Innovation in a service organization is usually driven by consumer demand or displeasure with previous services available where as, in manufacturing, innovation may be the result of engineering or VOC. As services are not protected by patent, it is more difficult for service companies to maintain the advantage over subsequent competitors. To win at this game, the company first-in-market must expand or adjust its service quickly to pre-empt the competition, and invest sufficiently to establish and maintain a leading brand image. For the more commodity-like services, response time and flawless execution are relatively more important. Ongoing continuous improvement and performance metric strategies are recommended to maintain a leadership position.

Consider that marrying new technology to a new service (especially if patentable) is an effective way to slow down competitors. On the other end of the spectrum, providing a deliberately higher level of touch with the customer provides an advantage.

For any of these strategies, the company that spends more time carefully designing and process-mapping the service to be offered in depth before launch will be more successful. Similarly, the company should invest heavily in training its staff and run simulations before opening for business with the public.

Note that the distance between tangible and intangible activities is blurring in the discussion above. The service companies that dissect their services and activities into tangible, trainable, measurable competencies – even for activities that provide a higher touch experience for the customer – will have the advantage.

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