The literature available on organisations and management provides better
support for the improvement of current business operations than the
development of new ones. Corporate literature largely describes the end
results of the change, not the path taken to reach those results. Researchers
in VTT Technical Research Centre of Finland, Aalto University School of
Economics, and University of Helsinki followed the change of over ten
companies from a product- and production-focused approach towards a service
business over a three-year period. The result is a unique publication that
also depicts how the companies floundered in the process of renovating their
operations towards service business. The main thread of renovation and
management comprises interaction with both the company’s own staff and its
customers and network partners.
Service development is one of the means of gaining a competitive advantage. It
allows a company to better meet its customers’ needs. A technology company’s
transition into a service business requires identifying the developmental
stages towards service business. It also requires developing a new kind of a
joint learning method, involving the customers and network partners in the
development of the services. During the transition towards a service business,
companies must open up to their customers, and be able to utilise the know-how
of their partners in service production.
As it changes into a service company, each company must act according to its
own initial situation, and find its own development path. The companies must
be aware of both their current and target business model. Similarly, the
companies must evaluate their organisation and management policies, and their
requirements for change. This is essential, as the current production-focused
and product-focused management models hinder the transition towards a service
It is important that resources shared by the entire organisation are created,
maintained and developed for identifying and testing the continuously changing
service goal during the transition. It is also important to dare to try and if
necessary fail. The companies must learn to see failure as an essential part
of finding the right direction and methodology.
A new kind of leadership is necessary for building a service business. Its
core characteristics are interactivity and the enablement of interaction
within the company, with the customers, and in extensive networks. Changing
organisational and management practices towards new interactivity is slow.
In the early stages of the transition, the main challenge faced by the
companies is how to help their management and employees to step out of their
comfort zone, i.e., to begin searching for new business proactively before
operations hit a crisis. This means that the requirement for change must be
realised, the weaknesses in old-style operations identified, a new operational
principle found, and the operations modified correspondingly.
In reality, the change progresses through detours, retracing of steps, and
repeating the same stages. During this development, it is essential that the
need for a change, and the feasibility and sensibility of the new direction
are proven to the staff.
Raimo Hyötyläinen and Maaria Nuutinen (editors) Mahdollisuuksien kenttä.
Palveluliiketoiminta ja vuorovaikutteinen johtaminen. The Federation of
Finnish Technology Industries 2010. The book introduces the field of service
business management, and the role of management in the companies’ transition
towards a service business. The book is part of a research project on the
interactive organisation and management of service business operations,
co-ordinated by VTT. New, in-depth knowledge on the organisation and
management models of service business, and change in the service culture, was
created during the project. The analysis and examination are based on a
three-year co-operation with over ten companies.