Initiating Ambidexterity through Digital Innovation Labs

Many established organizations struggle to become ambidextrous. Recently, pervasive digitalization exacerbates the pressure on incumbents to find adequate organizational responses in order to survive under changing industry conditions. In this paper, we report a multiple case study into six financial services providers. Exploring the question of how organizations can initiate ambidextrous activities into their business, we focus on the widespread practice of digital innovation labs (DILs). Through our analysis, we identify two modes by which DILs help organizations initiate ambidexterity; (i) active engagement is a set up that allows DILs to directly carry out explorative and exploitative activity for the firm; (ii) passive enablement, on the other hand, uses DILs as providers of infrastructure, coaching, and resources for the remaining organization to initiate ambidextrous activities where needed. We discuss these findings in light of the recent literature on digital innovation management and ambidexterity. We make important contributions: 1) in line with the view of ambidexterity as dynamic capability, we add to the explanations of structural separation as effective vehicles to initiate ambidexterity, 2) we outline that the two identified modes of operating DILs are associated with unique configurations of managing digital innovation in incumbent firms.