This dissertation consists of three essays which progressively develop and refine a model of effective customer and frontline employee involvement in the new service development process. The first essay builds a conceptual model based on the literature; the second essay develops the model constructs and relationships based on findings from a series of in-depth interviews; and the third essay consists of an empirical study which tests the hypothesized model with data from a survey of senior managers who are directly involved in the new service development process of their organizations.

Essay 1. Prior research describes how service firms involve customers and frontline employees in the new service development process, but no studies have examined how that involvement relates to NSD key success factors and performance outcomes. This study proposes a model of how customer, frontline employee and entrepreneurial leader participation in various stages of the NSD process directly affects project success factors and indirectly influences the operational and financial performance of service innovation initiatives. The paper identifies opportunities for future research and proposes two exploratory and quantitative studies to refine and test the model.

Essay 2. Many service firms rely on innovation strategies to build competitive advantage. This exploratory study proposes a model of new service development that enhances performance outcomes by prescribing specific roles for customers and frontline employees in the new service development process. Service innovation project outcomes improve when customers and frontline employees participate in the process in ways that positively affect the project’s service marketability, deliverability, launch preparation and launch effectiveness. Findings are based on interviews with managers from nine service firms across a broad variety of service sectors. Recommendations are offered for future empirical research to further refine the model.

Essay 3. Service firms recognize the major role of product and process innovation in building and sustaining competitive advantage in the marketplace. This empirical study tests a model of new service development that enhances performance outcomes by prescribing specific roles for customers and frontline employees in the new service development process. Findings are based on survey data collected from organizations across a variety of service sectors. The study provides support for hypotheses that customer and frontline employee participation in specific stages of the new service development process positively affects the project’s service marketability, deliverability, launch preparation and launch effectiveness. The influence of customers and frontline employees on project performance outcomes is indirect and mediated by new service development success factors. Recommendations are offered for future empirical research to further refine the model.