Companies that find innovative ways to manage capabilities gain competitive advantages. The results of multiple case studies of capital goods manufacturing companies suggest that management innovation contributes to dynamic capabilities. The findings confirm the importance of sensing, seizing, and reconfiguring as dynamic capabilities. Management innovation differs in terms of whether it contributes to sensing, seizing, or reconfiguring. The findings describe issues of management innovation, such as key change agents and utilization (motivation, invention, implementation, as well as theorizing and labeling), which facilitate sensing, seizing, and reconfiguring. Maintaining capability-driven competitive advantages is not limited to the innovation of products and services, but should also address management innovation that drives dynamic capabilities. The present study relies on a novel conceptualization of dynamic capabilities through management innovation. This conceptualization advances theory-building on the issue of dynamic capabilities.