Embracing Ambidexterity: The Innovation Game-Changer for Product Managers

Have you ever been impressed by how easily some people can write with both their left and right hands? This is a physical attribute known as ambidexterity. But what if I told you that the concept of ambidexterity extends past the physical? Imagine applying this concept to the realm of business — specifically, product management

In the tech world, we’re amazed by startups, those small nimble companies that seem to innovate at the speed of thought. They’re magical; they have a raw energy that allows them to pivot rapidly and challenge the giants of the industry. On the other hand, we have the giants, with their established processes, resources, and market presence. These behemoths, while powerful, often seem to move at a glacial pace when it comes to innovation.

Imagine a world where organizations could harness the agility of startups while wielding the might of the giants.

In a dynamic and competitive market in which change is the only constant, businesses must explore new ground by creating and innovating; and, at the same time, exploit their existing resources. That is, they must aim to be ‘ambidextrous’.

But how exactly do they do this? Over two years, I delved into this, involving countless hours of research and interviews. You can read all 200 pages, if you’d like. Here’s the summarized insights.

The High Stakes Rollercoaster of Exploration

Exploration in a business context takes place when a company embarks on a journey into uncharted territory. Exploration is the daring journey into the unknown — embracing chaos, improvisation, and untapped markets. It’s all about value creation.

Although a breeding ground for radical, disruptive innovation, the fruits of exploration are rarely guaranteed. Organizations may find their ventures leading to ‘bad ideas’ owing to high-risk stakes and unpredictable returns. The leap of faith in exploration requires a readiness for possible failure, patience, and the knowledge that returns may not come fast.

The Clockwork Efficiency of Exploitation

Exploitation, despite its name, is the bedrock of innovation. It’s about maximizing existing resources, streamlining processes, and fine-tuning mechanisms. It’s all about value capture.

Yet, a solely exploitative approach could lead to obsolescence, barring the company from keeping pace with industry alterations. Leonard-Barton (1992) suggested that excessive exploitation can cultivate rigid cognitive maps, breeding inelastic competencies that are complex to unsettle. How many times have you just known that you could make meaningful change, but were blocked by rigid hirearchies or processes?

Organizational Ambidexterity: it’s a tightrope.

Why is organizational ambidexterity such a challenging feat? Imagine trying to sprint and tie your shoe at the same time. The two actions demand different types of attention and focus. Similarly, exploration requires a culture of risk-taking, agility, and acceptance of failure, while exploitation demands consistency, process optimization, and risk aversion.

When companies tilt too far towards exploration, they risk spreading themselves too thin, chasing every potential opportunity without reaping any rewards. Conversely, overemphasizing exploitation can lead to stagnation, with companies becoming too rigid and bureaucratic to innovate.

Contextual, Structural and Sequential Ambidexterity

If you imagine ambidexterity as a coin, it has three sides (quite an unusual coin!) in the context of business — contextual, structural and sequential.

1. Contextual ambidexterity calls for balance: helping the team understand when to explore and when to exploit.
2. Structural ambidexterity, on the other hand, encourages creating separate teams for exploration and exploitation.
3. Sequential ambidexterity is about timing, knowing when to switch between exploration and exploitation.

The trick is to acknowledge that these forms of ambidexterity exist not in separate silos but must be interwoven.

Leaders need to build teams that don’t think like them.

Leaders matter, often more than we think they do. Leadership isn’t just about direction; it’s about balance. It’s the delicate act of weighing innovation against exploitation

For instance, where leadership is innovation-focused, and the company is highly exploitative (as successful companies often are), they’ll often develop temporary sub-units (structural ambidexterity) specifically directed towards explorative innovation.

This can work in the inverse. Some companies are too explorative! They innovate constantly and never see success. If the company is oriented towards exploration, exploitative sub-units are created as a balance to moderate the negative consequences of excessive exploration.

Sequential ambidexterity: when do we do what?

Sequential antecedents propose a time-based approach — innovate now, optimize later. But there’s a debate. While some hail its merits, others argue it misses out on potential synergies. While you might have structural ambidexterity, you’ll usually see high-level sequential ambidexterity in successful companies.

Pivot and innovate! Consider a firm that predominantly zeroes in on incremental improvements. Their consistent success in the market is undeniable. However, upon noticing startups breaking new ground, the leadership, in a daring move, shifts their orientation towards a significant 18-month exploration. They described this pivot as a risky venture, laden with opportunity costs. Yet, the potential to tap into fresh customer segments made this gamble seem worthwhile.

Since speaking, they’ve 5x’d their business.

Fix your shit! On the other end of the spectrum, other informants recounted tales of their firm’s relentless innovation, which, over time, compromised their foundational stability. Recognizing the impending peril, they embarked on a two-year journey of stabilization and optimization. Not for immediate rewards, but as a strategic play for future explorations.

Hire people you trust, and let them figure it out.

At the heart of strategy lies ‘contextual ambidexterity’. Rather than solving everything through re-orgs or structural changes, it empowers individuals, giving them the context to decide. The crux? Empower individuals with the right context — the systems, beliefs, and processes that influence organizational behavior — and let them decide when to innovate and when to optimize. The beauty of this approach lies in its simplicity and effectiveness. The evidence suggests that it yields massive performance dividends.

Translate this to the world of product management, and a vivid picture emerges from my conversations with industry insiders. Leaders with an innovative bent are more receptive to radical shifts, often based on insights from product managers. Take one senior PM at a 5000-person company, who recounted how a mere presentation of data led their CEO to pivot their strategic orientation, embracing change as if it were second nature. Or consider another tale: a single product catering to multiple use cases was transformed into separate applications based on single product management insights.

This change was not just at the product level but echoed throughout the organization, reshaping engineering teams and realigning organizational goals. As product managers, the lesson is clear: armed with data and the ethos of contextual ambidexterity, one can influence not just product trajectories, but the very fabric of organizations.

The Ambidexterity Playbook for Product Managers

The world of ambidexterity isn’t black and white. It’s a spectrum. And as product managers, the challenge is to navigate this spectrum, drawing from a range of approaches.

Instead of viewing strategies as dichotomous constructs, there’s rising evidence that multiple antecedents can, and often do, work in tandem. Terms like “simultaneous ambidexterity” and “hybrid ambidexterity” are making their rounds, hinting at a landscape where firms leverage a combination of spatial, sequential, and other approaches.

For a product manager, here’s the actionable insight: Forget the old-school binary mindset.

Embrace the interdependence of strategies at the firm, product, and individual levels. Your goal isn’t to pick one path but to navigate the intricate web of synergies between them. And this isn’t just theoretical musings; my interactions with industry professionals underscore this. They’ve recounted tales where combining different ambidextrous approaches was not just feasible but the most logical path forward for product management. The key enabler? Leadership with an innate bias towards innovation. As you chart your product’s course, consider how you might integrate these combined forms of ambidexterity into your strategy, leveraging the strengths and mitigating the weaknesses of each approach.

TL/DR: Final recommendations

1. Diagnose your company’s innovation pulse: Before diving into strategies and execution, take a step back. Is your company’s heartbeat primarily explorative, always seeking the next big thing? Or is it exploitative, perfecting what’s already known? Recognizing this is paramount.
2. Map Team Orientations: Just as a body has different organs with distinct functions, so does an organization have teams with varied roles. Understand which of your teams are the pioneers, charting new territories (explorative), and which ones are the perfectionists, refining and optimizing (exploitative). This mapping can be your blueprint for strategy alignment.
3. Decipher Leadership Tendencies: Leaders are the North Star, guiding the ship’s direction. Recognizing which leaders lean towards exploration — those who embrace risks and champion innovation, versus those who lean towards exploitation — the guardians of process and efficiency, can offer valuable insights for organizational synergy.
4. Pinpoint Your Current Cycle: Every company oscillates between periods of value creation, where they’re inventing and innovating, and value capture, where they’re monetizing and refining their innovations. Discerning where you currently stand in this cycle can inform your next strategic move.
5. Aim for balance: While it’s essential to understand where you and your organization lean, remember that the magic often lies in the middle. Strive for a balance, allowing exploration to feed exploitation and vice versa.
6. Stay Fluid and Adaptable: The landscape of business is ever-evolving. What worked yesterday might not work tomorrow. While it’s crucial to understand your current stance on the explorative-exploitative spectrum, be ready to pivot as circumstances change.
7. Foster Self-awareness: Encourage teams and leaders to regularly introspect and understand their own tendencies. A self-aware organization is agile and responsive to the demands of the marketplace.