Management strategies in the creation and preservation of BU-ambidexterity : a multiple case study

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Management Strategies in the

creation and preservation of

BU-ambidexterity: a multiple

case study

Student: Dieuwertje de Rover (10738606) Date of submission: 19-08-2016 (Final)

MSc. In Business Administration – Strategy Track Amsterdam Business School, UvA

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1 Statement of originality

This document is written by Dieuwertje de Rover, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

Research shows that ambidextrous firms are able to deal with fast changing environments and short-term competitive pressures, and thereby become and remain successful. Although studies indicate the importance of ambidexterity-creation, research on how this is done is underexposed. This thesis attempts to fill in this gap by answering the question how business unit managers create and preserve business unit ambidexterity. A multiple case study was conducted containing 9 cases (business unit’s) in 4 medium-to large firms in 2 different industries (industry and professional services). A total of 27 interviews (3 per case) were held, next to discussions with key informants and the use of secondary data. The results show that the way managers enhance ambidexterity differs for structural and contextual focused BU’s. The setting of Structural Ambidexterity Business Unit’s (SAB’s) tends to rely more on processes and thereby is inclined to overrule the ‘capabilities of people’ in fostering ambidexterity. Managers (try to) overcome this with 1) placing the right people at the right place, and 2) and supportive leadership. In contrast the setting of Contextual Ambidexterity Business Unit’s (CAB’s) tends to rely more on people for ambidexterity creation and has less supportive processes in place. Managers overcome this through 1) attention and visibility, 2) and gap-filling. In addition, both SAB’s and CAB’s ambidexterity creation and preservation is enhanced by the ‘congruence of goals among multiple levels’. The findings demonstrate some of the interactive effects between setting, processes, people and managerial action in the creation and preservation of BU-ambidexterity and thereby meet the query for micro-level and multiple level research on the process of ambidexterity creation at lower levels in the organisation.

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1. Introduction

Firm survival and how this is achieved is an important question of both strategy scholars as well as managers. Long-term success in dynamic environments depends on an organisation’s ability to exploit its current capabilities and simultaneous exploring new opportunities (Raisch et. al., 2009). This ability to align and adapt appears to be(come) essential for better financial performance and firm survival (O'Reilly and Tushman, 2013; Tempelaar and Van de Vrande, 2012). However, these two types of innovations require different structures, cultures, and people (O’Reilly and Tushman, 2013; Raisch and Birkinshaw, 2008). This leads to a tension and makes managing ambidexterity a challenging act of balancing conflicting demands. Hence research on how an organization can achieve both simultaneously, and thereby become ambidextrous, is crucial.

Earlier research has looked at organizational ambidexterity in structural terms (O’Reilly and Tushman, 2013). The spatial separation of exploration and exploitation, and its integration at the top-management level is found to be fruitful in achieving ambidexterity, although its success (partly) depends on the behaviour and qualities of top management (O’Reilly and Tushman, 2011; Smith, Binns and Tushman, 2010; Smith and Tushman, 2005). However, Gibson and Birkinshaw (2004) posit that contextual ambidexterity leads to better (BU-)performance. They state that the exploration/exploitation trade-off should be solved at the individual level. To what extent this can be done successfully depends on the stimulation of both exploration and exploitation by the specific organizational environment (Carneli and Halevi, 2009).

At the managerial level several studies have investigated important attributes, actions and strategies enhancing ambidexterity. It is found that managers who are able to host contradictions, are multitaskers, and that they both refine and renew their knowledge, skills and expertise contribute to ambidexterity creation (Mom, Fourné and Jansen, 2015; Turner et. al., 2015). In addition, research shows that integration and differentiation help to manage interwoven paradoxes and support the maintenance of ambidexterity (Andriopolous and Lewis, 2009; Raisch et. al., 2009). Furthermore, ambidexterity is enhanced by supportive leadership (Jansen, Van den Bosch and Volberda, 2010; Jansen, Vera and Crossan, 2009). However, research on lower-level managers and their strategies in ambidexterity creation is underexposed (Turner, Swart and Maylor, 2012; O’Reilly and Tushman, 2011)

In general there is a lack of knowledge how ambidexterity is managed within organizations (O’Reilly and Tushman, 2011), especially at lower levels of the organisation. In addition micro-level (O'Reilly and Tushman, 2013; Turner, Swart and Maylor, 2012; Gibson

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6 and Birkinshaw, 2004), and multi-level studies (Turner, Swart and Maylor, 2012; Raisch et al., 2012; Lavie, Stettner and Tushman, 2010; Raisch and Birkinshaw, 2008) on the management of ambidexterity are missing. Qualitative and in-depth studies are required to better understand and explain how managers create and preserve ambidexterity at lower levels of the organisation. This will not only enhance scholars’ understanding of the underlying interactive processes of ambidexterity, but also inform practice on what actually should be done to achieve ambidexterity.

This research attempts to fill in these gaps by answering the question: how do business unit managers create and preserve ambidexterity at a business unit level? Answering this question is crucial in attaining more detailed knowledge about (the influence of) managerial ambidexterity on business unit ambidexterity and performance, and what managers can actually do to achieve ambidexterity.

By answering the question how BU-managers create and sustain BU-ambidexterity it is attempted to make several contributions to the theory. First, this micro-level and multi-level research will provide a more detailed understanding of how ambidexterity is achieved. More specifically, this study sheds light on what managers in ambidextrous units do on a day to day basis to foster ambidexterity. Thereby discovering how lower-level processes contribute to balanced exploitation and exploration choices and efforts. Thereby it tries to fill in the current knowledge gap on what managers actually do to contribute to ambidexterity (Turner, Swart and Maylor, 2013; O’Reilly and Tushman, 2011; Sarkees and Hulland, 2009).

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2. Literature Review

2.1 Structural and contextual ambidexterity

Although organizational ambidexterity appears to be important for firm performance, the question how it must be achieved is underexposed (O’Reilly and Tushman, 2011; Sarkees and Hulland, 2009). Many authors view ambidexterity in structural terms, meaning that conflicting activities (i.e. exploration and exploitation tasks) are best managed through structural separation (O’Reilly and Tushman, 2013). Spatial separation allows for organizing competences, structures and cultures which best fit to either exploration or exploitation. The strategic alignment and integration of these separate units occurs at the top management level. This makes the organizational capability of sensing and seizing opportunities more a leadership issue than a structural one (O’Reilly and Tushman, 2013; O’Reilly and Tushman, 2011; Smith, Binns and Tushman, 2010; Smith and Tushman, 2005).

Although some similarities with structural ambidexterity exist, Gibson and Birkinshaw (2004) propose that the exploration/exploitation trade-off can better be solved at the individual level through contextual ambidexterity. By this they mean a supportive organizational context that entails processes and systems which enable individuals to ‘make their own judgments to how best divide their time between the conflicting demands for alignment and adaptability’ (Gibson and Birkinshaw, 2004: 211). In other words, contextual ambidexterity can be seen as a function of a culture that fosters both flexibility and creativity, and control and execution (Bueschgens, Bausch and Balkin, 2010; Khazanchi et. al., 2007)

Empirical evidence shows that both structural ambidexterity and contextual ambidexterity can have an positive effect on firm performance (O'Reilly and Tushman, 2013: 7; Tempelaar en Van den Vrande, 2012; Burgers et al., 2009; Gibson and Birkinshaw, 2004). Nonetheless, more research is required to get a better understanding how the underlying processes (the preservation of) ambidexterity. Since the starting point of structural and contextual ambidexterity is different, it is expected that the ‘setting’ of the organisation, a BU-focus on structural vs a BU-BU-focus on contextual ambidexterity affects the manner BU-managers create and preserve BU-ambidexterity.

2.2 Managerial behaviour and Leadership

Some studies – mostly focused on senior level management – have found some ambidexterity-enhancing skills and behaviour of managers. First, managers need the ability to engage in complex cognitive processes like paradoxical or integrative thinking (Smith and Tushman,

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8 2005; Martin, 2007) in order to host contradictions (Mom, Van den Bosch and Volberda, 2009) and integrate different knowledge domains (Turner et al., 2015). In addition, they should be comfortable in executing different types of tasks simultaneously (Mom, Van den Bosch and Volberda, 2009; Birkinshaw and Gibson, 2004) and take initiative outside their own job role (Turner et al., 2015; Birkinshaw and Gibson, 2004). Managers enhancing ambidexterity continuously learn, they refine and renew their knowledge, skills and expertise (Mom, Van den Bosch and Volberda, 2009; Floyd and Lane, 2000). These studies suggest several important attributes, but there is a lack of understanding in what this really means in practice.

Other research suggests that managers should serve as a good example in adaptable behaviour and set the tone for their team (Turner et al., 2015; Gibson and Birkinshaw, 2004). They need to be able to use both using planning and control systems as well as flexibility when required (Turner and Lee-Kelley, 2012), and fulfil both administrative and entrepreneurial leadership roles (Probst et al., 2011; Jansen, Vera and Crossan, 2009). In interaction with their organisations managers use strong and weak network ties to improve both exploitation and exploration (Turner and Lee-Kelley, 2012).

Tushman and O’Reilly (2004) state that tight-loose coupling of culture is crucial in ambidextrous firms with separate innovation-processes. This is created with a common vision and supportive leaders who encourage the culture and simultaneously allow for variation. Local autonomy and risk taking is promoted, while local responsibility and accountability through consistent control systems is ensured. A strong shared culture and values promotes integration and encourages the sharing of information and resources. Provision of consistency, trust and predictability are also promoted by culture (Tushman and O’Reilly, 2004). Although Tushman and O’Reilly’s research was focused on large firms and separate units it shows similarities with contextual ambidexterity creation as discussed by Birkinshaw and Gibson (2004). Through stretch and discipline, managers can create a context in which subordinates are stimulated to deliver results and are hold accountable for their actions. Equally important, and mutually reinforcing, is social support. Support and trust are attributes that create a context in which people are feel the security and latitude they need to perform (Birkinshaw and Gibson, 2004).

This mix of quantitative and qualitative studies show a wide variety of necessary managerial factors contributing to ambidexterity. Nonetheless, a detailed investigation of what managers can do to achieve and maintain ambidexterity at the lower organisational level is lacking. Especially the focus on maintaining ambidexterity is missing.

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3. Data and Methods

3.1 Introduction

A good research design ‘is the logic that links the data to be collected (and the conclusions to

be drawn) to the initial question of study’ (Yin, 2004: 24). This chapter describes the research

design of this study. The methodology, case selection, data collection and data analysis will be discussed subsequently. The epistemological position taken in this research holds in between (post-)positivist and the interpretive paradigm. Researchers nowadays do not take an explicit standpoint for one perspective, nor do they combine all (Tracy, 2013). From the belief that there is a single truth to be known, but very hard to find, triangulation methods as well as ‘verstehen’ is used to conduct this study. Methodological triangulation improves reliability and formal generalizability (Tracy, 2013). In addition, being aware that the position of people influences their perspective will help to better understand the data and information given by the interviewees.

3.2 Methodology

3.2.1 Research Strategy: multiple case study

The strategy that best fits this research is a case study. First, the research question requires a method that is able to dive deep into the subject leading to an explanation of how a certain phenomenon, ambidexterity in this research, is reached and preserved (Yin, 2009). The description of this long-term process is hard to obtain with a survey or experiment, especially when it is not clear yet where to look for due to lack of knowledge about the independent variables. Furthermore, the creation and preservation of BU-ambidexterity is a contemporary phenomenon of which the researcher has no control. In addition, the boundaries between managerial action towards the creation of ambidexterity and the context in which this happens are not clearly evident (Yin, 2009). As opposed to a survey or experiment a case study allows for the incorporation of more (many) (unknown) variables. Taken together, a case study allows for a detailed investigation of a complex phenomenon to find ‘meaningful characteristics of real life events’, which corresponds with the aim of this research and therefore is the appropriate strategy for this study (Yin, 2009).

Two traditional critiques of the case study method are ‘lack of rigor’ and ‘little basis for scientific generalization’. Concerning the latter it is true that case studies are small-N studies and therefore results can most often not be generalized to populations (Yin, 2009). However, findings can be generalized to theoretical propositions (analytic generalization) and therefore can be useful for building or expanding theory, which is the aim of this research (Yin, 2009).

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10 The lack of rigor of case study research is indeed a great concern (Yin, 2009), which demands for the creation of a similar fashion, procedures and protocols in the scientific field. The researcher is aware of this possible flaw and therefore an structured plan of action was made before the start of the research and a detailed description of the steps taken is presented here.

One should not forget that case studies are not alternatives to other types of research, but ‘adjuncts’ (Yin, 2009). They are better than other types of research in explaining social phenomena and therefore are useful in expanding our knowledge about a complex phenomenon like managerial actions and behaviours in ambidexterity-creation. Previous studies on ambidexterity have also used the case study method and appeared to be useful studies expanding our knowledge on this subject (Turner and Lee-Kelley, 2012; O’Reilly III and Tushman, 2011; Andriopolous and Lewis, 2009).

All in all, the case study is a strategy that has its challenges and implications – like any other method. And the difficulties in executing it are not even discussed yet (Yin, 2009). However, the researcher is convinced that challenges should not be avoided, and that structured working and devotion will help in executing the strategy that fits best to achieve the goals of this study. The chosen design is a multiple-case study. According to Yin (2009), the evidence from a multiple-case study is more compelling and therefore the overall research is regarded as more robust. When a method of structured, focused comparison is used the comparison of case studies will yield valid causal inferences (King et al., 1994). Therefore it is chosen to select, analyse and compare multiple cases in two different industries in 3.3. Elaboration on the case selection will be discussed in the next session.

3.2.2 Unit and variables

The unit of analysis in this research is ‘the process of BU-ambidexterity creation’. The dependent variable is ‘business unit ambidexterity’. The independent variable encompasses ‘managerial actions and behaviour’. Although possibly connected to personal characteristics of managers, such as gender or age, this research does not look into personal traits.

3.3 Case Selection

3.3.1 Case Selection Strategy

Due to selection bias, random selection in small-N studies is not an appropriate strategy (King et al.,1994). ‘The decision as to which observations to select is crucial for the outcome of the

research and the degree to which it can produce determinate and reliable results’ (King et al.,

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This research has taken place in 4 firms in two different industries: professional services (Firm A and B) and industry (Firm C and D). According to the literature, both industries face pressures to explore due to ‘changes in technologies, customer demands, competition, and regulation’ and pressures to exploit due to ‘short term competitive pressures in terms of an increased focus on efficiency and the growing importance of economies of scale (Mom, 2015: 139), thus experience forces to be(come) ambidextrous. Within each firm 2 or 3 cases were selected. The real-life setting of a case study makes it hard, or even impossible, to control for other variables. Therefore, comparison of more cases per firm helps to partially overcome this problem. Moreover, selecting firms in the same industries aid comparisons and replication, while ‘sufficient heterogeneity helps to assess potential generalizability’ (Andriopolous and Lewis, 2009). By analysing cases in different industries it is attempted to generate context-overarching results resulting in analytical generalizations. A total of 9 cases is studies, which lies in between the advised amount of cases (Stake, 2006). More than 15 cases show more uniqueness than a researcher will be able to capture and is therefore less desirable (Stake, 2006).

Table 1: specification of the firms under research Sector Year founded /

age

#employees Annual Revenu / profit (?) Firm A Professional Services 1938 / 78 350 €50 million Firm B Professional Services 1983 / 33 100+ Firm C Industry 1965 / 51 3.434 (3500) €1,161.3 (1,150) million/ EBITDA: €84,8 million Firm D Industry 1871/1947 / 69 22.000+ €11,265 / operating profit: €576 million / net profit: €343 million 3.3.2 Case Selection

The case selection takes several factors into account. On the level of the firm, similar to most research in the field of strategy the focus is on medium- to large sized companies. In terms of both employees and profit. In addition, firm-age was taken into account, since survival can be

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an indicator of success (Tempelaar and Van de Vrande, 2012). All firms are at least 30+ years. For specifications see Table 1.

The selection of BU’s was based on two criteria. First, this research focuses on the impact of managerial action on a higher level outcome which demands for a certain time period to see the effects. Following similar research, the time of a manager being in function must be at least 1 year (Gibson and Birkinshaw, 2004). Secondly, the function of the BU within the organisation should not be focused on solely exploitation or exploration activities.

Table 2: specification of the cases

Firm Code | Focus Time Manager | total

time in company (years) Approaching ambidexterity Firm A Professional services

BUM1 CAB 2,2 (10) Convincing

BUM2 CAB 4,6 (17) Convincing

BUM3 CAB 4,8 / 13,5 Less convincing

Firm B

Professional services

BUM4 CAB 1,6 / 10 In transformation

BUM5 CAB 2,6 / 11 In transformation

Firm C Industry

BUM6 SAB 1,7 / 4 Convincing

BUM7 SAB 2,25 / 2,25 Less convincing

Firm D Industry

3.3 Data Collection

In this study primary and secondary data is studied. As common in case studies, interviews were the most important source of data (Yin, 2009). A total of 27 interviews are conducted on site, each taking approximately one hour. For reasons of data triangulation, of each manager, two of his or her employees were interviewed (Eisenhardt, 1989). Hence, three interviews were held about the same case thereby enhancing internal validity. With confirmation of the interviewees, all interviews are recorded and transcribed. Confidentiality was affirmed by the researcher.

Using a semi-structured approach, an interview guide with basic and open questions was prepared in advance: a list of basic questions to be asked and specific topics to be discussed. This results in a great amount of freedom how to respond to the interview questions, and room for the interviewer to ask additional questions for clarifying responses and go into new topics that come up during the interview (Bryman, 2012). In order to maintain comparability, the same questions and a similar wording are used in each interview (Bryman, 2012).

In each case it was preferred to first interview the BU-manager who is expected to have the best overview of his or her intentions, actions, and BU-results. Information gathered in this

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interview was checked in the interviews with employees in the same BU. Formulation of those checks was done as objectively as possible and together with control questions about factors not mentioned by the BU-manager and not expected to play a role.

Secondary data, like websites and documents, are used to ‘corroborate and augment

evidence’ from the interviews (Yin, 2004: 103). To compare the information given in the

interviews and to get a better view of the context documents such as BU-plans and annual reports were studied. By using evidence from different sources of data, this research employs data triangulation. This contributes to the consistency of a finding and increases reliability and validity (Bryman, 2012; Yin, 2004).

3.4 Data analysis

In the data analysis phase the raw data were turned into the identification of specific processes and the management thereof. In a four-stage process data was systematically and iterative compared, and linked to existing literature to develop cohesive constructs and compelling conclusions (King et. al., 1994; Eisenhardt, 1989).

Stage 1: coding and within case analysis

The analysis started with coding the transcript data in MAXQDA 12 using an a priori coding scheme with the subjects ‘setting’, ‘people’ and ‘processes’ each containing multiple codes. Processes also included exploitation, exploration and integration. During coding additional codes and sub-codes where made until no new codes were found.

For each case it was identified if they took a more structural ambidextrous approach or a more contextual ambidextrous approach. It turned out that he BU’s in the industrial firms tend to separate the exploitation and exploration processes, while the BU’s in the professional services tend to integrate the exploitation and exploration processes. BU’s approaching structural ambidexterity will be referred to as SAB’s, while BU’s approach contextual ambidexterity will be referred to as CAB’s.

Furthermore the extent to which the BU’s are ambidextrous was identified. Following Turner et. al. (2015) and O’Reilly and Tushman (2011) the cases in which both exploitation and exploration were strongly evident i.e. cases in which examples thereof were present in all three interviews per case were labelled as ‘convincing’. Choices herein were discussed with the key informants of each firm (not being one of the interviewees). Five cases indicate BU-ambidexterity (‘convincing’), 2 cases did not show evident exploration efforts (‘less convincing’) and 2 cases were in a firm which just redesigned their firm and thus business units and therefore had not enough examples to show exploitation and exploration examples and

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processes, but demonstrated deliberate efforts (‘in transformation’). Convincing and less convincing will also be cited as ‘successful’ and ‘less successful’ throughout the thesis. However, the cases not identified as convincingly ambidextrous were used to identify what differences can explain how ambidexterity was reached and preserved in the ambidextrous units.

Stage 2: Conducting cross-case comparison

First of all, comparison was made within each case-group. Thus within the group of SAB’s and the group of CAB’s. The first containing 3 successful cases, and 1 less successful case, and the latter containing 2 successful cases, 1 less successful, and 2 ‘in transformation’. The cases and codings were reread, memo’s written and thought patterns were outlined, leading to some key insights per case-group. Attention was paid to similarities and differences between units of one firm and between units of different firms, aiming to moderate the influence of environmental factors (such as market and firm) and to correctly assign the managerial efforts to ambidexterity creation and preservation.

Stage 3: Cross-level and cross-subject comparison

Subsequently analysis and comparison within each level (business-unit, project-level, individual level) and within each ‘subject’ (setting, processes, people) were made leading to an overview of interactive and collective, factors and actions, that lead to (the prevention of) ambidexterity. This was visualised into a table which was during an iterative critical thinking process readjusted. When in doubt, the raw data were checked again and the finding was (dis)confirmed. Differences and similarities between SAB’s and CAB’s were identified. In this stage the researcher became cautious of the hazard of oversimplification which can happen when you try to reduce a great amount of data into a single table. Directed and inspired by the table some hypotheses were formulated and tested with the raw (coded) data in MAXQDA.

Stage 4: building theory

In the final stage it was urged to really understand the just described phenomena. Existing studies on ambidexterity (creation), (supportive) leadership and organisational design helped to explain and understand the findings.

Two main findings were intriguing. First, the importance of goal-alignment among multiple levels within the BU. And second, the organisational tendency to rely on organisational design and processes for exploitation and exploration (in SAB’s) versus the organisational tendency to rely on people(‘s decisions) for exploitation and exploration. Those findings were taken as the starting point for the formulation of theory. We will now elaborate on those findings.

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4. Results

Investigating exploitation and exploration processes across the case firms, two different patterns were identified. First, the managerial focus on the empowerment of people both on the individual and collective level in the process of ambidexterity creation in the SAB’s. In contrast, the organisation of which the SAB’s are part tends to focus more on processes in order to foster exploitation and exploration. A second pattern is the managerial recognition of the importance of processes both at a project and a collective level in the more ambidextrous CAB’s, while the organisations of which the CAB’s are part tends to be more people-oriented. This is better explained by making use of the mechanistic and organic management systems as identified by Burns and Stalker (1961). The organisations of which the SAB’s are part are more organised according to a mechanistic structure. As opposed to the CAB’s organisations, this means that there is a more hierarchical structure of authority and control, higher formalization with clear roles, responsibilities, and job methods, more centralisation of decision making and more standardisation (Burns and Stalker, 1961, in Hatch, 2006). Close supervision and vertical communication in the form of instructions are less present.

In contrast, CAB’s are more organised in line with the organic structure: a network of authority and control based on knowledge of the task, low formalisation which means that task and responsibilities are redefined depending on the situation, and decentralisation of decisions. Moreover, mutual adjustment and redefinition of asks and methods through joint problem-solving and interaction, personal expertise and creativity without supervision and frequent lateral communication (Burns and Stalker, 1961, in Hatch, 2006). This finding is not surprising when you compare it with the intention to cascade the responsibility for exploitation and exploration efforts to the individual employees (Gibson and Birkinshaw, 2004). However, the organic structure also seems to support explorative processes.

The different organisations have, implicitly or explicitly, a different starting point for the organisation of their exploitation and exploration processes. Although the reasons for a more process-oriented (mechanistic) versus a more people-oriented (organic) organisation can be multiple, the interesting part is the managerial focus on the opposite. Not to mention that managers are solely focused on only people or processes. All managers evaluate both as important in ambidexterity creation. However, the results suggest that the more mechanistic organisational structures facilitate in ‘process-management’ while the more organic structures facilitate more in ‘people-management’. We would speculate that BU-managers in their turn rely on this facilitation and try to overcome this cascaded organisational focus and/or they trust it and therefore orchestrate their focus and energy towards the opposite. Further research could

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16 find out what the underlying mechanisms are, but here we focus on what managers, given the setting, do next in the process of ambidexterity creation and preservation.

The rest of this chapter is organised as follows. We start with a discussion of the management of goals among multiple levels, this appeared to be quite similar for both SAB’s and CAB’s. Subsequently the most important findings found in the structural ambidextrous focused BU’s will be presented followed by the most important findings in the contextual ambidextrous focused BU’s. The reason for this is twofold: 1) there are too many findings to present (and compare) and what appeared to be the most important findings for the different case-groups differ; and 2) staying close to the data specific for each case-group will hopefully give the reader a good understanding of ‘where we come from’ before we present the discussion. As opposed to direct comparison which will easily draw the attention to the differences instead of a presentation of what is really found to be important in the different settings.

4.1 Managing goal-alignment to obtain and retain ambidexterity

In both successful SAB’s as well as successful CAB’s goal-alignment among multiple levels (BU, project, and individual) is found to be important. It supports an ambidextrous focus (by making it explicit) and orchestrates time and resources effectively and efficiently towards exploitation and exploration efforts. The implementation and effects of multiple level goal alignment will now be discussed.

4.1.1 Business Unit-level

One key finding is the importance of alignment of goals and choices therein among multiple levels. This means that the focus and goals of the BU, the project-investment decisions, and the goals and targets of employees are a coherent set. This canalises resources and efforts and thereby contributes to the effective and efficient use thereof.

Managers in the ambidextrous BU’s under study have a clear focus on both the short term and the long term. A focus on making profit and reach targets, as well as on and innovation and new projects. This clear BU-focus is translated into a limited amount of prioritised goals. To illustrate: “we choose our top priorities for the year 2016” (BUM7, Firm C)

A limited amount of goals makes it easier to accomplish them and prioritisation helps to make decisions about dividing (scarce) resources. When possible, making the goals concrete helps to steer towards a certain end and makes it easier to measure results. However, it might be less desirable when the goal is designed to foster innovation (Andriopolous and Lewis, 2009). As

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17 one manager explains: “..And then you decide what you are going to do. You better do 10 thing very good, than 25 half. So you have to choose. And then you end up with 1 sheet with 10 actions divided over the quarters of the year, since that is manageable.” (BUM8, Firm D)

Part of these goals are top-down directed (from above BU-level, with or without involvement of the BU-manager), and thereby limit the manager in goalsetting and prioritising. However, goal-conflict did not arise in the cases in this research.

The organisation of the accomplishment of the goals differs among the cases. There are more processes, systems and procedures in place in SAB’s than in CAB’s, i.e. they have a stronger formal organisation. Reasons for this will be discussed in the next two sections. What is found to be important in both cases is the translation of BU-goals into individual goals.

Although both SAB’s and CAB’s are partly top-down directed in the formulation of BU-goals, in the formulation of the BU-goals in a CA-setting is more done with involvement of employees than in a SA-context. Involvement of employees in the BU-goals formulation in CAB’s is most often an iterative process through several levels (TMT, BU-team, peers) which goes hand-in-hand with individual goal-setting (discussed below) and the goals are relatively easily adapted through the year. In a SA-setting it is more often a ‘yearly returning collective event’ to set the new goals. In SAB’s there is more guidance in how to design and align goals from overall objectives, to KPI’s and individual targets, which corresponds with the more formal organisation of which the SAB’s are part. Both in the ambidextrous SAB’s and the ambidextrous CAB’s goals are formulated with relation to the firm-goals, the current BU-focus (on both exploitation and exploration) and projects, the manager’s ambition and idea’s and the employees’ input. In the less ambidextrous BU’s it was often found that there was a lack of a coherent set of goals orchestrating the BU, projects, and subordinates towards the same exploitation and exploration objectives.

The results furthermore indicate that collective goal setting is part of the energy and focus creation fuelling the exploitation and exploration processes proposed to lead to a simultaneous BU-focus on both. To illustrate: “By the articulation of clear objectives I try to motivate and enthuse people. Next, formulate clear KPI’s for the short term and define how to get there. (…) I like to formulate the KPI’s together with my team. Than it is instantly supported.” (BUM6, Firm C)

All in all, a clear BU-focus and objectives for both exploitation and exploration efforts and the formulation thereof (partially) in collaboration with subordinates creates support and energy to work towards those goals.

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18 4.1.2 Decision making at the project-level

The findings show that managers of ambidextrous BU’s make the decision whether or not to invest in an improvement- or innovation plan is based on the question whether it serves the higher BU-goals or not and if its fit with the current projects, plans and the overall balance. Of course, other factors such as profit-potential and higher-level decisions also play a role, but that will not be discussed here.

Exploitation and exploration processes are to a great extent fuelled by the accomplishment of new projects and ideas. One concern therefore is how to get enough initiations of new projects and ideas, which will be discussed in the next two sections. A second concern is in what projects and ideas to invest, since time and resources are limited. The managers in the ambidextrous BU’s only invests in those projects that contribute to the overall BU-focus and the chosen objectives: “What I really try to do is to look for alignment with the rest of our propositions. Ideas that lie ‘far from our core propositions’, I find less suitable” (BUM2, Firm A). To keep focused and stick to priorities enhances the simultaneous balanced focus on both exploitation and exploration when this focus contains a balanced compilation of both. What the right balance is, depends on the BU, the firm and the environment, but it goes too far to discuss that here.

Nevertheless, managers in ambidextrous units are not blindly focused on the BU-goals. Sometimes interesting chances appear which can be of importance to the BU. This is especially the case with explorative ideas, which are harder to know up front. The findings suggest that managers in ambidextrous BU’s sometimes decide to invest in projects/ideas which do not directly serve the initial BU-goals. Nevertheless, as an implication they redefine and reprioritize the BU-goals so that there is still a coherent focus with a limited amount of objectives that directs the entire unit, and canalises the resources (O’Reilly and Tushman, 2008). This is in line with what O’Reilly and Tushman (2008) propose with the orchestration of resources towards the interesting opportunities in line with the chosen strategy.

What also appears to be important is the translation of the projects-goals into either an individual goal or a responsibility, thus to formalise the project so that objectives are reached. Whereas in SAB’s this is most often done quite automatically, in CAB’s formalisation of responsibilities for a project often receives less attention and/or relies informally at the initiator. This can be explained by the more organic design of the organisation as well as the aim of contextual ambidexterity, which lays the responsibility of making time-division decisions and the organisation of the tasks at the individual. This ‘tension’ will be discussed in section 4.1.

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19 Thus, the decision whether or not to invest in projects or not is based on the projects’ contribution towards the overarching goals which leads to effective and efficient use of resources, all together contributing to a simultaneous focus on exploitation and exploration. When an business opportunity arises which does not corresponds to the chosen focus it can be chosen to readjust goals and priorities. Obviously this should not happen too often.

4.1.3 Goal-formulation at the individual level

In the more ambidextrous BU’s individual targets, goals and responsibilities follow logically from the BU-focus and goals, and the current and planned projects. In addition, the sum of the individual goals collectively supports the BU-goals and are a reflection of the project-goals. In SAB’s it is often the case that an employee has either exploitation or exploration goals (mostly meaning quantitative targets or qualitative deliverables), which corresponds to the separation of exploitation and exploration as proposed by structural ambidexterity literature (O’Reilly and Tushman, 2013). In CAB’s exploitation and exploration choices are the responsibility of the individual employee.

However, in the CAB’s under study employees do have targets (quantitative) which appeared to be more in favour of exploitation than exploration. Hence, to keep a balance in exploitation and exploration-efforts it is important to equally reward and evaluate both targets and more qualitative goals. Employees state that they tend to divide their limited amount of time in favour of the goals on which they are evaluated, unless they are very passionate: “We don’t have so many spare afternoons. (…) And it are all projects for which you can’t ‘write hours’, where you don’t have targets for. Thus those things have less priority.” (EM9, BUM5, Firm B). Therefore the managers in the ambidextrous BU’s set individual goals (in collaboration with the employee) focused on both targets and innovations, and evaluate them as equally important: “What we also have in our strategy is innovation, entrepreneurship and collaboration.. so during yearly personal development meetings I ask what they want to do next to accomplishing their financial target in order to contribute to those goals. I write them down, and evaluate them on an equal basis with the targets” (BUM1, Firm A).

Thus in CAB’s individuals have more voice in the formulation of their goals than in SAB’s. In all ambidextrous cases the employee goals are aligned with the BU’s objectives and current and coming projects.

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20 4.1.4 Maintaining goal-alignment

Although the formulated goals in the SAB’s tend to be more static than in the CAB’s, in both settings managers are aware of the need for flexibility. This does not only mean that they sometimes invest in projects which do not directly supports one of the BU-objectives, but also that managers adapt goals at the other levels when they do this. They redefine and realign the priorities and objectives, since they are acutely aware of the need for effective and efficient use of resources when they both want to exploit current capabilities while exploring new ones. They see a coherent set of objectives, responsibilities and targets as a means to do this, since it defines the focus of the overall BU, steers (managerial) decisions for projects, and defines subordinates tasks and roles. In addition, a coherent set of goals is not only used for steering and monitoring, but the collective formulation also is seen as an energising. The (attention for) collective formulation, the adaptability of objectives so that it corresponds to the current activities, and the comprehensiveness together make that creating and preserving goal-alignment among multiple levels contributes to ambidexterity creation when the overall focus is on both exploitation and exploration.

4.2 Managing ambidexterity in Structural Ambidextrous focused BU’s

The overarching organisational setting of more structural ambidextrous focused business units tends to rely (more) on formalised and standardised processes when it comes to stimulating and accomplishing exploitation and exploration. As opposed to the CAB’s where it is more often believed that continuous improvement and innovations arise when employees are empowered, in SAB’s the whole organisation is more formalised, organised and standardised to foster the separate exploitation and exploration processes. This organisational tendency of relying on processes is also seen in the business units. This is not to state that people are not seen as important or not taken into account, but the more mechanistic design suggest that processes are taken as a starting point. As one employee describes it: “On paper we do a lot, I think, but it is all quite mechanistic.. (..) we have ‘continuous improvement’, initiative x [ name initiative] (…) but it’s really focused on procedures and systems.” (EM14, BUM7, Firm C)

Although well-defined and standardised processes may have its contributions (Benner and Tushman, 2003), managers in these settings mention ‘struggle of activating people’. Motivating subordinates to contribute to either exploit or explore in the most optimal way is found to be a challenge. They emphasise that in the end people are the ‘firms’ resource’ that really create the improvements and innovations. The results suggest that the organisational tendency to rely on processes can cause delaying in the achievement of results, make people

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21 more apathetic if there is no process or guideline in place, and can drain energy. However these findings are not convincing enough. Nonetheless, all successful managers refer to the challenging but so important management of people.

To overcome the process-dependency and to motivate and energise people successfully managers do several things. In the case of exploration, a common way to overcome this challenge is by placing a new project (innovation) separate from the existing business (and thus existing processes) and thereby give subordinates the freedom, autonomy and resources (and thus often the energy) to fulfil their task (O’Reilly and Tushman, 2013). Another option, as discussed in the previous section, is to translate projects into individual goals and responsibilities for which they are equally evaluated can also help. However, this is not always possible, and surely not enough. What managers are found to be doing in the more mechanistic organisations in their attempt to foster the exploitation and exploration efforts can be summarised as ‘strategic people management’ and ‘supportive leadership.

4.2.1 Strategic people management

First of all, ambidexterity-creation is mentioned to start with ‘having the right people at the right place’. The findings show that this is essential for the fostering of exploitation and exploration processes. As indicated by the literature, exploitation and exploration processes demand a different type of people (O’Reilly and Tushman, 2013; Raisch and Birkinshaw, 2008). The results show that managers in a more ambidextrous BU are aware of these differences and that they ‘place’ people on a function that fits their preferences, capabilities and personality. As one manager puts it:

“You have those people who are more into day to day business, you shouldn’t bother them with other things, and you’ve got those people who love to look further than the horizon. (…) an organisation works well when people are ‘in the right spot’ and this spot is just not the same for everyone.” (BUM8, Firm D)

This will not only help to execute the function (either focused on exploitation or exploration) as good as possible, but also makes optimal use of the strengths and capabilities of an employee. Hence, managers that want to execute an ambidextrous strategy are helped by their awareness of the different demands in ‘exploiting and exploring functions’. They place their employees in accordance to the functional requirements and the personal capabilities and characteristics. As one manger explains:

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22 “If you know [name employee] you know it fits his profile. You see the same with R&D, that are a specific type of people, ‘The Libero’s’ so to say. The free men and women who explore the market to see what’s going on, what is new and what might be interesting for us. If you look at [name employee in short term improvement projects], he is the type of guy who makes decisions, has ‘lists’ and takes care of an action plan where everybody knows of. Both guys have different qualities, each .. fitting their function.” (BUM7, Firm C)

Placing the right people at the right place does not only foster the exploitation and exploration processes, but it can also moderate the business unit managers’ inclination towards either exploitation or exploration. A simultaneous managerial focus on both (found in 2 of the 4 cases) probably enhances ambidexterity (Mom, Van den Bosch and Volberda, 2009; O’Reilly and Tushman, 2004). However a too extensive focus on exploration (solely focus on exploitation in the SAB-cases was not found) can harm exploitation (Andriopolous and Lewis, 2009). Managers in the more successful cases are found to be aware of their own tendency and pre-empt this by placing ‘opposite types’ around them and thereby ‘protect’ the exploitation-processes. As one manager explains: “I tend and want to focus on the exploration efforts we’re currently undertaking. So I look at profiles and find someone who complements me.. so that there is enough attention for an optimal flow of the day-to-day business” (BUM6, Firm C). This shows that managers are aware of the different demands in the exploitation and exploration processes and ‘organise’ people according to that. Managers are furthermore realistic about their own tendency and the hazard of that for the creation and preservation of BU-ambidexterity and organise for moderation. This is line with previous findings of project-managers who distribute ambidexterity among the team when they are not ambidextrous themselves (Turner et. al., 2015).

Taken together, managers who create and preserve ambidexterity deliberately organise people in line with the different demands of the standardised and formalised exploitation and exploration processes in place. Hereby they strive for optimal exploitation and exploration processes by making use of both the formal organisation ánd the capabilities of subordinates. In addition, they are aware of their own preference and strategically organise to moderate that.

4.2.2 Supportive leadership

Next to strategic people management, the creation of energy is important in order to reach the BU’s short and long term objectives. The results show that several aspects are important. First

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23 of all, managers enhance collective energy through the creation, articulation and communication of a vision that motivates subordinates to take initiatives (Jansen, Vera, and Crossan, 2009; Jung, Chow, and Wu, 2003). More than in CAB’s managers emphasize the importance of a clear vision. As one manager explains how he creates energy:

“Establishing a vision, belief in it, and then share.. in that way I try to motivate people or get them enthusiastic.(…) It is essential to describe the destination very well, to discuss it with each other, and to repeat it. And I truly belief that you really need to belief in it yourself, and that that works contagious, that people than go for it” (BUM6, Firm C).

Furthermore, the managers under study showed confidence in new projects or the entrance of new markets. They present novel activities as something they (their BU) are able to do and demonstrated a need for extra effort. “It was a client request our firm didn’t want to respond to. Unbelievable. So I said to my team, if there is one ‘club’ who can do this, then we are. (…) We’re just gonna do this! (…) It was fairly new but it goes ok now. I’m not gonna jubilate yet, but we’re getting there.” (BUM8, Firm D). Thus they take certain risks, explicate trust in their teams and serve as an example to explore novelties (Chang, 2015; Jung, Chow, and Wu, 2003). Managers in the more ambidextrous CAB’s also take risk, explicate trust and serve as an example. However, the result do not suggest that this was necessary to convince or enthusiasm subsidiaries for the entering of new markets or to try new approaches.

Thirdly, in line with ‘strategic people management’ managers focus on the individual strengths and needs of their employees and personally relate to them. They coach and help them whenever necessary. Employees mention that they feel autonomy in their decisions how to best fulfil their job an at the same time describe the willingness of their managers to help or coach them (Chang, 2015; Jung, Chow, and Wu, 2003). Although most of the subordinates mention that their manager lets them totally free to do their job, most managers are aware to what extent they can let their subordinates free and make deliberate choices herein. This is in line with what is found in the CAB-cases, although managers in those cases extend their role. This will be discussed in 4.3.2.

Lastly, the managers under study motivate their subordinates to learn, to challenge the status quo, and to search for answers and knowledge themselves. They encourage them to take risks and search for new ways. All employees feel the space and entrustment to do their work how they think it should be done, and they do not feel dependent on their managers for the obtainment of information or to find creative solutions. Only when a certain amount of

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24 resources are required or when there are high risks, they surely involve their managers. The last two arguments are nicely summarised by one employee:

“He empowers people and thereby they get a sense of responsibility and then they .. ‘start running’. (…) But he also coaches people. If you have a question, he gives the question back to you, asks what you should do and helps you to reflect instead of just telling you what to do. He is more of a coach and facilitator.” (EM12, BUM6, Firm C)

The results show a great amount of similarity with the transformational leadership approach which can contribute to the creation of a supportive context in which employees can flourish (Chang, 2015; Jansen, Vera, and Crossan, 2009; Jung, Chow, and Wu, 2003). The results thereby also underscore the importance of supportive leadership proposed by proponents of structural ambidexterity (Chang, 2015).

Taken together, managers of BU’s in a more mechanistic organisation use ‘strategic people management’ and ‘supportive leadership’ to make sure that both the exploitation and exploration processes are fuelled and thereby contribute to ambidexterity creation and preservation of their BU.

4.3 Managing ambidexterity in Contextual Ambidextrous focused BU’s

The overarching organisational setting of more contextual ambidextrous focused business units tends to rely (more) on intrinsically motivated and autonomous individuals when it comes to stimulating and accomplishing exploitation and exploration. This is also seen in the units. Managers mention how they struggle with ‘getting ideas in the flow of a process’ while simultaneously let their employees free and energised in working towards a result. Often, managers rely on the intrinsic motivation (willingness to contribute) and quality of their employees for the generation and accomplishment of innovation-projects: “I strongly believe that people are enthusiastic and have the energy and skills for subjects where they believe in. Thus.. I shouldn’t hinder them I guess” (BUM2, Firm A). This is in line with the need of employees to be autonomous in their work(-approach) and their choices for side-projects. Well-defined standardised processes and approaches are by most employees even mentioned as an energy drain: “we hire people who ‘can take care of themselves’ and thus look for autonomy, and if you’re then pushed into a process or cadre all energy will just flow down” (EM9, BUM5, Firm B). Therefore standardised and formalised forms of continuous innovation (such as R&D or an innovation pipeline) are therefore mostly absent.

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25 This freedom and autonomy in combination with other demands (current clients), and the lack of fixed processes often lead to the delaying (or even the discontinuing) of improvement and innovation-projects. CAB’s need to have enough successful projects to maintain ambidexterity, since projects are (next to integration of innovations in client-projects) the way to exploit current capabilities and explore new ones (Raisch et.al., 2009).

The ‘tension’ between autonomous individuals and fixed processes has several causes. First of all, the type of people working in these business units under study are intellectual, creative, entrepreneurial and opinionated professionals, i.e. individuals who are hard to manage, but valuable and non-commutable for the company (Teece, 2003). Secondly, it is found that the organisation (context) of which the BU is part, cascades the responsibility of time allocation decisions (on exploitation/exploration) to the individual employee (Gibson and Birkinshaw, 2004; Raisch and Birkinshaw, 2008). This individual autonomy implicates that it is difficult for managers to organise collective structured processes to support the exploitation and exploration efforts for the BU simultaneously. Furthermore, the ad hoc and organic start and follow-up of innovations often also leads to an underexposure or lack of attention in the targets and goals of an employee. Moreover, the type of projects often demand a different approach, which in combination with the willingness of employees to work autonomously, often leads to customised processes. One illustrative quote of a BU-manager:

“What I’ve done a few times is presenting 5 or 6 themes and asking ‘who finds it interesting to work in teams on one of these themes’. But it varies. If you keep on using the same outline, then it is hard to enthuse people. And it depends on the type of project. So we are busy with how does our sector develops, where are we going to play a role, how are we going to do that.. and we keep on trying to find new vehicles to organise this. Beside a few enthusiasts who see chances and act anyway” (BUM3, Firm A).

Managing the tension between people and processes is challenging but not unsurmountable. A common way to overcome this problem is by integrating innovations into client-projects. Incentives (client satisfaction/make profit) for successful accomplishment are thereby build into the project. Moreover, as discussed in 4.1, translating innovation-projects into individual goals and responsibilities for which they are equally evaluated can also help. However, this is not always possible. What is found to be done by managers in the ambidextrous BU’s to overcome this tension is ‘customised management’ and ‘giving attention’ to projects

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26 and make them visible in the BU, and thereby appreciate the project-owners and reinforce the energy in the whole BU to start (thinking of) new projects.

4.3.1 Customised management

A vast amount of ideas in the CAB’s in this research are bottom-up initiatives. As discussed, the lack of standardised processes to support innovation-projects and the workload of other tasks often distract employees of devoting time to their new project, unless they are very passionate about it. But even then it happens that projects are not accomplished, which in the long term can be a hazard for keeping aligned and adapted.

The fulfilment of innovation-projects, both exploitation and exploration-projects is important for the BU, and the more successful managers acknowledge this. Besides having priority-projects and goal-alignment, as discussed in the 4.1, the results show that in order to help projects succeed managers customise their management and support towards the needs of the subordinate (or team) and the needs of the process.

First, they know what the specific individual needs are and act on that. Thereby they empower the subordinate to make optimal use of his or her own strengths. Choices about to what extent to monitor, to motivate or to coach subordinates are all specified to the needs of the individual employee (Chang, 2015; Jung, Chow, and Wu, 2003) . In addition, they compensate for the less developed talents or capabilities of the employee and thereby contribute to the fulfilment of the project. This is in line with the research of Turner et. al. (2015) who found that project-managers enable ambidexterity by ‘gap-filling’. This role entails that managers ensure the delivery of all requirements in the project. In this study this role is less explicit for BU-managers since they are not the project-BU-managers of each project. Nevertheless, they seem to keep in mind what the project needs to become a success and that they ensure this needs are met. This can be as simply as keeping people on track through (informal) monitoring, or attach or convince other people in the BU or organisation. These findings support other research suggesting that managers who enhance ambidexterity take initiative outside their own job role (Turner et al., 2015; Birkinshaw and Gibson, 2004). As one employee explains:

“I organise it myself.. but.. I tell him (the manager) what I plan to do and he asks me some critical questions such as what I think to accomplish or what I think the market potential will be, if my story is ok he is ok with it… (..) and then, when necessary, he becomes a sponsor of the project and supports me or attaches me to other projects” (EM1, BUM1, Firm A)

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27 At the same time managers trust their employees and have a good sense of knowing who ‘can take care of themselves’ and then hold back. As one employee who accomplished several exploitation and exploration-projects states: “If I am really honest, the only thing he does is not stopping me. (…) It doesn’t feel like I’ve been managed the last years.. He is more of a sparring partner. Yeah, that description fits” (EM3, BUM2, Firm A).

Different from managers in SAB’s the results show that mangers in CAB’s are more busy with organising processes around ideas and helping their subordinates to accomplish the process. They are always looking for ways to help the employees making the innovation-projects to become a success. In Firm B they tried to make the process of the improvement-projects more standardised by implementing a process with deadlines on which they needed to present progress, however, there it still does not work (optimally). Where innovation and improvement-projects continuous to happen is in cases where the manager sees the specific individual needs, the specific project needs, and acts according to those needs. The most important projects for the BU also the priorities for managerial attention, which relates to multiple goal alignment previously discussed.

4.3.2 Attention and visibility

Next to gap-filling is ‘paying attention to’ and ‘making visible of’ initiated ideas and projects found to be supportive in overcoming the ‘people/processes-tension’. This can be done with the sharing and appreciation of initiated ideas and projects via different platforms such as meetings or e-mails. Visibility can be enhanced via for example a project-board showing the current innovation-projects and the people working on it, hanging in the office. This also works as a simple reminder for the subordinates working on it. Both attention and visibility can help to create ‘social pressure’ to accomplish a project. As one employee puts it: “It [the project-board] makes it visible.. so it doesn’t extort, but it is a way of showing it [innovation projects].. thus you give people working on it appreciation, and when you finish the project you get compliments of your colleagues.. and people who don’t do anything with it and then see it again think by themselves: ‘Oops, I didn’t do anything with it, I really need to do something now..’ (EM1, BUM1, Firm A). It also works the other way around, that energy withdraws and/or projects are forgotten when there is a lack of attention and visibility. This is seen in the BU’s which are currently transforming. As one manager puts it:

“If you accomplish the project than you’ll get the credits, in that sense that you can present the findings or actions during our weekly update-meeting. (…) We all have time to devote to

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28 projects next to our client-projects, but I simply don’t know what everyone is doing. As long as you are busy with it you won’t get the appreciation, that only comes in the end. You really need to do it yourself and I think that is a major problem for [company name]: that we don’t appreciate the internal activities that people are doing.” (BUM5, Firm B)

The interviews with the employees indicate the same. They state that you do get recognition sometimes, but that it is not the company’s strongest point. There is more informal than formal recognition of side-projects and innovations (except some), and overall there is a lack of attention for the contributions of employees next to their client-work.

Thus attention and visibility are supportive forces helping employees to keep energised and focused on their initiated ideas and projects. In addition, the attention, visibility and open rewarding of exploitation and exploration enhancing projects reinforces idea-generation and thereby stimulates a context wherein employees not only generate ideas but also accomplish projects, required for the creation and preservation of a more ambidextrous BU. Furthermore, sharing the result and celebrating the success of finished projects, and positively approach ‘failures’ as instructive and ‘part of the game’ will enhance a context in which employees feel the space and entrustment to start new projects. As one employee describes how his manager create a stimulating and safe atmosphere: “He stimulates, gives compliments and asks for updates.. so at one point I had an idea (…) in the end it wasn’t successful, but he mentioned it a few times in the group, as ‘being a good example of innovation, that it didn’t work out is just part of the game, but at least we tried it’” (EM2, BUM1, Firm A).

As important, this sharing will also help to integrate innovative knowledge or products in the existing business. Besides the integration of innovations in the organisation through project work (creating client-teams in which ‘innovation holders’ can transfer their knowledge to other employees), making the ongoing and accomplished projects visible and known can also enhance integration. In the cases under study knowledge sharing often goes in person, and is transferred via (informal) conversations and meetings, or is ‘deliberately picked up at the knowledge holder’. For this it is necessary that employees know what everyone is doing, and thus ‘where the knowledge’ relies. In addition, employees are often keen to pick up on new ideas, approaches and knowledge they can use in their work. As one manger describes it:

“It is often the case that a new idea is shared, and that people think for themselves how they can use it, for example (…) After it is shared during our weekly update meeting, you think for yourself ‘oh we can use this for client X!’ and then you go talk to the presenter and he or she will helps you how to do it” (BUM5, Firm B).

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29 All in all, attention and visibility create an atmosphere with a continuous focus on exploitation and exploration. It rewards and reminds the people working on it and it stimulates (thinking about) new initiatives, thereby reinforcing the energy and focus on improvement and innovation. In addition, platforms and attention support the integration of new approaches and knowledge

Management strategies in the creation and preservation of BU-ambidexterity : a multiple case study