Thursday, June 11, 2015

Five Keys to Implementing Service Innovations: New Research from Prof. Zhao Xiande

A new research study co-authored by Director of the CEIBS Centre for Innovations in Supply Chains & Services Professor of Operations and Supply Chain Management Zhao Xiande identifies the five key factors for implementing innovation projects in large organizations. The research received the 2015 Best Paper Award from the European Decision Sciences Institute (EDSI) at its annual conference.

The study looks at 10 service innovation projects at a large mobile telecom company in China and explores the degree to which they were successfully rolled out, and what factors influenced their implementation. The researchers found there are five keys to getting employees to put the new ideas into practice. They are:

1. Benefits must be clear to employees and projects where they see an immediate personal benefit will be implemented faster.
2. Innovations developed by headquarters, or that have visible support from top management, tend to be implemented more widely.
3. Appropriate resources must be allocated to facilitate and ensure implementation.
4. Top management should encourage collaboration between departments/business units to help increase implementation.
5. When an external partner is involved, top management should facilitate collaboration with the partner.

Large organizations have two types of innovation projects, according to the study: Push Projects and Pull Projects. Push Projects tend to originate with top management, require its support and tend to have more benefit for the organization overall. Pull Projects originate with front-line employees in subsidiaries and have a more direct effect on employee KPIs (key performance indicators). Some of these projects have an immediate tangible benefit for employees, while for others the benefit is only realized over the long term.

In reviewing their findings, the researchers said that support from top management is the most important factor influencing the adoption rate of an innovation project across a large company. They also recommend that organizations build a KPI system that will both inspire employees to develop new service innovations at the grassroots level, and incentivize them to quickly embrace those that benefit the organization overall.

The results of the study appear in the paper titled “Diffusion of Innovation in Multi-unit Service Organizations – A System Dynamics Perspective”. Prof. Zhao’s co-authors are Jinyu Yang of the Institute of Supply Chain Integration and Service Innovation, College of Business Administration, South China University of Technology and School of Business at Guangxi University; Ying Qian of the School of Management at Shanghai University, and Qiang Wang, an International Research Fellow at CEIBS.

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