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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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Sharing technology on a project involving a competitor is counterintuitive. Indeed, the competitor will be able to internalize the technology and use it against the company who initially shared it. While a project design which drastically reduces the risk of internalization of technology exists, some companies prefer to use riskier project designs that promote internalization. Our study explores this intriguing behavior using an in-depth and longitudinal case study from a company that has made a choice to move from only project design deemed "safer," to sometimes using "riskier". Our results show that this choice is strategic and many variables are encouraging this riskier structure. The change of project design reveals a change in the representation of the market relationship between competitors.