Learning while configuring : buiness model innovation processes in established firms

In this paper we contribute to the understanding of strategic renewal by studying how conception (cognition) and execution (action) interact in the context of business model innovation. Based on a qualitative process study we investigate the development of new business model configurations in four established firms. Our preliminary analyses resulted in uncovering five modes of interaction between cognition and action: retrospective sensemaking, implementation, experimentation, experiential learning, and improvisation. Each business model innovation trajectory contained a sequence of these development modes. These sequences, in turn, contained both partial and integral changes. We find that business model development progressed most smoothly when it took place "online", i.e. in operation for clients, instead of "off-line". We discuss implications for theory on business model innovation and strategic renewal.