Managing Innovation in the XXI Century - Ambidextrous organizations

Gesto da inovao sec XXI

Lab MindZero - source: strategyser.comBusiness Model InnovationThe Ambidextrous OrganisationYou engage in enough exploitation to ensure current viability.You engage in enough exploration to ensure future viability.

Explorar Exploit Improve Explorao INTERNA - Maximising returns by aligning and utilising existing resources and competences (Lean management)

Explore Invent Explorao EXTERNA - Seeking out new opportunities and adapting to changing environments (Lean entrepreneurship)

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Lab MindZero - source: strategyser.comExisting companies implement known business models.To assure their survival and growth, companies need to invent new business models.

This challenge requires entirely new organizational structures and skills.

IntroductionFocusing on improving existing BM is not enough.

Management Innovation in the 21st CorporationExisting companies and their operating divisions implement known business models. Using the business model canvas, they can draw how their organization is creating, delivering, and capturing value. A business model for an existing company or division is not filled with hypotheses, it is filled with a series of facts. Operating divisions execute the known business model. Plans and processes are in place, and rules, job specifications, revenue, profit and margin goals have been set. Forecasts can be based on a series of known conditions.Inside existing companies and divisions, the business model canvas is used as a tool to implement and continuously improve existing business models incrementally. This might include new products, markets or acquisitions.

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Lab MindZero - source: strategyser.com

Companies will need an organisation (strategy and structure) that can do two things at the same time:THE CHALLENGEThe ambidextrous organisation

Exploit, by improving existing business models, and

Explore, by inventing (new and disruptive) business models.

http://jibsgreeninnovation.blogspot.pt/2008/11/blog-post_19.html

Engage in enough exploitation to ensure the organizations current viability and engage in enough exploration to ensure future viability.3

The best way to look at it is by drawing a continuum between:Improving existing businesses that a companies has, and Lab MindZero - source: strategyser.com

Inventing new businesses that the company plans to build.

Thinking about Business Models in existing companies is slightly different than in a start-up.

Thinking about BM in existing companies is slightly different than in a start-up.The best way to look at it is by drawing a continuum between improving existing businesses that a companies has and inventing new businesses that companies plans to build.

On the left hand side you have one or several existing businesses models that the companies knows them well and the intire organization is trimmed to execute and incrementally improve them.

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The company knows them well and the entire organization is trimmed to execute and incrementally improve them.

Lab MindZero - source: strategyser.comOn the left hand side you have one or several existing businesses models,to ensure the organizations current viability. Here the company operates in a known environment with existing customers and a good understanding of the market.

Engage in enough exploitation to ensure the organizations current viability and engage in enough exploration to ensure future viability.5

Lab MindZero - source: strategyser.comIn such a known environment it is possible to make relatively accurate forecasts about sales and predictions about growth.

The left hand side is all about executing and improving known Business Models incrementally.

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Lab MindZero - source: strategyser.comOn the right hand side you have one or several new BM that the company is trying to develop.

The models are far from proven and the organization is still experimenting with them. Contrary to the improve-end in the continuum, inventing is usually done in an unknown environment.


Predictions such as sales forecasts or growth numbers are practically impossible to make at the early stages. Hence the right hand side is all about the search for business models that work. The company is still developing a good market understanding.

Lab MindZero - source: strategyser.comThe rules of the game are almost totally different on the opposite ends of the continuum.


For existing business models and their improvement you make business plans with performance projections.Failure is not an option.

You evaluate people on how they meet those projections.


When it comes to new BM detailed plans are worthless.

Projections dont make sense for yet unproven Business Models.

What you really want to do is perform many small experiments to test the hypothesis of your unproven BM.


You learn from these continuous small bets.

They will allow you to improve, adapt or pivot your Business Modeluntil you make sure it will really works.


Existing and new business models require completely differentthinking, rules and organizational structures to succeed.

ConclusionAre you able to play both games in parallel?

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THANK YOU!LAB MINDZEROhttp://mind-0.blogspot.pt/ Lab MindZero , 2013

Managing Innovation in the XXI Century - Ambidextrous organizations

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