The unbounded nature of digital innovation requires innovating firms to be agile in the way they manage the processes, governance and outcomes in order to sense and seize the market directly and timely. This study adopts an inter-organizational approach and asks to what extent and in what way does organizational agility impact on innovation performance? This perspective underscores the interdependencies between collaborating partners, which creates a relationship regulating system of workflow to drive value creation in the process of innovation. While the literature has offered a broad conceptual argument for organizational agility in the context of digital innovation, the mechanisms through which value is transformed in the innovation process is still unclear. We contend that an agile innovation process stands on four main cornerstones: (1) joint strategic planning, (2) joint problem solving, (3) joint improvisation and (4) community (market) sensing. The empirical research is set in the video game industry, which is in a largely digitalized and borderless business environment. The data was collected through an interviewer-administered questionnaire. The sampling frame is based on a Swedish trade association database. Usable sample is 113. We performed structural equation modelling to test the hypothesized model, including main and moderation effects, using Mplus. The findings show that while only improvisation has a significantly positive effect on innovation performance, the role of strategic planning and problem solving between two collaborating partners remains unclear. For example, strategic planning has shown to be a negative influence in our empirical research. Problem solving has no effect on innovation performance, but it interacts with community sensing and subsequently facilitates innovation outcome. This highlights the importance of community sensing, which could offer rich, crucial knowledge and resources for problem solving that proves to be effective. The results provide further theoretical arguments for understanding organizational agility and digital innovation, but also raise further questions for future research.

• Sabrina Thornton(Sheffield University Management School, United Kingdom)
• Desirée Holm(Uppsala University, Sweden)
• Martin Johanson(Stockholm University, Sweden)
• David Sörhammar(Stockholm University, Sweden)