Defining business model key performance indicators using intentional linguistic summaries

Area of Science:

• Business and Management
• Innovation Studies
• Decision Science

Background:

• Organizations innovate business models to stay competitive, but this process involves uncertainty and data challenges.
• Evaluating business models is crucial for decision-making, often using Key Performance Indicators (KPIs).
• Existing KPI methods are often quantitative and unsuitable for early innovation phases.

Purpose of the Study:

• To develop a novel method for defining business model KPIs.
• To address the limitations of quantitative KPIs in early-stage business model innovation.
• To provide holistic support for decision-making throughout the innovation process.

Main Methods:

• Design science research methodology.
• Development of a novel method for defining business model KPIs.
• Utilizing structured templates based on linguistic summarization theory to create qualitative KPIs.
• Demonstrating gradual quantification of KPIs for later innovation phases.

Main Results:

• A new method for defining business model KPIs was developed.
• Qualitative KPIs suitable for early-stage decision-making were created using structured templates.
• The method allows for gradual quantification of KPIs to support later innovation stages.
• The method was evaluated in two real-life business cases with 13 industry experts.

Conclusions:

• The developed method offers a more holistic approach to business model evaluation.
• Qualitative KPIs are effective for supporting early-stage business model innovation decisions.
• The method's adaptability supports decision-making across different innovation phases.