ABSTRACT
Every business model innovation has to be executed well if its full potential is to be realized. Executing a business model innovation involves organizing people to carry out the set of innovation activities that are required to create and capture value-it is about who carries out which activities, who works for whom, how to measure and reward performance, how information should flow in the organization, who to hire, what culture one would like to see develop, and so on. For example, to perform all the activities that enabled it to provide relevant searches, and monetize them using a paidlisting revenue model, Google used an organizational structure that fit its informal tech culture, developed its own incentive systems, and hired the right type of technical and nontechnical personnel. When IBM decided that services were going to be just as important as products to its business model, it had to restructure its organization to fit the new model, put in the right systems to measure and reward performance, hire the right people, and try to build the right culture. Effectively, to successfully execute a business model innovation, a firm needs an organizational structure, systems, and people that reflect not only the business model but also the environment in which it is being pursued. Business model implementation is about the relationships among the model,
the structure of the organization that must execute the model, the systems and processes that complement the structure, and the people that must carry out the tasks in the given environment. We explore some of these relationships using a business model, structure, systems, people, and environment (BS2PE) framework (Figure 11.1).1
