The 'Third Hand': IT-Enabled Competitive Advantage in Turbulence Through Improvisational Capabilities

Organizations are increasingly engaged in competitive dynamics that are enabled or induced by IT. A key competitive dynamics question for many organizations is how to build a competitive advantage in turbulence with digital IT systems. While the literature has focused mostly on developing and exercising dynamic capabilities for planned reconfiguration of existing operational capabilities in fairly stable environments with patterned “waves,” this may not always be possible, or even appropriate, in highly turbulent environments with unexpected “storms.” We introduce improvisational capabilities as an alternative means for managing highly turbulent environments, defined as the ability to spontaneously reconfigure existing resources to build new operational capabilities to address urgent, unpredictable, and novel environmental situations. In contrast to the planned role of dynamic and operational capabilities and the ambidexterity that they jointly offer, improvisational capabilities are proposed to operate distinctly as a “third hand” that facilitates reconfiguration and change in highly turbulent environments.