A company’s ability to execute today’s strategy while developing tomorrow’s arises from the context within which its employees operate.
For a firm to succeed over the long term it needs to master both adaptability and alignment — an attribute sometimes referred to as ambidexterity. The concept is alluring, but the evidence suggests that most companies have struggled to apply it. The standard approach has been to create separate structures for different types of activities. But separation can also lead to isolation, and many R&D and business development groups have failed because of their lack of linkages to the core businesses.
In an attempt to shed new light on the discussion, the authors develop and explore their concept of contextual ambidexterity, which calls for individual employees to make choices between alignment-oriented and adaptation-oriented activities in the context of their day-to-day work. The authors introduce this as a complementary concept to traditional structural ambidexterity.
By means of their survey- and interview-based research — which took place over a three-year period and involved 4,195 respondents across 41 business units in 10 multinational firms — the authors identify the four behaviors displayed by ambidextrous individuals, each of which involves taking independent, adaptive action in the service of overall company goals. They then present a framework for describing and analyzing which organizational contexts encourage or discourage such behaviors. They link organizational context to ambidexterity and, in turn, ambidexterity to high performance.
Finally, the authors describe how companies such as Nokia, Ericsson, Oracle and Renault have been able to create such high performance contexts, and they offer managers guidance on how to create them in their own companies.