In response to the growing need for resource mobilization, public innovation and democratic legitimacy, co-creation is on the rise in the public sector in most European countries. Public and private actors are invited to engage in collaborative efforts to produce innovative public value solutions based on a distributed exchange of knowledge, ideas and resources. However, co-creation is introduced into a relatively hostile environment in which classical forms of bureaucracy blend with elements of New Public Management. The ensuing clash between horizontal and collaborative co-creation processes and the preexisting institutional commitment to hierarchy, competition and control-based performance management gives rise to a series of tensions that may take the form of conflicts, dilemmas and paradoxes. This paper explores the repertoire of strategies for coping with these tensions. It suggests that the coping strategies applied by public managers may more or less reactive or proactive. The use of proactive coping strategies creates a constructive hybridization that seeks to align co-creation with entrenched governance paradigms.