The digitalization of businesses is a pervasive tide of innovation whose challenges the literature increasingly addresses. Nevertheless, management research has given much less attention to the implications of digital transformation (DT) for the innovation process and its management. This paper aims to contribute to the debate by exploring the implications of DT for the organization and management of innovation in five leading, innovative Brazilian incumbents. In-depth multiple case studies have been carried out in 2020/21 to produce empirical data on the diffusion of DT and how it has affected innovation strategy, organization, and management practices. Our findings suggest that innovative incumbent firms face a considerable challenge. Competition in their markets continues to require proprietary solutions, technologies, products, and processes as the basis of the current or new business models. So, they must perform both business model innovation and product/service innovation under the diffusion of digitalization. However, the attainment of each of these innovation goals is attributed to distinctive organizational units, which seldom are organically integrated. The companies investigated face the emergence of two poles of innovation, whose orchestration is not trivial.
