Case: Bank Of America
1. How would you characterize B of A’s new system for developing new services? Focus on its process, organization, management and culture.
B of A’s new system is more of a process/service innovation rather than a more Paradigm Innovation. They are not trying to achieve big leaps in terms of innovation. They are committed to improving innovation and willing to learn from mistakes.
The senior management at B of A is very much interested in innovation which is evident from its approval of 50% more resources to the I &D Market. So far they have been into consolidation, but now the management wants to focus on improving existing service and ...view middle of the document...
Service innovations usually require less R&D, require less in fixed assets, and need less investment on patents and licenses for the development of new services.
Technology is important but not the critical factor or component for the development in new service as many times the face-to-face relationship building component becomes more important. Because less of a financial and technological commitment is needed for service than manufacturing innovation, service innovation can be easier to imitate.
Some of the competing firms tend to duplicate services offered by their competitors. But products are hard to duplicate as it involves patents and licenses. However, it is not as easy as it may appear to imitate a competitor’s service innovation. Though capital investment may be low, organizational aspects play a larger role in the success of service innovation.
Also it does not matter if it is a product or a service which is being developed, as long as the process of innovation from conceptualization of ideas, planning, design and implementation is followed.
3. What is the role of experimentation? How can companies maximize their learning from experimentation?
When companies asses new opportunities, the emphasis tends to be on their financial earning power. However in early stages of development and innovation, the emphasis and objectives ought to be on learning rather than earning. On maximizing their learning...