Unpacking digital options thinking for innovation renewal: a clinical inquiry into car connectivity

Abstract

Options thinking is a powerful approach for managing uncertainty and change in digital environments. It is recognised as a structured process for identifying, developing, and realising options into novel products and services. At Volvo Cars, we have learned it can also become a powerful instrument for innovation renewal, although it can be difficult to apply because it challenges existing firm practices. We elaborate this tension by presenting digital options strategizing as a process of applying options thinking to negotiate capability gaps and configure innovation resources. Our clinical study reveals that this facilitates innovation renewal through emergent processes, practice-oriented design, and opportunity-driven management.