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How can an executive both optimize a mature business and encourage innovation? It's not easy, as Michael L. Tushman told JBS, but it can be done.
IN AN ERA OF RAPID CHANGE, ONE GREAT FEAR MOST EXECUTIVES face is that their product or service will go from leading edge to historical oddity in barely the blink of an eye. Because business life cycles are now measured in months rather than years, executives must plan for their new products' replacement at almost the same time that they launch them. And yet business history is as replete with stories of executives who were geniuses at innovating new products or services but total failures at managing mature businesses as it is with stories of their brethren who couldn't manage innovation. Is a talent for innovation inconsistent with an ability to create a stable organization?
According to a recent book by Columbia University management professor Michael L. Tushman and Stanford University management professor Charles A. O'Reilly III, Winning through Innovation: A Practical Guide to Leading Organizational Change and Renewal (Harvard Business School Press, 1997), that very inconsistency is essential if a company is to thrive over the long haul. The way to manage for both past and future, the authors say, is to create an "ambidextrous organization."
We asked Michael Tushman to explain the concept to us. We report below what he told us, interlaced with excerpts from his book.
JBS Yor've defined the ambidextrous organization as one that is able to implement both incremental and revolutionary change. Is what you're really describing, then, a way to keep a revolution happening, to create a structure that would let you have the discontinuity of revolution without disrupting the whole business?
tushman The idea of the ambidextrous organization is that you can create your own luck, your own learning, from which you make bets on the future. Ambidexrerity doesn't guarntee success, but it increases the probability you'll be able to actually shape the evolution of the product class. That's a pretty bold thing to do-to take action in advance to shape how a product class will evolve.
This is exactly what the Swiss watch industry failed to do. The Swiss had all the expertise, but they weren't able to use...