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Hope for the best, prepare for the worst: barriers to service innovation

Rezvan Velayati (Department of Management, University of Tehran, Tehran, Iran)
Esmail Shabani (Department of Management, University of Tehran, Tehran, Iran)
Alireza Nazarian (Business School, University of Westminster, London, UK)

Qualitative Market Research

ISSN: 1352-2752

Article publication date: 4 August 2020

Issue publication date: 11 December 2020




Despite the growing scholarly interest in service innovation and its associated benefits for organizations, research into the barriers to developing new services remains scant. In addition, most of these studies have been mainly conducted at the firm level, failing to incorporate macro forces in the industry. To fill this gap, this study aims to investigate major industry trends as well as organizational attributes that affect organizations’ capability in designing innovative services.


A qualitative approach was used. In all, 21 semi-structured interviews with senior executives in different banks were conducted to collect data. Data were analyzed through thematic analysis.


The results of this study suggest that privatization, technological shortcomings, legislative inefficiencies and deposit orientation instead of market orientation were major industry trends that affect service innovation. Furthermore, ambiguity in knowledge management regimes, silo mentality and the absence of a collaborative organizational culture, growing need to focus on human capital and risk aversion were the main organizational attributes that should be addressed for effective service innovation.

Practical implications

Service innovation is a strategic asset for organizations. To effectively leverage the benefits, managers should have an end-to-end approach toward the subject. The findings of this study would inform managers of different obstacles in the development of new services from an organizational and industry-wide perspective. Based on the outputs of the interviews and a thorough review of the literature, managerial implications are presented.


This study is one of the few studies that explores service innovation challenges at both macro and micro levels of analysis, providing a more holistic view of the phenomenon in the context of service organizations.



Velayati, R., Shabani, E. and Nazarian, A. (2020), "Hope for the best, prepare for the worst: barriers to service innovation", Qualitative Market Research, Vol. 23 No. 4, pp. 843-863.



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