– Companies that proactively organize for sustainability transitions in the construction industry require systemic business model innovation. Such, says Andrey Abadzhiev, new doctor in Business Administration.
Andrey Abadzhiev, you have recently defended your dissertation in business administration titled Managing business model innovation for sustainability transitions: Towards a theory-based typology – tell us about leading business model innovation in the transition to more sustainable solutions as you present in your dissertation.
– The role of companies in sustainability transitions is twofold: while companies are a significant contributor to sustainability challenges, they also serve as a major source of innovation to address these issues. My thesis focuses on the latter role, examining how companies actively organize for industry transitions toward sustainability.
– By adopting a business model perspective, my research focuses on the firms' potential to drive industry changes. Achieving such large-scale transformation requires a departure from the traditional "business as usual" mindset. This involves embracing a holistic approach to value creation that goes beyond economic profits to also consider environmental and social impacts.
– The central aim of my thesis was to explore the managerial implications of innovating business models for sustainability. I build on the argument that managing such business models is not simply a case of managing a business.
Through Andrey Abadzhievs research, he identify three key dimensions that companies must address to drive such sustainability changes:
Values Alignment
Companies need to go beyond a narrow focus on economic value by integrating and aligning sustainability values with those of a broader range of stakeholders. It also requires a normative orientation towards more responsible innovation.
Knowledge Management and Learning
Firms must acquire, share, and leverage knowledge related to sustainability challenges and solutions. This includes reconfiguring organizational competencies and fostering a culture of continuous learning and innovation.
Agency and Action
Companies need to translate knowledge into concrete actions and practices that advance sustainable outcomes. This requires building networks of people and technologies to actually drive change while embedding sustainability into daily practices and organizational strategies.
Why did you choose the wood industry for your research?
– I chose the Swedish wood construction industry as the focus of my research for two key reasons. First, it represents an industry actively engaged in sustainability efforts, offering a relevant context to examine the proactive role of business in driving such a transition. Second, my PhD was part of two research projects: Vinnväxt (2018–2020) and IndBygg (2021–2023), co-financed by Vinnova and the European Regional Development Fund. In these projects, I collaborated closely with Paper Province (a business cluster in the forest bio-economy based in ¹û¶³´«Ã½, Sweden), which provided valuable access to collect data from key stakeholders.
Tell us about some of the findings you did in your research
– My dissertation focused on understanding and managing business model innovation for sustainability, with empirical research based on case studies of the Swedish wood construction industry. Based on my thesis findings, I propose a multi-dimensional framework for managing business model innovation for sustainability. This framework emphasizes values, knowledge, and agency as key dimensions and offers a theoretically grounded and practically relevant base for researchers, practitioners, and policymakers. I have illustrated various facets of the proposed multi-dimensional framework through the four appended empirical papers.
Two key findings from Andrey Abadzhievs research
Companies that proactively organize for sustainability transitions in the construction industry require systemic business model innovation. Such innovation represents a major change in all aspects of their business. It is a holistic and higher-order innovation activity that includes the synergy of product, process and position innovations as sub-dimensions. In order to spread the new wood-based technology, the systemic innovation span the firm boundaries and focus on managing partnerships intact and values shared by all parties for finding a strategic direction. Hence, implementing wood-based innovations in construction is dependent on aligning multiple companies and their business activities in the value chain.
The findings outlines three frequently recurring reasons why these companies collaborate, primarily rooted in economic performance:
- increasing efficiency
- opening up new market opportunities
- increasing the level of servitization
Andrey Abadzhiev did not observe a strong connection to shared environmental values as an aligning mechanism of the construction value chain in developing green innovations. The primary drivers for adopting green innovations are not solely tied to reducing the environmental footprint. Companies apply a more pragmatic approach where economic viability and industry-specific problem-solving play key roles. Opponion leaders can also use these means to expedite the diffusion of green innovation.
In what way do you think that your research will be useful?
– I hope that my research on managing business model innovation for sustainability contributes both to advancing academic understanding and providing practical guidance for companies navigating sustainability transitions. By developing a multi-dimensional management framework, I aim to make the "big idea" of corporate transitions in unsustainable markets and industries more analytically clear and managerially relevant. I also hope that the findings offer actionable insights for companies seeking to innovate their business models to align with sustainability goals. Furthermore, I believe the research can also inform policy decisions related to promoting sustainability transitions at the company level.
Has your research got any attention?
– My research has already gathered some interest and recognition within the academic community. Two of the papers appended to my thesis have been published in highly regarded academic journals: Paper 1 in the European Journal of Innovation Management and Paper 2 in Creativity and Innovation Management. Notably, Paper 1 received the "2023 Literati Award for Outstanding Paper" and ranked among the top three most downloaded articles of 2023 in its journal.
– Beyond academia, my research has also demonstrated practical relevance through collaboration with key industry stakeholders. By presenting and different industry events, I have garnered attention from those seeking to implement sustainable business models in their organizations.
Tell us about the future – what is up next for you?
– By defending my thesis on December 12th, I am closing a chapter. The next chapter is not open yet and I currently explore different opportunities. One of them is to stay in academia and continue my research if I get funding. The other option is to go back to the industry and try to utilize the knowledge I gained through my PhD.
