Strategic Alignment of Innovation to Business: Balancing the Exploration and Exploitation Function

F.T.J.M. Fortuin, S.W.F. Omta

Research output: Book/ReportBookAcademic


This book addresses the crucial question for innovative prospector companies of how to bridge the gap between exploration and exploitation. Whereas exploration deals with the search for new ideas and opportunities, exploitation is about incrementally moving the performance bar a little bit higher. Finding the right balance between exploration and exploitation is essential for the long term survival in today's highly dynamic business environments. In a cross-industry study of ten large, multinational prospector companies, which are world leaders in their respective industries, it was discovered that the 'industry clockspeed', the length between the subsequent product generations, plays an essential role in bridging this gap. The product generation life cycle (PGLC) typically ranged from just several months in short life cycle industries (SLCIs), such as electronics and the mobile phone industry, to (more than) 10 years in long life cycle industries (LLCIs), such as aerospace and pharmaceutics. Our data indicate that companies operating in SLCIs face major problems in maintaining the long term knowledge base of their firms, whereas companies in LLCIs tend to have problems in aligning their innovation strategy to the short term business needs. To investigate the dynamics of strategic alignment, in one of the LLCI companies, a multinational supplier of industrial components, a six-year longitudinal study was conducted. Here our data indicate that finding a funding structure that effectively balances exploration and exploitation, combined with regular structured feedback between the exploration and exploitation function is needed to maintain long term strategic alignment. CTOs and innovation managers can use this book by first establishing the industry clockspeed(s) in their respective industries or product range(s) and then benchmark their innovation processes to those of the first class (SLCI or LLCI) prospector companies included in this book.
Original languageEnglish
Place of PublicationWageningen
PublisherWageningen Academic Publishers
Number of pages174
ISBN (Print)9789086860562
Publication statusPublished - 2007

Publication series

NameInnovation and sustainability
PublisherWageningen Scientific Publishers
No.vol. 2
ISSN (Print)1875-0702


  • life cycle
  • innovations
  • research
  • industrial applications
  • exploration
  • resource utilization
  • strategic management


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