Project Team Communication in Financial Service Innovation

We examine the role of communication during the innovation process of new financial services from an information processing perspective. A contingency framework is developed on the role of communication and its impact on new financial services success. In order to assess the unique nature of the services context of this study, this framework also depicts the moderating impact of the specific services characteristics (intangibility, inseparability, heterogeneity and perishability) on project communication during the innovation process. Project team communication is conceptualized by three types of communication: (1) intra-project communication, (2) extra-project communication involving (i) organizational liaisons, which refer to the transfer of intra-organizational communication by project members and (ii) gatekeepers of information, which refer to the transfer of extra-organizational information by customer-contact personnel. The relationship between project team communication and the reduction of innovative uncertainty on new financial service success is examined. Our contingency model implies that managers have to recognize the critical communication roles that project members and frontline employees may fulfill. The communication flows mediated by these individuals foster the uncertainty reduction during the innovation process. Moreover, financial service innovation management should conceive the service characteristics as sources of task uncertainty, as they may lower project communication effectiveness, i.e. the reduction of innovative uncertainty. Following the managerial implications of our model, we finally formulate directions for future research.