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

    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
    Collaboration versus simplification for organisational change

    One of my favourite books on organisational change is ‘Who Moved my Cheese?’ It’s short, and mice looking for cheese to eat is an appealing analogy. It’s a model for managers because it covers four theoretical outcomes of change. Those outcomes are: what happens if I (or we) do, or don’t make this change, what […]

    Read More
    12 signs that using 'ambidexterity as an agile transformation model' is not my original idea

    You see, I thought I was the first agilist to make the connection between agile transformation models and organizational ambidexterity. Certainly, it seemed original when it emerged in conversation with my supervisor. In fact, it was Dr Alireza Javanmardi Kashan’s idea (better make it 13 signs), but it came from our conversation so we said […]

    Read More
    What is contextual ambidexterity?

    Contextual ambidexterity is a culture that expects exceptional performance in both innovation and operation, overturning the illusion that it is either/or. Contextual ambidexterity is agile for managers.

    Read More
    The Future of Agile Leadership

    Introduction The future of leadership is Agile There are many different types of leadership styles and not all work well in every situation. The most popular method, the "Command and Control" style which has been dominant for centuries, may be on its way out as research shows that this type of leadership does not foster […]

    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
    December 7, 2017
    Two Agile Metrics for DevOps Teams & their Managers

    After almost two years of frustratingly slow progress, the DevOps transformation leaders at MIB (Massive Investment Bank, whose name is interesting but not important) are re-evaluating their choice of key performance indicators (KPIs). They’ve been using just two Agile metrics to measure DevOps progress, the number of releases made per month and the number of […]

    Read More
    May 15, 2014
    Slothful Lessons in Agile

    Slothful Behaviour is Good If ever an animal captured the principle of "maximising work not done", it must surely be the sloth. A curiously slothful practitioner of business agility. Strangely endearing and charmingly enigmatic, sloths are surprisingly inspiring. There exists a Sloth-Club which was formed "to promote slothful behaviours" such as ecology, economy and vegetarianism […]

    Read More
    1 2 3 11
    linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram