Building Ambidexterity Into an Organization
Publication Year: 2004
Journal: MIT Sloan Management Review
The technological downturn, political turmoil and economic uncertainty of the last five years have reaffirmed to managers the importance of adaptability--the ability to move quickly toward new opportunities, to adjust to volatile markets and to avoid complacency. But while adaptability is important, it is not enough. Successful companies are not just nimble, innovative and proactive; they are also good at exploiting the value of their proprietary assets, rolling out existing business models quickly and taking the costs out of existing operations. They have, in other words, an equally important capability we call alignment--a clear sense of how value is being created in the short term and how activities should be coordinated and streamlined to deliver that value. For a company to succeed over the long term, it needs to master both adaptability and alignment--an attribute that is sometimes referred to as ambidexterity. (1) For example, Finland's Nokia Corp. is trying out a vast array of new mobile technology offerings, while continuing to invest in its dominant handsets franchise. GlaxoSmithKline Plc is experimenting with alternative organization models, alliance partners and technologies in its search for new blockbuster drugs, and it is also pushing hard to maximize the return from its existing drug portfolio.