What Is Organizational Ambidexterity?
Organizational ambidexterity is a concept linked to the corporate universe that designates the search for operational efficiency and the capacity for innovation – that is, it values balance.
It is the ability to look to the future, anticipating trends and exploring opportunities, without neglecting the present, thinking about sustaining the business.
Surely, you’ve heard of ambidexterity, but in another context.
When we hear that a person is ambidextrous, we understand that he has the motor capacity to perform tasks with both the right and left side limbs.
In a way, this is what happens to organizations that apply this concept.
Using the analogy, operational efficiency could be a right-handed person, and the pursuit of innovation, a left-handed person.
By bringing the two sides together, we have perfectly balanced , ambidextrous capabilities.
To better understand how organizational ambidexterity works, we need to talk about the two fundamental pillars of this management model: exploitation and exploration.
Sustaining Innovation (Exploitation)
When we talk about exploitation, we refer to innovations that help increase your core business , based on the mutual contribution of employees to strengthen processes and products.
An example in this sense is when a streaming company invests in content of its own production , such as a series or an original film, and stops only reproducing third-party material.
This makes these organizations, such as Netflix and Amazon Prime, for example, increase their profit margin and gain autonomy and authority in the segment.
Another successful case is Apple, which annually launches new iPhone models, with more modern features, attributing more and more value to the brand.
Growth Innovation (Exploration)
The term exploration refers to innovations that take the organization to a new level .
This is when, for example, a company conquers a new market or undergoes a brand repositioning and starts operating in a completely different segment.
This is a complex step, as it requires working with variables that are not easy to predict .
To stick to the same example as the previous topic, we can analyze that Netflix followed a trajectory based on exploration.
About 10 years ago, the company operated in the field of remote rental of movies and series.
Then he migrated to a content producer, focused on streaming service.
Of course, by going through such a disruptive transformation, Netflix took risks , but this innovation was something necessary and that was already painted on the horizon.
This does not mean, however, that an organization needs to live solely on innovation.
The secret is to mix safe and well-known investments with those that involve some risk in search of new trends.
Thus, we return to the synthesis of organizational ambidexterity.
How Does Organizational Ambidexterity Work?
Organizational ambidexterity is not an exact science and may depend on a number of factors, such as, for example, the estimate in innovation management and the type of market the company is in.
When looking for an incremental innovation, based on sustaining measures, the short and medium term may be sufficient for its implementation.
On the other hand, when the scenario calls for more radical growth measures, based on exploration actions, more time is needed to put them into practice and achieve the expected results.
Differences also appear according to the business niche.
In a more competitive market, where companies compete for the same audience, support actions tend to work better.
In environments that are more open to new opportunities and that work with more dynamism, the innovation explored can be better received.
We are only talking about external issues (dynamism and competitiveness), but we cannot forget about internal factors.
Organizational ambidexterity essentially depends on an integration of processes and people to function.
Without strategic planning , just taking care of what surrounds the company will be insufficient.
Advantages Of Organizational Ambidexterity
In case you are still in doubt whether the implementation of organizational ambidexterity is a good strategy for your business , here are some advantages that can help to end the uncertainties:
- Faster and more sustainable development
- Gaining a competitive advantage
- Balance between effectiveness and efficiency
- increase in productivity
- Teamwork growth
- Continuous process improvement
- Greater exchange of knowledge and learning .
The Challenges Of Organizational Ambidexterity
It is not because there are numerous advantages in implementing organizational ambidexterity that we are talking about a simple process.
Seeking a balance between operational efficiency and the search for innovation has its challenges.
More traditional companies, for example, may feel apprehensive when trying to promote disruptive innovations fearing the risks they require and the time needed for results to appear.
Mainly because the budget , whether to promote incremental actions or for exploration measures, is the same.
That is, whenever there is competition, the tendency is for these organizations to opt for innovations that have a more secure ROI .
This makes it difficult for many businesses to have a long-term plan and to put a brake on their own growth.
Ways To Apply Organizational Ambidexterity In A Company
The concept of organizational ambidexterity is already known, but did you know that there are three ways to apply it?
Know the differences between structural, cyclic and simultaneous ambidexterity:
Structural Ambidexterity
It is a model where there is a division in the workforce .
While there is a team dedicated only to operational activities, another team takes care of the innovation area.
Here, the functions coexist, but they are performed by different professionals at the same time.
Cyclic Ambidexterity
In the cyclic model, there is a rotation in the focus of activities.
During a period, the focus is on operational, and then, it moves to innovation.
Here, all professionals work on both fronts, but at different times.
Simultaneous Ambidexterity
It is the model that unites a little of the two previous ones .
The structural side is due to the absence of cycles.
There is no division of focus, and sustaining and innovation carry the same weight.
The cyclical side is that all professionals start to have an ambidextrous look , with responsibilities under both prisms.
BCG Matrix And Innovation
The BCG matrix is a methodology that can be very useful in the innovation management of a company, as it offers a graphical analysis of an organization’s product catalog.
The model is divided into quadrants, each of which represents a product stage:
- Bet (high growth, low market share)
- Star (high growth, high market share)
- Dairy cow (low growth, high market share)
- Pineapple (low growth, low market share).
In this case, the bet is an innovation of growth , as we are talking about a promising market, but which still does not have a good share.
The star and the dairy cow, on the other hand, are sustaining innovations , as long-term investments have begun to bear fruit and have become successful realities in the market.
The Relationship Of Organizational Ambidexterity And Startups
When we think of startup , it is impossible not to think of disruptive innovation.
After all, the raison d’être of these companies is to deliver new solutions or improve existing ones through scalable, repeatable and technological business models.
From this synthesis alone, you can already understand its relationship with organizational ambidexterity, right?
Startups are highly requested by mature companies to develop exploration actions , which can range from taking advantage of existing demands, but in markets not yet addressed, to new demands in emerging markets.
That’s because they have the skills and agility to take advantage of these opportunities.
Ah, but what about the risks involved?
With the incremental sustaining actions developed by the mature organization , they decrease, and the partnership is more likely to be successful.
Examples Of Companies Using Organizational Ambidexterity
To demonstrate that the balance between operational efficiency and the search for innovation is the key to success in the corporate environment, check out these examples of companies that have organizational ambidexterity as a strategy:
Ford
The case of Ford is classic.
It is a demonstration that organizational ambidexterity is not necessarily related to technologies, but to suit the reality of the time and trends.
When launching the Ford Model T, in 1908, the automaker invested in an exploitation strategy, as it was a revolutionary vehicle for the time (cheap and simple, but safe and robust), which caught the public’s attention.
The fact that it is easy to maintain has also made the model even more popular.
However, Henry Ford believed he could go further .
The orders for the car were so many that the company could not keep up with the demand.
That’s when, in 1913, the businessman had the great idea of creating a production line .
With this exploration innovation, in addition to vehicles being able to be produced faster and on a large scale, the cost was lower, efficiency increased, and the company created more jobs.
In other words, everyone gained from this initiative.
The model was replicated in much of the world and, in a short time, Ford cars began to be assembled in several countries.
Amazon
This is a very contemporary example of one of the companies that most uses organizational ambidexterity.
Amazon started with an e-commerce of e-books and today, in its sustaining phase, it sells all kinds of goods on its digital platforms.
Still, it continues to explore new niches, such as Amazon Go, a product of its disruptive innovation.
Doing the reverse process of many brands (migration from physical to online), the company founded by Jeff Bezos has in Amazon Go a project of network of physical convenience stores.
Initially present only in the United States, and now also based in London, the initiative’s main attraction is its structure without boxes and checkout processes.
First, the consumer enters an Amazon Go through a turnstile that grants access with the support of a smartphone app .
Then, the most interesting part begins: he carries out his purchases normally, but when it comes to paying, he doesn’t have to do anything.
After all, all purchased items are automatically registered in the virtual shopping cart and charged to your online account.
The technology behind this system is in charge of different methodologies , such as artificial intelligence , internet of things , machine learning , among others.
Adobe
Adobe is a leader in the media editing software market, but for a long time, it has suffered from a very common problem in the business world: maintaining recurring revenue .
Until a few years ago, if you wanted to use an Adobe program, all you had to do was pay a fixed amount, buy the license, and have it forever.
This dynamic created a difficulty, getting customers to update their programs every year.
After all, who would want to “buy again” software they already own, just because of a few changes?
What the company realized was that only new customers bought the most current version.
Those who already had the program waited several years to upgrade, only when there was a more impactful change.
That’s why Adobe leveraged its organizational ambidexterity and changed the procurement system .
Now, anyone who buys any Adobe program needs to create a Creative Cloud account and hire a monthly subscription plan to use the desired software.
You can buy a package of just one program or make a combo, and there are special plans for companies, students, several different profiles.
In practice, the action was of support, as it brought stability and revenue security that did not exist before.
At the same time, it was a disruptive measure, as it found an innovative way to make money that led to growth.
Microsoft
Perhaps the greatest example of organizational ambidexterity is Microsoft, which demonstrates a lot of balance in its catalog of innovations.
In terms of support, the company, which is one of the largest software manufacturers in the world, has diversified its range of products .
In addition to developing programs for computers, he went on to create other merchandise, such as the Xbox video game and Lumia smartphones, for example.
This made it reach other markets and value its brand .
Speaking of disruption, in 2014, Microsoft stopped being a closed innovation company and opened the door for external programmers to develop solutions.
All to improve the customer experience.
Tupperware
Tupperware is revolutionary for its time in many ways.
The first of these is the quality of the product.
Created in 1944, the housewares brand has always used a light and resistant plastic, which was not available on the market until then.
The second point of innovation was the ways to demonstrate and sell the products.
Today, home and magazine sales seem outdated (in fact, they’re not), but at the time, they were big hits.
In addition to saving on renting physical stores and hiring numerous employees, the approaches helped to demonstrate the versatility of the products, especially when visiting homes.
Finally, Tupperware was one of the first companies to employ women en masse, ensuring they could generate their own income from the sales they made.
In addition to being innovative initiatives, which made the brand’s growth possible, they are also sustaining measures, as they served as the basis for medium and long-term planning.
Intel
Sometimes, sustaining and growing initiatives are so simple that we doubt their effectiveness.
Today, Intel is a well-known brand, one of the main developers of computer processors in the world, but it wasn’t always that way.
The company was born in 1968 and, in the early years, because its product was invisible, since it was hidden inside machines, the general public did not know who Intel was.
Until, in 1990, in a co-branded strategy, the brand began to include a seal on all equipment in which it had a component installed.
You may be reading this article on a laptop sporting a sticker that says “Intel Core iX Xth Gen” or something similar.
From an unknown brand, Intel has gone from being a company worth billions .
Apparently the little sticker worked.
How To Develop Organizational Ambidexterity In Employees?
As we have seen, internal strategic planning is fundamental for the implementation of a culture of organizational ambidexterity in companies.
That is, for it to work, it is vital that employees have this awareness as well.
Therefore, the first step is to define the ambidexterity application model early on .
All have their pros and cons, but the most complete is still the simultaneous.
After all, each employee has the chance to take care of both the operational part and the innovation sector at the same time.
A unique opportunity for them to understand the importance of balance between the two pillars and keep in mind that the company’s success depends on it.
Defining the ideal model, valuing knowledge, encouraging innovation and continuous improvement will help to develop organizational ambidexterity among employees.
