So how do businesses organise their structures to be able to simultaneously manage the needs to exploit and explore innovation?
In this post I wanted to explain my thinking through on this ability to be ‘ambidextrous’, knowing the difference of when to exploit and when to explore as essential to leveraging innovation, in all its forms and watching out for some of the traps in not managing this well.
Managing this, in all honesty, though, is hard to get the balance right but highly valuable if you do achieve it, it can transform the business. Many of our organisations struggle to manage both successfully as they tend to focus more on separation mostly in organisational structures alone as their attempt to become ambidextrous. It is far more than ‘just’ this. Get the balance right across the organisation’s design and in its leadership management, it becomes a very powerful mechanism for accelerating performances by delivering significantly new innovation and equally sustaining and leveraging the core business you have today.
Recently I contributed a blog post over on the Hype Innovation Blog ” Balancing Exploitation & Exploration for Changing Performance” that opens up the subject but then extensively dives into three examples of Apple, GE and Google that are working in highly ambidextrous ways, pursuing exploiting and exploring in their own unique ways.
We never seem capable of adapting as well as we should do. Adapting always seems a work-in-progress, or it is often something where we are simply making little or no progress!
We often stay ‘stuck’ in the way we do ‘things’ around here, never seemingly able to break out into something new or different.
To adapt we need to open ourselves up to learning and adjusting our organizational ‘form’ in new ways.
In business there should be a constant battle to reconfigure the assets and extend the existing capabilities. Yet often these stay ‘static’ not learning or improving. In our innovation activities there is an even greater pressing need to build into our thinking the ability to find more dynamic capabilities. It is a constant innovator’s dilemma to think through and get right.
Do we know what are the dependencies and requirements for building and sustaining your organizations innovation success? How do you sustain innovation, is it more through the structuring of everyday work, by creating a particular set of social rules and resources that foster specific routines? Or something different?
We work really hard at maintaining these re-occurring processes, never willing to extend and push them in different and new ways. We have actually become very static in our approaches and learning, we are not learning anew. We often simply end up with incremental innovation that might just ‘nudge’ the growth needle but does little more than sustain us in the present and can be ‘contained’ in a tidy process that makes many, including the ‘bean counters,’ very happy until someone changes the game.
Then we need to think differently but this is usually far too late.. As demand is more volatile today we need to experiment, explore, learn and adjust. What becomes more important is the ‘work to be done’, and how we go about tackling this and not the ‘work done’ where we often simply ‘default too. Surprisingly Adam Smith identified this important difference in work way back in 1776.
Option pathways are those viable alternatives available when you are suddenly confronted with the need to change. By being proactive, anticipating and structuring the options ahead you can be more prepared for disruption, you can respond with more thoughtful reactions. Have you ever considered option pathways?
Having available options so you can react to sudden changes, as more sketched out scenario’s that are representing possible variables, the better prepared you might be to respond thoughtfully.
Preparation for blunting or neutralizing possible attacks, vulnerabilities and changing business conditions is more than helpful, because you have made some investments in different possible options and far more ready to respond in thoughtful ways and not simply in those knee-jerk reactions, simply needing to respond. Considered response, with significant parts already thought through can safe significantly on ill-considered ones.
I recently provided a post on a very ‘upbeat’ PwC report on innovation and its growing importance to growth in the coming years. The PwC report “Breakthrough innovation and growth” was a survey of 1,757 C-suite and executive respondents, on their thoughts on innovation and where the new growth was coming from in approach. The top line was companies are seeing innovation transforming their businesses and their need to take a more sophisticated approach to innovation, so as to achieve the growth plans they are setting for the next five years.
There was a strong indication that the innovation that was going to be pursued was going to follow a far more radical set of innovation practices that have the potential for offering a real impact on companies future growth ambitions.
Yet I have also been reading another report issued by Corporate Executive Board (CEB), a leading members-based advisory company called “Growth Readiness- prioritizing investments to drive executive commitment” discussing the secret to effective investment prioritization is demonstrating your organization’s readiness to pursue growth. (N.B You need to fill out the form to obtain the report)
Both correlate on the strong need for growth. CEB suggests as the global growth has stalled that in response, companies have planned to boost non-incremental growth investments by almost two-thirds. The CEB defines non-incremental investment as a large growth opportunity that requires some change to the business.Continue reading →