Transformational IT Leaders and Digital Innovation

Does formal IT governance encourage innovation in the traditional domains of the IT function at the expense of new forms of "digital" innovation? We report on a study of 158 IT managers and leaders to understand the conditions under which transformational IT leadership can drive innovation in traditional forms of IT, as well as in the emerging "digital" domain. We find that highly formal IT governance practices can reduce ability of transformational IT managers and leaders to innovate in both domains, and this effect is greater for digital innovation. In stable cultures the moderation effect was strengthened, while insignificant in change cultures. We distinguish between IT innovation and digital innovation and operationalize this distinction, finding that in contexts with stability culture, the moderation is stronger for digital innovation than for traditional IT innovation.