Hope for the best, prepare for the worst: Barriers to service innovation

Rezvan Velayati, Esmail Shabani Nejad, Alireza Nazarian

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Abstract

Despite the growing scholarly interest in service innovation and its associated benefits for organizations, research into the barriers to developing new services remains scant. In addition, most of these studies have been mainly conducted at the firm level, failing to incorporate macro forces in the industry. To fill this gap, this research aims at investigating major industry trends as well as organizational attributes that affect organizations’ capability in designing innovative services.
A qualitative approach was used. Twenty-one semi-structured interviews with senior executives in different banks were conducted to collect data. Data were analyzed through thematic analysis The results suggest that privatization, technological shortcomings, legislative inefficiencies, and deposit-orientation instead of market orientation were major industry trends that affect service innovation. Furthermore, ambiguity in knowledge management regimes, silo mentality and the absence of a collaborative organizational culture, growing need to focus on human capital, and risk aversion were the main organizational attributes that should be addressed for effective service innovation.
Service innovation is a strategic asset for organizations. To effectively leverage the benefits, managers should have an end-to-end approach towards the subject. The findings of this research would inform managers of different obstacles in the development of new services from an organizational and industry-wide perspective. Based on the outputs of the interviews and a thorough review of the literature, managerial implications are presented This research is one of the few studies that explores service innovation challenges at both macro and micro levels of analysis, providing a more holistic view of the phenomenon in the context of service organizations.

© 2020, The Author(s). This is an author produced version of a paper published in QUALITATIVE RESEARCH uploaded in accordance with the publisher’s self- archiving policy. The final published version (version of record) is available online at the link. Some minor differences between this version and the final published version may remain. We suggest you refer to the final published version should you wish to cite from it.
Original languageEnglish
JournalQualitative Market Research: An International Journal
DOIs
Publication statusAccepted/In press - 5 Jun 2020

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