Service innovation capability: Proposing a new framework

Service organizations face the challenge of offering their customers continuously improved or completely new services and, hence, require service innovations to sustain themselves in the market. We interpret the design and implementation of new or enhanced service offerings as a dynamic capability because the service organization is required to sense impulses for innovation, seize meaningful ways for change, and to finally transform its operational capabilities to the desired state. Accordingly, we propose a new framework which structures service innovation capability into the areas of sensing, seizing, and transformation. We further identify and describe the key activities in all of these three areas based on an analysis of existing literature. With this conceptual paper, we contribute to a better understanding of service innovation capability by proposing a novel framework which is grounded in dynamic capability theory. This framework is beneficial to both practice and academia. It offers an overview of service innovation capability areas and activities against which service organizations can critically reflect their service innovation initiatives. As for academia, it stipulates promising directions for future research.