Forerunner Service Companies – the Trendsetters of Service Business Innovation

by Jenni Aranko

It is widely acknowledged, that services will gain ground from the traditional manufacturing and product-based approaches. As a part of this change, it has been recognized that market value is equally important focus point for the operations of a company as revenues and profits. Intangible assets such as knowledge, customer relationships and employee alignment are valued as much if not more than hard assets. These intangible assets contribute to the overall value and competitiveness of the company and are considered as facilitators to success.

In a report by Tekes, “The Future of Service Business Innovation”, the core competencies required for driving the service innovation of the future have been described in a clear manner. They are called as the “Forerunner Attributes”. In order to survive in the future and to create significant growth, companies will need to change their way of thinking. The key lies within design principles for creating and delivering new value. It is a completely different mindset that encourages engaging with customers in ways that expand the definition of value. Ongoing interactions, collaboration and co-creation are all examples of the tools that a Forerunner company would use.

In addition to the shift in their mindsets, companies should focus on the global megatrends that are currently shaping the future business landscape. These megatrends will have a significant impact on creating new possibilities for service business innovation.

Global Megatrends of
Service Business Innovation

However, even though a service mindset and understanding of future trends are important elements, they are not enough. To be able to create a winning business model, a company must develop and take full advantage of its creative imagination.

Examples of Forerunner Companies

The example cases of successful service innovation concepts that are presented here were considered to be both interesting and useful. These companies have approached service innovation in ways that challenge existing presumptions in order to introduce what may eventually become new directions for the service business models of the future.

InnoCentive – An open innovation and crowdsourcing pioneer that enables organizations to solve their key problems by connecting them to diverse sources of innovation

“InnoCentive is the global leader in crowdsourcing innovation problems to the world’s smartest people who compete to provide ideas and solutions to important business, social, policy, scientific, and technical challenges.”

InnoCentive’s product portfolio consists of Challenge Products and Enterprise Solutions. Their service is offered online which makes it easily accessed from all over the world. It also facilitates the wide extent of their source network. InnoCentive’s blog features reviews of some of the latest cases and introductions of Solvers.

Spotify – A music streaming service that facilitates listening of selected music anytime and anywhere

Instead of buying individual songs or albums, users can listen anything they like with monthly payments. After opening an account, one can browse music by artist, album, record label, genre or playlist. Music service is delivered to the customers by computer, mobile phone or home audio systems.

Spotify offers entirely new way of playing, discovering and sharing music with your friends. It is available instantly and there is no need to go to a physical shop. There is also a radio feature which creates a random playlist of songs chosen based on specified genres and decades. Customers can share their playlists and thoughts of music with their friends on social media. This makes customers’ direct experience of the service more multidimensional. In addition, customers benefit from faster access to the music and easier way of sharing it with their friends. – A non-profit organization with a mission to connect people through lending to alleviate poverty

Kiva organizes microloans to people, who are not able to get loan from a regular bank. The organization does it by connecting people who need money and people who want to help them. The process itself works like an online store and is carried through with local microfinance organizations.

The value and benefits come from an easy platform, ability to see the results and actual beneficiaries and the low risk factor. The lender can choose the sum between $25 and the entire amount of the loan. Once the loan has been paid back, the lender can decide whether they want to circulate it again, donate the funds to Kiva or withdraw the funds.


The pursuit of next significant service innovation is like climbing a mountain:

The peak is visible, but it doesn’t mean that it’ll be easy to get there.
The first thing to do is to set yourself a goal. Once that has been done, it’s time to start the planning process. The final plan should contain detailed description of the upcoming journey and few alternative route options. The better you’re prepared the more likely it is that you’ll achieve the goal.

Different kinds of tools are required during the ascent and in avoidance of pitfalls.
There are a lot of tools available that will facilitate the process and it all should be started by reading some literature and familiarizing oneself with the selection of the tools. No appliance will be helpful in case one doesn’t know how to use them.

Not everyone is going to make it to the top.
Almost anything can happen when aspiring to unknown territories. Force majeure, such as the economic situation, is just one of the things that can’t be predicted but can have a major impact on the outcome.

Once you have reached the peak, a whole new world opens up in front of you.
Companies that are able to become Forerunners will have a significant competitive advantage. They have overcome several obstacles during the process which has made them more experienced and firm and therefore more appealing to the customers. However, as soon as the new service innovation has been launched, the concept will be copied and rival service providers will appear. For that reason a Forerunner company will constantly develop their services and reach for the next unachieved peak.

Tekes (The Finnish Funding Agency for Technology and Innovation) review 272/2010. The Future of Service Business Innovation.

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