Organizing Digital Innovation

Abstract

Although digital technology has altered the innovation processes of firms in every industry, the existing literature continues to describe innovation as a sequence of two discrete and unidirectional activities: creation and diffusion. This study proposes that digital innovation should instead be understood as a development process that continues across the entire life cycle, often in collaboration with users. Drawing on in-depth interviews with 22 managers, the paper proposes an empirically grounded framework that explicates digital innovation as a continuous and iterative effort. The paper specifies principles for organizing digital innovation over time as centered on adaptation (containing core and peripheral elements) and user comprehension (containing user proximity and user sensing) of an already launched digital object. For managers, the key implication is that this process is not the exclusive preserve of any specific unit but should instead involve the whole organization.