Innovation at the Intersection between Exploration and Exploitation

Challenged by competition pressures and the unprecedented pace of change, firms cannot choose anymore whether to concentrate on the needs of today's customers or on the anticipation of tomorrow's needs: they must be excellent at both. This requires managing two related balancing acts: on the one side, being excellent in both the exploitation and exploration of their capabilities and, on the other side, being excellent in managing both incremental and radical innovation. These two balances are critical since exploitation and exploration, on the one side, and incremental and radical innovation, on the other side, require different approaches that have been traditionally considered difficult to combine within the same organisation. Our objective is to begin to shed light on the necessity of considering these balancing acts in a global perspective and on how companies can combine them. We performed a retrospective case study of Microlambda/ Selenia, which was successful in achieving and maintaining a combination of these two balancing acts.