Managing the exploration-exploitation paradox in healthcare: Three complementary paths to leverage on the digital transformation

Introduction

Healthcare organisations are currently trying to reconfigure and innovate their processes to achieve and maintain a continuous balance between quality improvement and cost rationalisation (Porter and Lee, 2013; McCullogh and Snir, 2010; Borzekowski, 2009; Djellal and Gallouj, 2007). Underlying this twofold aim, tensions emerge being produced by exploratory and exploitatory behaviours (Lavie et al., 2010), acting as opposing attractors whose effective balance can only be reached by deploying concrete and persistent efforts. On this point, recent ambidexterity research (e.g. D’Souza et al., 2017; Benner and Tushman, 2015; Birkinshaw and Gupta, 2013) suggests exploring the processes through which organisations cope with these tensions over time either reconfiguring their activities within an exploration-exploitation space limited by an efficiency frontier (EF), or pushing it out to achieve higher performance. However, such tensions seem to be highly context dependent and this may require approaching ambidexterity from a relative perspective (D’Souza et al., 2017).

The digital transformation characterising the healthcare sector nowadays (Antonacci et al., 2017; Lin et al., 2014; Kaushal and Blumenthal, 2014; Andreassen et al., 2015; McAlearney et al., 2015; Arvanitis and Loukis, 2016) offers important research opportunities from this viewpoint. It is also at the centre of the debate among policymakers and practitioners because of its potential impact in term of both cost reduction and quality improvement (OECD, 2016). The World Economic Forum (2016) shows that, although digital healthcare attracted more than $14bn in funding and investment over the past six years, concrete actions still must be implemented to structurally transform the industry. Indeed, if properly implemented, digital technologies can improve patient empowerment, quality of life, enable the communication among healthcare professionals and patients, and reduce both errors and length of hospitalisation (European Commission, 2012, 2014). An effective introduction of digital technologies provides occasions to: re-engineer healthcare processes and knowledge-based routines (Laing, 2002; Kim et al., 2012); balance exploratory and exploitatory efforts (Gastaldi and Corso, 2013); and improve the way healthcare services are offered—both in terms of cost and quality (Agarwal et al., 2010; Borzekowski, 2009). However, literature has produced little evidence on how digital technologies can achieve these results. What is also lacking is a framework able to help ad orient practitioners in their decision-making with...