Embracing paradox and contingency: integration mechanisms for ambidextrous innovation portfolio management

Abstract

PurposeThe purpose of this paper is to explore how organizations manage and integrate exploration and exploitation across the innovation project portfolio. Such ambidextrous capabilities are required for organizations to innovate and succeed in today's rapidly changing competitive environment. Understanding how exploration and exploitation projects are integrated can illustrate ways to enhance ambidexterity and boost learning for the benefit of both approaches.Design/methodology/approachA multiple-case study approach was used to explore innovation portfolio management in six large organizations that emphasize innovation in their strategies.FindingsThe findings draw upon concepts of paradox and contingency to reveal that the inherent tension between formality and flexibility in managing innovation project portfolios is aligned with the need for organizational ambidexterity that maintains effective exploitative innovation while supporting explorative innovation capabilities. Four integration mechanisms are identified that enhance ambidexterity across the innovation portfolio by embedding processes for transition from exploration to exploitation and cross-fertilizing knowledge to build innovation capability across both exploration and exploitation.Practical implicationsManagers may find inspiration on ways to enhance learning by bridging exploration and exploitation projects from the four types of integration mechanisms. Recognizing the paradoxical nature of the tension between formality and flexibility in project and portfolio management may also help guide organizations to effectively develop ambidextrous approaches to enhance overall innovation outcomes.Originality/valueIn contrast to perspectives which suggest that paradox and contingency approaches represent disparate perspectives, the authors demonstrate how they can complement each other and work together through innovation portfolio management to support ambidexterity at the portfolio and project levels.