Governing innovation platforms in multi-business organisations

Abstract

ABSTRACT Innovation platforms enable companies to create broad and dynamic portfolios of applications, which can be developed internally and externally. An increasing number of established companies from traditional industries have begun to explore the potential of innovation platforms. These companies are often organised as multi-business organisations (MBOs). When introducing innovation platforms, they face tensions between the corporate centre that runs such platforms and business units that develop applications on the platform. Established approaches to information technology (IT) governance in MBOs are ineffective in addressing these tensions because they focus on cross-business-unit synergies, rather than on innovation from business units. To explore this issue further, we conducted a longitudinal case study of an automotive manufacturer that introduced an innovation platform in its infotainment system. The company faced four tensions: rigidity, alteration, mistrust, and competition. To address these tensions, the company evolved its IT governance, allowing for more flexibility for business units, supporting their development efforts, and prioritising them over external complementors. The role of the corporate centre evolved from a gatekeeper to an enabler of innovation. Our findings link the literature on IT governance in MBOs with that of platform governance, providing insights into how MBOs benefit from innovation platforms.