This article suggests a new organizational form labelled as Dynamic Transformational Organization (DTO) which is a blend of concepts from Nonaka, Kodama, Hirose and Kohlbacher (2014) and Teece (2007). The 2007) premise that innovation alone is not sufficient for an organization to be competitive. Other than innovation (the result of knowledge creation), an organization also needs a specific set of capabilities which makes firms more competitive. DTOs are equally capable of generating knowledge and also have the specific capabilities necessary for firms to perform in a competitive environment. This article outlines the organizational structure of DTOs and the factors which constitute DTOs. Major antecedents of DTOs include organizational phronesis, Dynamic Fractal Teams (DFTs), Distributed Leadership (DL), Hypertext Organizations (HTO) and environmental fitness.