The Next Big Thing - A qualitative study on how strategic leaders of incumbent firms identify new opportunities

Abstract: In today's dynamic and volatile business environment, incumbent firms need to constantly rethink their value proposition and be flexible in adjusting their businesses to shifting market conditions through innovation. Leaders at the highest level of incumbent firms, i.e., strategic leaders, have been suggested to play a key part in driving and promoting innovation. Recognizing this, scholars have called for more research on the initial stages of the innovation process, especially on the role of strategic leaders. This study addresses this call for research by exploring how strategic leaders of incumbent firms identify new business opportunities with strategic importance and significant value potential using a qualitative research method based on 21 semi-structured interviews. Our findings highlight that strategic leaders identify new business opportunities by engaging in four distinct discovery behaviors - observing, questioning, experimenting, and idea networking. Moreover, this study contributes to previous research by showing that strategic leaders leverage their team when engaging in these different behaviors. As strategic leaders strive to expand their capability to identify new opportunities, they are involved in the discovery behaviors directly by themselves and indirectly through their team. However, to leverage their team, strategic leaders need to establish psychological safety. The findings of this study reinforce the importance of strategic leaders using their team as a sparring partner to identify new opportunities.