Sustainable business success, delivering consistent long-term results, depends not only on present performance but also on keeping a constant eye to the future — innovating and developing new products and services to stay competitive.
In a recent article in RSM Discovery, based on his new research, Justin Jansen, Professor of Corporate Entrepreneurship at RSM, urges companies to build ambidextrous teams that are readily able to switch focus between exploiting the present and exploring the future.
However, creating teams that are adept at focusing on both the present and the future is not universally accepted as the way forward — many companies tend to separate or differentiate between the two functions in order to avoid the clash of opposing priorities and because the present is predictable, whereas the future is uncertain and risky. An investment on the exploitation side brings immediate results, whereas an investment on the exploratory side may ‘possibly’ bring returns in five years or more. Consequently, Jansen says, organizations expend 90% of their efforts on exploiting the present.
A major downside to the differentiation approach is the loss of synergies between the present-focused exploitative learning and the future-focused exploration learning. Future focused initiatives eventually have to be brought back into the core of the organization — back to operations. If the exploratory or R&D team fail to take responsibility for the whole process through to commercialization and just dump the new product on marketing, the loss of synergies can be damaging.
Furthermore, new product development teams can be so lost in their future world that they become disconnected from customers. “What most people forget is that there could be a lot of synergies because the exploitation people are in contact with customers,” says Jansen. “When a customer complains, or when a customer wants additional features, that information should be transferred to the exploratory guys.”
For Jansen, the most effective and efficient way to organize the competing imperatives of supporting the present and building for the future is to bring both objectives into single teams, and he urges companies not to separate exploration and exploitation activities.
However, while creating ambidextrous teams may be better than pursuing a differentiation strategy, managing the exploitation vs. exploration trade-offs within such teams is a significant challenge. The ability for team members to work together effectively — supporting each other while not being afraid to air concerns or offer new solutions — is of particular importance when negotiating the complexity of ambidexterity.
Previous research has shown the importance of cohesion (a shared attraction among team members) and efficacy (the team’s collective belief that it can accomplish the task at hand) on team effectiveness. The research, by Jansen and his colleagues, affirms that, while team efficacy is important, team cohesion is a dominant success factor for ambidextrous teams. Members of a team were undoubtedly chosen because they had valuable skills and knowledge to bring to the team. As a result, senior leaders must maintain a “delicate balance,” Jansen says, between offering support — and thus reinforcing the cohesion of the team — and stepping back in order to avoid undermining team efficacy.
Ambidexterity works if top leaders choose the right people to be on a team — people who have a track record of working well together — and know when to be supportive and when to leave the team alone. “This is not about formal mechanisms, nor about hierarchy,” Jansen explains. “It’s about how people think about each other, about feelings and emotions.” In short, managing the tensions between the competing goals of an ambidextrous team requires a socio-psychological perspective that focuses on how people collaborate and communicate (the social part) and how they think and feel about each other (the psychological part).
Access the original research paper: A Socio-Psychological Perspective on Team Ambidexterity: The Contingency Role of Supportive Leadership Behaviours; Justin J. P. Jansen, Konstantinos C. Kostopoulos, Oli R. Mihalache and Alexandros Papalexandris, Journal of Management Studies, September 2016.