Exploring the Interplay of Mindset and Abilities at Multiple Organizational Interfaces

This article explores organizational change driven by the digitalization of services in technology firms. The change offers exciting opportunities for improved value creation, but challenges the prevailing business models, and requires fundamental changes in resource and capability portfolios as well as their integration within business ecosystems. The study investigates the change at the institutional and capability realms at internal and external interfaces. This study is conducted as a multi-case study among seven globally operating firms. We observe their transition toward digitally enabled smart services and value-based business logic. Our findings identify three groups of barriers to change, causing internal and external mismatches of mindset and abilities. The study contributes to the organizational change literature by deriving an analytical framework for understanding the interconnected change of the mindset and abilities, as well as the alignment of those two. We suggest that to capitalize on the emerging opportunities related to the digitalization of services, firms may need to disrupt the status quo, and to reconstruct a more competitive internal and external configuration of abilities for service-based business models.