Ambidextrous Organizations Explained

Link to case study video: https://youtu.be/EW_PX50NAps

Transcript

What is an ambidextrous organization? In a nutshell, an ambidextrous organization takes care of current core businesses with the right hand, while taking care of innovation with the left hand, as physically separate business units.

So, the left hand innovation unit is independent to the right hand, with its own people, processes and culture. Yet the right hand and left hand are still the same body, so super tight coordination and alignment at the senior leadership level.

It’s an organizational concept made famous by Stanford and Harvard professors Charles O’Reilly and Michael Tushman with their 2004 Harvard Business Review article “The Ambidextrous Organization.” It’s also known as organizational ambidexterity.

The thinking is that organizations have current clients to serve and money right in front to be made. Meanwhile, innovation is often disruptive and cannibalizing to current core businesses. So asking business units to embrace innovation sounds good, but in reality, it’s a hard ask. Therefore, let the right hand continue to “exploit” current business to the max,and separately let the left hand “explore” future opportunities, literally, with a free hand.

In fact, the theory is closely tied to the late Clayton Christensen’s concept of Innovator’s Dilemma, the dilemma that good companies that do everything “right,” like diligently doing kaizen, continuous improvement, can still fail, by unexpected new market entrants. They get disrupted.

As in O’Reilly and Tushman’s 2007 follow-on paper, “Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma,” Organizational Ambidexterity is an operating model solution to Christensen’s Innovator’s Dilemma.

Organizational Ambidexterity finds ways for incumbent companies to become disruptors themselves. Today, practically all major multinational companies have innovation arms of one sort or another. There is no global bank that does not have an incubation center with colorful walls and no cubicles, right? So, although you won’t hear the specific term much, Organizational Ambidexterity has become a prevalent practice.

The big question is, is it working? Do Ambidextrous Organizations work?

There are so many pitfalls.

• The right hand meddling with the affairs of the left hand, forcing Waterfall project management, and quarterly and annual reporting cycles on KPIs typical to traditional management accounting.
• The left hand not being managed by the right type of innovation resources.
• Teams not being given enough training opportunities for learning new ways of doing, like Design Thinking, Lean Startup and Agile Scrum.
• And even for innovation teams that are well self-organized, functioning and producing,a constant challenge we hear is misalignment with senior management, and the lack of truly committed sponsorship.

These are all solvable challenges. That’s why there are Organization Development and Learning professionals like us, and we have many, many proven means of intervention to address these challenges.

Innovation is closely tied with change and transformation, so it’s not an easy feat and it will take time and perseverance. Nonetheless, we can make it work.

Ambidextrous organizations work, and exist.I actually have a case study to share. In this video interview here, you’ll see that: