Companies must be adaptive and flexible to remain relevant in the increasingly competitive and volatile market. However, finding the middle ground between innovation and core business is not straightforward because, while planning the organization’s future is necessary, it is also essential to guarantee the core activities, which generate revenue and profit.
That is why; as organizational leaders understand the importance of looking to the future without negatively impacting what works in the present, organizational ambidexterity is gaining strength and space in corporate cultures. Implementing ambidextrous actions, in turn, can be a significant challenge, often due to a need for more information and knowledge to structure it, in addition to the internal support necessary for success.
Corporations that successfully apply ambidexterity stand out and become references in the market. At the same time, the competition, which needs to have it or carelessly manages the process, may increasingly lose competitive space. In some cases, this mismanagement can even cause companies to cease to exist.
Some of the main difficulties that organizations encounter during the journey to become ambidextrous are reconciling the core business with new opportunities, maintaining process consistency, applying the practice with employees, and transforming the ambidextrous culture into an aspect of the company.
Understanding ambidexterity
There is no recipe for cake for an organization to develop ambidexterity. Quite the contrary, countless paths and possibilities vary according to the company’s strategy and objectives. Therefore, it is necessary to understand the level of ambidexterity in the corporation to take the next step.
However, there must be an understanding of all those involved, including employees and leaders, with the concept and objective. Therefore, all operational levels must understand the importance of ambidexterity and why it is being applied since those involved will deviate from their traditional activities to achieve this new objective.
It is essential that the entire company understands the relevance of the concept and is willing to implement it; otherwise, if there is resistance or a lack of clarity towards the idea, there may be false ambidexterity applied in the organization, causing the company to do not develop as you would like, generating disappointments. Therefore, holding meetings with the team, explaining the process, and allowing time for the team to get used to it is essential. Small steps and actions are necessary at the beginning of this journey so that employees gradually adapt and understand the purpose of ambidexterity.
In this other blog post, we comment more on the origin of organizational ambidexterity and its relevance for companies in the corporate world.
Organizational ambidexterity is divided into two fronts. One thinks about the organization’s present and how to keep the company sustainable, while the other front seeks to expand operations beyond the core business.
With the examples below, let’s understand what these two divisions are and how they work.
Exploration
A company that sells powdered coffee wants to expand its operations and decides to sell products made with coffee, such as sweets, supplements, and food. To enter this market, which was previously unknown, the organization began to study the food segment in more depth to understand the pain and demands. After the study, the coffee company prepares a business plan, develops the products, and tests them with the public to understand their viability. With the products tested and approved, the company starts producing them in quantity.
This is what we call exploration ambidexterity, in which the company seeks to develop new products, explore opportunities, and analyze potential markets. These innovative ideas will be analyzed to understand their viability, which aims to expand the company’s core activities and expand the corporation’s scope of action.
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Exploitation
We also have exploitation, the other side of ambidexterity, which consists of evolving, optimizing, and scaling the company’s core business. These incremental ideas will improve operations and keep the business model sustainable.
An example of this would be a company with several subsidiaries worldwide that must monitor all branches’ results. However, it needs help in gathering the necessary information. To fill this gap, the CEO decides to hold quarterly and face-to-face meetings with the managers of the subsidiaries to collect data, understand their performance, and make decisions for the corporation’s future.
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Exploration and exploitation are opposite but complementary operational processes. Exploitation seeks quick wins, and exploration aims to get out of the corporation’s comfort zone, thinking about conquering new products and unknown markets through bolder strategies and initiatives.
This division needs to be temporary despite the ambidexterity creating two strands in the company. Otherwise, it runs the risk of one of the areas becoming irrelevant and being isolated from the rest of the organization. Both aspects can start separately, mainly with exploration, which seeks new opportunities. Still, the divisions must be reintegrated into the company after a period.
Need help expanding your business? Check out our innovation barriers blog and see some obstacles that may hinder the company’s development.
Conclusion
The ability to lead is another fundamental part of organizational ambidexterity. In ambidextrous companies, the ability to lead is disseminated throughout the organization, not just at the highest levels of the hierarchy. This leadership is developed through employees’ autonomy so that they are free to make decisions in activities and organizational support, with their leaders stimulating and encouraging this independence. In this way, leadership becomes omnipresent at all company levels and ambidextrous.
Plastipak Packaging do Brasil participated in a Venture Hub agile acceleration program. The program consisted of transforming the company’s culture and implementing organizational ambidexterity in it, giving autonomy and protagonism to employees at all levels and sectors of the company.
“Venture Hub’s experience in the area of innovation has brought us a unique experience, making the staff motivated every day and extracting a lot of potential from each of them,” said Evandro Pereira, managing director of Plastipak do Brasil. Check out Plastipak’s journey to become an ambidextrous company by clicking here.
Organizational ambidexterity is gaining more relevance and presence in corporations as it structures a sustainable and scalable business model with multiple possibilities. Several companies use the concept in their operations and have become significant players in the market. Executives need to understand how their companies work to best implement ambidexterity, as it is becoming increasingly necessary for companies that want to remain relevant in the market.
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