Managing the exploration-exploitation paradox in healthcare

Abstract

Purpose The purpose of this paper is to understand how digital technologies can help healthcare organisations and improve the exploration-exploitation paradox over time. The authors explore inputs, processes and outcomes of implementing digital transformation programs and advance four testable propositions. Design/methodology/approach The authors conducted multiple case studies with embedded units of analysis: digital transformation processes; hospitals; and regional healthcare systems. Primary sources come from 107 semi-structured interviews with key informants within 14 Italian hospitals between 2009 through 2011. Findings Three complementary paths emerge as fundamental to balance exploratory and exploitatory efforts in healthcare: assets digitalisation within hospitals; digitally based process integration; and disruptive decision-making through analytics. Intra- and inter-path characteristics are discussed to show how digital transformation can both move hospital within the exploration-exploitation space. Research limitations/implications By its very nature, this study is exploratory. Notwithstanding the number of cases and interviews, its generalisability is limited. Practical implications Digital transformation programs are fundamental to resolve the tensions raised by the exploration-exploitation paradox. Their implementation leads to better performance (cost reductions, quality improvements). A framework is provided for practitioners to make better decisions. Originality/value This study sheds new light on how digital technologies are actually adopted and adapted in healthcare contexts. It does it by entailing a longitudinal perspective.