This article examines union responses to the reorganization of call centre work in Germany, drawing on case studies from the telecommunications, financial services and subcontractor industries. Service unions initially adopted innovative strategies to organize these workplaces, response to threats and opportunities presented by the rapid growth of a new 'sector. However, the new conglomerate service union, ver.di, has been unable to sustain these alternative strategies due to both institutional and organizational factors. The increasingly fragmented character the German industrial relations system provides growing exit options for employers, while union is disadvantaged by declining membership, resource scarcity and an organizational structure reflecting past industry (and union) boundaries. Ver.di thus finds itself in an institutionally enhanced innovation dilemma. Sustaining innovations necessary to organize new workplaces would require organizational slack and redundant resources. However, environmental pressures of changing employer strategies and institutional erosion limit the possibilities for mobilizing these resources.