Innovate or Die: Role of Innovation in Facilities Management
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Facilities management service
innovations are also categorized as new-to-the-market, new-to-the-company, new
delivery process, service line extensions, service modifications, and service
repositioning types of service innovations (Avlonitis et al., 2001).
Literature from the marketing
field distinguishes between radical and incremental innovations. Whilst radical
innovations initiate new directions in technology, incremental innovations
progress along established paths (Christensen, 1997).
Innovative firms have certain
unique attributes. Working at firm level, Therrien et al. (2011) observed that innovative firms in the service industry
possess the following characteristics:
- innovative service firms consistently outperform non-innovators in terms of growth and productivity;
- Service industry firms which spend more on innovation per employment are more likely to report a positive impact of innovation on total employment;
- innovation has a positive impact on sales and employment growth;
- external linkages have a positive impact on service firm performance, regardless of the level of innovation considered, and service firms tend to be more outwardly focused;
- innovation within the service sector can require near continuous contact between the client and services firm; and
- distinction between product and process innovations in services may be more difficult to make in services in comparison to manufacturing.
Studies on innovation in the FM
sector as well as those that have made a link between the innovation literature
and the FM literature are few (Scupola, 2012). Cardellino and Finch (2006)
examine the nature of “service innovation” in the FM context and describe case studies
of 11 innovations in different FM organizations in the UK. These include both in-house
client based innovations and third party innovations. Cardellino and Finch
(2006) found that FM organizations in the UK are highly active with service
innovations, but that these are largely one-time commitments. This is in
contrast to the findings of Scupola (2012) in his study on the Danish FM sector.
Scupola (2012) observed that Danish FM companies perceive themselves to be
innovative, to have innovation on their strategic agenda, and have innovation
strategies, development departments and innovation laboratories.
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Cardellino and Finch (2006) observed
also that primary determinants for the success of an innovation in FM
organizations were the awareness of the external market, the development
process and the firm’s strategic and business fit. Analysis also suggested that
FM managers perceive innovation sources to be both external (e.g. market,
customers, partners) and internal to the company (development department,
innovation laboratories, top management), thus embracing both open and closed
innovation practices (Scupola, 2012).
In open innovation practices, the role of
benchmarking is perceived to be very important especially by big service providers
(Scupola, 2012). Market needs and customer wishes are also perceived as
important especially by SMEs, stating that innovation in their company was
mainly driven by their (usually big) customers’ needs.
In a critical review of
innovation in FM service, Noor and Pitt (2009) highlight that the creation of
strategic supply chain partnerships to gain long-term benefits are a vital aspect
of FM innovation. This means that new business models that involve partnering
are also types of FM innovations. Among the mutual benefits that partnering can
offer to the service provider and the client are increased customer
satisfaction, better understanding between partners as well as lower costs,
better predictability of cost and time and shorter overall delivery periods.
Noor and Pitt (2009) conclude that the role of innovation in FM services is not
just to produce innovative solutions, but also to establish and develop a
creative environment in which solutions can be conceived, developed and
implemented.
Goyal and Pitt (2007) in addition state that innovation achieved
as partnering between organizations maximise the opportunity to think and act
beyond an organization’s boundaries, bringing together aspirations, skills and
knowledge of all participants involved who work to gain profits, and competitive
advantage. They also declared that innovation in FM should be a mentality and
not a one-time event.
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Innovation
management principles should be integrated as a part of daily schedule for each
employee at all levels, strategic, tactic, and operational. Moreover, Pitt et al. (2006) by investigating different
issues comprising innovation in relation to building maintenance also state
that innovative solutions to maintenance issues are essential for continued
efficiency and are brought about through the creation of an environment in which
creativity is able to thrive.
Finally, Pitt and Tucker (2008) through a theoretical
analysis of performance measurement, benchmarking and innovation in FM conclude
that benchmarking is a technique that can be used in measuring facilities
service performance and a catalyst in generating innovation to the performance process.
References
Avlonitis, G. J.,
Papastathopoulou, P. G. and Gounaris, S. P. (2001). An empirically-based typology
of product innovativeness for new financial services: success and failure scenarios.
The Journal of Product Innovation
Management, 18 (5).
Christensen, C. M. (1997). The innovator’s
dilemma: when new technologies cause great firms to fail. HBS Press, Cambridge.
Francis, D. and Bessant, J.
(2005). Targeting innovation and implications for capability development. Technovation, 25(3): 171 – 183.
Scupola, A. (2012). Managerial
perception of service innovation in facility management organizations. Journal of Facilities Management, 10 (3): 198 – 211.
Therrien, P., Doloreux, D. and
Chamberlin, T. (2011). Innovation novelty and (commercial) performance in the
service sector: a Canadian firm-level analysis. Technovation, 31: 655 –
665.
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