A configurational approach to capabilities of business model innovation: Insights from a project-based firm

Abstract

The capabilities of business model innovation (BMI) are crucial for the modern firm to remain competitive. This study aims to answer recent calls for a more structured approach to understanding BMI and to researching how the capabilities relate to performance. Furthermore, and despite the rise of the project-based firm, there is still a profound lack of BMI research in the setting of project-based firms – a research stream, which we contribute to developing further. Theoretically, and on the basis of a literature review, we suggest a set of four overall capabilities for BMI with 29 corresponding themes within the areas of strategy, business models, management, and organizations. Empirically, we gained deep access to 15 projects in a major European engineering consultancy, which were marked by BMI. Analytically, we analyzed the results through a fuzzy-set qualitative comparative analysis (fsQCA) and derived three main findings. Firstly, a high degree of skunkworks with little relationship to the firm's strategic and operational logic leads to a fast time to market. Secondly, lack of managerial capabilities leads to increased investment and lower revenues. Finally, lack of managerial capabilities—even with the presence of strategic capabilities of BMI and organizational capabilities of BMI—leads to lower future potential of the business model. In continuation of these findings, we develop three propositions and recommend project-based firms to boost the managerial capabilities of leading BMI by focusing on training of BMI managers, organizational learning through experiments, establishing trust in project employees, ensuring openness in collaborations, minimizing transaction costs and developing appropriate key metrics for the BMI project.