Managing the exploitation-exploration tradeoff: how leaders balance incremental and discontinuous innovation

Abstract

Purpose The purpose of this paper is to explain how leaders balance exploitation (incremental innovation) and exploration (discontinuous innovation). Design/methodology/approach A qualitative study with 11 senior leaders in Australian Defence Force. Findings The study identifies a number of factors that leaders take into account when deciding whether to focus on exploitation or on exploration. Originality/value The study concludes that transactional leadership is appropriate in the context of exploitation, while transformational leadership is appropriate in the context of exploration.