The report by Advanced Institute of Management (AIM) into ambidextrous organisations discusses the idea of ‘organisational ambidexterity’ suggests a practical way of measuring it.
Ambidexterity in humans is the ability to use of both left and right hands or feet alike. Interestingly, naturally ambidextrous people are unusual. Only one in a hundred of us are ambidextrous naturally. Sadly, truly ambidextrous organisations are seemingly equally rare.
Unlike human ambidexterity, organisational ambidexterity is about dealing with two opposed qualities – ‘adaptability’ and ‘alignment’.
The balancing of adaptability and alignment, the ability to focus on both the future and the present at the same time, has been acknowledged as a way to achieve competitive advantage for decades.
On the one hand:
‘Adaptability is about focusing on the future’. An adaptable company is one that has the ability to respond to change, to be nimble, to innovate and to be proactive in its progress. Adaptability needs you to be able to act quickly to seize new opportunities and rapidly adjust to new situations. You need to avoid complacency.
On the other:
‘Alignment is about making the most of the present, using existing ideas more efficiently and effectively exploiting markets’. Organisations need to make the most of an existing situation, exploit the assets they own, roll out existing business models quickly and strip costs out of existing operations.
The ability to do both is organisational ambidexterity. Getting the balance right is difficult. Some organisations spend too much time focused on alignment at the expense of adaptability to both small and seismic changes. The result is good short-term performance but this is all to often at the expense of long-term success. The problem here is that sooner or later the changes around you will catch you out.
Other companies are long-sighted. They are highly adaptable and are structured to function with more than one eye to the future. Their problem is they build a structure for the needs of tomorrow’s business at the expense of today’s. They are not able to shift their focus to the present if an industry or global crisis occurs.
Creating separate structures (structural ambidexterity) Learning how to be an ambidextrous organisation often eludes us because we come at it the wrong way. Most organisations who accept that ambidexterity is a ‘must do’ not a ‘nice to have’ assume that the two sets of activities are so different they cannot coexist so they approach the problem by creating one structure focused on delivering future adaptability, and another alignment with the present.
The authors make three points to explain why in their view this is a mistake and why setting up core business units that are distinct from R&D development, for example, is not a good idea.
Firstly, separation leads to isolation. Even though the R&D labs may produce brilliant ideas their weak links to the business units means they often fail to get buy-in from them.
Secondly, even though attempts to set up other structures that blend the two sets of qualities are an honest attempts to attain a balance, they are still top down. Basically, they rely on the people in charge to direct the work, and to decide how they think it best to divide up the time their employees on each set of activities.
Thirdly, it is doubtful if those at the top do know when it is best for employees to do alignment or adaptability focused activities, but even if they do, they ask if this an efficient model anyway.
Empower individuals to create the balance The authors are clear that employees face choices about how to spend their time everyday: for example, ‘should they continue to focus on an existing customer account to meet targets, or should they nurture a new customer with a slightly different need?’ The authors ask, ‘Why not consider ambidexterity from the perspective of the individual employee?’ They argue that, ‘if individuals are able to make these choices effectively, then ambidexterity is no longer elusive’. What the authors refer to as ‘Contextual Ambidexterity’ takes place when you have individuals making choices between adaptability-oriented activities and alignment-oriented activities based on the context of the day-to-day work.
Organisationally ambidextrous individuals take the lead and are aware of opportunities beyond their own jobs. The authors’ research suggests that ambidextrous individuals:
- Co-operate and look for ways to combine their efforts with those of others.
- Are brokers who build internal networks.
- Are natural multi-taskers.
Two questions arise.
- How do you encourage individuals to behave in this way?
- What type of situation encourages individual ambidexterity?
Contextual ambidexterity To help us use this concept in real world situations the authors adapted the ideas of Ghoshal and Bartlett (1997) who viewed context as ‘the often invisible set of stimuli and pressures that motivate people to act in a certain way’.
Ghoshal and Bartlett (1997) identified four factors that interact to define an organisation’s behavioural context.
- Support, and,
From these four the authors created two dimensions (scales) of context:
- Performance management, a combination of stretch and discipline that is concerned with stimulating people to deliver high-quality results and making them accountable; and,
- Social support, a combination of support and trust, which is about providing people with the security, support, and latitude they need to perform consistently to their highest potential.
These two dimensions are then combined to create a framework with four different possible contexts (see Figure 1), which can be used for two purposes:
- It is a diagnostic tool that can be used to establish the balance of the organisation’s focus on performance management and social context, and,
- It points to changes an organisation might put in place to change its context to become more ambidextrous.
The high-performance context ‘stimulates people to deliver high-quality results through its performance management systems. At the same time it provides the social support and security required to do a job consistently well over the long-term’.
Low-performance context ‘offers neither the performance ethic, nor the social support, that people must do their jobs effectively’
The burn-out context ‘is a demanding results-driven orientation but lacks social support. People perform well for a limited time in such a context. Ultimately, however, its depersonalised, individualistic, and authority-driven nature results in a high turnover of personnel, making ambidexterity difficult to achieve’.
The country-club context has very strong the social support. ‘Employees benefit from and enjoy the collegial environment. The performance-orientation, however, is weak’.
Five key lessons to help build a high-performance context an ambidextrous organisation.
- Diagnose their organisational context. Use our diagnostic tool to find out what the current organisational context is like. To help with this the authors have designed an Organisational Context Grid. You need to get a cross-section of employees to complete the diagnostic tool. Link these findings to qualitative discussions and information. Follow this link to the on-line diagnostic tool. https://www.surveymonkey.com/s/Ambidorg
- Build understanding at all levels. Ensure that everyone in the organisation must understand what initiatives are in place to promote a high-performance context, and why.
- Understand the role leaders play. Ambidexterity is rarely leadership-driven. It is often leadership enabled. Ambidexterity comes by creating a supportive context in which people make their own choices about how and where to focus their energies. In general it is not charismatic leadership that creates ambidexterity. In most organisations an understated approach to leadership allows leaders to emerge as something everyone in the organisation has the opportunity to display.
- Focus on a few levers and use them consistently. There is no magic solution for creating a high-performance context. Many different organisational levers work. The key is to concentrate on a few, and use them consistently.
- Understand that contextual, and structural ambidexterity are complements. Structural solutions have their place however, they are rarely the best long-term solution. That said contextual ambidexterity shouldn’t be seen purely as an alternative/ replacement for structural solutions but as a complement. Structural solutions are necessary at times but they should be seen as temporary, a means of giving a new initiative the space and resources to get started. The target goal should be to reintegrate the new idea, or new unit back into the main business as soon as possible. Contextual ambidexterity can help both the structural separation process a well as the reintegration.
Birkinshaw, J. and Gibson, C., (2004) The Antecedents, Consequences, And Mediating Role of Organizational Ambidexterity, Academy of Management Journal, (47), 209-226.
Birkinshaw, J. and Gibson, C., (2004) Building Ambidexterity Into an Organisation, Sloan Management Review, Summer, Vol. 45, No. 4, 47-55.
Birkinshaw, J. and Gibson, C., (2004) Building an Ambidextrous Organisation, Advance Institute of Management Research, WP No. 003-June.
Ghoshal and C.A. Bartlett (1997) The Individualized Corporation, Harper Business: New York.
Tushman, M.L. and O’Reilly, C.A. (1996). Ambidextrous Organizations: Managing evolutionary and revolutionary change, California Management Review, 38(4): 8-30.
Tushman, M.L. and O’Reilly, C.A. (2004). The Ambidextrous Organization, Harvard Business Review. April, 74-8.
This report for The Advanced Institute of Management Research was written by Professor Julian Birkinshaw, Senior Fellow, Advanced Institute of Management Research & London Business School; and, Dr Cristina Gibson, Associate Professor, Graduate School of Management, University of California, Irvine
It is important to be clear that the IP team do not claim any intellectual property in this feature. All the credit for the research, analysis and recommendations should stay with the authors of the report. All the ideas and many of the words are those of the original authors. Our sole aim has been to make the ideas and practicalities more accessible to a wider audience.
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