Breaking the Paradigm of Sensing, Seizing, and Transforming – Evidence from Axel Springer


Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 95 
 

 

Journal of Business Strategies 

DOI:10.54155/jbs.38.2.95-124 

Breaking the Paradigm of Sensing, Seizing, and 
Transforming – Evidence from Axel Springer 

Niklaus Leemanna, Dominik Kanbachb, Stephan Stubnerc 

a HHL Leipzig Graduate School of Management, Jahnallee 59, 04109 Leipzig, Germany. 
niklaus.leemann@hhl.de (Corresponding author). 

b Junior Professorship in Strategic Entrepreneurship, HHL Leipzig Graduate School of 
Management, Jahnallee 59, 04109 Leipzig, Germany. d.kanbach@hhl.de. 

c Professor and Chairholder, Dr. Ing. h.c. F. Porsche AG Chair of Strategic Management 
and Digital Entrepreneurship, HHL Leipzig Graduate School of Management, Jahnallee 
59, 04109 Leipzig, Germany. stephan.stubner@hhl.de. 

Key Words 

Dynamic Capabilities; 

Incumbent 

Adaptation; 

Resource-Based View 

Abstract 

Dynamic capabilities have typically been conceptualized as 

sensing, seizing, and transforming. This article explores the 

interplay of these procedural dimensions employing a 

longitudinal case study of Axel Springer, a leading media 

corporation that has exercised dynamic capabilities to 

convert from a print publisher to an internet company. 

Insightful evidence is produced from interviews with 

current and former top managers. The case study shows 

iterations, overlaps, and interconnections between sensing, 

seizing, and transforming. Sensing-by-seizing is introduced 

as a dynamic capability to seize concrete opportunities 

while concurrently sensing them. A conceptual model 

furnishes implications and recommendations for 

managerial decision-making. 

 

 
 
 
 
 
 
 
 
 
 
 

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International  
License. Copyright (c) 2021 Niklaus Leemann, Dominik Kanbach, Stephan Stubner. 

mailto:niklaus.leemann@hhl.de
mailto:d.kanbach@hhl.de
mailto:stephan.stubner@hhl.de
https://creativecommons.org/licenses/by-nc/4.0/
https://creativecommons.org/licenses/by-nc/4.0/


96 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

1. Introduction 

The concept of dynamic capabilities aims to explain what processes, abilities, 

or routines enable the firm to thrive amid changing environments (e.g., Teece 

et al., 1997; Eisenhardt & Martin, 2000; Zollo & Winter, 2002; Winter, 2003; 

Teece, 2007; Helfat et al., 2007; Schilke et al., 2018). As such, dynamic 

capabilities also contribute to economic stability and social cohesion as they 

enable incumbent firms to adapt to a change in their contextual setting. 

The conceptual introduction of dynamic capabilities to the literature was 

followed by a multitude of empirical contributions. Typically, such studies 

follow the procedural dimensions of Teece (2007) that specify dynamic 

capabilities as sensing, seizing, and transforming (Schilke et al., 2018). 

Accordingly, many studies tend to construct incumbent adaptation in rather 

discrete and linear steps from the identification of opportunities and threats to 

the building up or alteration of resources, and finally to the transformation of 

the organization (e.g., Gebauer, 2011; Mousavi & Bossink, 2017; Vézina et al., 

2019). We believe that change in the real world is not that discrete and linear 

over time. Hence, our research question is: How do sensing, seizing, and 

transforming interplay over a longer time period of incumbent adaptation to 

changing environments? This proposes an extended perspective on dynamic 

capabilities and addresses calls in the literature to recombine, revise, and 

extend the existing procedural dimensions (e.g., Protogerou et al., 2012; Schilke 

et al., 2018). 

We explore our research question by applying the critical case approach 

(Flyvbjerg, 2006; Yin, 2018) to a longitudinal study of Axel Springer, a leading 

international media corporation that has managed to successfully convert from 

a print publisher to an internet company in the past two decades. Interviews 

with 18 current and former top managers, including five members of the board 

as well as peers covering the entire observation period, allowed us to gain rich 

and insightful data on the case. 

The Axel Springer case shows that incumbent adaptation over time is a less 

discrete and linear organizational phenomenon than the pertinent literature 

suggests. The firm began transforming before exercising any sensing and 

seizing activities. It sensed opportunities while already being in the process of 

seizing them, and when building up new businesses, it constantly iterated 

between sensing, seizing, and transforming. 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 97 

  
 

With this study, we provide three main contributions. First, we find support 

that incumbent adaptation is an iterative process with overlaps and 

interconnections between sensing, seizing, and transforming. Second, we 

introduce the concept of sensing-by-seizing, which describes the dynamic 

capability of gaining knowledge through action. Third, we present a conceptual 

model for dynamic capabilities in incumbent adaptation that furnishes 

implications and recommendations for managerial decision-making.  

2. Theoretical Background 

Rooted in the resource-based view (e.g., Penrose, 1959; Wernerfelt, 1984; 

Barney, 1991), dynamic capabilities are the firm’s processes, abilities, or 

routines to purposefully create, extend, modify, or release its resources to 

address changing environments (e.g., Teece et al., 1997; Eisenhardt & Martin, 

2000; Helfat et al., 2007; Schilke et al., 2018). Teece (2007) has further advanced 

the concept by specifying dynamic capabilities as sensing, seizing, and 

transforming. In particular, the micro-foundations of sensing capabilities are 

“analytical systems […] to learn and to sense, filter, shape, and calibrate 

opportunities […] and threats” (Teece, 2007, p. 1322, 1326); those of seizing 

capabilities are “enterprise structures, procedures, designs and incentives for 

seizing opportunities” (p. 1334); and those of transforming capabilities are 

“continuous alignment and realignment of specific tangible and intangible 

assets” (p. 1340). Subsequent empirical research has typically constructed its 

findings within these procedural dimensions of dynamic capabilities (Schilke et 

al., 2018), often suggesting a linear sequence and clear distinction among them 

(e.g., Gebauer, 2011; Mousavi & Bossink, 2017; Vézina et al., 2019). 

Moreover, Zollo and Winter (2002) conceptualize dynamic capabilities as 

“learned and stable pattern[s]” that are “systematically” (p. 340) applied in the 

strategic adaption of the firm. Their routinized, repetitious, and patterned 

nature also distinguishes dynamic capabilities from “ad hoc problem solving” 

that addresses the same purpose but is performed by employees or teams who 

are otherwise employed in ordinary capability roles, thus, carrying a lower cost 

burden on the firm (Winter, 2003). 

The literature on dynamic capabilities serves as a theoretical framework that 

we aim to extend with our grounded theory research approach. We confront 

the theoretical background with our findings in the Discussion section. 



98 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

3. Methodology 

Given the exploratory nature of our research, we employed a grounded theory 

research approach (e.g., Corbin & Strauss, 1990; Gioia et al., 2012) using the 

case study method that is particularly indicated for “how” research questions 

(Yin, 2018). In our quest to identify a theoretical sample that is “likely to 

replicate or extend the emergent theory” (Eisenhardt, 1989, p. 537), we 

selected the publishing industry as context and a longitudinal view (2000–2020) 

of Axel Springer, a leading media corporation, as its critical case. With the 

emergence of the internet, the media industry has suffered a tremendous 

decline in its traditional print-based business models. Similarly, the media 

industry has been considered suitable for dynamic capabilities research in other 

studies (e.g., Ellonen et al., 2011; Makkonen et al., 2014; Prescott, 2014). Within 

that context, Axel Springer stands out as a firm that is managing this transition 

outstandingly, with 73% of its current revenue being digital, realizing an 

EBITDA margin of 20% (cf. Table 2a-c). The firm, therefore, has 

demonstrated dynamic capabilities by definition (i.e., to thrive in a changing 

environment). Axel Springer thus uniquely qualifies as a “critical case” 

(Flyvbjerg, 2006; Yin, 2018) or “unique exemplar,” respectively (Eisenhardt in 

Gehman et al., 2018). As the aim of the study is to explore how dynamic 

capabilities interplay over a longer time period, the longitudinal single case is 

the pertinent method, which has also been used by other studies of dynamic 

capabilities (e.g., Danneels, 2010; Dixon et al., 2014; Pandit et al., 2018). 

We collected primary data from 18 semi-structured interviews with current 

and former managers, as well as peers (cf. Table 1). The collective tenure of 

these informants covers the entire observation period, which allowed us to 

conduct a longitudinal case study examining “the same single-case at two or 

more different points in time” (Yin, 2018, p. 51) with an ex-post perspective. 

The interviews were conducted in the years 2020 and 2021, recorded and 

transcribed verbatim except for one (due to confidentiality preferences), for 

which we took a memo. 

The interviews were subsequently coded according to the procedures 

outlined by Gioia et al. (2012) using the Atlas.ti software. Initial coding resulted 

in 502 open codes. By seeking similarities and differences among the open 

codes, we reduced the categories to a manageable number of 1st-order 

concepts while retaining informant terms, from which we eventually 

 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 99 

  
 

Table 1. Overview of Interviews 

# Relevant positions, Inter 
Alia 

Unit 
Full Tenure at 
Axel Springer 

1 Managing Director Newspapers 2004–2011 

2 Board Member Peer - 

3 Board Member Corporate 2004–Present 

4 Publishing Director Newspapers 2007–2012 

5 Executive Vice President Subsidiary 2004–Present 

6 Managing Director Newspapers 
2001–2008 

2015–Present 

7 Founder / Director Digital asset 2004–2011 

8 Chairman, Board Member Corporate 
1999–2017 

2020–Present 

9 Board Member Corporate 2000–2020 

10 Editor-in-Chief Newspapers 
2001–2005 

2008–Present 

11 Managing Director  
Digital 
ventures 

2001–Present 

12 Chief of Staff to the CEO Corporate 2007–2017 

13 Board Member Corporate 2006–Present 

14 Senior Vice President Peer - 

15 Senior Vice President  Finance 2001–2011 

16 Founder / Publisher Peer - 

17 Board Member Corporate 2013–Present 

18 Senior Vice President M&A 2001–Present 

constructed our data structure with 2nd-order themes and aggregate 

dimensions, as shown in Figures 1a-c. Secondary data was retrieved from 

openly accessible sources such as annual reports, trade press articles, or social 

media. This data was mainly used to triangulate interview data and give more 

context. Data collection and analysis were performed iteratively until 

theoretical saturation (Corbin & Strauss, 1990). 

 

 



100 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 101 

  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Figure 1b. Data Structure (continued) 



102 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 103 

  
 

4. Axel Springer Vignette 

Axel Springer was founded in 1946 as a print media publisher by Axel Cäsar 

Springer (1912-1985). Today, the firm is active in digital classifieds and news 

media with annual revenue of 3,112m€. By 2000, Axel Springer was mainly 

active in Germany with newspapers, magazines, and books. International and 

digital business played a minor role with 16% and 3% of total revenue, 

respectively. After decades of high margins, the company reported its first loss 

in 2001, which coincided with the beginning of the market’s decline. 

Subsequently, the company began consolidating its print-based legacy business 

and looking for external growth options. From 2003, Axel Springer aimed to 

take over ProSiebenSat.1 Media (“P7S1”), one of the two major TV 

corporations in Germany, a move that was eventually prohibited by anti-trust 

authorities. Afterward, the company stepwise acquired PIN Group, a postal 

service provider. Following the introduction of a minimum wage, PIN Group 

became loss-making, and Axel Springer sold the group in 2007 with a 

significant loss of 545m€. The firm then focused its growth strategy on digital 

assets, acquiring a series of digital firms (e.g., Idealo, StepStone, Zanox, 

AuFeminin, SeLoger). In 2014, it sold a significant part of its legacy print 

business to Funke Mediengruppe. Following this sale, the firm acquired digital 

journalism products (e.g., Politico Europe, Business Insider). Throughout the 

observation period, the share of digital revenues increased to 73%, and 

EBITDA increased from 217m€ to 631m€, which was in part debt-financed, 

though, debt ratios remained moderate. This overview is based on the official 

company timeline (Axel Springer SE, 2020), annual reports, and context given 

by informants. Tables 2a-c summarize key figures for the market and the case. 

 

 

 

 

 

 



104 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

 

 

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Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 107 

  
 

5. Findings 

In our quest to study the interplay of sensing, seizing, and transforming in the 

context of incumbent adaptation, we identified the following dynamic 

capabilities (cf. Figures 1a-c; Table 3). 

5.1 Transforming Step-By-Step and Layer-By-Layer 

Axel Springer exercised transforming activities in two distinguishable steps: 

the first encompassed only some layers of the firm while the second radically 

transformed it as a whole. 

In 2000, when markets began to decline, Axel Springer was the market 

leader with a profitable business. Its culture, however, was driven by infighting 

and intriguing, which made it inert and unable to innovate and adapt to 

looming market change. The first reported loss in 2001 was a pivotal warning 

shot and led to the election of a new CEO who came to realize that the 

management, as well as the corporate mindset, was not ready to confront the 

challenges ahead. Before initiating any sensing or seizing activities, the CEO 

began transforming the organization by hiring key personnel from outside. 

“From the beginning, he got several managers from Gruner + Jahr and 

Bertelsmann. […] This included also three new board members. All of them 

had another upbringing and leadership philosophy […]. This was set up 

from the beginning […] and contributed heavily to the success.” (Current 

manager) 

Furthermore, the new CEO initiated an open dialogue and self-critical 

reflection about the firm, which previously would have been taboo. This 

introduced a liberal mindset that led to frank discussions about the declining 

core business. 

These first transforming steps can be considered the essential condition for 

the following adaptation, as they preceded any significant sensing or seizing 

activity. More than a decade later, the second and more radical transforming 

step was initiated. 

“Previously, the transformation was point-by-point. […] But then, 

digitalization was broadened and everybody was taken aboard. […] From 

this point, we were a digital company.” (Current manager) 

In 2012, Axel Springer sent three key executives to Silicon Valley on a nine-

month trip to study digitalization. Back home, they initiated radical change. 



108 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

Afterward, a management conference was held in the Silicon Valley with one 

clear message: from now on, the transformation would be radical, and 

everybody would have to think digital – no excuses. 

“The trip to the Silicon Valley was a highly symbolic act. […] Now nobody 

can remain in Springer’s leadership team without endeavoring in 

digitalization.” (Former manager) 

In consequence, the composition of the workforce changed significantly: 

“From the 14,000 employees we had at the beginning of the year 2000, […] 

no more than 1,000 are still here.” (Former manager) 

Additionally, the divestment of legacy assets in 2014 underscored the 

communicated radicality with concrete actions. 

5.2 Profitizing and Streamlining the Legacy Business 

The strategic role Axel Springer attributed to the legacy business was to 

generate cash flow to partly finance investments into new businesses. Thus, it 

was put under a strict profitizing mandate which meant to find new revenue 

streams and cut costs. Additionally, the portfolio was divested where 

necessary. 

Profitizing involved particularly the newspaper Bild which was the main 

breadwinner of the company in the first half of the observation period. Rather 

than limiting consolidation mainly to cost cuts, Axel Springer put equal efforts 

into boosting revenues by innovating the print product offerings. Most 

notably, the Bild brand was repositioned, which opened it up for new 

advertisers. Axel Springer created many new advertising formats that allowed 

it to tap into further advertising budgets, and it also launched new print 

products, which stabilized circulation and advertising revenues. Moreover, 

Axel Springer has been at the forefront when it comes to digitalizing the legacy 

business. For example, it was the first publisher to launch a news app when 

the iPad was introduced, and it introduced paywalls on its online publishing 

sites. A move that has been copied by many of its peers afterwards. These 

innovations were coupled with cost-cutting programs. In the labor-intensive 

media business, cost is predominantly reduced by making job cuts. Axel 

Springer reduced its legacy workforce steadily with various programs across 

the entire organization. These measures allowed to keep legacy profits high for 

several years after the markets started to decline.  



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 109 

  
 

“The consolidation of the core business […] was very important to finance 

the expansion. […] The print market peaked in 2000, but the earnings of 

Bild peaked as late as 2009 or 2010. […] The strategy was to keep the print 

business up in the air like a paraglider and move the touchdown point as 

far as possible into the future.” (Current manager) 

However, for some legacy assets, these measures were exhausted at one point. 

Axel Springer constantly screened its portfolio from a valuation point of view 

and divested assets that were evaluated to be at the end of their lifecycle. 

“Axel Springer has always managed to recognize when an asset has been 

milked out. […] [The firm] has identified intelligent cutoff points […].” 

(Former manager) 

These cutoff points included the book publishing business in 2003 (175m€ 

annual revenues), stakes in regional newspapers in 2009 (not consolidated), 

and a significant share of its magazines and newspapers in 2014 (514m€ annual 

revenues). These divestments represented over one-fourth of the original 

business portfolio. 

5.3 Sensing-By-Seizing 

In 2001, three strategic priorities were defined: consolidation, 

internationalization, and digitalization. These remained, however, simple 

headlines of a strategy that had yet to be written. Furthermore, the firm did 

not practice any systematic and regular sensing activities. 

“I would make a big question mark to whether this [i.e., sensing] was made 

systematically and regularly. […] We always looked at single pieces of the 

puzzle without analyzing everything until the end.” (Former manager) 

Consequently, Axel Springer assessed a plethora of investment opportunities 

as broad as the articulated strategic priorities. This even included acquisitions 

in the declining print media business that never materialized. Eventually, the 

firm did engage from 2005 to 2007 in the P7S1 and PIN Group transactions, 

which turned out unsuccessful due to antitrust and regulatory reasons, 

respectively, despite a comprehensive strategic calculus. 

By seizing these opportunities, however, Axel Springer learned about the 

political reluctance to let a powerful media corporation or a competitor to the 

state-owned Deutsche Post emerge. We see from the interviews that these 

strategic roadblocks would most likely not have been detected if the firm had 

just engaged in traditional sensing activities during the due diligence for these 



110 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

transactions (e.g., desk research, management workshops). Hence, the firm 

gained knowledge through action rather than planning action based on 

knowledge. Therefore, we introduce sensing-by-seizing as a dynamic 

capability. This novel understanding proposes that the firm senses its 

environment more concretely and reliably when seizing particular 

opportunities. 

“They […] very systematically gained knowledge from this trial-and-error 

approach. […] For example, in the follow-ups to the ProSiebenSat.1 

disaster, [they asked] why did it fail? What other possibilities are there? And 

so on. They are very good at analyzing.” (Peer) 

As the following findings show, sensing-by-seizing has developed as a 

learned and stable pattern at Axel Springer. After the two unsuccessful 

transactions with P7S1 and PIN Group, the firm managed to pivot 

expeditiously to digitalization; a strategic priority it had previously begun to 

sense by seizing Idealo in 2006. Idealo was its first major digital acquisition, 

which allowed Axel Springer to explore digital business models at low risk 

because Idealo was acquired at a relatively low price and because its founders 

were kept aboard as managers. The path to digitalization was further 

emphasized by the acquisitions of Zanox in 2007, StepStone in 2009, and 

Seloger in 2011, among other companies. This series of acquisitions represent 

the beginning of Axel Springer’s development into an internet company. 

Today, StepStone is the main breadwinner. The way StepStone found its way 

into the firm shows an exemplary sensing-by-seizing capability. To enter the 

German market, the Norwegian start-up founded a joint venture with Axel 

Springer in 2004. Therefore, Axel Springer was able to sense the new market 

empirically for quite a while and then conclude to invest further. In 2009, it 

acquired the entire company. 

“In the case of new and unknown business models, we decided to gradually 

sneak up on [them]. Meaning, we felt more comfortable in a minority 

situation initially, to get to know the business and the management. Later, 

we increased our share to a majority.” (Current manager) 

The concept of sensing-by-seizing appears to work particularly well in 

nascent markets with only a few experts in the field such as the digital 

classifieds market at that time. Axel Springer was unable to acquire the 

necessary expertise to assess its digital classifieds acquisition targets outside of 

the firm (e.g., consultants, lawyers). Thus, it had to build up the expertise 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 111 

  
 

internally. As a result of sensing-by-seizing, Axel Springer gained exclusive 

expertise that was otherwise not available externally. 

“[Axel Springer] could not rely on external parties but had to build up 

know-how internally. For example, classifieds, I am very sure that over time 

competencies were developed that probably wouldn’t even have been 

available on the market because there haven’t been that many transactions 

really and when you participated, you effectively built up this know-how in-

house.” (Former manager) 

The firm defined its corporate strategy to become an internet company 

retrospectively. As such, the strategy was a result of various sensing-by-seizing 

activities rather than a masterplan defined ex-ante. 

5.4 Managing Digital Assets at Distance 

Once Axel Springer had seized the digital assets, it developed a distinctive 

dynamic capability to integrate and manage them. They were kept structurally 

separate from the legacy business and managed by a small portfolio 

management team. Any interference from the legacy business was forbidden. 

Consequently, the firm waived any synergy potential from their acquisitions. 

Central functions were only used by request but not as a corporate mandate. 

The digital assets were allowed to openly compete with the legacy business. 

Accordingly, “self-cannibalization” became a positive mantra. 

“The approach was by no means to delight the newly acquired digital assets 

with services from the headquarters and to integrate them. […] To the 

contrary, the headquarters should learn from these acquisitions how 

digitalization works.” (Former manager) 

This approach was a stable pattern and as such, it was much appreciated by 

the management of the digital assets, as one manager remembers: 

“My impression was that they left us alone in a positive sense. […] They 

looked at us as the experts in the online job industry. […] I personally 

experienced [Axel Springer] as bringing us into the next era and opening 

quite a lot of doors.” (Former manager) 

To secure knowledge sharing despite this structural separation, Axel Springer 

introduced up to 20 expert groups for specific technical topics (e.g., SEO, 

cloud solutions, agile working). Their members were subject matter experts on 

a working level rather than management, something which secured genuine 

expert dialogue. 



112 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

“We started early on to bring the digital employees together in specific 

groups so they could get to know each other and exchange on certain 

topics. […] These expert networks still exist.” (Current manager) 

Axel Springer did not approach the acquired companies as a “conqueror” that 

changed the management team once the transaction was closed. On the 

contrary, the firm tried to keep onboard the former team, often consisting of 

the founders, as managers and shareholders. This maintained valuable 

knowledge and secured an entrepreneurial management style. 

“We developed an acquisition formula that was the key success factor in 

our acquisition strategy: we acquire 75% and the founders stay onboard and 

keep 25%, for which we have call options. So, we can be sure not to buy a 

shell for which we do not have the management and cultural capabilities.” 

(Current manager) 

5.5 Safeguarding Stability and Continuity 

It seems paradoxical amid the need for change but most informants 

emphasized stability and continuity as success factors. This regarded the 

shareholder structure, the corporate heritage and principles, and the 

management. 

“When you are dealing with a changing environment and you realize that 

your commercial basis begins to crumble […] it helps when you have a 

certain foundation you can build on and hang onto.” (Peer) 

During the entire observation period, Axel Springer had one anchor 

shareholder that guaranteed a great deal of stability and continuity. The 

management describes this relationship as very trustful and supporting. They 

were able to focus on managing the firm and not get distracted by shareholder 

issues. This trust and backing were especially evident after the unsuccessful 

transactions with P7S1 and PIN Group. 

“The most impressive moment was when this whole PIN-story failed. Then 

the supervisory board said: we are not going to fire the entire board. They 

made a mistake. They didn’t make it alone. We in the supervisory board 

also went on with the decision. And we get out of this mess together.” 

(Current manager) 

 

 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 113 

  
 

Table 3. Representative Quotes Underlying Aggregate Dimensions 

Second-Order Themes Quotes 

Transforming Step-by-Step and Layer-by-Layer 

Reconfiguring the 
management team 

“[The CEO] reformed the leadership team. He 
made this very thoroughly. He was mocked in 
the public for his “boy group” because he hired 
many young managers.” (Current manager) 

“Then he fired [a person]. That really was an 
intriguing guy with a very bad reputation. […] 
This signaled a fresh start.” (Current manager) 

Establishing a liberal 
mindset 

“If you would have mentioned [the political 
past] with [the former CEO], you would have 
been fired immediately.” (Peer) 

 “This willingness to discuss in an open-ended 
way was decisive for the development of the 
team. […] Board meetings were never held with 
a preconceived opinion.” (Current manager) 

Signaling radical need 
for change 

“That was the moment to say it is not sufficient 
to have acquired some selective digital assets. 
[…] Everybody has to become digital.” 
(Current manager) 

Profitizing and Streamlining the Legacy Business 

Developing new 
revenue streams 

“We developed Bild into a marketing machine 
by repositioning it and, thus, opening it up to 
new advertisers.” (Current manager) 

“The switch from free to paid content was the 
next revolution.” (Former manager) 

Downsizing cost 
structures 

 “We developed a restructuring case that 
included several painful measures.” (Current 
manager) 

Exiting large parts of 
the legacy portfolio 

“[The CEO] diverged categorically from 
anything that had eaten up capacities and was 
loss-making. […] I think this was decisive 
because unnecessary management ballast was 
eliminated.” (Former manager) 

Table continued on following page 

 



114 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

Table 3. Representative Quotes Underlying Aggregate Dimensions 
(continued) 

Second-Order Themes Quotes 

Sensing-by-Seizing 

Assessing various 
scattered investment 
proposals 

 “You don’t believe how many shi**y proposals I 
had to get off the table.” (Former manager) 

“It was an enormous multitude of M&A targets 
that were assessed, very remarkable for a company 
of this size.” (Former manager) 

Failing with two 
major acquisitions 

“This was a decisive phase with these two failures. 
Both have really shaken up the company.” 
(Current manager) 

“After [P7S1] was not possible, we completely 
changed course without communicating this too 
hard and explicitly.” (Former manager) 

Learning by assessing 
acquisition targets 

“We learned enormously from these acquisitions. 
[…] With everything we have learned […] new 
acquisition opportunities opened up for us.” 
(Current manager) 

“We have the capability to make brave decisions 
based on the current state of knowledge but we 
also know that the decision base can change 
significantly within just a few years.” (Current 
manager) 

Formulating strategy 
around assessed 
investment options 

 “It now looks as if everything was planned, but of 
course it wasn’t.” (Current manager) 

 “Major strategic moves […] were always 
opportunities and not the result of a systematically 
defined strategy.” (Former manager) 

Managing Digital Assets at Distance 

Protecting digital 
assets from HQ and 
legacy business 

“We always said: each integration into the 
corporate structures means the lingering death of 
any young startup.” (Current manager) 

 “That was an internal culture war. They needed to 
fight against all the controllers and other corporate 
departments.” (Current manager) 

Table concluded on following page 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 115 

  
 

Table 3. Representative Quotes Underlying Aggregate Dimensions 
(concluded) 

Second-Order Themes Quotes 

Managing Digital Assets at Distance 

Securing knowledge 
sharing through expert 
groups 

“We were linking people together in specific 
expert groups.” (Former manager) 

“I think it is an important factor that we used 
the word synergies very seldom but worked 
more in a business and experience exchange 
mode.” (Current manager) 

Keeping entrepreneurs 
aboard as shareholders 
and managers 

“[We did] not acquire as conquerors and 
integrate entire teams that wanted to explain to 
them how the world works.” (Current manager) 

“We seldom acquired one hundred percent, 
rather step-by-step.” (Former manager) 

Safeguarding Stability and Continuity 

Securing a supporting 
shareholder structure 

“The management was able to focus on the 
strategy and didn’t have to manage shareholder 
issues.” (Current manager) 

“I spent maybe two percent of my time on 
company politics.” (Former manager) 

Using corporate 
principles and founder 
figure as focal point 

“There are a lot of people from the digital 
scene that want to work with or sell their 
company to Axel Springer because they say: 
they have a soul.” (Current manager) 

“In this age of digitalization and when 
everything important emerges in the Silicon 
Valley – what would our founder have done?” 
(Current manager) 

Safeguarding continuity 
in the management team 

“The people that he hired, they stayed very 
long.” (Current manager) 

“Back then I got a contract with a termination 
period of one year. […] I wanted to have a 
shorter period. […] But he insisted because he 
wanted to have continuity […].” (Former 
manager) 



116 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

The firm has historically been driven by the “Springer-values”, a set of 

principles that was defined many decades ago. For example, journalists have 

to stand up for a united Europe or uphold the principles of a free market 

economy. These principles and the omnipresent founding figure were skillfully 

used by management to explain and advocate the need for change while 

referencing their heritage. The CEO staged a theater play in which he played 

the founder in today’s world. He dressed up in a hoodie and a t-shirt, like a 

startup founder, and thought out loud how to disrupt the media. This signaled 

both appreciation of the past and the need for change.  

After the initial reconfiguration, management has remained very stable. 

Rather than placing vacancies with external candidates, internal managers were 

developed and assumed different roles. Therefore, management tenures often 

stretched over large parts of the observation period (cf. Table 1), which in turn 

preserved stability and continuity. 

In conclusion, Axel Springer was capable of managing the balancing act 

between stable reference points, such as corporate principles and key 

personnel on one side and major business change on the other. In this case, 

the former is paradoxically a key success factor for the latter. 

6. Conceptual Model 

Our examination of the Axel Springer case has shown that its dynamic 

capabilities have iterated, overlapped, and interconnected over time. Axel 

Springer began transforming the firm before sensing or seizing any 

opportunities. The transformation of key management posts and the corporate 

mindset was followed by profitizing and streamlining the legacy business to be 

able to finance seizing opportunities in new business areas. The firm developed 

a dynamic capability to manage its new business that allowed it to thrive vis-à-

vis the legacy business. Later, a more radical round of transforming allowed to 

adapt the entire firm. Despite a heavy burden of change on the organization, 

it maintained a dynamic capability to safeguard stability and continuity. Based 

on these findings, we constructed the “dynamic capabilities in incumbent 

adaptation model” depicted in Figure 2. It represents the “conceptual leap” 

that generalizes our findings (Gioia et al., 2012). By bringing research and 

practice together, this conceptual model shall also contribute to advance 

strategic management as a discipline (Cox et al., 2012). 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 117 

  
 

The model is embedded in the overarching strategic challenge to convert 

the firm from a declining legacy business (in gray) into a new business. For 

Axel Springer, this conversion was from printed to digital media. However, 

shifts in consumer behavior that pose a strategic challenge to incumbents also 

occur in other contexts. For example, e-commerce in the retail industry, 

carsharing in the automotive industry, online bookings in the travel industry, 

battery-operated household appliances in the electronics industry, or online 

banking in the banking industry. 

Our research has shown that particular transforming activities stand at the 

beginning of the incumbent adaptation process (labeled “Transformation A”), 

which are the essential condition for all following adaptation activities (links 

1). For Axel Springer, this was the reconfiguration of the top management and 

the establishment of a liberal mindset. In other cases, Transformation A might 

encompass other activities, for example setting up a sustainable financing 

structure, resolving looming legal issues, or creating awareness of market 

realities. In any case, we argue that particular transforming activities need to 

be performed before any further activities can be initiated. As such, 

Transformation A suggests some degree of linearity in the concept as it always 

stands at the beginning. 

Figure 2. Dynamic Capabilities in Incumbent Adaptation Model 

 

N
e
w

 B
u
si

n
es

s 

T
ra

n
sf

o
rm

at
io

n
 B

 

Safeguarding Stability and Continuity 

2 

Profitizing and Streamlining  

the Legacy Business 

T
ra

n
sf

o
rm

at
io

n
 A

 

L
e
g
ac

y
 B

u
si

n
e
ss

 

Managing New Business at Distance 

Sensing-by-  

Seizing 4 

3 

 5 

 

1 

1 

2 



118 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

“Transformation A” is to be distinguished from “Transformation B”. 

Whereas the former only addresses the immediate essential conditions, the 

latter aims at radically transforming the entire firm. Axel Springer postponed 

Transformation B for many years. This bridged a period in which the strategy 

was still rather fuzzy and relieved the organization from energy-consuming 

transforming during this unclear period. Once a feasible strategy had emerged 

from sensing-by-seizing, Axel Springer launched “Transformation B” for the 

entire organization (link 2). 

Between the two transforming activities, Axel Springer put the legacy 

business under a strict profitizing mandate to invest in new businesses with 

the sensing-by-seizing approach (link 3). The firm focused on acquisitions. In 

other cases, however, new business may also emerge from sensing-by-seizing 

via internal venturing, research and development, or new product 

development, among other processes. 

When it comes to managing the new business (link 4), Axel Springer 

followed a distinct form of structural separation. We conceptualized our model 

accordingly. The ambidexterity literature describes similar approaches as 

“structural ambidexterity” (e.g., Carter et al., 2013; O’Reilly & Tushman, 2013). 

Finally, we integrated safeguarding stability and continuity into the model 

(link 5). As Axel Springer has shown, the strong foundation of the firm in its 

heritage and people was crucial in the adaption process. This aspect should, 

we argue, be flexible enough to facilitate necessary change. 

7. Discussion 

Changing environments have required Axel Springer to exercise dynamic 

capabilities to convert from a print publisher to an internet company. The 

conversion began at the point when print markets started to decline in 2000 

until the present when the firm reports a digital revenue share of 73% (cf. 

Table 2a-c). By examining this longitudinal case of incumbent adaptation to 

changing environments, we studied the interplay of sensing, seizing, and 

transforming over time. 

Empirical research has typically relied on sensing, seizing, and transforming 

(Teece, 2007) to study dynamic capabilities (Schilke et al., 2018), with some 

suggesting a linear sequence and clear distinction between them (e.g., Gebauer, 

2011; Mousavi & Bossink, 2017; Vézina et al., 2019). Our study confronts this 

concept with the “messy” reality of organizational phenomena. It finds that, 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 119 

  
 

first, the firm iterates between the different procedural dimensions of dynamic 

capabilities, and second, that there are overlaps and interconnections between 

sensing, seizing, and transforming. Axel Springer began its adaptation process 

with initial transforming activities followed by iterating between and 

combining seizing and sensing, ongoing smaller transforming activities and, 

later, transforming radically. Moreover, some of the dynamic capabilities 

identified cannot be discretely mapped onto sensing, seizing, and 

transforming. For example, “managing new business at distance” integrates 

seizing (i.e., asset integration), transforming (i.e., securing knowledge sharing), 

and sensing (i.e., screening for further digital targets). 

Axel Springer did not perform any systematic or regular sensing activity; 

rather, it aimed to seize various opportunities within strategic priorities. By 

doing so, the firm has sensed opportunities and threats as a by-product in a 

concrete and reliable way that could not have been possible had it used 

standard sensing activities. Therefore, we introduce the concept of sensing-by-

seizing defined as sensing opportunities and threats at the same time as seizing 

concrete opportunities within defined strategic guidelines. This concept is a 

novel perspective on dynamic capabilities, as the literature has not 

dimensionalized them by integrating analytical (i.e., sensing) and actionable 

(i.e., seizing) capabilities. 

One could argue that sensing-by-seizing is a form of “ad hoc problem 

solving” (Winter, 2003). However, evidence from our case supports the 

contrary, as sensing-by-seizing was performed regularly and systematically by 

dedicated personnel. The lessons learned from sensing-by-seizing projects 

were openly and critically discussed and internalized, and thus articulated and 

codified. Sensing-by-seizing can therefore be characterized as a “learned and 

stable pattern” (Zollo & Winter, 2002, p. 340) and a “repeated practice” 

(Eisenhardt & Martin, 2000, p. 1114). 

The literature has often stated that the dynamic capabilities concept lacks 

managerial applicability, which has hindered practitioners from making 

practical use of the concept (Schilke et al., 2018). Bearing this issue in mind, 

our study makes two contributions. First, the model conveys the building 

blocks of incumbent adaptation stating, for example, that transforming 

activities must be considered at the outset of the process. Second, we identified 

specific and applicable dynamic capabilities for incumbent adaptation (e.g., 

sensing-by-seizing).  



120 Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 

8. Limitations and Future Research 

Our research has been conducted following a high theoretical and 

methodological standard. However, we acknowledge some limitations and 

avenues for future research. 

First, the single case study approach represents a standard limitation (e.g., 

industry, geography, company size). We argue, however, that Axel Springer is 

the critical case (Flyvbjerg, 2006; Yin, 2018) to study our research question. By 

examining two decades and accessing several top managers, we were able to 

gain very rich and insightful data. Second, the results of our study might be 

biased toward a positive account of Axel Springer’s accomplishments, as the 

key data source was internal informants. However, triangulation was done by 

interviewing peers and former managers that partly see the firm with a critical 

eye as well as analyzing secondary data. Third, although we examined our case 

at several points in time, the interviews were all conducted ex-post. We solved 

this problem by triangulating with secondary data that originated at these 

points in time (e.g., newspaper articles, social media) and interviewing former 

managers active in earlier periods. 

We have found that Axel Springer has performed particular transforming 

activities at the outset that were the essential conditions for the entire 

incumbent process (termed “Transformation A”). We acknowledge that 

Transformation A looks different from case to case; however, we suggest that 

it might occur in every incumbent adaptation case. Future research should 

examine the activities and micro-foundations of Transformation A in 

qualitative case studies. 

The concept of sensing-by-seizing is one of the main findings of our study. 

Future research may revise or extend this concept qualitatively. Furthermore, 

quantitative studies could measure the outcomes of this concept as it might be 

(a) more cost-effective, as sensing occurs as a by-product of seizing; (b) more 

insightful, as assessing concrete options is more informative than simple 

sensing; and (c) allow faster incumbent adaptation, as concrete opportunities 

can be seized simultaneously to sensing. Finally, managerial cognition research 

proposes that organizational development is shaped by the manager’s 

interpretations of the environment (Eggers & Kaplan, 2013). As concrete 

investment proposals supposedly garner higher management attention than 

simple sensing, future research may examine if the sensing-by-seizing 

approach can lead to better-informed management. 



Leemann et al. / Journal of Business Strategies (2021) 38: 95-124 121 

  
 

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