Designing Innovation in the Digital Age: How to Maneuver around Digital Transformation Traps

Marx, Carolin; Haskamp, Thomas; Uebernickel, Falk

Abstract

Companies that embrace human-centered digital innovation approaches like Design Thinking are better equipped to master the challenges of digital transformation. Still, the number of failed digital transformation activities is rising, and companies struggle more than ever to turn their transformation initiatives into a success to remain competitive in the digital age. One promising avenue toward detangling this phenomenon is to identify the “traps” that, if not identified or addressed, can cause an organizational digital transformation to run into distress and potentially fail. In this chapter, we discuss the potential traps organizations can fall into during their digital transformation activities. We then synthesize them based on their difficulty to identify in a three-layered framework. The framework consists of execution traps, reaction traps, assessment traps, and recognition traps. Based on an in-depth case study with a large incumbent firm in the banking sector, we validate the trap categories and provide guidelines on how to use the framework in practice. This not only adds to the “demystification” of failing digital transformation endeavors but also serves as a foundation for understanding how adopting human-centered digital innovation approaches or other mitigation strategies can help to maneuver around the traps of transformation.