Center for Service Innovation (CSI)

In 2010, at the outset of CSI, service innovation was novel. Today the topic has been discounted and attention has moved to artificial intelligence and digitization. CSI has been a major contributor to this development by being very visible in communicating and disseminating our research. During spring 2019, we published the results of the Norwegian Innovation Index (NII). With NII we had developed a theory, a research design, and a methodology for measuring service companies' innovation capability as customers experience it. The customer perspective complements the internal expert/management perspective and measures the impact of the various innovation initiatives in the customer market. Innovation has no or limited value before it hits the market. The CSI's approach is implemented in the United States (American Innovation Index, Fordham University) and in Sweden (Swedish Innovation Index, Karlstad Business School). We are currently in dialog with more countries. We take this as a evidence of academic and theory-driven innovation for services. The NII model can be implemented with small adjustments for goods-producing consumer companies and public service organizations. NII is the materialization of a position CSI took early as to what is an innovation. We opted for the customer perspective in our definition: "An innovation is any change in an organizations market offerings or business model that customers can cognitively register and that affect their perception of value." With this view, we capture the idea that an innovation that can have a negative impact on perceived value, which could lead to loss of customers, reduced cash flow, and reduced firm value. Service innovation is characterized by being more holistic and multi-faceted than goods innovation and includes changes in the way in which we develop, deliver, communicate and capture value. For service organization with returning customers, innovations becomes a strategic issue of increasing or maintaining the retention rate.. For service companies, this becomes a matter of management, organization, and business model. CSI's research agenda has reflected this through four research themes: Innovation in the business model, innovation in organization and culture, innovation in market offerings, and innovation economics. THEME 1: BUSINESS MODEL INNOVATION (BMI) Innovation in business models (BMI) is an important source of competitive advantage. However, to date, the majority of business model research is limited to conceptual work, with little guidance for executives on how to successfully initiate, implement and manage the innovation process of their firm's business model. The aim of our research is threefold and organized in two WPs: * How companies are redesigning and innovating business models with the dual objective of aligning sustainability concerns and profitability. * based on a large-scale empirical study on Norwegian companies we aim to unravel the antecedents, moderators and performance implications of business model change. * Best practices of business model innovation in the retail industry offering hands-on recommendations and managerial tools to support executives in innovating their business models and hereby strengthening their competitive advantage. 1.1, Smart and sustainable business models 1.2 Best practices in business model innovation THEME 2: MANAGING AND ORGANIZING FOR SERVICE INNOVATION AND TRANSFORMATION (MOST) Recently a service dominant logic has emerged as an important perspective to analyze how competitive advantage is gained and sustained. This notion has major implications for modern service providers, especially regarding how organizations need to conduct revolutionary transformations to be more customer and experience centric, and ultimately innovative. 2.1: Organizational culture and transformation THEME 3: SERVICE DESIGN THINKING AND CUSTOMER EXPERIENCE Service design thinking is a cornerstone for transforming core business to digital, and for creating new and innovative digital services. This is not only related to the processes of improving or innovating services that create great customer experience, but the whole way of approaching a firm?s transformation in the digital area. Therefore, service design thinking is increasingly important going forward for service firms and demands new questions and opportunities for empirical work and theory development in terms of the role, application and impact of design. 3.1: Service design thinking 3.2: Customer experience including Virtual and Augmented reality THEME 4: SERVICE INNOVATION ECONOMICS (SIE) At the end of the day, service innovation is all about real and perceived risk, revenue, profit, and return on investments. In order to defend a service innovative investment, the many and complex effects must be documented. We see (at least) two issues, corresponding to work packages: 4.1: Economical effects on service innovation 4.2: A mode

PhDs and PostDocs are employed at respected institutions and on their way with their career. For tenured faculty, CSI has advanced their career and some are about to be full professor. 180 master theses document that future leaders have been exposed to service innovation. Today, innovation is prevalent in NHHs education programs, birth of new courses and a new master profile captures the essence of CSI. Design thinking and customer journey mapping have become tools that firms have internalized in their own innovation projects. The Norwegian Innovation Index provides firms with a tool to measure the effects of innovations as perceived by customers. CSI has had an impact on how partners make decisions and on organizational culture and development. Finally, CSI has disclosed the complexity of service innovation relative to goods innovation: IT, strategy, HR, marketing, logistics, organization and culture and increasingly the importance of digital market offerings and business models.

CSI is organized with 5 of Norway's largest communication, ICT, financial, and logistics service provider partners, 6 academic knowledge partners and 4 business knowledge partners specializing in innovation process management and ICT-supported service inn ovation. It includes 5 bridging partners assisting knowledge dissemination and SME-partner inclusion. CSI will incorporate into its research environment the innovation interactions between large services providers and KIBS-firms. Through bridging partners it will enable more SMEs to take part in open innovation driven by the largest buyers of sub-contracted services in Norway. The CSI-board, where business partners hold the majority positions, identifies and develops research themes to be pursued, and dec ides which partner development projects to integrate into its research environment. The environment consists of physical resources including test-, experiment- and demonstrator facilities, human resources including internationally recognized service innov ation researchers and PhD/Post doc-scholars, and virtual resources and best practices reflected in service innovation procedures, -methods, -systems and -guidelines. CSI will pursue four service innovation challenges as its initial research themes: Innova tions in customer and brand experiences; Open and co-creating innovation processes; Business model innovations and, finally; Infrastructure- and structural innovations. Eleven Work Packages (WPs) will be organized within these themes. Among the deliverabl es from these WPs are new services, new service interfaces, service innovation methodologies, best practices and guidelines, conferences and workshops, in addition to high quality professional and scientific publications, 18 PhD-dissertations and more tha n 100 master theses. CSI will significantly improve the service innovation capabilities of its partners and enhance researchers' and policy makers' understanding of service innovation beyond state of the art.