Innovate to Govern, Govern to Innovate: A Dynamic Organizational Dance

This paper explores the intricate co-evolutionary dynamics between innovation models and governance structures within organizations. Innovation is crucial for maintaining competitiveness, fostering growth, and adapting to market changes, necessitating structured models to guide its processes effectively. Simultaneously, governance plays a pivotal role in aligning innovation with strategic objectives and mitigating associated risks. Despite the acknowledged importance of both constructs, their interplay remains underexplored. This study addresses this gap by examining how these two processes co-evolve through an eight-year longitudinal case study of an Italian multi-utility company. We used a longitudinal design to capture the key phases in the evolution of the company's innovation model and governance structures, demonstrating how governance mechanisms adapted in response to changes in the innovation process and vice versa. Our findings contribute to innovation management literature by highlighting the reciprocal influence between governance and innovation, portraying governance as a dynamic force that not only supports but also shapes innovation. Additionally, we emphasize governance’s mediating role in managing the complexities inherent in innovation and Open Innovation initiatives, offering a nuanced perspective on organizational adaptability during strategic transformations.