Managing Digital Innovation Units—Life Cycle, Transitions, and Growth Traps

Overview:

Digital transformation presents a major challenge for many incumbents. Digital laggards are falling further behind frontrunners and digital-born startups. To make up some ground, more firms resort to experimentation with and implementation of digital innovation units (DIU). While knowledge about types of DIUs and their challenges is helpful, little is known about how to manage DIUs along the DIU’s development life cycle and the parent organization’s digital transformation process. Based on an exploratory study of six DIUs, we identify two dynamic and embedded loops that DIU leaders need to actively manage: DIU leaders ensure a smooth transition between the lifecycle stages in the first loop, while avoiding critical growth traps in the second loop. We provide practical guidance for how to manage DIUs for sustainable impact.

Keywords::

• Digital transformation
• Digital innovation units
• Organizational ambidexterity

Additional information

Notes on contributors

Matthias Trischler

Matthias Trischler is a PhD student at the Centre for Technology Entrepreneurship, Technical University of Denmark (DTU). His research interest is the digitalization of established firms with a focus on digital business model innovation. He has published in Review of Managerial Science and Journal of Business Models. He is active as a lecturer in various courses at DTU, including a course on digital trends for entrepreneurs for the MSc in technology entrepreneurship. He holds an MSc in business and development studies from Copenhagen Business School. Before undertaking his PhD studies, he worked as a strategy consultant for several years. [email protected]

Christian Bason

Christian Bason leads the Danish Design Centre (DDC), a nonprofit foundation backed by the Danish government that builds capacity for innovation and sustainable growth by design. Previously, he was director of MindLab, the Danish government’s innovation team, and manager with Ramboll Management Consulting. He has authored seven books on innovation, design, and leadership, including Leading Public Design (Policy Press 2017). He has published in Harvard Business Review and Stanford Social Innovation Review. He teaches executives at Henley MBA, the European School of Administration and Copenhagen Business School. He has an MSc in political science and a PhD in design, leadership, and governance. [email protected]

Jason Li-Ying

Jason Li-Ying is a professor of corporate entrepreneurship and innovation and director of research at the Centre for Technology Entrepreneurship, Technical University of Denmark (DTU). He has a PhD in innovation management. He has published in journals such as Long Range Planning, Journal of Product Innovation Management, Research-Technology Management, R&D Management, and the Journal of Technology Transfer. He chairs a project to design and implement social-economic impact metrics for European Spallation Source. He is a member of the journal ranking expert committee for the Danish Ministry of Higher Education and Research. He also serves as a board member for several organizations. [email protected]