This paper explains the paradox of successful hierarchical failures in multi-businesses firms’ renewal. Despite the corporate advantage that multi-business firms bring to their units through the hierarchical interventions from parents, value-destroying parental interventions are well documented. Yet, how such value destruction can be overcome is a process that has received little scholarly attention. We conducted an in-depth longitudinal case study of a major firm attempting to cope with defense industry challenges. Case data showed how the parent intervened in an advanced unit to facilitate in coordinating synergies throughout the hierarchy, but impeded corporate development; the parent had to exploit the unit’s knowledge in becoming experienced to facilitate the exploration learning needed throughout the corporate hierarchy. To explain the process, we introduce the concept of conflict-based learning. Our analysis shows why practices of framing, empowering, and understanding can help counteract the value destruction that occurs in parent and business unit exchange.