Ontological Humility and Business Model Innovation

Introduction

One of the key debates in cognitive psychology is whether higher-level cognition is best understood as a process of differentiation — breaking down information into smaller and smaller parts — or integration — putting information together to form new and more complex representations. This debate has important implications for how we understand the process of innovation. If we see innovation as a process of cognitive differentiation, then it is primarily about generating new and unique ideas. If, on the other hand, we see innovation as a process of cognitive integration, then it is about taking existing ideas and combining them in new and interesting ways.

The ontological humility principle states that we should be open to the possibility that our current understanding of the world is incomplete or even wrong (D'Oro, 2019). This principle has important implications for how we think about innovation. First, it means that we should not be too quick to dismiss new ideas out of hand. Second, it means that we should always be open to the possibility that there are better ways of doing things.

Cognition, Differentiation, and Integration

Cognition refers to the process of acquiring knowledge and understanding through thought, experience, and the senses. It encompasses all mental processes, including attention, memory, perception, decision-making, language, and problem-solving. It is an important part of innovation and involves both differentiating and integrating information.

Business Model Innovation and Organizational Redesign

Cognitive differentiation is the process of breaking down complex information into smaller, more manageable pieces. This allows us to better understand and remember that information. Cognitive integration is the process of reassembling those smaller pieces to form a cohesive whole, enabling us to see connections and relationships that we might not have noticed before. Both cognitive differentiation and integration are essential for effective learning and memory (Siegler & Chen, 2008).

Should organizations undergo redesign prior to implementing business model innovations (BMIs)? The answer may depend on the specific organization in question, as there are advantages and disadvantages to both approaches. Ultimately, it is up to each organization to decide whether organizational redesign is necessary for the successful implementation of BMIs.

The first assumption commonly made is that organizational redesign is necessary for the successful implementation of a BMI. The second is that organizational redesign is a prerequisite for business model innovation (Foss & Saebi, 2017). However, there is evidence to suggest that neither of these assumptions is necessarily true. In some cases, organizational redesign may actually hinder successful BMI implementation. For example, if a company undergoes a major reorganization just before launching a new business model, it may be difficult to align employees with the new model and generate the necessary level of buy-in. Similarly, if a company tries to implement a BMI without first understanding how it will fit within the existing organization, it is likely to encounter resistance from employees and other stakeholders. When considering whether organizational redesign should precede the implementation of a BMI, it is therefore important to carefully consider the specific context and objectives of the innovation.

One school of thought argues that organizational redesign should precede BMI. The logic is that redesign is necessary to make the organization more agile and responsive to change, and that only after the organization has been appropriately restructured should BMI be considered. Otherwise, the new business model will simply be overlaid on top of the old organizational structure, leading to inefficiencies and stagnation. However, a competing school of thought argues that BMI should precede organizational redesign. The rationale here is that BMI often leads to significant changes in the way work is done, which in turn necessitates a corresponding change in organizational structure. As such, it may make more sense to implement BMI first and then follow up with organizational redesign. There is no universally correct answer; ultimately, it depends on the specific situation and context, and both options should be carefully considered before a decision is made.