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Innovation AND efficiency? Organizational ambidexterity

Digitalization is and remains the hot topic. Every day, there are new articles that report on digitalization trends and strategies, on the opportunities and challenges of change. If companies want to be successful these days, they must take action to be able to handle these changes. It’s a balancing act to keep an eye on core business and innovation at the same time.

To drive digital transformation, businesses need to be agile. At the same time, they should want to be stable and efficient. For many, at first glance, this seems to be a contradictory proposition. Many organizations even tend to strictly separate core business and innovation. This results in isolated innovation units, which are often even at other locations.

Innovation and efficiency need not be opposites. On the contrary, they can even work together. Innovations and traditional core business can ideally complement each other.

Companies that want to be successful today must be innovative AND efficient. Without innovation (in ways of thinking, working methods, and structures), efficient work will hardly be possible in the near future.

But how?

Organizational ambidexterity

The term ambidexterity (from Latin, meaning “both right” or “both favorable”) means mixed-handedness and describes the ability of organizations to be both efficient and flexible. Organizational ambidexterity means exploitation (of existing things) and exploration (of new things) done in parallel.

In short, what this means for companies is:

Exploitation: optimization of the core business through solid structures

Exploration: innovation, creativity, breaking up silos, leaving old structures – to find new solutions

Organizations that master the challenge of handling and shaping exploitation and exploration processes equally are called ambidextrous organizations. These companies are more agile, adaptable and thus better equipped for digital transformation.

Organizational ambidexterity has a positive effect on efficiency, knowledge transfer, innovation and corporate culture

Companies and managers must ensure that structures are created in which employees are enabled to:

•       communicate – this allows the transmission of innovation and helps to reduce possible conflicts

•       network and share their knowledge – they need space for exchange, mutual support and inspiration

•       try out and develop solutions – experimental and innovative spaces must be created

•       take responsibility – managers must let go and trust their employees (and vice versa)

•       get a chance to participate

Organizations that manage to balance these different goals are clearly at an advantage. They are more flexible and autonomous. Structures become more agile, knowledge silos are reduced, and employees are strengthened in their self-management – as a result, cultural change takes place.

All of this in turn leads to equally innovative and efficient teamwork.

 

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