Trabajo presentado a la DRUID15 Conference on: "The Relevance of Innovation" celebrada en Roma (Italia) del 15 al 17 de junio de 2015.This study seeks to explain the paradox that firms most engaged in fulfilling actual user needs might be the ones who benefit less from a capability for systematically evaluating market demands. Service-oriented innovation research stresses that the relational nature of service delivery, especially when customized, provides opportunities for firms to engage in intensive user-producer interaction already during their regular business activities. We examine under which conditions having a strong sensing user needs capability can be a weakness rather than a strength for such firms. By using NK-logic, we modelled the conjunction of customer and firm behaviour with respect to sending and sensing user feedback. Our simulations resulted in a hypothesis regarding the relation between various interactive search strategies on the one hand, and innovativeness on the other hand. Subsequently, we used survey data from 292 respondents to verify these findings empirically. Our regression results suggest that, for firms who provide client-specific services, there is limited value in investing in an ability to monitor and evaluate user feedback closely. Having a sensing capability and receiving user requests has a negative interaction effect for firms providing customized solutions, while this effect is positive when firms do not tailor their services. The results confirm that focusing too much on articulated market demands might prevent customizing firms from introducing commercially successful service solutions. With these findings, we support innovation managers dealing with the strategic dilemma whether or not to devote resources to sensing capabilities.Peer reviewe
