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Context-Based Design – A Business Model Architecture for an Innovation Centre in the Energy Transition

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This research contributes to the development of business model architectures that are responsive to the needs of organisations focused on innovation for the energy transition, which is essential for sustainability. It expands research on considering context in developing architectures and their guidance. Currently there is no business model architecture specifically designed for an innovation centre in the energy transition. The objective of this research was to explore a new business model architecture for an organisation in this context. Due to the worldwide need for sustainability, this research considered existing sustainable business model architectures as potential foundations for this context-based architecture. The research used a qualitative approach with semi-structured interviews. Interviews were conducted with experts in the energy transition and in business models. The findings from the interviews identified the elements of context, the components and applicable guidance, and the interrelationships between these components that were a fit with this context. The research concluded that the Flourishing Business Canvas provides a good foundation for a business model architecture that can be adapted for the context. Values, as introduced by the Business Innovation Kit, is added as a component. Using this structure, the thesis provides an architecture with context-specific adaptations and guidance. Innovation centres in similar contexts could use this as a precedent and use significant parts of these recommendations in their own context-based architectures. This research provides an example of how context-sensitive adaptations and guidance can make business model architectures more useful to organisations and companies in their various contexts focused on sustainability. Future research could explore architectures and their guidance as related to other contexts.
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FINAL MASTER THESIS REPORT
Context-Based Design A Business Model Architecture
for an Innovation Centre in the Energy Transition”
Submitted in partial fulfillment of the requirement
of the degree Master of Business Administration Programme
International Business School of Hanze University of Applied Sciences, Groningen,
Netherlands
Student name : Eric Fath-Kolmes
Student number : 361270
Cohort : 2016-2018
Date of submission : 21st June 2018
Hanze Supervisors : Dr. Egbert Dommerholt and Dr. Arnd Mehrtens
TNO Supervisor : Drs. Henk Ensing
Assessor : Dr. Beata Kviatek
Co-Assessor : Dr. Ning Ding
Number of words : 21700
Email : e.m.fath-kolmes@st.hanze.nl
Eric Fath-Kolmes
Student Number: 361270
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Acknowledgements
I would like to thank my supervisors for this project, Dr. Egbert Dommerholt and
Dr. Arnd Mehrtens. They provided continual support and encouragement
throughout the project. I learned a tremendous amount from them regarding the
importance of sustainability in business models.
I would like to thank my supervisor at TNO, Drs. Henk Ensing, and his colleague
Jeroen van den Berg, for the amazing opportunity to work on an interesting and
challenging project. They and the other staff at TNO were always friendly,
encouraging, and willing to take time to give valuable and applicable suggestions
for my thesis.
I would also like to thank the Flourishing Business Canvas community for helping
me sign up as a First Explorer and providing a wealth of resources regarding
sustainability and sustainable business models.
My colleagues in the MBA programme were also supportive throughout, and it was
a great team environment throughout our programme. I received good ideas and
feedback from them. I want to express a special thank you to Kiko Motomura for
his continual support and encouragement.
A thank you to the interviewees for this research. The wealth of thoughtful and
creative perspectives provided are what made this research. I hope these people
can keep sharing their knowledge with others and helping people like me feel
motivated to change the world for sustainability.
I would like to express my gratitude to my family and friends. Margarita Bernal
Cabas, my wife, and my parents, Tom and Jo-Ann, were always there for me and
happy to give ideas and feedback at any time. I would also like to thank my very
good friend Jeremy Burman. He and my wife helped introduce me to the world of
research, and Jeremy generously gave his skilled input to help me improve my
thesis.
Eric Fath-Kolmes
Student Number: 361270
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Abstract
This research contributes to the development of business model architectures that
are responsive to the needs of organisations focused on innovation for the energy
transition, which is essential for sustainability. It expands research on considering
context in developing architectures and their guidance. Currently there is no
business model architecture specifically designed for an innovation centre in the
energy transition. The objective of this research was to explore a new business
model architecture for an organisation in this context. Due to the worldwide need
for sustainability, this research considered existing sustainable business model
architectures as potential foundations for this context-based architecture. The
research used a qualitative approach with semi-structured interviews. Interviews
were conducted with experts in the energy transition and in business models. The
findings from the interviews identified the elements of context, the components and
applicable guidance, and the interrelationships between these components that
were a fit with this context. The research concluded that the Flourishing Business
Canvas provides a good foundation for a business model architecture that can be
adapted for the context. Values, as introduced by the Business Innovation Kit, is
added as a component. Using this structure, the thesis provides an architecture
with context-specific adaptations and guidance. Innovation centres in similar
contexts could use this as a precedent and use significant parts of these
recommendations in their own context-based architectures. This research provides
an example of how context-sensitive adaptations and guidance can make business
model architectures more useful to organisations and companies in their various
contexts focused on sustainability. Future research could explore architectures and
their guidance as related to other contexts.
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Student Number: 361270
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Table of Contents
Acknowledgements ............................................................................................ 2
Abstract ............................................................................................................... 3
List of Figures ..................................................................................................... 6
List of Tables ....................................................................................................... 6
1. Introduction .................................................................................................. 8
1.1. Problem Statement ................................................................................... 8
1.2. Research Objective ................................................................................ 10
1.3. Research Questions ............................................................................... 11
2. Literature Review ....................................................................................... 11
2.1. Business Models .................................................................................... 12
2.2. Context .................................................................................................... 13
2.3. Elements of a Business Model Architecture ........................................ 14
2.3.1. Components ..................................................................................... 14
2.3.2. Interrelationships ............................................................................. 24
2.4. Conceptual Framework .......................................................................... 25
3. Methodology ............................................................................................... 26
3.1. Research Approach ................................................................................ 26
3.2. Sample and Sampling Technique.......................................................... 27
3.3. Data Collection Instruments .................................................................. 29
3.4. Data Collection Procedure ..................................................................... 32
3.5. Data Analysis .......................................................................................... 33
3.6. Validity and Reliability ............................................................................ 34
4. Findings and Analysis ............................................................................... 36
4.1. Current Business Model Benefits and Issues ................................... 36
4.2. Context .................................................................................................... 37
4.3. Components ............................................................................................ 39
4.4. Components Perspective: Measurement .......................................... 46
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4.4.1. Goals ................................................................................................. 46
4.4.2. Revenue Streams ............................................................................. 47
4.4.3. Benefits ............................................................................................. 48
4.4.4. Costs ................................................................................................. 50
4.4.5. Values ................................................................................................ 50
4.5. Components Perspective: Product, Learning, and Development ... 52
4.5.1. Value Proposition ............................................................................. 52
4.5.2. Value Co-Creations .......................................................................... 52
4.5.3. Value Co-Destructions ..................................................................... 54
4.6. Components Perspective: Stakeholders ........................................... 55
4.6.1. Stakeholders ..................................................................................... 55
4.6.2. Ecosystem Actors ............................................................................ 58
4.6.3. Needs ................................................................................................. 58
4.6.4. Relationships .................................................................................... 58
4.6.5. Channels ........................................................................................... 59
4.7. Components Perspective: Process .................................................... 59
4.7.1. Activities ........................................................................................... 59
4.7.2. Resources ......................................................................................... 60
4.7.3. Partnerships ..................................................................................... 62
4.7.4. Governance ....................................................................................... 63
4.7.5. Biophysical Stocks........................................................................... 64
4.7.6. Ecosystem Services ......................................................................... 66
4.8. Interrelationships.................................................................................... 66
5. Conclusions ................................................................................................ 68
5.1. Context .................................................................................................... 70
5.2. Components ............................................................................................ 71
5.3. Interrelationships.................................................................................... 77
6. Recommendations ........................................................................................ 78
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7. Discussion ..................................................................................................... 82
References ........................................................................................................ 85
List of Figures
Figure 1: Triple Layered Business Model Canvas (TLBMC), image from Joyce
and Paquin (2016). ............................................................................................. 17
Figure 2: Flourishing Business Canvas v2.0 (used under license for researcher
and image taken from the provided resources). .................................................. 18
Figure 3: Business Innovation Kit’s canvas, image from UXBerlin (2016). ......... 19
Figure 4: Research overview of the business model architecture, as guided by
values and within a context. The number of components and their
interrelationships are examples only. Graphic developed by researcher. ........... 25
Figure 5: Internal interview questions and their connection to Sub-Research
Question 1. ......................................................................................................... 29
Figure 6: External interview questions and their connection to Sub-Research
Questions 2-4...................................................................................................... 30
List of Tables
Table 1: Perspectives representing the areas of a company (Jones & Upward,
2014; Upward & Jones, 2016). ........................................................................... 15
Table 2: SBM architectures identified by Lüdeke-Freund and Dembek (2017). .. 16
Table 3: Listing of SBM-specific and institutional components to be considered.
Table provided by researcher. ............................................................................ 24
Table 4: Information regarding experts who participated in the research. ........... 28
Table 5: Internal interview questions and their relevance to the research. ......... 30
Table 6: External interview questions and their relevance to the research. ........ 31
Table 7: External interview method and details per interviewee. ........................ 32
Table 8: Examples of codes and the corresponding phrases from the interviews.
............................................................................................................................ 34
Table 9: Findings - Perspective: Measurement ................................................... 42
Table 10: Findings - Perspective: Product, Learning, and Development ............ 43
Table 11: Findings - Perspective: Stakeholders .................................................. 44
Table 12: Findings - Perspective: Process .......................................................... 45
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Table 13: Sub-Research Questions (SRQs) of the research. ............................. 69
Table 14: Elements of context identified in this research. ................................... 70
Table 15: Guidance for each component within the Measurement perspective. . 73
Table 16: Guidance for each component within the Product, Learning, and
Development perspective. .................................................................................. 73
Table 17: Guidance for each component within the Stakeholders perspective. .. 74
Table 18: Guidance for each component within the Process perspective. .......... 76
Table 19: Guidance for interrelationships in the context-based architecture. ...... 78
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1. Introduction
1.1. Problem Statement
The Hybrid Energy System Integration (HESI) facility is an innovation centre in
Groningen, Netherlands, which operates under the aegis of the Netherlands
Organization for Applied Scientific Research (TNO). HESI’s mission is focused on
catalyzing developments within the energy transition, which is the long-term
structural shift from fossil-fuel to renewable energy sources and systems (TNO,
2017a).
HESI staff have identified that the current business model does not sufficiently
reflect their objectives, values, or methods of operation. As a result, they are
seeking alternative approaches. The purpose of this thesis is therefore to provide
HESI’s decision-makers with analysis and evidence for a business model
architecture that better fits their specific context.
HESI serves its stakeholders by providing an advanced facility, and supporting
services, for innovators to test their new energy transition projects. It does so
following the same vision as its parent organisation, TNO, which is focused on
enhancing industry and society in a sustainable way (TNO, 2017b). HESI’s facility
is in Groningen, Netherlands. It is a small organisation with fewer than 10 people
working directly for it. However, TNO is a larger organisation with over 2,000
employees, and the HESI staff are TNO staff. While HESI is in the energy sector,
it is different from energy utilities, as HESI provides innovation services and testing
equipment but is not involved in any power generation or distribution. Additionally,
HESI’s focus on the energy transition means it is targeting sustainable energy
solutions, whereas existing energy companies likely need to still support significant
investment and infrastructure in fossil-fuel based sources.
HESI focuses on connecting innovation companies with other areas of TNO,
providing expert support to innovators, and partnering with other organisations.
However, the present evaluation metric is monetary: investment payback within a
certain number of years. This then drives how they operate and sell their services,
since their offerings to customers are entirely built around investment recovery.
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The present evaluation scheme conflicts with current operations because, in
addition to following TNO values, HESI is also looking to find better ways to
connect with stakeholders with similar values and create the best value for them.
HESI staff believe that how their company operates and creates value needs to be
aligned with HESI’s vision. Their present business model prevents them from doing
that: simply put, it focuses on and rewards only the monetary aspect.
Since their launch in January 2017, HESI has used the Business Model Canvas
(BMC), developed by Osterwalder and Pigneur (2010), as the framework for their
business model. They selected the BMC because it is a very well recognized tool
for business model development and is widely used in organisations (Foss &
Saebi, 2017b; Lüdeke-Freund & Dembek, 2017; Upward & Jones, 2016).
The BMC assumes a profit motive: it is composed of nine components that
collectively indicate how an organisation seeks to make money. Each component
represents part of an organisation’s plan, and the components are visually
represented together to make it easy to understand (Osterwalder & Pigneur, 2010).
This visual representation is commonly referred to as a canvas. Organisations then
fill in their own specific information into each component of the canvas and use the
completed canvas as a planning document.
Examples of components from the BMC include the Value Proposition,
Partnerships, and Customer Segments. These components have various links
between each other their interrelationships and collectively these components
and interrelationships can be understood as the business model architecture (Foss
& Saebi, 2017a). For simplicity, these interrelationships are usually not visually
represented on a canvas.
The conflict for HESI is the BMC’s assumption that all the components are related
to driving profit. Their concern is also widely shared: secondary literature
demonstrates that there is increasing concern for organisations to have a focus on
shared/multiple value creation and sustainability. This is driving research on new
ways to design business models, focused on capturing environmental, social, and
economic value for multiple stakeholders (Bocken et al., 2014). The main driver for
these trends, especially for the energy transition, is that our world is undergoing
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global warming, and there is an increasing focus on ways to reduce emissions into
our environment.
As of 2015, the power generation sector remained the main contributor of
greenhouse-gas emissions (International Energy Agency, 2017). Of particular
relevance to HESI is that in 2016 the total emissions in the Netherlands increased,
largely due to increased use of natural gas and increased electricity production
(Centraal Bureau voor de Statistiek, 2017). Yet HESI’s present metrics for success
do not encourage it to help reduce these emissions.
Authors such as Kramer and Porter (2011), and Jonker (2012), have identified the
importance of shared and multiple value creation for organisations seeking to
address sustainability, which considers value created for stakeholders rather than
for shareholders. In recent years, researchers have also developed new business
model architectures to better capture the concepts of shared values and
sustainability (Lüdeke-Freund & Dembek, 2017). However, while these sustainable
architectures appear to provide an answer to some of HESI’s business model
concerns such as connecting with their value of sustainability these
architectures, and the BMC, do not fully consider context. In other words, these
architectures do not fully consider whether companies or organisations, such as
innovation centres, may differ in their needs compared to organisations in other
sectors. As HESI looks to ways that it could update its business model, a new
business model architecture could be a better fit with HESI’s context, including the
need for sustainability.
1.2. Research Objective
Based on the identified problem, the objective of this research was to develop a
new business model architecture that would be a better fit for an innovation centre
in the energy transition. This new architecture was comprised of the components
and their interrelationships that fit this context, along with any applicable guidance
to organisations. The architecture was also designed for sustainability. Innovation
centres in the energy transition could then take this new architecture and use it in
developing their own business model.
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1.3. Research Questions
What are the business model components and their interrelationships that would
comprise a new business model architecture for an innovation centre in the energy
transition?
Sub-Research Questions
1) What does the existing business model look like, in terms of its architecture
and focus areas, and what are its benefits and issues?
2) What are the context elements that play a role in the design choices for the
business model architecture for an innovation centre in the energy
transition?
3) What would the components be in a new business model architecture,
based on the identified context?
4) What are the interrelationships between the newly identified components,
based on the identified context?
Sub-Research Question (SRQ) 1 is focused on expanding the information
regarding the current business model architecture in use by HESI, at the time of
this research study. This helped understand the current benefits and issues with
the architecture, which assisted in understanding the need for a new architecture
and on what areas it needs to focus.
SRQ 2 then looks to the initial assumptions of this research that elements of context
for this organisation are “innovation centre” and “energy transition”, to validate or
exclude these ideas, and then determine if there are additional elements of context
that need to be considered.
SRQs 3 and 4 explore what a new architecture for this context might be and look
to build the components and their interrelationships, which are the two fundamental
elements of an architecture.
2. Literature Review
This literature review builds an understanding of business models and business
model architectures, and how context is relevant for business models. The review
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then identifies from literature a list of business model components focused on
sustainability. This list provides ideas to consider when developing components for
a new architecture. Finally, the review provides information about the second
element of architectures: interrelationships.
2.1. Business Models
To identify the elements of business model architecture, it first needs to be
understand why business models are important and the definition of a business
model. All companies have a business model, even if they do not explicitly state it
(Teece, 2010), and “[a] better business model often will beat a better idea or
technology” (Chesbrough, 2007, p. 12). However, there is still no established
consensus on the definition of a business model (Foss & Saebi, 2017b; Massa,
Tucci, & Afuah, 2016). This research uses the definition of a business model to be
that for a business it is the “design or architecture of the value creation, delivery,
and capture mechanisms it employs” (Teece, 2010, p. 172). As shown by Foss and
Saebi (2017a), Teece captures the concept of many other definitions, and the
concept can be even better defined by clarifying that the term architecture is based
on the definition proposed by Zott and Amit (2010). Their paper focuses on how a
business model is comprised of interdependent activities, such as links between
components, and activities beyond the boundaries of the organization (Zott & Amit,
2010). However, since the term business model is frequently used to refer to the
business model that an organisation is actively using, this paper refers to Teece’s
business model definition as the “business model architecture”. This business
model architecture is comprised of two elements: the components and the
interrelationship between the components (Foss & Saebi, 2017a). An example is
the BMC, which specifically identifies business model components and their
interrelationships. Many of these architectures are visually represented in a canvas
format for ease of use. As seen from a multitude of web articles, social media
discussions, and research articles on the topic of canvases, businesses very
commonly use these canvases to design their business models. Although there
are different ways of representing business models, this paper focuses on the
business model architectures that directly identify the components of a business
model. Important questions are: to what organisations are these architectures
applicable, and are there differences based on the context of the organisations?
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2.2. Context
An organisation functions in a particular environment in other words, in a context.
A general understanding of context is that it can characterise the situation of an
entity, and what aspects are important will change from situation to situation (Dey,
2001). Context in this research is therefore defined as the elements of an
organisation and its environment that may influence what components, and their
interrelationships, are needed for the organisation’s business model architecture.
These elements would differentiate the architecture developed from architectures
for different kinds of organisations with different elements of context. Sound
business planning must consider the relevant elements in the social, political, and
economic environment.
The literature indicates that some authors have taken some contextual elements
into account in the construction of business model architectures, but there has not
been a comprehensive enough approach. Further, while some authors do mention
some contextual elements, these elements are not then identified in the
components of the architecture created. For example, while Osterwalder (2004)
referenced the idea of e-business and Pigneur (2002) referenced m-business,
these concepts do not appear in their main article for business model generation,
which details the BMC (Osterwalder & Pigneur, 2010). There are examples of
context-based designs, guidance, or general topics related to business model
architecture: an architecture designed for airlines (Daft & Albers, 2013) and
guidance provided for the BMC as applicable for the circular economy
(Lewandowski, 2016) and for energy utilities (Bolton & Hannon, 2016; Helms,
2015; Richter, 2013; Wüstenhagen & Boehnke, 2008). As well, there are
classification papers for the energy transition, such as business model types
(Huijben & Verbong, 2013) and a business model classification framework for the
household sector (Hamwi & Lizarralde, 2016). There are also articles that classify
business models based on what organisations generally do, such as with Malone
et al. (2006) and the business model archetypes for sustainability identified by
Bocken et al. (2014). However, these articles do not include any designs for
business model architectures as related to the context of an innovation centre in
the energy transition. Of the identified articles, only Daft and Albers (2013) appear
to propose a new business model architecture including a detailed discussion
about components. Additionally, Daft and Albers (2013) only consider the type of
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company airlines and do not appear to consider whether any other contextual
factors may influence the architecture. There appears to be research gaps in
considering the elements of context that may influence a business model
architecture and how the architectures can be designed for specific contexts.
An example of a contextual element not sufficiently considered is institutions. As
defined by Nooteboom (2000, pp. 92-93), institutions consist of “norms and values
of conduct, habits, and lifestyles”. There are various sub-elements under the
general element of institutions. One of these is the regulatory environment. As
described by Provance, Donnelly, and Carayannis, (2011), the regulatory
environment can play a role in what business models are effective for an
organisation. The article shows how institutions can influence the choice of
business model, but it does not examine how these elements can affect the design
itself of the business model architecture. This is but one example of an institutional
element for consideration as part of context. As noted by Provance, Donnelly, and
Carayannis (2011), there are two important dimensions within institutions: statism
and corporatism. They describe “statism” as the way in which government can
directly influence organisations, and “corporatism” as the structural organization of
society within a nation-state. Each of these dimensions suggest possible
contextual elements in the construction of the business model architecture.
2.3. Elements of a Business Model Architecture
2.3.1. Components
Next, an understanding is needed of the elements of business model architectures.
This allows an evaluation of whether re-selecting and identifying these elements,
based on context, developed a business model architecture that is different from
the current generic architectures. As discussed earlier, a business model
architecture consists of components and the interrelationship between these
components, where it is understood from Aziz, Fitzsimmons, and Douglas (2008)
that components are the key elements and dimensions of a business model. To
understand how these components represent a business, Upward and Jones
(2016) outlined four perspectives. The components each fit within a perspective,
and the components in each perspective provide coverage of the perspective. The
four perspectives represent the main areas of a business, so the components
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provide coverage of these areas (Upward & Jones, 2016). These perspectives are
presented in Table 1.
Table 1: Perspectives representing the areas of a company (Jones & Upward,
2014; Upward & Jones, 2016).
Based on the need for sustainability, the focus should be on business models
designed to fit this need. Upward and Jones (2016) include a detailed discussion
on the shortcomings of monetary-based architectures, such as the BMC, and why
architectures need to be significantly revised to be suitable for sustainability. This
research therefore does not consider architectures that are not designed with
sustainability in mind. There is an emerging field of research on Sustainable
Business Models (Lüdeke-Freund & Dembek, 2017), which can be used by
businesses to include the new dimensions needed to represent sustainability.
Using the definition of a Sustainable Business Model (SBM) from Bocken et al.
(2014, p. 44), these models “capture economic, social and environmental value for
a wide range of stakeholders”. Researchers have built on this new definition of
value to modify and develop business model components to capture these new
concepts. In developing a new architecture, it is important to consider what
components already exist as ideas for inclusion in the architecture (Osterwalder,
2004).
This research considers the components in the canvas-tools, or SBM architectures,
identified by Lüdeke-Freund and Dembek (2017), and listed in Table 2. Their article
is a comprehensive review of the field, especially considering its recency and
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because Dr. Lüdeke-Freund is one of the main authors in the field of SBMs.
Additionally, this review provides a detailed discussion on practical tools to assist
with the development of SBMs, including architectures. Other prominent review
articles (Bocken et al., 2014; Boons et al., 2013; Boons & Lüdeke-Freund, 2013;
Lüdeke-Freund, 2010; Schaltegger, Hansen, & Lüdeke-Freund, 2016;
Schaltegger, Lüdeke-Freund, & Hansen, 2012; Schaltegger, Lüdeke-Freund, &
Hansen, 2016) identify components that generally align with components in Table
3, which is based on the SBM architectures in Table 2. Evans et al. (2017) only
references the BMC and indicates there are few sustainability-driven business
model tools. Based on these review articles, the architectures in Table 2 seem to
be the main existing SBM architectures, from which it is possible to identify the
components and relationships that need to be considered for a potential
architecture.
Table 2: SBM architectures identified by Lüdeke-Freund and Dembek (2017).
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Figure 1: Triple Layered Business Model Canvas (TLBMC), image from Joyce and
Paquin (2016).
The SBM architecture developed by Joyce and Paquin (2016), the Triple Layered
Business Model Canvas (TLBMC), is displayed in Figure 1. The authors indicated
that this model uses the BMC for the economic layer but builds new layers for
environmental and social perspectives. This architecture therefore adds several
new potential components, reflected in Table 3.
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Figure 2: Flourishing Business Canvas v2.0 (used under license for researcher and
image taken from the provided resources).
The next SBM that develops further components is the Flourishing Business
Canvas v2.0 (FBC), Figure 2. This canvas, still under development, is based on
the ontology created by Upward and Jones (2016). Several new components for
sustainability are identified, and names of components taken from the BMC are
modified, to fit with Upward and Jones’ (2016) definition of sustainability.
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Figure 3: Business Innovation Kit’s canvas, image from UXBerlin (2016).
Another recent development in business model architecture is examining why a
company chooses to take certain directions, such as focusing on sustainability,
when innovating their business model. Breuer and Lüdeke-Freund (2015)
introduced the concept of values-based innovation to provide a normative
understanding of these decisions. As indicated by these authors, companies use
concepts like their mission and value statements in areas such as human
resources, but these ideas are lacking in business model development. Just as
Teece (2010) indicated that all companies have business models, Breuer and
Lüdeke-Freund (2015) identify that all people have values, as do companies, which
are of course run by people. The authors indicate that concepts such as SBMs are
derived from values, be it the desire to improve sustainability or to make more profit
via sustainability, and these values need to be explicitly stated and considered in
the business model innovation process. This gives us the direction we need to
develop business models, such as choosing partners with similar values (Breuer &
Lüdeke-Freund, 2016). These authors’ addition of values-based innovation to
business models is a relatively new concept, but the idea of values being important
to organizations has been discussed by authors previously, and has been shown
to bring success to companies, including their short- and long-term profit. Collins
and Porras (1996) define core values as essential tenets for an organisation that
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are deeply held and will seldom change. These values are significant shaping
forces for the company and are so important that, for example, the company would
change markets to fit its values, rather than change its values to fit a market (Collins
& Porras, 1996, 2005). Collins and Porras (2005) indicate that these ideologically
driven companies consider profit to be necessary for the organisation to survive,
but not as the purpose of their operations. Relatedly, values-driven companies
have been shown to do significantly better than their profit-driven counterparts,
throughout short- and long-term timeframes (Sisodia, Wolfe, & Sheth, 2003). In
summary, Breuer and Lüdeke-Freund’s (2016) extension of values-based
innovation to business models brings an important layer for the long-term focus of
the company.
The Business Innovation Kit (BIK) by Breuer and Lüdeke-Freund (2016), shown in
Figure 3, is based on the BMC by Osterwalder and Pigneur (2010), and adds the
layer of their values-based concept. One of the main new components is the
grounding for the canvas by explicitly stating the values of the organisation, which
allows values-based innovation for the rest of the canvas and for the organisation’s
new projects, products, or other decisions (Breuer & Lüdeke-Freund, 2016).
Additional adjustments are the concept of stakeholder segments, rather than
customer segments on the BMC, and making sure to consider the underlying
values of stakeholders, such as customers, and how that can affect the value
proposition.
While values have now been shown to be an important consideration in developing
a business model, a broader perspective of this new layer may need to be
considered. As seen from the section on context, institutions can have an influence
in the choices made for business models. This can be combined with North’s
(1990) identification that institutions help define the opportunities that organizations
can then take advantage of. It is proposed in this thesis that a more complete
perspective is gained by considering an institutional layer. As an example,
Nidumolu, Prahalad, Rangaswami (2009) show how organizations can use
emerging norms to identify opportunities for building their business models. Stubbs
and Cocklin’s (2008) definition of cultural attributes already includes the concepts
of values, norms, and institutions, along with the need to connect these to
stakeholders to drive towards sustainability. Based on the above, identifying how
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institutions can directly affect the business model helps in developing it and
understanding what assumptions it is built on. An example is the regulatory
environment, within the concept of statism from Provance, Donnelly, & Carayannis
(2011), which expresses how governments can have a direct role in business
activity. It can then be understood from Nooteboom’s (2000) definition of
institutions, what elements from values, norms, habits, and lifestyles can have a
direct role in the business model architecture. Breuer and Lüdeke-Freund (2016)
and Provance, Donnelly, and Carayannis (2011) are therefore examples of values
as well as formal norms, in this case regulations. Another example of a formal norm
that could have an influence is any special taxation rules for the industry, as seen
from Zhang (2001). The components to consider are therefore formal norms and
values, and there may be other components not yet researched or developed on
how institutions may be applicable in business models.
Synthesizing from the above literature on SBMs and on the concept of institutions,
Table 3 provides a list of components as options to consider in developing the
business model architecture, as designed to support sustainability.
Based on the literature in the Context section as to which of these components
have already been researched for this context or related contexts, it can be seen
that:
While the BMC has had some context-specific research in the energy
sector, there does not appear to be research for an innovation centre for the
energy transition.
There do not appear to be peer-reviewed studies of the identified SBMs
within the energy sector.
There does not appear to be discussion in literature as to the exact priority of
components relative to each other. Additionally, since each of the components
represents a unique part of the business, it would seem important to ensure an
organisation considers each component in the business model. Some business
model research, such as Osterwalder and Pigneur (2010), does provide guidance
per component and ideas for certain types of organisations. This would seem the
closest to the idea of prioritization and instead provides guidance on how
organisations can understand and use these components, rather than looking into
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explicit priority ranking of components. This guidance would seem more effective
for organisations as it likely provides much more information than just numerical
rankings.
Potential Business
Model Components
Source
Architecture
Activities
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Benefits
Upward and Jones (2016)
FBC
Biophysical Stocks
Upward and Jones (2016)
FBC
Channels
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Costs
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Customer Segments
Osterwalder and Pigneur
(2010); Joyce and Paquin
(2016)
BMC; TLBMC
Ecosystem Actors
Upward and Jones (2016)
FBC
Ecosystem Services
Upward and Jones (2016)
FBC
Employees
Joyce and Paquin (2016)
TLBMC
End-of-Life
Joyce and Paquin (2016)
TLBMC
End-user
Joyce and Paquin (2016)
TLBMC
Environmental Benefits
Joyce and Paquin (2016)
TLBMC
Environmental Impacts
Joyce and Paquin (2016)
TLBMC
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Formal Norms
Breuer and Lüdeke-Freund
(2016) and Provance,
Donnelly, and Carayannis
(2011)
<Not yet used>
Functional Value
Joyce and Paquin (2016)
TLBMC
Goals
Upward and Jones (2016)
FBC
Governance
Upward and Jones (2016)
FBC
Local Communities
Joyce and Paquin (2016)
TLBMC
Materials
Joyce and Paquin (2016)
TLBMC
Needs
Upward and Jones (2016)
FBC
Partnerships
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Relationships
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Resources
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Upward and
Jones (2016); Joyce and
Paquin (2016)
BIK; BMC; FBC;
TLBMC
Revenue Streams
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Joyce and
Paquin (2016)
BIK; BMC; TLBMC
Scale of Outreach
Joyce and Paquin (2016)
TLBMC
Social Benefits
Joyce and Paquin (2016)
TLBMC
Social Impacts
Joyce and Paquin (2016)
TLBMC
Social Value
Joyce and Paquin (2016)
TLBMC
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Societal Culture
Joyce and Paquin (2016)
TLBMC
Stakeholders
Breuer and Lüdeke-Freund
(2016); Upward and Jones
(2016)
BIK; FBC
Supplies and Out-
sourcing
Joyce and Paquin (2016)
TLBMC
Touchpoints
Breuer and Lüdeke-Freund
(2016)
BIK
Use Phase
Joyce and Paquin (2016)
TLBMC
Value Co-Creations
Upward and Jones (2016)
FBC
Value Co-Destructions
Upward and Jones (2016)
FBC
Value Propositions
Breuer and Lüdeke-Freund
(2016); Osterwalder and
Pigneur (2010); Joyce and
Paquin (2016)
BIK; BMC; TLBMC
Values
Breuer and Lüdeke-Freund
(2016)
BIK
Table 3: Listing of SBM-specific and institutional components to be considered.
Table provided by researcher.
These identified components are only the names, and as noted by Peric, Durkin,
and Vitezic (2017), there is no consensus on the descriptions used by authors for
each component. It is beyond the scope of this thesis to do an in-depth review to
assess the different alternatives to the interpretation of each component. From the
definition of a business model architecture, it is not complete to consider only the
components themselves, since an understanding of how they are interrelated is
also needed.
2.3.2. Interrelationships
The second element of an architecture is the interrelationships. However, there
appears to be very limited discussion and recognition in literature as to the
interrelationships between components and what these relationships mean.
Almost all the architectures presented discuss or show the components but provide
limited to no understanding of the interrelationships between these components.
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The exceptions were the ontologies by Osterwalder (2004) and Upward and Jones
(2016), which discuss how components are connected to each other and visually
show the multitude of links. These ontologies indicate that these interrelationships
represent how the components affect each other. A change in the business model
as related to a component then needs to be considered in relation to potential
change to any linked components in the architecture (Osterwalder, 2004;
Osterwalder & Pigneur, 2010; Upward & Jones, 2016).
2.4. Conceptual Framework
Figure 4: Research overview of the business model architecture, as guided by
values and within a context. The number of components and their interrelationships
are examples only. Graphic developed by researcher.
Figure 4 represents the concepts explored in the Literature Review and a structure
of how to develop a new architecture, based on context. Context shapes the
architecture that is the best for a certain organisation, and this research identifies
what the elements of context may be. Values provide additional guidance for an
organisation, and the following sections discuss how these values can be
considered directly in an architecture. The architecture is comprised of components
and their interrelationships, which this research identifies and for which it gives
guidance.
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From the main research question, Figure 4 shows how in the process of developing
a new architecture, it becomes necessary to understand the role of values in the
architecture and then how these two concepts are shaped by the context for which
the architecture is being designed. SRQ 2 first establishes the understanding of
the context layer and SRQs 3 and 4 then examine the components and
interrelationships of the architecture. The concept of values is included within SRQ
3’s exploration of components, since values is being explored as a potential
component in the architecture. SRQ 1 is focused on the need to explore this new
architecture, and therefore the structure as visualized in Figure 4.
3. Methodology
This section reviews the process used for data collection and analysis for this
research, along with the steps taken to maintain validity and reliability for the study.
The purpose of this process was to answer the main research question and sub-
research questions, to lead to the sections on conclusions and recommendations.
Included in this section is a detailed discussion of the steps taken for the interviews
and the data analysis approach relevant to a qualitative study.
3.1. Research Approach
As this study is focused on developing a business model architecture for
organisations in a certain context, this research follows an interpretivist paradigm.
Since there is limited existing literature applicable to an innovation centre in the
energy transition, it would seem appropriate to gain insights and opinions from
people in the field as to what this business model architecture might look like.
Interpretivism is based on the belief that social concepts are very subjective and
are very dependent on the perceptions of people (Collis & Hussey, 2013).
Interpretivism recognizes that the opinions from these experts, as well as the
opinions of the researcher, will be subjective and will also be influenced by even
the nature of the study (Walsham, 1995). It would not seem possible to use
objective data to test prior hypotheses or theories, which are needed for a positivist
approach (Walsham, 1995).
Due to the lack of previous studies on this context, and with the BMC not being
sustainability-focused and being predominant in the business field (Foss and
Saebi, 2017a; Upward and Jones, 2016), the area of study of this research seems
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very new and not yet well defined. This research is therefore exploratory and is
focused on developing a proposed framework (Collis & Hussey, 2013). Collis and
Hussey (2013) also indicate that exploratory research does not focus on testing
these concepts, which aligns with the view of interpretivism. Semi-structured
interviews were used to gain rich information from the experts, and,
correspondingly, this research followed a qualitative research approach.
Generally following the COREQ checklist for qualitative research, as developed by
Tong, Sainsbury, and Craig (2007), the following sections outline the design of the
data collection, analysis, and steps for validity and reliability.
3.2. Sample and Sampling Technique
To select participants, the researcher used a combination of purposive and
snowball sampling, as defined by Collis and Hussey (2013). The researcher
reached out to several people knowledgeable in the field to participate in the
research and recommend other potential participants. The researcher knew of
these participants from the researcher’s network of contacts including individuals
working at Hanze University of Applied Science, TNO, University of Groningen,
and authors who had papers published in relevant areas. Some of these contacts
recommended other individuals in the field who would be able to provide insights
for the research. The researcher needed experts in business models and the
energy transition, so to determine whether to invite a person for this research, the
researcher considered their:
Work or research involvement in the following fields:
o Energy transition
o Innovation centres
o Sustainable Business Models, new business models, and/or
business models
Work or research experience, including:
o Current position at their organisations
o Years of work or research experience in the identified fields above.
As people involved in these fields for long periods of time and holding more senior
roles, these experts have built up, and continue to develop, considerable
knowledge in applicable areas for this research. This was seen in the interviews by
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the breadth and depth of insights provided, including unique and valuable guidance
for innovation centres in the energy transition.
The information regarding the experts who participated in this research is
summarized in Table 4.
Table 4: Information regarding experts who participated in the research.
The researcher also looked for people who could likely provide a different
perspective compared with the other potential interviewees. This was important to
ensure that potential viewpoints that could be very valuable for this research were
not missed. The researcher generally approached people with knowledge of the
energy transition from a business perspective, as they would likely have a better
understanding of what is needed for businesses in this field. Any individuals
included who did not have strong experience in the energy transition was because
of their significant involvement with sustainable business models.
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Invitations for the interviews were sent via e-mail and in-person, and the interviews
were conducted either face-to-face, via telephone, or via Skype. The researcher
conducted a total of 10 interviews. For 4 others, the researcher could not find a
time that worked or did not receive a response to the e-mails. There were no
interviewees who refused to participate, and everyone appeared to be very
interested in the research and willing to share her or his thoughts.
3.3. Data Collection Instruments
For data collection, this research used two types of semi-structured interviews. The
interview questions applicable to SRQ 1 are indicated in Figure 5 and their
relevance to the research in Table 5. These questions were presented to an
internal interviewee with HESI. The interviews questions to answer SRQs 2-4 are
shown in Figure 6 and discussed in Table 6. These questions were presented to
the external experts, as discussed in the sample details in the previous section.
The steps and details for the internal and external interviews are discussed in the
following Procedure section.
Figure 5: Internal interview questions and their connection to Sub-Research
Question 1.
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Table 5: Internal interview questions and their relevance to the research.
Figure 6: External interview questions and their connection to Sub-Research
Questions 2-4.
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Table 6: External interview questions and their relevance to the research.
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3.4. Data Collection Procedure
Table 7: External interview method and details per interviewee.
To answer SRQ 1 related to the current business model, the researcher conducted
a face-to-face interview with one of the HESI staff members who developed the
existing business model and who, at the time of the research, was responsible for
day-to-day operations at HESI. This interview developed an initial understanding
of their business model and their challenges with it. This interview primarily relied
on open questions, as identified by Collis and Hussey (2013), to explore and gather
broad background information about the topic. Because the interview contained
organisation-sensitive information, the transcript is not included in the Appendices.
In collecting information to answer SRQs 2-4, this research conducted interviews
with the experts indicated in Table 7. The face-to-face interviews were done at the
interviewee’s workplace, either in their office or in a meeting room, and the Skype
interviews were done in a quiet environment on both sides, so there were no
interruptions. The interviews were conducted with only the researcher and
interviewee. The duration of the interviews was between approximately 40 minutes
and 1 hour and 15 minutes, with most being around 1 hour. Due to time constraints
for this research, there were no repeat interviews. Each interview was audio
recorded and then transcribed. The interviewees gave permission for the
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recordings, with the provision that the audio would be used only by the researcher.
To focus on the conversation, the researcher did not write any field notes during
the interviews. The researcher has ensured confidentiality of the interview results
from the experts by keeping the interview transcripts and the findings anonymous.
Table 7 summarizes this information and contains further details regarding the
procedures for the interviews.
3.5. Data Analysis
For data analysis of the interview transcripts, the researcher used the procedures
recommended by Collis and Hussey (2013) for qualitative data, in the following
steps:
1) Data reduction by coding. This is to understand the main concepts that
emerge from the transcripts.
2) Visually representing the reduced data. This gives a better perspective
on how the concepts are related and connected to each other. This
research will primarily use matrices to display the information.
3) Using the reduced and displayed data to draw conclusions. This
research will focus on the elements of context and the components and
interrelationships.
The researcher used the programme ATLAS.ti Version 8.1.3 for the coding
process for the data. This allowed the researcher to review the transcripts, attach
codes to segments of the interviews, and review concepts and common themes
that emerged. Coding usually needs several cycles (Saldaña, 2009), which the
researcher did based on learnings on what codes best fit the information. As
categorization is an important part of coding (Saldaña, 2009), codes were focused
towards the following areas, based on the SRQs:
From SRQ 2: Elements of context
From SRQ 3: Names of components
From SRQ 3: Guidance per component
From SRQ 4: Interrelationships between components.
The interviewees frequently provided specific names for the elements of context
and components, but in general provided much richer information on the guidance
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for innovation centres, not always directly linked to a context, component, or
interrelationship. The researcher interpreted their meaning and applied the most
applicable term to the interview segment.
Table 8 contains examples of some of the codes generated and examples of
interviewee phrases that were connected to the code. The example codes are
grouped into components and context for reference.
Table 8: Examples of codes and the corresponding phrases from the interviews.
3.6. Validity and Reliability
As per Collis and Hussey (2013), validity is focused on keeping the research
connected with the main research objective and questions, and reliability on the
precision of the measurement for qualitative data collection and analysis. The
COREQ checklist (Tong, Sainsbury, & Craig, 2007) provides further guidance on
methods for improving validity and reliability, which this research used as follows:
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The researcher ran several pilot tests of the interview to confirm if the
questions could be understood and what information was useful for
interviewees to have in advance. One of the main feedback items was that
the list of potential components needed to be quite short, because a long
list was too time intensive for the people doing the pilot tests. Additional
feedback was that some of the terms used were identified as challenging to
understand, so it was helpful to provide examples or more detailed
descriptions of some of the concepts.
The interview transcripts were returned to each interviewee to confirm their
validity. Five interviewees responded, and the researcher updated the
transcripts with their minor corrections.
A pre-interview information document was provided by the researcher via e-
mail to experts, along with supplementary material and potential business
model components. These documents are provided in Appendices 1-3. The
researcher indicated that the potential elements of context and components
did not need to be followed or included, and that interviewees could come
up with their own thoughts on what might be important for this architecture.
The descriptions and definitions for each of the components are in the
articles from Osterwalder and Pigneur (2010) for components related to the
BMC, Jones and Upward (2014) and Van den Broeck (2017) for
components related to the FBC, and Breuer and Lüdeke-Freund (2016) for
the BIK. As there are obviously many different definitions in use for the
different components, the researcher did not bias the study by providing
definitions in any pre-interview material or to guide the interviews. This also
supported the open concept of interviewees being able to develop their own
components and/or definitions as applicable. If interviewees asked specific
questions about the pre-interview list of potential components, the
researcher would explain using the definition from the applicable literature.
Most of the interviews were conducted face-to-face, which improved the
communication between researcher and interviewee. This also made it
easier to identify misunderstandings, since many of the interviewees spoke
English as an additional language.
To reduce bias in the interviews, the researcher endeavoured to take a
neutral position and be open to the interviewees’ different perspectives. The
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researcher attempted to ask any probing questions in a non-leading
manner.
The interviewees were mainly from the Netherlands, and this helped focus
the research. Since the topic is about an innovation centre in the energy
transition located in the Netherlands, it was appropriate to have the
information come from sources and perspectives within this context. This
research was not focused on comparisons between contexts, but rather on
gaining these specific recommendations for an organisation in the context.
4. Findings and Analysis
This section includes the findings from interviewees and the corresponding
analysis. Included first are the results from internal interviews regarding the current
business model in use by HESI. The chapter then includes the results from the
expert interviews as to the potential elements of context, components, and
interrelationships to consider in designing an architecture for this context.
4.1. Current Business Model Benefits and Issues
The internal interview, using the 3 questions identified in Table 5, provided the
results and corresponding analysis below. These then lead to the Conclusions in
answering SRQ 1. This helped build the understanding of the current problem and
the need to answer the main research question.
The interviewee reported that HESI is currently using the BMC and has been since
HESI opened. The interviewee considered the benefits to be that this model is very
simple to use and that the interviewee feels very familiar and comfortable with
it. However, the interviewee noted that the current model does not fit with reality.
The business model needs to be connected to some of the overarching principles,
such as the mission and vision of the organisation. This builds an understanding
of how everything ties together, a concept that is missing from the BMC. The
connection of the business model with the overarching principles was identified by
the interviewee as important for HESI, as well as for TNO. TNO in general is
values- and sustainability-focused, although this was more so when the economy
was doing better, when money was more easily available through more projects
and more government funds. The interviewee considered it important personally,
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as well as for TNO, to find a way to have the monetary part in place and behind
them, so that they can focus on work to benefit society and sustainability.
These concerns regarding the BMC are reflected in literature, especially as related
to the BMC’s fit with sustainability. As mentioned in the Literature Review, Upward
and Jones (2016) do a detailed analysis of the BMC and show how it is lacking in
many areas on providing an architecture focused on sustainability. An organisation
can also benefit by directly recognizing its focus towards sustainability, as well as
how the organisation’s goals and values drive the business model (Breuer &
Lüdeke-Freund, 2016; Upward & Jones, 2016). The need for sustainability and the
specific context for HESI further support this research for an architecture that is a
better fit for this context.
4.2. Context
These results were from the expert interviews, in response to the first and second
interview questions as outlined in the Methodology. These lead to the Conclusions
to provide answers to SRQ 2.
Several interviewees spoke about how context was applicable in architecture
creation. Interviewee 2 indicated that the context needs to be characterized “before
creating a business model design and use it again when evaluating”.
Interviewee 3 cautioned not to focus just strictly on the defined context and thereby
have it limit you. Interviewees 1 and 9 noted that if the context is not ready to
support the design or elements of the business model, it will not work. Interviewee
9 added that context can be changed; however, stakeholders within the context
need to “consider you as one of them so they accept your recommendations to
make a change”.
Many interviewees supported considering the energy transition as an element of
context. Interviewees 4 and 6 considered there would be different implications for
a business model related to the energy transition. Interviewee 10 noted that for a
company related to energy management solutions, this changes the focus of the
business model. Interviewees 4 and 6 highlighted the importance of recognizing
planetary limits, represented in Doughnut Economics (Raworth, 2017).
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Interviewees 1 and 4 noted that people want to be more sustainable, self-
autonomous, and de-centralized.
Interviewees also supported innovation centre as an element of context.
Interviewee 6 considered it an element that would influence a business model
architecture. Interviewee 10 indicated that this architecture would be different from
ones for product-based or typical service-based companies. Interviewees 1, 4, 5,
and 8 also appeared to support this element. Interviewee 2 noted that the
innovation centre can be considered as operating on a more “meta level” as
compared to typical businesses. An innovation centre’s core is constant renewal.
They are usually connected to social challenges, with either a focus on technology
or on societal re-engineering. Interviewee 3 thought that the architecture developed
would be applicable to any innovation centre. Interviewee 1 indicated that context
will be influenced by many factors, and it could be challenging to represent it on
the business level.
There was a substantial amount of discussion on topics that would fit into the
category of institutions. Interviewee 3 indicated that we need to be aware that we
may have a “first world perspective”. The business model architecture as well as
the modelling itself may be relevant in this context but not if the organisation is in
a country at a very different stage in terms of its energy grid and how it approaches
the energy transition. Interviewee 9 discussed the role of the economic situation,
since globalization and the economic slowdown caused “many investments in
green technologies and green processes” to be halted or delayed. Policy is an
important part of context, in terms of how regional and local governments are
implementing sustainability. Interviewee 9 indicated it is important to understand
potential cultural aspects of context. It can be much easier in an innovation
environment where everyone is willing to change, but much more difficult in a more
traditional and change-resistant culture. Interviewee 6 said that the term “context”
could be considered more broadly as the institutional environment, including
current and future regulation, the school system, and links between organisations
and consumers. Interviewee 9 indicated that to create an “innovation atmosphere”,
an organisation “needs to have support from the surrounding system”.
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Based on the interviewees discussion about context, it seems that elements of
context can influence different layers of the architecture. The world-wide concern
about sustainability guided this research to look at business models designed for
sustainability. The context elements identified by Upward and Jones (2016)
environmental, social, and financial economy represent sustainability as
important for organizations. These are general elements of context applicable for
all businesses. An example is the Doughnut economics (Raworth, 2017) on how
all businesses need to appreciate planetary limits and do their part in recognizing
and being sustainable within these limits. However, there are also specific
elements of context that can differentiate groups of organisations. Examples are
seen from the models discussed in the Literature Review, outlining how context
elements such as industry can be considered for an architecture. In this case an
innovation centre in energy transition would be specific elements of context.
From the findings, and interpreting how these elements of context appeared to
influence the business model architecture, it appears that two areas were
influenced:
the structural layer, and
guidance for components and interrelationships.
The structural layer refers to the components and their interrelationships of the
business model architecture that would usually be represented visually as a
canvas. Guidance for components and interrelationships assists an organisation in
understanding the parts of the architecture when developing their business model.
This research started by following the approach of existing research on developing
a new architecture based on the structural layer, but now recognizes that the
guidance can also be distinct between contexts, even if the same architecture
structural layer is used in these contexts. This concept is addressed further in the
Conclusions and Recommendations sections outlining the architecture and the
corresponding guidance for the context.
4.3. Components
The following findings and analysis were in response to the third interview
questions for experts relating to the components to include in an architecture for
the identified context. The primary focus was on guidance for organisations to
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consider for the components. Findings were included only if they had specific
recommendations for this context. For example, findings that could be considered
general information for businesses were not included as, although interesting, they
were not relevant to this research. The researcher applied some interpretation and
summarizing of the information, including combining some topics
The Findings and Analysis are organised per component, with the components
categorised into the four perspectives of a business from Upward and Jones
(2016). Fitting these components within each of the perspectives then gives an
overall understanding of what components are related to what areas of the
business. Presenting the results per component gives the foundation for presenting
in the Conclusions section an answer to SRQ 3, with specific guidance per
component.
As stated in the Methodology, the definitions were not provided for each
component, as there are no agreed upon established definitions, and therefore
providing any specific ones in advance or guiding the interviews based on a certain
set of definitions would introduce bias in the discussions. Therefore, it was left open
to interviewees to help develop what components to include and the definitions and
guidance for these components.
A summary of these findings is contained in Tables 9-12. These are based on the
coding performed for the research, where the codes were based on the identified
potential components from literature or any new components that emerged as a
theme during the interviews.
The presentation of findings and analysis includes:
Tables 9-12 present one component per row, and each row shows whether
interviewees supported the component and what guidance they provided.
The table indicates if any interviewees did not support the component or
supported it with concerns. Also indicated is whether an interviewee
supported the component by directly saying it should be included, but then
either did not give any guidance or gave guidance that was not context-
specific.
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The Findings and Analysis for the components Sections 4.4 through 4.7
go component by component to summarize what the interviewees said and
provide a discussion regarding these ideas. Included is consideration of why
interviewees may not have responded on a topic.
This step-by-step presentation of the Findings and Analysis provides rich
information and discussion for each component. Consideration of each
component follows the structure of existing business model research, such
as for the BMC and FBC.
The analysis is included into each section along with the findings to provide
an immediate discussion about the ideas presented by the interviewees.
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Table 9: Findings - Perspective: Measurement
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Table 10: Findings - Perspective: Product, Learning, and Development
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Table 11: Findings - Perspective: Stakeholders
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Table 12: Findings - Perspective: Process
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4.4. Components Perspective: Measurement
4.4.1. Goals
Interviewees identified several types of goals applicable in this context. Interviewee
8 identified the goal as to “[make] profit or at least that you can run a laboratory
without having to add additional financial support”. Interviewee 10 indicated that
the organisation “is helping … the transition to a sustainable energy system”.
Interviewee 2 indicated that some goals could be in terms of its size, world ranking,
employees, IP generated, business renewals and innovations with which their
customers create impact. In a regional context, where the organisation “may be
funded by a regional development agency”, two goals could be job creation and
economic contribution. Interviewee 6 identified that the “goal is not to make money”
and is instead “to solve a societal issue”, although money is needed to be viable.
Interviewees 1, 2, and 4 questioned whether the goal was to generate and evolve
knowledge or, as put by Interviewee 2, to evolve the lab, or, by Interviewee 1, to
make money. Interviewee 4 indicated that if the organisation chose to be the
expert, and therefore focus towards knowledge, its goal could be as a leading
expert in the field, nationally or internationally. The organisation could then “make
the judgement call” in terms of what is a good or bad system. However, to do so,
the organisation would need to be transparent about the payments they are
receiving and ensure that they are independent and are not just reflecting the
opinions of the companies that are paying them. This “independence needs to be
guaranteed, and it only can be guaranteed by transparency full disclosure, no
reports behind lock and key anymore”.
What emerged is that there are two very different paths for an innovation centre in
the energy transition:
1) being an expert in the field and generating knowledge, or
2) being a lab facility and making money.
Given the urgency of generating solutions to environmental challenges facing
humanity, the path of leader and expert seems to be the logical and better path.
An innovation centre in the energy transition is in the perfect position to be a hub
of information and guidance. It can better fulfill its role as an innovation centre if it
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is aware of technical, social, and governmental developments, and works with
others to promote energy transition. For an innovation centre in the energy
transition, therefore, key goals are leadership, expertise, and knowledge
generation. As a leader, the innovation centre can consider how it may operate on
regional, national, or international levels (Stolwijk, de Heide, & van der Horst,
2017).
Monetary considerations cannot be completely discounted and can be thought of
as oxygen needed for survival (Collins & Porras, 2005). But this is not its goal.
4.4.2. Revenue Streams
Interviewee 4 indicated that an issue can be finding a way to balance revenues
and costs across the value chain so that no one company is making a significant
amount while another company is experiencing losses because of the focus on
sustainability.
Some of the recommended sources of revenue are:
Citizen ownership and crowdfunding: Interviewee 1.
Government: Interviewees 1 and 5. Interviewee 5 indicated this could be
from project requests at the national or international level.
Proposals: Interviewee 5 highlighted these as the main mechanism to attract
new revenue streams, through projects and tenders.
University sponsorship: Interviewee 1.
Interviewee 4 indicated that an important question is whether the organisation has
guaranteed funding to be able to develop its own research programmes, or if it
would need to raise these funds externally.
Whether the organisation has guaranteed funding from its parent organisation can
make a significant difference on the direction it takes. If it knows it has this revenue
stream available, then it can focus more on developing its own research and
initiatives, in line with many of the points discussed in Goals. However, if it is
entirely dependent on third parties for its revenue, it would likely need to make
more compromises on its direction to be able to obtain sufficient funding. It would
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seem likely that the organisation would have a blend of these two scenarios and
would gain some internal funding but also need to supplement these revenue
streams with external sources.
The Revenue Streams component is encompassed in the FBC’s Benefits
component, per Upward and Jones (2016). Since there was significant overlap
between these two areas in the interviews, further analysis is included in the
following Benefits component. Many of the discussions were focused on how
organisations can recognise their efforts toward sustainability or other
measurements of benefits beyond just monetary revenue streams. The
interviewees appeared to generally support recognising the inclusion of non-
monetary benefits, rather than only monetary sources.
Some interviewees did not respond to Revenue Streams and some did not respond
to Benefits. However, since these two components overlap, it can be understood
that almost all interviewees responded to this topic.
4.4.3. Benefits
Some potential metrics that innovation centres can use in developing the Benefits
component are:
Interviewee 2: the “number of business renewals that [it] creates or is the
basis for”. This would reflect “the number of innovations that their customers
take up and apply in their businesses and create impact with”.
Interviewee 3: the innovation centre needs to “make a plausible case that it
has a positive influence on employability in the area”.
Interviewee 8: a major factor of success is how much they are being used.
An example of utilization metrics is how many experiments are being carried
out and how many people are involved.
However, some interviewees expressed that it may be challenging to support
anything more than measurements of success based on a monetary perspective.
Interviewee 5 indicated that proposals are needed for revenue. While it is desirable
to have new discoveries and technologies focused on sustainability benefits, the
question remains as to who is going to pay for these developments. The
responsibility then would fall to the State to enact “taxes or subsidies in pricing” for
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these endeavours. From Interviewee 8, it may be difficult to measure how much
the experiments “facilitate the acceleration towards sustainability”.
Understanding that it may be challenging for organisations to measure non-
monetary benefits provided, some ideas for measuring the areas suggested by the
interviewees are as follows:
A metric that could be used by an innovation centre to measure its success
in building awareness toward sustainability is the number of partners and
stakeholders, and from what sectors. With an education program on
sustainability, the more stakeholders that are connected with the innovation
centre, the more awareness is expanded.
Another metric could be focused on the innovation centre’s success in
building knowledge. Examples could be numbers of papers published and
conferences participated in, in relation to both the innovation centre itself
and the experts who develop research through their collaboration with the
centre.
An organisation in this context needs to be aware of revenue health
throughout the value chain. It could reflect negatively on the innovation
centre if its marketing (and therefore revenue stream) has benefitted from
working with an innovation entity, but the innovation entity later struggles
due to the increased cost of producing the more sustainable innovation. This
concern might lead an innovation centre to think about ongoing support
mechanisms, or a sliding scale of fees, etc. Considering profit as a success,
but without regard to the success of others, may not be such a good
measurement after all.
The above metrics could help provide solutions for concerns about how to measure
progress toward sustainability. Organisations could develop many more metrics
that are a fit for their specific business. There is likely support to be found from
SBM communities in developing the metrics. While it may be a challenge to
develop these metrics and shift the organisation to using them in conjunction with
monetary-based metrics, this seems critical to the move to sustainability. As
discussed throughout this research, and well covered in SBM literature,
sustainability is necessary for organisations in the future. Organisations need to
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develop these new metrics to be future-fit with the world as it transitions towards
sustainability.
4.4.4. Costs
While this component received very limited discussion from the interviewees, this
component is well supported from literature, with the understanding from the
SBMs, notably the definition of the FBC, that cost includes monetary,
environmental, and social cost (Upward and Jones, 2016). Cost is also an essential
part of any business. Even though there was limited discussion on this component,
this can be understood as reflecting that costs are fundamental, there was nothing
specifically unique identified for organisations in this context, and it is still important
to include this component.
4.4.5. Values
Interviewee 6 supported the Values component and viewed it as beyond just the
mission statement. The key to a business model is that all partners and all who
contribute to the model need to support the same values. Partners should be
selected based on this. “If you have a combination of people [with] different and
contradictory values”, then there may be a clash of values and opinions, which may
not be productive.
Interviewee 9 said that it is important for a company to support core values and for
employees to be aligned with them. Collaboration is needed toward the solution.
The disagreements would just be about the pathways, and the idea is to “stimulate
each other to find a pathway that eventually leads to the high-level goals”.
Interviewee 4 was of the view that the innovation centre, as the expert giving advice
to government and making judgment calls, needs to be transparent and
independent, and to guarantee knowledge. Understanding the values of
stakeholders will assist the organization in managing the relationship with them.
For Interviewee 2, values are “…not primarily relevant for the R&D or the innovation
centre”. It is the values of the businesses that the innovation centre is trying to help
that should be guiding.
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Interviewees 7 and 10, saw values as being considered through the component of
Goals. Interviewee 7 did not find anything in literature to support a separate
component for Values. Interviewee 7 thought that Values can be expressed
explicitly for Stakeholders in the canvas if it is a key aspect for understanding the
stakeholder. Otherwise it can be included as background information on the
stakeholder.
Interviewee 1 focused on the concept of guiding principles and considered
sustainability, thereby the energy transition, to be a major factor for this context.
Based on the importance given by many interviewees to values, it is recommended
that Values be considered as a separate component. This is consistent with
recognition of the innovation centre as a leader. Explicit values will help guide its
leadership and alignment with stakeholders. A distinct Values component follows
the idea from the BIK by Breuer and Lüdeke-Freund (2016), along with their ideas
on values-based innovation, as discussed in the Literature Review. This
component would seem to best fit into the measurement perspective, based on the
perspective’s definition in Jones and Upward (2014).
The Values component would represent the core values of the organisation, as
established by the stakeholders who have governance roles. The concept of
Values will influence all components of the canvas. It will guide the organisation’s
goals, with whom it is aligning, what it is delivering. It is important to consider
regularly the values of each stakeholder, to promote values alignment and assist
with managing the relationships.
The innovation centre has several things to consider on alignment with
stakeholders. If the potential stakeholder is not aligned on values, one possible
approach is to reject that potential stakeholder. This has monetary implications.
Interviewees cautioned that one must be realistic. Another approach is to view this
as an opportunity for education. Awareness of the importance of sustainability is
still developing. The innovation centre can be an educator, not only in relation to
energy transition, but also on sustainability solutions. In relation to feasibility, the
innovation centre may need to consider reaching out to government and building
sector organisations to gain support, including monetary. However, an organisation
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may be able to increase its financial performance by putting a strong emphasis on
values, and outperform non-values-driven companies (Sisodia, Wolfe, & Sheth,
2003).
4.5. Components Perspective: Product, Learning, and Development
4.5.1. Value Proposition
Interviewee 5 explained that to develop the value proposition, a company in the
energy transition needs to understand the roadmap of where the technology will
evolve. Interviewee 8 indicated that the innovation centre can assist with the next
steps for companies, based on the stage of their concept or product, in other words
their Technology Readiness Level (TRL). This is typical value from an innovation
centre, and the centre can also help the customer determine who needs to be
involved in the concept or product. Interviewee 8 also indicated that the innovation
centre needs to determine if its proposition is just to be a place to test or if it supplies
expertise. Interviewee 5 indicated that the main value offered by an innovation
centre is its core expertise.
Because the FBC encompasses Value Proposition within Value Co-Creations
(Upward & Jones, 2016), the analysis for Value Proposition is combined into Value
Co-Creations. Interviewees discussed at length how the organisation needs to
work with stakeholders to develop value jointly. Especially due to the focus on
sustainability from interviewees, it seemed the best fit to evaluate the findings
jointly. This helps explain the gaps in interviewees responses, since every
interviewee did respond, either on Value Proposition or Value Co-Creations.
4.5.2. Value Co-Creations
Interviewee 7 identified that the value co-creation is “forming new relationships that
didn’t previously exist”. Interviewee 2 indicated that an innovation centre acts
effectively on the “meta level” of business as compared with what businesses
propose to their end customers. This means that constant renewal is core for an
innovation centre. Interviewee 2 discussed again the idea of a platform business
model and the need to connect supply and demand, which creates lots of
brokerage”. Interviewee 2 indicated that another type of value brought by the
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innovation centre is new knowledge development through, for example, a
“competence centre”.
Interviewee 2 said that an innovation centre can be a service provider of
competencies. Interviewee 4 emphasized that for an innovation centre to be an
expert, it needs to take a stance and build up its own research programmes. The
innovation centre is a facilitator for testing new ideas and technical innovations.
The centre can compare the impact between experiments that people are doing.
Interviewee 4 believes that, by being the expert, the innovation centre can make
“the judgement call” as to what are good or bad systems.
Interviewee 2 indicated that the innovation centre needs a portfolio of innovation
services, which are technological competencies and innovation management
competencies.
Education is an important part of the transition towards sustainable solutions and
the value of an innovation centre, as detailed by Interviewees 3 and 9. Interviewee
9 noted that education is needed to make people aware of the importance of
sustainability. Companies may have general ideas about what is happening on
sustainability, but do not know how it will impact them.
Interviewee 2 noted other types of value that innovation centres can co-create,
including:
providing access to different types of funding, and
help on acquiring licences for IP that are needed for the innovations.
The value created by innovation centres is significantly based on the
interconnections among multiple stakeholders. Co-creation is a specially apt term
in this context. The innovation centre is a hub encouraging collaboration among
stakeholders. The collaboration goes beyond networking. The innovation centre
can connect a business that has a project with experts in a variety of areas and
with other businesses working on related ventures. The multi-sided platform relates
to this role. The innovation centre does not itself have to deliver all the services
it can connect supply-side and demand-side enterprises.
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There are value elements and challenges particularly relevant for innovation
centres:
The development of knowledge and expertise is central for innovation
centres and the value the centre can co-create.
Key challenges are the need for constant renewal and the reality of constant
change. The innovation centre must be knowledgeable about cutting edge
research and technology. It must be prepared for constant updating of its
facilities and services.
Education about the need for sustainability and energy transition, and about
new research and technology, will be an important element of value
delivered.
Different TRL groups will have different sets of needs. Stolwijk, de Heide,
and van der Horst (2017) give examples of services needed per applicable
TRL.
4.5.3. Value Co-Destructions
For Interviewee 2, even though it is not normally part of a business model creation
process, it is important to ask what is destroyed because of achieving a goal or
value proposition. Interviewee 9 gave the example of employment losses, where it
may be necessary to remove a step in the value chain to have a greener process.
New technologies for sustainability can mean replacing fossil fuel-based ones,
which can mean positives or negatives in terms of jobs, energy security, and
capital. Interviewee 9 indicated that it is important to analyze these gains and
losses with stakeholders and come to an agreement, so they later support what is
being implemented. Interviewee 2 indicated that a task for an innovation centre
would be to take steps to help reduce the negative impact or to help find ways to
compensate for them.
Value Co-Destruction is a key feature for innovation centres in energy transition.
Other transitions may be open to question or debate such as robotics but
energy transition is an imperative. Can the destruction be turned into an
opportunity? Yang et al. (2017) discuss how this is possible. Tools exist to assist
this process, such as the Value Mapping Tool (Bocken, Rana, & Short, 2015).
Understanding Value Co-Destruction therefore gives organisations in this context
a way not only to appreciate how actions they take may have an impact on others,
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but also to investigate ways they can turn those potential negatives into ways to
co-create value with those stakeholders. An example could be if the organisations
can support workers in fossil-fuel based energy technology to bring that knowledge
to projects in the energy transition.
Many interviewees did not respond regarding Value Co-Destruction, which was
likely because it was a newer and less understood concept, rather than as a lack
of support. Except for the FBC, other SBM architectures and the BMC usually focus
only on the value creation/proposition concepts.
4.6. Components Perspective: Stakeholders
4.6.1. Stakeholders
Stakeholders is a concept discussed and supported by all the interviewees.
Interviewee 6 considered that stakeholders can be “just about anybody who can
contribute to developing or who has an opinion on this value proposition. Do not
exclude anybody”. Interviewee 6 noted that it is not possible to do the energy
transition alone. Interviewee 1 observed that the innovation centre could take on
anyone who wants to use the facilities, but only if they fit with the centre’s guiding
principles.
Interviewee 6 noted that it is valuable to prioritize stakeholders for the ones that
are the “most important … for the survival of the business”. Interviewee 3 indicated
that “first and foremost [is] who are going to be our customers”.
However, Interviewee 1 indicated that there cannot be a dominance of one or two
of the “status quo players”. Interviewee 4 also identified the need to treat all
stakeholders equally, otherwise the organisation will end up with shareholders
being considered the priority stakeholders and end up in the same situation that
we are in now, regarding sustainability.
Interviewee 4 indicated that the opinions of stakeholders should be “complemented
with insights … from research, if it is available”.
Interviewee 2 was of the view that the innovation centre can be thought of as a
platform model, with a supply side and a demand side.
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Demand side: “industries that try to use the facility or the competences”.
Supply side: industry partners, such as knowledge partners or partners with
the lab facilities.
Interviewee 7 indicated that there cannot be a non-human stakeholder (such as
the environment), since it is a human organisation. However, Interviewee 4
highlighted that if you put stakeholders to represent the environment, then they
have a political agenda and self-interest.
Interviewee 1 identified diversity of stakeholders as very important. This diversity
can be through, for example, new sectors, new players, and new knowledge bases.
However, this is “not just diversity for the sake of diversity”, and it needs to be
focused on how to connect these diverse “knowledge, sectors, or groups, [to]
increase the potential for innovation”. There will not be the same potential if the
innovation centre has, for example, only people from one sector. The innovation
centre also needs to be inclusive.
Interviewee 1 indicated that to support diversity and inclusiveness, it is important
to be aware of barriers. An innovation centre can have conscious barriers, but the
organisation needs to be sensitive to whether it is creating inadvertent barriers.
Barriers for small and medium enterprises (SMEs) may be bureaucracy,
complexity, and administrative burden.
Interviewee 10 indicated that the innovation centre would not pick partners based
on their views on sustainability, “unless it has a negative effect on [their] image”.
Interviewee 8 noted the innovation centre needs to consider the TRL of its
stakeholders.
Other types of stakeholders identified by interviewees:
Society: Interviewees 1, 3 and, 4.
Communities: Interviewee 3 and 6.
Entities that generate energy or supply components: Interviewees 4 and 5.
The scientific community: Interviewee 4.
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Municipalities linked to companies that generate and distribute electricity:
Interviewee 5.
Regional authorities, national governments, or institutional bodies:
Interviewee 5. Governments were also identified by Interviewees 3, 9, and
10.
Structural funds for large implementation projects: Interviewee 5.
Prosumers: Interviewee 6, who noted that the difference is reducing
between producers and consumers within the energy transition.
Regulators: Interviewee 7.
Organisations in the energy transition sector: Interviewee 9. These could
form a sector organisation.
Diversity of stakeholders was linked to the theme that the energy transition needs
a wide variety of perspectives. Other interviewees were of the view that the
stakeholders to consider are the customers. The view more fitting with an
innovation centre in the energy transition would seem to be the diversity view.
Diversity provides much greater possibility of enhancing innovation potential. Too
homogenous a stakeholder group could lead to missing ideas and possibilities. A
focus primarily on customers could undermine the innovation centre’s role as
leader. An important caution was given by two of the interviewees, who advised
against giving priority to certain stakeholders, which could lead to dominance of
status quo players.
To promote such diversity, an innovation centre would need to do active outreach
to various enterprises, groups, and government bodies. The innovation centre
should constantly think about who could give additional insights relevant to its
research programmes and projects.
How to include the environment as a stakeholder is a particularly important
question for an innovation centre. Conflicting views appear from the research. A
potential way to reduce biases of human stakeholders is to seek input from the
scientific community for factual information.
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4.6.2. Ecosystem Actors
While there is limited interviewee discussion on Ecosystem Actors, applicable
guidance is that the scope of actors may be very broad. A common theme through
the architecture is the need for diversity of stakeholders and cooperation with
others, along with the understanding that the innovation centre is aiming to connect
these different groups. This will likely assist the organisation in representing a more
diverse and inclusive subset of the actors in the Stakeholders component.
The lack of interviewee focus on this topic can likely be understood as unfamiliarity
with the concept, rather than disagreeing with the idea. The unanimous support for
the Stakeholders component, which appears in the FBC and BIK, reinforces the
several interviewees who thought this component was also important for the
architecture, even if there is not any specific guidance for this context.
4.6.3. Needs
Most of the discussion related to needs was in terms of stakeholders and their
specific needs. Since several interviewees stressed the importance of simplicity in
an architecture design, this raised the question whether needs should be a stand-
alone component or should be integrated into the Stakeholder component. There
was limited direct discussion on this component. However, it is represented by
Upward and Jones (2016) as a distinct component supporting Stakeholders and
Ecosystem Actors. It could be argued that specifically recognizing these needs
helps this concept not get forgotten in the process of building the Stakeholders
component for a business model. Several interviewees did support this component,
even if there was no context-specific guidance. Other interviewees did not discuss
the component, likely due to focusing instead on other areas.
4.6.4. Relationships
There was limited discussion from interviewees directly referencing this
component, but the importance of relationships, especially for organisations in this
context, is discussed in several other areas. Due to this discussion, and since the
literature, including architectures, discusses in depth the importance of
relationships, it would seem important to consider this component in a new
architecture for this context.
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The lack of focus on this area by interviewees can be understood as relationships
being critical for practically any organisation, so interviewees instead focused on
areas more specific to this context.
4.6.5. Channels
This component had limited discussion from interviewees either directly or in
discussion about other components. However, the literature recognises that this
component is important for any business. This component would therefore seem
important to consider, but with no specific guidance needed for this context.
Organisations in this context could rely on existing literature when developing this
component.
Interviewees’ lack of discussion is likely because channels are very important for
organisations, and there is nothing specific to note for this context.
4.7. Components Perspective: Process
4.7.1. Activities
For innovation centres, Interviewees 5 and 8 identified that there are some unique
activities to consider. From Interviewee 5, some of the activities need to be regular
“communication and conversation with policy makers that the environment is
relevant”. From Interviewee 8, activities may be dependent on the TRL or levels
that the organisation chooses to focus on, since innovations with a higher TRL will
likely have fewer technical issues in the experiments than innovations with a lower
TRL.
Ecosystem Management was introduced as a concept by Interviewee 2. It is
focused on how to “[get] the supply and demand up and running” for a two-sided
platform, where the innovation centre is functioning as a hub. Mechanisms are
needed to achieve a critical mass of supply and demand. Because innovation is
constantly evolving, it is key for the innovation centre to have programmes or
roadmaps, as “both supply and demand need to understand what this innovation
centre is working towards”. This will be either an attractor or a disincentive for the
facility. Interviewee 2 also indicated that the innovation centre and its partners may
be able to support social acceptance of the innovation projects.
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Synthesising the findings for this component with related information in other
components, activities of an innovation centre could include:
Education of stakeholders: this involves working with stakeholders to make
their innovations and their own operations more sustainable. The innovation
centre would encourage sustainability from a systems perspective, beyond
the transition of energy sources.
Ecosystem management: these are the steps to get the supply and demand
sides up and running.
Expertise management: the innovation centre will need to identify, attract,
and retain experts in the applicable fields.
Programme management: with the goal of being a leader, the innovation
centre will need to set the direction for, establish, and operate its research
programmes.
Diversity management: as seen in Stakeholders, activities are needed to
enhance diversity.
Safety management: an innovation centre will need to take safety-related
steps to contain and control the inevitable issues that will arise in
experimentation. The activities needed will likely be dependent on what
TRLs the organisation chooses to focus on, as there will be different safety
needs.
While several interviewees did not directly discuss activities, none seemed
opposed to the component. The concept of activities came up in several
discussions related to other components, such as Interviewee 9’s discussion about
stakeholders needing education on sustainability.
4.7.2. Resources
Interviewees frequently discussed knowledge and its importance for an innovation
centre. Interviewee 4 indicated that an innovation centre needs to be “building on
ongoing knowledge” and, to do so, needs to “attract people from a great many
fields and disciplines”. This assists awareness of the current knowledge gap in the
path to a sustainable energy system. The innovation centre should make its
knowledge publicly available. Interviewee 9 indicated that an innovation centre
needs to understand the gap between the present and the future, so they can
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advise companies on steps needed for a “low-emission, low-energy future”. To
advise businesses, the innovation centre will need to know:
Current policy and what future policies will look like, based on
environmental and energy goals.
Processes needed in different sectors and what kind of techniques are or
will be available.
International climate commitments.
Interviewee 8 indicated that it is important to focus on what knowledge the
customer wants to gain, and the innovation centre needs to be flexible. Interviewee
2 indicated that the facility needs to be in a constant state of renewal. The
resources need to have a “reusable context”.
Another type of resource is safety, discussed by Interviewee 8. Since an innovation
centre is doing experiments, safety measures and a focus on safety are needed.
The centre needs to ensure that if something fails, it is not bad “because the
[innovation centre] has taken the appropriate measures to handle those kinds of
failures”. Interviewee 8 stressed that it is easy to skip over safety, but safety needs
to be a high priority.
Other potential types of resources include:
Interviewee 4 considered stakeholders as knowledge generators.
Interviewee 2 considered:
o Intellectual Property (IP), with access provided to customers under
certain conditions.
o Licences that companies would need for their innovations.
Summarizing from the findings, it is clear that knowledge is a central part of an
innovation centre. This knowledge is not only current knowledge but also future-
focused knowledge. For an innovation centre in the energy transition, this is
especially important because there is a specific end goal in mind: the use of
renewable energies, with a general goal of sustainability. If the innovation centre
is more aware of the path needed, then it can better guide and support its
stakeholders in achieving the energy transition.
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An issue for an innovation centre is the openness and availability of knowledge
developed under its auspices. There are conflicting views. One is that in the drive
for sustainability and energy transition, sharing and openness are important. The
other is that stakeholders may require protection of what they are developing. As
to knowledge developed by the innovation centre itself, while there are differing
views on this, the better view is that the innovation centre should make such
knowledge open and accessible. The goal is to move to worldwide sustainability
as fast as possible, and open knowledge and collaboration can help accelerate this
transition (Tàbara, 2013).
Several interviewees did not discuss the concept of resources. Their idea was that
an innovation centre may have fewer physical assets, like other businesses in the
service sector. It may be that the idea of experts and knowledge as a resource is
a less familiar concept.
4.7.3. Partnerships
Interviewee 10 indicated partners could be a consortium of parties, companies, or
institutes that build a facility lab and offer expertise. Interviewee 10 also noted that
customers can potentially be considered as partners.
Interviewee 2 explained that innovation centres could be considered as a platform
business model. The supply side of the platform could come from the organisation
and/or parent organisation(s) or could be provided by partners. These partners
would be in the two groups:
knowledge partners providing a “competence centre for developing new
knowledge”, or
industry partners for the “constant renewal” of the lab facilities.
Interviewee 2 continued that the organisation could have a “network of competence
suppliers” or “service providers”, including:
human resources providers who are “trained people on technological
aspects or facilitation”,
financial institutes, and
lawyers.
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Interviewee 2 noted that universities or research-based institutes may have access
to different types of funding than private parties have and could be partners by
providing access to these funds.
Interviewee 9 indicated that it is important to connect with the government and that
partners can have sector organisations. A group of similar companies who want to
learn more about sustainability can, by including government officials in the group,
“be very close to policymakers and have an influence on what policymaking will
look like in the future.
Transition in roles emerged from the findings on Partnerships, and this seems to
be a particular consideration for an innovation centre. A business could come to
the innovation centre for assistance with development of a new idea and can then,
through the innovation centre, help others implement the innovation or develop a
similar one. Anyone using the innovation centre could then potentially be a partner,
providing their own expertise and types of equipment that could assist others
innovations. Customers can make connections through the innovation centre. The
innovation centre then becomes a more attractive hub, with businesses and
individuals interacting not only with the innovation centre, but also with other
participants, thereby becoming partners.
The component of Partners would seem important for practically all organisations,
so interviewees who did not discuss this component likely just did not have any
context-specific guidance. There was not any noted disagreement with this
component.
4.7.4. Governance
Interviewee 4 indicated it is important to know if the organisation is fairly
autonomous or if the parent organisation has central control. Interviewee 4
identified it is important to determine if the organisation can create or develop its
own research programmes and whether it has guaranteed funding for these
programmes.
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Interviewee 3 did not support this component because it did not seem to be
something that could be changed or influenced.
This component connects with the recurring theme of the inclusiveness and
collaboration needed for sustainability, including having employees and
stakeholders involved in the decision-making and goals-setting process, and
consideration of the possibility of citizen ownership.
The main guidance for an innovation centre came from the idea that if you want to
be a leader/centre of expertise, you will want to have the autonomy and vision to
position the organisation as such. Therefore, organisations need to question
whether they can take this leadership position and what level of autonomy they
have. The research programme then becomes part of this leadership concept, if
the organisation can, or is allowed to, set the path it wants to develop. The
organisation’s level of autonomy and whether it has guaranteed funding can have
a major role in how the organisation organises itself and the direction it can take.
Even if the organisation has limited ability in influencing its own autonomy and
guaranteed funding, being aware of these factors will still help the organisation in
knowing what will influence the direction it can take. Making these factors clearer
to its parent organisation may even help in showing these potential limitations and
assist with transitioning to a better leadership position.
Governance would seem to be a newer component, as it only appears in the FBC,
so interviewees may have not been as familiar with this concept and instead
focused on other areas. Any lack of discussion did not appear to be dissent.
4.7.5. Biophysical Stocks
Interviewee 7 indicated that a knowledge-based and relationship-based
organisation may use far less materials, but if the organisation seriously considers
the long term, it will discover that it produces a “fair amount of waste”. This includes
resources used by groups working with them.
However, Interviewees 2 and 3 did not see this component as relevant. Interviewee
2 indicated that for an R&D organisation, it is important to be aware of biophysical
stocks, but not as a component for this type of company.
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The consistent sustainability focus for most of the interviewees leads to the
usefulness of guidance within the component of Biophysical Stocks. First, the
innovation centre needs to have awareness of its own operations and impact on
sustainability. This would make a statement that the centre is itself committed to
sustainability and the energy transition. Inversely, if the centre were still relying on
non-renewable power or heating sources, this would presumably have a negative
impact on their standing as an expert if they are claiming to be one of the main
groups driving the transition.
Secondly, the innovation centre is well positioned to inspire its stakeholders and
partners to factor sustainability into their innovations. While these innovations are
focused on the energy transition, there could still be elements that these
companies are not considering. For example, the use of lithium batteries for energy
storage may assist the energy transition to renewables, but disposal can be
environmentally damaging. Innovation centres would seem to need to consider
other ways of encouraging their stakeholders and partners to take these aspects
into account. It is important for organisations to understand on a systems level how
their actions may impact the environment and society (Bocken, Rana, & Short,
2015). An innovation centre could have a significant impact on how these
innovations are developed for sustainability, by focusing not only on the shift to
renewable energy, but also on the broader scope of sustainability. While some
authors on sustainability are discussing how a company needs to be aware of the
environmental impact throughout its own value-chain, an innovation centre would
need to take an even broader perspective, considering the value-chains of their
stakeholders.
Many interviewees did not discuss the concept of biophysical stocks. The general
message received was that Biophysical Stocks may be important in, for example,
manufacturing organisations, but not for this context. It would seem likely that many
interviewees were thinking only short term and only about the organisation itself,
not the stakeholders.
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4.7.6. Ecosystem Services
There was limited discussion from interviewees on this topic, however, as seen
from the FBC, the component of Ecosystem Services is a companion to
Biophysical Stocks. The focus is on impact from an ecosystems perspective. The
same factors for consideration apply, and although this component received limited
discussion, it would seem relevant to consider in an architecture for this context.
An innovation centre has more reason than enterprises in other contexts not only
to look at the impact of its own operations, but also to raise awareness among its
stakeholders as to the impact of their projects or operations. An example could be
a customer seeking advice from an innovation centre on a hydroelectric project.
The innovation centre as an educator and leader would bring forward an
examination of the potential impact on river flow, disruption of salmon runs, effect
on Indigenous peoples, and effect on wildlife that depends on the salmon.
Many interviewees did not discuss this component, likely for similar reasons as
with Biophysical Stocks. This may be due to a lack of understanding and
perspective about sustainability. Considering the rapid and recent new
developments in sustainability thinking, these ideas are still being embraced.
4.8. Interrelationships
In answering the fourth interview question for experts, interviewees discussed the
interrelationships among the components in the architecture, and this section
contains the corresponding analysis. This leads to the Conclusions in answering
SRQ 4.
Interviewee 4 considered that canvases are a simplified understanding of a
business model, or a “digest”, and that it is important to consider the ontology level
information, such as component groupings and interrelationships. Interviewee 4
thought that many canvases still miss identifying the interrelationships and what
they mean.
Interviewee 2 recommended that an innovation centre develop a roadmap, which
would show the end goals and the steps along the way that connect the
components. This roadmap will help an organisation understand the required
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evolution of lab facilities and societal changes, and “each of the steps of the
roadmap will require different types of skills and knowledge”.
Interviewee 1 identified that the introduction of Values in the architecture would be
linked to Stakeholders in terms of building alignment. Interviewee 8 identified a
connection between knowledge in the Resources component and Activities. For an
innovation centre, it would be important to consider the knowledge needed to be
able to perform activities such as safety steps. Interviewee 8 also identified a
connection between knowledge in Resources and Goals, Stakeholders, and Value
Co-Creations, in terms of the knowledge that will be developed. As seen from the
discussion in Goals, the innovation centre can have research programmes focused
on developing new knowledge, and this would involve connections with who is
involved in developing this knowledge, what knowledge bases are needed, what
value it is bringing, and how it aligns with the general goals. Interviewee 8 identified
a connection between Activities and Costs, specifically focused on safety. It is
important for an innovation centre to understand costs are needed to ensure the
experiments are conducted safely, and to avoid the all-too-common idea of saving
some costs at the expense of safety. Interviewee 9 indicated that organisations in
this context need to consider government involvement in, for example, co-
development of educational programmes for stakeholders education. This would
involve connections among the components Activities, Value Co-Creations,
Partnerships, and Stakeholders.
With the recommended addition of the Values component, there are new
interrelationships to consider. The Values component would likely link to:
Stakeholders: considering the benefits of aligning the organisation’s values
with the values of the stakeholders.
Goals: values are identified as being a guide for developing goals.
Value Co-Creations: it would seem important to consider how the delivered
value aligns with the values of the organisation and stakeholders.
From the findings, an organisation in this context would therefore need to
understand the following interrelationships as connected to Activities:
Developing research programmes: Who from a diverse group of
Stakeholders needs to be involved? How do the programmes align with
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Values and Goals, as well as the values of Stakeholders? For knowledge in
Resources, what is needed and what will be developed? For Value Co-
Creations, what value will the programmes create with others?
Education: Who needs to be involved from Stakeholders and Partnerships,
including the government?
Safety: What Resources are needed for equipment and knowledge to have
effective safety for experiments? The Costs component needs to reflect the
cost of safety and appreciate why it is important to not skip these costs.
Many interviewees did not discuss any context-specific guidance for
interrelationships. Interviewees may have been unfamiliar with this concept, since
it is not sufficiently discussed in literature and architectures, so they instead
focused on other areas.
5. Conclusions
The objective of this research was to explore what business model architecture,
based on sustainability, would be more useful for an innovation centre in the energy
transition, since the business model being used was not reflective of its context.
This research has concluded that consideration of context should be given greater
emphasis in the development of sustainability-focused business model
architectures. The research has identified the elements of context, the
components, their interrelationships, and the guidance applicable in this context.
This follows the conceptual framework on the need to understand the context and
then values in their role of guiding the development of a new architecture.
The research began with the initial development phases of a new architecture, to
discover if a new structure could be a better fit. The research question was “What
are the business model components and their interrelationships that would
comprise a new business model architecture for an innovation centre in the energy
transition? The SRQs, as outlined in Table 13, then set out the path toward
answering this main question.
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Table 13: Sub-Research Questions (SRQs) of the research.
SRQ 1 was designed to find out the nature of the problem for the organisation in
relation to the business model it was then using. It was concluded, from the findings
and analysis above, that the BMC was not a good fit for an innovation centre in the
energy transition, one that had goals based on more than monetary value. This
precipitated the need for an alternative more focused and useful approach.
For SRQ 2, the goal was to understand elements of context that could influence
the structure and guidance related to an architecture. This research concluded that
the main elements of context were an innovation centre, the energy transition, and
institutions.
SRQs 3 and 4 were to determine what a new architecture might consist of, in terms
of the components and relationships. The conclusion from the research findings
was that for an innovation centre in the energy transition, the FBC provides a good
base structure, with context-specific guidance being useful when considering its
components. The Values component is recommended as an addition to this
architecture. As several interviewees pointed out, there has already been
significant research and thought put into these existing architectures. With
practically all the components from the FBC being supported and justified, it seems
appropriate to use the FBC, with the Values component, as the base for this
architecture focused on sustainability. This research then provides the guidance to
make the architecture more effective and understandable for organisations in this
specific context.
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5.1. Context
This research identified the contextual elements of innovation centre and energy
transition, and the literature review added institutions as a contextual element. In
answering SRQ 2, Table 14 provides the elements of context identified in this
research. General elements of context are not considered in this research since
the focus is on what needs to be uniquely considered for this context; there is
already research and discussion about what is important for all businesses to
consider, especially with the growing emphasis on sustainability. The elements of
context below have an impact on the different layers of the architecture, as
discussed further in the following Components section of the Conclusion.
Table 14: Elements of context identified in this research.
In understanding these elements of context, “innovation centre” represents the type
of company, and “energy transition” represents the industry or sector. These
context elements did not seem to have any sub-elements to consider.
The element of context of institutions did appear to have sub-elements, including:
First world perspective: regions with complex and developed energy grids
would likely have very different needs and approaches related to the energy
transition, as compared with regions with basic or non-existent energy grids.
Boons and Lüdeke-Freund (2013) support how these different levels of
development will influence sustainability approaches.
Economic situation: the recent economic slowdown had a negative impact
on sustainability initiatives. Geels (2013) discussed decreases in public
attention and policy towards sustainability. An innovation centre needs to be
aware of the economic situation and may have to shift its business model
based on current realities.
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Policy and regulation: formal norms can play a role in how the organisation
approaches its business model. For example, an organisation in a region
with no regulations for reduced emissions or policies to support
sustainability initiatives may need very different guidance on how to support
the energy transition, compared with an organisation which has
environmental support through formal norms.
Cultural aspects: a culture more supportive of the changes needed for the
energy transition and sustainability would influence the programmes from
the innovation centre and its educational role.
Education: a sustainability-supportive education system would enhance
innovation centre initiatives and would provide opportunities for the
innovation centre to expand its educational activities.
These multiple elements of context appear important in architecture development.
From the Context section of Literature Review, it seems that existing context-
specific research for business models only considers a limited number of these
elements. An example is energy utilities. These articles consider the type of
company being ‘energy utility’ and the industry being the ‘energy sector’, but lack
consideration of the institutional environment. It would make a significant
difference in the business model’s guidance, for example, if the energy utility is in
an area with a complex and developed energy infrastructure and whether there is
an active push through government policies for sustainable energy sources.
Considering a more complete view of the elements of context would give an
improved perspective in determining what guidance is an appropriate for
organisations in different contexts.
5.2. Components
The following section details the conclusions for SRQ 3 on the guidance for the
components, so they will more specifically serve the circumstances and needs of an
organisation in this context. Tables 15-18 provide the guidance per component. An
organisation in this context could then use this architecture and guidance in
developing their organisation’s business model.
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Perspective: Measurement
Components
Guidance for This Context
Goals
Position your organisation to be a leader and expert
in the energy transition.
Consider goals for advancing the energy transition:
o Being a hub of information, guidance, and
connecting stakeholders.
o Creating and assisting with knowledge
development.
o Leading research programmes.
o Being aware of technical, social, and
governmental developments.
Benefits
Consider metrics including:
o Influence on employability, usually locally
focused.
o Sustainability impact of innovations.
o Sustainability awareness built, including across
multiple industries. Example: sector
organisations established to support
sustainability.
o Knowledge built by the innovation centre and
experts for advancing the energy transition.
Examples: Number of conferences participated
in or papers published.
Consider the success of others and not only the
success of your own organisation.
Consider revenue sources, such as crowdfunding
and government or university grants.
Do you have guaranteed funding for your research
programmes?
Costs
No specific guidance (refer to FBC).
Values
Recognize your own organisation’s core values.
Values for a leader include transparency and
independence.
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Develop values alignment between your organisation
and your stakeholders.
Consider your stakeholder’s values when managing
your relationship with them.
Table 15: Guidance for each component within the Measurement perspective.
Perspective: Product, Learning, and Development
Components
Guidance for This Context
Value Co-Creations
Expertise and the development of knowledge are
core elements.
An innovation centre can co-create value by:
o Being knowledgeable about cutting edge
research and technology.
o Having up-to-date facilities and services.
o Realizing that different TRL groups will have
different needs.
o Educating stakeholders on the transition and
sustainability.
Value Co-
Destructions
Consider the negative impacts of the energy
transition, especially on the non-renewable sector.
How can these impacts be reduced?
Table 16: Guidance for each component within the Product, Learning, and
Development perspective.
Perspective: Stakeholders
Components
Guidance for This Context
Stakeholders
It is important to consider a diverse set of
stakeholders to enhance innovation potential at the
centre.
Outreach may be needed to enhance diversity.
Focus on who may give additional insights related to
your research programmes and goals.
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As a leader, consider the overall goals you are
working towards and endeavour to treat all
stakeholders equally.
Ecosystem Actors
Be aware that the set of actors related to an
innovation centre may be very broad. This may help
improve diversity in the stakeholders you recognise.
Needs
No specific guidance (refer to FBC).
Relationships
No specific guidance (refer to FBC).
Channels
No specific guidance (refer to FBC).
Table 17: Guidance for each component within the Stakeholders perspective.
Perspective: Process
Components
Guidance for This Context
Activities
Your organisation may consider the following
activities:
o Educate stakeholders making their own
innovations and operations more sustainable.
o Manage your role as a hub to start up and
continue the supply and demand sides.
o Set the direction for, establish, and run research
programmes.
o Promote and enhance diversity in the
stakeholder groups involved with your
organisation.
o Establish regular communication and
conversation with policy makers that the
environment is relevant.
o Identify, attract, and retain experts. These
experts can be within your organisation or can
be partners.
o Provide safety management for the inevitable
issues that will occur with experimentation.
Resources
Consider knowledge bases as a resource, including:
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o Future-focused knowledge, especially as related
to the energy transition including how it may
progress and what is needed to achieve it.
o Technology-, policy-, and regulation-related
knowledge.
o Safety, especially as related to physical
experimentation.
Consider having knowledge open and accessible.
However, there may be stakeholder requirements to
protect the knowledge developed in the innovations.
Consider experts as a resource, either as staff or
partners.
Partnerships
Consider how stakeholders could become partners
through helping the innovation centre and/or other
stakeholders involved with the centre. Your
organisation is a hub and needs to support and
enhance interactions between stakeholders.
Consider if any of the following may be partners with
your organisation:
o Knowledge partners (example: competence
suppliers for financial, legal, or technical
expertise).
o Industry partners (supplying components for
constant renewal of the facility).
o Entities providing access to different funding
options (example: research institutes with
access to funding that is not available to private
parties).
Consider joining or developing a sector organisation
o Include government officials who can influence
policymaking to support sustainability.
Governance
Determine what level of autonomy the organisation
has from any parent or controlling organisations. This
includes:
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o Can the organisation create its own research
programmes?
o Is funding guaranteed for these research
programmes?
To what extent are stakeholders, especially
employees and co-workers decision-makers? How
can the organisation be made to be more inclusive?
Biophysical Stocks
Be aware of your own operation’s impact on
sustainability. This shows your commitment to the
transition and sustainable innovations.
Inspire and educate your stakeholders and partners
to focus on sustainability in their innovations and
operations. Jointly consider their, and their value-
chain’s, impact on biophysical stocks and
sustainability.
Ecosystem Services
No specific guidance (refer to FBC).
Table 18: Guidance for each component within the Process perspective.
The conclusion to base this architecture significantly on the FBC is due to the very
significant response by interviewees on the focus towards sustainability. While the
BMC was still an option in the research as a prominent example of a well-
developed and structured monetary-focused business model, the continual
messaging seen in the research was to focus on sustainability. This supported a
move away from the BMC, and the discussion and choices for components went
even further in supporting an architecture that was not based on the BMC. This
reflected Upward and Jones’ (2016) view that a shift was needed in the
fundamental structure of the business model architecture to support sustainability.
While the TLBMC does provide other layers to support sustainability, these
sustainability focused components received practically no support in the research.
This further supports the idea from Upward and Jones (2016) that SBMs need to
be significantly redesigned, rather than viewed as layers added to the BMC.
However, this research also concludes that it is important to recognise values as a
component in business models, which is aligned with Breuer and Lüdeke-Freund
(2016). The values of an innovation centre in the energy transition are seen to play
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a fundamental role in shaping the organisation and its business model. It would
seem very beneficial to recognise Values as a component to promote alignment
with the other components and to support alignment with the values of
stakeholders, including partners. While Values was supported, the encompassing
concept of institutions does not appear to have a place directly in the architecture,
and instead plays a role in the elements of context.
Tables 15-18 represents this architecture as based on the FBC, with the addition
of the Values component. It is recognized that the visual canvas representation of
the FBC had significant research put into it and presents more than a list of
components (Jones & Upward, 2014; Upward & Jones, 2016). The architecture
developed in this research could be converted into a visual canvas, but it would
seem more powerful to use the existing FBC canvas and join it with the relevant
sections of the BIK canvas. This technique has already been tried for HESI by this
researcher in developing a business model, and it seemed to work effectively and
understandably.
The guidance in Tables 15-18 adds an aspect that seems missing from the FBC
and BIK. While those architectures provide general descriptions and support
information for their components, this research shows how an organisation in a
specific context, in this case an innovation centre in the energy transition, needs
more information to understand and use these components better. The guidance
recommendations provided per component are the main conclusions of this
research on how an organisation in this context can best develop its business
model. Osterwalder and Pigneur’s (2010) article does have some guidance
provided for specific contexts, but this research concludes that the guidance needs
to be much more complete, be provided for every component, and be very
reflective of the specific context, based on multiple elements of context.
5.3. Interrelationships
The conclusions on the guidance on interrelationships for this context are in Table
19, which provides an answer for SRQ 4. Because this research concludes that
the FBC appears to be an effective base structure for an architecture for this
context, it follows that the interrelationships, as identified by Upward and Jones
(2016), are applicable in addition to the ones recognised here.
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Table 19: Guidance for interrelationships in the context-based architecture.
While these are specific conclusions for an innovation centre in the energy
transition, the research also concludes that that more recognition is needed for
interrelationships in architectures. The literature recognizes the links in
interrelationships visually and that these connections need to be considered while
developing a business model (Osterwalder, 2004; Osterwalder & Pigneur, 2010;
Upward & Jones, 2016), but there is no discussion about guidance related to the
interrelationships. It is hoped that future research can explore the guidance
applicable generally and for other contexts.
6. Recommendations
This section discusses the recommendations from this research from both
theoretical and applied perspectives. It then discusses the feasibility of the
recommendations, from a research perspective and for organisations which may
use the results from this research.
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Understanding the influence that context has on business model architectures can
be helpful for both researchers and organisations. A recommendation for
researchers to consider as related to context is:
When presenting architectures, consider who is going to be using the
architecture and provide guidance applicable for that context. This will help
businesses more rapidly adopt the architecture and understand how to use
it more effectively.
Expanding on the guidance for components as outlined in the Conclusions, the
follow is a summary of the main areas an organisation in this context needs to
focus on when developing its business model.
The innovation centre needs to position itself as a leader/expert in the field.
It needs to be an educator and develop research programmes to advance
the energy transition. Along with this comes a commitment to upholding its
own values towards sustainability, transparency, and independence.
The relationships among stakeholders would appear to be more complex
than in more traditional business models. Customers can be viewed as
partners and partners as customers depending on how they interact with the
many other stakeholders. More thought and management are needed to
support these relationships.
Diversity of stakeholders is critical. It is very important to get ideas from and
collaborate with many groups of people. An organisation in this context
needs to focus on methods to encourage diversity in ways that will support
the ongoing research programmes and improve innovation potential.
The innovation centre can play a core role in sustainability, more than simply
helping switch energy sources as part of the energy transition. Innovation
centres can set an example of their own commitment to sustainability and
then play a strong role in education and inspiration of their stakeholders to
enhance sustainability in the stakeholders’ innovations and processes,
throughout their value-chain.
The innovation centre must recognise the current context for the business
and be aware that this may change over time, which could require
adjustments in the business model. Understanding the institutional layer for
the organisation can help direct the approach of the business model and
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changes that may be needed. An example is recognising how there may be
new challenges in being a leader if there is a significant economic
slowdown, and the organisation itself needs to focus more on just making
money to continue to survive. New policies or regulations could require
change, as a government law significantly limiting fossil fuel use and
focusing on renewable energy could cause a major shift in the applicable
guidance and business model.
These recommendations for the direction of the organisation can be considered
while using the architecture of the FBC, with the Values component, and using the
guidance for these components as outlined in the Conclusions. It is recommended
that organisations also look closely at the article by Upward and Jones (2016), as
well as understanding the values component in the BIK by Breuer and Lüdeke-
Freund (2016).
Important for organisations in this context while they develop their business models
is consideration of the interrelationships between components and how changes
in one can affect others. The identified guidance for interrelationships in the
Conclusions of this research can help an organisation, in combination with the
ontology by Upward and Jones (2016), to see which components are linked. The
FBC and BMC also provide methods to include these links in the business model
development process.
The above direction and guidance needs to be shaped by the values of the
organisation. A recommendation for any organisation in this context, using this
architecture, is to first develop a strong understanding of the values the
organisation supports. It is then important to ensure throughout the business model
development that the ideas and approaches are aligned with these values.
Potentially even more important to consider is whether the organisation and parent
organisation, if applicable, already embrace these values. If the organisation claims
to be sustainability focused, but still establishes practically all monetary-based
measurements for their employees, this could create conflict with the organisation’s
goals and other areas of the business model. Organisation-wide alignment on
these values is needed to use this architecture and guidance most effectively.
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Transitioning to this new architecture and a focus on sustainability will need time
and resources. Concepts such as aligning employees towards the same values
could mean dismissing those who cannot support the organisation’s values. There
would also need to be established and understood metrics for the organisation and
staff which are sustainability based, rather than only monetary. These metrics
would need support from all levels of the organisation to succeed. Depending on
the existing staff and structure of the organisation, this could be a long and involved
change process. However, the world is moving towards sustainability, and this
research supports how important it is for an innovation centre in the energy
transition to be at the forefront of this movement. An organisation that does not
make the transition to sustainability thinking and SBM architectures would likely
soon be left behind and not supported by its stakeholders that are committed to
sustainability.
On the feasibility of these recommendations, the following needs to be considered:
While this research is focused on concepts related to sustainability, it does
recognize and provide guidance on monetary aspects. Profit is needed for
an organisation to survive, and many current metrics are still based on these
concepts. Ideally, this paper will assist the move towards sustainability,
while still providing a solid base for the ability to make money.
Many interviewees stressed that whatever architecture is developed or
chosen, it needs to be simple and usable. The goal of these architectures is
for organisations to use these structures and guidance to develop their own
business models. This research has therefore focused on providing context-
specific, practical, and usable information to organisations.
It is hoped that this research may assist organisations to have architectures
that better match their needs. This would strengthen the organisation and
help it realize better value from the business model architecture, for
themselves and their stakeholders. Correspondingly, models which do not
support sustainability would seem not to be feasible in the long term, as the
entire world must move to sustainable practices.
In summary on recommendations, an organisation in this context can consider the
following steps to use this research:
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1) Recognize the elements of context for the organisation to better understand
what should influence their business model development.
2) Identify the values of the organisation. This will help the organisation ensure
alignment of the business model with its own values, which will also have a
significant role in shaping the goals it establishes.
3) Discuss whether the organisation follows these values and take steps as
needed to have the organisation, including its staff, better align with the main
values it supports. As seen from the literature, this can also help the
organisation in its success and even to outperform those that are solely
monetary driven.
4) Develop the business model by using the architecture from this research
and supporting information from the FBC and BIK. This will likely be an
iterative process throughout the business model development, especially
since SBMs may be a new concept for the organisation. Also important are
existing communities supporting these tools and resources. These can be
a great way for collaboration and joint learning to continue advancing
sustainability as a major focus for organisations.
5) The organisation also needs to be aware that the business model
development process will never finish or be completely static. Especially for
an innovation centre in the energy transition, there are constant changes in
technology and in worldwide efforts towards the energy transition. These
can have a major impact on the business models of these organisations, so
they need to be regularly reviewing their business model, including its fit
within their context.
These steps and recommendations are towards a strong focus on sustainability.
This research, along with the substantial and growing research on SBMs, is a clear
step away from using the BMC, focused on monetary objectives, and transitioning
to a new way of representing the values and goals of the organisation also including
society and the environment.
7. Discussion
Sustainability is a world-wide concern. A leading-edge innovation centre in the
energy transition was finding that there was a disconnect something missing in
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its business model. This was a crucial problem for an innovation centre in the
current emphasis on sustainability. Any business model architecture that this
centre was going to use needed to be built around its context so that the
organisation’s design was aligned with its goals and area of work. This generated
the research goal. The research findings identified the elements of context, the
components and applicable guidance, and the interrelationships between these
components that were a fit with this context. The research concluded that the
Flourishing Business Canvas provides a good foundation for a business model
architecture that can be adapted for the context, with an additional component for
Values. The results and recommendations offer an approach that is more resonant
with the innovation centre and with the broader social concern. An additional
benefit of this context-based approach is that it is more responsive to change,
which will be important through the dynamic move to sustainability.
Is it an unwieldy scenario to try to match an architecture to every possible context?
This research applied a filter by considering only context that will have an influence
on architecture. Very specific context for a business may affect how they develop
their business model but would likely not have a role in the structural design. While
the consideration of any context would seem to add complexity to the architecture,
this context-based approach provides more tailored guidance for organisations,
making business model architectures more useful. It recognizes the strength of the
base structure of general architectures, while adapting it to the specific context.
The result is an efficient and useful tool.
Potential limitations with this research, including the methodology used, were:
Many of the interviewees spoke English as an additional language. This
could have led to misunderstandings as the interviews were conducted in
English and the interview questions and preparatory material were in
English. For improved validity, these questions could have been translated
to the interviewees’ native languages and the interviews themselves
conducted and recorded in those languages.
The interview questions were developed by the researcher for this study,
based on the research and SRQs, and were correspondingly not based on
any previous studies. The interview questions were not validated beyond
the several pilot tests that the researcher conducted.
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Qualitative research is inherently subjective and can be easily influenced by
biases of the researcher and interviewees. While the researcher took steps,
as per the Methodology, to ensure the validity, it is important to recognize
this limitation of qualitative research in exchange for the richness of
information it provides. These biases could also play a role in the final
conclusions and recommendations and could cause potential errors or
limitations on what the research delivers.
The researcher did not include the age of interviewees in Table 4, as this
information was not collected during the interviews. This may limit insight
about what may influence the perspectives of the interviewees.
There was not enough time available to do a second round of interviews,
which could have allowed interviewees to give more information and
feedback based on the initial results.
This research is likely transferable and/or usable for social and professional fields
in the following ways:
Organisations in this context can use these recommendations and business
model architecture when designing their business models. TNO HESI has
already reported that this research has been beneficial for their business
model development, so it is hoped that similar organisations can also gain
from this research.
Many concepts from this research could be relevant for innovation centres
focused on sustainability-related fields in different contexts. They would be
promoting similar innovation in their areas, with a goal of helping a sector
transition to sustainable practices.
The FBC, with the addition of the Values component, appears to be a solid
structure for SBMs. Other organisations can use this as a base while
determining what to consider for their contexts. These organisations can
then focus on the specific guidance needed for their context, rather than first
needing to determine what architecture is the best fit.
Considering context appears to be very important for business model
architecture. This research shows that different guidance is needed for
different contexts, and existing SBMs, such as the FBC, could benefit by
providing this specific guidance.
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Future research could be done to further advance this area of study, and there
were several perceived gaps in literature. Potential areas are:
Additional studies are needed on what guidance could be applicable for
organisations in other contexts. These studies could have the FBC, with the
addition of the Values component, as a base structure for the architecture.
While the component of Values has been added to the architecture in this
study, further research could explore whether this component is applicable
in other contexts. This research would build on the research by Breuer and
Lüdeke-Freund (2016), to show the importance of considering values as a
component in business model architectures, and then provide guidance
specific to the context.
More research is likely needed on the different ways in which context plays
a role in business models. New research could also develop further insight
into how organisations can use the understanding of context in bettering
their business. Different elements and sub-elements of context could be
considered.
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