CLIENT NEED: NEW GROWTH ALONGSIDE THE CORE
CLIENT NEED: NEW GROWTH ALONGSIDE THE CORE
Ambidexterity
Ambidexterity
We help leadership teams establish the distinct disciplines new businesses need, protect the performance of the core and decide where the two should connect.
We help leadership teams establish the distinct disciplines new businesses need, protect the performance of the core and decide where the two should connect.
Why Ambidexterity?
Why Ambidexterity?
The core and a new business face different demands.
The core and a new business face different demands.
The core must deliver reliable performance. A new business must learn which customers, propositions and economics can support growth. Applying the same measures to both can prevent the new business from developing.
The core must deliver reliable performance. A new business must learn which customers, propositions and economics can support growth. Applying the same measures to both can prevent the new business from developing.
The new business needs room to develop and access to the core.
The new business needs room to develop and access to the core.
The new business may need different measures, skills and investment disciplines while still depending on the core for customers, expertise and funding. Leaders decide where separation is necessary and where connection creates advantage.
The new business may need different measures, skills and investment disciplines while still depending on the core for customers, expertise and funding. Leaders decide where separation is necessary and where connection creates advantage.
Senior leadership holds the two agendas together.
Senior leadership holds the two agendas together.
A separate unit does not resolve the tension by itself. Senior leaders must allocate resources across both businesses, judge progress against different evidence and resolve conflicts over customers, talent and attention.
A separate unit does not resolve the tension by itself. Senior leaders must allocate resources across both businesses, judge progress against different evidence and resolve conflicts over customers, talent and attention.
Ambidextrous Organization
Ambidextrous Organization
The core and emerging businesses need different ways of working. Senior leaders create the conditions for each to succeed and decide where connections between them create an advantage.
The core and emerging businesses need different ways of working. Senior leaders create the conditions for each to succeed and decide where connections between them create an advantage.
Senior leadership holds the tension.
Senior leadership holds the tension.
Senior leadership team
Senior leadership team
Differentiate where the work requires it. Connect where the businesses depend on one another.
Differentiate where the work requires it. Connect where the businesses depend on one another.
Core business
Core business
New business
New business
Align each operating unit to its work.
Align each operating unit to its work.
Core operating unit
Core operating unit
Core operating unit
Core operating unit
New-business operating unit
New-business operating unit
Senior leaders set the shared ambition, protect the differences each business requires and make the connections that allow both to perform.
Senior leaders set the shared ambition, protect the differences each business requires and make the connections that allow both to perform.
A shared ambition explains why the company needs both businesses.
A shared ambition explains why the company needs both businesses.
Leaders explain why the company needs both, how each contributes and which commitments they are prepared to make.
Leaders explain why the company needs both, how each contributes and which commitments they are prepared to make.
Different demands require different organizational arrangements.
Different demands require different organizational arrangements.
The new business may need its own people, skills, incentives and culture. Its progress must be assessed against evidence appropriate to its stage of development.
The new business may need its own people, skills, incentives and culture. Its progress must be assessed against evidence appropriate to its stage of development.
Separation and connection must be designed together.
Separation and connection must be designed together.
Leaders decide which activities need autonomy and which core assets the new business needs to access. Those relationships require explicit commitments from both sides.
Leaders decide which activities need autonomy and which core assets the new business needs to access. Those relationships require explicit commitments from both sides.
The senior team takes responsibility for the tensions.
The senior team takes responsibility for the tensions.
Conflicts over funding, customers and talent cannot all be settled within either business. Senior leaders hold the tension, make the trade-offs and uphold the decisions together.
Conflicts over funding, customers and talent cannot all be settled within either business. Senior leaders hold the tension, make the trade-offs and uphold the decisions together.
Building a new business requires innovation and organizational change.
Building a new business requires innovation and organizational change.
Innovation develops and tests the opportunity. Organizational change creates the leadership commitments, capabilities and connections needed to turn it into a business.
Innovation develops and tests the opportunity. Organizational change creates the leadership commitments, capabilities and connections needed to turn it into a business.
Innovation develops and tests the opportunity.
Customer discovery and business experiments build evidence about the customers, proposition and economics that can support growth.
Organizational change creates the conditions for growth.
Leadership commitments, capabilities and designed connections to the core enable the new business to develop without applying the core’s expectations too early.
Leaders make different decisions as an opportunity develops.
Leaders make different decisions as an opportunity develops.
These are disciplines leaders revisit as evidence develops. Scaling can expose assumptions that require further testing.
These are disciplines leaders revisit as evidence develops. Scaling can expose assumptions that require further testing.
Ideate
Ideate
Decide which opportunities deserve investigation.
Decide which opportunities deserve investigation.
Define the growth ambition, identify customer problems and develop business concepts. Make assumptions explicit so the team knows what it needs to learn.
Define the growth ambition, identify customer problems and develop business concepts. Make assumptions explicit so the team knows what it needs to learn.
Incubate
Incubate
Decide what the evidence justifies.
Decide what the evidence justifies.
Test the value proposition and revenue model through experiments. Use the findings to invest further, learn more or stop.
Test the value proposition and revenue model through experiments. Use the findings to invest further, learn more or stop.
Scale
Scale
Build the organization the business now requires.
Build the organization the business now requires.
Put leadership, skills, structure and culture in place for sustained growth. Secure the commitments and core relationships needed to move beyond experiments.
Put leadership, skills, structure and culture in place for sustained growth. Secure the commitments and core relationships needed to move beyond experiments.
Different leaders carry distinct responsibilities.
Different leaders carry distinct responsibilities.
Senior leaders own both agendas.
Senior leaders own both agendas.
They make choices across the portfolio, protect the conditions each business needs and resolve competing commitments.
They make choices across the portfolio, protect the conditions each business needs and resolve competing commitments.
New-business leaders develop the opportunity.
New-business leaders develop the opportunity.
They lead experiments, build customer understanding and assemble support across the company as the opportunity develops.
They lead experiments, build customer understanding and assemble support across the company as the opportunity develops.
Innovation leaders connect the work across the company.
Innovation leaders connect the work across the company.
They establish methods, support the teams and bring decisions that require senior attention to the right forum.
They establish methods, support the teams and bring decisions that require senior attention to the right forum.
We help your leadership team make these choices and apply the methods to your business, building your team’s capability to lead the work.
We help your leadership team make these choices and apply the methods to your business, building your team’s capability to lead the work.
Research for this work
Research for this work
Selected books from our professors that deepen the questions examined in this offering.
BOOK
Andrew Binns, Charles A. O’Reilly and Michael L. Tushman · 2022
BOOK
Charles A. O’Reilly and Michael L. Tushman · 2021
BOOK
Winning Through Innovation
Michael L. Tushman and Charles A. O’Reilly · 2002
RELATED IDEAS
Research and perspectives for this client need.
Research and perspectives for this client need.
Excelling at one or two of the three stages of disruptive innovation is unlikely to lead to success. If a firm generates new ideas but cannot adequately determine which are likely to succeed as a new business, it will waste resources on unsuccessful ventures.
Joel M. Podolny and Morten T. Hansen’s article in the December 2020 edition of the Harvard Business Review, “How Apple Is Organized for Innovation,” is a fascinating read.
This article is reprinted with permission from Fast Company.