Applying Options Thinking to Shape Generativity in Digital Innovation: An Action Research into Connected Cars

Although extant research convincingly argues that managers can change product innovation practices by exploiting new forms of generativity afforded by digital technology, the literature has so far been silent on how incumbent firms may conceive of and implement requisite generative capability. Against this backdrop, we report from an action research study into a digital innovation initiative aimed at developing connected cars. The managers in charge of the initiative engaged us as they faced considerable skepticism and push-back from the organization. To help the firm embrace new innovation norms and practices, we therefore infused innovation theory and options thinking into the group of managers as a means to conceive of and implement generative capability. As a result, we present and validate an integrative theoretical model of how incumbent firms may leverage digital options thinking to shape their organizational and technological resources into requisite generative capability. In conclusion, we discuss the contributions of the model and the empirical results to extant literature on generative capability in digital innovation.