Keywords

1 Introduction

Continuous change, which is based on intensifying global competition and quickening technological development, is a central characteristic in today’s economies. It has made rapid learning, i.e., the adoption and creation of new knowledge, an essential ability in organizations. Innovation activities have come to the fore and our understanding about the successful ways of carrying out these activities has deepened and become more versatile. In order to make innovation more efficient and effective, two developments are particularly important: the opening and the democratizing of innovation. The former is a result from the insight that organizations do not possess all the valuable knowledge in-house, but the utilization of external sources is necessary (Chesbrough 2006, 2011). The latter highlights that innovations do not emerge from expert groups only, but also emanate from “non-experts” in communities of practice (Lave and Wenger 1991). In these communities, people learn with others while engaging collectively in creative efforts (John-Steiner 2000). Both views emphasize users, i.e., citizens, communal members, or service customers, as active agents (see also von Hippel 2005).

The view of innovation as a collective undertaking is not new. However, early theories restricted the cooperation to specialized R&D functions and focused on separately organized innovation processes. Mainstream theories considered neither layman employees nor users to be capable of contributing to innovation; their role was limited to application of science-based inventions. The linear model, which favored strong preplanning and systematic process, narrowed the perspective even further (Kline and Rosenberg 1986; Dosi et al. 1988). Since the latter half of 1980s, the engagement of various actors with different skills and competences has been considered beneficial for the emergence and spread of innovations. Innovation has been understood as intertwined and co-evolving with practical activities, which means that it is closely linked with different forms of learning—not only with the conscious search for novelties but also with learning-by-doing (Lundvall 1992).

The earlier view focused mainly on radical technological inventions. Without broadening this view, the majority of service innovations and other intangible innovations would have remained hidden (Miles 1993; Howells 2004). Service innovations are not usually radical breakthroughs, but incremental in nature. Recombination of pieces of existing knowledge is typical. However, these small improvements may gradually lead to radical changes; hence neglecting them would be a serious mistake (Jensen et al. 2007). The pioneers of service innovation theory have pointed out that the cognitive inputs behind the individual outcome may be widely applicable, although the visible change would be minor (Gallouj and Weinstein 1997; Preissl 2000). While the broad view of innovation has enabled the “discovery” of service innovation, the latter has also encouraged further development of the broad view. An example is the perception that innovation activities in services are usually dispersed in different parts of the organization (den Hertog et al. 2006; Sundbo 1997; Tuominen 2013).

This perception has fostered research into the management of multiple and recursive, not only unified and linear, processes of innovation. The emergence of the broad view does not mean downplaying the need for the management of innovation. The point is to reconcile the top-down managerial activities with the grassroots-level activities that also include “management” in the form of resource integration. This chapter focuses on the resource integration carried out by employees and users.

In recent years, service-dominant (S-D) logic has become one of the most influential approaches in service research (Vargo and Lusch 2004, 2008). It suggests the adoption of an actor-to-actor perspective, instead of the currently dominant provider-centric view, in the analysis of economic and social practices. In this sense, it is in line with the user-based views of innovation. However, the proponents of S-D logic have focused more on the general economic development and everyday business behavior than on innovation. Connecting S-D logic with the broad view of innovation is a tempting perspective, but also a very demanding task.

We take a step in this direction: we examine and integrate the approaches of user-driven and employee-driven innovation and apply S-D logic and its “neighboring” theories—effectuation and bricolage—in this framework. Based on the close linkages between innovation and learning noted above, we supplement our analysis with learning theories, especially with the theory of expansive learning (Engeström 1987). We argue that the actual interaction between frontline employees and users is a unique learning opportunity that organizations should utilize more effectively in the development of novelties.

We have structured the chapter as follows. We start by reviewing the present discussions of user-driven and employee-driven innovation. Thereafter, we summarize those points of S-D logic, effectuation, and bricolage, and the theory of expansive learning, that we will apply in the creation of an integrative view about the role of user-employee collaboration in innovation. We demonstrate the suggested framework with two case studies and discuss the framework’s contribution to the theory and managerial practice of service innovation.

2 Perspectives on User-Driven and Employee-Driven Innovation in Services

Employees’ and users’ involvement has been considered fundamental in the service innovation literature. This is because an innovator needs to understand a variety of activities involved in value creation linked to a particular service (Fuglsang and Sundbo 2005; Sundbo and Gallouj 2000). In addition to analyzing the service providers’ activities, the interactions in the user interface and the users’ activities that are not visible for the organizations are important to understand (Grönroos 2012). Users and employees are key actors in innovation because they co-create value in intangible service processes and thus have best knowledge of them. The perspectives highlighting their role are summarized next.

2.1 User-Driven Views on Innovation

The point that organizations do not create innovations alone was first highlighted during the 1970s (e.g., von Hippel 1976, 1978). Later on, a large body of literature has indicated the importance of users for innovations; here, we refer to these studies as user-driven innovation perspectives (hereafter UDI). Users act in several roles, ranging from the suggestion of ideas to acting as sole innovators (e.g., Edvardsson et al. 2010; Nordlund 2009). Recent literature suggests a growing range of methods that enable users’ participation in a controlled manner in different phases of an innovation process (e.g., Alam 2006). Users also innovate without service providers’ guidance by creating new solutions for their own use (e.g., von Hippel 1978) and by reinventing and modifying an innovation after its launch (Tuomi 2002; Sundbo 2008). Organizations are advised to identify and develop the users’ solutions further into replicable solutions (e.g., von Hippel and Katz 2002).

Whereas our knowledge concerning these situations is increasing rapidly, what is often overlooked is that also everyday interactions during service delivery are important arenas for UDIs (Sørensen et al. 2013). This is highlighted in project-based services, where user-specific solutions may lead to innovations (Gadrey and Gallouj 1998). However, the active role of users as innovators is often not explicitly addressed in this literature. On the other hand, similar everyday activities are perceived as one form of employee-driven innovations.

2.2 Employee-Driven Views on Innovation

Frontline employees are considered important in service innovation, both because they have practical knowledge of service processes and because they are able to identify and communicate users’ needs and ideas during their daily work (den Hertog et al. 2006; Gadrey and Gallouj 1998; Sundbo 1997). Employees’ roles are currently creating interest also in general innovation management discussions. Employee-driven innovation (hereafter EDI) refers to “the generation and implementation of ideas, products, and processes—including the everyday remaking of jobs and organizational practices—originating from interaction of employees, who are not assigned to this task” (Høyrup 2012, p. 8, see also Kesting and Ulhøi 2010). Even though EDI as such is a fairly new discourse, it builds on earlier studies on participation and democratization of work (Ehn 1993), organizational creativity (Amabile 1988), high-involvement innovation (Bessant 2003), innovative work behavior (Axtell et al. 2000), proactive behavior (Bindl and Parker 2011), and intrapreneurship/corporate entrepreneurship (de Jong and Wennekers 2008). These studies show that employees raise concerns, suggest ideas, negotiate and promote ideas, carry out innovation activities, make decisions, and modify novelties in their daily work (de Jong and den Hartog 2010; Scott and Bruce 1994; Tuominen 2013).

The proponents of EDI suggest that employees can act as active innovators in all types of innovation processes, even though the form may vary from organized participation in management-driven processes to spontaneous and autonomous creation of novelties at the grassroots level (Høyrup 2012). In service organizations, especially the latter activities are important to recognize: employees create novelties during their daily customer work (Carlzon 1987; Gallouj and Weinstein 1997; Sundbo 1997; Sørensen et al. 2013). These activities are strongly linked with learning, which has been characterized as practice-based, improvisational, or experimental (Brandi and Hasse 2012; Brown and Duguid 1991; Ellström 2010). While the EDI discourse emphasizes employees’ resources—such as creativity, competences, and problem-solving ability—as the drivers of innovation (Høyrup 2010), it does not yet focus on the relationship between employees and users.

2.3 A Need for an Integrative Perspective

The studies show the importance of users’ and employees’ involvement and describe practices through which UDI and EDI take place. While this knowledge is developing rapidly, we recognize two research gaps. First, UDI and EDI theories have developed in isolation from each other, as the focus is either on user-driven or employee-driven innovation. Even though studies show that many innovations take place in the user interface, only a few empirical studies provide insights into how users and employees practically innovate together. Second, even though grassroots-level activities are viewed as important, they are not necessarily recognized and supported with managerial models. Without managerial support they may never transfer into replicable solutions (Fuglsang 2010; Brandi and Hasse 2012). Particularly management models that would integrate UDI and EDI are still scarce (Hasu et al. 2011).

Next, we will suggest several promising concepts for addressing these gaps. First, S-D logic can provide a sound theoretical background for conceptualizing users’ and employees’ interaction in service innovations. Second, the concepts of effectuation and bricolage address situations where changes happen in an experiential way; even in circumstances of resource constraints, entrepreneurial employees and users can find innovative solutions based on “whatever is at hand” (Baker and Nelson 2005; Fuglsang 2011). This viewpoint is especially relevant in public services, which face demands for cost-cutting and structural renewal. Third, the theory of expansive learning provides understanding of the emergence and development of these processes and helps integrate perspectives.

3 Service-Dominant Logic Applied in the Innovation Framework

During the last two decades, the focus on use value has gained ground in innovation theories (Normann and Ramirez 1998; von Hippel 2005). This viewpoint is particularly suitable in the service context, in which it is difficult to think about value as inherent in specific outputs. A strategy based on the pursuit of use value is tightly linked to the pursuit of innovations: redefining the users’ problems and discovering hidden demand, and providing users (or together with users, i.e., coproduction of value) solutions which they can make use and benefit in their everyday life (e.g., make vital improvement, achieve important goal, acquire anticipated change, enhance wellbeing etc.). When innovations are examined as new values, it is not enough to pay attention to individual services, but broader solutions and systemic changes are often under the spotlight. In these, the rearrangement of existing items may be the core of innovation (Kim and Mauborgne 1999; Normann and Ramirez 1998).

Value-based analysis has much in common with the broad view of innovation (Kline and Rosenberg 1986; Lundvall 1992). In recent years, similar thoughts have been presented within the framework of S-D logic. As a service marketing-based approach, S-D logic is not directly linked to innovation theories. On the other hand, it aims to change our traditional thinking even more profoundly than any other theory toward the appreciation of users as central economic and social actors. Next, we first summarize the core propositions of S-D logic and then analyze its implications from the viewpoint of innovation.

3.1 Short Summary of the Core Propositions of S-D Logic

Service-dominant logic, developed by Vargo and Lusch (2004, 2008), focuses on the process of collaborative and reciprocal value creation. It starts from the critique of goods-dominant (G-D) logic that views economic activities from the perspective of the exchange of tangible and intangible products. According to S-D logic, the products represent only temporal cross-sections in more complex and timeless value-creation networks that make up the economy and society.

S-D logic focuses first and foremost on new theorizing based on the concept of “service”, not “services.” The former refers to the process of using one’s competences (knowledge and skills) for the benefit of another party. “Services” (plural) are a particular type of products. Both goods and services are important, but not primary to value creation. They are conveyors of competences, i.e., appliances or vehicles for service provision. In G-D logic, value is seen as a property of goods, which are created by the provider and distributed to users. S-D logic argues that the provider cannot create value but value is collaboratively co-created with the beneficiary. The multiple relationships in the user’s economic and social context contribute the value creation—the user integrates contextual resources with the specific input received from the provider. Before the value can be realized, the input from a single provider has to be integrated with other resources, some of which are obtained through the market, others based on public sources, and still others privately provided.

3.2 Linkages of S-D Logic to Innovation

Even though the analysis of S-D logic in relation to innovation is only beginning (see Mele et al. 2010; Kowalkowski et al. 2012 as examples of the first efforts), it contributes in several ways to the deepening of our view on innovation. It highlights the social and systemic features of innovation and the recursive and complex nature of the processes in which innovations emerge. It points away from linear, sequential views—based on the dyad of the provider and the customer—towards the interactive network orientation. A special contribution is the replacement of the producer-centric view with an actor-to-actor perspective (Vargo and Lusch 2011). This view favors genuinely user-based approaches in innovation. If users are seen only as a target, the “user-based” approach is restricted to surveying their needs and interpreting them from the producer’s viewpoint, while the creative potential of users is neglected. In addition, the end result may be perceived as a useful novelty by the producer, but not by the user (Helkkula and Holopainen 2011).

Broadening of the view from the focal actors—the provider and the user—to their context brings to the fore the resources available to actors. Vargo and Lusch (2004) made an important remark from the viewpoint of innovation: resources are not, but they become. The usefulness of any particular potential resource from one source is moderated by the availability of other potential resources from other sources, the removal of resistances to resource utilization, and the beneficiary’s ability to integrate resources (Lusch et al. 2010). S-D logic highlights the importance of networks of the actors providing resources. Networks are not just aggregations of relationships, but dynamic systems. A critical characteristic of these systems is that they are self-adjusting and thus simultaneously functioning and reconfiguring themselves (Vargo and Lusch 2011). The importance of resource integration and the reconfiguration of relationships links S-D logic to learning theories—learning in a dynamic, changing environment is essential.

In addition to its own theoretical postulations, S-D logic has analyzed and integrated views that are dispersed in various scientific “schools” and disciplines, and which are relevant in the development of nonlinear, user-, and actor-based understanding of innovation. S-D logic-related approaches that are particularly useful are effectuation and bricolage. Next, we discuss the similar views of these two approaches on behaviors related to innovation in uncertain, resource-constrained environments. These notions can be used as a “bridge” between S-D logic and innovation theories—regarding the theories on the management of innovation in particular.

4 Effectuation and Bricolage as Frameworks to Tackle the Uncertainties in Innovation

How do people take action in uncertain, resource-constrained environments in order to innovate? Prominent theoretical perspectives on entrepreneurial action, particularly effectuation (Sarasvathy 2008) and entrepreneurial bricolage (Baker and Nelson 2005), suggest that instead of selecting between means to achieve a predetermined goal, in these environments individual entrepreneurs may rely on already available resources in identifying and exploiting opportunities (Fisher 2012). Effectuation replaces predictive logic with a means-oriented approach, which begins from available resources and allows the goals to emerge in the courses of action. In line with S-D logic, it highlights that any given resource can be made more or less valuable and capable of producing long-term advantages: thus, what participants do with resources matters. Expanding cycles of resources characterizes effectuation, including the process of partner acquisition (Sarasvathy and Simon 2000; Sarasvathy 2008). In iterative processes of adaptive trial and error, participants try out strategies that enable direct control, co-creation, and transformation of situations toward positive outcomes. Quickly realized small successes and failures help avoid the risk that some action would put the entire effort in jeopardy (Sarasvathy and Kotha 2001). For the present study, effectuation provides means to recognize and understand the often messy potential of service innovation processes in the making.

Bricolage gives us a view of the grassroots problem-solving practices of participants. It suggests that when faced with resource constraints, employees may find innovative solutions based on “whatever is at hand” (Baker and Nelson 2005; cf. Lévi-Strauss 1967). The participants create and combine their scarce resources in a novel way in order to develop some useful and novel outcomes (Baker and Nelson 2005; Fuglsang and Sørensen 2011; Salunke et al. 2013). Bricolage is a process of co-shaping an emerging path: participants offer inputs to generate a virtuous learning circle. The boundaries blur between design and implementation, and between rulemaking and rule following (Garud and Karnøe 2003).

Effectuation and bricolage both emphasize the significance of individuals’ actions and control over resources (Fisher 2012). In order to explore how “ordinary” interaction between employees and users can lead to innovations, we chose to use the concept of bricolage in the empirical analysis. Bricolage serves as a bridging concept between inherently abstract notions of UDI, EDI and resource integration. While being a theoretical concept, it is also a mode of individual practice which can be observed empirically. Bricolage incorporates contributions and resources of all participants in a given situation. Personal experience of bricolage, signaling the motive/need of an individual or a group, and the benefit that bricolage provides for meeting that motive/need, is often required for resource integration to begin (Engeström 2001a; also Baker and Nelson 2005).

5 Development of Value Co-creation: The Theory of Expansive Learning

Practice-based (Blackler 1995; Ellström 2010) and situated (Lave and Wenger 1991) views on learning are especially relevant in the context of service innovation. New knowledge created in innovation activities is not only incorporated in new products, processes and services, but also in organizational practices; it is internalized by the people involved in the activity (Lundvall 1992; Ellström 2010). Due to the intangibility of services, opportunities for unique value constellations may emerge during everyday service delivery, and the actors involved may improvise on the spot by creating and testing new tactics for value creation (Gallouj and Weinstein 1997). Service ideas are developed and elaborated in action without detailed a priori planning and new opportunities are rapidly used to revise the goals and value offerings (Toivonen and Tuominen 2009; Toivonen 2010).

As discussed above, S-D logic, effectuation, and bricolage all open up new perspectives on the significance of multiple relations and activities in acquiring resources for value creation in service innovation. We also acknowledge that these views inherently approach the idea of learning, i.e., the development of communities and capabilities related to new value creation (e.g., John-Steiner 2000; Miettinen 2013). The idea of resources as “becoming” (Vargo and Lusch 2004) suggests that resources emerge in social action. Correspondingly, the argument that what people do with resources matters (Read et al. 2009) proposes that people’s context-specific actions related to resources are significant. These views imply that integrating or expanding resources for innovation require concrete “making”: creative and laborious process in which contexts, participants, and relations are constantly being reconfigured in order to create new value.

Why and how would participants make the effort to reach beyond their known resources and capabilities in order to collaborate creatively (John-Steiner 2000)? This question is the interest of inquiry in the theory of expansive learning (Engeström 1987) which derives from the cultural-historical activity theory (Cole and Engeström 1993; Leont’ev 1978) and which is also closely connected to practice-based, situated, and cultural theorizing of learning.

Expansive learning in a community begins when, during the course of activity, some individuals begin to question the current goals, patterns and norms, sometimes even the basic motive/need of the activity, and search for new practices. In some cases, this escalates into collaborative envisioning and a deliberate collective change effort at grassroots level (Engeström 1999, 2001a, b), after which a new motive and expansive cycle follows. Engeström (1987) proposed this as a new form of learning: expansive learning of cultural patterns of activity that are not yet there, and which therefore involves horizontal or sideways learning and development (Engeström 2001a, b). Hence, actions in situations that require innovative solutions often take the form of improvisation and bricolage (ibid.). Individuals’ and groups’ transformative agency is at the core of expansive learning: a firm cannot be the subject of expansion. Therefore, expansive learning perspective offers theoretical and analytical means to explore, in a nuanced way, the emergence and development of resource integrator roles and practices in service innovation.

6 Integration of Resources as a New Perspective in Innovation Management

The separate development of EDI and UDI literatures has both theoretical and practical consequences. The exclusion of employees in the theorizing on user-driven innovation and vice versa conflicts with the basic ideas of widening inclusion in open innovation and innovation democracy. It also undermines the network perspective for innovation. From the viewpoint of organizational practice, this separation may cause confusion among those who try to guide the involvement of users, employees, and other participants in innovation.

Consequently, we suggest an integrative framework in order to better understand and enhance users’ and employees’ interaction, especially the integration of resources for co-creation of use value in service innovations. We apply ideas from three sources discussed above: S-D logic (Vargo and Lusch 2004, 2008), effectuation and bricolage (Read et al. 2009; Garud and Karnøe 2003), and expansive learning (Engeström 1987). Together these theories tackle the following interrelated processes:

  1. (1)

    Practice-based emergence of motive, relations, and capabilities related to resource integration and configuration (this involves opportunity recognition by experimenting with resources for tackling the unknown, i.e., what is not yet there).

  2. (2)

    Integration and configuration of resources from multiple actors (this relates to the actor-to-actor -perspective, the expansive use of resources comprising of users, employees, and other parties, and the ensuing creation of new resources).

  3. (3)

    Adoption or transformation of integrated resources for sustaining and diffusing/reinnovating the use value (effectuation through expanding cycles of resources).

The three interrelated processes can be seen as a dynamic development process or a temporal trajectory of resource integration and configuration. Expansive learning takes place—or needs to take place—across all these processes, but especially in the second and third processes. Shifts between processes are critical for the expansion to continue, as it does not necessarily proceed smoothly (Hasu 2000a, b; Hasu and Engeström 2000). Figure 1 presents the focus of the present study and the linkages to its three theoretical backgrounds, hereafter formulated as the learning framework of resource integration.

Fig. 1
figure 1

The focus of the study and the linkages to its three theoretical backgrounds: learning framework for resource integration in service innovation

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7 Learning-Based Resource Integration in Practice: Two Case Examples

We provide two in-depth case studies from the Finnish public sector to illustrate the developmental dynamics of the resource-integrator roles of employees and users in a resource-constrained environment. We apply the framework developed above and highlight these groups as “practical bricoleurs.” Both case studies, Elderly day club and Forest pre-school, come from a middle-sized city in the southern part of Finland. Next, we present the analytical challenge, the data and the methodology used. After that we summarize our results as three phases of resource integration.

7.1 Invisibility of the Creation and Use of Resources as an Analytical Challenge

Even in service organizations, the S-D view faces the risk of being neglected because the value creation is indirect in nature. Typically, attention is directed to single goods and services that are easy to grasp (Vargo 2009), whereas the potentially innovative resources of grassroots-level actors may not be visible to managers and top executives. Even the employees themselves may not recognize the significance of solutions they create to users’ problems. They may lack the means to comprehend and communicate to the managers their individual and collaborative competences and other available resources.

In order to explore the role of resources of employees and users in microlevel interactions, we apply the learning framework for resource integration developed above. The framework provides the analytical means to make visible the emergence of various cultural resources and the expansion of these resources from one mode of activity or one participant group to another.

7.2 Data and the Case Study Methodology

The data collected from 2011 to 2013 included thematic interviews of four informants involved with the Open day club for elderly and eight informants involved with the Forest preschool, each lasting approximately 1.5 h. In addition, few on the spot interviews of managers, employees, and users were conducted during participant observation. Interview themes covered the interviewees’ perceptions concerning their prevailing—current and future—intentions, roles, practical tasks/duties, benefits, and ideas related to the novelty under scrutiny. The interviews also included narratives about everyday life at the sites. All the interviews were recorded and transcribed. Field notes and reports were written during and after the observations. Also documents, such as planning documents, brochures, journal articles, webpages and a book, were collected from both cases.

Our case study included both the temporal and the social-material point of view of expansion, i.e., what actions had been taken in particular point of time, and what material and social resources had been used at that time (methodology of analyzing expansion, see Hasu 2005, 2000a). Among the potential dimensions of expansion (Engeström 2001a; Hasu 2000a), the social-spatial (“who else should be included?”) dimension refers to the inclusion of employees, users, and potential other parties as resource integrators in service innovation. It characterizes the interactional practice in the context in which resource integration takes place and new relationships are built up in order to create, sustain, and spread a novelty. Accordingly, we aimed at examining and interpreting the temporal development of value co-creation in resource integration activities as social-spatial expansion. Our analysis was conducted in three phases. First, the development trajectories of both cases were written into rich narratives bearing the resource integration (of all the actors involved) in focus. Then, the trajectories were divided into three phases of expansion and finally, the elements in social-spatial expansion in each phase were investigated and considered in detail (as shown in Table 1).

Table 1 Developmental phases of resource integration and related roles in the two case studies
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7.3 Results: Development of Resource Integrator Roles and the Co-creation of use Value in Two Cases

We identified three phases of resource integration and related roles in the two cases:

  1. 1.

    Origin and emergence of the resource integrator capabilities of employees (employee bricoleur)

  2. 2.

    Emergence of collaborative resource integration of employees and users (the most critical phase of expansion in the resource integration)

  3. 3.

    Transformation of resource integrator roles of employees and users

All the three phases are depicted above in Table 1. The findings suggest that the second phase is critical especially from the viewpoint of employee–user interaction. It opens up an insight into the previous and preceding phases of resource integration accordingly. Next, we will first describe both cases by briefly introducing the overall context, and then concentrating on the second phase of the resource integration.

7.3.1 Elderly Day Club: Emergence of Collaborative Resource Integration of Employee and Elderly

This case describes a municipal service which provides the elderly with an opportunity for social interaction and stimulating social activities. The aim was to promote the physical, social, and mental wellbeing of the elderly who were living on their own. The case illustrates how an employee, working as a facilitator of the elderly day club, together with the users, creatively integrated available human and material resources (her own and those of the users) in order to develop novel activities. The facilitator actively sought new resources by developing collaboration with volunteers and other groups. As an outcome, the elderly day club covered a much wider range of social activities than originally budgeted for.

In the first phase of resource integration (Table 1), the responsible employee had learned how to gather and nurture scarce material resources to test her service ideas. However, a new service idea, carpentry workshop, was the outcome of collaborative resource integration. The engaged employee convinced the local manager that separate, dedicated groups were needed for men and women in order to keep men participating in the club. She made an application with an action plan, got a few rooms, and acquired some funds and donations; when the workshop project started, she was the motor of the project.

Critical expansion in this second phase marked the emergence of collaborative roles of the employee and elderly users as resource gatherers and integrators. Because of scarce resources and without former experience of woodwork, the responsible employee asked the future users, i.e., the elderly men, to help finish the carpentry workshop facility. She “hand-picked” a small group of recently retired men and collaborated with them intensively in gathering donations, materials, and equipment from their personal and former occupational networks. The men were eager to help. Instead of being the sole bricoleur, the responsible employee and the elderly users became co-bricoleurs.

New activities, abilities, and energy emerged in the participant groups. This resulted into rich production of crafts, which were then sold outside to get new funds for materials and trips. For instance, men renovated old furniture and donated them to the campus. The men’s group sustained: more men came in and stayed. The most inspired participants recognized the unique potential of the service and volunteered to spread the activity. The responsible employee felt empowered as she succeeded and learned new competences.

The carpentry workshop project proved successful, and as the word spread, also the upper management recognized the work and praised it in public. Ideas of the elderly were heard and appreciated in the planning of the activities. In the third phase of resource integration (Table 1), however, a major transition started in the organizing of many services for elderly, and the management’s target shifted to systematization of all services instead of developing single services. The roles of the responsible employee and the elderly in the local campus changed: the employee was given a new assignment as a general coordinator of the elderly day activities in the city, and the elderly users adopted the role of facilitators of their own activities.

7.3.2 Forest Preschool: Emergence of Collaborative Resource Integration of Employees, Managers, Children, and Parents

This case study illustrates how a pedagogical novelty called Forest Preschool evolved from a local service improvement in a children’s day care center into a forest pedagogy concept covering the entire town. The first experiment was created by employees, and nurtured by several training occasions, contacts with foreign forest pedagogy researchers, and the forest surrounding the day care center. During a period of scarce financial support, resources and knowledge were actively sought from the parents of the children. However, spreading the local service improvement required help from the service director. The expansion of resources and ideas from the employee-bricoleur to the service director, and the resulting collaboration between them, served as a springboard for the wider diffusion and sustainability of the novelty.

In the first phase of resource integration (Table 1), a nature-enthusiast local manager had encouraged her employees to integrate nature in their educational practices. She had asked one outdoor-hobbyist employee to plan how nature could be integrated to the early childhood education and even solve the shortage of facilities. The outcome of the ensuing broader collaborative resource integration was the forest preschool—with a hut in the woods—as a local attraction. Two employees made a plan, actively participated in the start-up, and solved many practical problems while organizing the educational activities outdoors. In the early phase, the group stayed only a few hours a day in the forest but later on they started to spend there more time to fully benefit from the idea. In spite of many practical problems, the employees persistently developed the nature-related educational activities outdoors, and stayed outdoors even during the winter.

Critical expansion in the second phase was the emergence of collaboration between employees, parents, and children as resource gatherers and integrators. The children kept a diary on their nature observations, which formed a basis for learning and documentation of the novelty. The parents were welcomed to join right from the beginning and their occupational competences served as a resource in enriching the education. Especially, fathers became enthusiastic collaborators: some of them joined winter-fishing trips and loaned their fishing equipment to children. Employees, parents, and children became co-bricoleurs.

Preschoolers became active observers, explorers, and bricoleurs of their surroundings. One of the two responsible employees became known as an expert of forest pedagogy, and started to write a book about the endeavor and to give lectures for early childhood educators. The other responsible employee became a skillful photographer of the nature and the preschool activities. Fathers in particular became involved with early childhood education in a new way, and the residential area became attractive for families.

The local manager and upper management (a service director) reacted quickly to the needs of the forest preschool group: for instance, a milk trolley was acquired in order to serve lunch outdoors. The local manager often acted as a partner in problem solving and bricolage. In the third phase of resource integration (Table 1), one responsible employee, the local manager, and the service director joined forces and started to spread Forest preschool as a service concept in the municipality. All parties broadened their competences, but the capabilities and responsibilities of the individual employee expanded the most as she became an active agent in diffusing the substance of the novelty.

7.3.3 Summary of the Two Cases in the Critical Phase of Resource Integration

Figure 2 depicts the critical second phase of resource integration, the expansion of employee–user interaction and emergence of collaborative roles in resource integration (co-bricoleurs) in the two cases. The cases have similar characteristics, but they also differ in some respects.

Fig. 2
figure 2

Second phase of resource integration in the two cases (the width of the two-arrow line indicates the intensity of interaction)

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The cases illustrate, first, that the ability for expansive resource integration between employees and users was actually rooted in the preceding experiences of small successes and failures (Sarasvathy and Kotha 2001) and relations in the wider network contexts, in which the motivated employees had learned to replace missing or incomplete resources with other available sources (e.g., Vargo and Lusch 2004, 2011). The employees had become bricoleurs, equipped with a work pattern of dynamic resource utilization and confidence on self-determining and creative problem solving.

Second, employees’ ability to recognize users’ experiences, networks, and competences as meaningful resources was an important prerequisite for successful collaboration. Users were respected as co-bricoleurs, i.e., hands-on partners in service development. Inspired by a challenging opportunity, employees and users together collected and nurtured partial resources and combined them in a novel way. Through this laborious activity they built control over the idea and resources (Fisher 2012) that were meaningful and available for them. The service opportunity was materialized in new facilities and equipment, and manifested in new supportive and rewarding relations (social-spatial expansion). Both employees and users learnt new capabilities and agency as they co-created new value.

The case examples also reveal the challenges in creating service innovations through bricolage: the work methods were not replicable as such, as they depended on creative combinations of unique resources in the local context. However, the features and principles of forest education were generalized, or as they themselves call it, productized (cf. Valminen and Toivonen 2011). This was not yet the case in the Elderly day club, as the managers were reconsidering the role of the service.

Third, the cases show that these combinations may involve different sets of actors and the lack of some actors’ involvement can be replaced by others.” Here, the cases differed in some respect. In the Elderly day club, resource integration became a shared capability between a single employee and the elderly users, while in the Forest preschool, collaborative agency emerged within a larger community, which included employees, managers, children, and their parents. In the Elderly day club, discovering the capabilities and social support of the elderly at least partially replaced the management’s support. Constant managerial support was not critical, implying that learning and agency of elderly users as producers of their own services was strengthened. When the role of the employee later changed into that of general coordinator, the elderly partially replaced her as the facilitator at the site (see Table 1, phase 3). In the Forest preschool, on the other hand, the employees could not rely solely on children’s own willpower. The broader community comprising parents and managers had to be mobilized for nurturing the novelty, which also strengthened the resource utilization from the very beginning. In spite of scarce and partial resources available in the two cases, both succeeded in expanding the novelty.

8 Conclusion

The motive of our study derived from the observation that even though the resource integration perspective in the co-creation of value is increasingly discussed in the context of service innovation, producer-centric and R&D-based practices still dominate both innovation studies and practical innovation efforts. Although interest in “lay knowledge” in service innovation has increased, research on grassroots users’ and employees’ practical activities and, in particular, their interaction in resource integration, has not attracted much research interest. In this chapter, we analyzed the user–employee interaction as a source of innovation both theoretically and on the basis of empirical cases. We aimed to contribute to this research gap and suggested a new integrated approach via combining several theoretical frameworks, namely, user-driven innovation, employee-driven innovation, S-D logic, effectuation and bricolage, and expansive learning.

We demonstrated the benefits of this framework in empirical analysis: it enabled exploring resource integration as a practical, dynamic activity which is sensitive to practice-based interaction and learning between users, employees and other potential stakeholders. Our study showed that grassroots-level collaboration between employees and users was critical in the development of the novelty.

This approach provides several contributions. First, the framework established a connection between user-driven and employee-driven views of innovation, both of which can be placed at the center of open and democratic innovation debates addressing widened participation and “lay knowledge” in innovation from the point of view of resource integration. Second, the approach links S-D logic with the theory of expansive learning, which—supplemented with effectuation and bricolage—provides S-D logic with new analytical means to explore how, in microlevel practices, use value is co-created in dynamic processes of expansion. The integrated view therefore represents the learning framework of resource integration. Third, we applied S-D logic to study innovation in the public sector which is also a new contribution in the S-D logic field.

The framework also suggests theoretical and managerial implications. First, it has implications for the research and management of service innovation processes. Earlier research addressing co-creation have either focused on planned activities or on practices at the organizational level (Kowalkowski et al. 2012; Mele et al. 2010; Salunke et al. 2013). Our study implicated, on the contrary, the significance of improvisational practice-based activities. Effectuation and bricolage provide useful analytical perspectives for studying these activities. From a managerial point of view, effectuation and bricolage can be considered as alternatives for linear, predetermined managerial processes (Fisher 2012). Our cases indicate that these bottom-up managerial patterns do emerge also in the public sector, where renewals are traditionally initiated by policy or structural changes and managed top-down. The bottom-up practices enable the emergence of novelties by providing the employees not only with a frame for service but also with control over resources and freedom to use creativity. The combination of frame, freedom, and control of resources supports the employees and users to utilize opportunities perceived.

Second, implications address fostering of service innovation culture. Our study suggests analytical and methodological means to understand the nuances of practical contexts, actions, and roles in the emergence of new services. Recognizing the dynamics of resource integrator roles requires sensitivity from managers. Service employees and users do not necessarily recognize the innovative potential of their practices. In addition, they typically lack the time, motivation, or capability to conceptualize their novelty in order to be able to transfer it from one context to another. A successful resource integrator needs to be able to expand his/her role and related interactions (e.g., Wrzesniewski and Dutton 2001). An essential managerial capability is that of being able to identify the role of both employees and users in service processes, and of sensitively guiding the dynamics of the resource-integrator roles.

Third, the implications of the research on diffusion of service innovation include the view of resource integration as developmental process in which collective, practice-based learning is critical. Prerequisites for the diffusion of the novelty do not just exist there to be discovered by an outside party, but they are rooted in the preceding cycles of expansion: experiences of small successes and failures and relations in the contexts (e.g., Sarasvathy and Kotha 2001). A theoretical perspective able to analyze development is needed. From the managerial point of view, our study suggests that the replication of novel solutions is a separate learning challenge which is often unrecognized, and consequently left unmanaged. It requires that a broader group of actors learn from the novel value-creation processes. Managers may initiate these collective learning processes, if they are able to recognize the significance of a solution, and provide resources and support for subsequent developmental activities. Another option is to create a collaborative service culture in which service employees within and between organizations actively share novel solutions, and in this way gradually develop the services. Thus, although novel solutions often emerge at the customer interface, a single employee cannot leverage the solutions without managerial support.

Our study also suggests a few new directions for further research which we were not able to cover in detail, but which are connected to the implications discussed above. The current views on service productivity highlight that it is not enough to focus on efficiency of resource utilization, but the interactive process between the provider and the user and the impacts on the use value (effectiveness), have to be taken into account (Grönroos and Ojasalo 2004). The suggested theoretical framework contributes to this interactive view of creation of use value in service innovation. Further research will be needed to explore how the proposed learning framework of resource integration can be applied to study service productivity and quality.