Frontline employees’ collaboration in industrial service innovation: routes of co-creation’s effects on new service performance

Abstract

From a Service-Dominant Logic (S-DL) perspective, employees constitute operant resources that firms can draw to enhance the outcomes of innovation efforts. While research acknowledges that frontline employees (FLEs) constitute, through service encounters, a key interface for the transfer of valuable external knowledge into the firm, the range of potential benefits derived from FLE-driven innovation deserves more investigation. Using a sample of knowledge intensive business services firms (KIBS), this study examines how the collaboration with FLEs along the new service development (NSD) process, namely FLE co-creation, impacts on service innovation performance following two routes of different effects. Partial least squares structural equation modeling (PLS-SEM) results indicate that FLE co-creation benefits the NS success among FLEs and firm's customers, the constituents of the resources route. FLE co-creation also has a positive effect on the NSD speed, which in turn enhances the NS quality. NSD speed and NS quality integrate the operational route, which proves to be the most effective path to impact the NS market performance. Accordingly, KIBS managers must value their FLEs as essential partners to achieve successful innovation from an internal and external perspective, and develop the appropriate mechanisms to guarantee their effective involvement along the NSD process.

Innovation at the Service Encounter in Knowledge Intensive Business Services: Antecedents and Boundary Conditions

“…Internal communication refers to activities aimed at transferring or disseminating knowledge inside the firm (Carmeli et al, ). With the focus on customer and internal communication, this study further responds to the calls from Santos‐Vijande et al () and Stock, de Jong, and Zacharias (2017) by bringing attention to the importance of organizational processes that support FLEs' behaviors at the service encounter. This study shows that the simultaneous application of customer and internal communications is necessary to stimulate FLEs' creativity and customer orientation.…”

“…Central to the quest to capture benefits from service encounters is frontline employees (FLEs) and the strategic position they occupy (Sørensen et al, ; Sundbo, Sundbo, and Henten, ). This strategic position allows FLEs to access information directly from customer firms (hereafter customers), act proactively on the basis of such information, and creatively develop new ideas that can facilitate the tailoring and customizing of services to solve customer problems (Coelho, Lages, and Sousa, ; Santos‐Vijande, López‐Sánchez, and Rudd, ; Stock, ). The accumulation of these new, creative, and customer driven ideas enhances the capacity of the service firm to build a foundation for future service innovation (Sørensen et al, ).…”

“…The accumulation of these new, creative, and customer driven ideas enhances the capacity of the service firm to build a foundation for future service innovation (Sørensen et al, ). While the importance of FLEs in service innovation has been acknowledged, there is still lack a comprehensive understanding of the organizational processes and managerial practices that empower FLEs to engage in service innovation at the time of the service encounter (Santos‐Vijande et al, ; Sørensen et al, ).…”

“…KIBS firms (such as KPMG and PwC) are processors and producers of knowledge (Siahtiri, ). They are increasingly recognized by innovation and management scholars because of their effective contribution to the growth of innovation (Pina and Tether, ; Santos‐Vijande et al, ). At the service encounter, professional FLEs use their accumulated knowledge and experiences which they integrate with knowledge coming from the customer to creatively develop service solutions to solve customers' unique problems (Santos‐Vijande et al, ; Siahtiri, ).…”

“…Engaging in ad hoc innovation requires a high level of FLE creativity (Engen and Magnusson, ; Gallouj and Weinstein, ; Santos‐Vijande et al, ; Sørensen et al, ). Creativity allows FLEs to flexibly respond to customers' ever‐changing needs through their ability to connect diverse knowledge disciplines and integrate divergent thinking (Engen and Magnusson, ; Wilder, Collier, and Barnes, ).…”