Originally published on Hargraves Institute website
Is it more important to focus on sustaining and maintaining current operations, or to focus on survival in the future? This can be a critical question for organisations recognising the need to remain both enduring and competitive.
As the Head of Innovation of a large international organisation we recently interviewed has identified, “Innovation happens in the here and now – but where you start to have competing needs for innovating in the future, that can be challenging, because the here and now tends to dominate.”
The most innovative organisations are ambidextrous
Research from the University of California has in fact indicated that most innovative organisations are ‘ambidextrous’, particularly when it comes to fixed vs growth mindsets. They are able to focus on incremental updates and on radical breakthrough innovations.
We refer to the apparently contradictory yet interrelated approaches required as ‘Exploration’ mode and ‘Preservation’ mode, and our research has further revealed that few organisations are effectively able to manage both.
Rather than doggedly hanging on to one polar position, or erratically swinging from one side to the other, the most innovative companies have been set up to embrace the apparently contradictory yet interrelated factors simultaneously. This has enabled them to survive whatever challenges have come their way, no matter how unexpected or unknown.
The peril of polar positions
Consider at one extreme the long-established monolith with a clear fixed mindset that is not able to readily adapt. Organisations like Motorola, Ford, Sony, Walt Disney, and Boeing were identified by Collins and Porras as successful visionary companies in their books Good to Great in the early 2000s, but they may have failed to take a forward looking future perspective and would not make the top performing list today.
Or sitting at the other extreme, there is the rapid growth start-up that continues to focus solely on growth without ensuring firm foundation for long term development.
Harvard Business School research has revealed that 75% of venture-backed start-ups fail (Forbes quotes the failure rate as 90% of start-ups overall), and a CB Insights study into start-up post-mortems has demonstrated that a lack of ability to establish clear foundations for growth at the leadership level is usually responsible.
Split and synthesize: what to do differently
98% of the respondents in a study we have conducted with more than 50 executives from a range of organisations around the world, including a number of Fortune 500 companies, have revealed that it is human factors rather than technical factors that will impact the success of an innovation. At the core of this, we believe, is the Exploration vs Preservation mindset.
Here’s how it’s possible to balance both perspectives simultaneously:
- Split: Initially divide the two functions apart to identify if they are both being adequately addressed.
- Focus: Address each element separately, eg
- Develop ‘preservation’ opportunities: Check that all systems and structures are in place to support growth and change, and ensure small scale incremental innovations are continually developed and maintained through patient nurturing
- Develop ‘exploration’ opportunities: Ensure there are opportunities for rapid paced ideas to emerge and be converted to new innovations through a sense of urgency
- Synthesis: Once both functions have been checked, ensure sustainability through integrated balance. Check there is a united vision along with clear channels for communication and negotiation between functions to ensure that both breakthrough innovations and incremental innovations continue to be pursued simultaneously to fuel long term sustainable growth
Converting kinetic energy to opportunity
Ambidextrous organisations are successfully able to navigate the dynamic tension between the two poles. This can be a hugely risky and challenging perspective to take, as it requires constantly shifting to adapt to rapidly changing internal and external factors and to avoid settling into a set status quo.
Successfully managing the dynamic tension can convert the kinetic energy to opportunity. Failing to do so can easily rip an organisation apart.
Developing the skilled acrobatics required for a constant balancing act can be challenging, but it will ultimately lead to more sustainable results. Although it’s not possible to predict what will happen next, it is possible to develop these ‘ambidextrous’ capabilities to ensure the flexibility needed to be ‘fit for the future’.
About the Grants
Gaia Grant and Andrew Grant are the authors of The Innovation Race: How to change a culture to change the game (Wiley) along with a number of other international bestselling books and resources. As the Directors of Tirian International Consultancy Gaia and Andrew help to develop innovation cultures for a range of international organisations from Fortune 500 companies through to NFPs. The Grants are top-ranking keynote speakers, and Gaia is a doctoral researcher and lecturer at the University of Sydney Business School in the discipline of Strategy, Innovation and Entrepreneurship. For more information see The-Innovation-Race.Com.