BOOK A CALL

March 26, 2023

What is contextual ambidexterity?

By Russ Lewis. Published online March 26, 2023

When Christina Gibson and Julian Birkinshaw showed managers could create contextual ambidexterity by creating a culture that expected both innovation and operational performance, it was like injecting oxygen into a very slow-burning fire. Think of contextual ambidexterity as agile for managers.

Robert Duncan birthed the topic of organizational ambidexterity but framed it as a structural separation. Twenty-eight years later, Gibson and Birkinshaw showed that firms had contextual ambidexterity, that contextual ambidexterity was a management capability, and that the path to contextual ambidexterity was the unique product of behaviour and culture in context.

During that period we entered the digital age, and the role of the manager has adapted accordingly.

Organizational ambidexterity

Ambidexterity is an academic concept - a theory developed by researchers to explain how organizations resolved the core tensions between:

"exploration of new possibilities and the exploitation of old certainties".

March, 1991

James March was interested in how people adapted knowledge within organizations so he simulated the process. It is his highly influential paper, Exploration and exploitation in organizational learning, that established the terms exploration for innovation and exploitation for gathering the profits from innovation. The word is now abhorrent, so let's call it operations instead.

Duncan had noticed managers separated innovation and operations and thought it was so they could be ambidextrous - good at both. Organization Design was an emerging topic and Duncan's findings were published in the proceedings of a conference in 1976. Duncan's paper was called 'The ambidextrous organization: Designing dual structures for innovation'.

Structural separation was given, so academics needed to create a theory that explained integration. Mary Benner and Michael Tushman, as well as Charles O'Reilly, held that integration was a function of leadership. Their case studies featured leaders capable of communicating a "unifying vision".

Structural separation and poor integration are common

Innovation and operations activities were traditionally conducted separately, and still are if you have separate R&D departments. Many firms even maintain different budgets (RTB / CTB) and functional hierarchy means separate managers and governance too. Separation allows innovation and operations mindsets and knowledge to prevail in their own context.

The challenge comes when it's time to integrate new knowledge into existing routines. People from each discipline think and behave differently. They have different ways of managing risk and governance that can be incompatible. Collaboration and cooperation skills are often underdeveloped in siloed organizations, and the situation is often made worse by individual incentives. Without contextual ambidexterity, the only theoretical option beyond leadership by top management was dedicated management of handover processes.

So what?

Failing to balance innovation and operations leads eventually to failure, just as it did when transistors disrupted the valve industry, and quartz movements the Swiss watch industry. Tushman and O'Reilly's (1996) article told leaders to become Machiavellian revolutionaries. If you can't access that but have access to HBR, you can read their updated (2004) version, The ambidextrous organization.

Get ambidexterity right, and your firm / department / team performance can be outstanding in both areas. Paradox researchers Wendy Smith and Marianne Lewis call this Both/And Thinking in their book, and warn leaders that solving today's tough problems takes a mindset shift in their HBR article.

Contextual ambidexterity

By 2004, Gibson and Birkinshaw were able to show that separate structures were not the only path to ambidextrous performance.

They established that many business units achieved ambidextrous performance by creating a context where both adaptability and alignment were achieved. The mechanism was for managers to create the appropriate culture and clarify the priorities, in other words, to expect both innovation and operation to take place and support everyone in reaching those goals. Obviously, contextual ambidexterity has a lot in common with agile. Adaptability and alignment are not quite the same as explore-exploit or innovation-operation, but they are opposing forces. This is how they define them:

"Adaptability: the ability to move quickly toward new opportunities, to adjust to volatile markets and to avoid complacency. Alignment: a clear sense of how value is being created in the short term and how activities should be coordinated and streamlined to deliver that value."

Gibson and Birkinshaw, 2004

DevOps is an ambidextrous solution pattern

In 20th-century IT, Development was all about change, and Operations was about preserving reliability. Everyone believed it was either one or the other.

With DevOps, we understood that by making both change and reliability the priority, performance actually improved. In one investment bank I helped, we both doubled the rate of software releases and halved the number of incidents every year for six years. Nicole Forsgren, Jez Humble, and Gene Kim provided the evidence Tech leaders need to make an informed decision on this in their book, Accelerate.

By 2021, the annual State of DevOps survey (pka DORA) reported that high-performing DevOps organizations deployed almost 1000 changes to production for each change made by low performers. Their finding that it took low performers 6,570 times longer to deploy their code changes to production was so outstanding they added the text:

"Yes, you read correctly. This is not an editorial error."

State of DevOps Survey (2021) Google

Don't forget, DevOps is an IT case and academic research is interested in strategy and theory that applies to whole organizations. This is why I'm so interested in contextual ambidexterity as a model for agile transformation.

Photo credit

Thanks to Vincent van Zalinge for the amazing photo via Unsplash.

Newsletter signup

    Recent Posts

    How to restore Teams Wiki data after Jan 2024

    Microsoft killed Wiki on Teams - who knew they would delete our data too - here's how to restore it

    Read More
    Transformation research update

    'Managing Tensions not People' as transformation method research update at the end of 2023 This time last year I was searching through the ambidexterity literature for tensions other than the usual explore-exploit. I built a website to publish my progress online, which I think was a diversion! Literature research update I found more than 70 […]

    Read More
    The HOW of Transformation

    The HOW of Transformation recorded at the Global Digital Transformation Summit in Berlin 2023 Summary Managers who manage tensions enjoy greater performance, especially in complex and dynamic environments. In this 36-minute talk: I tell the story of Transport for London's transformation from a one-sided fares Operator to an integrated Developer-Operator. And show how technologists using […]

    Read More
    In praise of rights licensing bots

    I was at the digital transformation summit in Berlin last week when I got a scary "unlicensed use" email from a rights licensing lawyer. The rights licensing bot service sent me a screenshot of the page and the cartoon I was alleged to have used. I say alleged because I didn't recognise the cartoon or […]

    Read More
    Ways of Working: 5 improvements for leaders

    Most ways of working still rely on functional hierarchy, where managers make decisions and workers do the work. Managers know they can't change this work structure, but they can transform its effectiveness without asking for permission and without needing a budget. Before exploring the changes that transform the way people work, we need to recognise […]

    Read More
    Manage tensions if you want an agile transformation

    Today’s challenge is that traditional management approaches, where managers tell people what to do and how to do it, are not as effective as they once were. Agile transformation takes years, but changing management’s focus from people to tensions could be a better solution. It is simpler, faster, and considerably more cost-effective. Management is the […]

    Read More
    October 7, 2014
    Cost of selling on-line down by 45 points

    Another true story about the art of Agile Estimation About 14 months ago, I wrote this story card: We should sell estimation cards online, to offset the cost of producing them We gave it an estimate of 50 points as it seemed “do-able”, but no-one was exactly sure “how” to do it. Amazon was a […]

    Read More
    July 3, 2020
    New Normal: FGS Panel Discussion

    I joined FGS CEO, Peter Stroud and his guests discussing “the new normal”; James Hall, Global Storage Chief Technologist at HPE Frank Purcell, Operational Services Manager at Islington Council What you cant see is the wine-tasting that followed. Pete sent each of us a case of half-bottles of wine from Berry Bros. It was great.

    Read More
    August 9, 2016
    Manager Role for Enterprise Agility Agile 2016 conference

    This session explores the top 10 “good practices” in good agile and good management that help medium and large organizations reach enterprise agility. See the video here: https://www.agilealliance.org/resources/sessions/the-manager-role-for-enterprise-agility-this-is-what-good-looks-like/ Abstract/Description If you follow Scrum, XP, or the scaled versions of the same, it’s difficult to see the point of managers in an agile workplace. Teams get […]

    Read More
    1 2 3 13
    linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram