Design research (DR) positions information technology artifacts at the core of the Information Systems discipline. However, dominant DR thinking takes a technological view of the IT artifact, paying scant attention to its shaping by the organizational context. Consequently, existing DR methods focus on building the artifact and relegate evaluation to a subsequent and separate phase. They value technological rigor at the cost of organizational relevance, and fail to recognize that the artifact emerges from interaction with the organizational context even when its initial design is guided by the researchers' intent. We propose action design research (ADR) as a new DR method to address this problem. ADR reflects the premise that IT artifacts are ensembles shaped by the organizational context during development and use. The method conceptualizes the research process as containing the inseparable and inherently interwoven activities of building the IT artifact, intervening in the organization, and evaluating it concurrently. The essay describes the stages of ADR and associated principles that encapsulate its underlying beliefs and values. We illustrate ADR through a case of competence management at Volvo IT.