So far this journal has talked about clever people and the challenges of managing them, as well as discussing clever teams and how to encourage their best work. In this article, however, I pose some questions and present some of my own thoughts about what makes a clever organisation. Over the past decade, legacy businesses have perfected the art of efficiency, by streamlining processes, eradicating the unnecessary duplication of work and fostering cultures in which compliance is venerated. Often this has come at the expense of creativity and innovation. In contrast, many companies that have emerged in the digital age display fearlessness, since they are not burdened by having a heritage they need to protect. Both approaches have their merits and down sides, but here I suggest that the clever company is one that is able to incorporate the best of the two models, without letting either element impede the other. I call this ‘the ambidextrous organisation’.
In this article then, I’ll examine this concept, thinking about what makes such an organisation clever. It is an introduction to the topic which will be re-examined in the next edition of The OE journal, where I’ll be looking in more detail how we can go about creating ambidextrous organisations.
Leading in the Known World
A successful product or service needs to be highly specified. Customers have come to expect consistency and reliability and for many organisations, this has become their brand promise. Shareholders have also come to expect and demand increasing levels of return. Satisfying these two groups has often been achieved by systematisation in its broadest sense; by creating order, fixed processes and detailed specifications, while ensuring that all these are strictly adhered to. This approach has been seen as being the essence of what is needed to ensure the delivery of a successful product or service.
Organisations looking to gain a competitive edge have learned to map out and continually improve their processes. In fact, they eradicate variance by applying the Six Sigma approach. Teams are developed to deliver a consistently superior performance. ‘Continuous Improvement’ is fundamental – though its focus is more often to do with compliance to specifications, rather than changing the specifications.
A few years ago I was working with one of the world’s largest earth-moving equipment manufacturers – their focus on continuous improvement was exemplary. Staff were engaged in reducing faults and warranty claims by making sure that the product was right first time. The problem came when staff proposed changes to the specifications, process or quality standard. This was deemed by those in charge to be largely outside the remit of continuous improvement. The design, the process and the suppliers were determined by the Head Office 5000 miles away. As a global brand, its global product range could not be altered by one factory in a single country. The business model was based on global sourcing for a global product, paired with a relentless dedication to meeting those exacting standards.
In these ways the culture, the ways of working are focused on the known world, seeking improvement wherever the opportunity presents itself. Well-established brands and products have the past to maintain. Reputation takes a long time to build and is so easily lost. It is good that cultures and working habits are so focused.
…alongside all this order and control we need to create a ‘playpit’ that can be the crucible for the future. The producing business is so cohesive and so aligned but they now need to create something that is incoherent. There needs to be another culture at play, one that can enter the unknown, experiment, fail, be deviant, be non-conforming”
Exploring the Unknown World
Let’s contrast this to a new digital company. Few of the new digi-companies have histories to protect. They are very much future focused. For many, their revenue streams are prospective. Such organisations operate in the unknown, being shaped and developed in a world where the rational disciplines adopted by established firms to sell winning products, are less helpful. Having little history or reputation to protect means there is also no existing order to maintain. Instead, such organisations can focus on innovation, by promoting creativity and experimentation. It is a different culture and different way of working.
Businesses are so mindful of the need to re-invent themselves, to create future revenue streams and innovate. This places a heavy demand on the best producing businesses. Alongside all this order and control we need to create a ‘playpit’ that can be the crucible for the future. The producing business is so cohesive and so aligned but they now need to create something that is incoherent. There needs to be another culture at play, one that can enter the unknown, experiment, fail, be deviant, be non-conforming.
The challenge then is to create the organisation that can encourage the ‘playpit’ and yet has sufficient cohesion not to disintegrate. It is about balancing the potential incoherence that comes from “letting one thousand flowers bloom” and the potential rigidity that comes from “sticking to the knitting”.
The reality of most companies is that alongside continuously improving current products and services, they have to develop new ones. Many of those routines and practices that have enabled companies to thrive, sit uncomfortably against ideas of innovation, creativity and new product development. So it’s not surprising that when they try to add innovation, creativity and new product development to this mix, they struggle.
Evolution in the bio world happens through deviance and variation in the genes of organisms. Sometimes, these variations are better adapted to the ecology than the prevailing ‘norm’. This is how our physiology develops and so too the organisation…”
But many companies can do both:
- the auto industry invents new models alongside the old
- big pharma companies invest a major part of their expenditure on R&D
- consumer electronics companies reinvent themselves regularly
- Apple now has a big history to protect and can still innovate.
The Ambi-Dextrous Organisation
So how is this done? By creating businesses that are ‘ambi-dextrous’ and are able to do both. Such businesses recognise that applying the rigours of industrial production to an unknown product in a yet-to-be established market doesn’t add up. They recognise that their good leadership and management require situational responses.
Consistency and conformity still have their place, but we need to recognise that the creative exploration required for innovation may well eke out ideas from failure and mistakes – the inconsistent and non-uniform. Evolution in nature happens through deviance and variation in the genes of organisms. Sometimes, these variations are better adapted to the ecology than the prevailing ‘norm’. This is how our physiology develops and so too the organisation.
Organisations wanting to achieve this need what we call ‘plural leadership’ or ‘situational leadership’; which is the ability to lead and manage at both ends of the scale. It requires living with ambiguity and having the ability to make sense of what many will see as inconsistency or contradictory. This will open us up to challenge that we are ‘speaking with forked tongue’ and treating people differently. The accepted notions of fairness and unfairness are being tested.
Becoming an ambi-dextrous organisation is necessary to survive. It requires making use of both sides of the brain to become creative and developmental on the one hand and rigorous and relentless on the other.
There are big messages here for leaders regarding their instincts and their practices. Those who lead within the known world may struggle to do so in the unknown world. Ideas about common controls and cultures need to change: for example ideas about what is a job and what constitutes good performance need to change. Leaders live with the ambiguity and have to make sense of it for their teams. Different teams need to be managed differently and perhaps we need to be less concerned about uniform cultures and control.
The next edition of The OE Journal will focus on how we create the Ambi-dextrous Organisation.
The challenge then is to create the organisation that can encourage the ‘playpit’ and yet has sufficient cohesion not to disintegrate”