“The basic problem confronting an organization is to engage in sufficient exploration to ensure it´s current viability and, at the same time, devote enough energy to exploration to ensure its future viability (1991, p. 105).

Exploiting means further honing your practiced skills – how can we do things faster, cheaper and more efficiently? For the newspaper business, exploitation of the current print business is attractive simply because it is an extension of existing competences, technologies and paradigms, with returns that are positive, proximate and predictable. Incrementally improving current operations is also a necessity as print sales decline and profit margins erode away.

Exploration is all about surveying new opportunities, taking risks and building new business. For the newspaper business, exploration entails experimentation with new digital products and services with uncertain, distant and sometimes negative outcomes. One key concern is for example that new digital ventures cannibalize existing print sales further by offering for free the news that you used to pay for reading in the newspaper.

Balancing both exploitative to explorative activities are seen as crucial for firm survival, but competition for attention and resources still means that explicit and implicit choices have to be made between the two, as “exploration of new alternatives reduces the speed with which skills at existing ones are improved” (1991, 72).  This exploit/explore framing has been one of the most enduring ideas in organization literature over the past 20 years, and March´s original article from 1991 has been quoted almost 10 000 times.

More recent research introduces the notion of an ambidextrous organization, with the dynamic capability of simultaneously exploring and exploiting – resulting in “superior performance” (Tushman & O´Reilly 1996; 2002). An attractive concept, the ambidextrous firm is able to compete concurrently in both mature and emerging markets, balancing the following different strategic foci, structures, tasks, competencies, processes, cultures and leadership roles:

But the chart above clearly illustrates the paradoxical nature of “ambidexterity,” and how organizations have to reconcile seemingly irresolvable internal tensions and conflicting demands in their task environments to become ambidextrous (Raisch and Birkinshaw, 2009). The practical application of ambidexterity would imply that organizations would have cultures that simultaneously are low-risk and risk-taking; structures that are formal and adaptive; leaders that are authoritative and visionary; and so forth. This raises a number of real world-questions, and despite the increasing interest in ambidexterity, there is still no widely agreed-upon organizational framework to actually achieve ambidexterity. Several important research issues remain unexplored, ambiguous or conceptually vague (Raisch et al, 2009, Tushman and O’Reilly 2011). Indeed, Tushman and O’Reilly note some 15 years after their first article that articulating why ambidexterity is a good idea is perhaps less important that understanding how it is implemented and operationalized (2011, p. 18).

Still, “Innovation” isn’t just the invention of a new process, product, technology or service. As Schumpeter point out, the concept of innovation is closely tied in with value added — an innovation doesn’t occur until someone successfully implements it and makes money from it.

New technology can offer enticing value propositions, but the return on investment on any given technology or innovation is notoriously difficult to pinpoint. In 1993, Erik Brynjolfsson popularized the “productivity paradox,” which noted the apparent contradiction between the remarkable advances in computer power, heavy IT-investments, and the relatively slow growth of productivity at the level of the whole economy, individual firms and many specific applications. The concept is sometimes referred to as the “Solow computer paradox” in reference to Robert Solow’s famous statement “You can see the computer age everywhere but in the productivity statistics.”

Since then, McAfee and Brynjolfsson (2008) have done extensive research, tracking performance data for all publicly traded US companies from 1960 to 2005, noting that a new competitive dynamic has emerged (2008, p. 100), because new technologies that enabled companies to improve operating models exponentially. In this view, the mere existence, or availability of new technologies is not a fundamental driver of change. Rather, technology and organization is seen as dynamically interacting; IT serving as a catalyst for innovative ideas and an engine for delivering them.

This notion of technology-enabled opportunities mirrors Leonard-Barton (1988), who argues that as technology is implemented, a process of mutual adaptation between the technology and the organization occurs where developers and users strive to wring productivity increases from the innovation. The diffusion of technology includes changes in organization as well as the technology itself, and the outcomes are not always predetermined.

Leonard-Barton proposed that implementation misalignments between technology and organization fit into three categories: Technical, delivery system, and value. Of special interest is the latter, which is a mismatch between technology and organization, where technology disrupts and reforms the organization in fairly unpredictable and situation-specific ways. The significance and impact on job performance criteria can work on different levels. The author mentions end-users, organization managers, business managers and corporate management. Discrepancies between these four “reward systems” may strongly affect the success of technology implementation.

This project will examine how value is created in the aforementioned interplay between organizational, technological and market forces, and specifically how misalignments between technology and organization may affect value.

Newspapers have traditionally been very profitable businesses, but also rigid, hierarchical organizations, with sharp job divides around functions and specialized tasks. As is typical of mature organizations operating in stable environments, news organizations have focused on efficiency gains through incremental improvements of existing processes. Managers favor projects that sustain and replicate the core business rather than allocate resources to explore new vehicles for growth. Successful organizations tend to disregard practices, people and structures regarded as peripheral to their current recipe for success – in effect breeding inertia. Organizational inertia is characterized by the following:

• Dense, tightly coupled interdependencies among subunits
• Efficiency as a core value
• Focus on short-run adaption rather than long-run adaptability
• Institutionalization as a restraint on action
• Powerful norms embedded in strong subcultures
• Imitation as a major motivation for change

In 1985, Tushman and Romanelli proposed the punctuated equilibrium model of organizational evolution, which sees organizations progress through convergent periods punctuated by reorientations that demark and set bearings for the next convergent period. These convergent periods are characterized by incremental changes, short-time adaption, effective performance, and organizational alignment. This would seem to fit with the characteristics of inertia proposed above, suggesting that convergence leads to inertia. A reorientation occurs in the event of a discontinuous change, where strategies, power, structure and systems are fundamentally transformed. The introduction or emergence of a disruptive technology would seem to fit into this model.

Tushman and O’Reilly (2004, 1996) later argued that to counteract inertia, organizations and managers must become ambidextrous, balancing the need for both exploratory and exploitive activities. Organizations must strive to be both evolutionary and revolutionary; pursue both incremental and discontinuous activities. Managers must be like “jugglers” that balance these contradictory needs, creating a culture that celebrates both stability and change.

The project will apply the punctuated equilibrium model to investigate how “reorientations,” or discontinuous changes, have disrupted strategies, power, structure and systems, and to which extent organizational inertia affects innovation in news organizations.

For the purpose of this PhD-project, one particularly relevant theory is that of disruptive technologies. The term was coined by Harvard professor Clayton M. Christensen in the mid-90s, referring to technologies that initially underperform existing market standards, but with steady improvements meets or exceeds demands. Over time, disruptive technologies may sink industry leaders, who are focused on existing, profitable markets and customers and don’t see the “threat” coming until it is too late. One example is the personal computer, which started out as an inexpensive alternative to large mainframe computers, which at the time were costly and required expert handlers. The earliest PCs could not handle complicated tasks, but over time, the technology matured to a point where PCs transformed the computer industry and our daily lives –in both trivial and profound ways. Tablets may very well be the next wave of technological disruption – displacing the PC. Christensen has later revised his theory, putting in question the inherent “disruptiveness” of technologies. The same technology, take Internet as an example, can be disruptive to incumbent firms (such as “brick” bookstores), but offer great opportunities for others (such as Amazon.com).

The project will investigate to what extent digital technologies disrupt the media business, and the impact of these technologies.  At what point does a technology become disruptive, and to whom? The project will draw on Danneels (2004), who offered a critique and agenda for revising the theory of disruptive technologies. Research themes include:

-       The definition and identification of disruptive technologies

-       The predictive use of the theory

-       Explaining the success of incumbents

-       Merits of being market-oriented

-       Merits of creating organizational spin-offs for exploring disruptive innovations

The project will investigate the complex interplay between organizational, technological and market forces, and specifically how organizational inertia affects innovation in media organizations.

For now, I try to think of technology as a more-or-less independent variable in this equation. To quote Everett Rogers: “The diffusion of innovations is a social process, even more than a technical matter.”

The main focus of the project is the study of how media organizations adapt to changing business climates.