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Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 1
Everything Is IT, but IT Is Not Everything –
What Incumbents Do to Manage Digital
Transformation Towards Continuous Change
Completed Research Paper
Michael Bitzer
FIM Research Center
Project Group Business & Information
Systems Engineering of the Fraunhofer FIT
86159 Augsburg, Germany
michael.bitzer@fim-rc.de
Silvana Hinsen
University of Bayreuth
95444 Bayreuth, Germany
silvana.hinsen@uni-bayreuth.de
Jan Jöhnk
FIM Research Center
95444 Bayreuth, Germany
jan.joehnk@fim-rc.de
Nils Urbach
Frankfurt University of Applied
Sciences & Fraunhofer FIT
60318 Frankfurt
nils.urbach@fim-rc.de
Abstract
Driven by the ongoing emergence of digital technologies, today’s business environment is
changing at tremendous speed. Thus, incumbents have initiated digital transformation
programs to cope with the associated challenges. While transformation programs are
typically associated with punctuated change, emerging research conceptualizes digital
transformation as an ongoing process that demands new approaches to organizational
change. Hitherto, we lack insights on how organizations prepare themselves for such
continuous change. Thus, we conduct an explorative interview study with 29 interview
partners that provide insights from different roles, organizations, and industries.
Thereby, we gain an overview of organizations’ digital transformation realities and
challenges. We contribute to the existing literature on digital transformation by
elucidating the individual foci and interdependencies of digital, agile, and cultural
transformation. Further, we shed light on additional elements that foster continuous
change, i.e., organizational culture, purpose, vision, and values in the context of digital
transformation.
Keywords: Digital transformation, continuous change, interview study, organizational change
Introduction
Digital technologies’ characteristics continue to spur digital innovation efforts in organizations globally
(Nambisan et al. 2017). Due to their reprogrammability, the homogenization of data, and their self-
referential nature, digital technologies challenge erstwhile assumptions about how organizations can derive
value from technology (Yoo et al. 2010). By collecting, analyzing, and leveraging the potential of data, digital
technologies create novel opportunities to satisfy people’s evolving needs with client-centric (digital)
products. Further, the speed of technological change is almost exponential, and rules of market competition
are changing radically. Organizations integrate vertically and horizontally, often challenging or even
disrupting venerable business models (Baiyere and Hukal 2020). This requires organizations to
continuously adapt to today’s fast-changing business environment (El Sawy et al. 2010; Hanelt et al. 2020).
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 2
To remain competitive, organizations require, inter alia, different structures, processes, skills, and cultures
(Berger et al. 2020; Berghaus and Back 2016). In addition, the worldwide pandemic has been forcing
organizations and individuals to accelerate the adoption and usage of digital technologies. Thus, they have
become an inherent and instrumental enabler to stay connected with employees, clients, and partners.
Specifically, incumbents still often struggle, among others, with their deep structures, legacy systems,
historical assumptions about customer needs, and challenged value creation patterns where the underlying
logic of value creation has changed (Chanias et al. 2019; Sebastian et al. 2017; Svahn et al. 2017). Thus, to
cope with the changes and challenges that digital technologies pose, organizations engage with company-
wide digital transformation (DT). Although DT has been a top concern of research and practice for over a
decade now, we are still in dire need of theorizing this phenomenon (Lynne and Rowe 2021). Hitherto,
research provides ample insights into the general DT process (e.g., Vial 2019), associated action fields (e.g.,
Gimpel et al. 2018), challenges (e.g., Heavin and Power 2018; Piccinini et al. 2015), success factors
(Andersen and Ross 2016; e.g., Holotiuk and Beimborn 2017), or the roles of technology within DT (e.g.,
Sebastian et al. 2017). For instance, the literature elucidates how to strategize for DT (Chanias 2017; Fischer
et al. 2020; e.g., Hess et al. 2016; Matt et al. 2015), the necessary structural and contextual changes (e.g.,
Jöhnk et al. 2020; Ossenbrink et al. 2019), or the underlying need for cultural change (e.g., Hartl 2019).
Further, attempts to guide organizations’ DT efforts have resulted in a plethora of DT maturity models that
outline development paths towards a desired target state (e.g., Berger et al. 2020).
However, we share Bordeleau and Felden's (2019, p. 1) concern, who argue that we still lack answers to “the
question of ‘how’ to support managers in the organizational change”. This is for two major reasons: First,
we see the need to complement the vast body of conceptual and in-depth case studies with a broader
understanding of organizations’ DT journey. This may help to gain an overview of how organizations
approach their DT journey and to what extent these efforts follow or differentiate from our scientific
understanding of DT. Thereby, we adopt an actor-centric perspective to explore “internal renewal and
change processes in the light of DT” (Nadkarni and Prügl 2021, p. 237). Second, in line with emerging
research (Hanelt et al. 2020; Hinsen et al. 2019), we challenge the notion that DT is a matter of large
organizational transformation programs that eventually achieve a desired target state. Instead, DT often
unfolds from multiple concurrent initiatives or acts of organizational improvisation that follow the
fluctuating imperatives of organizations’ turbulent business environment (El Sawy et al. 2010; Jöhnk et al.
2020; Zimmer 2019). Thus, we seek to extend the discussion on organizational change by arguing that
organizations should not understand DT as a punctuated change to reach a new stable state but rather to
achieve a new state of making continuous yet intentional change the new normal (Lyytinen and Newman
2008). The literature on new organizational identities and organizational agility in DT corroborates this
reasoning (Lee et al. 2015; Wessel et al. 2021). To summarize, this paper seeks to examine the status quo of
organizations’ (especially incumbents’) DT journeys and the underlying intentions for what they want to
achieve with their DT efforts. Thus, we ask:
What are incumbents’ approaches to DT and how do these efforts contribute to continuous change?
To answer our research question, we conducted a broad, explorative interview study. We interviewed 29
practitioners from mainly incumbent organizations, which are heavily involved in their DT efforts. Thereby,
we focused on a better understanding of their overall transformation activities and recognized that they also
conducted an agile transformation (AT) and cultural transformation (CT) at the same time. During our
research, we identified individual employees as the driver and obstacle for DT and continuous change and,
thus, focus on employees, i.e., how their roles might change in the future and how leaders can create an
organization that fosters continuous change. Our results contribute to our understanding of DT (Vial 2019)
and address, hitherto, underexamined topics in the DT context, i.e., the role of organizational culture,
middle management, and the work environment (Nadkarni and Prügl 2021). Further, we challenge
prevailing assumptions of organizational change behavior (Hanelt et al. 2020) and build a connection to
well-known concepts that may guide future research in times of continuous change (Venus et al. 2019).
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 3
Foundations
Digital Transformation
According to Vial (2019, p. 118), DT is a “process that aims to improve an entity by triggering significant
changes to its properties through combinations of information, computing, communication, and
connectivity technologies.” While Vial (2019) focuses on the effects of technology, Hinings et al. (2018)
describe DT as the “combined effects of several digital innovations bringing about novel actors (and actor
constellations), structures, practices, values, and beliefs that change, threaten, replace or complement
existing rules of the game within organizations, ecosystems, industries or fields”. To distinguish DT from
IT-enabled organizational transformation, Wessel et al. (2021) claim that DT not only enhances
organizations’ way of doing business but affects and respectively changes their entire identity. Integrating
those definitions from an organizational perspective, we define DT as a multi-dimensional transformation
that affects the whole organization due to the emergence and ongoing development of digital technologies
(Berger et al. 2020). Due to the paradigmatic shift towards a different identity, the literature proposes novel
approaches on how to conduct such a transformation (Chanias et al. 2019; Hess et al. 2016; Matt et al.
2015). Further, Matt et al. (2015) emphasize the recursive nature in exploring digital technologies’
imperatives in value creation and organizational structures.
While Matt et al. (2015) focus on four overarching strategic planning dimensions of DT, other research
focuses on the operationalization of DT. For instance, Gimpel et al. (2018) identify six action fields, i.e.,
customer, value proposition, operations, data, organization, and transformation management, each with
four specific action items. Further, the literature provides insights into specific areas of DT, e.g., strategy
(e.g., Bharadwaj et al. 2013; Mithas et al. 2013; Sambamurthy and Zmud 2000), structures and processes
(Berger et al. 2020; e.g., Jöhnk et al. 2020), systems and data handling (e.g., DalleMule and Davenport
2017; Dremel et al. 2017), and culture (e.g., Duerr et al. 2018; Hartl and Hess 2017). Moreover, since digital
technologies offer novel ways to interact with customers and satisfy their needs, DT literature often focuses
on the characteristics of incumbents that face the potential loss of their market position due to digital
disruption (Andersen and Ross 2016; Sebastian et al. 2017). Hereby, extant work elucidates barriers (e.g.,
Vogelsang et al. 2019), challenges (Heavin and Power 2018; e.g., Piccinini et al. 2015; Svahn et al. 2017),
success factors (e.g., Holotiuk and Beimborn 2017), lessons learned (e.g., Hansen and Sia 2015; Loonam et
al. 2018; Morgan 2019; Svahn et al. 2017), and identified misconceptions (e.g., Kane et al. 2015; Tabrizi et
al. 2019). Further, the literature discusses different approaches to drive DT, e.g., through new roles and
units like the CDO or dedicated DT units (e.g., Jöhnk et al. 2017; Raabe et al. 2020). In summary, we can
separate technology-centric and actor-centric perspectives in DT literature (Nadkarni and Prügl 2021). Our
focus is on the actor-centric perspective. Here, we see multiple connections to other domains and
discussions within the information systems literature and beyond, e.g., around agility (e.g., Fuchs and Hess
2018), digital innovation (e.g., Nambisan et al. 2017), and digital intrapreneurship (e.g., Reibenspiess et al.
2020). Currently, we lack a thorough empirical understanding of the status quo of organizations’ DT efforts.
Thus, research may benefit from an overview of approaches reaching beyond single cases and individual
success stories to gain insight into research gaps in the theory.
Organizational Change
Extant research increasingly embeds DT in a broader organizational change perspective to conclude that
DT is an ongoing process due to the continuous development and adoption of digital technologies (Hanelt
et al. 2020; Hinsen et al. 2019). This is to demarcate DT not only from previous IT-enabled change (Wessel
et al. 2021) but from all other hitherto seen transformations (Hanelt et al. 2020). Established literature on
organizational change distinguishes episodic change, i.e., change that is infrequent, discontinuous, and
moves intentional from one stable state to the other (Lyytinen and Newman 2008; Romanelli and Tushman
1994) and continuous change, i.e., change that is ongoing, cumulative, and emergent, often occurring on a
daily basis (Orlikowski 1996; Weick and Quinn 1999). In addition, emergent research claims for a novel
form of organizational change behavior (Hinsen et al. 2019), because DT is conceptualized as a major
organizational change and an ongoing process at the same time. In a similar vein, a recent case study
investigating the patterns of change in DT strategies found these patterns to be continuous and incremental
rather than discontinuous, which is contrary to the common understanding in IS research (Dang and
Vartiainen 2020). Hence, Hanelt et al. (2020) question Levin’s well-known, three-step concept for episodic
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 4
organizational change (unfreeze – transform – freeze). Instead, they argue that DT may classify as an
episodic change without (re-)freezing because digitalization is an ongoing process. While Cummings et al.
(2016) note that even Levin thought that “groups were never in a steady-state [but] in continuous
movement, albeit having periods of relative stability or quasi-stationary equilibria”, those periods of relative
stability erode more quickly than before due to the constant flux in organizations’ environment (Hinsen et
al. 2019).
Based on the notion that DT knows no end state, the question is how organizations approach this novel
form of organizational change. (Kossowski et al. 2020). Even though research starts to investigate DT in
the context of organizational change (Hanelt et al. 2020), more research is required to understand the
interplay. While empirical research in the context of DT provides several DT success stories (e.g., Hansen
and Sia 2015), the organizations studied recognized that they have only reached milestones in a long journey
and are currently on their way to the next transformation (e.g., Andersen and Ross 2016). With this in mind,
far-reaching organizational change should rather aspire to achieve a capability for continuous change
(Hanelt et al. 2020; Hinsen et al. 2019; Vial 2019). Consequently, researchers claim that organizations need
to adapt their structures (Fuchs and Hess 2018; Nguyen et al. 2020) and organizational culture (Duerr et
al. 2018; Hartl 2019) to foster continuous change. However, hitherto, we still lack insights about how DT
and associated transformation efforts, e.g., AT and CT, contribute to enabling continuous change. Further,
it remains fuzzy if organizations strive for an organizational mode that welcomes and enables continuous
change during their DT. Thus, we see the need to elaborate on how to better integrate the findings regarding
organizational change and transformations from previous literature with incumbents’ current DT
approaches and progress.
Method
To shed light on how incumbents currently engage with DT and how this affects their approach to
organizational change, we conducted an exploratory in-depth interview study (Myers and Newman 2007;
Schultze and Avital 2011). This helped us to gain a comprehensive overview of incumbents’ DT realities.
Inspired by the extant DT literature (Hanelt et al. 2020; Vial 2019) and our research in the field, we created
a semi-structured interview guide. Specifically, we sought to nudge our interviewees to reflect on their DT
approach, progress, and potential challenges as well as DT’s influence on organizational change behavior.
The first block comprised our explanation of the research topic to the interview partner (IP) as well as the
IP’s introduction to its position and organization. The second block focused on organizational change
behavior. We asked for the prevalent understanding of organizational change and how it differs from the
past and the expected future. In the third block, we investigated how organizational change unfolds in the
context of DT. We asked how our interview partners (IPs) define and manage their DT, what their biggest
challenges are, and how DT affects their organization’s change behavior. We identified appropriate IPs from
our industry network and through cold calling via the professional network that met two requirements:
First, to ensure an appropriate yet diverse interview scope, we included experts from the fields of either
digitalization, IT, strategy, or innovation. Second, we selected IPs that drive DT by being responsible for
overarching DT programs or by contributing to DT in specific DT initiatives. Thus, we expected IPs to share
a broad understanding of their organizations’ DT efforts. Hence, our sample includes mostly IPs that hold
leadership positions in various industries. In total, we conducted 28 interviews with 29 IPs from 25 different
organizations within the scope of our research objective between November 2020 and February 2021, i.e.,
we had one interview with two IPs at the same time as well as six interviews with two IPs from the same
organization, respectively. The interviews were typically scheduled for 90 minutes and lasted on average 85
minutes (excl. the introduction of all participants). This indicates that we often delved into a lively and
intense dialogue with the IPs following our semi-structured interview guide. With only one face-to-face
exception, we interviewed all IPs virtually via Microsoft Teams. We recorded all interviews with our IPs’
consent for subsequent analysis. To include multiple perspectives already during data collection, at least
two members from our research team were by default present in the interviews. Our IPs represent various
organizational contexts as the responses differ regarding their DT progress, industries, organization, sizes,
and roles. This allowed us to better contextualize and abstract our findings regarding our research question.
Due to this variety, we discussed the organizations’ DT progress against the backdrop of the five-stage
maturity model of Berghaus and Back (2016) to indicate the respective context of our IPs’ answers (see
Table 1).
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 5
After data collection, we analyzed the interview recordings. First, we transcribed all interviews using an AI-
based solution (HappyScribe) with subsequent manual editing to ensure transcript quality. Second, we
coded the interviews using MAXQDA. Due to the explorative nature of our research question, we chose an
open coding style without imposing any predefined categories from theory on the data (Saldaña 2013). We
aligned our coding procedure and found a common understanding of the data by jointly coding three
interviews at the beginning as well as weekly discussions on the coding progress. Thereby, we paid attention
to adopt a common approach and similar coding style by reviewing our open codes. In addition to the open
codes, we used comments to summarize key statements and note emerging ideas for later analysis. Open
coding the interviews resulted in 2,973 different codes, i.e., codified statements. Third, we used theoretical
memos to explicate and consolidate recurring topics of concern from our interviews. Thereby, we used the
major blocks of our interview guide to categorize these topics. This step resulted in a total of 81 memos. For
example, one memo consolidated all statements regarding the changing role of leadership. We clustered
the statements into three groups, i.e., the relevance of the topic, different expressions of the topic, and links
to other topics. Due to the explorative nature of our study and the vast amount of collected data, we focus
on the key topics and challenges of our IPs in the findings section. Beyond our initial endeavor to investigate
DT and its impact on organizational change, our interviews and the subsequent analysis have brought to
light that DT initiatives are accompanied and heavily interrelated with an AT and CT. Accordingly, we use
DT, AT, and CT as the main constructs to cluster our findings.
#
Job Title
Industry
Employees
Revenue (EUR)
DT progress1
1
Chief Financial Officer
Clothing
> 1,000
< 1 bn
Stage 2
2
Area Manager
Retail
> 100,000
> 50 bn
Stage 2
3
Senior Account Manager
Technology
> 100,000
> 50 bn
Stage 4
4
VP Strategy & Governance
Mechanical Engineering
> 10,000
> 1 bn
Stage 2
5
VP IT
Mechanical Engineering
6
Head of Digital Solutions
Medical & Hygiene
>10,000
> 1 bn
Stage 2
7
Senior Specialist Digitalization
Banking
< 1,000
> 50 bn
Stage 2
8
Head of Business Development
Banking
9
Engagement Leader
Consulting
> 10.000
>10 bn
n.a.
10
Managing Director
Mechanical Engineering
< 1,000
< 0.1 bn
Stage 2
11
Chief Marketing Officer
Banking
> 50,000
> 1 bn
Stage 3
12
Chief Information Officer
Retail
> 100,000
> 10 bn
Stage 2
13
Head of Digital Business
Optics & Optoelectronics
> 20,000
> 1 bn
Stage 2
14
VP Business Unit
Optics & Optoelectronics
15
Chapter Lead
Telecommunication
> 100,000
> 50 bn
Stage 4
16
Chief Information Officer
Insurance
> 10,000
> 1 bn
Stage 3
17
Head of IT, HR, and Legal
Construction
> 1,000
< 1 bn
Stage 2
18
VP Innovation
IT
> 100,000
> 10 bn
Stage 3
19
Director Chief Digital Office
Technology
> 100,000
> 50 bn
Stage 3
20
Director Customer Process Excellence
Insurance
> 100,000
>50 bn
Stage 3
21
Head of Digital Business
Mechanical Engineering
> 1,000
< 1 bn
Stage 2
22
Director Customer Experience
Office Furniture
> 10,000
> 1 bn
Stage 2
23
Managing Director & Owner
Construction
> 1,000
> 1 bn
Stage 2
24
Head of Innovation
Construction
25
Chief Digital Officer
FMCG
> 1,000
< 1 bn
Stage 4
26
Head of IT Transformation & Strategy
Insurance
> 100,000
> 50 bn
Stage 4
27
Director Strategy
Automotive Industry
> 100,000
> 50 bn
Stage 4
28
Head of Data Assets & Analytics
Life Science
> 50,000
> 10 bn
Stage 4
29
Senior Vice President
Aircraft Equipment
> 1,000
< 1 bn
Stage 2
Stage 1: Promote & support | 2: Create & build | 3: Commit to transform | 4: User-centered & elaborated processes | 5: Data-driven company
(Berghaus and Back 2016)
Table 1. Overview of the Interview Partners
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 6
Results
We structure our results into four major subsections. Subsections 1 to 3 summarize the key topics regarding
DT, AT, and CT. Finally, Subsection 4 describes the relationships among DT, AT, and CT as well as their
impact on organizational change.
Digital Transformation
Our IPs mentioned many different ambitions they pursue with their DT endeavor. In the following, we
illustrate the consolidation of the most important ambitions, i.e., the development of customer-centric
business models, the exploitation of the potential of technology and data, the adaptation of the
organizational setup, and the strategic planning for implementing the digital transformation.
Client-Centric Business Models. The ongoing digitalization contributes to ever-new opportunities to
satisfy individual customer needs. Due to the seamless, client-centric experience provided by leading IT
companies, like Amazon, customers will no longer accept offerings that do not meet their individual needs.
Thus, also organizations in non-IT industries, like life science, retail, and insurance, need to provide the
same experience. „Customers need to tailor their problems to the products we deliver. That does not work
anymore with digital products. You have far too many providers.“ (IP6) It is important to deeply
understand the customer's problem by first asking questions. Therefore, collecting and analyzing data is
the basis for becoming client-centric. “Forward-looking organizations have understood who their
customers are. They have taken them seriously as market participants, i.e., communicate at eye level, and
then built an ecosystem that keeps them satisfied such that they buy more and mo re products, services &
benefits.” (IP11) Thus, customers are no longer an external party but collaborative partners who are
involved in development processes through continuous and fast customer feedback. Consequently,
organizations build business models which put customer needs at the center to quickly adapt to changing
needs. Beyond that, our IPs report the challenge of the enormous speed at which digitalization is changing
the business environment requiring them to adapt their business models quickly to remain competitive.
“Another difference in digital transformation is the speed. That's not because of how organizations are
transforming digitally right now, that's because of how markets are changing right now.” (IP20) That
means organizations must rethink their existing business models and be open to thrive for new markets
and segments and even re-evaluate who their customers might be in the future. While some organizations
already exist for decades and their business models generate revenues over long periods, these
organizations must get used to developing business models much faster than before due to market
dynamics. “I think we have to say goodbye to the idea that we will have such cash cows again over this
mega long period […] Instead, we have to prepare the organization to be able to bring products and
services to our customers faster.” (IP19)
Technology and Data. To enable client-centric business models, our IPs emphasize the roles of
technology and data to leverage internal and external potentials. The usage of technology and data supports
the exploitation of automation potentials of processes within organizations to increase efficiency and speed
as well as reduce costs. “We use digitalization where it helps us to improve our customers and increase
efficiency” (IP2) In the course of process automation, organizations try to simplify and digitize processes to
relieve employees of repetitive tasks so that they have more time and space for creativity. This also facilitates
the quick response to changing customer needs and, thus, technology and data enable the creation of client-
centric business models. Thereby, our IPs understand data as one of the key drivers for DT to better
understand internal operations and performance as well as market trends and customer needs. “The people
who do business for money only, and they do not generate revenue out of online significantly, forget about
it. […] Generating consumer empathy, leveraging data and technology, and harnessing the power of data.
[…] Data is the new oil.” (IP1) Internal utilization of data focuses on being able to take data-driven decisions
and to increase the measurability of organizational performance. Based on their purpose and derived
strategy, many of our IPs define measurable strategic objectives. “The trick is to make everything
measurable.” (IP12) Even though the importance of a company-wide, harmonized database is recognized
to properly measure organizational performance towards the defined strategic objectives, many IPs still
struggle in this area. Due to complex processes, data silos, and manual process steps, data collection and
analysis are impeded. “Many people are currently being painfully shown that they are not managing their
business in a data-driven way.” (ID 12) Only one IP confirmed that their data management is competitive,
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 7
having implemented data management decades ago but now facing the challenge of identifying appropriate
analytics approaches to better understand their customer behavior and needs. The required data
harmonization goes hand in hand with the harmonization and standardization of the IT landscape. Complex
IT landscape and existing legacy systems still impede flexibility and fast responsiveness as well as building
platforms to integrate new partners into the IT infrastructure. “We know that we need a platform. We must
chase all the data across a platform. Huge fight. Every country has built its own solutions. There is
nothing that is really centralized.” (IP6) The ability to scale one's IT infrastructure is a key factor in building
partner ecosystems to develop new business models and deliver client-centric products. To be able to react
quickly and flexibly to rapid changes, a harmonized database and IT landscape are essential. Without a
proper understanding of the organization and business environment, DT will only stay a buzzword that
does not support organizations in fulfilling their self-defined purpose. “Many organizations today are
struggling with understanding what happens in their business […] If these senior executives can't become
real where they are, digital transformation becomes a buzzword.” (IP1)
Organizational Setup. Across all interviews, we observe different approaches to how organizations
approach DT regarding the chosen organizational setup, i.e. patterns regarding the driving units for DT.
More than half of our IPs reported that they have established a dedicated digital unit outside of their IT unit
to drive DT or are currently planning to do so. In cases where the corporate structure consists of many
different, independently operating business units, the digital unit is anchored right under the Executive
Board. In this setup, the digital unit both drives overarching digitalization projects with Executive Board
support and works with the business units to implement digital initiatives derived from their strategy. In
some cases, it even supports the development of the business units' strategy. In some organizations, there
is not only an overarching digital unit but also a digital unit within each business unit that reports to the
overarching one. In another scenario, the digital unit is deeply anchored within an organization’s business
area and drives digitalization within that business area by defining the digital strategy and working together
with the IT unit. In this scenario, the digital unit either develops MVPs of digital products in an agile setup
and hands them over to the IT unit, or the digital unit is completely responsible for developing and
operating all client-facing digital products. In the latter, the IT unit only focuses on the development and
maintenance of the basic IT infrastructure. Beyond these two main scenarios, we observed one setup in
which the digital unit operates completely independently from the general business to develop disruptive
products apart from the current product portfolio to support the overarching growth strategy. In addition,
three of our IPs established a digital unit to focus on specific digital topics, like data analytics, but not on
driving the overarching DT. Rather the IT unit is the main driver of DT in these organizations like described
by six further IPs without any established digital unit.
Strategic Planning. Further, we observe two different approaches to strategic planning as a means for
DT execution. First, organizations develop a corporate purpose or vision to derive an overarching business
strategy from which strategic measurable objectives or digital roadmaps per business unit are determined.
“From our purpose, we have derived our strategy, which consists of various pillars. […] From those pillars
then the projects or the project portfolio are derived.” (IP28) In some cases, DT thus was not defined as a
dedicated program, but digitalization was inherent in the derived objectives or digital roadmaps. As one IP
highlighted, the term digital transformation leads to resistance in many employees due to associated
insecurities and falsely indicates that DT has a dedicated end. “We haven't defined a concrete term because
we're not trying to run it as a project. I do not think much of a CDO, who is there for four years and then
he's gone. From my point of view, a continuous process is necessary.” (IP12) This contrasts with the second
approach in which DT was established as a dedicated program to create a common understanding and to
act as an enabler or even an accelerator of the business strategy. “We have this huge digital transformation
program. It is linked to our main strategy. It's an accelerator for the whole strategy.“ (IP28) Regardless
of the approach of integrating DT into their organizational structure and strategic planning, many of our
IPs understand DT as an ongoing process without a precise end and strive to embed DT as an integral part
of the organization to continue living digitalization in the future due to ever-changing digital technologies.
“Digitalization is not a one-off thing. […] It's now a program to make it visual, to work on it at full throttle,
but it will never stop.” (IP28)
Agile Transformation
Our analysis constitutes that our IPs strive for establishing new ways of working and collaboration in teams
or even in the whole organization. Thus, we see that organizations initiate an AT to set up their development
Incumbents’ Digital Transformation Towards Continuous Change
Forty-Second International Conference on Information Systems, Austin 2021 8
teams in agile structures or even transform themselves company-wide into interdisciplinary teams. This
development goes hand in hand with new decision-making processes in which managers hand over their
control to subject matter experts who must be willing and able to take on end-to-end product responsibility.
To flourish this development, both new incentive structures need to be defined and an engaging work
environment needs to be created. In the following paragraphs, we provide more details on decision-making
processes, incentive structures, and the work environment.
Decision-Making Process. While decisions were traditionally taken top-down, the complexity and
speed of today’s business environments raise the need for novel approaches. Many of our IPs struggle with
slow decision-making processes because decisions are often taken by managers without the necessary
knowledge. “When you look at digital leaders, they understand that the world is getting increasingly
complex. […] And therefore, leadership needs to emerge with skill and capabilities. If this happens to be a
24-year-old girl from India who understands AI, then she becomes the leader of the day” (IP1) In general,
organizations strive for more democratic and decentralized decisions. While long-term decisions should be
based upon discussions that are informed by a diverse set of perspectives and the knowledge from domain
experts and customer-facing employees, product-related decisions should be taken on an operational level
by subject matter experts. Thus, organizations recognize that they need to empower their employees, i.e.,
giving authority and setting a framework to guide those decisions. “It is no longer a head of a department
who decides, but the decision-making responsibility for the progress, the MVP, the product, the
application route, is handed over to teams, using swarm intelligence.” (IP20) Establishing new decision-
making processes requires employees to cultivate entrepreneurial thinking so that they can assess the
benefits and risks of specific options and have the courage to act. Entrepreneurial thinking goes hand in
hand with the mindset to serve the customer. “I have to empower my organization, no matter at what
level, so that in case of doubt it is always questioned: Is this a good thing for the organization?” (IP4)
Incentive Structures. To encourage the willingness to take on the end-to-end responsibilities and make
decisions as well as to drive entrepreneurial thinking, proactivity, and the ambition to explore, our IPs look
for novel incentive structures. “Make sure that they adopt new technologies. And how do you make them
adopt new technologies is to encourage them, to incentivize them, and to make a learning organization.”
(IP1) However, defining an appropriate incentive structure remains a challenge. We observe that one way
to incentivize employees to take on responsibilities is by defining clear personal goals together with their
direct leader. Thereby, employees know what is expected from them. “The second is incentives. We always
have employee reviews. So, they know very clearly what the goals are. The goals are communicated and
written down. This is also linked to the incentives. Each person has his or her natural inclination to
somehow get hold of the incentives and then to fulfill his or her role and responsibilities.” (IP3) Another
approach observed aims at aligning incentive systems with the performance of the team rather than the
individual. Instead, employees are not incentivized based on their individual performance but their
personal development. “We measure performance at the team level through the achievement of the
Objectives and Key Results. And we measure performance at the individual level based on 360-degree
feedback. This means that we are not so much interested in what an employee must deliver on which
project. That is irrelevant for us. Our sport is a team sport.” (IP12)
Work Environment. Since the environment can either support or hinder certain behaviors, we recognize
across our interviews that creating a good work environment also includes spatial structures that foster a
creative and collaborative setting, which is especially important for agile settings. “You also have to create
the spatial environment that you can be agile.” (IP10) In addition, in times of global teams, COVID-19, and
the ongoing emergence of remote work settings, by working from anywhere, the question of how employees
can most effectively work together and how organizations can create an engaging and motivating
environment is a huge concern. “Mixed Presents. So, what does it mean that we work together in such
hybrid forms, partly physically in a room, but also integrating team members who are only connected
virtually? How do we manage to be at eye level, to make people feel like they belong? These are sometimes
very subtle things.” (IP22) An engaging environment allows employees to have more fun at work, which
also promotes employees’ creativity, flexibility, and openness. “It may sound strange now. Fun at work is
also essential. I can only do what I like to do. That's an important aspect. The workplace equipment is
part of it.” (IP15)
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Cultural Transformation
Without a suitable mindset, our IPs expect that neither the best strategy, nor governance, processes,
technologies, or tools may be enough to leverage the potential of the transformation efforts of DT and AT.
Thus, the CT must aim to develop a work environment nourishing the appropriate mindset. “There are
certain structures and processes that have evolved. But you always find people in the organization who
want to do something […] You can get people together and make progress with innovations if you want
to. But it has to be supported and wanted from the top.” (IP21) In the following paragraphs, we present the
most important components of the CT for our IPs.
Leadership. Our IPs agree that leadership is the most important stakeholder in today’s transformation
and that a change in the understanding of leadership is at the same time the biggest obstacle and facilitator
on the journey towards an organization that enables and welcomes continuous change. “We have to see
ourselves as a team, be results-oriented, and focus on the task at hand and not on the origin of the
organizational unit. It starts with managers, letting go of silo thinking, and working together in a
different way. And to unlearn one's own ego and assertiveness from the top down.” (ID 2) Accordingly,
we observe that a new definition of leadership is necessary. Leaders increasingly focus on providing
strategic direction, empowering employees, taking care of their needs, removing impediments, moderating
decision-making processes, giving new stimulus, and acting as motivators and coaches. Furthermore, the
role as a communicator and role model was stressed across our interviews since leaders transfer corporate
values to employees and, thereby, shape the corporate culture, especially in those organizations that we
classify as more digitally mature. “You then saw who the real leaders are. Those who take care of their
teams, who know what's going on, who have a good influence.” (IP9) By filling this role, leaders enable
employees to act out their intrinsic motivation, be curious to explore new technologies, and take the
initiative to drive change and at the time design a work environment ensuring that employees’ ambitions
fit the overall organization’s goal. “So, I am convinced that you must create this space. That is the role of
the modern leader.” (IP15) In general, our IPs state that intrinsic motivation is more important than specific
skills since skills can be taught, and intrinsic motivation not. “It's not so much the qualifications. It's the
motivation that's decisive.” (IP15) However, the new definition of leadership often goes hand in hand with
the removal of hierarchy levels to take up speed. This change often leads to resistance and lack of support
by the middle management due to power loss. “If you have people sitting there who are very attached to
their power and who don't allow any changes, because, with any change, I usually give away power, then
the things are mostly doomed to fail.” (IP6) Many of our IPs initiated huge leadership training to fill the
knowledge gap of DT because lacking the knowledge impedes the leadership to define appropriate strategic
direction for the whole organization. “We have challenges with both technological topics and topics of
cultural change. And we have invested a lot to get all the managers at my level on the same page.” (IP14)
Psychological Safety. Another aspect in the context of leadership is the provisioning of psychological
safety, i.e., a promise to care about employees. While innovation is about creativity and exploration, we
recognized that change and digitalization are connotated with fear and uncertainty, which employees
usually try to avoid. While the change in the past was mainly driven by a “burning platform”, i.e., pain, we
conclude with one of our IPs that continuous change cannot be driven by persistent pain but desire. “If you
have chronic pain, your capacity is impaired, no matter what pain is added. And you must have really
bad pain if at all, to perceive it somehow. [...] I think in today's world with all the changes, a strong
purpose is the only thing that somehow holds you together as an organization.” (ID9) However, to
emphasize change without fear and stimulate creativity and exploration, organizations need to create secure
conditions. Only when employees feel secure, they can think openly and come to novel outcomes that go
beyond a way out of trouble but lead towards a certain direction. “And in the end, they couldn't find
anything in their data except the issue of Psychological Safety, which means people can be who they are,
don't have to hide or be afraid of being judged.” (IP9) By providing a safe work environment, employees
are encouraged to question the status quo, which is necessary for a dynamic environment, as no
organization is immune to disruption. “Even if I say this process is the ultimate […] If I don't keep
questioning, because I keep getting new opportunities, I stand still as an organization and will also
disappear from the market at some point.” (IP5)
Cultural Values. Our IPs emphasize that they need a culture of trust and a new failure handling, i.e., a
better failure culture. Trust becomes more important because work happens more independently, and the
focus is more on the outcome than on activities. One of our IPs claims that organizations have hierarchies
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because they do not trust their employees. However, hierarchies slow down organizations. Thus, without
trust, organizations waste the potential of their employees and speed, which they need in today’s
competition. “I do believe that topics like respect or trust will not go away as a core element for the future
of an organization.” (IP12) Failure culture describes an environment that fosters experimentation and
learning and consists of a novel attitude towards dealing with unfavorable outcomes. This topic raises major
concerns in organizations that are traditionally driven to avoid errors and risks under any circumstances,
e.g., banking and insurance. “Nevertheless, we now do this process every year. [...] we're slowly
approaching this topic step by step – daring to do something, trying something out. Of course, it's not a
matter of investing millions in budgets, but [...] you can see that it doesn't correspond 100 percent to
people's culture, that it's always difficult to say, I've tried something new and it didn't turn out to be the
best idea in the world, it just turned out to be useless.” (IP7) While those areas of zero-failure tolerance
remain in certain parts of those organizations, they need to accept, create awareness for, and moderate
subcultures when they strive to develop digital products.
The Transformation Triad to Foster Continuous Change
From our interviews, we corroborate that organizations conduct DT to remain competitive in today’s hyper-
competitive business environment. Since DT is an ongoing phenomenon, it requires much more than the
ability to adopt digital technologies for internal operations and build client-centric digital products. “Digital
transformation is the first transformation that also affects the organization itself. This is something new
about the digital transformation, it has allowed IT mechanisms to find their way into conservative areas
of the organization.” (IP20) That means technology is only one part of the transformation journey. “One is
the technology that we can use. More or less everyone has the same prerequisites. What will make the
difference are the employees. How they interact with each other, how they can work.“ (IP15)
Consequently, the sole adoption of digital technologies is not sufficient. Rather, pioneering organizations
also simultaneously conduct an AT. With their AT, our IPs aim to enable teams to develop client-centric
products in shorter iterations and with increased speed to facilitate the DT endeavors. Like DT, AT is
understood as a continuous change. “So, the journey, the agile transformation, it's continuous.” (IP15) Our
results show that there is a difference between ‘doing agile’, i.e., implementing new roles and decision
processes, and ‘being agile’, i.e., having the necessary mindset and culture. Although many organizations
have already implemented agile practices, the shift towards ‘being agile’ has so far clashed with existing
structures and cultures.
Therefore, the intensified use of digital technologies and a new way of working and collaboration require a
CT to create a new mindset among leaders and employees. “The fourth pillar is cultural change, i.e., how
do we create a culture that supports the whole thing. […] Creating a culture that is open to change and
successfully supports it.” (IP21) While leaders must accept to give up control due to new decision processes,
employees must be willing to take on the responsibility. Furthermore, client-centric business model
development requires an end-to-end product responsibility and, thus, breaking down silo thinking. The role
of leaders, employees, and functional silos highly depends on organizations’ culture. Consequently, CT
builds the foundation for DT and AT and, thus, accompanies them. However, CT is perceived as the most
difficult transformation by our IPs. “That's one of the problems we're facing. This transformation is not
just a digital transformation but also a cultural one – and the cultural one is much more difficult than the
digital one.” (IP12) Regardless of the challenges that a CT entails, most of our IPs highlight the importance
to set up a culture which puts employees in the focus of all transformation efforts and enables them to
continuously change “If the human being is the flexible organ, the learning organ, you can do all that. So,
I just need the people.” (IP26). According to our IPs, CT is essential for continuous change. “That means
constant change is necessary and if you are not constantly changing, then you will not be able to survive
in the long term. But constant change requires an open mindset and that's why we have focused on
culture.” (IP12) Consequently, CT is seen as interrelated with AT and DT by our IPs. Organizations must
develop equally on all levels, i.e., DT, AT, and CT, to enable continuous change. “I believe that all levels can
only be driven forward in interaction with the other topics. I can't proclaim cultural transformation
alone. […] If everyone works in silos and the incentives are different or they have never seen anything
from other departments because there is no end-2-end responsibility, then it doesn't work. It has to work
across all levels.” (IP26) In summary, integrating DT, AT, and CT, i.e., the transformation triad, provides
the foundation for continuous change.
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However, living continuous change requires great effort from employees, especially in dealing with risks
and uncertainty, which often leads to resistance from employees. In this context, our IPs emphasize the
importance of a target picture to excite people and reduce potential resistance. “One success factor is the
attractiveness of the target state, and attractiveness has something to do with visionary. How innovative
is it? How inspiring is it for me as an employee?” (IP20) Considering that the target picture of the
transformation is not stable but subject to constant change, our IPs highlight corporate values, purpose,
and an inspiring vision as reinforcing tools to guide employees. While values and purpose provide guidance
and drive to identify the most appropriate opportunities in an era of unprecedented technological
possibilities, a vision provides stability. “It's becoming more important because things are changing faster
and so people need orientation. Such a vision and purpose give orientation.” (IP23) Thereby, strategic
planning becomes even more relevant. Whereas purpose provides the content-related frame and serves as
a North Star for organizations, the strategy directs organizations towards the purpose. “The purpose
provides the framework. […] This is the North Star, around which it is all about. The whole thing must be
filled with life, with concrete strategies, with projects.” (IP27) Many of our IPs mentioned a three-year
review cycle for their strategy with intervening updates as needed. So a purpose is much more stable than
a strategy. “The topic of strategy is one that we scrutinize every three to five years at the highest level, and
much more frequently below that. We always try to take up the recent challenges, translate them into a
crisp target picture, and generate motivation by saying: Look, this is the direction we want to go.” (IP14)
In this context, leadership takes over a key role to manifest the corporate values, purpose, vision, and
strategy into the roots of the organization. Leaders must communicate them consistently throughout the
organization to ensure a common understanding, and they must model them so that employees accept them
and use them as a guide. In summary, all of the transformation initiatives our IPs are currently undergoing
are just the initial spark to begin a journey of continuous change that will help them succeed in an ever-
changing business environment. “Absolutely. That is a mindset, to get in motion, to lose the shyness of
change. I don't know why, but change is somehow perceived as evil. But it's not that way at all. Change is
the essence of progress. Once you realize that you precisely get these little plants that are now sprouting.”
(IP15)
Discussion
Overall, DT as umbrella term concerns all investigated organizations. While the individual foci of
organizations differ, we observe generic patterns across all organizations. For example, we have seen
organizations develop new business models because they have noticed that customer-centricity is becoming
increasingly important to remain competitive. However, most organizations struggle to increase their
efficiency by automation due to their complex IT and process landscapes and lack of data governance. Our
study shows that, contrary to the typical motivation in the literature, i.e., the challenges of digital
technologies, technology is not the only concern. In our interviews, an actor-centric perspective
predominates, i.e., our IPs are primarily concerned with the novel role of customers as equal partners
(external) and the expected role of employees as decentralized decision-makers (internal). Further, in most
organizations, it is not the lack of knowledge that hinders DT but the mindset of employees, irrespective of
their role or hierarchical level. To cope with rapid environmental change, organizations must engage their
employees in flexible structures and create a culture that enables change. Accordingly, instead of a one-time
DT sprint, organizations must brace themselves for a marathon. Our findings indicate that practitioners
understand DT as an ongoing process that requires an organization's capacity for continuous change,
emphasizing recent conceptualizations of DT (Hanelt et al. 2020; Hinsen et al. 2019; Vial 2019). So while
practitioners today struggle to define a clear and enduring target state, they should instead figure out what
they need to do to continuously adapt to rapidly changing challenges.
Based on our interview analysis and outlined findings in the results section, we derive the transformation
triad of DT, AT and CT to enable continuous change (see Figure 1) which we will describe in the following.
New technological opportunities bring constant change to the organization (outside-in perspective) and,
thus, trigger organizations to strive for continuous change due to their ever-evolving nature. However, DT
alone will not enable organizations to cope with these challenges. Rather, our results emphasize that the
continuous adoption of new technologies requires flexible organizational structure and processes as well as
a new culture supporting an open and flexible mindset. Thus, DT is accompanied by AT and CT to enable
the necessary adaptations of organizations’ internal setup (inside-out perspective). Organizations must
empower employees to better utilize digital technologies and to develop client-centric digital products at
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increasing speed. With the AT, they want to introduce new working and collaboration methods to improve
their overall responsiveness and accelerate the development of digital products. Without this, organizations
limit their ability to exploit the potentials of technologies at an accelerated speed and thus the benefits DT
brings about. In addition, CT helps on the path to a culture of trust, where employees can live out their
intrinsic motivation and entrepreneurial thinking and challenge the status quo. As a result, CT is creating a
new mindset among employees that fosters creativity, flexibility, and openness to new technologies, and
encourages them to experiment and develop new digital solutions. Across our interviews, we observe the
emphasis on taking employees the fear of any negative consequences if they fail when experimenting with
new technologies. Like the lack of the potentially positive impact of AT, a culture of fear and tight control
can limit the benefits of DT if employees resist using the new technology. As both AT and CT primarily focus
on organizations’ inner workings (inside-in perspective), they also mutually enable (or restrict) each other,
as well as restrict DT. As our findings show, many organizations are seeking new decision-making processes
and incentive structures to promote agile working. Thus, organizations transfer responsibilities from the
top and middle managers to employees with in-depth knowledge. This requires employees' willingness to
take responsibility and make decisions. However, this can only happen if a culture of trust prevails and
employees feel a sense of safety that they can make wrong decisions without having to expect negative
consequences. Without this cultural setup, neither adaptations through AT nor the opportunities through
DT will be fully exploited. Thus, all three transformations are interrelated so that the success of each
transformation is bound to the progress of the other two. In addition, we propose to place the individual
employee at the center of these interrelated transformations. Our findings show that organizations are keen
to enable their employees to respond more flexibly to new technological challenges arising from digital
transformation by giving them more responsibility and decision-making power (AT). Further,
organizations establish a different culture to encourage this flexible way of working, because ultimately it is
the employees who need to be open to experimenting with new technologies. Consequently, employees
constitute the biggest driver and obstacle at the same time. Our findings provide a potential explanation for
Dang and Vartiainen’s (2020) assertion that technology plays an important role in DT but people are the
engine for the transformation.
Figure 1. The Transformation Triad to Foster Continuous Change
With our understanding of the interrelation of the transformation triad and due to their ongoing nature, we
find that all three transformations play a key role in enabling continuous change. However, to leverage the
full potential, organizations need to make sure that their employees understand the necessity and direction
of change. Thus, organizations increasingly often try to (re-)define their purpose and vision as attractive
North Stars that provide orientation and pull their employees in one direction. This makes sense because
purpose and vision remain unchanged over longer periods and, thus, provide stability and shared values
for employees in times of continuous change (Venus et al. 2019). Furthermore, a common long-term goal
has the potential to overcome silos and foster collaboration, which is especially important for incumbents.
Accordingly, we recognize that leading organizations increasingly derive their business strategy from their
purpose, vision, or values. While in the past, organizations set up long-term strategies with a focus on
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economic growth, today, due to the hyper-dynamic business environment, strategies become short-term
action plans that are aligned with their purpose. Thereby, the purpose of the derived strategy not only gives
employees the framework in which they can operate, but also the freedom to act out their intrinsic
motivation and entrepreneurial thinking to contribute to the overarching economic success of the
organization.
Theoretical Contribution and Future Research Opportunities
The Transformation Triad. We observe that DT is accompanied by AT and CT initiatives to address this
challenge. While existing research already emphasizes the interrelations between DT and AT (Fuchs and
Hess 2018) and between DT and CT (Hartl 2019), literature that examines these interfaces is still scarce,
especially for the role of CT (Nadkarni and Prügl 2021). Thus, the contributions of our work are threefold:
First, in contrast to existing research, we draw on a broad empirical investigation of incumbents across
industries to better understand the underlying connections and equivalent relevance of the three ongoing
transformations for continuous change. Second, following our actor-centric focus, we explicate the
challenges that organizations face during their AT, i.e., the difference between adopting agile methods
(doing agile) and incorporating as well as scaling agile values and an agile mindset (being agile). Thereby,
we extend existing research, which already claims that DT needs to be a synthesis of organizational agility,
change commitment, and digital orientation (Nguyen et al. 2020). Further, our results show that change
commitment is not enough, and we provide additional insights on what kind of organizational culture
organizations should foster to support their AT and DT efforts. Third, by addressing the roles and incentives
of individual employees, middle managers, and corporate leadership, we provide indications about existing
challenges and tensions in organizations’ AT. Overall, our findings not only shed light on what it means to
have an organizational culture that encourages DT exploration, but we also outline the mechanisms why
the still-prevailing structures and risk-averse, silo-based mindset of organizations hinder AT. In conclusion,
the utilization of digital technologies to develop client-centric digital products requires organizations to re-
think their ways of working and corporate culture. If organizations do not address these two aspects in line
with DT, they will hinder the realization of the full potential of digital technologies. Only by understanding
this interrelation, the overall transformation to a continuously changing organization will be successful.
While our research provides a high-level overview, we still lack a deep understanding of the underlying
mechanism between CT, AT, and DT. Therefore, we propose to dive deeper into this topic and investigate
these mechanisms, especially in the context of large-scale AT, given the lack of empirical research in this
area (Dikert et al. 2016).
Employees at the Core. Our findings show that organizations identify their employees as the most
important driver and barrier for change and, thus, put them in the middle of their DT efforts. Hitherto, DT
literature mainly addresses this topic from a top-level perspective, i.e., the strategic role of a CDO (Singh et
al. 2020; Tumbas et al. 2017) and the necessary commitment (Nguyen et al. 2020), and capabilities of
decision-makers (Kane et al. 2019). Our observations fully underline those aspects but also indicate that
this is not enough. According to the increasing speed and complexity of the business environment,
organizations need empowered employees close to the customers. However, the importance and role of
individual employees above top management have been mostly neglected so far (Nadkarni and Prügl 2021).
Thus, our results provide a new perspective on the roles of employees within the context of DT and the
aspired target of continuous change. While existing research in other disciplines already elucidates the
importance of employees in the context of DT (Gale and Aarons 2018), our results show that the role of
middle managers and employees fundamentally changes. Further, we provide insights on what expectations
organizations have towards their employees regarding the ability to drive continuous change. While our
results provide a shallow understanding of the relevance of individual employees, their roles, and the
underlying connections between different organizational levels, future research should dive deeper and
examine how people can become the engine of organizational change. For instance, the DT community
might profit from digital intrapreneurship literature to gain insights on how individual employees can drive
DT and become a source of intentional continuous change. Further, our findings support Venus et al. (2019)
who claim that a vision of change needs to be a vision of continuity such that employees have something
that provides psychological safety. However, in contrast to the assumption of Venus et al. (2019),
organizational culture and identity cannot be such factors of continuity within organizations’ DT efforts
(Wessel et al. 2021). Accordingly, we observe that organizations seek other factors that provide continuity,
attractiveness, and direction. While attractive visions inspire people, our results show that product- and
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competitor-related vision statements may not provide long-term guidance in times of continuous, and often
even disruptive, change. Within our results, we find indications that long-neglected and ridiculed concepts
like purpose, vision, and values may provide direction, ambition, and continuity for organizations’ cohesion
in the future.
Purpose, Vision, and Values. Finally, all those transformations are only a means to an end, i.e., to fulfill
the organization’s purpose. As our findings show, the business strategy is derived from the purpose and
detailed out by measurable objectives to give direction. Our findings depict that this approach does not
inevitably result in the definition of a DT strategy, as it is recommended by prevalent research to coordinate
and guide DT (Hess et al. 2016; Matt et al. 2015), but rather digitalization becomes more an inherent part
of the overall project prioritization. Organizations evaluate those projects against their purpose to ensure
that only such projects are conducted that contribute to its fulfillment. Since, we only received high-level
insights on the procedures of how organizations approach strategy derivation and project prioritization
without the definition of a DT strategy, future research should focus on more in-depth case studies to
evaluate different procedures and to compare them with the existing research body. Further, while purpose
has been associated with shareholder value for a long time, we observe that organizations and their
employees increasingly often seek a purpose beyond money, i.e., to have an impact on their customers or
society. While this might sound like an interesting topic for organizational studies, our results show that
organizations often seek short-term benefits and, thereby, neglect those projects that build the foundation
to leverage the full potential of digital technologies, e.g., harmonization of the IT infrastructure. However,
hitherto, we lack insights on how purpose and values interact with the progress of organizations’ DT effort,
their competitiveness, and sustainability. Future research should examine whether there are differences
between organizations that seek to maximize shareholder value, the longevity of their organization, or a
deeper sense of purpose for society, and how these decisions affect the long-term motivation of their
employees, their capacity for continuous change, and economic KPIs.
Practical Implications
Our results are also meant to support practitioners’ DT. We show that they should not solely care about
technology but rather their employees who need to understand, leverage, and develop the technology.
Further, by bringing DT, AT, and CT together, we enhance the understanding of the different
transformations’ roles. Additionally, we provide valuable hints on what organizations, in general, do to re-
think their ways of working, and what corporate culture they aspire to create an engaging environment.
Practitioners can draw upon those insights and establish such ways of working and collaboration to foster
their capability for continuous change, e.g., new decision-making processes and related incentive
structures. These insights may help them to deploy their employees more effectively and create an
understanding of different roles within the organization. Further, our research supports practitioners in
their understanding of the increasingly important role of concepts that provide continuity and direction as
a solid foundation for their DT journey. Thereby, they can (re-)define their corporate purpose, vision, and
values in a way that does not only attract their employees’ motivation but also provides a common
understanding for the overall organizational goal. This, in turn, enables them to make better decisions for
their DT strategy and individual projects.
Limitations
Besides its merits, our study is beset with limitations. First, there are inherent limitations to our research
approach. While interviews provide the opportunity to take a deep dive and get to the roots of an issue, they
are highly subjective in various ways, e.g., our IPs’ understanding of DT, the interpretation of questions and
answers during the interview, the coding process, and the synthesis of the codes. To limit subjectivity, we
recorded the interviews such that we had the opportunity to listen to the statements and their context
repeatedly. Further, we conducted various iterations within our research team to stay aligned against the
background of the large dataset. Second, we acknowledge that interviews with other IPs within the same
organization or other organizations might have led to different insights. Even though we tried to examine a
diverse set of perspectives, i.e., different roles, organizations, and industries, our dataset cannot cover all
possible perspectives and expressions. Third, our IPs are mainly from German organizations. Since our
research approach addresses topics like organizational structures and culture that depend on the domestic
heritage and organizational context, the worldwide validity of our insights may be limited. While we believe
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the overall contribution regarding continuous change to be valid also in a broader context, we encourage
further studies from other countries to challenge our conclusions regarding the roles of AT and CT.
Conclusion
Organizations recognize that they must continually adapt to their ever-faster changing environment,
whether that means new opportunities to create value or changing customer needs. In this context,
organizations conceptualize digitalization as a continuous process that has no end. Although our study
shows that continuous change is not new, the increasing pace of technological development leads to a
permanent disturbance. While in the past organizations conducted profound transformations once in a
decade, today the need to overhaul their organizations happens in much shorter timeframes. Accordingly,
our results support the findings of Hanelt et al. (2020) that conventional change management may be
outdated. Instead, due to the rising complexity, organizations emphasize the role of the individual employee
to drive change bottom-up. Especially, for incumbents with established hierarchical structures and
processes that are governed top-down, the switch towards an organization that welcomes continuous
change is challenging. Thus, we propose that organizations must accompany DT with AT and CT. Finally,
we call for a stronger focus on actor-centric challenges beyond technology-driven matters to better
understand purpose-driven organizational identities that enable continuous change.
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