Today, universities operate in an exceptionally challenging environment characterized by financial constraints and state‐imposed restrictions on critical strategic and operational issues. At the same time, they face rising student numbers and a more diverse student population. One way to address these challenges is through new service development (NSD). This paper examines how staff engagement through action learning can facilitate the development of new services in a complex organizational setting, such as a well‐established publicly funded university. En route, staff engagement in action learning enables the creation of capabilities for NSD. The empirical work involved four action learning projects carried out over a 15‐month period focused on the development of various service types. Applying action learning research, we describe and reflect on how different actors collaborated to develop new services and capabilities for NSD simultaneously. This study contributes a framework that identifies how action learning serves as an enabler for NSD and capability development, providing guidance for researchers and practitioners alike.
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