An increasingly digital world requires organizations to act more agilely, to succeed in responding quickly when changes or new opportunities arise. The increased digitalization creates a need for organizations to develop an ability to quickly deliver digital innovation, with quality to meet changing customer needs over time. This need for agility to support innovation has aroused interest among information systems researchers in recent years. Two different research streams on agility exist, with the following perspectives: organizational agility concerning IT strategies and operations for organizational cost efficiency; and agile methods in software development, to achieve continuous rapid delivery of digital solutions that meet customer needs. The current information systems literature on organizational agility covers only the first-mentioned perspective, leaving a knowledge gap. To fill the gap we must have a broader understanding of how organizational agility relates to achieving high-paced digital innovation capability.

This thesis intends to broaden our understanding of how organizational agility impacts digital innovation by reporting my studies of startups in the automotive industry. The reasons for studying automotive startups are twofold: (a) media reports have indicated that startups generally seem be successful at high-paced digital innovation despite limited means, and (b) some of these startups have begun to challenge automotive incumbents. This aroused an interest in better understanding how startups achieve this ability, and whether there are any lessons that are transferable to incumbents. Therefore this thesis contributes to a broader perspective of organizational agility by addressing the research question: How do startups use organizational agility to drive digital innovation?

Results from the research show that not all startups possess equal abilities in terms of organizational agility for digital innovation. This research has identified nine organizational agility capabilities, which form four organizational agility readiness patterns impacting digital innovation.

This research provides a theoretical contribution to organizational agility by showing that an amalgamation of two research streams in the information systems literature is needed to achieve a more holistic approach. This approach is needed as the role of IT has changed, from a primary focus on supporting organizational efficiency and cost savings to today, when IT plays a vital strategic role through digital innovation. The two information systems research streams concerning agility are: a) IT strategies and operations supporting organizational efficiency, and b) software development as an innovation outcome. Currently, the information systems research on organizational agility primarily covers only how agility relates to the IT role of supporting efficiency. This research argues that a broader perspective on organizational agility is needed, to understand better which organizational agility capabilities impact digital innovation and how they impact it.

The empirical contribution is the identification of nine organizational agility capabilities, which form four organizational agility patterns that affect digital innovation capability to varying degrees. It is crucial that organizations be knowledgable about these nine organizational agility capabilities, since how they manage them will result in different digital innovation capabilities. The contribution to practice is the conceptual framework of four agility readiness patterns for digital innovation. These can be used to evaluate organizations' current digital innovation capability, and guide them as to which capabilities they may need to improve if they want to develop another level of digital innovation capability. The nine organizational agility capabilities identified in this research represent a minimum set that an organization needs to manage knowledgeably, in order to become an agile enterprise for digital innovation.