Ambidexterity, the Holy Grail of Corporate Innovation… but what is the meaning of this word? Why is it so difficult to attain? The concept is easy to understand, being able to use both hands indistinctively, but applied to business practice. That is, the capability of excelling in regular operations while having a worthy innovation practice. In order to explain my point of view, I will use an analogy with Physics, Nuclear Fusion in this case, another phenomenon “easy” to explain but very difficult to do.
The first time I heard about the “ambidextrous” organization using that specific term was from my colleague and mentor Paco Bree, during the Master in Business Innovation I enjoyed some years ago. The concept is very easy to explain and, as far as I know, was introduced by Duncan in the 1970’s and expanded by March in the 1990’s, although the reference I prefer is the article “The Ambidextrous Organization” from O’Reilly and Tushman published in HBR during 2004 (https://hbr.org/2004/04/the-ambidextrous-organization). The idea from Clayton Christensen about disruption and incumbents is not far from the mark either.
Let me explain the basics. In a company you need to keep the business running: manufacture, provide services, sell, marketing, accounting, quality, etc. We will call this, “exploitation”, because we are using the company’s assets to generate business and value for the shareholders and society, that is, to keep the company running. In order to properly manage this exploitation, or the “operational cycle” as I like to call it, you need to excel at qualities like efficiency, predictability, quality, performance, control, etc. In a few words: “I don’t like surprises”.
However, even if you do all those things very well, the future (and specially the longer term future) is not guaranteed because conditions change, technology advances sometimes in unexpected ways, there are new entrants in the market and even some “black swans” like the pandemic we are living. So, although organizations that are properly managed can many times react, it is not always the case, so you need to get ahead of the change, to focus on “exploration”. I like to call this the “innovation cycle” and things like experimentation, failure, imagination, connection, risk, etc become fundamental to properly explore. Again, in a few words: “Let’s be surprised”
So, here the conundrum then, exploitation and exploration, keep the company running while you get ahead of the change. Simple, right? Wrong… very difficult indeed, and I am sure that if you work in the innovation world, you will have personally experimented this and, maybe even on both sides of the spectrum. If you work in a big corporate, operational excellence is all around, but freeing the time or the people to experiment is a big challenge. On the other hand, in a start-up, ideas fly around all the time, but the difficult part is actually making a profitable and repeated business out of them.
But why is so difficult? Well, there are a myriad of reasons. The main one is that, as you could see above, the “virtues” that we look for are opposite in many cases, or at least orthogonal, and as we hire (or promote) according to our needs, then we have people that are good in one cycle and not in the other. There are other factors which relate and support this first one, like accountability (what shareholders ask from us), time perception, risk tolerance, partnerships and others.
Of course, it is not impossible, and some companies have designed strategies to play evenly in both cycles. For instance, having different teams with different processes and even in different premises to allow them to thrive. However, the trick in this setup is the connection between them, so that operation accepts what innovation brings, and innovation keeps an eye on the reality of the company. Actually, I heard it being called “the bicycle”. The operational cycle would be the back wheel, which should provide steady traction allowing the company to move, while the innovation cycle would be the front wheel, exploring the path and leading the company into the future. But they need to function in a connected and well understood manner, which is the role of the frame in a bicycle, and this proves also to be significantly complex (as most human issues are).
So, let me bring up an example related to the Physics of Innovation that, as you know if you are a reader of the blog, I refer to from time to time. Let’s think about Nuclear Fusion, and as I always say, allow me to remain generic for the sake of simplicity. The concept is “easy”, we get two atomic nuclei (normally Hydrogen isotopes) very close and they bind together into a Helium nucleus releasing a big amount of energy in the process. This is how stars function, the energy released from the star coming from fusion of Hydrogen into Helium. But to do so, the conditions of pressure and temperature need to be extreme, generated by gravity and other phenomena, in order to overcome the electrostatic repulsion the two nuclei experiment. And here the analogy to ambidexterity, a simple concept to define and a very difficult thing to do because we are trying to bring together two cycles which fundamentally “repel” each other.
Can we generate Nuclear Fusion “artificially”? Well, we are trying… different projects like the ITER or the private efforts from Helion and others are working on it, aiming to generate those extreme conditions that will allow the reaction to be triggered. We are still not there, and there is still a lot of work, but we seem to be getting closer. So, in our business world, the analogy would be getting explorers and exploiters very very close together, mixing them, which may trigger the reaction, allowing both to understand the point of view of each other and operate in both cycles at the same time in a coordinated and connected way, exploiting and exploring at the same time. However, in general, the effort in terms of “company energy” is sometimes too great and difficult to maintain, so people fall back to “business as usual” into their more comfortable initial positions, so both cycles become disconnected again or even one of them completely disappears (the rigid incumbent or the never profitable start-up)
Is “cold fusion” possible? Triggering the fusion without those extreme conditions and thus, without such a great initiation energy. There were some claims some years ago, but they were never demonstrated. Who knows what the future will bring and I will not be the one to say it is impossible, because human ingenuity keeps breaking barriers that were “impossible”. But I hope that in the realm of business innovation, we would be able to find soon a different approach, linking the operational and innovation cycles in an ingenious way that does not need to solve the “repulsion” problem because it simply would not be necessary… And this all starts by talking to each other. Are you ready to talk?