Exploit and Explore: What is Organizational Ambidexterity?

By Govert van Sandwijk · April 16, 2019 · Posted in: Collaboration, Design Thinking, Leadership Development, Strategy Facilitation

Literally, ambidexterity is being able to use both hands with equal effectiveness. In organizations, it’s about balancing two seemingly opposed capabilities: Exploitation, and Exploration.

If the future were predictable, past performance would be the most reliable, straightforward way of knowing what lies ahead. We could then, quite relaxedly, focus our resources and efforts on analyzing what we did right, and what didn’t work so well.

Strategizing would be insanely simple. Competitive advantage would favor firms with the best insights into what’s already happened—what went right, what went wrong. How we could replicate and build on things that we’ve already done. Perhaps, it would be about having the most in-depth data or the most efficient way of assessing where we went right or wrong.

But we know the future isn’t clear-cut, so why are so many firms still so focused on the past? Why do some companies do so well while others sink, when the past is there for everyone to analyze? We know hindsight is 20/20, but it’s time for us to learn from the future, too.

Explore Exploit Organizational Ambidexterity

What is Organizational Ambidexterity? A Definition

According to organizational theorists O’Reilly and Tushman, ambidexterity is a dynamic leadership capability,

“to orchestrate the complex trade-offs that the simultaneous pursuit of exploration and exploitation requires” (O’Reilly III & Tushman, 2011).

Exploitation is what most companies already do well. It’s the 20/20 vision most businesses do well; it offers a sense of control because we can look at what’s around us and examine what we see. It’s about looking at the past and the present and knowing our strengths.

Some would say that exploration frameworks, models, techniques and approaches make up the vast bulk of what we’re taught at business school. We learn to critically appraise and select the best means of approaching strategy, but arguably, it’s fairly exploitation focused. We learn to identify past mistakes, reconfigure assets, restructure, conduct needs analyses, gap analyses, and basically value hard data.

Of course, they are often invaluable, but ambidexterity posits quite rightly that an over-focus on the past and the present is not enough. It doesn’t give us the whole picture. For a better chance at moving forward, therefore, we need to explore what that might be.

Strategic Exploration

I want to reassure you that there’s never a need for firms to stop learning from the past. The central premise of ambidexterity is that both exploitation and exploration help organizations succeed. My experience, however, is that our brains aren’t wired to embrace future uncertainty with quite the same gusto that we bring to exploitation. As leaders, we often face pressures to justify our decisions—and generally, ‘safe’ decisions are better received than risky ones.

Exploration is about looking forward. We don’t know what the future’s going to look like, but we can certainly branch out and explore our opportunities before going full sail ahead. As organizations, we can think of it as looking forward through the windscreen rather than driving with our eyes on the rearview.

All organizations are unique, as are the ways we go about exploring the future. Some companies will have divisions for each, some will approach exploration a completely different way, by going flatter and more open. In either case, ambidexterity will always be more successful if it’s part of your organizational culture. After all, without getting too ‘soft and fuzzy’, we’re all in it together.

How To Encourage Exploration

So, both exploitation and exploration are useful mindsets to adopt. But as our preference for exploitation shows, humans are naturally more tentative about what we don’t know. In the spirit of appreciative inquiry, let’s start by thinking about how powerful questions can be, and here are a few to start.

– Will our vision work in multiple different futures?

– What are three ways our industry might change significantly?

– Are there brand new markets we’d like to discover?

–  Where haven’t we been?

– And, what’s feasible there?

Learn more about perspectives, thinking, and ideas that can help you grow at our Time To Grow Global blog. Or, ask me any question at our LinkedIn.

References

Hughes, M. (2018). Organizational Ambidexterity: What is it and why should we care?. Retrieved from https://www.jmmnews.com/organizational-ambidexterity-what-is-it-and-why-should-we-care/

O’Reilly III, C. A., & Tushman, M. L. (2011). Organizational ambidexterity in action: How managers explore and exploit. California Management Review, 53(4), 5-22.

Govert is Time To Grow Global’s Managing Partner, specializing in Strategy Facilitation, Leadership development and Organisational performance. Reach him on our Time To Grow Global LinkedIn.

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