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

Abstract

Due to a rapidly changing business environment, companies feel under constant pressure to innovate. In response to this challenge, and to accelerate their digital innovation endeavours, many incumbent firms set up Digital Innovation Units. To assess the effectiveness of these units, scholars and practitioners have called for the need to develop adequate means of measuring performance. This paper, therefore, reviews the literature on Performance Measurement Systems for Digital Innovation Units, and derives nine requirements. Conducting five case studies of Digital Innovation Units, we investigate the level of adoption of these requirements and propose three additional ones for a Performance Measurement System for innovation activities in Digital Innovation Units. We discuss these requirements and explain the reasons for their different levels of adoption. Thus, we contribute to literature and practice with a more adequate way of evaluating the performance of Digital Innovation Units, valuable to researchers and managers.