Ecosystem effectuation: creating new value through open innovation during a pandemic

Abstract

The severity of the COVID-19 pandemic confronts us with a global grand challenge representing an unprecedented crisis for health, economies, and societies. While digital champions are thriving, a large number of businesses and industries have been facing radical uncertainty, pushing some to the edge of collapse. This emergency calls for new ways to look at organizational ambidexterity and business model innovation. In this paper, we present and discuss a unique case study of a low-cost airline, AirAsia. With their fleet of aircraft grounded, and unable to pursue any incremental innovation opportunities, AirAsia decided to follow a radical ambidexterity path - focusing on exploration by building an innovation ecosystem. This case not only offers insights on a novel way to create value through open innovation but also extends the body of knowledge on entrepreneurial effectuation by introducing the concept of an ecosystem effectuation. AirAsia's case shows that, in financially distressed times, business model reconfiguration may not be enough, and instead of selecting means to attain goals, the goals may be created upon available means.