The service sector is now the dominant part of many western economies ‚Äď and seems to be growing in importance. To differentiate their offerings; service providers need to be innovative to meet conscious and unconscious user needs. The innovation process to improve and redesign the way organizations deliver services demands collaboration from multiple sources; of which two are competence in design and in strategic leadership. The variety of services offered in the market raises cross-functional internal and external service leadership issues. How businesses understand and organize design activities can have a profound impact on the innovation process and outcome. Organizational leaders are often not designers. However; they are part of the design and innovation process in creating the vision and by making design-related decisions to obtain the envisioned future. The emergence of the service economy calls for rethinking within leadership. Thus; the term service design leadership is introduced in this paper to reflect a new attitude towards leadership in the service economy in response to the characteristics of services.