Companies must be ambidextrous: they must focus on winning the present while at the same time laying the foundation to win the future. The challenge is that emphasizing one priority can undermine the second. A recent study offers some guidelines for overcoming the challenge of ambidexterity by examining key factors – sometimes complementary, sometime conflicting – that enable companies to focus on the present and the future.
Ambidexterity involves two goals that are often at odds:
exploitation – successfully competing in the present with quality products and services, superior execution, and successful marketing; and
exploration – preparing to win the future through investments in R&D and innovation and acquiring the knowledge to anticipate changes in the business environment.
How can companies navigate the ongoing, conflicting demands of ambidexterity? Recent research examining the antecedents of ambidexterity – the factors in place at the company that will support exploitation, exploration or both — offers some guidelines.
The research analyzed four ambidexterity antecedents: the composition and size of top management teams; the existence of a clear, written vision; the extent of investment in R&D; and a commitment to a company-wide continuous improvement process.
The study, based on a survey of 422 small to medium-sized UK companies, showed that:
The challenge for pursuing both exploitation and exploration is finding the right balance. This research highlights factors in a company that can cause a conflict between these two components of ambidexterity – for example, over-investment in R&D might benefit the company in the long-term but can undermine the company’s current success.
On the other hand, the research also identifies complementary factors that benefit both exploitation and exploration, such as continuous improvement and a diversified top management team. Thus, leaders in organizations are no doubt aware of the tensions between exploitation and exploration, but they should also be encouraged to find the complementary managerial choices – recruiting a diverse top management team and implementing continuous improvement processes – that help their organizations win the present and prepare for future success.
Disentangling the Antecedents of Ambidexterity: Exploration and Exploitation. Oksana Koryak, Andy Lockett, James Hayton, Nicos Nicolaou & Kevin Mole. Research Policy (March 2018).
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