THE COYOTE AND THE ROADRUNNER DIGITAL OPTIONS IMPACT ON INNOVATION SPEED

Digital options theory, which includes knowledge and process components, contends that IT capabilities influence digital options, which influence agility and, therefore, competitive actions. This paper uses a multi-method, multi-study approach to explore innovation speed as the competitive action in the context of digital options theory. Since scales for the digital options constructs do not exist, this research seeks to establish a measurement instrument for the four digital option generators: knowledge reach, knowledge richness, process reach, and process richness. This research then leverages the constructs in an empirical study to measure the effect of IT capabilities on digital options, the impact of digital options on innovation agility, and, finally, the impact of innovation agility on innovation speed. Contrary to the theoretical foundation, this study was only able to develop a single digital options generator that encompasses knowledge and process. Using this construct in the larger conceptual model, it was found that IT capabilities positively impacted digital options. The more lightweight the IT capabilities, the higher the impact. Digital options were found to positively impact innovation agility, and innovation agility was found to positively impact innovation speed.