How can incumbent companies increase the likelihood of successful implementation of sustainable business model innovation?

Abstract

There is increasing pressure on incumbent companies to innovate their business to include sustainability, thereby creating social, environmental as well as economic value. This requires companies to innovate their existing business model to include sustainability, known as sustainable business model innovation (SBMI). This study aimed to develop insights and new understanding into how incumbent companies implement SBMI, thereby contributing to the emergent literature relating to SBMI implementation in incumbent firms. As incumbent firms implement SBMI, internal and external factors impede or facilitate the changes that are required. Identifying and understanding the challenges and the enablers that assist a company in overcoming the challenges, act as a guide to assist companies in increasing the likelihood of more successful implementation of SBMI. Furthermore, having insight into the value that is created through the successful implementation of SBMI, may provide impetus for incumbent firms to undertake the process. This was a qualitative study that explored the challenges, enablers, and outcomes of SBMI implementation. Data was gathered from 16 semi-structured interviews with participants that had experience of SBMI implementation in an incumbent firm. Participants were from three industry sectors in South Africa, namely, manufacturing consumer goods, financial services, and the retail sector, which allowed for comparison across the industry sectors. The qualitative data was systematically analysed using a hybrid thematic analysis approach. The study culminated in a conceptual framework of how incumbent firms implement SBMI. Similarities of the study to the literature added to the existing body of theory and the differences identified five potential refinements to the literature, relating to external challenges, internal enablers, and internal outcomes.