In what major aspect is service innovation different from product innovation? The idea-phase is practically the same for both. Without people proposing new ideas, not much is going to happen. This is also the phase in which some tools are used to structure the process and to increase the creativity.
The main difference starts with the development phase. For product innovation you start with (thinking about) the manufacturing process or prototyping your new concept. In essence your new idea has to be materialized through the production process.
For service innovation this is completely different, because it is the people who deliver the service who have to change. Either they have to learn some new skill through training, or they have to change their behaviour towards customers. Both will only work when they want to change themselves. And they will only be motivated to do this when it is clear why they have to change and buy into the new idea.
This is a massive change process, which needs to be managed very well. If you are McDonalds or Starbucks and want your employees to act differently towards their customers a lot of people are involved. The success of your change, i.e. your service innovation depends on how accurately your employees behave according to the new ‘idea’.
This is even more complex because the result of your service depends on the way your customer experiences it. If your customer doesn’t perceive any difference in the way your employee treats him or her, than your innovation has failed.
This is a full circle (of innovation) where you need the involvement of your employees in every step. Your employees have to come up with new ideas for innovation. Their main sources are the customers with whom they are in contact with every day. To implement these new ideas you need your people as well because they are your main sources that deliver the new service. And the success of your new services depends on how your customers perceive it. Etc. etc.
This means that in service innovation it is crucial to have knowledge and experience of the innovation process itself AS WELL AS of helping your people to change!