Should Your Organization be Ambidextrous?

Should Your Organization be Ambidextrous?

By Stephen Rutan

How well is your business balancing the quality and cost benefits of disciplined process control with the game-changing potential of innovative products and services? Structured management tools such as Six Sigma offer the prospect of potent gains in company performance through elimination of wasteful activities, faster delivery of business services and a dramatic improvement in the quality of your customer experience. Successful innovation provides the opportunity to differentiate your business in the marketplace and delight customers with entirely new ways of meeting or exceeding their expectations. Both are valid means of achieving your goals for company success, but with the current limitations of managerial science, the two approaches demand conflicting commitments to organizational resources and cultural mindset. Our challenge as managers is to choose whether we can benefit from both approaches at the same time. In essence, should we become an ambidextrous organization?

A recent BusinessWeek cover article entitled, 3M's Innovation Crisis – How Six Sigma Almost Smothered Its Idea Culture, describes how the highly structured problem-solving approach of Six Sigma put a clamp on the disorderly process of creative product development. The article indicates that the historically innovative temple of the Post-it note risked damaging the new product pipeline process that had fueled their success for so many years. The new CEO, George Buckley, is trying to loosen the manacles on company creativity to regain momentum in the area of new product development.

Was the 3M commitment to Six Sigma a mistake? The impact of this rigorous process along with other organizational changes on 3M's business performance was initially very positive. There was clear evidence that the company had become a little too chaotic and its resources too loosely managed to sustain the performance that historically had been driven primarily by a series of marvelously innovative products. James McNerney, a high-profile graduate of the GE CEO-grooming process, hit the ground running when he took over leadership of 3M in 2001. He immediately installed the Six Sigma process, slashed jobs and cut back on capital expenditures. Clearly there was room for some drastic action to have an immediate impact on financial performance. By the end of his tenure, however, there were signs that the innovation culture at 3M was weakening. It was time for a re-emphasis on innovation along the lines of what George Buckley is trying to achieve today.

The history of 3M described in the BusinessWeek article is parallel to the corporate path chosen by McNerney's past employer, GE. Two decades of success under the "make your numbers" leadership of Jack Welch, is now being followed by Jeff Imelt's corporate-wide push for innovation – his attempt to rewire senior GE executives to embrace risk with high potential new business ventures. After slumping in 2003, the stock price is recovering well and appears to be poised for accelerated performance if these innovation initiatives continue to bear fruit.

Do not let these current examples from the annals of big company management tip the scale too far in the direction of focusing more on innovation. Especially for small to mid-sized businesses, one must be prudent in choosing whether they have the resources to embrace both control and innovation at the same time.

One example, Bolton & Associates, a civil engineering firm in southern Maryland, has successfully achieved high double-digit growth per year for the last several years. CEO Gore Bolton attributes a portion of this success to his adoption of a disciplined process for defining staff jobs and detailing work activities in their employee manual. Setting up processes and procedures for the rapid training of new employees has enabled them to grow very aggressively without the typical pauses needed to assimilate growth. By documenting effective work procedures and company policies and immediately communicating this "how we do it" information to newly acquired talent, they have effectively avoided the delays usually caused by a slow learning curve for new staff members.

One might be concerned that this factory-like approach to cloning their success could lead to intense work environment pressure and burnout of employees. On the contrary, in the midst of this growth, this firm has also earned distinction as one of the best civil engineering firms to work for in the country. Their disciplined approach has allowed them to grow explosively while firing up their employees versus burning them out. For now, Bolton & Associates' outstanding progress is based more on systematic, disciplined execution of existing business services versus an attempt to disruptively redefine the civil engineering business.

In summary, companies with sufficient managerial bandwidth and corporate resources can and should attempt to become ambidextrous – to reap the rewards of applying structured managerial tools to their business processes while also supporting the more unstructured activities that allow true creativity to flourish. The wise manager, especially in the small to mid-sized company, can achieve sufficient business success by identifying their market and competitive opportunities, understanding the realistic limitations of their business and choosing to emphasize one approach versus the other.

Steve Rutan is a Consultant with Center for Simplified Strategic Planning, Inc.
He can be reached by email at

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