Dialectic Perspective on Innovation 1 A Dialectic Perspective on Innovation : Conflicting Demands , Multiple Pathways , and Ambidexterity

Innovation, the development and intentional introduction of new and useful ideas by individuals, teams, and organizations, lies at the heart of human adaptation. Decades of research in different disciplines and at different organizational levels have produced a wealth of knowledge about how innovation emerges and the factors that facilitate and inhibit innovation. We propose that this knowledge needs integration. In an initial step toward this goal, we apply a dialectic perspective on innovation to overcome limitations of dichotomous reasoning and to gain a more valid account of innovation. We point out that individuals, teams, and organizations need to self-regulate and manage conflicting demands of innovation and that multiple pathways can lead to idea generation and innovation. By scrutinizing the current use of the concept of organizational ambidexterity and extending it to individuals and teams, we develop a framework to help guide and facilitate future research and practice. Readers expecting specific and universal prescriptions of how to innovate will be disappointed as current research does not allow such inferences. Rather, we think innovation research should focus on developing and testing principles of innovation management in addition to developing decision aids for organizational practice. To this end, we put forward key propositions and action principles of innovation management. Dialectic Perspective on Innovation 3 A Dialectic Perspective on Innovation: Conflicting Demands, Multiple Pathways, and Ambidexterity Throughout this paper we use the term creativity for the generation of new and useful ideas and that of innovation to include both creative ideas and their implementation. Innovation can take different forms, including technological innovation, product and service innovation, and process innovation. The importance of innovation is widely acknowledged by organizational scholars, practitioners, and the wider society in an economic environment characterized by fierce competition, rapid change, and the global challenges of climate change and economic booms and busts. Decades of research have produced a wealth of knowledge about the characteristics of individuals, teams, and organizations that are related to outcomes of innovation (e.g., Anderson, De Dreu, & Nijstad, 2004; Damanpour, 1991). Some of these findings converge around factors that have been reliably found to influence innovation, such as a shared vision, innovative organizational culture (Miron, Erez, & Naveh, 2004; Naveh & Erez, 2004), emphasis on exploration rather than exploitation, and investment in R&D (Zahra & George, 2002; Cohen & Levinthal, 1990). Findings with respect to other factors, such as team diversity (Gibson & Gibbs, 2006), task related conflict, monetary rewards (Amabile, 2000; Eisenberger & Rhoades, 2001) remain contradictory. While we think that the scientific understanding of innovation is an important endeavor in its own right, we also suggest that the impact of scientific knowledge about innovation can be improved in organizational practice. While many reasons may account for a lack of transfer of scientific knowledge to management practices, one reason may be that the scientific findings do not readily or easily produce actionable knowledge. On the other hand, simplistically inferring practical implications or trying to be overly prescriptive can do harm, particularly if the context of an individual, team, or organization is not Dialectic Perspective on Innovation 4 taken into account. We, therefore, chose to integrate empirical findings of the extant literature with an attempt to develop a set of broad principles of innovation management that can guide decision making and action in organizations. We base this integration on a perspective on innovation which we term “dialectic”; we present and develop this perspective below. Toward this goal we offer three contributions to the literature: • By developing and applying a dialectic perspective on innovation, we aim to gain a more valid account of innovation in organizations that can enrich research and practice. • By reviewing core findings about innovation we illustrate how multiple pathways can lead to idea generation and innovation. • By redefining and extending the concept of ambidexterity, we propose a cross-level framework for the successful management of inherently conflicting demands of innovation. Tensions of Innovation: Theoretical Perspectives A pervasive theme in research on organizational innovation is that innovation is characterized by tensions (Lewis, Welsh, Dehler, & Green, 2002), paradoxes (Miron et al., 2004), contradictions (King, Anderson, & West, 1991), dilemmas (Benner & Tushman, 2003), and the so-called “dark side” of innovation processes (Anderson & Gasteiger, 2007). Table 1 presents a number of examples of tensions related to innovation that have been noted in the published literature. We organize Table 1 by the referent level of the tension (individual, team, or organizational) and by whether the tension is primarily focused on antecedents of innovation or on innovative processes and outcomes. That tensions have been described frequently at all levels of analysis and with regard to antecedents, processes, and consequences of innovation provides Dialectic Perspective on Innovation 5 what we think is compelling evidence for their pervasiveness within organizations attempting to innovate. -----------------------------Insert Table 1 about here -----------------------------We propose with others that understanding and managing these tensions is central to successful innovation and use the terms conflicting demands and conflicting activities to refer to the origins of tensions, paradoxes, contradictions and dilemmas. In the following we contrast two theoretical perspectives and the strategies they imply for dealing with these tensions. One strategy deals with tensions by emphasizing the separation of conflicting activities to different sub-organizations or even different organizations altogether (O'Reilly & Tushman, 2004). The top management of the organization is responsible for the necessary integration of activities that produce the tensions. In a way, this strategy deals with tensions by reducing them as much as possible. This strategy derives from a dichotomous theory perspective (March, Sproull, & Tamuz, 1991). We contrast the dichotomous approach with a second theoretical perspective which argues that a strict separation of conflicting activities to sub-organizations leads to disadvantages. Given that a system has sufficient levels of internal complexity (Brown & Eisenhardt, 1997), the tensions should be kept within the system to be managed rather than organized “out” of the system. Both the dichotomous (“keep separate”) and dialectic (“integrate and manage”) perspectives concur that the innovation process poses potentially conflicting task demands on individuals, teams, and organizations. By task demands we refer to the patterns of requisite Dialectic Perspective on Innovation 6 activity an individual, team, or organization must engage in to achieve an outcome. Innovation confronts individuals, teams, and organizations with fundamentally different demands in several important and unavoidable ways: First, the demands of innovation differ from the demands of routine performance. Whereas routine performance is based on the exploitation of knowledge, skills, and abilities that emphasize quality and efficiency criteria, innovation requires exploratory action and creative thinking. People and teams who need to be creative and innovative must crave newness and be curious, while people and teams who are supposed to produce efficiently must be able to close their minds to new ideas that just interrupt the clear pattern of existing routines and hinder the further development of those routines into ever more efficient production. Second, the innovation process itself encompasses different sets of activities, such as those related to idea generation and innovation implementation: These sets of activities are linked to different or conflicting antecedents. For instance, granting autonomy is linked to the generation of new ideas (Shalley, Zhou, & Oldham, 2004), while initiating structure is related to the success of implementing incremental innovation (Keller, 2006). Maximizing the conditions fostering creativity is unlikely to translate directly into innovation because innovation encompasses much more than idea generation. Indeed, the maximization of factors that facilitate the development of new ideas is likely to simultaneously cause conditions that may inhibit idea implementation, and thus innovation overall. For example, Xerox Parc developed many innovations in software design, PC hardware and PC connectivity. The creativity of this group was enormous. And these innovations were often implemented in products. However, Xerox made little economic use of these enormously creative new products that essentially were fed into innovations marketed by Apple and Microsoft (Bergin, 2006; Miller & Steinberg, 2006). Dialectic Perspective on Innovation 7 Third, in addition, there are different types of innovation: An innovation is incremental when it builds on and exploits existing products and processes; an innovation is radical or disruptive if it departs strongly from the status quo (Benner & Tushman, 2003). Incremental innovation leads to expected increases in mean levels of performance, while radical innovation creates variability in performance (potential for high losses or high returns). The expected level of returns is lower for radical than for incremental innovation (Taylor & Greve, 2006). We assume with others that for radical innovation the problem of conflicting task demands of innovation is more pronounced than for incremental innovation and the management of tensions is particularly challenging (Christensen, 1997). But even incremental inn