Increasing innovation capability of product-service systems through collaborative networks

Abstract: Many manufacturing industries are undergoing a transition from manufacturing of products towards integrating more services into the traditional product concepts and provide product-service systems (PSS). Development of PSS changes the focus from the product to the functionality of the product; hence it can be referred to as functional product development. PSS also puts focus on the value of the knowledge-intensive solution. This change in focus challenges the way companies innovate. When developing PSS, the solutions are not limited to the product parameters; hence PSS broadens the solution space for innovations. Innovation capability can broadly be defined as the ability to routinely achieve innovative outcomes, which is crucial for industrial companies in order to grow and be competitive on the market over time. Therefore, there is an apparent need to increase the innovation capability in order to find strengths and weaknesses, especially in the change towards PSS. However there are many factors that affect a company’s capability to create innovative products and services. The research question that has guided the work presented in the thesis is: How can the innovation capability for product-service systems be increased in a systematic way? The research study has mainly been conducted at Volvo Aero, a company in the aerospace industry, which is characterized by high technical complexity, high development cost and long product lifecycles. The industrial position has allowed close studies in the organization; hence the research approach has been participatory action research. Mainly qualitative methods have been used for data collection, such as observations and interviews. Measuring the innovation capability is one way to find ways to systematically increase the innovation capability of a company or organization. Results from this research points to areas of importance when measuring a company’s innovation capability. These regards what kinds of projects the company selects, how the customer is involved with the development of innovations, how the different functions within the company interact, what kind of climate there is within the development projects, what methodology is used in the innovation process and how the innovative work is rewarded. The results also indicate that developing product-service systems involve close internal collaboration between individuals with different skills and competences and may also require external skills and competencies that may not reside within the product focused organization. Therefore, to increase the innovation capability of product service systems companies need to reassess how they collaborate both internally and externally, throughout the value-chain and throughout the product lifecycle. Finally, this thesis presents a model of networked competence innovation that combines the designerly approach with strategic, tactic and operational dimensions. The model builds on techniques to visualize strategic planning, facilitate shared understanding in focused workshops, and visualize innovations using prototyping in networked projects.