Riding Two Horses at The Same Time: Paradox Responses for Navigating Exploration and Exploitation in Small and Medium-Sized IT Consulting Firms

On the one hand, due to the relentless advancements in information technologies, IT consulting firms are under constant pressure to gain new knowledge and develop innovative offerings to satisfy their clients’ needs in the long term. On the other hand, their business models hinge on the tyranny of billable hours, which emphasizes efficiency, scalable reuse and refinement of current knowledge, and a culture of operational excellence boosting short-term performance. Pursuing these demands simultaneously makes tensions salient. Focusing on two small- and medium-sized IT consulting firms, we study how they use responses discussed in paradox research to navigate exploration and exploitation. Building on paradox research and the analyzed empirical data, we develop a framework that classifies various approaches the two firms use to navigate exploration and exploitation on different levels. We contribute to recent calls for studying repertoires of paradox responses to advance our understanding of dealing with exploration and exploitation.