(2) I enjoyed the process of this project experience. It has demonstrated the pro-cess of use of cross-functional teams (CFTs) effectively to come up with novelideas, which might have a great impact. This suggests that this project pro-cess of CFT could be employed to come up with novel ideas that are veryuseful in a short time through different levels of brain-storming from differentlevels of team members. The demonstration of the CFT was very useful, aswell as, both the thinking methods provided in round 2 and round 3 “deepsmart” methods. I currently use these methods in my graduate research to tryto come up with different ideas to study the problem at hand.

(3) The method will force someone to use the thinking methods to expand someoneelse’s ideas instead of his/her own ideas. When someone has an idea, most likelyhe/she thinks other people’s ideas are wrong.

(4) This is a wonderful opportunity for me to think “outside of the box” by usingdifferent methods of thinking. However, I still feel that the project is notcompleted. Each idea can be developed much more. There are so many ideas,therefore, it takes a lot of time to tackle all of the ideas in detail.

(5) I think that “comment on ideas in which in your options are not new, obvious,or not useful” was the most useful. It made me look at the suggestions in acompletely different way and ultimately I was able to eliminate some of thesuggestions.

(6) I think that this process was great to understand the role that peer pressure,feelings, and personal interest, affects the outcome of a group decision. I likedthis process because it allowed me to focus on the raw idea and not how Iwould hurt someone’s feelings, or how to properly critique someone’s idea. Idefinitely think that I will use this somehow in the future.



(7) I like the project experience very much. I have learnt lots of useful knowledgeand obtained a well-round practice during this project. I will cherish them asone of my best memories in my studying life.

(8) Being able to work on and develop ideas individually for each round was a greatexperience. Starting the process was difficult but you really became involvedin the topic. You also got to develop your ideas without being influenced byanother person’s interpretation of your idea.

(9) Round three was a great round. The first step of organizing and cutting-back ideas by using the “commonplace,” etc. descriptors allowed focus to beplaced on those ideas that warranted further refinement and thought. Then,the deepsmart process provided some very pointed questions that helped tocomplete the refinement. I was able to use both concepts to develop new ideasand refine existing ones.

(10) Yes. It was my first time working on a brainstorming process in this manner.I can truly see the benefit of using the independent process and areas whereit would be useful. I was uncertain about the process in the beginning andwas not sure if it would provide any benefit. But, I kept an open mind andonce into round 2 and 3 could really see how my ideas evolved from obviousto novel. Overall, it was a very useful and educational experience.

(11) Yes, I never felt inhibited by the prospect of others looking down on one ofmy ideas. I felt very free and open to suggest ideas that were a little bit of astretch as I began to think about the problem. Some of the ideas that beganas a stretch helped me to think about other possibilities that I may not haveotherwise. Also, I have noticed that in the past I have tended to take partin “social loafing” in group settings. Unless I am the leader of the group, Isometimes tend to sit back and wait to see what other people say. I still mayoffer suggestions, but generally I do not have to push into a problem like Idid with the approach presented in this course. This approach made me reallylook at the problem and ideas suggested by others in a thorough manner. Thisapproach seemed beneficial in allowing me to dig deeper into the problem.

(12) This team exercise certainly challenged me to think past the obvious. Itreminded me of the importance of thinking more deeply about an idea orconcept. It taught me the value of going back to a problem a few times andcontinually reevaluating and refining the ideas. It gave me some tools to useas I get into situations where the obvious answer may not be the best answer.

(13) I thought it was a good exercise. It started with a group of sometimes nebulousand unconnected ideas. The ideas evolved into new ideas when expanded on byteam members. This expansion, improvement, and refinement were facilitatedby the team members inherently with different view points and the multitudeof newly introduced thinking techniques. I plan on using these techniques tohelp address issues that I encounter during my work as a staff senior designengineer designing new products.

(14) Concerning the opportunity of voicing your ideas/opinions in an uninhibitedway, I think that was the best part of the project, very effective and efficient.I think it helped and forced everybody to participate rather than just leadersof a group.


128 C. M. Chang

(15) I liked the project, I felt it was very helpful, and very useful because time isalways a constraint, and this project allowed me to fit the project in whenconvenient to me. Also, it was useful to be in teams because people createdsome great ideas that I would have never thought of, which helped me to thinkdifferently. Also, it was great to not have to meet with people and have somepeople dominate how the project would go and also this project did not allowpeople to slack off because we all submitted to you. I think this was a greatidea!

6. Some Observations by the Author

In reviewing this case, I have come up with a number of noteworthy observations.The suggested technique, when applied to a number of parallel teams, make use

of the knowledge and experience of a large number of experts, both in house andexternal, thus facilitating the generation of a lot of potentially new ideas within ashort period of time. Parallel teams are not expensive to operate, as participantsneed to commit for only a short period of time (say 1 to 2 h per week) to the projects,with no need in physical relocation, traveling, changes in roles and responsibilities,and others. The duration of these idea-generation projects are usually short as well.By organizing the teams in series, wherein the outputs of previous teams are fedinto newly formed teams to enable a deeper level of discovery, further refinement ofideas becomes possible.

These is no location-based limitation regarding participants; this techniqueallows company workers, selected customers, external experts, and specific sup-pliers at global locations to participate. By selecting the participants in accordancewith their demonstrated willingness and ability to contribute innovatively, compa-nies will be able to constantly increase the pools of talented innovators who canthen be readily engaged to address new challenges. A continued application of thistechnique allows the company to screen and establish the most valuable talent poolsfor innovative pursuits.

Furthermore, participants remain anonymous to each other, and are only knownto the team coordinator. The sessions are free of a number of deficiencies recognizedin traditional sessions (“social loafing,” “evaluation apprehension,” and “productionblocking”). The expert’s participation is usually limited to 1 to 2 h per week, thusnot likely to materially affect the individual’s normal daily professional duties. Theteams may be set up and disbanded rather quickly in accordance with the changingneeds of the company.

The technique is readily scalable. A single team coordinator can easily manage10–12 brainstorming sessions concurrently and without difficulty. Thus, up to 70–80participants could be involved in brainstorming to tackle a specific project topic,with minimum organizational and other hurtles to overcome. As many service firmshave already established communities of professionals to focus on knowledge transferin core technology and business domains, this technique can be readily appliedto involve these professionals in pursuing innovations in related topics. Engaginga large number of diverse participants in short durations enables the capture ofadvantages in global economies of scope.



Participants need to climb a very short learning curve. Past results have shownthat most participants become proficient in applying the recommended thinkingtactics after a few rounds of deliberations. If properly nurtured, the internal compe-tition between participants can be very effective in promoting deeper-level thinkingthat results in better discoveries.

The suggested technique does not require new software tools for implementation.What will be needed are word processing programs for preparing text, PowerPointtools for preparing graphs, and Internet access for communications via e-mails.

For such “stealth” teams to innovate effectively, service companies must estab-lish and implement proper incentive programs, including extra compensation (e.g.bonus, stock options), formal recognition in company’s annual inventor’s confer-ence, or Hall of Inventors, and inclusion of participants in any intellectual rightsand patents, which might result from such a participation.

Services companies should be encouraged to apply the suggested combinatorial,heuristic, and normatively guided technique to actively pursue the development ofmajor service innovations by generating a lot of ideas first and then developinga selected few to satisfy customer’s needs, while aligning with company strategicobjectives.

7. Application as Front end to Stage-Gate Process

Many companies apply the well-known stage-gate process [Cooper et al. (2002)]to develop new products/services, while involving customers (Fig. 8). Typically, aservice development program is initiated by defining the specific goals and actionplan for the first in a series of consecutive stages. The program will be continuedinto the next stage, only if the pre set goals of the current stage are satisfied. Eachstage may involve different participants and be concentrated on different aspects ofthe development process, such as:

(1) generation of novel ideas;(2) selection of specific ideas for development;(3) review applicable prerequisites (e.g. target costing, supply chains, distribution

network, marketplace assessment — niche size, growth rate, ease of access,marketing, projected profitability, financial viability, etc.);

Fig. 8. Stage-gate process.


130 C. M. Chang

(4) initiation of the costly development;(5) commercialization; and(6) products/services launch.

The combinatorial, heuristic, and normatively Guided technique may be read-ily applied to the stages of (1)–(3), serving as the frontends to such a stage-gateprocess. For those companies, which do not have R&D departments or in housegroups for pursuing innovative work, the combinatorial, heuristic, and normativelyguided technique can be easily applied to engage in open innovation, [Chesbrough,2003], by way of stealth teams involving customers, external experts, suppliers, andconsultants. Therefore, the absence of in house groups is not a limiting factor forinitiating innovation efforts and achieving successes in major service innovations.

Some service companies are fearful of the negative consequence that might becreated by a novel service, due to a lack of prototyping and pre market testingopportunities. In such a case, the combinatorial, heuristic, and normatively guidedtechnique could be readily invoked by a team of experts who could apply the failuremode and effect analysis (FEMA) [McDermott et al. (2008)] concepts to exhaus-tively define all potential failure modes related to the new service, rank order themaccording to the PRN number, and specify remedial actions to mitigate them beforethe novel service is launched.

Other service companies hesitate to pursue innovative development efforts forfear of being easily imitated by competitors. Applying the suggested combinatorial,heuristic, and normatively guided technique to focus on major service innovations,instead of process innovations and product-line extensions, will build a significantprotection against such competitive imitation. For example, when the combinatorial,heuristic, and normatively guided techniques are applied to Stage 1, its goal (G1in Fig. 7) could be set as a minimally required number (say 5) of innovative ideas,whose novelty is clearly above and beyond the current best practices — the principleof target innovating. Doing so will facilitate the incorporation of a number of (atleast 5) novel ideas to be bundled in a new service value package, thus significantlyreducing the opportunity of being competitively imitated.

Enterprise Rental Cars initiated a smart positioning strategy by locating incities, rather than at airports. Now, many major car rental companies imitate thisnew process strategy by having expanded their pickup and drop-off locations intothe cities as well. This is the case in which an innovation of a supplemental serviceelement (e.g. in delivery mode) has been readily copied by competitors. In contrast,Cirque du Soleil offered a major service innovation in the form of the hybrid servicecontent of circus and dance performance, which is difficult to imitate. Even itsChinese competitors, who are known to have a very long history of offering circusentertainment services, have not been able to match its innovative offerings. It isthus important for service enterprises to strive for strategic differentiation in thecore service element (e.g. service features), so that they cannot be readily copied orimitated.

The impact of service innovations is also more readily recognized for majorservice innovations, than for those related to process innovations or process-lineextensions. In fact, if companies focus on developing major service innovations,instead of those related to process innovations and process-line extensions, and



apply the combinatorial heuristic and normatively guided technique using the openinnovation model, many of the recognized reasons for the scarcity of major serviceinnovations can be eliminated.

8. Application of the Suggested Techniquefor Assessing Marketability

Service ideas need to be innovative, in order to create strategic differentiation in themarketplace and avoid being readily imitated by the competition. They also needto be marketable so that they could lead to profitability for the service companies[Berry et al. (2006)]. Applying the combinatorial, heuristic, and normatively guidedtechnique, stealth teams could be engaged to focus on:

(1) marketplace (size, growth rate, accessibility, alignment with company’s overallproduct/service-line strategies);

(2) customers (core benefits sought, problem solving, conflict resolution, interactionpreferences, buying decision, desirable service quality, future needs, etc.); and

(3) competition (strengths and weakness, relative marketing power in specific sec-tors, strategic intentions).

If supported by analytical work and other back office operations, these teamscould rapidly assemble broad-based understanding, knowledge, perspectives, andinsights that are useful for managing the innovative development program. It isof course important to engage customer-facing staff in these teams so that theirinsights, observations, experience, and perceptions are carefully included in thedeliberations.

The process of developing a marketable new service is typically long and expen-sive. To increase the cost effectiveness of such a development process, companiescould pay special attention to the front end efforts, which are involved in:

(1) defining novel services ideas;(2) estimating unit service costs;(3) checking on market attractiveness (size, growth rate, and accessibility);(4) assuring customer receptivity; and(5) Sizing up the competition in the marketplace.

before spending a significant amount of company resources to actually developthe chosen service ideas. The combinatorial, heuristic, and normatively guided tech-nique suggested in this paper could be applied to systematically address these frontend issues. By setting up specific goals for various gates in a stage-gate process, thesuggested technique could assist in rapidly screening out weak ideas, thus increasingthe probability of developing commercially successful service ideas over time.

9. Conclusions

Creative minds are everywhere. These minds are wasted, if not properly engagedto produce new and useful ideas. This paper has offered a few guidelines on how toengage creative minds and how to encourage them to become productive.

Creativity and innovations are of paramount importance to service companies.For a number of reasons, service companies have been generally less proactive than


132 C. M. Chang

their products counterparts in pursing innovations. This paper suggests the useof combinatorial, heuristic, and normatively guided technique to overcome some ofthese reasons by focusing on developing new core services ideas to create sustainablecompetitive advantages.

It is believed that the presented methodology of creating novel service ideasis new. The application of this technique enables service companies to realize theadvantages of global economies of scope, based on the technique’s capability ofreaching globally, engaging diverse participants in short duration, deploying strate-gically, and being cost efficient.

The technique may be invoked by virtual teams of the “stealth” type to addressmany issues related to the development of novel and commercializable service ideas,the competitive value proposition of the service package, customer receptivity, mar-ketability, and other such issues. When applied as the front ends of a stage-gateprocess, which is typically used for the development of new services, this techniquehelps to screen out weak ideas before the company needs to commit resources forits active development, thus improving asset utilization and raising the likelihoodof launching commercially successful services that leads to profitability.

The combinatorial, heuristic, and normatively guided technique has been classtested in a few projects involving Master-level graduate students. The early projectswere focused on service improvements. The latest project addresses the creation ofnew service ideas. The outcome has been quite good, testifying to its practicalusefulness. This technique is expected to gain new applications in many fields.

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Biography

C. M. Chang is the former director of Service Systems Engineering Program,Department of Industrial and Systems Engineering, State University of New Yorkat Buffalo, Buffalo, USA. He has a Dr.-Ing. degree in mechanical engineering fromTechnological University of Aachen, Germany and an MBA from SUNY Buffalo.He is also president of CChang LCC, a business consulting firm specialized inbusiness strategy and technology management issues. He authored the graduatetextbook Engineering Management: Challenges in the New Millennium, PrenticeHall (2005), which was translated into Korean language and won the Best BookAward 2007 of the International Association for Management of Technology. Healso authored the graduate textbook Service Systems Management and Engineering:Creating Strategic Differentiation and Operational Excellence, John Wiley (2010).He have received five US patents and published numerous articles on technology andengineering management. He is on the Editorial Board of International Journal ofInnovation and Technology Management (IJITM) and has served as a gust editor forthe IJITM Special Issue on Technology Management in Health Care Organizations.He is an honoree in Who’s Who in American Education, Who’s Who in Financeand Business, Who’s Who in America, and Who’s Who in the World.

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