Does method matter? An experiment on collaborative business model idea generation in teams.

Author:Eppler, Martin J.
 
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Generating new business models presents one of the most challenging tasks for management teams today (Chesbrough, 2006; Christensen & Raynor, 2000) because the need for a new business model often emerges from a serious crisis concerning the firm and its current business model, which in turn threatens its survival in a changing market (Johnson, Christensen, & Kagermann, 2008; Meehan & Baschera, 2002). According to evolutionary models of the innovation process (Campbell, 1960; Romer, 1993; Simonton, 1999; Singh & Fleming, 2010; Weitzman, 1998), generating a variety of new ideas is the first step in developing an innovation. In the context of business model innovation, this step translates into generating various ideas for new business models (Gallupe et al., 1992; Girotra, Terwiesch, & Ulrich, 2010; Jung, Schneider, & Valacich, 2010; Osborn, 1957).

Thus, this article (based on Eppler, Hoffmann, & Bresciani, 2011) focuses on idea generation as the first crucial step towards developing a new business model--after identifying the need and desire to change a firm's current business model. Developing business model ideas is not an individual task. Rather, it requires group collaboration and the integration of knowledge from different divisions within the firm. Idea generation tasks are generated in both formal and informal group collaborations (Garfield, Taylor, Dennis, & Satzinger, 2001; Maccrimmon & Wagner, 1994), which makes idea generation both a cognitive and a social process (Dennis, Aronson, Heninger, & Walker, 1999; Garfield et al., 2001; Nagasundaram & Dennis, 1993). Teams are considered the building blocks of many organizations (Nijstad & de Dreu, 2002) because they allow a company to integrate expertise from different fields, ease coordination, and assure mutual accountability. These advantages are also important when creating business model ideas.

However, while many firms have established processes for generating product innovations in teams, no established team processes exist for generating business model innovations. The academic community has predominantly focused on explaining ex post facto how firms conduct business model innovation (Johnson et al., 2008; Meehan & Baschera, 2002). Yet no established processes or tools are available both to manage complexity and foster creativity in the context of business model innovation. Successful business model idea generation requires sharing, creating, and integrating knowledge across epistemic boundaries (Gavetti & Levinthal, 2000). Knowledge sharing, creation, and integration occurs through insights resulting from the information pooling process (Carlile, 2002, 2004; Dougherty, 1992; Peterovic, Kittl, & Teksten, 2001) and from interacting with knowledge sources both inside and outside the team (Harris & Woolley, 2009). As teams may have prerequisites to work on complex issues, they also encounter challenges beyond their prior knowledge and experiences (Nonaka, 1999) that may require them to include experts from outside the organization and support these experts through fitting tools.

The overall complexity of the task presents an additional challenge for the generation of new business model ideas (Chesbrough, 2010) because business model idea generation requires the innovation team to consider and understand the various and potentially conflicting positions of the stakeholders and units affected. Thus, complexity needs to be structured and mastered.

Some of these challenges can be addressed by using artifacts to facilitate the group process of developing new business model ideas. Evidently, artifacts provide useful support for creative tasks in organizations (Lawson, 2006). For example, three-dimensional objects used for 'Serious Play' in organizations have been found to support both the abstraction and construction (Heracleous & Jacobs, 2005; Schrage, 2000) of novel ideas in complex environments. However, the potential benefits of using artifacts for facilitating innovation in business model innovation has not yet been deeply investigated. An important exception is the template (or 'canvas') developed by Osterwalder and Pigneur (2009), which is often used in practice, but has not been systematically analyzed thus far. Additionally, a similar, but physical, business model innovation artifact, the so-called 'business model brainstorm kit,' allows managers to play interactively with the (paper-based) elements of a business model and thereby generate new business model ideas (Board of Innovation, 2010).

This study aims to understand how different artifacts affect collaboration and participation in groups working on the development of business model ideas. This process will be examined from both quantitative (survey-based) and qualitative (observation-based) points of view.

The theoretical background is based on the concept of boundary objects (Carlile, 2002; Star, 1989; Star & Griesemer, 1989), which suggests that boundary objects support knowledge sharing and creation by functioning as bridging devices. The boundary objects used in this study are visual templates and physical objects. Hence, the research question is: how do artifacts affect the dynamics of groups working on the development of business model ideas?

ARTIFACTS

The role of artifacts in the development of new business model ideas has been addressed mainly in two literature streams: the literature on business model innovation and the literature on idea generation. These two research fields are briefly reviewed in this section.

Artifacts in business model innovation

Finding new business model ideas poses a challenge to new as well as long established firms. This problem can be alleviated by providing structure and guidance to frame and focus thought (Brown, Tumeo, Larey, & Paulus, 1998; Connolly, Routhieaux, & Schneider, 1993; Hoegl, Gibbert, & Mazursky, 2008; Stroebe, Diehl, & Abakoumkin, 1992). Artifacts such as objects, templates, and sketches are considered helpful tools to structure and focus the group process (Suthers, 2001; Suthers, Vatrapu, Medina, Joseph, & Dwyer, 2007; Tversky, 1977). However, only a few methods, such as distancing and abstracting (Doz & Kosonen, 2010) and the three-step scenario based approach (Pateli & Giaglis, 2005), have been explicitly proposed in the business model literature. These methods have not yet been widely applied and tested in the business model context. More recently, a new tool, in the form of a business model innovation template, has been specifically developed for the generation of new business model ideas (Osterwalder & Pigneur, 2009) and has gained attention and recognition among practitioners and scholars (Chesbrough, 2010). Despite evidence that the template is applied in practice, its effectiveness has not yet been scientifically investigated. Thus, the business model innovation literature alone does not provide sufficient evidence to answer the research question at stake here. The following section provides an analysis of findings on the role of artifacts in idea generation.

Artifacts in idea generation

Recent research in innovation management argues for a participatory approach towards innovative idea generation (Castiaux & Paque, 2009) and idea management (Brem & Voigt, 2007). Effective collaboration in multidisciplinary teams enhances the points of view included in the discussion, while overall ensuring that the complexity of the target issue is sufficiently considered by group members (Fay, Borrill, Amir, Haward, & West, 2006). Equal participation is important for successful idea generation (Dayan & Di Benedetto, 2009), as well as facilitating divergent viewpoints (Klein, 2002). The field has just begun to explore the potential benefits of artifacts in supporting meetings (Bugeaud, Giboin, & Soulier, 2010).

The idea generation literature has proposed and analyzed several methods for enhancing collaboration on divergent tasks. Brainstorming--mostly in groups but either online or offline--is the most widely known and tested method (Aiken, Vanjani, & Paolillo, 1996; Osborn, 1957; Rietzschel, Nijstad, & Stroebe, 2006). Other methods include the use of objects for meeting facilitation, such as Serious Play, especially for complex tasks. Serious Play relies on using artifacts to stimulate idea generation or complex strategy development (Heracleous & Jacobs, 2005, 2008; Schrage, 2000). Sketching is also suggested for collaborative idea generation (Shah, Vargas-Hernandez, Summers, & Kulkarni, 2001; Van der Lugt, 2002). Sketching fosters collaboration, communication, and building upon ideas, while generating a variety of novel ideas. Sketches and prototypes allow for the integration of viewpoints (Fiol & Huff, 1992). In supporting the idea generation process, research has shown that formal constraints and guiding of the collaborative process is useful in improving the effectiveness of the process (SunWolf & Seibold, 1999) while also equalizing participation (Okhuysen & Eisenhardt, 2002). However, the idea generation literature alone does not provide sufficient evidence of how the idea generation process for new business models is best supported in groups.

This assessment has identified numerous research gaps in the current literature. First, none of the reviewed methods noted above has been tested rigorously (or been observed while used by real managers) in the context of generating business model ideas. Second, generating business model ideas is a particular task that is especially complex, requires knowledge creation, sharing, and integration among business domains, and threatens the survival of firms. Altogether, this idea generation task is different from the tasks normally given in the existing empirical literature on idea generation. Additionally, subjects in idea generation experimental studies are usually students from US universities (Girotra et al., 2010; Jung et al., 2010; Silver, Cohen, & Crutchfield, 1994) who are given...

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