Demystifying the benefits and risks of Lean service innovation: a banking case study
| Published date | 09 November 2015 |
| Pages | 364-380 |
| DOI | https://doi.org/10.1108/JSIT-03-2015-0019 |
| Date | 09 November 2015 |
| Author | Yiwei Gong,Marijn Janssen |
| Subject Matter | Information & knowledge management,Information systems |
Demystifying the benets and
risks of Lean service innovation:
a banking case study
Yiwei Gong
School of Information Management, Wuhan University,
Wuhan, China, and
Marijn Janssen
Faculty of Technology, Policy, and Management,
Delft University of Technology, Delft, The Netherlands
Abstract
Purpose – The purpose of this paper is to demystify Lean for service innovation by investigating its
benets and risks. Lean innovation is a relatively new approach which is advocated in management
literature. Little scientic work about its practice exists in the eld. Although the Lean innovation
principles are clear, there is limited evidence about their impact on service innovation processes.
Design/methodology/approach – From the knowledge-based view (KBV) of the rm, a framework
for understanding Lean innovation is developed. Using this framework, the benets and risks of Lean
innovation are analyzed in a case study.
Findings – The case study not only shows that Lean service innovation can have many advantages,
but also draws attention to the risks. The risks might result in the inability to follow Lean principles and
might hamper the realization of the benets. Using the case studies, study mitigation mechanisms are
identied.
Originality/value – This research offers a new knowledge perspective and a better understanding of
Lean service innovation. There are two main contribution of this paper. First of all, it reports on the
impact of Lean innovation on a bank’s innovation processes, both its benet and risks. This has a
contribution to understanding the innovation process in service organizations. Second, this paper
extends Lean innovation to a service context and contributes to the knowledge basis of Lean innovation.
Keywords Lean, Knowledge-based view, Service innovation, Lean innovation, Continuous delivery,
Omni-channel
Paper type Research paper
Introduction
Innovation processes are critical in achieving a company’s service innovation objective.
The strategic need for exibility and value creation requires companies to develop
effective innovation processes. Lean innovation advocates the use of Lean thinking in
innovation, and it is a relatively new concept that can be used for improving innovation
processes (Sonnenberg and Sehested, 2011). In recent years, Lean has become a popular
management philosophy for organizations to improve their operational performance.
Although traditionally Lean is focused on well-structured processes, currently, the focus
has shifted toward less structured processes, including the Lean startup (Ries, 2011) and
innovation (Ismail et al., 2014). Lean might allow organizations to turn passive and
defensive organizational cultures into proactive and open cultures that promote
The current issue and full text archive of this journal is available on Emerald Insight at:
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JSIT
17,4
364
Received 2 April 2015
Revised 23 August 2015
Accepted 17 September 2015
Journalof Systems and
InformationTechnology
Vol.17 No. 4, 2015
pp.364-380
©Emerald Group Publishing Limited
1328-7265
DOI 10.1108/JSIT-03-2015-0019
organizational learning and innovation (Dahlgaard and Dahlgaard-Park, 2006;
Johnstone et al., 2011;Bhasin, 2011). However, publications that connect Lean and
innovation are still relatively few in number and most of them focus on production
innovation (Hoppmann et al., 2011). The application of Lean innovation in a service
context is an emerging topic. This gives rise to research that explores Lean innovation
approach in a service context.
The services sector is distinct from other industrial sectors (Grönroos, 2001). Along
with the growth of the services sector and its use of information technology (IT), there is
a rise in needs for effective methods to enhance service innovation by means of IT. While
traditional product innovation emphasizes on the design of tangible and relatively static
products, services are often intangible and customers are involved in the service
delivery process (Bitner et al., 2008;Oliveira and Hippel, 2011). Grönroos (2001)
identied three basic characteristics of services:
(1) services are processed using a series of activities (a business process) rather than
things;
(2) services are to some extent produced and consumed simultaneously; and
(3) the customer participates in the service delivery process.
Taking the characteristics of service into account, a service innovation can be regarded
as a new service experience or service solution in one or more of the following forms:
• new service concepts;
• new customer experiences; and
• new delivery systems (Den Hertog et al., 2010;Wooder and Baker, 2012).
The intangible nature, the interactivity characteristic and the different forms of service
innovation bring a great challenge to the application of Lean innovation approach in a
service context, as Lean is often used in the production environment. The research
questions addressed in this study is to gain an understanding of the benets and risks of
Lean innovation in the service industry.
Although Lean innovation is often advocated, to our knowledge, there is no research
that investigates the use of Lean innovation in the practice of service organizations. This
article is aimed at demystifying Lean for service innovation by investigating its benets
and risks. For this purpose, a framework for examining Lean in the services sector is
developed based on literature. We use this framework to analyze Lean innovation in
digital banking service innovation by conducting a case study of the ING Bank. The
framework is based on the knowledge-based view (KBV) of the rm. The KBV considers
knowledge as the most strategically signicant resource of a rm, and the source of
competitive advantage resides in the application of the knowledge rather than in the
knowledge itself (Alavi and Leidner, 2001). From a KBV point of view, Lean innovation
is not only a management philosophy and a terminology for continuous improvements,
but also a set of specic methods for knowledge sharing and management (Sonnenberg
and Sehested, 2011). This specic strength makes Lean innovation appreciative when it
comes to commitment and learning and, therefore, a promising approach for enabling
effective innovation processes.
This article is extended from a prior publication of the authors in the 13th IFIP
Conference on e-Business, e-Services and e-Society (Gong and Janssen, 2014). The prior
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Benets and
risks of Lean
service
innovation
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