Ambidextrous Organizations
Chapter 1: Ambidexterity in Innovation:
This concept is likened to a two-footed soccer player who can play equally well with both the right and left foot. In the context of a business organization, this means the ability to balance improving current operations while inventing new strategies and solutions. This is referred to as an ambidextrous organization, which is capable of pursuing both incremental and radical innovation. Incremental innovation is about making existing systems better, akin to a soccer player using their stronger foot. On the other hand, radical innovation is about exploring entirely new possibilities, like a soccer player surprising the opponent by using their weaker foot.
1.1 Innovation Logic
To think innovatively, organizations should first identify opportunities or challenges and then decide which data to leverage. This approach is symbolized by the McDonald's Milkshake. The milkshake represents the idea that innovation should be thought of systematically. Instead of starting with the data, the focus should be on identifying the problem or opportunity and then determining which data can provide the solution.
1.2 Creativity in Innovation
To generate innovative ideas, organizations can leverage patterns of existing innovation logics and apply them to their specific context. An example of this is Gillette’s Razor and Blade, which serves as a tool for creativity in the innovation process. The razor represents the existing product or service, while the blade represents the potential for innovation and improvement.
Chapter 2: Misconceptions in Data-Driven Innovation
Many organizations make the mistake of starting with the data when planning for data-driven innovation. However, it is critical to first clarify the opportunity or challenge that needs to be addressed and then determine which data to leverage. Collaboration between technical and business teams is crucial in this process. Additionally, regulations can actually serve as an advantage as they represent entry barriers for companies outside the market. This can lead to differentiating factors on the global market, giving the organization a competitive edge.
Chapter 3: Importance of Ambidextrous Organizations
In today's rapidly changing business environment, companies can only survive by constantly discovering new opportunities while delivering on current commitments. This is reflected in the significant drop in the average lifespan of companies listed on the S&P 500 from 33 years in the late 70s to only 22 years today. This drastic decrease demonstrates how much faster our business environment is changing, emphasizing the importance for organizations to balance discovery and delivery.
Chapter 4: Aligning Innovation Projects
A common reason for the failure of many data-driven projects is the misalignment between the project's purpose and whether it was intended for improving delivery or discovering the new. When pitching innovative ideas, it's crucial to clarify if the focus is on incremental innovations that can deliver more efficiently on current operations, or if it's on more radical innovations that have the potential to unlock a bright future for the company. Misalignment can lead to conflicts within the team and with sponsors, making it difficult to secure support and resources for the project.
Chapter 5: Roles in Innovation
In a company, both delivery and discovery roles are necessary. Delivery roles excel in delivering current operations, while discovery roles focus on discovering new opportunities, prioritizing long-term performance over short-term gains. An individual's preference for delivery or discovery can be determined through a series of intuitive questions. This test, developed by Harvard Professor Clayton Christensen, provides valuable insights into an individual's innovation style, helping organizations to better align roles with individual strengths and preferences.
Key Learnings:
- To remain competitive and relevant in the rapidly changing business environment, organizations must adopt a data-driven culture.
- Successful companies are ambidextrous, capable of balancing the improvement of current operations with the invention of new strategies and solutions.
- When planning for data-driven innovation, organizations should first identify the opportunity or challenge and then determine which data to leverage.
- It's crucial to align innovation projects with the organization's focus, whether it's on improving delivery or discovering the new.
- Both delivery and discovery roles are necessary in a company, and understanding an individual's preference can provide valuable insights into their innovation style.