Interplay between Innovation Ambidexterity and Business Performance in the Indonesian Professional Services Industry

Purpose: Professional services organizations are crucial in promoting innovation and enabling expansion across diverse industries. The professional services business has several hurdles in terms of its innovative maturity level, notwithstanding its potential. Although the notion of innovation has been extensively studied, there is still a paucity of studies on the factors that influence innovation and business performance in the professional services industry. To provide an empirical study on the interplay between innovation ambidexterity and business performance, espe-cially with the influence of customer trust and co-creation, becomes the objective of this study. Design/methodology/approach: This quantitative research involves using a structured survey instrument and em-ploys a convenience sampling technique. An analysis is conducted with a structural equation model (SEM) and SmartPLS4 software version 4.1.0.0. Data was collected from 104 Indonesian professional industry employees. Findings: This study concludes that innovation ambidexterity significantly influences business performance. Innovation ambidexterity is also found to be a partial mediator between customer trust and business performance and between co-creation and business performance. Research limitations/implications: This work contributes to the advancement of Dynamic Capabilities Theory by providing valuable insights. Additionally, it offers management implications in formulating strategies for improve-ment in the innovation environment and business performance. Originality/value: This study addresses the lack of information on the factors that affect the ability to balance exploration and exploitation in the professional service industry, and how this ability relates to the success of a business.