Family businesses are beginning to recognize the advantages of agile working methods in an ever-changing market environment. Consequently, many initiate a transformation process towards more agility, especially in the innovation departments. With this transformation process, they find themselves in a paradoxical situation. While their core business is characterized by excellence and zero error tolerance, in their innovation department, they aim to learn from mistakes quickly to become more innovative. Additionally, there often is knowledge imbalance between employees in the operational business and employees in the innovation departments. To comprehend how companies balance excelling in their core business while learning from mistakes to drive explorative innovation, we conducted a multi-case study of seven family businesses. Our findings extend current literature, revealing that operational and innovative business units are subject to different rule-based frameworks within which they can actively operate. These frames allow for performance in various business cultural environments. Our findings reveal that convergence and divergence cannot be considered separately when striving for long-term success. Although our case companies are family-owned, our findings are relevant to all types of companies characterized by a high value-based corporate culture and facing paradoxical strategies.
