Designing Organizations for Dynamic Capabilities

How can organizations put dynamic capabilities into practice? We focus on the power of organizational design, showing how managers can harness new organizational forms to build a capacity for sensing, shaping and seizing opportunities. Fast-moving environments favor open organization and self-organizing processes that quickly convert individual capabilities into actionable collective intellect. We argue that self-organizing processes do not organize themselves but require managers to design and execute them. We examine new design principles – such as polyarchy, social proofs, and new forms of open organization – that allow organizations to build dynamic capabilities for sustained innovation in dynamic environments.