Digital Innovation Units: Exploring Types, Linking Mechanisms and Evolution Strategies in Bimodal IT Setups

Due to rapidly changing customer needs, enterprises seek to innovate continuously. This includes the capability of discovering and developing digital innovations. As a nascent phenomenon, companies increasingly use digital innovation units (DIU) as fast and flexible accelerators. Although DIUs are established in practice, research on them and their role in bimodal IT setups is still sparse. Based on a qualitative cross-industry study in nine organizations, we identified two types of DIUs: Coaching & Screening (C&S) units and Center of Excellence (CoE) units. Furthermore, we describe two linking mechanisms between the DIUs and the main organization for ensuring impact and continuous innovation. Finally, we present four DIU evolution strategies, which can be employed by companies seeking to establish a DIU. Our study contributes to research on bimodal IT by developing a foundational understanding of how digital innovation activities are organized in DIUs to create impact on the main organization.