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Open Innovation’s “Multiunit Back-End Problem”: How Corporations Can Overcome Business Unit Rivalry

by Thuy Seran and Sea Matilda Bez

Open Innovation’s “Multiunit Back-End Problem”: How Corporations Can Overcome Business Unit Rivalry
In the banking industry, collaboration with startups can rapidly accelerate digital transformation - but internal rivalry can become a barrier to implementation.
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This article examines the “multiunit back-end problem” of open innovation based on a case study of the Banque Populaire Caisse d’Epargne (BPCE) Group, a large French bank with two business units. The multiunit back-end problem occurs when internal business units who consider themselves rivals are asked to collaborate for the success of an open innovation initiative. BPCE failed several times to use external startups to accelerate its digital transformation due to rivalry between its internal business units. This article presents guidelines that firms with rival business units can use to align their front-end and back-end when working with startups to accelerate their digital transformation program.




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