Purpose – Currently, organizations worldwide are witnessing environmental disruptions. This study explores ways through which organizations in service-based industries can learn and adapt to these disruptions. The study proposes that teams should pursue exploratory learning to augment their knowledge. Exploratory behavior facilitates team adaptive capability and team performance. Also, team members' positive mood and satisfaction levels are essential for enhancing exploratory learning and adaptive capability.

Design/methodology/approach – A survey was conducted at the team level. We collected data from project managers and team members from an Information Technology services organization. PROCESS macro developed by Hayes was used for mediation and moderated- mediation testing.

Findings – The study establishes that exploratory learning enhances team adaptive capability. Furthermore, adaptive capability mediates the relationship between exploratory learning and team performance. The study confirms that team positive mood moderates the relationship between exploratory learning and team adaptive capability. Moreover, employee satisfaction moderates the relationship between adaptive capability and team performance.

Originality/value – This study is an empirical study that adds to theory by establishing that adaptive capability mediates the relationship between team exploratory learning and performance in service organizations. For this, the team members must have higher positive mood and satisfaction levels.