Interface as a design choice: How the implementation of interfaces influences coordination and performance in modular systems

Research Summary Modular systems play a central role in technological innovation. Such systems emerge when interdependencies among modules in a complex system are isolated through interfaces. While early seminal work highlighted the importance of interface design, subsequent research on modularity has largely overlooked it. We develop a model that treats interfaces as a set of design choices, separate from module choices. This model elucidates the mechanisms through which interface design influences system performance and identifies novel strategies for sequencing the search of interface and module designers to improve outcomes. The framework has implications not only for standalone innovations but also for the design of standards in platforms and ecosystems. Ultimately, it demonstrates that interface design is as much a strategic challenge as it is a technical one.Managerial Summary Managers increasingly rely on modular designs to enable innovation, yet often overlook interfaces as a strategic lever. This study shows that actively designed and periodically updated interfaces can coordinate interdependencies without constraining decentralized search, enabling modular systems to approach the performance of integrated designs. Crucially, sequencing matters: allowing modules to evolve before introducing interfaces improves long-run performance, as early experimentation generates knowledge that interfaces can later build upon. Finally, infrequent interface redesign is sufficient to sustain coordination, reducing the need for continuous adaptations. Overall, interfaces should be treated as evolving strategic choices that shape innovation trajectories in products, platforms, and ecosystems.