Overcome Top Challenges in Service Innovation

By Abigail A. Lorden | July 08, 2008

If you've ever admired (or even envied) the innovative services that other hospitality organizations offer their guests, you're not alone. Senior-level technology and operations executives are tasked every day with differentiating and improving their guest experiences through innovative new services.

Perhaps you've launched an innovative service offering (self-service kiosks, a social networking website, or a CRM program, for example) only to be met by failure and disappointment. Again you're in good company. Why? Because successful service innovation is not easy.

What is service innovation?
What does service innovation actually mean,
and why is achieving it so elusive? Are there strategies
that can boost the chances of success for your next foray into service innovation?

These are the questions that a group of industry executives, ranging from top-level hotel leadership to technology vendors, discussed during a recent roundtable hosted by Cornell University School of Hotel Administration and The Center for Hospitality Research.

The group collectively define service innovation as "the introduction of new or novel ideas that focus on guest service, and provide new perspectives on the delivery, concepts, and service business models through continuous operational improvement, technology, investments, or management of the customer experience," according to the Cornell report on findings from the roundtable.

Simply put, successful service innovation is taking a good
idea and making it work to improve the guest experience. 

Three Service Innovation Challenges
The Cornell roundtable identified several core challenges that fly in the face of fostering and executing service innovation:

1. Innovation versus procedure: are they at odds? The operational environment that is at the foundation of the hospitality industry (check-in at this time, order here and pay here, e.g.) makes it particularly challenging to truly innovate.

2. The cross-cultural factor. Many hospitality organizations operate in varying marketplaces, be they as regional as 'East Coast city' versus 'East Coast suburb,' or as global as North America versus Asia. When successful innovation is identified in one regional marketplace, it may not translate well in other regions where cultural norms for a positive guest experience vary.

3. Innovation requires risk. Hospitality operators must be willing to accept some risk of failure as a part of their innovation plans. Because these are service-based initiatives, testing often takes place in the actual marketplace where the guest experience occurs, instead of in a lab, raising the stakes
even higher.

Four Ways to Improve the Innovation Process
These strategies can help hospitality operators improve the processes that support
successful service innovation:

1. Build support for innovation into the company's culture. One of the best resources for identifying ways to improve processes is employees; especially those on the front-lines who interact with guests on a regular basis. Leadership must create a culture that motivates employees to innovate. Consider aligning employee compensation and goals with innovation, for example. Carlson Hotels World Wide builds innovation into its corporate bonus plan.

2. Be willing to accept risk. Once employees are empowered to come up with new ideas, the organization must also accept that, with any novel idea there is always a risk of failure. Moreover, it must be made clear to employees that failure is not only allowed but acceptable in order to be innovative.

3. Get employee buy-in for new initiatives.
Employees must be educated on the goals associated with new initiatives, and not just process changes. Hyatt Hotels learned this lesson during the roll-out of its self-service kiosk initiative for guest check-in/out. Early on in the process employees in some locations unplugged the kiosks because they believed the units threatened job security. The hotel chain quickly educated employees that goal for the initiative was to offer options to guests, and not to reduce labor, and employee support grew. Today the hotel chain has one of the most successful self-service kiosk initiatives in the lodging industry.

4. Be open to incremental innovation. Innovation is not necessarily a new idea; it might be an existing idea used in a new way. This incremental innovation can help mitigate risk and ease the burden on employees and company resources.

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