Abstract
The creation and dissemination of knowledge is critical for enabling digital innovation in firms. Yet, many digital units fail to do so. We analyze multiple interviews with functional experts and digital unit members from eight firms to explore how digital units enable organizational digital transformation. Findings emphasize that strong structural separation and poor strategizing of the digital unit solidify existing schemes while not reducing organizational rigidities. This leads to knowledge becoming difficult or sticky to exchange. Successful digital innovation depends on knowledge creation and exchange among experts, non-experts, and managers. Digital units must find and integrate experts from digital technology and functional domains and convert their tacit knowledge into digital innovation requirements. We highlight the need for balance between fluidity and stability, as sticky knowledge conversion requires long-term relationships, while digital innovation demands fluid knowledge inflows and outflows. Thus, we contribute to digital unit research which emphasizes strong cross-functional exchanges.