Architectural Search and Innovation

Product innovation can result from the novel design and combination of product components as well as from changing the underlying architecture: that is, the way components interact with each other. Even though previous studies have shown that architectural change can constitute a powerful source of innovation, little insight exists on how organizations should engage in architectural search itself. In this paper, using computer simulation, we explore underlying mechanisms of architectural search. We find that contrary to search for component combinations, architectural search provides greater performance improvements the narrower the search scope, regardless of product complexity. Moreover, our theory and findings suggest a more differentiated typology of architectural innovation. Although narrow architectural search often leads to pure architectural innovations that do not require substantial component changes, broader architectural search often leads to composite architectural innovation (i.e., architectural innovations that typically render existing component designs suboptimal but allow for new high-performing component combinations to arise). Lastly, although narrow architectural search outperforms broad architectural search in the long run, in the short run broad architectural search can have performance advantages.