How service firms create successful new services: the roles of cross-functional teams, frontline employees and learning orientation
Product and process innovation play key roles in building and sustaining competitive advantage for service firms. Cross-functional teams (CFTs) and frontline employees (FLEs) are important business resources for gathering and integrating the knowledge that drives successful new service innovation. Cross-functional teams are employees from diverse functional areas who share knowledge and ideas to create a new service.Frontline employees are service workers who interact directly with customers (e.g., sales representatives, tellers, customer service representatives.) This study develops and tests a model how CFTs, FLEs and learning orientation (open mindedness and commitment to knowledge acquisition) contribute to creation and launch of financially successful, highly valued new services.
Based on analyses of 160 new service development (NSD) projects, the study finds that CFTs, FLEs, and learning orientation consistently, positively influence NSD sales and process efficiency outcomes when they first create a service having (1) superior attributes and expert frontline employee service delivery (service marketability) and/or (2) a well-targeted launch with formal promotion to internal and external markets (launch effectiveness).
Those NSD project characteristics in turn yield favorable new service performance results. Specifically, service marketability and launch effectiveness mediate the influence of CFTs on NSD outcomes. Launch effectiveness mediates the influence of learning orientation, and service marketability mediates the impact of FLEs on NSD outcomes.
In ranking the organizational resources, the study finds that CFTs and learning orientation have greater effect on NSD sales performance than do FLEs. The results highlight the importance of aligning CFTs, FLEs, and learning orientation with NSD project characteristics in order to maximize sales performance and process efficiency.
Melton, Horace L. and Michael D. Hartline (2013), ‘‘Employee Collaboration, Learning Orientation, and New Service Development Performance,’’ Journal of Service Research, 16 (1), 67-81.
Dr. Horace L. Melton is a member of the College of Business Marketing Department. His teaching interests include: Marketing Management, Marketing Research, Product Development Management and Integrated Marketing Communications.
Melton’s research interests are in the areas of New Service Development and Marketing Education Innovation.
He received his Ph.D. from Florida State University M.B.A. from Columbia University and his B.A. from Harvard University.