In professional services, innovation occurs in the delivery. The purpose of this paper is to provide a framework for classifying innovation in professional services by taking into account the strength of the relationship with the client in addition to the incremental‐radical nature of innovation.
Based on the framework provided, there are operational, experimental, tactical, and high‐potential professional services, the characteristics of which are illustrated both conceptually and with a case example.
Professional service goes through different stages during its lifespan. A high‐potential service is a stage where the nature of the innovation is radical and the relationship with the client is strong. It is suggested that high‐potential services create a future competitive advantage not only for the service provider, but also for the client.
A qualitative network approach with a focal actor perspective, in which the networks are illustrated from the supplier's point of view, is used. The characteristics of a high‐potential service are connected to the development stage of the service.
Classification of professional services is provided, and the importance of high‐potential services is highlighted. Advice for managers is given for designing suitable management initiatives in professional services in all their stages: idea, development, and commercialization.
The approach introduced in this paper addresses three gaps in the existing research: it helps to characterize and theorize the concept of innovation in professional services; it draws attention to the important role of the client in professional services, and it expands the management of innovation in professional services to include network relationships.
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