Objective and main results

This article discusses how incumbent organizations must manage four interrelated competing concerns as they embrace digital innovation.

Main findings: The authors describe how Volvo Cars, seeking to embed digital technologies into existing products and innovation processes, had to balance new opportunities and established practices within the following interrelated domains:  

• Innovation capability - i.e. maintaining existing innovation practices while developing new capabilities.
• Innovation focus – i.e. balancing product innovations with leveraging digital technology in products and services.
• Innovation collaboration – i.e. developing internal competence and relationships while at the same time engaging external resources.
• Innovation governance – i.e. combining practices that enable creativity and differentiation with structures for control and authority.

Summary of practical implications

To embrace digital innovation, incumbent organizations must develop new capabilities to identify and develop novel ideas within existing institutional contexts, as well as developing governance structures to efficiently engage external audiences. 

The authors argue that managers in incumbent organizations must manage the four competing concerns cohesively to embrace digital innovation. This means that organizations should be aware of the individual trajectories, joint emergence, and multifaceted integration of the four concerns. Such awareness enables organizations to manage the interrelatedness of the concerns and the ongoing trade-offs between them.

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