Tushman and O’Reilly (1996) discuss the concept of ambidextrous organizations, which are able to effectively manage both evolutionary and revolutionary change. They argue that in order to succeed in today’s dynamic business environment, organizations must be able to simultaneously exploit existing capabilities and explore new opportunities. However, these two types of change require different structures, processes, and leadership styles.
The authors suggest that ambidextrous organizations must have a dual structure that allows for both exploitation and exploration. The exploitation side of the organization is focused on maximizing efficiency and productivity in existing operations. This requires a hierarchical structure, with clear roles and responsibilities, standardized processes, and performance metrics. On the other hand, the exploration side of the organization is focused on innovation and experimentation. This requires a more decentralized structure, with greater autonomy and flexibility for employees to pursue new ideas and opportunities.
To effectively manage both sides of the organization, Tushman and O’Reilly recommend that leaders adopt an ambidextrous leadership style. This means being able to balance the competing demands of exploitation and exploration, and knowing when to prioritize one over the other. It also means being able to create a culture of innovation and risk-taking, while also maintaining a focus on performance and accountability.
The authors provide several examples of successful ambidextrous organizations, including Hewlett-Packard and 3M. These companies have been able to achieve long-term success by balancing exploitation and exploration, and by investing in both incremental improvements and radical innovations.
Tushman and O’Reilly also highlight the importance of managing the tension between exploitation and exploration. They argue that this tension is inherent in any ambidextrous organization, and must be actively managed by leaders. One way to do this is through strategic experiments, which allow organizations to test new ideas and approaches in a controlled environment.
Overall, Tushman and O’Reilly’s article provides valuable insights into the challenges of managing organizational change in today’s dynamic business environment. By adopting an ambidextrous approach, organizations can effectively balance exploitation and exploration, and achieve long-term success.