Published on

March 29, 2024

Organisational Ambidexterity: Balancing Innovation & Efficiency

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Dr. Nico Broers

Program Manager


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Implementing ambidexterity in your business

In today's rapidly changing business world, companies need to be adaptable and innovative in order to remain competitive. One way to achieve this is through the concept of ambidexterity. This means striking a balance between exploration and utilisation. This allows you to both exploit new opportunities and maximise existing strengths. In this blog, we look at what ambidexterity means in business and how it can be implemented in your company. We'll also give you some tips and strategies on how to achieve this balance and stay agile in an ever-changing market.

What does organisational ambidexterity mean?

Imagine if your organisation could simultaneously explore new, innovative ideas and optimise existing processes. This is what organisational ambidexterity is all about. It is about mastering the art of harmoniously integrating both approaches - exploration and exploitation - to remain competitive in an ever-changing business world.

Exploration vs. exploitation

Exploration refers to trying out new ideas and taking risks to drive innovation. Exploitation, on the other hand, focuses on maximising existing resources and capabilities and increasing efficiency. Organisational ambidexterity means successfully managing these two, often opposing, activities.

Exploration vs. Exploitation

Three types of organisational ambidexterity

Organisational ambidexterity can be divided into three main forms:

  1. Temporal ambidexterity: this involves alternating explorative and exploitative phases. A company could first explore new markets and then enter a phase in which it uses the knowledge gained to optimise processes.
  2. Contextual ambidexterity: This form enables employees to work both exploratively and exploitatively at the same time, depending on the situational requirements and the context.
  3. Structural ambidexterity: Here, there are separate organisational units for exploration and exploitation, but they are linked by common goals and the exchange of knowledge

The importance of management in organisational ambidexterity

Effective management is critical to achieving a balance between exploration and exploitation. Managers must ensure that teams engaged in exploring new opportunities are given the necessary resources, while at the same time teams optimising existing processes are not neglected. This often requires a high degree of flexibility and strong internal communication.

5 examples of organisational ambidexterity

Examples are a good way to learn about abstract topics. That is why we would like to show you three examples of how small and medium-sized companies as well as corporations have successfully implemented ambidexterity. You will see the impact this has on both corporate culture and performance.

1. SIGA: Innovation in the construction industry

SIGA, a Swiss company specialising in the development and production of high-quality products for the construction industry, uses "workshop days" as a platform both to generate new ideas and to review and improve existing processes. These days are specifically reserved for employees to step back from their regular work and focus on rethinking work processes and identifying opportunities for improvement. Through these regular innovation workshops, SIGA has been able to develop several ground-breaking products that significantly reduce energy consumption in buildings. This not only promotes corporate innovation, but also strengthens SIGA's market position in a highly competitive sector.

2. Toyota: A culture of continuous learning

Toyota's success is largely due to its unique corporate culture, which is characterised by the concept of 'kaizen', or continuous improvement. This principle promotes both innovation and increased efficiency through constant, incremental improvements. Employees are encouraged to constantly seek challenges and find creative solutions to problems. This culture has helped Toyota remain a leader in the automotive industry by developing both new technologies and efficient processes that help reduce waste and increase product quality.

3. Google: Freedom for creativity

Google is known for its policy of giving employees 20% of their working time to work on their own projects. This strategy has led to the development of several successful products such as Google News, Google Maps and Gmail. These products were created by fostering entrepreneurial thinking and encouraging the exploration of new ideas that go far beyond day-to-day tasks. This kind of organisational ambidexterity helps Google to continuously innovate while improving and optimising its existing offerings.

4. Amazon: Duality of efficiency and innovation

Amazon demonstrates organisational ambidexterity through its ability to combine highly efficient logistics operations with aggressive expansion strategies into new markets and technologies. The company continuously invests in research and development of new technologies such as artificial intelligence and machine learning, while optimising its core business processes. This enables Amazon to offer its customers fast delivery times and innovative products such as Alexa and the broad Echo device portfolio.

5. Bosch: Ambidexterity in the manufacturing industry

Robert Bosch GmbH has created a unique structure that allows it to emphasise both efficiency and innovation. Bosch has separate units for research and development and for production, but supports regular exchange between these areas. This promotes the rapid integration of new technologies into production processes. For example, Bosch has invested heavily in the development of electromobility and autonomous driving in its automotive division, while at the same time improving efficiency in production through Industry 4.0 initiatives.

How can you promote organisational ambidexterity in your company?

  1. Establish a value system: A clear value system that supports exploration and exploitation is crucial.
  2. Create space and time for creativity: Give your teams the freedom to think and experiment creatively alongside the day-to-day business.
  3. Build innovation teams: Create teams that focus specifically on developing new ideas.
  4. Encourage a culture of error: Allow mistakes to serve as learning opportunities and establish a culture that supports risk-taking.

Long-term benefits of organisational ambidexterity

Companies that practice successful organisational ambidexterity often report increased adaptability to market changes and an improved ability to respond quickly to new challenges. In the long term, this can lead to more sustainable business development and a stronger competitive advantage.

Organisational ambidexterity: How companies master innovation and efficiency

Implementing organisational ambidexterity can make your company more dynamic and adaptable. There is no one-size-fits-all recipe, but with the right steps you can create a culture that promotes both innovation and efficiency.

The successful implementation of organisational ambidexterity is closely linked to a company's ability to establish a dynamic learning culture. In order to be successful in both areas - exploration and exploitation - it is essential that employees continuously learn and develop. In our blog post on effective learning, we share practical tips on how to design learning processes to maximise efficiency and effectiveness both individually and across the organisation. These principles are crucial to fully exploit the potential of organisational ambidexterity.

In addition, it is important for organisations to create an environment that encourages learning and continuous improvement. In our article on fostering an active learning culture, you will learn how to establish a culture that encourages employees to take on new challenges and develop innovative solutions. Such a culture is key to overcoming the dual challenge of organisational ambidexterity by providing the necessary support and resources to both optimise existing processes and explore new opportunities.

By integrating these strategies to promote effective learning and an active learning culture, you lay the foundation on which your organisation can build its capacity for ambidexterity and ensure sustainable success.

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edyoucated is funded by leading research institutions such as the Federal Ministry of Education and Research (BMBF), the Federal Institute for Vocational Education and Training (BIBB), Federal Ministry for Economic Affairs and Climate Action (BMWK).

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