Ambidextrous Organization: Examples, Definition, Levels & Benefits

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Digital Strategy

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Ambidextrous organizations are a concept that has been gaining traction in the business world in recent years. As companies strive to find new ways to innovate, stay ahead of their competitors, and meet the rapidly changing demands of the market, many are turning to the ambidextrous model as a way to achieve these goals.

The goal of an ambidextrous organization is to balance the need for both exploration and exploitation in its organizational strategy and organizational development. Exploration involves developing new products, services, or processes, while exploitation focuses on optimizing existing ones.

If you’re looking to understand more about how an ambidextrous organization works, and how it can help your company achieve its goals, our experts at Digital Leadership AG are here to help. They have the knowledge and experience to help you implement an ambidextrous model that can drive success and innovation in your organization. So if you’re ready to learn more about the benefits of an ambidextrous organization, and how it can help your company achieve its goals, read on!

What is an Ambidextrous Organization?

Ambidextrous organizations are businesses that have the ability to balance and manage exploration and exploitation effectively in their organizational strategy and development. The term “ambidextrous” comes from the ability to use both the left and right hand equally well, and in the context of organizations, it refers to the ability to balance the focus on both innovation and efficiency.

The concept of an ambidextrous organization has several different angles, including:

Dual structure:

One of the key components of an ambidextrous organization is its dual structure, which involves creating separate units or teams within the organization that are dedicated to each of these goals.

  1. Separate units for exploration and exploitation
  2. Aligning units for effective collaboration

Innovation and efficiency:

The goal of an ambidextrous organization is to balance the need for both exploration and exploitation in its organizational strategy and development. Exploration involves developing new products, services, or processes, while exploitation focuses on optimizing existing ones.

  1. Exploration – developing new products, services, or processes
  2. Exploitation – optimizing existing ones

Supporting Culture:

A supporting culture for an ambidextrous organization should encompass both exploration and exploitation. This requires cultivating types of organizational culture that prioritize risk-taking, creativity, and innovation, as well as emphasizing efficiency and continuous improvement.

In other words, the organizational culture should encourage taking risks, being creative, and innovating while simultaneously valuing and striving for efficiency and ongoing improvement.

Resource allocation:

Another angle of an ambidextrous organization is the way it allocates resources. This involves balancing the allocation of resources between the units or teams that are dedicated to exploration and exploitation.

Adaptability:

An ambidextrous organization must be adaptable to changing market conditions and customer demands. This involves being able to quickly pivot and adjust its focus as needed, while still maintaining its dual structure.

  1. Ability to quickly pivot and adjust focus as needed
  2. Maintaining dual structure even during change

By understanding these different angles, organizations can work to implement an ambidextrous model that can drive success and innovation in their operations.

For further information on related topics, be sure to check out our articles on organizational development and organizational structure. These articles delve deeper into the concepts and provide additional insights and best practices for organizations looking to improve their effectiveness and alignment. By understanding the principles of both organizational development and structure, organizations can build strong and adaptive ambidextrous organizations that drive success and innovation.

Related Articles:
Organizational Development: Everything you Need to Know
Organizational Structure: Types, Definition and Examples
Organizational Strategy: Definition, Types & Importance
Unleash the Full Potential of Organizational Culture with the Culture Canvas

Ambidextrous Organization Structure

The organizational structure of an ambidextrous organization is designed to balance the focus on exploration and exploitation, which are two distinct yet interrelated goals in an organization. To achieve this balance, the ambidextrous organization adopts a dual structure that creates separate units within the organization that are dedicated to each of these goals.

The organizational structure of an ambidextrous organization typically includes the following elements:

(1) Exploration Unit: This unit is responsible for developing new products, services, or processes and focuses on innovation and creativity. The exploration unit operates independently and is structured to encourage risk-taking and creativity.

(2) Exploitation Unit: This unit is responsible for optimizing existing products, services, or processes and focuses on efficiency and continuous improvement. The exploitation unit operates within a more traditional organizational structure and focuses on refining and improving existing offerings to meet customer needs.

(3) Collaboration: The dual structure of an ambidextrous organization is designed to promote effective collaboration between the exploration and exploitation units. This includes regular communication, joint decision-making, and the sharing of knowledge and resources.

(4) Resource Allocation: The ambidextrous organization must allocate key resources effectively between the exploration and exploitation units. This involves balancing the allocation of resources, such as funding, talent, and time, between the units to support both exploration and exploitation.

(5) Adaptability: The ambidextrous organization must be adaptable to changing market conditions and customer demands. This involves being able to quickly pivot and adjust its focus as needed, while still maintaining its dual structure.

Ambidextrous Organization Benefits

The concept of an ambidextrous organization has gained significant attention in recent years due to its potential to provide organizations with a number of benefits. By balancing the need for stability and the need for innovation, an ambidextrous organization is able to maintain its existing operations while also pursuing new growth opportunities.

This enables the organization to remain relevant and competitive in a rapidly changing business environment.

An ambidextrous organization has several benefits, including:

(1) Improved Innovation:

By dedicating separate units to exploration and exploitation, an ambidextrous organization is able to encourage and support innovation while also maintaining its existing operations. This helps the organization stay ahead of its competitors and remain relevant in a rapidly changing business environment.

(2) Better Alignment:

The ambidextrous structure enables the organization to align its activities with both its short-term and long-term goals. The exploitation unit focuses on maximizing the value of existing products and processes, while the exploration unit focuses on developing new products and processes that will drive future growth.

(3) Enhanced Agility:

The ambidextrous structure allows the organization to respond quickly to changing market conditions, as the exploitation unit can focus on maintaining existing operations while the exploration unit searches for new opportunities.

(4) Increased Flexibility:

By dedicating separate units to exploration and exploitation, the organization can experiment with new ideas and approaches without disrupting its existing operations. This helps to foster an organizational culture of innovation and supports the organization in trying new things.

(5) Improved Employee Engagement:

By providing employees with opportunities to explore new ideas and experiment with new approaches, the ambidextrous organization can enhance employee engagement and motivation.

Ambidextrous Organization Examples:

There are several examples of companies that have successfully implemented an ambidextrous organizational structure, including:

(1) Procter & Gamble:

Procter & Gamble (P&G) is a consumer goods company that has successfully implemented an ambidextrous structure. The company has a dedicated innovation unit called “Connect + Develop” that is responsible for exploring new growth opportunities, This unit is responsible for finding new technologies and business models that can help P&G grow.

At the same time, the existing business units focus on exploiting existing products and processes (Incremental Innovation). This allows P&G to maintain a balance between exploration and exploitation, which has helped the company stay ahead of its competitors and maintain its position as a leading consumer goods company.

(2) 3M:

3M is a technology company that is known for its commitment to innovation. The company has a dedicated research and development (R&D) unit that focuses on both exploration and exploitation. This unit is responsible for exploring new growth opportunities and finding new technologies that can help 3M maintain its competitive edge.

At the same time, the existing business units focus on exploiting existing products and processes, which helps 3M maximize the value of its existing assets. This balance between exploration and exploitation has allowed 3M to remain at the forefront of innovation and maintain its position as a leading technology company.

(3) Google:

Google is a technology company that is known for its innovative culture and its ambidextrous organizational structure. The company has a dedicated unit called “Google X” that focuses on exploring new growth opportunities. This unit is responsible for developing and testing new technologies, such as self-driving cars and internet balloons.

At the same time, the existing business units focus on exploiting existing products and processes, such as its search engine and advertising products. This balance between exploration and exploitation has allowed Google to maintain its position as a leading technology company and remain at the forefront of innovation.

(4) Amazon:

Amazon is a retail company that is known for its innovative culture and its ambidextrous organizational structure. The company has a dedicated unit called “Amazon Web Services” that focuses on exploring new growth opportunities. This unit is responsible for developing and testing new technologies and business models that can help Amazon grow.

At the same time, the existing business units focus on exploiting existing products and processes, such as its e-commerce platform and Prime membership program. This balance between exploration and exploitation has allowed Amazon to remain at the forefront of innovation and maintain its position as a leading retail company.

These are just a few examples of companies that have successfully implemented an ambidextrous organizational structure. By dedicating resources to both exploration and exploitation.

The 3 Levels of Ambidextrous Organizational

The different levels of ambidextrous organizational structures can be divided into three main categories: individual, team, and organizational levels.

(1) Individual Level

At the individual level, ambidextrous organizations focus on developing employees who are both explorers and exploiters. Employees are encouraged to be both innovative and efficient and to balance their focus between exploring new opportunities and exploiting existing ones.

(2) Team Level

At the team level, ambidextrous organizations create cross-functional teams that are responsible for both exploration and exploitation. These teams are made up of individuals who have the skills and expertise to both explore new opportunities and exploit existing ones.

(3) Organizational Level

At the organizational level, ambidextrous organizations create a structure that supports both exploration and exploitation. This structure is designed to balance the need for innovation with the need for efficiency and to ensure that resources are allocated appropriately to both exploration and exploitation activities.

In an ambidextrous organizational structure, these different levels work together to create a balance between exploration and exploitation that helps the organization stay ahead of its competitors and remain at the forefront of innovation.

Conclusion

In conclusion, the ambidextrous organization is a business model that balances exploration and exploitation in its organizational strategy and development. It has a dual structure with separate units for exploration and exploitation and promotes collaboration between the two.

The ambidextrous organization values both risk-taking and creativity for exploration, and efficiency and continuous improvement for exploitation. The structure, culture, resource allocation, and adaptability must all support this balance in order for the ambidextrous organization to be successful.

The concept has gained significant attention and has the potential to provide organizations with numerous benefits such as increased innovation, efficiency, and adaptability. By understanding the principles of an ambidextrous organization, companies can drive success and innovation in their operations.

Frequently Asked Questions

What is the role of the exploration unit in an Ambidextrous Organization?

The exploration unit in an Ambidextrous Organization is responsible for developing new products, services, or processes and focuses on innovation and creativity. The unit operates independently and is structured to encourage risk-taking and creativity.

What is the role of the exploitation unit in an Ambidextrous Organization?

The exploitation unit in an Ambidextrous Organization is responsible for optimizing existing products, services, or processes and focuses on efficiency and continuous improvement. The unit operates within a more traditional organizational structure and focuses on refining and improving existing offerings to meet customer needs.

What is the goal of an Ambidextrous Organization?

The goal of an Ambidextrous Organization is to balance the need for both exploration and exploitation in its organizational strategy and organizational development. Exploration involves developing new products, services, or processes, while exploitation focuses on optimizing existing ones.

Is an ambidextrous organization suitable for all types of businesses?

The quick answer is No, an ambidextrous organization may not be suitable for all types of businesses. It is important to note that the concept of an ambidextrous organization is designed to address the specific challenges faced by organizations that operate in rapidly changing environments, where they need to balance exploration and exploitation.

For businesses operating in stable and predictable environments, a more traditional, hierarchical structure may be more appropriate. Additionally, businesses with limited resources and a strong focus on efficiency may struggle to implement the complex, flexible organizational structures required for an ambidextrous organization.

It is important for businesses to carefully assess their unique needs, goals, and resources, and determine if an ambidextrous organizational structure would be the best fit for them.

How does an ambidextrous organization deal with risk and failure?

An ambidextrous organization can deal with risk and failure in the following ways:

  • Embracing failure: Ambidextrous organizations embrace failure as a learning opportunity and see it as an essential part of innovation. They encourage experimentation and risk-taking, but also have mechanisms in place to manage risk, such as contingency plans and risk mitigation strategies.
  • Separate units for exploration and exploitation: By separating the units responsible for exploration and exploitation, an ambidextrous organization can minimize the risk of failure. The exploration unit can pursue new ideas and take risks without affecting the core business, while the exploitation unit can focus on delivering consistent results and maintaining the stability of the organization.
  • Balancing risk and reward: An ambidextrous organization balances risk and reward by prioritizing initiatives that offer the best return on investment while also taking into account the level of risk involved. This helps the organization to make informed decisions about which risks to pursue and which to avoid.
  • Continuous learning and improvement: An ambidextrous organization is committed to continuous learning and improvement, which allows it to adapt to changing market conditions and avoid potential risks. By continually improving its processes and systems, the organization can minimize the likelihood of failure and maximize the chances of success.
  • Encouraging experimentation: An ambidextrous organization encourages experimentation and encourages employees to think creatively and take risks. By creating an innovation culture, the organization can foster new ideas and approaches that can help it overcome challenges and succeed in the face of risk and uncertainty.

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