Transform Me If You Can: Leveraging Dynamic Capabilities to Manage Digital Transformation

This study sheds light on the relationships between digital transformation, business model, and process efficiency capabilities, and new product development (NPD) performance by employing a sequential explanatory approach, combining quantitative and qualitative research methodologies, utilizing structural equation modeling based on 430 questionnaire respondents, and a multiple case study design using four cases. The derived framework highlights that digital transformation does not directly lead to NPD performance but that organizations use idiosyncratic higher order (e.g., business model and process efficiency) capabilities that mediate this relationship to strategically cope with change. When assessing, reconfiguring, and integrating, organizations tap into internal and external value, individual, technological, and organizational (VITO) dimensions to transform operational capabilities and resources. Thus, higher order capabilities enable organizations to leverage firm-external opportunities to adjust intrafirm operational capabilities, resources, and competencies, emphasizing a complex hierarchical and contextual interplay. The contributions of the study are twofold: 1) we provide statistical evidence that the business model and process efficiency capabilities are coping mechanisms to master digital transformation and 2) the successful orchestration of VITO dimensions is essential for assessing, reconfiguring, and integrating resources, competencies, and operational capabilities to derive NPD performance.