Understanding product-service system innovation capabilities development for manufacturing companies
Journal article, 2015
Purpose – Manufacturing companies are increasingly making efforts to combine products and
services into integrated offerings. However, the companies’ success in such transformation is linked
with the presence of structured routines and processes, which the authors conceptualize as productservice
systems (PSS) innovation capabilities. The purpose of this paper is to address the important
question of how manufacturing companies can systematically build PSS innovation capabilities and
does its presence or absence significantly influence PSS innovation.
Design/methodology/approach – This study is based on longitudinal data from an aerospace
company, which acts both as an OEM providing through-life services for aircraft engines, as well as a
developer of innovative subsystem technologies. Data has been collected over three years (2009-2012)
and constitutes 40 in-depth explorative and semi-structured interviews with diverse respondents. For
analysis of the data, the authors have used constant comparison technique leading to identification of
three high-order categories. In addition, the authors gain from observations and secondary data which
enable to achieve data triangulation and data validity.
Findings – The results objectively depict an overview of how the case company developed PSS
innovation capabilities, though progression of routines over three early PSS development stages. More
specifically, the authors find evidence for development of formalized routines related to customer
interaction and innovative organizational climate during need phase, cross-functionality, and network
partnering during solution-seeking phase, and competence and business case development during
solution development phase. As these routines become more structured within the case company, they
forge a path for PSS innovation capabilities development.
Originality/value – This study provides two distinctive contributions to emerging PSS literature.
First, the authors propose and explain how PSS innovation capabilities are developed. Although prior
studies acknowledge the importance of possessing specialized PSS innovation capabilities, limited
studies have reported empirically how they are developed. Second, through adopting a longitudinal
perspective, the authors reveal key routines and actions that drive PSS innovation during different
development stages. To the knowledge, no prior study has combined insights from PSS literature and
resource-based view to objectively explain capabilities development process.