The Processes Of BMI Development
When it comes to study the change and the innovation processes within organizations, two definitions for change is provided by Poole at al. (2000).
An observation which is done over a period of time, with regard to specific dimensions in order to address the differences,
A narrative which tends to explain a sequence of events regarding how the change occurs. Based on the first definition, the change is studied as an dependent variable together with several independent variables and taken the “variance theory” as its methodology.
The second definition is related to the “process theory” in which change is clarified according to a historical narrative. Mohr (1982) suggests that scholars have to differentiate between variance and process approaches. Similarly, Barnett and Carroll (1995) distinct “content” and “process” when explaining the change; content is dealing with what really changes within the organizations (antecedents and outcomes of the change), while process focuses on how the changes is happening (sequence of events). Hence, based on the purpose of this research which is, unravelling the processes of BMI development, the approach of studying the processes as a sequence of events will be followed. Within the literature, studies which tend to probe into BMI processes, are more prone to dynamically investigate organizational characteristics, which can either be enablers or barriers.
Innovation processes have been transformed from product innovations (incremental) to more radical innovations which drive by learning and examination from early product and service offering and customer feedbacks. BMI processes are not planned always, which means that many companies experience them without they planned for or being aware of them. Scholars point to the concept of design thinking which is about developing and testing various innovative solutions iteratively (iterative processes) till finding the most optimal solution. This concept is built upon development of several prototypes by redesigning and testing them several times until achieving the most viable prototype which ables to satisfy customer needs. Moreover, Sosna et al. (2010) argue that during the first years of the establishment of a company, the “best” business model evolves through the process of “trial and error” which starts since the creation of the first viable business model and continues over time without making any changes in core logic of the company. Moreover, innovation processes which are performed based on a sequence are leading to incremental change; while radical changes call for more iterative process rather than linear sequential ones.
In addition, it is claimed that BMI processes are not necessarily following a sequence; which means that business model design (conceptualization) and implementation (operationalization) are performed parallel. Furthermore, Stampfl (2016) proposes three important milestones within BMI processes; which are “emergence of the need”, “recognition of the need” of a new business model and “achievement” of the first viable business model which fits the environment. In relation to these three milestones, Stampfl (2016) recognizes three phases inside BMI processes: “sense-breaking”, “sense-giving and “freezing” and “refinement”. Sense-breaking happens when a company recognizes that there is a gap between its offerings and market requests; during the phase of sense-giving (at strategic level) and freezing (at operational level) the company develops and applies the first viable prototype of its business model, and after achieving this viable prototype, through the continues refinement processes, the company performs adjustments to its business model (at both strategic and operational level). Similarly, Roome and Louche (2015) propose a model which elaborates on (radical) change processes within business models toward sustainability, and consists of four steps: an event-driven problemistic search in order to find new solutions, interpretation of new concepts into an operational reality, embedding new knowledge into a new business model, and the business model consolidation through a collaborative structure. The transformation process is configured upon innovation, change and learning which are engaged in the development of new vision, new concepts, and new practices; that will result in creation of the new business model.
Moreover, when it comes to the process of sustainable value proposition, it is claimed to be a long iterative process in which several prototypes are developed through interaction with stakeholders until business model design captures desired sustainability as well as reaches economic performance. Furthermore, Cavalcante (2014) points to a “pre-stage” phase before the potential change occurs in the business models; which consists of two constructs, “experimentation” and “learning”. These two constructs are related to the challenges regarding the introduction of new practices and ideas; thus they may lead to changes in business models if the company at this stage succeeds in overcoming these challenges, otherwise, no changes will take place within the business model. In addition, some scholars concentrate on these two constructs as being influential on BMI design.
