Service Innovation Capabilities Dynamization in Knowledge-Intensive Organizations: Evidence from Research and Technology Organizations

Innovation is of fundamental importance in services (den Hertog, van der Aa, and de Jong, 2010) as it underlies the ability to sustain competitive advantage (Miller, Fern, and Cardinal, 2007). Moreover, it helps fight commoditization (Lyons, Chatman, and Joyce, 2007), as new ideas are easily introduced and also easily imitated in services; “in such an environment, innovative ability — the ability to continue the process of innovation — may be crucial for leading edge companies”. Proficient New Service Development (NSD) process has been declared one of the key determinants of successful service innovation (de Brentani, 1995; Riedl et al., 2009), but still few organizations actually actively manage it (de Jong et al., 2003; Kim and Meiren, 2010). Thus, often, NSD and related service innovation becomes simply based on an historical way of acting. This raises concerns about the organizations’ ability to ensure long-term performance through service innovation. In other words, in order to maintain or improve performance, organizations must continuously develop new services (Storey and Kelly, 2001) and build innovation capabilities (Schang, Wu, and Yao, 2010). This requires a certain level of their service innovation capabilities’ “dynamisation”, aimed at solving the capability-rigidity paradox (Leonard-Barton, 1992), which means fighting a situation whereby core capabilities become rigidities because of path dependence, inertia, or cognitive traps such as commitment.