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Digitally transformed firms show resilience against environmental volatility by regularly developing adaptive capabilities and transforming their processes to mitigate the effects of obsolescence. However, there is a lack of conceptual clarity on the obsolescence notion and means of avoiding it. This paper aims to investigate how firms’ empirical sensitivities to evolving environmental changes emerge and materialize into the ongoing management of obsolescence. We undertook an interpretive longitudinal study between 2009 and 20, capturing both the transformation journey and the habitus of a high-tech SME, which is a family business and located in the UK. In doing so, we develop an integrative framework to explain the interplay between the noncognitive dynamic capabilities, obsolescence, and digital transformation. This study has important implications to boost SMEs’ capacity to counter obsolescence. We suggest managers pay attention to the development of noncognitive dynamic capabilities. This, in turn, inadvertently leads to successful digital transformation for obsolescence trap avoidance.
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