Abstract
Orientation: The contemporary business environment challenges financial organisations and threatens their capability to generate revenue. They aim to stay competitive through continuous service development, competence development together with development of operational models, and the creation of a corporate culture that ensures services are in line with customer expectations. Established financial organisations are becoming more agile and customer-centric, even though most financial organisations still have to undergo the customer-centric transformation. Approaches based on service design, design thinking, and agility support the adaptability to the market and enable organisational transformation.
Research purpose: The study’s primary objective is to increase knowledge of adopting a service design approach in financial organisations in Nordic countries. The literature review revealed that service design has thus far been a predominantly practitioner concept and the scientific research has been scarce. Service design could benefit from incorporating viewpoints from non-design fields such as marketing, leadership, and engineering. Further research is needed on advancing service design thinking throughout organisations and adjusting a service design approach for existing organisational structures. So far, service-dominant logic (S-D logic) literature includes very little information on how to apply it in practice and there is a knowledge gap pertaining to pragmatic approaches, such as service design, to assist in its execution.
Motivation for the study: A review of the relevant financial industry literature highlighted the challenges that established financial organisations in Nordic countries are facing and explained their motives to develop customer centricity across organisations through a service design approach. New organisational capabilities are needed to embed a service design approach in existing practices. However, the literature review indicated that current research does not sufficiently address this phenomenon. Consequently, the motivation for the study is to increase knowledge of adopting a service design approach in financial organisations in the Nordic area.
Research design, approach, and method: The empirical study followed the interpretivist research philosophy, where the researcher had a subjective stance in the research process. The study aimed to create new theories by abduction, thus the research process iterated between the theory and the data. In line with the philosophical assumptions and the logic of reasoning, this explorative study had a qualitative research approach. The research strategy was grounded theory and the data collection method was in-depth interviews. In total, 32 interviews were conducted.
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Main findings: The study demonstrates a dynamic and iterative adoption process of a service design approach. The adoption advances from a mutual understanding to organisational commitment and finally to integration. Simultaneously, organisational learning proceeds from an individual level to a group and then an organisational level. Service design facilitates higher-level learning by its reflective nature. The adoption of service design causes changes in organisations’ systems, structure, and processes, thus supporting the implementation of its strategy. By adopting a service design approach, organisations implement S-D logic.
Managerial implications: This study provides a practical contribution by introducing the adoption process of a service design approach that supports managers in the financial organisations to implement and embed the approach into their organisations. The study gives recommendations for each phase of the adoption process. The research results offer new knowledge of managerial approaches, helping managers choose an applicable approach for implementing the change. The findings help managers to comprehend service design’s role as a link between the customer-centric strategy and its operationalisation. The identified factors supporting and resisting the change enable managers to create organisational conditions in favour of service design and systematically develop service design capabilities.
Contribution: This research extends the theoretical foundation of the emerging discipline of service design by developing theories from the management and business perspectives. This study contributes the earlier theories by proposing a model of adopting a service design approach in financial organisations. The model consists of three overlapping phases integrating theories from service design, organisational learning and organisational change management. These new theories increase the manageability of service design adoption and broaden the perception of managers’ role and involvement in the adoption. Thus, the study contributes to a strategic perspective of S-D logic benefiting strategy implementation and managerial decision-making in service design. Moreover, this research increases knowledge about how service design adoption proceeds from the micro to the macro and finally to the meso level, thus implementing S-D logic across financial organisations. This study extends knowledge about how service design influences changes in organisations by providing the multi-level learning perspective to the change. Simultaneously, the findings confirm the shift from informative to transformative models of learning. While extending the understanding of transformative power of service design, this research adds to literature of how service design facilitates systemic change in legacy organisations.