Digital transformation in high-reliability organizations: A longitudinal study of the micro-foundations of failure

High-reliability organizations (HROs) and their complex operating models have been a focus of scholarly work for more than three decades. Recently, HROs have been challenged by new market pressures that require them to digitally transform in ways that affect their identity and value creation models while still maintaining high levels of security and efficiency. This longitudinal, in-depth single-case study of a major European utility company examines the role of HRO identity in digital transformation (DT), specifically in terms of tensions between innovation and transformation on the one hand, and maintaining reliable operations on the other. Our findings show how tensions between HROs’ identity and key features of DT give rise to threat perceptions and self-protective behaviors by the IT workforce, that eventually may derail the transformation process. We develop a process model that highlights the sources and consequences of identity misalignment during major DT initiatives in HROs. In doing so, we extend the research on D T by highlighting the importance of bottom-up processes for DT success and failure, especially concerning the IT function’s perception of organizational identity.