Christoph Lechner

Why do so many exploratory initiatives fail? This article suggests the reason may be managers' tendency to under-invest in four key learning activities - searching, processing, codifying and practicing. Based on a study of forty-one exploratory initiatives in three insurance firms, this article explains why each of these four activities is important and why, despite their benefits, managers tend to neglect them. In addition, the study identifies three features of the context surrounding an initiative that facilitate appropriate investments in learning. For managers, the article offers a description of the factors that may either impede or support effective learning in exploratory groups, and provides a fine-grained analysis of the links between learning activities and specific learning outcomes.

This study examines the impact of portfolios of strategic initiatives on performance in large, multibusiness firms. Conceptualizing multibusiness firms as complex systems, we draw on complexity theory to argue that portfolios of strategic initiatives have an effect that exceeds the cumulative effects of single initiatives. We suggest that managers can address three types of complexity that have differing performance effects by employing the design principles of goal variety, modularization, and formalization. With the help of a unique, longitudinal data set in the European financial-services industry, we find evidence of the hypothesized portfo-lio effect. Our results suggest that goal variety and formalization are positively related to per-formance, which partially supports our theory. In addition, we find that modularity has a cur-vilinear effect.