Organizational Agility and Digital Innovation Capability in Automotive Startups

Abstract: Existing research on organizational agility has primarily focused on large com- panies. This research tends to reference startups as the truly agile organizations, and it is assumed that large established corporations have much to learn from startups, especially for digital innovation. However, little research has studied startups with an organizational agility lens to identify how startups develop organizational agility and what enables and hinders such agility. There is a need to better understand how startups use organizational agility to gain leverage in digital innovation.This licentiate thesis is based on three papers, where each paper focuses on one aspect of organizational agility, and aims to answer the research question: How do startups use organizational agility to gain leverage in digital innovation?A qualitative approach was applied, and two interview studies were conducted in the automotive products and services domain. This domain was chosen be- cause it has recently been challenged by newcomers with very different strategies for innovation and the automotive incumbents are now struggling to transform into agile enterprises. Subsequently, it became possible to identify differences in how organizational agility is applied in digital innovation in large companies and startups. The first study included three incumbents and two in- ternational startups, and the second study included nine startups. The startups included in the two studies were located in Sweden and one startup in the USA (active in Sweden). 23 semi-structured interviews were conducted, which en- abled us to gain a richer and more in-depth understanding about how startups develop and applied organizational agility in their digital innovation initiatives. An initial literary study helped identify core dimensions of organizational agil- ity that were empirically investigated. Organizational agility as an analytic lens was operationalized using different frameworks to support our analysis work.The concluding analysis showed differences between startups' ability to use organizational agility in digital innovation. The startups had different ap- proaches to digital innovation and the analysis shows different types of organ- izational agility. The startups that applied an agile culture, visionary and trans- formative approach (effectuation logic) and open innovation, were the most successful when it came to keeping a high digital innovation pace compared with the other startups in this study. Based on the analysis of how organization-Page 2 of 167al agility affected the studied companies' digital innovation capability, we iden- tified four ideal types of startup organizational agility: digital industrial, digital complementary, digital exploiter, and digital disrupter. In Digital industrial, the value of organizational agility is less exploited because it applies a planning approach and a unilateral technical focus with a vague business model, leading to a low digital innovation capability. In Digital complementary, the value of organizational agility is utilized while applying a planning approach, focusing on in-depth technical research where the value, once integrated into a customer product, can lead to a high digital innovation capability. In Digital exploiter, the value of organizational agility is fully utilized while applying a visionary and adaptive approach, focusing on the rapid exploitation of market-driven digital services applied but can lead to low digital innovation capability. In Digital disrupter, the value of organizational agility is optimally utilized by using a visionary and transformative strategy, focusing on in-depth and rapid explora- tion in innovation ecosystems or networks, which leads to high digital innova- tion capability.The research contributes to practice and the theory of organizational agility by showing how the various aspects of organizational agility impact the organiza- tions' digital innovation capability.