Short answer

Prioritize the development of organizational agility and adaptive capacity alongside technological advancements to ensure successful digital business model innovation.

Field: Innovation & Design
Source: Schmalenbach Journal of Business Research (2023)
Method: Qualitative case study analysis
Evidence: Strong effect

Successfully innovating digital business models requires organizations to develop robust dynamic capabilities, specifically the ability to sense emerging opportunities, seize them effectively, and transform internal structures and processes. This innovation & design research insight is drawn from a 2023 study published in Schmalenbach Journal of Business Research. Using Qualitative case study analysis, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Prioritize the development of organizational agility and adaptive capacity alongside technological advancements to ensure successful digital business model innovation.

Study

Innovation & DesignRecentStrong effect

Digital Business Model Innovation Hinges on Sensing, Seizing, and Transforming Capabilities

Schmalenbach Journal of Business Research · 2023

Key Findings

01Digital business model innovation is significantly enabled by dynamic capabilities (sensing, seizing, transforming).
02Challenges in building these capabilities often stem from individual, process, and structural factors within organizations.
03Specific responses are required to overcome these challenges, tailored to the context of IoT and SaaS innovations.

Application

Design takeaway

Prioritize the development of organizational agility and adaptive capacity alongside technological advancements to ensure successful digital business model innovation.

How to apply

Conduct an audit of your organization's sensing, seizing, and transforming capabilities before embarking on a new digital business model initiative. Identify specific gaps and develop targeted interventions.

Project actions

01When researching a new product or service, consider how the organization will adapt to support it.
02Analyze the existing organizational structures and processes that might hinder or help a new digital initiative.

Method & Evidence

AimWhat are the micro-foundational challenges and successful measures for incumbent industrial firms in building dynamic capabilities for digital business model innovation, particularly in IoT-driven platforms and SaaS models?

MethodQualitative case study analysis

ProcedureSix case studies of industrial firms focusing on IoT-driven platform or SaaS business model innovation were analyzed to identify challenges and successful responses related to building dynamic capabilities.

ContextIndustrial firms undergoing digital transformation, focusing on IoT-driven platforms and SaaS business models.

Variables

IVOrganizational dynamic capabilities (sensing, seizing, transforming)

DVSuccess of digital business model innovation

CVOrganizational structure, processes, individual roles, type of digital innovation (IoT platform vs. SaaS)

Strengths & Limitations

Strengths

+Focuses on the micro-foundations of dynamic capabilities, offering a deeper understanding.
+Examines real-world cases of digital business model innovation in industrial settings.

Limitations

The case studies might not represent all types of industrial firms or all forms of digital innovation.

Reliability & validity

The qualitative nature of case studies provides rich insights but may limit generalizability. Triangulation of data within cases and across cases enhances validity.

Think critically

To what extent can 'sensing' capabilities be proactively developed, or are they primarily reactive to external stimuli?

Design Principles

"Organizational agility is a prerequisite for sustained digital business model innovation."

For established industrial firms navigating digital transformation, understanding and cultivating these dynamic capabilities is crucial for survival and growth. Neglecting them can lead to missed opportunities and an inability to adapt to market shifts driven by digital technologies.

What This Means for Your Design

To make new digital business ideas work, companies need to be good at noticing new chances, grabbing them, and changing how they operate. Problems often come from people, processes, and company structure.

How to use in your project

1.Use this research to justify the need for organizational change alongside product development in your design project.

Add to My Project

Quick Cite

Paragraph starter

This research highlights that successful digital business model innovation is contingent upon an organization's dynamic capabilities, specifically its ability to sense emerging digital opportunities, seize them through strategic action, and transform its internal structures and processes. Challenges often arise from individual, process, and structural impediments, necessitating targeted responses to foster adaptability and ensure the successful integration of new digital models.

Source

Schmalenbach Journal of Business Research

What Takes the Wind out of Their Sails? A Micro-Foundational Perspective of Challenges for Building Dynamic Capabilities Towards Digital Business Model Innovation

journal · 2023

View source

Questions About This Research

What does the research say about digital business model innovation hinges on sensing, seizing, and transforming capabilities?: Prioritize the development of organizational agility and adaptive capacity alongside technological advancements to ensure successful digital business model innovation. Evidence: Schmalenbach Journal of Business Research (2023).
Why does "Digital Business Model Innovation Hinges on Sensing, Seizing, and Transforming Capabilities" matter for design?: For established industrial firms navigating digital transformation, understanding and cultivating these dynamic capabilities is crucial for survival and growth. Neglecting them can lead to missed opportunities and an inability to adapt to market shifts driven by digital technologies.
How can designers apply this research?: Prioritize the development of organizational agility and adaptive capacity alongside technological advancements to ensure successful digital business model innovation.
What were the main findings?: Digital business model innovation is significantly enabled by dynamic capabilities (sensing, seizing, transforming).. Challenges in building these capabilities often stem from individual, process, and structural factors within organizations.. Specific responses are required to overcome these challenges, tailored to the context of IoT and SaaS innovations.
What research method was used?: Qualitative case study analysis.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2023 journal from Schmalenbach Journal of Business Research.
What should I do differently in my next project?: Conduct an audit of your organization's sensing, seizing, and transforming capabilities before embarking on a new digital business model initiative. Identify specific gaps and develop targeted interventions.
What are the limitations?: Findings are based on a limited number of case studies, and the specific context of industrial firms may limit generalizability to other sectors.