Research reveals the disjointed nature of service innovation and an overall desertion in studies towards cumulative knowledge development. Studies also show a lack of focus on customers and employees as the fundamental resources for innovation and value creation. The purpose of this study is to investigate how service innovation can be more comprehensive, systematic and focused on the customer and employee resources of the firm. A constructivist paradigm directed this study’s research design and methodology. The investigative, qualitative research design incorporates an inductive and deductive approach and utilizes semi-structured interviews as the primary data collection method. Collected data were analysed with a predetermined coding frame by way of a phased thematic analysis process. The data analysed informed four constructs: focus, frame, function and forms – all essential to effective innovation and value creation. The four constructs were developed in a framework for service innovation and value creation that is oriented more towards the employee and customer, and one that is more comprehensive and systematic. The paper provides researchers and business managers with an enhanced understanding of how value is created through service innovation. The study’s purpose-driven, human-centred and means-enabled framework affords guidance, both in terms of the service innovation approach and its development process for value creation. The guidance and insights put forward may aid practitioners in their pursuit of service solutions with purpose, contribute to superior performance and have a sustainable impact.