Established, successful companies are faced with unprecedented pressure to change. Quite simply, companies that do not evolve and discover new markets or new capabilities will, inevitably, fail. They must find opportunities in unfamiliar terrain, while also constantly improving in the core business. Designing ambidextrous organizations is a helpful way to align people for success in strengthening the core business while simultaneously innovating for an uncertain future. In the core, the emphasis is efficiency and incremental improvement. For explore, greater flexibility, autonomy, and experimentation are needed.
For example, let’s look at the media industry. How people purchase and consume content has drastically changed. There is increasing fragmentation in the viewer market where there is less reliance on traditional media, and more people access content anywhere, anytime. At the same time, cloud computing, big data, and AI are changing business processes and creating opportunities for media companies to establish direct relationships with consumers.
In order to remain relevant and competitive, media executives are learning to play two games at once: exploring entirely new opportunities whilst maintaining focus on the core customers, products, and services. We describe an approach to accelerate that learning in the article Tables instead of chairs: Designing ambidextrous organizations with multiple executive teams that I co-wrote with my esteemed colleagues Dr. Gabriele Becker and Professor Dr. Thomas Schumacher¹.
Bertelsmann University, the corporate learning unit of the Bertelsmann Group, held executive programs at Harvard University and Stanford University. The programs included sessions on Ambidextrous Organizations and Ambidextrous Leadership. Afterwards, the executives were interested in going deeper on these topics, so Bertelsmann University launched a Leadership Lab to support alumni. The objectives were to achieve more innovation, efficiency, and adaptability. Business leaders across all industries can benefit from the approach. Let’s delve into the Leadership Lab process and key takeaways from the executive participants.
Accelerated approach to strengthen ambidextrous organizational design and leadership team effectiveness:
“Tables Instead of Chairs”: Each executive brought 2 to 4 colleagues from their organization, because ambidexterity is not just an individual leadership endeavor. The team brings perspective on how to manage the tensions that arise between core and explore.
Designing Ambidextrous Organizations: Each business unit had its own requirements. They were defined based on the innovation portfolio, deciding the degree of separation needed for exploratory innovation, and identifying the integrating mechanisms to leverage capabilities in the core.
Focusing on the Disciplines of Innovation: Success in explore requires mastery of three distinct disciplines: ideation – developing ideas for potential new businesses; incubation – validating the ideas in the market; and scaling – reallocating existing assets and capabilities to help the new venture grow.
Experiences and Results: The teams participated in cross-team dialogues, providing an opportunity for participants to learn from each other. The dialogue deepened everyone’s understanding of where they are and need to be, and how to get there.
Upon completing the Leadership Lab, all participants were prepared to strengthen their organizational design to execute their innovation priorities. They established a shared understanding of their challenges and learned how to increase their odds to capture new sources of growth.
As evidenced by the experiences and outcomes of the Leadership Lab, you, too, can strengthen organizational alignment: separate the core from explore, identify where to integrate, take a disciplined approach to innovation, and talk to other executive teams.
Want to know how you can create an ambidextrous organization? Contact us to learn how you can ideate, incubate, and scale new businesses within your organization.
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¹ Dr. Gabriele Becker, Co-Head of Leadership Programs at Bertelsmann University, and Professor Dr. Thomas Schumacher, Editor of OrganisationsEntwicklung, Professor of Organization and Leadership at the Catholic University of Freiburg, and Research Program Leader and Lecturer at the University of St. Gailen.
By Kristin von Donop, Principal