Embedding Digital Innovations in Organizations: A Typology for Digital Innovation Units

Abstract

Embedding digital innovation into existing organizational structures poses a critical challenge to many established companies across all industries. One option that has drawn increased attention lately is the implementation of dedicated digital innovation units. However, it is yet unclear, how these units are designed to fit their specific objectives. Therefore, we develop a typology for these digital innovation units, identifying different types based on the objectives and respective design option patterns of these units. To do this, we follow a qualitative-empirical research approach, covering 23 real world instances of digital innovation units. We employ the loose-tight-coupling perspective as a theoretical lens to interpret and classify the observed design choices. We contribute to literature by identifying three ideal types of digital innovation units and provide insights for practitioners on how to set up this specific type of organizational units.

Bridging the Gap – An Analysis of Requirements for Performance Measurement Systems in Digital Innovation Units

“…These are organisational setups intended to initiate and develop digital innovation of various types [3]. While DIUs are gaining increasing attention in both academia [4,5] and practice [6], there has been no agreement yet on their definition, only on several of their key characteristics. Accordingly, DIUs are dedicated and specialized (digital) units [7], separated from the main organisation in terms of location, mindset, collaboration, and communication.…”

“…At the same time, they still remain "connected through the transfer of knowledge, exchange mechanisms, and people moving between the new and 'old' units" [3]. In this paper, we follow the definition proposed by Barthel et al [5] which focuses on DIUs as "organisational units with the overall goal to foster organisational digital transformation by performing digital innovation activities for existing and novel business areas". Until now, research on the success or performance of DIUs in creating value is rare to non-existent [5].…”

“…In this paper, we follow the definition proposed by Barthel et al [5] which focuses on DIUs as "organisational units with the overall goal to foster organisational digital transformation by performing digital innovation activities for existing and novel business areas". Until now, research on the success or performance of DIUs in creating value is rare to non-existent [5]. Conversely, one of the reasons for their failure or abolishment, as identified in a recent study by Raabe et al [8], is the lack of clarity surrounding the objectives that a DIU has been given.…”

“…For example, the customer perspective on a specific digital product or service is becoming increasingly important, but has so far not been adequately represented by a key performance indicator [11]. While the literature has already analysed requirements for measuring innovation activities [12], and specifically looked at designing Performance Measurement Systems (PMS) in the context of ambidexterity [13][14][15], research is limited when it comes to combining the necessity of rethinking measurement efforts for early digital innovation activities [5,10]. Therefore, this paper aims to investigate the specific requirements of a PMS for innovation activities in DIUs and the current state of awareness and operationalisation in practice.…”

“…From the perspective of PMS research, we create the basis for the development of a PMS that can capture the complexity of the early innovation activities and recognize the impact of digital innovation on the measurement process. From a DIU research perspective, we take a first step in the challenging direction of measuring their success, which has already been raised in previous papers [4,5].…”