Ambidexterity: Combining Innovation and Efficiency

Managers frequently face a difficult contradiction. They feel an immense pressure to cut costs and pursue efficiencies. At the same time, the increasing pace of change demands a focused emphasis on innovation. Resolving this contradiction in strategy requires ambidexterity—the ability to explore new avenues while exploiting existing ones.

Ambidexterity is an essential weapon for operating in diverse environments that require different approaches to strategy simultaneously—or in dynamic environments that require companies to transition from style to style over time.

Ambidexterity is crucial in the following situations:

  • When operating in both emerging and developed markets
  • When bringing new products and technologies to market while exploiting existing ones
  • When integrating start-ups into the existing business

To build ambidexterity, companies must understand the diversity and dynamism of their environment—and choose the appropriate approach. Each approach requires a different set of organizational interventions and implies a different role for the center.

Ambidexterity is a tough art to master. But for managers struggling with the paradox of exploring and exploiting, it is absolutely critical. The imperative to achieve ambidexterity will only rise as technological change and economic turbulence increase the diversity and dynamism of the business environment. Managers must act decisively or risk being overtaken by ambidextrous rivals.