Introduction

[…] organizational adaptation requires both exploitation and exploration to achieve persistent success. (March 1991, 205)

Organizing collective action has taken different structures and used different means to channel its effervescence. Over the last decades with increasing interest on innovation management, several models have been prescribed in order to support firm’s innovation. An overwhelming concern for exploration (Wilden et al. 2018) and its means have been the centre of attention to counter limitations of exploitation such as path-dependence, bounded rationality, cognitive biases and other myopic behaviours.

Designing an ambidextrous organization has become mainstream for managers. Academics have studied the topic in-depth through several units of analysis to understand how it can contribute to innovation and firm’s competitive advantage. It has given ideas for implementations, and contingencies to be aware of, but has spiralled around the paradoxes of balancing exploration and exploitation (Birkinshaw and Gupta 2013; O’Reilly and Tushman 2013; Benner and Tushman 2015). However, organization design and allocation of resources to sustain two separate regimes aimed originally at organizational learning (March 1991). The drift towards innovation necessarily have encountered other practices such as exploration project management. Is the original perspective on learning and adaptation compatible with innovation management?

Moving beyond problem-solving, adding uncertainties and more significantly addressing the unknown are the signature of innovation management. Novelty is generated and managed through an arsenal of practices and methods that can be seen in marketing, strategic analysis, design reasoning and theory (Le Masson, Hatchuel, and Weil 2017). These practices are enclosed within projects (Lenfle 2016, 2008) or portfolios(Maniak and Midler 2014).

However, ambidexterity promotes a separation between exploration and exploitation and it is more generally discussed for organizational dimensions of time and structure supporting a regime and the other. Consequently, the unknown occupies a different place and is related to in different ways when seen from innovation management through exploration projects or seen from organizational ambidexterity and its foundations. Over time, and with evolution of practices and constructs in literature, the separation of regimes could now be in conflict with generative processes driving the exploration and exploitation of the unknown.

Ambiguities on the meaning of ambidexterity, exploration and exploitation have been spotted and extensively discussed in (Gupta, Smith, and Shalley 2006). Having a common definition of these constructs appears critical. At the light of what ambidexterity has become over the years for organization studies, performance and innovation, (Birkinshaw and Gupta 2013) stress the discomfort caused by how exploration and exploitation are considered with respect to ambidexterity, and the seminal model on organizational learning and adaptation.

On several occasions in seminars and at conferences I have had debates with colleagues about how the notion of ambidexterity might be reconciled with March’s (1991) view that exploration and exploitation are mutually incompatible. My response is quite straightforward. March (1991) provided a theory to explain his observation that exploration and exploitation represent self-reinforcing patterns of learning. I agree with this observation. However, I don’t believe he is saying that it is impossible for organizations to overcome these self-reinforcing patterns; he is just saying that it is extremely difficult. This is where ambidexterity comes in. Essentially, ambidexterity provides a normative perspective on how organizations function. It says that managers are making choices and trade-offs among competing objectives, and when they do their job well they override the organization’s tendency to go down the path of least resistance. For example, they might actively push one objective ahead of the other for a limited time, or they might find creative ways of delivering on two objectives at the same time (Birkinshaw and Gupta 2013, 293)

The underlined extract highlights the potential divergence and necessity to reconsider the separation between exploration and exploitation, its meaning and how it can be conditioned one another. Indeed, both should be performed, they bear different mindsets that are not sustainable on their own for the firm, but should be kept separate and balanced in sequence or in parallel. Cross-contamination between exploration and exploitation jeopardizes firm’s performance and potentially underlying forces driven by innovation pushing the performance frontier drawn by both regimes. Given new practices of innovation management driving exploration regime, we should also help clarifying where the unknown lies and its impact with respect to the dichotomy encouraged by ambidexterity.

Our PhD manuscript starts with this perspective: designing an ambidextrous organization will separate exploration from exploitation activities through different means. If the firm is not able to sustain the innovation effort to explore and exploit, who is to blame? Should we consider the firm is not doing it well enough? Or should it be the model of segregating exploration from exploitation?

Such questions are legitimated by the issues and ambiguities raised in the literature in recent years, and we propose to come back to the origins of such model of ambidexterity, and the dichotomy exploration/exploitation. Starting of again with the seminal article (March 1991) will allow confronting the original perspective of organizational learning and adaptation with the contemporary issues of innovation management. This literature has also created a place for exploration engines: exploration project management (Lenfle 2008) for instance put the emphasis on managing the unknown, generative processes.

We suggest testing original foundations and hypotheses to discuss the validity of the ambidexterity models given new practices of innovation. For instance, such exploration projects develop requirements, engineering capabilities that are new to established and mirrored organizations (Colfer and Baldwin 2016). Project-based organizations supporting new product development will face several challenges such as decomposition and integration (Sosa and Mihm 2008), but as interdependencies are reconfigured with innovative design, dynamically mirroring product engineering with the organization becomes critical to sustain learning and adaptation in the long run. In other words, the unknown brought by exploration projects and generative processes can be at odds with the assumptions made in implementing ambidexterity.

The PhD journey was hosted by Zodiac Aerospace offering an industrial context to study their concern for organizational ambidexterity and their innovation practice. This conglomerate of SMEs built over more than a century has been the grounds for numerous designs, products and technologies that have largely contributed to the structure of the aviation industry. With raising uncertainties on the future of the market, designs, technologies and qualification/certification requirements, and the pressure to maintain and optimize legacy products, ZA designed an ambidextrous organization. However, they have had difficulties in the implementation and several exploration project raised controversies for business units and top management. Since not all projects could be considered as failures, with also a concern on the notion of failure and performance (Elmquist and Le Masson 2009), we were in a position to discuss the prescribed model of management and actual practice.

Several case studies were identified to study their practice, its course of action and try to understand it given literature models of ambidexterity and managing the unknown. These cases were proposed by managers and engineers who had open management issues with their projects.

In this PhD thesis, we will then closely study the implementation of an ambidextrous organization and its impact on sustained innovation. The development in management of exploration project, of the unknown and generative processes will also bring a new light on the original purpose of separating exploration and exploitation: organizational learning and adaptation. The organization design with the underlying mirroring hypothesis will necessarily be challenged as project dynamics will interfere with intra-organizational boundaries, inter-organizations and inevitably with strategic management.

The sections below provide a starter to the manuscript. First, we explain the industrial request specifying the nature and preliminary formulation of the management issue faced by the Chief Technical and Innovation Officer of Zodiac Aerospace. Second, we further detail our opening research questions which will guide us through the literature review (part 1). Third, in the last section, the synopsis is pictured showing the overall structure of the PhD thesis.

An industrial request: Zodiac Aerospace struggling with exploration projects and ambidexterity

Conglomerate of SMEs and a group holding

The thesis was conducted at the Technical & Innovation Direction of Zodiac Aerospace (ZSA, holding). Established in 1896, this large industrial group of 75 entities designs, develops and manufactures aeronautical equipment for aircraft/helicopters manufacturer and airlines. These are scattered across 100 facilities across the globe and mainly centralized in Europe and North America. In the last couple of decades, some facilities were established in cost-competitive countries for the serial production of some entities. The group of SMEs where each of them with a few hundreds employees each, equating to a total of 35,000, have their own responsibility and performance logic. A light group holding of 200 employees with several support functions have the challenge to manage the sometimes competing SMEs due to the market structures and build up synergies targeted by the executive committee. The management directives are cascaded down to the pool of business units grouped in so-called “divisions” and branches with a Master Plan (Hoshin Kanri planning) synthesizing the strategy. However this broad strategic plan is largely adjusted by the individual business units as their autonomy is driven by operational concerns faced locally in their line of business. The group holding controls the BUs through several reporting channels, the major one being Profit & Losses; so beyond the control dimension, the corporate staff serves as the flag holder of the Zodiac Aerospace brand, representing BUs for key accounts and suppliers at the top management level, in addition to external functions: institutions, certification authority, research councils and public funding schemes.

An entrepreneurial history closely linked to the historical roots of the aircraft industry

Since 1896, the history of ZA has developed numerous innovations at the time when the aviation industry was building up in Europe and in North America. These largely contributed to aircraft safety, aircraft components and later to systems and cabin equipment. Today as the market has largely settled and rationalized with safety and certification frameworks, several novelties and radical improvements have also reached the market thanks to long-term partnerships with aircraft manufacturers and airlines. However, BUs are looking for new growth catalysts as they face growing uncertainties on future aircraft architectures and kick-off date. In parallel, the world fleet continues growing but mainly for legacy aircraft with occasional marginal improvements, and a symmetric requests for substantial decrease in (re-)development costs. A macro-economic side-effect is the growing concentration of equipment and system manufacturers: main competitor of ZA (B/E Aerospace, very similar structure and market footprint) was acquired by Rockwell Collins (equivalent of Thales group) who is currently being acquired by United Technologies Corporation. Along the same dynamic, ZA has been very recently acquired by Safran group.

Increasing uncertainties and novel unknowns for intra/inter-BU exploration projects

After splitting the former Zodiac group in 2007, between Zodiac Aerospace and Marine & Pool Activities, the current corporate team has largely developed its intervention starting off with counselling and support in order to back up the performance of exploitation activities (Quality, Cost and Delay) but also value exploration and competencies regeneration for future prospects: expert network, scientific and technical council (ZSTC), expert review (technical audit for NPD), creation of an R&T function, evaluation of technology maturity level (Technology Readiness Level), creation of technology/production road maps (TRM/PRM) challenged by top management, lobbying and external funding, transverse future technologies, and intellectual property. Given raising uncertainties on exploitation certainties such as aircraft architecture and integration, or new program, and airline demanding frequent changes, several exploratory projects and sometimes key programs have gained visibility for the corporate teams. Overall, ZA has been developing organizational ambidexterity locally in business units and at the corporate level. The Technical and Innovation Direction along with the Executive Committee are in a position to try out management innovations with respect to these projects (intra/inter BU) that appear to regenerate organizations in a large internal pool of agents, tools, competencies, processes and organizational structures. The challenge for the Innovation Direction was to overcome the limitations of the market-pull dynamic of aircraft manufacturers and airlines. Several techno-push projects had been identified by BUs and top management, these were promoted and steered through a committee called “Multi-BU”. For more “short-term concerns” associated with the anticipation of user and client needs, two special teams where created near assembly lines of Airbus and Boeing. The aim of these teams is to capture potential future needs, deal with a portion of the technical support addressed to their BUs of origin, formulate new concepts and tests these with airlines and aircraft manufacturers. Projects were launched using these platforms, among several other R&T topics within each BU, and they raised technical barriers, issues associated with institutional barriers (certification, client/user desirability), and collaboration between BUs. Overall, they have caused difficulties in transitioning between exploration and exploitation. Some of them have been considered as (partial) successes, others as failures, questioning what makes innovation performance. But given the demanding constraints of exploitation in the aircraft industry, and the mirroring by BUs and their internal organizations, the projects’ trajectories question the organizational fit, boundaries and their capability to sustain such potential innovations. This organizational context, individual histories of entrepreneurship and SMEs’ collective history, framed by a strong dominant design, we wonder what is the managerial perspective regarding intra/inter-BU projects, and the first questions that come to mind would be the following:

• What are the benefits of organizational ambidexterity for exploration projects within a conglomerate of SMEs?

• How is the innovation effort challenging the performance frontier set by exploration and exploitation balance?

• What are the implications of organization design for exploration project management?

• How is the corporate and local management dealing with these potentially conflicting trends (exploration project management and ambidexterity)?

These questions were originally raised in the early stages of the PhD journey. They touched upon a critical idea: is Zodiac Aerospace not good enough to develop an ambidextrous organization? As it has been stressed in our preliminary introduction to the literature, we have some arguments to believe that perhaps ZA could actually be applying the models appropriately. So, it is rather an invitation to reconsider the underlying assumptions and implications of ambidexterity, and separation of exploration from exploitation.

An invitation from literature: ambidexterity revisited by innovation management evolutions

Organizational ambidexterity - separating and balancing exploration and exploitation

Zodiac Aerospace has been developing an ambidextrous organization with several means: dedicated departments to exploration (e.g. R&T, innovation, design, advanced concepts) within BUs, autonomous team, group-level initiatives to foster exploration, committees discussing and deciding on exploration project management at the light of strategy, corporate leadership and sponsorship. The BUs have been gradually establishing project-based organizations to support the delivery of legacy products/services and NPD based on customer demands. Along with the rationalization trend of the market, major customers such as aircraft manufacturers and airlines have been prescribing specific ways to manage programs and projects along with equipment qualification and certification. BUs require maintaining their knowledge, competencies over long periods of time to satisfy clients along the value chain during the lifetime of the products and the aircraft (from a few years to several decades). Exploitation performance is thus achieved in reinforcing these routines with a spirit of continuous improvement (March 1991). Yet, as threats of uncertainties and unknown are seen for the future of the ecosystem, several innovative projects try to anticipate and shape what ought to be designed for the future aircraft platforms or airline retrofits to keep up with the competitive advantage. Consequently, they require building creative dynamic capabilities (Nonaka et al. 2014), and regenerative dynamic capabilities (Ambrosini, Bowman, and Collier 2009) to sustain repeatable patterns of innovation inspired by the historical entrepreneurial spirit of BUs. These patterns largely contribute to exploration regime. The literature (Birkinshaw and Gupta 2013; Gupta, Smith, and Shalley 2006) has stressed it may not be on the same continuum of exploitation, but perhaps in an another dimension. However, it is recognized these should coexist and be balanced; which reinforces the idea of separation between the two: non-conditioning of both regimes. It becomes then critical to understand how dynamic capabilities, fed by innovation practices, can contribute to shifting the performance frontier set by exploration and exploitation to solve efficiently the problem worked out by agents in the firm. How is organizational learning and adaptation actually sustained? Key representatives of the ambidexterity literature (Birkinshaw and Gupta 2013; O’Reilly and Tushman 2013; Benner and Tushman 2015) have questioned the how inviting more qualitative research and micro-foundational approaches. Indeed, innovation-driven exploration will rely on numerous practices trying to shape the unknown and generative processes that may be stretching beyond the seminal problem-solving defined by James March. For instance, the challenge of building these capabilities will have a stake in the strategic intent and organization design that is directly linked to the decisions (Birkinshaw and Gupta 2013) made along the project management and design steps taken in the radical innovation process. It also potentially contributes to redefining problems to be solved by agents in the firm, thus repeatedly updating (March 1991) model. More precisely, in terms of problem-formulation, engineering design efforts mobilized in the exploration regime will necessarily reveal and challenge interdependencies from technical standpoint but also from an organizational perspective (Colfer and Baldwin 2016). Aiming for the unknown to reformulate problems goes however beyond search-based model of exploration may compromise what exploitation is capable of performing.

Managing the unknown for organization studies

These limitations encourage us to consider the management and design of underlying dynamic capabilities and organizational fit to support these exploration, or simply innovative projects as they glide across the conglomerate. It channels then the PhD journey through another literature field mainly concerned by project management and managing the unknown. Overall, it could be considered as an encapsulation of practices in another regime of collective action differing from organization studies. With the development of project management and other contemporary approaches to innovation management, the attention and locus of innovation is relocated at a meso-level: not centred on the individuals and not necessarily seen managed at the organizational level. Project-based management (Galbraith 2010; Turner 2009) and other organic views that could be traced back to (Burns and Stalker 1961) bring another perspective. Calls have been made in major journals on challenges the field should address (Sydow, Lindkvist, and Defillippi 2004; Bakker et al. 2016; Söderlund, Hobbs, and Ahola 2014; Söderlund and Müller 2014). Projects have been studied for being a flexible and convenient vehicle for exploration and innovation practices (Midler, Killen, and Kock 2016), innovation management can be historically linked to project management (Lenfle and Loch 2010, 2017; Davies, Manning, and Söderlund 2018). However, putting aside the normative view of project management (e.g. Project Management Institute), the nature of exploration project management and the encapsulation of generative processes (e.g. Design Thinking, creative problems-solving, C-K theory, etc.) raises numerous questions on organizational ties compared the host firm, the risk of spin-off ad-hoc patterns. These contingencies are crucial for a conglomerate of SMEs where organization design reflects engineering design and its constraints (Colfer and Baldwin 2016). So, the contributions of the project management literature encourages us to study the perspective and impact of portfolio and program management for exploration, for organization design and strategy (Gemünden, Lehner, and Kock 2018; Hobday 2000). More generally, it is another way of discussing organizational ambidexterity, and its coexistence in a firm such as Zodiac Aerospace. For instance, these projects re-discuss aircraft equipment and systems technical constraints, as well as corresponding BUs’ organizational boundaries. We must also stress here the pressures related to the dominant designs, the lock-ins, and path-dependence associated to these products in the market and how the BUs are organized internally given a mirror hypothesis. The crucial issue being how the corporate team of ZA (Group Innovation Direction, CTO, ZSTC along with the ExCom) steers, organizes, manages these projects as they tend to revise individually not only the design/engineering dimension of the products, but the underlying organizations and ecosystems (environment, institutions) whilst playing within the group strategy and market footprint. Exploration projects consequently moderate the organizational learning, design and adaptation brought initially by the separation of exploration and exploitation.

Preliminary Research questions

Zodiac Aerospace practice of innovation, organization design, strategic management and engineering bring new questions to be answered given this preliminary literature review at the light of conditions imposed by the industrial context. This early formulation of our research questions will guide through the literature review (part 1). We invite the reader to consult the identified research gap and associated research questions in chapter 3. Further advice on reading is given in the Reading tips, the synopsis below.

• What are the implications of enforcing the non-conditioning of exploration and exploitation for organizing ambidexterity?

• How is organization ambidexterity understood from the perspective of exploration project and project-based management?

• How comparable is the foundational model of (March 1991) with today’s approaches to innovation management?

• What is the organization design and change associated to exploration project management?

References