The Big Picture…
Miles argued that Knowledge Intensive Business Services (KIBS) – such as consultancies etc – could be sources, facilitators or carriers of innovation. They can be a:
- Source of innovation – when they bring an innovation to the world themselves;
- Facilitator of innovation – when they introduce a client to a 3rd party that has an innovation;
- Carrier of innovation – when they help move an innovation from one market/industry to another.
Is this limited to KIBS? Any service can be a source of innovation. And, they can be a facilitator or carrier of innovation to themselves. The use of a KIBS might accelerate diffusion, but is not a pre-requisite. An innovation team can be tasked as that facilitator or carrier.
Carrying innovation is becoming particularly important as customers begin to demand to do in your industry/market things they can in other industries/markets. Be ahead of the curve.
And, as everything is a service, then every organisation could be a source, facilitator or carrier of innovation.
What’s the Idea?
When we think of innovation, our minds dream of radical ideas that change the world. And we like to see those innovations as coming from genius innovators identifying something the world has not seen before.
Doing so, unnecessarily pressurises the innovation function. If we’re not identifying something new and world-changing, and being the world’s first, then we’re not doing innovation.
But this is false pressure.
There are plenty of organisations that innovate by leveraging other organisation’s services. By combining those services with their own in a novel way. Even by using a service used in another market/industry that is not yet in use in their market/industry. (And remember, we see every organisation as a service organisation).
In this article, we will explore how every organisation should aim to be sources, facilitators and carriers of innovation. And see how being a carrier is growing as customer expectations change.
It starts with seeing where these three terms – source, facilitator and carrier – come from.
Knowledge-Intensive Business Services (KIBS)
Miles et al (1995) studied Knowledge-Intensive Business Services, also known as KIBS. These are service organisations that:
- “rely heavily upon professional knowledge;
- either supply products which are themselves primarily sources of information and knowledge to their users (e.g. measurements, reports, training, consultancy);
- or use their knowledge to produce services which are intermediate inputs to their clients’ own knowledge-generating and information-processing activities (e.g. communication or computer services);
- have as their main client other businesses”
And they saw that KIBS could be users, producers or facilitators of innovation. Miles et al refined this view a little and broke KIBS into two components – professional and technology KIBS. And also referred to KIBS as being sources, facilitators or carriers of innovation. Let’s look at those in a little more detail, as defined by Bilderbeek & den Hertog (1997).
Source of Innovation
If a KIBS firm plays a major role in initiating and developing innovations in client firms, then we would label them as a source of those innovations. They would usually do so in close interaction with the client firm.
As examples, we can look to:
- “an advertising agency developing and implementing a complete, new campaign for a client.
- a provider of call centre solutions advising and actually implementing a new call centre at a client.”
- an IT consultancy building a bespoke system for a client
Facilitator of Innovation
However, a KIBS firm can support a client in its innovation process without originating the innovation (or transferring it from other firms). In this case, the KIBS is acting as a facilitator of innovation.
- “a management consultant helping a client to introduce a new account management system or developing a new services distribution channel;
- a technical engineering firm seconding a team of its engineers to work with the technical engineers of the client to co-produce an innovative solution in e.g.offshore platform construction or subsoil building.”
Carrier of Innovation
Finally, a KIBS firm is a carrier of innovation if it helps transfer existing innovations from one firm, industry or market to the client firm (or industry or market).
- “an IT firm implementing and customising advanced and innovative ERP software(SAP, BAAN) in a client firm.;
- a management consultant specialising in CAD/CAM applications helping a major client (a shipyard) to specify the exact user needs and technical specifications of a new CAD/CAM programme, and subsequently to implement it.”
- an IT firm helping a travel client firm implement QR codes in an app