THE AMBIDEXTROUS ORGANIZATION

If you’re ambidextrous, it means you can use both hands equally well. You’re not limited to just one. The book, Lead and Disrupt: How to Solve the Innovator's Dilemma, looks at this phenomenon form another perspective: the ambidextrous organization. 
 
Authors Charles O’Reilly and William Tushman believe such organisations can balance two essential forces for business success: Exploration (seeking new ideas and innovations) and Exploitation (refining and optimizing the operations they’re already running). But it’s a high-stakes juggling act, because it calls for the organisation to stay efficient while simultaneously disrupting its operations to stimulate future growth? It calls for them to be ambidextrous.
 
How can this work? Let’s break it down.

Four quadrants
For O’Reilly and Tushman, organizations operate in four quadrants. Each quadrant focuses on a different combination of exploration and exploitation.

A: Core exploitation
Refining the core business. Making incremental improvements that ensure consistent profitability. In this quadrant, the focus is on operational efficiency: cutting costs, optimizing supply chains, scaling successful products. It’s about doing what you already do; just a little bit better.

B: Radical exploration
This is where you take the big bets, exploring entirely new markets, technologies, or business models you believe may have potential for massive growth. This quadrant is about creating entirely new industries and developing disruptive technologies. And yes, it is risky. You’re looking at transformative innovations that could lead to groundbreaking successes—or to failure.

C: Capability exploration
By acquiring new organizational capabilities within existing markets and customer bases, it becomes possible to deliver new products and services. Staying within familiar markets reduces risk compared to fully exploring unknown territories. For example, this could involve adding subscription models to currently one-time purchase services.
 
D: Market exploitation
This is where you leverage your core capabilities to enter adjacent markets. You’re not venturing far from proven strategies; instead, you’re applying what you already know and are capable of doing in a way that’s both innovative and familiar. For example, this could involve acquiring new customers by entering different price segments distinct from your current business model.
 
Four quadrants. Four different levels of engagement. So how do they come together in the real world? Fujifilm offers an excellent example of a truly ambidextrous organisation.

The Fujifilm reinvention
Fuji began life in Japan in 1934, manufacturing photographic film. For many years it enjoyed a near monopoly in that country, and impressive sales in the rest of the world. But when the market in film began to collapse, the company didn’t just stick with its legacy. Instead, it reinvented itself, leveraging its technological infrastructure and moving into such new fields as medical imaging and cosmetics.
 
Contrast this with a competitor, Kodak, which had actually invented the digital camera but didn’t pivot to it soon enough. Instead, it stuck to its film-based business model, saw its sales plummet and filed for bankruptcy in 2012.  Fujifilm’s success didn’t come from randomly diversifying, but from understanding its core capabilities and applying them in new ways. The company’s former CEO, Shigetaka Komori, explained it this way.

“Our company possesses management resources such as technological infrastructure, financial foundation, brand strength, and high-quality employees. First, we organized what kind of technologies, resources, and strengths we have. Then, we identified which markets and products these can be applied to.”

Driving innovation
So now we’ve broken down the four quadrants, and seen how an organization like Fujifilm managed to stay ambidextrous, let’s look at how organizations in general can drive innovation. I suggest they should focus on:
 
1.     Emerging needs
Discover what people will need in the future and develop products and services to meet those needs.

2.     Happy accidents
3M’s Post-it note wasn’t planned. Nobody set out to design it. The adhesive that makes it work was discovered by accident – 3M’s researchers were trying to make a super-strong glue – and then put to use in the form we all know today. Sometimes, the key to success is taking a breakthrough technology and finding a completely new application for it.

3.     Internal strengths
Looking outward and to the future is good and you shouldn’t ever avoid that. But don’t forget that you can also innovate by leveraging what you already do well, by applying it in new ways.
 
A balancing act
Managing ambidexterity isn’t easy. You’ll need to find the perfect balance between efficiency and innovation. But, if you allocate your resources strategically, you can strike that proper balance and position yourself for both short-term success and long-term growth. Whether you’re following in Fujifilm’s footsteps – reinventing itself with its existing capabilities – or embracing new technologies, the key to success remains the same.
 
Knowing when to push the envelope and when to make the most of what you already possess.