The concept of ambidexterity – of balancing disruption, innovation and change with stability and enhanced efficiency – is not unlike the age-old argument about the difference between management and leadership. Management is about efficiency, deadlines, timeframes and structures, while leadership is the broader, more creative art. But this need no longer be the case. This research highlights how an organisation’s leadership can simultaneously encourage the logic and creativity required for innovation while exploiting the functions necessary for efficiency. In other words, it is possible to straddle both realities, just like Dr. Strange.
In the paper, we explore how leaders can use the ambidextrous continuum to understand the current organisational change logic at play and then fine-tune the approach based on the requirements of future strategy. In other words, you can both exploit and explore, be efficient and innovative, and stable and agile if you know where you sit on the continuum and where your business intends to go in the future.
Where is your business positioned?
When examining ambidexterity, the first point to consider is whether your business is positioned to deal with change and ambiguity. The ambidextrous nature of an organisation ultimately influences how it deals with change, the type of people it employs and whether the focus is on exploit (efficiency) or explore (innovation) activities.
Of the companies spoken to, those with an exploit function were likely to have centralised decision-making processes and structures, making them more complex and less easily changed. Leadership roles were more formal and integrated, and strategy had to be communicated clearly and throughout the organisation, thereby taking up more management time and energy. The smaller, more knowledge-based organisations were flatter in structure and easier to shift, with teams enjoying greater autonomy and empowerment.
While these mark two ends of the continuum, all companies have to deal with business impacts and external changes; they need to maintain processes and routines, enhance competitive advantage and navigate operational changes. Many of these functions bog leaders down as they strive to navigate operational challenges amid external change. Focus too much on the systems, and the market change might take you by surprise. Focus too much outside the business, and the perceived continuous requirement for change might hinder actual implementation and efficiencies. This is why the ability to switch between these two considerations, and also integrate them in stages, is a key leadership skill.
This human face of organisational ambidexterity was at the heart of the research, drawing attention to the capabilities required of leaders and underlining the importance of hiring the right people with the skills necessary to straddle operational and innovation requirements.
A practical aside
This research was conducted in a pre-Covid world when international travel was undertaken at the drop of a hat, when people sat face-to-face in meetings, bumped into each other at office coffee shops, shared working spaces, and where managers and leaders had physical oversight of their employee’s behaviour and work output. Covid has, without a doubt, changed this dynamic and complicated matters for leaders.
After the initial flurry of activity to get people working from home and communicating effectively online, it became easier to fine-tune and coordinate communication with teams and individuals. But it also became clear that digital platforms accentuated personal differences and personality quirks, requiring managers to be even more in tune with their teams and their specific contributions to the team. This put the focus squarely on the ability of leaders to navigate change, on the one hand, while instituting processes that keep the organisation ticking over – even from a distance.
Last year, Harvard Kennedy School Professor Ricardo Hausmann penned an article entitled ‘Why Zoom Can’t Save the World’. The technology, the webcasts, and the ability to talk to thousands of employees through this technology were all well and good from a functional perspective, but when you need to be innovative, or when you need to run a big project, then, he argued, you inevitably need to be in the same room. The current shift towards digital communication fits in comfortably with a culture of efficiency (an exploit focus), but what about the explore part? Is innovation, as Hausmann argues, not well served by these online platforms because, by their very nature, they are not ambidextrous?
This brings us back to the dichotomy this research highlights so well: the efficiency vs innovation continuum, which goes hand in hand with exploit vs explore and stability vs agility considerations.
If anything, the events of the past year have highlighted how easy it is for organisations to fall back into the comfort of structure and routine while forgetting that the future is where the potential lies. If ever there was a time to equip your company with leaders who can simultaneously focus on both efficiency and innovation, it is now.
About the research
GIBS alumna, Liezl Bell, and Professor Karl Hofmeyr’s paper, Enabling organisational ambidexterity: A leadership perspective, was born out of Bell’s well-received MBA research report, which inspired Hofmeyr to suggest a collaboration. Their paper appears in the South African Journal of Business Management and set out to explore how leaders managed a continuously changing environment while dealing with potential organisational hindrances, which stood in the way of developing an ambidextrous culture and business processes. The research aimed to produce a practical framework of change processes and capabilities required by leaders and insights on enabling these within an ambidextrous organisation.
Three research queries underpinned the study: understanding how organisations were currently structured to deal with change; how leaders managed structural shifts; and the capabilities leaders required to manage change with an ambidextrous approach.
Eleven respondents took part in the study, each on a middle management level or higher and who had a role to play in devising, enacting or influencing their company’s change processes. The final sample consisted of four female and seven male participants, all of whom took part in a semi-structured interview session.
The respondents were selected from four organisations that differed in size, culture (hierarchical and creative or collaborative), value drivers and structure. The two smaller companies were owner-managed, and the two larger organisations had recently undergone organisational changes in anticipation of market shifts.
Using a thematic analysis of the interviews, the researchers could draw out salient patterns and themes.
What is organisational ambidexterity?
Ambidexterity is usually a term we associate with left or right-handedness. However, for a lucky few – about 1% of the global population – neither hand dominates, meaning these individuals can use both their left and right hand with equal adroitness. In business, the word is used to describe a leader or an organisation capable of excelling in both the efficiency stakes (processes and structures, for example) and the innovation game.
Stanford and Harvard professors Charles O’Reilly III and Michael Tushman describe this as exploiting versus exploring. In 2011, they defined ambidexterity as the ability to develop new products while still exploiting an existing market and building on current knowledge and capabilities while developing (or exploring) new knowledge and capabilities.
Like trying to use a pair of scissors with your less dominant hand, ambidexterity doesn’t always come easy if we favour a certain style of management or thinking, but the good news is that it can be taught and the skill acquired. Similarly, organisations can develop managers and leaders with the ability to balance present-day operational needs with future-focused innovative thinking.
O’Reilly and Tushman explored this duality in a 2004 Harvard Business Review article entitled The Ambidextrous Organisation, in which they wrote, “When it came to launching breakthrough products and services, ambidextrous organisations were significantly more successful…more than 90% of the ambidextrous organisations achieved their goals.”
This is significant because research and literature on the subject tell us that both innovation and efficiency require specific cultures, organisational structures and processes, and leadership styles to succeed. The one requires internal stability, while the other needs external agility. Yet, like oil and water, they seem to have a natural aversion to one another unless you position leaders within the organisation who can keep agitating the mixture and adding in the right emulsifiers to create a stable blend. Get this right, and the magic happens.
Key capabilities of ambidextrous leaders
The research set out to create a practical leadership framework to help those at the coalface of an organisation better manage the interplay between future-focus and organisational efficiency without dampening the effectiveness of processes or the creative adaptation necessary for future relevance. Several noteworthy themes emerged from the research, including the following:
Understand macro-shifts and themes
How leaders understand the business environment is critical for appreciating the internal and external context of the company or industry in question, the specific risks and opportunities at play, the competitive environment and client requirements. Without tapping into macro-shifts and emerging themes, a leader is inevitably operating in a void.
Support strategic agility
An outward-looking appreciation of the world becomes even more potent when leaders are well versed in the company’s strategy and can take ownership of supporting strategic imperatives within their decision-making processes. Because of its ability to straddle processes and potentialities, ambidexterity has the potential to offer increased stakeholder value and performance advantages, but only if the strategy fits the organisational environment and resources are allocated to communicating and enacting strategy effectively.
Stakeholder management came across strong as a crucial component of ambidextrous organisations. Leaders must understand the priorities of their own environment and those of others to prioritise work and support the overall business strategy. Proper stakeholder management, teamwork and collaboration can lead to increased innovation, improved performance and a more stable internal environment amid change.
Empower teams and individuals
If a leader is after results and has a firm end goal in sight, then empowering teams to get the job done and deliver results is critical. To get this right, leaders may have to shift resources around to make the best use of the skills at hand, but the key is never to revert to controlling and micro-managing.
Help teams through change
Ambidextrous leaders help to support their teams as they deal with constant change. To do so, they must create a shared vision and ensure that people have the necessary resources, skills and tools to execute the work. Avenues to express concern must also be in place.
Other aspects that would enable the leader to manage structural changes include personality traits such as the ability to work amid uncertainly, to see opportunities in gaps, to take ownership of business strategy, to dream, to build multi-skilled teams, to harness the best in all team members, and to be open-minded. A leader’s personal skill set leans towards ambidexterity if they understand that exploring and exploiting resources requires a different approach, but both are grounded in respect and teamwork.
Professor Karl Hofmeyr
Karl Hofmeyr is a full-time professor at GIBS. Before joining the new business school in 1999, he worked for Anglo American Corporation in London and Hudson Bay Mining Company in Canada. He also worked for the Greatermans/Checkers Group and the University of South Africa’s School of Business Leadership. He spent time with International Survey Research in Chicago and taught at the University of British Columbia in Canada as well as at the HEC School of Management in France. Between 2000 and 2009, Hofmeyr was the director of Custom Programmes at GIBS. Hofmeyr has published many articles on employment equity, management development and employee attitudes both nationally and internationally. He has consulted on employee engagement and employment equity to many South African organisations. His main areas of interest are employee engagement, human resource development and leadership.
Liezl Bell recently completed her MBA at GIBS, during which she published this research on leadership and organisational ambidexterity. After 15 years at Sasol, working across engineering and project management, she will shortly be moving over to gas technology expert, Air Liquide. Currently, she is a production manager at Sasol and manages nine Air Separation Units. In addition, Bell was involved in Sasol’s Women in Synfuels programme, a drive to enable diversity and inclusion.