Inside the Innovation Lab: How Paradoxical Tensions Persist in Ambidextrous Organizations Over Time

Digital innovation is arguably one of the biggest challenges facing the pharmaceutical industry, and digital health provides a threat as well as an opportunity for pharmaceutical companies to move beyond medicine. In 2015, a Danish pharmaceutical company (PharmaCo) founded an innovation lab (PharmaLab) to enable the digital transformation of the existing business through a business unit located separate from, yet in proximity of corporate headquarters. The Danish mainstream media hailed PharmaLab as an exemplar of corporate innovation labs, but moving inside the innovation lab managers struggled in managing the seemingly mutually exclusive relationship between exploring new business opportunities of digital innovation and exploiting digital health for the existing business. This dissertation studies how paradoxical tensions persist in ambidextrous organizations over time.
Viewing ambidexterity through a paradox lens, the literature review builds on micro-foundations of ambidexterity to understand how managers handle paradoxical tensions in practice. The literature review decouples micro-level drivers (individual- and organizational-level) and micro-foundations of ambidexterity (individual and organizational ambidexterity) to understand how the paradoxical practices of individual managers enable ambidextrous organizations to handle persistent tensions over time. By developing the concept of ambidexterity dynamics, the literature review couples latent tensions to micro-levels drivers, salient tensions to individual ambidexterity and persistent tensions to organizational ambidexterity. Through the concept of an ambidexterity cycle, the literature review develops a theoretical model on persistence in ambidexterity that is dynamic, yet non-deterministic.
Approaching the study of paradoxical tensions through a practice epistemology, the methodology chapter builds on practice-theoretical principles for zooming in and out on paradoxical tensions in practice and over time. The methodology chapter describes the case of PharmaLab as the corporate innovation lab of a pharmaceutical company, which provided the foundation for a longitudinal case study over a five-year period (2015-2020). Through more than 30 interviews with managers and mployees in PharmaLab, more than 50 observations of meetings between managers and employees, and the retrieval of more than 70 archival documents, data collection evolved as a snowballing process. Through an iterative coding process, evidence emerged for the concept of an ambidexterity cycle, driven by ambidexterity dynamics, and indicated the existence of dynamic shifts in cycles.
The analysis results in three main findings. First, the analysis finds that four different paradoxical tensions persisted within PharmaLab over the five-year period, namely “Enabling transformation”, “Modelling business”, “Incorporating innovation” and “Sharing dedication” tensions. Second, the analysis finds that paradoxical tensions persisted within PharmaLab through eight different ambidexterity cycles, emerging and reemerging across four overlapping periods (2015-2017, 2016-2018, 2017-2019, and 2018-2020). Third, the analysis finds that PharmaLab shifted between ambidexterity cycles through the differential perceptions of different managers on tensions as dualisms, paradoxes and dualities. The analysis concludes that PharmaLab cycled through ambidexterity by viewing tensions from different perspectives over time.
The discussion claims three main contributions. First, ambidexterity dynamics add to the existing literature on micro-foundations of ambidexterity by showing how micro-level drivers trigger latent tensions, and individual managers handle salient tensions through paradoxical practices, which embed persistent tensions in organizational processes over time. Second, ambidexterity cycles add to the existing literature on dynamic ambidexterity by illustrating that ambidextrous organizations cycle through multiple, dynamic equilibria over time. Third, dynamic shifts add to the existing literature on paradox dynamics by illuminating how the nature of the relationship between the opposing poles of exploration and exploitation changes through a dynamic equilibrium. The conclusion recommends that managers and researchers beware of the temporal persistence of tensions in theory and practice.