Embracing Organizational Ambidexterity

Roman Kopytko by Roman Kopytko
October 19, 2017
Although open innovation serves as a path towards greater openness in product innovation and organizational growth, it is not immune to the typical failures that can be found within any business system. Failures in open innovation programs don't necessarily mean that open innovation itself is flawed, but indicate that the particular program fell victim to various flaws in the execution stage.
 
Many organizations get stuck in a pattern of 'innovation theater', where teams go through the motions of innovations (starting an innovation team, attending conferences, developing 'innovation spaces', etc) but do not have a clear link to core product strategy or lack the  accountability needed to achieve tangible, revenue-positive results. This especially effects teams in organizations where there is a lack of commitment to real business change but  a sustained pressure to "innovate" ; as such, organizations walk through all the actions of innovation but at the end of the day still contribute little meaningful output.
Stiff-haired corporate ladder climbers play dress-up in hoodies, trading their golf outings and steak dinners for drone flying and hipster tacos. They return to the home office in Parsippany or Peoria brimming with ideas about growth hacking. Maybe they rip out their cubicles and install an open floor plan. Perhaps they create “intrapreneurship” competitions. They might even hire a staff futurist or an overpriced “millennial consultant.” - Erin Griffith, Fortune
This is particularly popular in industries that face a significant pressure from external innovators on their business model, but are too timid to delve into innovations that might cannibalize their existing business. As such, organizations invest huge sums into half-hearted innovation programs that end up as failures.
Many of these 'innovation theater' programs fail for the sole reason that they do not have a clear link to the companies core product strategy.
 
Rather than strengthening the organization, these attempts lead to wasteful spending. In order to move past the cycle of innovation theater, organizations need to consider whether their organizational structure is even designed to handle innovation-at-scale effectively.
 

ORGANIZATIONAL Ambidexterity

A key issue facing organizations looking to excel in innovation is a lack of organizational ambidexterity. Organizational ambidexterity refers to the ability of organizations to innovate current products incrementally while simultaneously generating breakthrough innovations for future release.

Generally, organizations find these duel roles difficult as they involve two disparate goals that share the same resource pool. Incremental innovation is less risky, as it involves slow improvements to revenue-generating products, while breakthrough innovation involves long-term investment into products that have a risk of failure and may cannibalize existing profitable product lines. While many organizations' are founded on the back of breakthrough innovation companies often become more risk-averse as product lines mature.

Many organizations opt for having the same team handle both incremental and breakthrough innovation, thisarrangement typically fails to achieve breakthrough results as team members face pressure to return immediate success, and begin to shift focus toward more immediately viable incremental improvement. Organizations can successfully avoid this issue by having two separate teams that focus one either incremental or breakthrough projects.
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