Power to your people

NESTA, the UK’s National Endowment for Science, Technology and the Arts, recently produced a policy briefing on innovation in services. As you would expect from a policy report, it has a host of ideas of what governments should do to foster innovation – a bottom-up understanding of needs, open and flexible markets, better leadership, skills development and funding for start-ups. All good, if obvious, stuff.

Where it really hits the nail on its head is in a section titled ‘Services businesses innovate differently from manufacturers’. This difference can be summarised in one word: people. Service innovation depends less on some geniuses having aha moments, less on R&D, less on secret endeavours behind closed doors and more on creative front-end staff, flatter hierarchies and rewarding relationships with partners and competitors.

Service innovation happens in real time and each transaction is an opportunity to create and own new types of services. The best people are those who know the customer best – the staff on the sales floor, the nurse in the ward, the rep at the end of the phone. When brands understand this – as they do at First Direct, American Express and Disney – they give their employees not just the tools but also a philosophical platform that equips them to literally make it up as they go along, and deliver real innovation in services. They give their employees real power. Leveraging those innovations in the organisation then becomes a matter of having the right sharing and memory processes (including external sources), and humble management that recognises and celebrates ideas from the edge.

Of course, many businesses don’t do this – NESTA points out that retailers, hoteliers and restaurants lag behind traditional manufacturing in innovation. Crazy really. It might be they have the wrong people – not at the edge, but in the middle. It is more likely they have the wrong philosophy and have failed to equip themselves with a brand that drives through a culture of creativity at the edge, where each person understands the difference they can make in people’s lives.

Without that kind of power, front-line service providers become mere cogs in the wheel, instead of an army of innovators, daily creating and sharing new services that make real money for the organisation.

NESTA’s policy briefing Innovation in Services was published in March 2008. More at www.nesta.org.uk

16 June 2008, posted by Ije Nwokorie