A practice approach focuses on the actions that actors undertake according to a context and time. Such a research angle assesses how skillful practices become a resource for the organization (Ahrens and Chapman 2007). These authors use a practice perspective to dive deeper into the functioning of subsytems such as “relationships forged between understanding and tradition”. When other approaches stop at general constructs, as does actor-network theory, practice theory continues its observation of specific actions taking place at a micro level. According to Schatzki (2005), any practice is an organized, open-ended spatial temporal plethora of activities.
There are two aspects relating to actors that a practice approach chooses to shed light upon. First, it exposes the cognitive aspects which are “distributed over the environment of the actors”. Thus to better grasp this distributed knowledge taking place outside the actors’ heads, researchers study the interactive elements such as charts, maps, diagrams. Although diagrams are static, their use by the actors makes them dynamic and transportable as described by Alac & Hutchins (2004). Overtime, this practice (1) creates a contextual language and (2) generates action from interaction. Both of these elements of practice become a shared resource to answer the functional goals of the organization. With these two objectives in mind, we hope to adapt the business model canvas as a tool for strategy practice.
By demonstrating how practice theory can be applied to the field of strategy, Whittington (1996, 2006) greatly contributed to create a practice perspective. He structured three key elements in the theory of practice: praxis, practices, and practitioners. Praxis refers to what people do in actuality. It comes with a valid warning about the importance of context: “Evaluating praxis within a particular organization requires an understanding of prevailing practices without”(2006). Second, practices are a set of shared routines of behaviour and procedures for thinking, acting and using “things”. The word “things” is meant in its broadest sense. Lastly, practitioners are the individuals also called the actors when they undertake the practices in praxis.
Wittington (1996) proposes that strategy as practice is more than a tacit property of organizations, it can be explicit in the things that people do. Also, we note a similarity between his three dimensions and those of Arhens and Chapman. In sum, we can extract from these examples of research with a practice perspective that a practice perspective looks at four aspects of organizations: actors, action, context and time.
A practice approach to shed light on strongly sustainable business models
An organization’s business model is often tacit. Managers are just beginning to think about how the nine building blocks (value proposition, customer segments, customer relationships, channels, key activities, key resources, partners, revenues and costs) of their business are related to each other as a coherent system (Ostenwalder & Pigneur 2010). That is why an attempt at improving the business model first obliges to make it explicit. Similar to the old adage: You can’t improve what you don’t measure. In this case, you can’t improve what you don’t first design. From here on, we propose that designing the organization’s business model is a new practice.
Figure 6. Joyce (2013)
A practice approach sheds light on four dimensions of designing business models. First, practice is characterized by action. Second, practice implies wilful actors. Third, practice is grounded in context. Fourth, practice is evolutive in time. We will now explore these dimensions in further detail.
First, practice is characterized by action. Although one could argue that a single action is a practice, the meaning of practice comes with planned and repetitive action. When an organization plans and repeats an action, it builds a practice. It is easy to see how planning to satisfy client needs by generating repeated revenues make the implementation of business model a practice too. Interestingly enough, we can build upon multiple practices to arrive at a sum of a practice. For the purposes of our research, the action we are interested in studying is the sub-practice of designing the business model in hopes to better influence the larger practice of business model transformation.
Second, practice implies wilful actors. Without people as actors, there can be no action. We establish that a practice is undertaken by a person whom is free of will. Whether or not such an actor is conscious of business model actions or the consequences of his actions is to be further discussed. In the case of designing business models, we begin by assuming that most people aren’t aware of their current practice. First, we must identify the people in the organization that have the will and capacity to take part in this practice. Because this is a new practice, an outside advisor can share the practice with the identified actors. Second, we endeavour to make explicit the business model to the internal actors. Lastly, the practice of designing business models is about proposing change. And whenever change is suggested, those who hold the reigns of power need to take part in the change. If the improved business model is to be implemented in the future, there will be a need to include decision makers. One novel aspect of our research is studying an external actor can initiate the practice of designing business models.
Third, practice is grounded in context. As we have seen, the context of the organization can be both understood as internal and external to the organization. The external contexts to be taken into account in terms of business model innovation are the macro-economic situation, key trends, industry forces and market forces. There are many frameworks to study the context of the organization such as Porter’s five forces (1979) and the PESTLE analysis (Political, Economic, Social, Legal, Environmental). That is the external context. The internal context that influences the practice of designing business models refers to classic organizational behaviour and operations management. However, this distinction between intra and extra organizational context evaporates when the time comes to apply the business model into practice. Equally so, the nine building blocks of the business model includes external aspects of the organization such as partners and customer segments. Moreover, with the goal of strong sustainability, we choose to give a voice to those who are often not taken into account in the design process. We hope to include stakeholders such as society at large and the environment as a part of the context. One could argue they become actors.
The separation between intra and extra organizational practices does not seem to be a promising avenue in studying business model design. However, the idea that one organization’s practice can have an influence on the societal context is of great value to our research. The reason behind the use of the word “context” when speaking of the analysis of the business “environment” is to make way for the natural environment.
Practice is evolutive in time. Reasons behind historic decisions come from past experiences. A practice is then created by learning from experiences. Practice has been seen as means to an end (Lave 1988). Organizations build a capacity to improve practices into an expertise. That expertise becomes the center of their value proposition in their business model. In our research, we will study how the evolution of practice becomes a working business model.
In conclusion, we now see the practice of designing business models in a similar light to that of Whittington’s strategy as practice (1996). The resemblance lies in way strategy as practice brought a tacit property to an explicit practice. Also, when studying the practice of designing business models, we are in fact creating a contextual language and generating action from interaction. Following Arhens and Chapman’s research (2007), the four dimensions of a practice perspective were explored and served as a basis to formulate questions for future research on designing strongly sustainable business models.