‘Ambidexterity in Action’: Combining Exploitation and Exploration Through Innovation Portfolio Management for Interlinked Ambidexterity

ABSTRACT Many companies face the challenge of successfully managing the tensions from simultaneously exploiting their current business for incremental innovations while exploring new opportunities for more radical innovations. Increasingly, scholars suggest ‘interlinked ambidexterity’ with successive separation and integration of exploration and exploitation activities to balance and potentially combine both. To advance theoretical understanding in this domain, the study examines how innovation portfolio management (IPM) can serve as an integration mechanism for realizing such interlinked ambidexterity. The study draws on qualitative data from a single case study of the IPM process at a global manufacturing technology company. The findings propose crucial elements for an IPM to facilitate interlinked ambidexterity. These include organizational ambidexterity intention to differentiate exploration and exploitation for their simultaneous pursuit, and operational, managerial and organizational linking mechanisms to integrate these differentiated activities through the IPM. Together, these contribute to the proposed outcome of innovation ambidexterity attainment with both incremental and radical innovations. As a contribution to ambidexterity and innovation theory, these findings show how IPM enables the conversion of an organizational ambidexterity intention that follows a trade‐off logic of differentiating exploration and exploitation into innovation ambidexterity attainment, which requires a paradox logic of integrating both. For managers, they identify the concrete differentiation and integration elements required to realize interlinked ambidexterity through IPM in practice.