R&D Comes to Services

This is an article I find interesting: R&D Comes to Services: Bank of America’s Pathbreaking Experiments (Harvard Business School, by Stefan Thomke, April 2003). Look at this excerpt: “At the heart of business today lies a dilemma: Our economy is increasingly dependent on services, yet our innovation processes remain oriented toward products. We have well tested, scientific methods for developing and refining manufacturing goods – methods that date back to the industrial laboratories of Thomas Edison – but many of them don’t seem applicable to the world of services. Companies looking for breakthrough in service development tend to fall back on informal and largely haphazard efforts, from brainstorming, to trial and error, to innovation teams. Such programs can produce occasional successes, but they offer little opportunity for the kind of systematic learning required to strengthen the consistency and productivity of service development, and innovation in general, over time. The challenge in applying the discipline of formal R&D processes to services are readily apparent. Because service is intangible, often existing only in the moment of its delivery to a customer, it is difficult to isolate in a traditional laboratory. As a result, experiments with new services are most useful when they are conducted live, with real customers engaged in real transactions.” There is also a great case study about Bank of America from Harvard Business School (Case No. 9-603-022).